Can sustainability help JPMorgan Chase bounce back?

Even as JPMorgan Chase has incurred billions in losses from botched trading, acknowledged by its CEO Jamie Dimon as an “egregious mistake,” the stalwart bank has been enthusiastically supporting a new environmental strategy that spans all of its businesses.

In a particularly creative move, the bank recently announced it is financing an initiative in New York City to help building owners cover upfront costs of converting old boilers to natural gas. It is also encouraging home owners to make their homes more energy efficient through improvements that may be eligible for tax benefits.

Matthew Arnold, the Head of the Office of Environmental Affairs, sees the move as the sort of innovation he hopes the bank can achieve across businesses to help solve real-world environmental problems.

Appointing Arnold -- former leader of PwC’s Sustainable Business Solutions, co-founder of Sustainable Finance Ltd., and COO of World Resources Institute -- to the top environmental position a year ago was something of a coup for the bank. In Arnold, JPMorgan Chase has lured not just a daring environmental thought leader, but also a well-known implementer of sustainability projects.

On the risk management side, Arnold’s complement is Andre Abadie, Head of Environmental and Social Risk Management, also a former director of Sustainable Finance, as well as head of ABN AMRO’s Sustainable Business advisory group, where he co-authored the Equator Principles, the framework some 70 banks now use to manage environmental and social risk in project financing.

A year into the job, Arnold says his broad mandate to implement an “environmental strategy for every line of business has been met with nothing but support from senior leadership to bankers in all of our businesses, who all want to conduct first-class business in a first-class way.”

He said the various lines of business and the environmental team are collaborating extensively to engage clients and develop sustainability solutions. The growing collaboration has to do partly with the current need for new ideas and sources of innovation. “At its best, this collaboration drives innovation, new solutions and new ways to serve clients and their businesses,” Arnold told me.

Much of the value of the Arnold-Abadie team includes “building new revenue,” says Arnold, through products like the new energy-efficient mortgage.

He adds: “If we start winning business because we’re good at sustainability, that’s revenue, too. As we introduce our work to the bank’s businesses, they’re thinking of us as a way to strengthen relationships with clients, so that helps drive their revenue goals. On the product side, the bar is higher, because they don’t think of environmental professionals as coming up with those types of solutions.”

Image of Money Tree by Mopic via Shutterstock.

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