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I came across this report from Environmental Defense Fund and thought I'd share. In a March 2023 report, Citi showed a striking 30% decline in absolute emissions in its oil & gas portfolio from the previous year, but a slight increase in emissions intensity. JPMorgan Chase, in a December report, did not disclose absolute carbon emissions from oil & gas but showed a slight uptick in emissions intensity. These results are difficult to make sense of: how could Citi's absolute emissions plunge so sharply, while its emissions intensity rose? And how can investors hope to compare Citi's carbon performance with its peer JPMorgan Chase, which did not report absolute emissions at all?
What is a responsible bank to do? The report gives 3 answers.
§ Banks should disclose multiple metrics, including absolute emissions and physical emissions intensity, by committed amounts
§ Banks should work with data providers to release emissions data more quickly and should explicitly report mismatches in emissions and financial data years
§ Banks should support regulations to improve emissions data quality across the market
This report from Environmental Defense Fund unpacks real-world measurement challenges including fluctuations in emissions attribution, gaps in decarbonization tracking, data reporting timeline mismatches, and more.
Does this mean that a bank can double its funding to a fossil fuel company and still report a decline in financed emissions even if the company emissions didn't decline? If you have experience or insights on this, share here.
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Aya Pariy
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