Carbon Conundrum: The Curious Case of Financed Emissions

Actionable Insights for a Decarbonizing World

Carbon Conundrum: The Curious Case of Financed Emissions

Big banks have made progress in setting climate commitments, but disclosure of their oil & gas portfolio emissions are inconsistent and unclear.

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Absolute Emissions vs. Emissions Intensity

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?

This report unpacks real-world measurement challenges including fluctuations in emissions attribution, gaps in decarbonization tracking, data reporting timeline mismatches, and more.

What is a responsible bank to do?

  1. Banks should disclose multiple metrics, including at the very least, absolute emissions and physical emissions intensity, by committed amounts.
  2. Banks should work with data providers to release emissions data more quickly, and in the meantime, banks should explicitly report mismatches in emissions and financial data years.
  3. Banks should support regulations to improve emissions data quality across the market.

Citi and JPMorgan Chase Oil & Gas Sector Financed Emissions, from 2022 Climate and TCFD reports

big banks Financed Emissions

Citi
• Baseline: emissions data 2019; financial data 2020
• Update: emissions data 2020; financial data 2021

JP Morgan
• Baseline: emissions data period undisclosed, likely 2018; financial data 2019
• Update: emissions data period undisclosed, likely 2020; financial data 2021 + 1H2022

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Big banks have made progress in setting climate commitments, but disclosure of their portfolio emissions are inconsistent and unclear.

DOWNLOAD BRIEF