JP MORGAN CHASE & CO. | Human Rights Risks in Conflict-Affected and High-Risk Areas Policies at JP MORGAN CHASE & CO.

Status
AGM passed
AGM date
Previous AGM date
Proposal number
9
Resolution details
Company ticker
JPM
Resolution ask
Conduct due diligence, audit or risk/impact assessment
ESG theme
  • Social
ESG sub-theme
  • Human rights
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Financials
Company HQ country
United States
Supporting materials
  • Exempt solicitation - proposal 9 - JP Morgan.pdf Download
Resolved clause
RESOLVED: Shareholders request the Board of Directors commission an independent third-party report, at reasonable cost and omitting proprietary information, on JPMorgan Chase’s (JPMC) due diligence process to determine if and how its lending, underwriting, or other services in conflict-affected and high-risk areas (CAHRA) expose it to human rights and other material risks.

Shareholders seek a report that, at board and management discretion:
•Discusses how JPMC assesses, mitigates, and reports human rights and material risks in CAHRA; and
•Evaluates whether additional policies, practices, and governance measures are needed to mitigate risks.
Whereas clause
WHEREAS: The World Bank estimates that by 2030 nearly two-thirds of the world’s poor will live in settings characterized by fragility, conflict, and violence,1 and thus may have heightened vulnerability to widespread human rights abuses and violations of national or international law. Given these endemic risks, the United Nations Guiding Principles on Business and Human Rights and the Equator Principles call on companies to conduct heightened human rights due diligence2 and analyze potential violations of international humanitarian law during human rights assessments.3

CAHRA also include a higher prevalence of material risks. The International Finance Corporation reports that companies in conflict-affected settings “face business risks that are much greater than those in other emerging markets,” including destruction of physical capital, deaths and injuries, weak state control, and supply-chain disruptions.4 A recent survey of executives indicated 97 percent of respondents altered investment plans and over one-third relocated operations, due to geopolitical volatility.5

Multilateral organizations, states, and accounting bodies are passing legislation on mandatory due diligence6 and sustainable investment reporting in the European Union,7 and calling for companies to report on human rights and conflict as material risks.8 In a 2022 report, “conflict risk” was the second leading environmental, social, and governance criterion among institutional investors representing over $6 trillion assets under management.9

As the world’s largest bank by market capitalization, JPMC has operations and relationships in numerous CAHRA where it has counterparties, partners, or clients that are implicated in corruption, armed conflict, violations of international humanitarian and human rights law, and environmental degradation. Examples include JPMC providing lending and underwriting services for state agencies and affiliated companies in China,10 Guinea,11 Kazakhstan,12 Mozambique,13 Myanmar,14 Russia,15 Saudi Arabia,16 and Venezuela17 – JPMC’s Human Rights Policy18 and Environmental and Social Policy Framework19 notwithstanding.

JPMC trails peers that adopted measures to mitigate these risks, including ABN AMRO Bank N.V.,20 Citi Group,21 and ANZ.22
1 https://www.worldbank.org/en/topic/fragilityconflictviolence/overview
2 https://www.undp.org/publications/heightened-human-rights-due-diligence-business-conflict-affected-contexts-guide
3 https://equator-principles.com/app/uploads/Human_Rights_Assessment_Sept2020.pdf
4 https://www.ifc.org/content/dam/ifc/doc/mgrt/201902-ifc-fcs-study.pdf
5 https://assets.ey.com/content/dam/ey-sites/ey-com/en_us/topics/ceo/ey-ceo-outlook-pulse-survey-january-2023-global-report.pdf
6 https://commission.europa.eu/business-economy-euro/doing-business-eu/corporate-sustainability-due-diligence_en
7 https://finance.ec.europa.eu/sustainable-finance/disclosures/sustainability-related-disclosure-financial-services-sector_en
8 http://www.entegreraporlamatr.org/tr//mailing/25122020/images/Reporting-on-enterprise-value_climate-prototype_Dec20.pdf
9 https://trends2022highlights.com/
10 https://www.bankingonclimatechaos.org/
11 https://www.banktrack.org/project/lefa_gold_mine
12 https://www.business-humanrights.org/en/from-us/extractives-in-eastern-europe-central-asia/investor-summary/
13 https://www.banktrack.org/project/mozambique_lng
14 https://www.banktrack.org/download/investing_in_the_military_cartel_19_international_banks_invest_over_us65_billion_in_companies_linked_to_myanmar_regime_and_atrocities/ 210726_final_investing_in_the_military_cartel_updated_report.pdf
15 https://putin100.org/index.html#ranking
16 https://bankingonclimatechaos.org/
17 https://www.icij.org/investigations/fincen-files/global-banks-defy-u-s-crackdowns-by-serving-oligarchs-criminals-and-terrorists/
18 https://www.jpmorganchase.com/about/our-business/human-rights
19 https://www.banktrack.org/download/environmental_and_social_policy_framework_10/211012_environmentalandsocialpolicyframeworkdatedoct82021.pdf
20 https://assets.ctfassets.net/1u811bvgvthc/DJ2luR6Luk4gy0vpHqXZp/bbae98ca816b61efe381cd8150b9d740/ABN_AMRO_-_Human_Rights_Report_2022.pdf
21 https://www.citigroup.com/rcs/citigpa/storage/public/Global-ESG-Report-2022.pdf
22 https://www.nortonrosefulbright.com/en/knowledge/publications/cac8443e/anz-sets-a-global-precedent-with-adoption-of-human-rights-grievance-mechanism

How other organisations have declared their voting intentions

Organisation name Declared voting intentions Rationale
Kutxabank Gestion SGIIC SAU. Against We believe that the Company has made reasonable efforts to address the concerns raised by the proponent; and
Given the Company's existing disclosures, we do not believe that production of the requested report would provide shareholders with especially valuable information at this time.

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