Amazon Biome Now a Sensitive Zone: JPMorgan Chase Implements Enhanced Due Diligence

Takeaways

• JPMorgan Chase has introduced enhanced due diligence for clients operating in the Amazon biome, treating the region as a sensitive business location.
• The new measure requires a case-by-case review for transactions but does not impose outright restrictions on client activities in the Amazon biome.
• The move is viewed as an essential step by environmental groups, though some activists are pushing for full financing exclusions in the fragile ecosystem.

JPMorgan Chase has announced a significant policy enhancement, placing the Amazon biome under a new level of scrutiny by requiring enhanced due diligence for clients and transactions associated with the region. This pivotal move signals the banking giant’s commitment to better manage risk in sensitive business locations.

In a statement to ESG Dive, a JPMorgan Chase spokesperson confirmed that the addition of the Amazon biome as a business location requiring enhanced review is designed "to facilitate a comprehensive understanding of the associated risks." They stressed that "managing risk is critical to the long-term success of our business."

The change, however, does not include any pre-set restrictions on client activities or transactions within the region. Instead, a spokesperson clarified that each activity and transaction will be considered "on a case-by-case basis, in line with [its] risk appetite and commercial interests."

To define the extent of the biome, JPMorgan Chase will utilize the RAISG geospatial definition, a standard that Stand.earth notes "is widely recommended by Indigenous leaders and activists."

Read More: What is a Due Diligence in ESG?

This measure follows mounting pressure from shareholders and environmental organizations. In the 2024 proxy season, 30% of JPMorgan’s shareholders supported a proposal calling for a report on the bank’s practices concerning Indigenous People’s rights. This led to an agreement with shareholders, including the United Church Fund, which withdrew its proposal after the bank agreed to disclose that it "will consider free, prior and informed consent where risks are identified before proceeding with transactions that may have material implications for Indigenous Peoples."

The announcement has been met with guarded approval from activist groups. Allison Fajans-Turner, a senior campaigner at the Rainforest Action Network, hailed the move as "the bare minimum that we should expect from other large backers of Amazon drilling." In a Stand.earth release, Fajans-Turner called it "an essential—if long-overdue—step to confront its role as the largest financier of oil and gas extraction in the Amazon."

However, activists continue to push for stronger action. Fajans-Turner emphasized that "Promises on paper to respect Indigenous and human rights and screen clients operating in the Amazon biome fall far short of what’s needed: real financing exclusions applied to the Amazon and other fragile ecosystems and rigorous implementation of human rights protections for Indigenous peoples and all affected local communities."

Also Read: Flood Continues to Stumble People in Brazil's Amazon Rainforest

The Amazon biome now joins a list of other areas and activities that require an enhanced, case-by-case review by JPMorgan Chase. This list includes the Arctic, coal mining and coal-fired power activities, physical trading of conflict minerals, cobalt, or diamonds, and specific hydropower and agricultural commodity activities. This rigorous approach highlights the bank's strategy to integrate environmental and social concerns into its core risk management framework.

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Source: ESGDive