Awards for Excellence 2016
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Also shortlisted: |
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Citi |
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UBS |
It used to be that corporate social responsibility in financial institutions was limited to the corporate level; firms spent their philanthropic dollars, engaged with local communities and that was it.
Now there is a realization that financial institutions can play a pivotal role in helping to solve the world’s most important issues. Whether it is in interaction with clients, products created by the investment bank, research, or investment policy, CSR is now becoming ingrained in every part of a firm’s activities. Banks are tackling challenges as diverse as neighbourhood regeneration, climate change, youth unemployment, refugee crises, gender or race exclusion in the workplace and healthcare issues.
In a hugely competitive field, in which many banks showed impressive CSR credentials, one bank edges this award for its commitment and innovative approach to facilitating solutions to the world’s most pressing issues: JPMorgan Chase.
The bank has long been at the forefront of philanthropic giving globally, but now, says Peter Scher, who heads up CSR at JPMorgan Chase, data is the key to best put those dollars to work.
“Unlike traditional models of corporate philanthropy,” says Scher, “we are relying on robust data and research – from our proprietary data on the finances of nearly 50 million US households to analysis of real-time labour market dynamics in countries throughout Europe, Asia and beyond.”
This new approach was marked by the launch of the JPMorgan Chase Institute last year, which the bank describes as “a global think tank dedicated to delivering data-rich analyses and expert insights for the public good.”
That data helps the firm highlight where the challenges lie. Financial health is one theme the bank has been focusing on. Two years ago it started the Financial Solutions Lab, a $30 million initiative, which last year launched its inaugural $3 million competition for social entrepreneurs with business models that help to improve the financial health of low-income US families. This theme was then expanded globally with the launch last December of the Catalyst Fund, which brings together impact investors such as the Gates Foundation to provide grants and advice to social entrepreneurs on how to better serve low-income households in emerging markets.
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Peter Scher, |
The bank has also directed its philanthropic spend towards alleviating unemployment. In January this year the bank launched New Skills for Youth, a $75 million, five-year global initiative designed to increase the number of young people who successfully complete career training. The bank has targeted partnerships around the world. In South Africa, with Harambee Youth Employment Accelerator, it is aiming to connect unemployed youth with micro, small and medium-sized enterprises that need workers. In France, JPMorgan is helping to tackle high unemployment in local communities by co-investing with Carrefour and six other franchisers to create jobs. In India, it partners with Tata Strive and Don Bosco Tech to provide disadvantaged youths with skills in infrastructure development and advanced manufacturing.
In the US, JPMorgan Chase has committed $100 million to regenerating Detroit – an initiative spearheaded by the bank’s chief executive, Jamie Dimon. This invests in training programmes, incubators, lending opportunities and other projects. It is also part of the firm’s larger focus on cities and the role banks can play in supporting them as an increasing proportion of the global population is urbanized.
“The challenges Detroit and other communities are facing are too big and complex for the public sector to solve in its traditional silos, or for nonprofits alone to pick up the slack where government resources fall short,” says Dimon. “Helping cities spur growth, create jobs and arm their residents with the skills to land them isn’t charity – it’s an investment.”
That is why the firm has committed to deploying $1 billion in philanthropic giving globally over the next five years.
As Dimon says: “While financial contribution is part of the equation, finding transformative, lasting solutions also requires the expertise, tools and innovation capacity of the private sector.”
That is where JPMorgan really comes into its own, leveraging its investment banking expertise to help provide solutions to environmental and social issues. It is a leader in green bonds for example. In Costa Rica, India and China the bank has led deals for renewable energy products. And as part of its initiative with The Nature Conservancy’s NatureVest the bank helped create the first-ever climate adaptation debt restructuring for marine conservation in the Seychelles.
JPMorgan has also structured funds such as the UK Dementia fund that looks at opportunities to invest in better treatments for dementia, and the Global Health Investment Fund, which allows individual investors to invest in late-stage health technology to save lives in low-income countries.
