JP Morgan’s “sustainable” funds have invested £200m in Glencore, a mining giant with a history of environmental violations in South Africa. Activists accuse the bank of greenwashing, as ESG investing comes under global regulatory scrutiny.
JP Morgan has promoted “sustainable” investment funds that hold more than £200 million in the mining giant Glencore, despite the company’s environmental controversies, according to a joint investigation by the Bureau of Investigative Journalism, Voxeurop, and the Daily Maverick.
Greenwashing Concerns
JP Morgan’s asset management arm offers over 500 funds marketed as environmentally and socially responsible investments. However, under current rules, only 51% of a “sustainable” fund must align with ESG (Environmental, Social, and Governance) principles—leaving nearly half of the portfolio unrestricted.
Jakob Thomä, CEO of climate think tank Theia Finance Labs, argues this loophole misleads retail investors:
“The overwhelming majority of retail investors would feel misled if they knew that was the criteria for a sustainable fund.”
Glencore, despite being one of the world’s largest coal producers, falls under JP Morgan’s 20% revenue threshold for exclusion—although coal accounts for nearly half of its actual profit.
Glencore’s Environmental Violations
Activists are particularly outraged given Glencore’s long record of environmental violations in South Africa. A government report reveals that since 2017, its Tweefontein coal mine has:
- Contaminated local water sources
- Stored hazardous waste improperly
- Failed to fix sewage facility walls
Locals in Phola, Mpumalanga, say they don’t trust the water supply, blaming it for health issues. Despite repeated warnings, Glencore remained in violation of environmental laws as recently as November 2023.
Mariette Liefferink, CEO of the Federation for a Sustainable Environment, criticized lax enforcement:
“Our regulators are often compromised and give in to the pressure of the coal mining industry.”
JP Morgan’s Response
Despite public outcry, JP Morgan has not commented on the controversy. Chuka Umunna, its Head of Sustainable Solutions, was urged to review Glencore’s inclusion in ESG funds but did not respond.
As ESG investing faces growing scrutiny, regulators are now working to tighten definitions and prevent misleading claims.
Read more sustainable finance news here.
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