Against that backdrop, some of Wall Street’s biggest banks are designing transition finance frameworks to define eligible assets and activities. Lenders include Wells Fargo & Co. and Citigroup, according to public documents and people familiar with the process who asked not to be identified because they’re not authorised to speak on the subject.
JP Morgan Chase & Co. is turning its back on a trend that’s been embraced by many of its Wall Street peers.
Transition finance — a term intended to describe the allocation of capital to activities that will ultimately help cut carbon emissions in the wider economy — exists in something of a regulatory grey zone. At the same time, financing corporate decarbonisation has been identified as a huge business area, with Apollo Global Management recently suggesting the energy transition may represent a US$50 trillion ($67.21 trillion) investment opportunity in the decades to come.
