JPMorgan Chase Issues $1B in Inaugural Social Bonds
The bonds are expected to fund affordable housing projects.
JPMorgan Chase & Co. has issued $1 billion in inaugural social bonds, which are expected to fund affordable housing projects. The fixed-to-floating rate notes are due 2025. The co-managers for the social bond offering consisted solely of minority and women-owned business enterprises and service-disabled veteran-owned business firms, according to JP Morgan Chase.
“JPMorgan Chase is committed to using innovative financing strategies to support a sustainable and inclusive recovery,” said Marisa Buchanan, Head of Sustainability at JPMorgan Chase said in a prepared statement. “With a focus on boosting affordable housing, our inaugural social bond issuance builds on our leadership in the sustainable bond market and our strategy to use our business expertise to create opportunity for underserved communities.”
The firm’s sustainable bond framework targets activities that promote economic development in low- and moderate-income areas by financing small businesses, affordable housing and projects that promote access to education and health care.
JPMorgan Chase, which has long supported affordable housing, announced last October that it had committed $30 billion over the next five years to provide economic opportunity to underserved communities, especially the Black and Latinx communities.
Climate change has also been a priority for the firm. Last year, JP Morgan’s broker-dealer subsidiaries underwrote $23.7 billion in green, social, and sustainability bonds and set a goal to facilitate $200 billion in financing for transactions that support climate action and advance the United Nations Sustainable Development Goals. That year it also committed to adopting a financing commitment aligned with the goals of the Paris Agreement
While JP Morgan Chase may be one of the most notable, many firms are making ESG a priority. That can pay off, according to a recent meta-study from NYU Stern Center for Sustainable Business and Rockefeller Asset Management.
After reviewing 1,000 studies published between 2015 to 2020, NYU Stern and Rockefeller found a positive relationship between ESG and financial performance for 58% of the corporate studies focused on an operational metric such as ROE, ROA or stock price. Thirteen percent showed a neutral impact, while 21% demonstrated mixed results.