JPMorgan Chase says it is shifting its financing portfolio away from fossil fuels after facing years of pressure from shareholders and environmental activists.

The US bank on Tuesday called for its clients in the oil and gas, electric power and automotive sectors to reduce emissions by 2030 and vowed to cut its exposure to companies that do not align their operations with the Paris climate accord.

The announcement followed longstanding criticism from activists who have targeted JPMorgan. This year the bank said it would replace Lee Raymond, the former chief executive of ExxonMobil, as lead independent director, in a move heralded as a win by sustainable investment advocates.

“Today’s announcement is significant,” said Alec Connon of the Stop the Money Pipeline Coalition. “The world’s largest lender to the fossil fuel industry has clearly signalled that the fossil fuel game is coming to an end.”

However, he added: “If Chase is serious about its climate commitments, it’ll need to quickly follow this up with policies that prohibit all lending to coal companies and companies still expanding fossil fuel production.”

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An increasing number of financial companies are making the case that cutting carbon makes business sense. Last year a group of 38 banks, primarily in Europe, including Natixis, Santander and Société Générale, announced their intent to cut emissions linked to their portfolios.

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Natixis went a step further last year and began assigning an environmental score to every company or project it has financed, with a goal of increasing its exposure to green assets. The asset manager BlackRock also said it would be putting climate risk at the centre of its investment strategy.

JPMorgan Chase said it would announce specific emissions reduction targets next year. The first step will be to get better data from companies in its portfolio to determine the carbon intensity of their operations.

As part of this push, the bank has launched a new advisory unit led by Rama Variankaval, head of JPMorgan’s corporate finance advisory team, that will look to finance clean energy projects.

JPMorgan said it would also cut the direct carbon emissions from its operations.

Via Financial Times