Human Rights Risks in Conflict-Affected and High-Risk Areas Policies

Resolution Text

RESOLVED: Shareholders request the Board of Directors commission an independent third-party report, at reasonable cost and omitting proprietary information, on JPMorgan Chase’s (JPMC) due diligence process to determine if and how its lending, underwriting, or other services in conflict-affected and high-risk areas (CAHRA) expose it to human rights and other material risks.

Shareholders seek a report that, at board and management discretion:

● Discusses how JPMC assesses, mitigates, and reports human rights and material risks in CAHRA; and

● Evaluates whether additional policies, practices, and governance measures are needed to mitigate risks.

WHEREAS: The World Bank estimates that by 2030 nearly two-thirds of the world’s poor will live in settings characterized by fragility, conflict, and violence,i and thus may have heightened vulnerability to widespread human rights abuses and violations of national or international law. Given these endemic risks, the United Nations Guiding Principles on Business and Human Rights and the Equator Principles call on companies to conduct heightened human rights due diligenceii and analyze potential violations of international humanitarian law during human rights assessments.iii

CAHRA also include a higher prevalence of material risks. The International Finance Corporation reports that companies in conflict-affected settings “face business risks that are much greater than those in other emerging markets,” including destruction of physical capital, deaths and injuries, weak state control, and supply-chain disruptions.iv A recent survey of executives indicated 97 percent of respondents altered investment plans, and over one-third relocated operations, due to geopolitical volatility.v Multilateral organizations, states, and accounting bodies are passing legislation on mandatory due diligencevi and sustainable investment reporting in the European Union,vii and calling for companies to report on human rights and conflict as material risks.viii In a 2022 report, “conflict risk” was the second leading environmental, social, and governance criterion among institutional investors representing over $6 trillion assets under management.ix

As the world’s largest bank by market capitalization, JPMC has operations and relationships in numerous CAHRA where it has counterparties, partners, or clients that are implicated in corruption, armed conflict, violations of international humanitarian and human rights law, and environmental degradation. Examples include JPMC providing lending and underwriting services for state agencies and affiliated companies in China,x Guinea,xi Kazakhstan,xii Mozambique,xiii Myanmar,xiv Russia,xv Saudi Arabia,xvi and Venezuelaxvii – JPMC’s Human Rights Policyxviii and Environmental and Social Policy Frameworkxix notwithstanding. JPMC trails peers that adopted measures to mitigate these risks, including ABN AMRO Bank N.V.,xx Citi Group,xxi and ANZ.xx

i https://www.worldbank.org/en/topic/fragilityconflictviolence/overview 

ii https://www.undp.org/publications/heightened-human-rights-due-diligence-business-conflict-affected-contexts-guide 

iii https://equator-principles.com/app/uploads/Human_Rights_Assessment_Sept2020.pdf 

iv https://www.ifc.org/content/dam/ifc/doc/mgrt/201902-ifc-fcs-study.pdf 

v https://assets.ey.com/content/dam/ey-sites/ey-com/en_us/topics/ceo/ey-ceo-outlook-pulse-survey-january-2023-global-report.pdf 

vi https://commission.europa.eu/business-economy-euro/doing-business-eu/corporate-sustainability-due-diligence_en 

vii https://finance.ec.europa.eu/sustainable-finance/disclosures/sustainability-related-disclosure-financial-services-sector_en 

viii http://www.entegreraporlamatr.org/tr//mailing/25122020/images/Reporting-on-enterprise-value_climate-prototype_Dec20.pdf 

ix https://trends2022highlights.com/ 

x https://www.bankingonclimatechaos.org/ 

xi https://www.banktrack.org/project/lefa_gold_mine 

xii https://www.business-humanrights.org/en/from-us/extractives-in-eastern-europe-central-asia/investor-summary/ 

xiii https://www.banktrack.org/project/mozambique_lng 

xiv https://www.banktrack.org/download/investing_in_the_military_cartel_19_international_banks_invest_over_us65_billion_in_companies_linked_to_myanmar_regime_and_atrocities/210726_final_investing_in_the_military_cartel_updated_report.pdf 

xv https://putin100.org/index.html#ranking

xvi https://www.bankingonclimatechaos.org/ 

xvii https://www.icij.org/investigations/fincen-files/global-banks-defy-u-s-crackdowns-by-serving-oligarchs-criminals-and-terrorists/ 

xviii https://www.jpmorganchase.com/about/our-business/human-rights 

xix https://www.banktrack.org/download/environmental_and_social_policy_framework_10/211012_environmentalandsocialpolicyframeworkdatedoct82021.pdf 

xx https://assets.ctfassets.net/1u811bvgvthc/DJ2luR6Luk4gy0vpHqXZp/bbae98ca816b61efe381cd8150b9d740/ABN_AMRO_-_Human_Rights_Report_2022.pdf 

xxi https://www.citigroup.com/rcs/citigpa/storage/public/Global-ESG-Report-2022.pdf 

xxii https://www.nortonrosefulbright.com/en/knowledge/publications/cac8443e/anz-sets-a-global-precedent-with-adoption-of-human-rights-grievance-mechanism