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May 28, 2024

Indigenous Peoples’ rights proposal garners support at JPMorgan AGM

Resolution seeks report on effectiveness of firm’s ‘policies, practices and performance indicators’

Around three in 10 votes cast at JPMorgan Chase & Co’s AGM last week were in favor of a shareholder proposal seeking information about the bank’s efforts in support of Indigenous Peoples’ rights.

The resolution filed by the United Church Funds asks JPMorgan Chase’s board to issue a report ‘outlining the effectiveness of [the firm’s] policies, practices and performance indicators in respecting internationally recognized human rights standards for Indigenous Peoples’ rights in its existing and proposed general corporate and project financing.’

According to an SEC filing, 30.4 percent of votes cast backed the resolution. Although not a majority, governance experts widely regard that level of support as significant.

The United Church Funds notes in a filing with the proposal that the UN Declaration on the Rights of Indigenous Peoples and the International Labour Organization Convention 169 concerning Indigenous and Tribal Peoples in Independent Countries are internationally recognized standards for Indigenous Peoples’ rights.

‘Violation of these rights presents risks for [JPMorgan Chase] that can adversely affect shareholder value, including reputational damage, project disruptions and civil and criminal liability,’ the proponent writes. ‘JPMorgan has a history of financing projects and companies that violate Indigenous rights.’ It adds that the bank is the ‘subject of ongoing protests for its role as the largest financier of oil and gas operations in the Amazon rainforest that pose ‘an existential threat’ to Indigenous Peoples.’

The United Church Funds states that JPMorgan Chase’s human rights and risk-management policies do not clearly define the international standard of free, prior and informed consent with affected tribes and do not include guidance on how the bank deals with companies that have track records of violating Indigenous rights.

Board opposition
JPMorgan Chase’s board had urged shareholders to vote against the proposal, writing in the firm’s proxy statement that:

  • ‘JPMorgan Chase supports fundamental principles of human rights across all our lines of business and in each region of the world in which we operate’
  • The bank’s risk-management process includes assessing clients’ approach to, and performance on, environmental and social (E&S) matters such as those related to Indigenous Peoples’ rights, where appropriate. ‘We have firm-wide policies and standards, including an escalation and due diligence process conducted by E&S subject matter experts when a client’s transaction is considered to have material impacts related to Indigenous Peoples’
  • The proponent made ‘inaccurate assertions about the firm’s financing activities and cites subjective determinations by sources that are not necessarily aligned with or knowledgeable about our shareholders’ long-term financial interests’
  • JPMorgan Chase ‘has adopted and implemented appropriate policies and practices that address the concerns raised by the proponent.’

The board concluded that JPMorgan Chase’s ‘risk-based approach to E&S issues, including to those related to Indigenous Peoples, is intended to prevent adverse impacts and related reputation risk. The proponent has failed to provide any credible evidence of the ineffectiveness of this approach. The requested report would incur unnecessary expense and would not provide shareholders with meaningful additional information.’

A JPMorgan Chase spokesperson declined to comment beyond the proxy statement.