Banks Reimagine Climate Strategy: Profitability, Policy, and the Energy Transition

A Scottsdale, Ariz., conference room in the spring drew attention from corporate leaders and financiers who collectively oversee roughly $8.5 trillion in market value and assets under management. About 120 attendees gathered for what organizers labeled the Scottsdale Action Forum, a forum that brought JPMorgan Chase & Co. CEO Jamie Dimon, Microsoft co-founder Bill Gates, and Ford Motor Co. chief executive Jim Farley into the same room with oil-and-gas executives, clean‑tech pioneers, and top asset managers. The assembled group represented a cross-section of the global finance and industrial complex, signaling that the climate conversation has moved from rhetoric to an agenda focused on capital, products, and risk management. There was little pomp, and the wall didn’t even advertise the event’s host or purpose; the emphasis was on the hard work of aligning climate goals with the realities of markets and policy.

Despite the low‑key setting, Dimon remained at the center of attention throughout the day. He told the crowd that the world faced a growing carbon‑emissions challenge and urged a more balanced, pragmatic approach to the climate dialogue. “We have an issue; we should face it,” he said, framing the matter as one that requires not just urgency but also a “full, honest assessment.” The U.S. needs a “more rational conversation” about energy and climate policy, he added. The remarks underscored a broader tension in corporate climate strategy: push for decarbonization while preserving the core business of financing energy and growth.

JPMorgan has tried to thread the needle between financing oil and gas and building a green banking franchise. The bank has reaffirmed its commitment to oil and gas financing even as it pursues emissions reductions and builds capabilities to serve clients in the clean-energy sector. Dimon has signaled that he does not favor “philanthropy-grade” climate finance and has called for profitable, scalable solutions. The bank’s climate strategy has become more formalized through an internal hub—called the Center for Carbon Transition—where climate scientists collaborate with bankers to translate climate risk into traditional banking terms. JPMorgan’s green-economy banking practice has grown with subject-matter experts, including scientists and engineers, to support clients in the clean-technology space. Last year, the bank reported more than $1 billion in revenue from green transactions and clients, a milestone that underscores the business potential of climate-oriented finance even as the firm acknowledges it may miss the ambitious targets it set in 2021 if the macro and policy environment remains unsettled.

The broader finance industry has long claimed a central role in driving the energy transition, a dynamic TIME has described as the “Wall Street fix.” The idea is simple in theory: mobilize capital for clean energy and phase out funding for fossil fuels. The practical challenges, however, are enormous and persistently political. In the years after the Paris Agreement, activist groups and opponents of climate financing frequently pressed banks to curb or rethink their fossil-fuel exposure. One widely cited benchmark: in the years since the agreement, the Rainforest Action Network labeled JPMorgan the world’s biggest financier of fossil fuels, a designation it held into the following decade. Protests in New York in 2018, when activists chained themselves to sculptures inside a JPMorgan office, underscored the tension between public pressure and private capital markets. The public argument that climate action requires a decisive break with fossil fuels coexists with an industry narrative that rational, profits-aligned finance is essential for delivering real-world emissions cuts. In Scottsdale, executives signaled that the private sector remains engaged, even if the public messaging has evolved.

From the Paris Agreement to Glasgow in 2021, climate commitments became a cornerstone of corporate strategy. Bank and asset-manager pledges to align financing with a net-zero pathway became common among global financial players, with JPMorgan joining coalitions such as the Net Zero Banking Alliance and Climate Action 100+. Dimon did not attend Glasgow, but JPMorgan still rolled out a suite of commitments, including alignment of funding with a path to net zero and a goal to finance $1 trillion in green initiatives by 2030. Yet even with these pledges, JPMorgan and many peers continued to finance fossil-fuel industries, arguing that the transition must be market-based and reliable. The reality of geopolitics and energy security—particularly after Russia’s invasion of Ukraine and the ensuing energy-price volatility—added complexity to the climate calculus. The bank’s stance sought to emphasize energy reliability and affordability while pursuing emissions reductions, a stance many other large banks adopted as well.

In the years since, the sector’s approach to climate finance shifted away from hard, portfolio-wide targets toward more flexible guardrails and deal-by-deal discretion. Some big names in banking retooled or paused portions of their climate commitments: Wells Fargo discarded its 2050 financed-emissions target and 2030 sector targets; Morgan Stanley shifted its 2030 goals into flexible ranges; Bank of America replaced hard bans on Arctic oil and coal with enhanced due diligence. Several high-profile coalitions, including the NZBA, faced pressure and, in some cases, paused or dissolved activities. Yet the market for climate finance did not disappear. Debt issued to support sustainable investments continued to rise, and transition finance—financing that supports emissions reductions even when the borrower remains in transition—gained traction. Clients remained engaged, asking questions about climate risk, resilience, and opportunity.

Dimon has argued that the downshifts in public ambition do not equate to a retreat from climate work. “The things that people are dropping,” he has said, “are stuff that just didn’t work—and was virtue signaling.” He contends that rational, capital-allocating decisions will ultimately determine which climate initiatives survive. JPMorgan’s leadership has leaned on experts from outside traditional banking, including the appointment of Sarah Kapnick, a former NOAA chief scientist, as global head of climate advisory. Kapnick has framed the human demand for climate solutions as a driver for client needs: if clients truly want climate strategies, they must be able to translate them into credit decisions, balance sheets, and shareholder communications. “My job wouldn’t exist. None of this would exist if there wasn’t clear client demand for it,” Kapnick has said.

Meanwhile, the Scottsdale conversations reflected a broader pivot within Wall Street: a shift from grand declarations to pragmatic deals, pipeline development, and financing strategies that aim to be climate-friendly while still profitable. The participants explored how venture capital and large-scale capital markets could structure larger investments in climate technologies, including the tricky terrain of risk, yield, and regulatory expectations. There is recognition that a purely philanthropic model will not move the dial fast enough. One banker described the challenge as balancing “existential” climate priorities with the bank’s core mandate to produce returns for investors.

As the forum wore on, attendees debated how to sustain momentum through a landscape of policy volatility and shifting investor sentiment. The consensus, such as it was, pointed toward a dual-track strategy: advance commercially viable clean-energy products and services while developing financing tools and advisory capabilities that help clients navigate the transition without compromising balance sheets. “Investors, industry participants, developers, banks, they need good rules,” Dimon said, noting that policy and market stability are prerequisites for meaningful scale. When rules swing with each election or sentiment shifts, the path to durable investment becomes uncertain. That reality is not unique to JPMorgan; it is shared by many of the world’s largest banks and investment firms.

To illustrate the continuing real-world role of climate finance, the article notes a broader sense that even as some public commitments have loosened, the private sector remains engaged. Transition finance has become a prominent segment, as banks seek to fund projects that reduce emissions across heavy industry, energy, and transportation. The objective is not merely to fund green projects but to structure transactions that align with client needs, credit conditions, and long-term value creation. The private sector’s ability to engineer innovative financing tools—such as blended philanthropy with market-rate investment—will likely influence the pace of decarbonization across sectors. As one JPMorgan executive summarized, the right approach may be to “right-size” the role of banks in climate debates, focusing on the parts of the climate agenda where banks have unique strengths: advisory services, risk assessment, deal structuring, and capital allocation.

The discussion in Scottsdale was not about abandoning fossil fuels; it was about reconciling climate priorities with the realities of energy demand, job markets, and political processes. A September report from environmental nonprofit RMI described the moment as an “inflection point” for how banks are viewed in climate circles and urged a recalibration of expectations—leaning into banks’ core strengths while dialing back on expectations that financial institutions alone can solve climate change. Rama Variankaval, who oversees JPMorgan’s Center for Carbon Transition and serves as the firm’s global head of corporate advisory, has framed the approach this way: a single CEO will not be compelled to invest more in climate; instead, the case must be demonstrated in terms of balance-sheet impact, credit ratings, and shareholder engagement. “Only if you’re able to give them a complete picture, and say here are all the domino effects of doing that. Only then is it useful,” Variankaval said.

The Scottsdale gathering captured a moment when the private sector was still asking big questions about the best path forward. It highlighted the tension between climate ambition and financial discipline, and it underscored the ongoing need for policy clarity, stable business models, and collaborative public-private initiatives. The climate agenda, in other words, remains a work in progress. The question now is how finance will continue to evolve its tools and strategies to align profitability with decarbonization goals in a way that is sustainable across cycles of political change and market volatility. As the sector experiments with new forms of funding and risk-sharing, the hope is that the pace of real-world emissions reductions will accelerate in ways that are technically feasible, financially viable, and broadly supportive of energy access and economic growth. The Scottsdale talks may not have produced a single, neat blueprint, but they did illuminate a finance industry determined to stay in the climate conversation—and to do so in a way that can survive the political and market headwinds that define the path ahead.

The evolution of climate finance continues to unfold across boardrooms, trading floors, and regulatory meetings. The lessons from Scottsdale—about balancing risk, client demand, and policy realities—will likely shape how banks and asset managers think about climate strategy in the years to come. And as the industry tests new models and partnerships, the line between green rhetoric and financial performance will be tested by the market itself. A second image captures the broader scale of the landscape, reminding readers of the human and institutional weight behind every financing decision in this arena.