JP Morgan’s Jamie Dimon Defends Stakeholder Capitalism Amid Conservative Criticism

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JP Morgan CEO Jamie Dimon on Wednesday became the latest finance leader to defend ‘shareholder capitalism’—an embrace by businesses of socially conscious and environmentally sustainable actions—pushing back against conservative leaders who have derided the practice as “woke” and discriminatory against the likes of fossil fuel companies.

Jamie Dimon, Chair and CEO of JP Morgan Chase, takes his seat to testify before the House Financial … [+] Services Committee in Washington.

The Washington Post via Getty Images

Key Facts

At an event organized by the asset management firm Bernstein, the JP Morgan chief said he was a “red-blooded free-market capitalist” and it was a mistake to label shareholder capitalism as “woke,” according to the Financial Times.

Dimon added that the investment banking giant was serious about climate change—a key tenet of stakeholder capitalism.

Dimon, who according to the FT said the bank was committed to treating all employees respectfully, added that lawmakers criticizing this as “woke” were not “thinking clearly”.

The CEO also made some grim predictions, warning of an economic “hurricane” fueled by Russia’s invasion of Ukraine and rising inflation and added his bank was preparing for “bad outcomes” from the strain on the economy.

Key Background

The embrace of socially conscious and environmentally sustainable practices has been criticized by conservative politicians who have accused supporters of shareholder capitalism of being politically correct and anti-business. Some oil-producing U.S. states are pursuing legislation to cut ties with asset managers who invest in sustainable energy. In Florida, Disney has come under attack from the state’s Republican leadership including Governor Ron Desantis over its stance on its so-called “Don’t Say Gay” legislative measure. The ESG (environmental, social and governance) approach to investing has also faced criticism from others who have accused it of being mere “greenwashing” and a “placebo” that fails to adequately address environmental and social issues. Dimon’s remarks mirror similar comments made by BlackRock CEO Larry Fink in his annual letter to corporate America published in January. In his letter, Fink wrote shareholder capitalism was not about politics and not “woke.” He noted that companies were now faced with expectations from everyone—including shareholders, employees, customers, communities, and regulators—to play a role in “decarbonizing the economy.” Fink warned that companies who fail to cut back on their carbon footprint run the risk of being left behind as billions of dollars are invested into tackling climate change.

Tangent

Texas, which is a major oil-producing state, has attempted to push back against companies that are trying to divest fossil fuel companies from their portfolios. Last year, Texas lawmakers passed a measure called Senate Bill-13 which prevents state institutions from investing in financial companies that have chosen to “boycott” fossil fuel companies. Earlier this year, JPMorgan was one of the companies flagged by the state’s comptroller Glenn Hegar under this measure who ordered the bank to disclose its “fossil fuel investment policies and procedures.” Hegar wrote that he will finalize a list of companies that “boycott the fossil fuel” based on the response he receives.

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