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Chuka Umunna joins JP Morgan to oversee ESG efforts

  • JP Morgan has hired Chuka Umunna to oversee its European environmental, social and governance advisory efforts.

  • Chuka Umunna

JP Morgan has hired Chuka Umunna to oversee its European environmental, social and governance advisory efforts, making the former Labour MP the latest high-profile politician to take a senior role in the City of London.

Umunna, who was a UK employment lawyer before being elected in 2010, will join JP Morgan in a newly created position that aims to unite all its ESG-related activities with clients, according to a memo seen by the Financial Times.

The position will make him one of the most senior black bankers in London’s financial services industry and a key part of a drive at the Wall Street giant to boost its environmental and social credentials.

The hire also comes just over a month after JP Morgan’s longest-serving board director, Lee Raymond, the 82-year-old former chief executive of oil major ExxonMobil, resigned from his role following sustained pressure on the bank from climate activists and investors.

ESG affects “everything from corporate finance strategies and investment flows to day-to-day operational decisions and capital allocation”, said JP Morgan’s Emea head Vis Raghavan in the memo. “Clients are looking at how they may need to adapt their business models.”

While never in government, Umunna was an influential British politician as shadow business secretary and member of the Treasury select committee. Two years ago, he quit Labour in protest at Jeremy Corbyn’s leadership and founded a new party called Change UK. After it fared poorly in EU elections, he joined the Liberal Democrats, but he failed to win a seat in the 2019 election.

The 42-year-old follows in the footsteps of numerous MPs in recent years. Last week, the FT reported that George Osborne, the former Conservative UK chancellor, is joining Robey Warshaw, a London-based boutique UK advisory firm. Sajid Javid, who held the same government office, secured a lucrative role advising JP Morgan last summer.

There have also been many transitions to finance by left-leaning Labour politicians. Shortly after stepping down as prime minister, Tony Blair took a £2m-a-year part-time role also counselling JP Morgan. In 2015, his political successor Gordon Brown became an adviser to Pimco, one of the world’s largest asset managers.

As an MP, Umunna was occasionally outspoken in defending UK companies from overseas acquisitions, which is an important source of revenue for lenders with global investment banking arms.

In February 2017, Umunna took to Twitter to blast Kraft Heinz’s aborted takeover of Anglo-Dutch consumer group Unilever, declaring “good riddance”. He wrote that the US food group’s owners “have a reputation for cost cutting in the short term at the expense of long-term investment, growth and — most importantly — jobs”.

JP Morgan was playing a leading role helping to finance the Kraft Heinz bid, multiple people with direct knowledge of the matter told the FT at the time.

Umunna’s appointment comes as part of ESG-related initiatives from JP Morgan, which has reported bumper profits through the coronavirus pandemic.

Last year the bank bowed to years of pressure from shareholders and activists to adopt a commitment in alignment with the Paris climate accord, and pledged $30bn in financial aid to help address racial inequality in the US.

In 2020 it was the top global underwriter of green bonds with about 6 per cent of the $544bn market — including deals for Adidas and Alphabet — and is reportedly helping arrange the UK’s inaugural “green gilt” sovereign bond.

However, despite those credentials, the US bank is one of the biggest financiers of fossil fuel companies in the world, according to data from the Rainforest Action Network.

Umunna will work alongside Rama Variankaval, who runs JP Morgan’s recently announced Center for Carbon Transition, which advises and provides financing for clients on sustainability. He joins from PR company Edelman, where he was co-head of ESG consulting.

This article originally appeared in the Financial Times here.