High Risk, High Impact
J.P. Morgan Chase investors should reconsider Mexico Pacific’s Saguaro Energía LNG project.
Cuvier’s beaked whales swimming near an oil tanker ship in the Mediterranean Sea
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As global investors increasingly prioritize environmental, social, and governance (ESG) performance, J.P. Morgan Chase’s (JPM) involvement in Mexico Pacific LLC’s (MPL) proposed Saguaro Energía liquefied natural gas (LNG) export terminal in Sonora, Mexico, should raise serious concerns. With a projected capital cost of at least $15 billion, Saguaro LNG would be one of the largest new fossil fuel projects in North America. But its risks—financial, environmental, and reputational—far outweigh its promise.
A bad bet in a changing market
The International Energy Agency projects fossil gas demand will peak before 2030. Long viewed as the growth market for LNG, Asia is instead accelerating investments in clean energy, hydrogen, and electrification. Meanwhile, Saguaro LNG faces rising construction costs, legal disputes, and community opposition. Investors should question whether this project will ever deliver meaningful returns—or if it will become a stranded asset (i.e., capital-intensive investments that may cease being viable before the end of their economic life).
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Climate & biodiversity risk
The Saguaro LNG terminal alone would emit nearly 6 million tons of CO2 equivalent emissions each year while driving more fracking in the Permian Basin and locking in decades of fossil fuel dependence. Beyond greenhouse gas emissions, the site is next to the UNESCO-listed Islands and Protected Areas of the Gulf of California, home to endangered whales, dolphins, and sea turtles. JPM is a signatory to the UNESCO World Heritage “no-go” commitment, yet its support for Saguaro LNG would contradict that pledge and undermine its ESG credibility.
Governance & community risks
MPL’s unstable ownership and financing history, combined with lawsuits and pipeline routes that cross Indigenous territories without proper consultation, compound the risks. Investors could find themselves entangled in reputational and legal liability just as ESG scrutiny of banks is intensifying worldwide.
The investor choice
NRDC’s new investor brief, High-Risk, High-Impact, outlines why JPM’s support for Saguaro LNG is a poor bet for investors, communities, and the environment. Clean energy alternatives in Mexico present lower risks, shorter timelines, and stronger returns. JPM shareholders should use every available opportunity to urge the bank to step away from this high-risk gamble in the Gulf of California and align its portfolio with long-term cleaner energy infrastructure.
READ THE FULL ISSUE BRIEF & VIEW THE PRESENTATION
Suggested Questions for Engagement with J.P. Morgan Chase
Investors engaging with J.P. Morgan Chase regarding the Saguaro Energía LNG project may wish to consider the following questions to assess the company’s alignment with its biodiversity, climate, and human rights commitments:
- Climate and market risk oversight: How does JPM’s board assess and manage climate-related and market risks associated with fossil fuel infrastructure, specifically the Saguaro LNG project? To what extent are these risks integrated into the company’s overall business strategy and investment decisions?
- UNESCO World Heritage exclusion policy compliance: What governance mechanisms are in place—at the board and committee levels—to ensure that JPM adheres to its commitment to avoid financing projects that threaten UNESCO World Heritage sites, particularly in relation to its current or planned involvement in Saguaro LNG?
- Portfolio alignment with “no-go” commitments: If not already undertaken, will the board direct senior management to review and adjust the bank’s energy portfolio to ensure compliance with its no-go pledge for UNESCO sites? How is this commitment reflected in JPM’s due diligence, client engagement, and project financing practices?
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