CLIMATE CHANGE - JP MORGAN CHASE & CO.

Whereas:

Global climate change threatens to affect companies across a wide variety of industries. Reports from respected scientific bodies such as the Intergovernmental Panel on Climate Change and the National Academy of Science confirm that climate change is real and will cause a variety of profound changes in the earth’s climate if not arrested.

Regulatory responses to climate change have been adopted, and more are likely. The Kyoto Protocol, which recently came into force, requires signatory nations to reduce greenhouse gas emissions on average 5.2% below 1990 levels. U.S. states including California have proposed emissions-reduction initiatives. These regulatory measures present both challenges and opportunities for regulated entities and the users of their products and services.

Companies with significant income from investments in companies or fees derived from investments in companies that are themselves affected by climate change could see a reduction in income from those investments.

JPMorganChase was the top financer of the US oil and gas industry in 2002, lending $18 billion and accounting for 33% of the market (Oil and Gas Investor). JPMorgan Partners and other private equity groups recently acquired the oil, gas, and petrochemical business of ABB Ltd. More than half of all greenhouse gas emissions in the U.S. are from oil and gas combustion. Industry leaders such as Royal Dutch/Shell, BP, and ConocoPhillips are taking actions to reduce exposure to climate related risks, including assuming a cost for carbon in their strategic planning, reporting on and reducing greenhouse gas emissions, engaging in emissions trading, and investing in renewable energy.

Our company is also a lender of choice to the logging sector, including MeadWestvaco, Weyerhaeuser, and International Paper. Forests are central both to global warming problem and its solution. Forests act as carbon sinks, or giant reservoirs of carbon. Deforestation releases vast amounts of carbon into the atmosphere. Twenty percent of global carbon emissions come from deforestation. Slowing deforestation would dramatically reduce carbon emissions.

Competitors Citigroup and Bank of America have developed policies designed to curb greenhouse gas emissions and deforestation of endangered forest areas. Both companies have agreed to report on greenhouse gas emissions from their power sector, energy or utilities project finance portfolios, and to identify investments in renewable energy focusing on greenhouse gases and energy efficiency. Both companies have agreed not to finance commercial logging operations in primary tropical moist forests and to carefully evaluate environmental impact before providing financing to projects in critical natural habitats and endangered forest areas.

RESOLVED: That stockholders request that the Board of Directors report to shareholders by October 2005 on the effect on the company’s business strategy of the challenges created by global climate change. The report should include, but need not be limited to, a discussion of the effects of (a) rising public and regulatory pressures to limit the emission of greenhouse gases, and (b) changes in the physical environment. The report should be prepared at reasonable cost and omit proprietary information.

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