Tokyo, Japan – Mitsubishi UFJ Financial Group (MUFG) announced its new ESG policy on May 13 (JST), drawing stronger criticism by climate campaigners across the globe than when the bank’s domestic competitors – Mizuho Financial Group (Mizuho) and SMBC group announced their new ESG policies a month ago.
Takayoshi Yokoyama, 350.org’s Japan Representative said:
“It is very disappointing to see MUFG’s new policy. MUFG was the first major Japanese bank to adopt a tighter coal policy a year ago. We had high expectations that they will further strengthen this policy. The description of coal finance has not changed since last year, and its exception provisions still allow the bank to provide financing to coal-fired power projects such as Vung Ang2 in Vietnam, which has received strong criticism by the international community.
In order to achieve the 1.5C target of the Paris Agreement, it is necessary for all developed countries to completely abolish coal-fired power plants by 2030 and the rest of the world by 2040. There is no room for new construction, thus MUFG’s policy exception is not acceptable and it is nothing but an act of disturbing international cooperation if the bank continues to provide financing to new coal-fired power projects. The new policy is also not aligned with MUFG’s endorsement to the UN Principles for Responsibility Banking which require the bank’s business strategy to be aligned with the Paris Agreement. The response to the dual crisis we are facing now -Covid-19 crisis and climate crisis must be addressed with the common denominator of international cooperation backed by scientific knowledge.”
Eri Watanabe, the Japan Campaigner for 350.org said:
“MUFG’s new policy is inferior to the Mizuho’s new policy which set a quantitative target of outstanding credit balance for coal-fired power plants to be reduced to zero by 2050, though the target itself should be tightened to be consistent with the Paris Agreement. In addition, although MUFG has now added the oil and gas sector (oil sands and Arctic development)to their policy, the effectiveness of reducing greenhouse gases is questionable given that its policy only relies on environmental and social assessments. Furthermore, the scope of the oil and gas sector covered is too narrow compared to SMBC’s new policy. Given that MUFG is the world’s sixth-largest financier of the fossil fuel industry, its new policy is far behind its international peers which apply the policy to corporate finance and expand restrictions not only in the coal sector but also in the oil and gas sector. If MUFG is serious about fulfilling its commitments such as the United Nations Principles for Responsible Banking and exercise its leadership in tackling the climate crisis, it must set and implement clear targets for coal and fossil fuels phase-out consistent with the 1.5C target of the Paris Agreement.”