MUFG fails to commit to Paris alignment at 2020 AGM
ESG financing policy now weakest among Japanese megabanks
Tokyo, Japan – Mitsubishi UFJ Financial Group (MUFG), Japan’s largest bank, indicated at today’s annual shareholder meeting that it has no intention to phase out its financing of fossil fuels or deforestation, a necessary condition for alignment with the Paris Climate Agreement and meeting the standards set by the UN Principles for Responsible Banking. MUFG’s admission came in response to a question asked by US-based NGO Rainforest Action Network (RAN), who holds shares in the bank and attended the AGM.
Over the past week, climate activists have held rallies at the shareholder meetings of all three Japanese megabanks – including Mizuho and SMBC. Notably, on June 25th, Mizuho faced the first-ever climate-related resolution in Japan, filed by Japanese NGO Kiko Network, which received more than one-third of shareholder support.
“Given MUFG’s substantial financing of climate-destroying companies, not only through its financing of coal but also oil and gas and tropical deforestation, we asked if MUFG would commit to a phase-out of financing for all fossil fuels and deforestation, on a timeline that is necessary to achieve the goals of the Paris Agreement. However, instead of answering the question, MUFG just reiterated its policy content. With such bad faith, MUFG will likely face a harsh shareholder resolution next year, similar to Mizuho this year,” said Toyoyuki Kawakami, Japan representative of RAN who attended the MUFG AGM. MUFG endorsed the UN Principles for Responsible Banking (PRB) last September and committed to align its business strategy with the UN Sustainable Development Goals (SDGs) and the Paris Agreement.
MUFG has been the sixth-largest fossil fuel financier in the world since the signing of the Paris Agreement, exceeding both Mizuho and SMBC. Its financing of fossil fuel expansion is particularly problematic, given clear evidence that the carbon budget leaves no room for new fossil fuel extraction or infrastructure. MUFG is also considered one of the most influential banks driving deforestation around the world, given its role as one of the largest global financiers of the rainforest-destroying palm oil industry. This year, MUFG adopted a tar sands and Arctic oil & gas policy and adopted both coal and palm oil policies within the last two years. However, the bank continues to finance problematic companies and projects, indicating its policies and practices are too weak to assure climate and other ESG risks are properly addressed.
“MUFG continues to finance major palm oil and pulp & paper companies that are destroying rainforests and peatlands and violating human rights. MUFG also continues to finance major new coal infrastructure, as well as controversial tar sands pipelines in the US, such as Keystone XL, which presidential nominee Joe Biden pledged to cancel for climate reasons if elected. If MUFG fails to show sustainability leadership, then investors will likely exert more pressure on MUFG.”