Japan's Sumitomo Mitsui Banking Corporation (SMBC) is the world’s third-biggest lender to coal plant developers and continues to finance coal plants that undermine global climate goals.
Despite its massive funding of coal projects, SMBC applied for accreditation to receive money from the United Nations' Green Climate Fund. This fund is mandated by the UN climate convention to support developing countries in addressing climate change impacts.
We demand that the Green Climate Fund Board, deny accreditation to institutions that have funded coal projects in Indonesia, Vietnam, Bangladesh and other parts of Asia.
Help us tell the Green Climate Fund Board that coal funders cannot be legitimate partners in implementing climate projects in developing countries. There is no justification for the Green Climate Fund to consider subsidizing a dirty company with public funds that are urgently needed for climate action.
Dear members of the Green Climate Fund Board,
I am writing to you to express my opposition to the accreditation of Sumitomo Mitsui Banking Corporation (SMBC) given its history of financing coal projects in developing countries.
The SMBC is the world’s third-biggest lender to coal plant developers and continues to finance coal plants that undermine global climate goals. Between 2017 and 2019, they provided US$8 billion in loans to coal plant developers.
SMBC’s track record and its continued involvement in highly controversial coal plants directly contradict its commitment to contributing to the Paris Agreement. They do not meet your standards of environmental and social governance. Consideration of its accreditation application puts the reputation of the Global Climate Fund on the line and makes a mockery of the mandated objectives of the Fund. There is no justification for the GCF Board to consider giving a dirty company access to public funds that are urgently needed for urgent climate action.
SMBC should prove its commitment to align its business strategy with the Paris Agreement by withdrawing from the above-mentioned projects immediately and making a total exit from all coal projects. It should also declare that it will not fund any coal project, not even so-called clean coal.
Sincerely,
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Dear GCF Board real climate action starts by keep coal funders like Sumitomo Mitsui Banking Corporation away from the Green Climate Fund
Green Climate Fund Board, please deny accreditation to Sumitomo Mitsui Banking Corporation it is the world’s third-biggest lender to coal plant developers and continues to finance coal plants that undermine global climate goals.
There is no justification for the Green Climate Fund to consider subsidizing a dirty bank like Sumitomo Mitsui Banking Corporation with public funds that are urgently needed for climate action.
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August 10, 2020
Dear Green Climate Fund Board,
We write to you to express our strong opposition to the accreditation application of Sumitomo Mitsui Banking Corporation (SMBC), a major lender to coal developers with a long history of financing coal projects in developing countries.
The SMBC is the world’s third biggest lender to coal plant developers and continues to finance coal plants that undermine global climate goals. Research finds that between 2017 and 2019, SMBC has provided USD $8 billion in loans to coal plant developers.[1] A dirty company cannot be a legitimate partner in the implementation of climate projects in developing countries it has placed into carbon lock-in for years to come.
On April 16, 2020, SMBC announced a revised policy effective May 1, 2020, which states that for coal-fired power generation,
“Support for newly planned coal-fired power plants, in principle, is not provided. Exceptions may be considered for those projects which use environmentally friendly technologies, such as ultra-supercritical pressure and for those projects which have been provided support before the revision.”
There are numerous studies that show this so-called clean coal technology may be more “efficient” in terms of generating energy per ton of coal, but global greenhouse gases and other toxic substances are still produced in significant levels that are harmful to health, the environment and climate.
Furthermore, meeting the goals of the Paris agreement requires a swift just transition away from coal, followed by other fossil fuel energy. SMBC is currently considering its support for controversial Vung Ang 2 in Vietnam using ultra-supercritical pressure technology, which is an example of the exceptions it mentions in its revised policy.
Projects which have been approved for support before the new policy are also exempted by SMBC’s new policy. These include the Cirebon 2, Tanjung Jati B units 5 & 6, and Batang in Indonesia and Van Phong 1 and Nghi Son 2 in Vietnam. SMBC is also involved as financial advisor in two projects on Matarbari Island in Bangladesh. All of these projects are high-polluting projects that are being met by strong resistance by communities at the site, and by many climate and energy civil society groups in these countries, in the rest of Asia and around the world.[2]
Given SMBC’s track record, its continued involvement in highly controversial coal plants, and its inadequate new coal policy, we cannot agree with the findings that SMBC is “strongly committed to contributing to the Paris Agreement.” We struggle daily with the impacts of coal-fired power plants in our communities and we say SMBC does not meet the GCF standards of environmental and social governance. Approval of its accreditation application puts the reputation of the GCF on the line and makes a mockery of the mandated objectives of the Fund. There is no justification for GCF to consider giving a dirty company access to public funds that are needed, now more than ever, for urgent climate action.
SMBC should show real commitment to align its business strategy with the Paris Agreement by withdrawing from the above mentioned projects immediately and making a total exit from all coal projects. It should also declare that it will not fund any coal project, not even so-called clean coal.
[1]The December 2019 report by Urgewald, Banktrack and 30 partner NGOs on global financiers of the coal industry found that Japan’s biggest commercial banks — Mizuho Financial Group, Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group are ranked first, second and third biggest lenders to the top coal plant developer companies, respectively. Together these mega banks provided USD 39.3 billion in loans to coal plant developers between 2017-2019.
[2] https://www.nocoaljapan.org/smbc-ignores-climate-concerns/
August 10, 2020
We are writing about SMBC’s application for accreditation with the Green Climate Fund.
We believe a corporation who has been the world’s third biggest lender to coal plant developers and will continue to finance coal plants that undermine global climate goals cannot be a legitimate partner in the implementation of climate projects in developing countries it has placed into carbon lock-in for years to come.
We acknowledge that on April 16, 2020, SMBC announced a revised policy effective May 1, 2020, which states that for coal-fired power generation,
“Support for newly planned coal-fired power plants, in principle, is not provided. Exceptions may be considered for those projects which use environmentally friendly technologies, such as ultra-supercritical pressure and for those projects which have been provided support before the revision.”
However, your new policy is still not aligned with the Paris goal of keeping global temperature rise to below 1.5 degrees Celsius.
There are numerous studies that show this so-called clean coal technology may be more “efficient” in terms of generating energy per ton of coal, but global greenhouse gases and other toxic substances are still produced in significant levels that are harmful to health, the environment and climate. Such adverse impact will be caused if Vung Ang 2 in Vietnam is pushed through, for this project SMBC is currently considering its support.
Furthermore, your new policy does not cover projects which have been approved for support before the new policy was adopted, including Cirebon 2, Tanjung Jati B units 5 & 6, and Batang in Indonesia and Van Phong 1 and Nghi Son 2 in Vietnam. SMBC is also involved as financial advisor in two projects on Matarbari Island in Bangladesh. All of these projects are high-polluting projects that are being met by strong resistance by communities at the site, and by many climate and energy civil society groups in these countries, in the rest of Asia and around the world.
If SMBC is serious about meeting the Paris goals and contributing to climate action, SMBC should:
SMBC does not have to use GCF funds for this purpose. You can well afford to fund climate projects on your own. Your company has $2.02 trillion in total assets—which is more than 206 times the size of GCF’s US$ 9.8 billion in total replenishment pledges as of February 2020.
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