December 18, 2019
Standard Chartered further restricts financing for coal fired power, leaving Japan’s megabanks and corporations to risk their reputations on new coal plants in Vietnam.
Standard Chartered PLC “the Group” released its Taskforce on Climate-related Financial Disclosures (‘TCFD’) report on 17 December, detailing its commitment to align its lending portfolio with the Paris Agreement goal of limiting global temperature rise to significantly below 2 degrees.
The Group announced that it will “only support clients who actively transition their business to generate less than 10% of earnings from thermal coal by 2030”. Recognising that the transition to clean technology will require fundamental changes across the energy sector, the policy will be implemented on a phased basis, using set milestones, beginning 1 January 2021.
These new restrictions apply to all products and services offered by the Group and are in addition to its prohibition on direct financing for new coal-fired power plants announced in September 2018. The Group also confirmed that it will withdraw from three projects that it had agreed to fund before this prohibition.
Head of 350.org Japan, Takayoshi Yokoyama commented on the announcement:
“We understand that the 3 coal-fired power plant projects that Standard Chartered will withdraw funding from include Vung Ang 2 and Vinh Tanh 3 in Vietnam, both of which involve Japanese companies and financial institutions. Both Vung Ang 2 and Vinh Tanh3 involve direct investments by Mitsubishi Corporation through joint ventures, and the 3 japanese megabanks (Mitsubishi UFJ, Mizuho, and Sumitomo Mitsui) plus Sumitomo Mitsui Trust Bank are reportedly planning to finance Vung Ang2. Following the announcement by Singaporean bank OCBC to withdraw funding from Vung Ang 2 last month, Standard Chartered’s announcement means that 2 major banks have withdrawn from funding Vung Ang 2 in quick succession. As pressure on global banks to align their business practices with the Paris Agreement becomes more acute, these recent coal divestment decisions by major banks puts the inadequacies of Japan’s 3 megabanks coal policies in high-relief, as the world’s top lenders to coal developers during 2017-2019. As signatories to the UN Principles for Responsible Banking, Japan’s megabanks must align their financing with the Paris Agreement and swiftly end their support for coal.”
Shin Furuno, East Asia Finance Senior Campaigner, 350.org
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