4月 8, 2019

Since Paris Agreement, Japanese Megabanks Poured $186 Billion into Fossil Fuels

 

Monday, April 8, 2019 1pm JST

CONTACTS:

Yuki Sekimoto, Rainforest Action Network, Japan Communications Coordinator
[email protected], +81(0)80 4005 2489
Chisato Jono, Communications Officer, Greenpeace Japan,
[email protected], +81 (0) 80-6558-4446

 

 

Since Paris Agreement, Japanese Megabanks Poured $186 Billion into Fossil Fuels

Bank policies unfit to avert climate disaster, says new report

 

As climate change impacts worsen, Japanese banks are facing increasing international scrutiny for their financing of coal power and other fossil fuels around the world. A recent report, Banking on Climate Change 2019, found Japan’s three largest banks – Mitsubishi UFJ Financial Group (MUFG), Mizuho Financial Group, and Sumitomo Mitsui Financial Group (SMBC) – funneled $186 billion into the global fossil fuel sector in the three years since the Paris Agreement was adopted at the end of 2015. NGOs warn that these Japanese banks are exposed to significant reputational risk, stranded asset risk, and other climate-related financial risks that are not being properly disclosed and can ultimately harm investors.    

 

Banking on Climate Change 2019 is the tenth annual fossil fuel report card and the first ever analysis of funding from the world’s major private banks for the fossil fuel sector as a whole.[1] It found 33 global banks, including Japan’s three largest banks, provided a total of $1.9 trillion in loans and underwriting to 1,800 companies across the coal, oil and gas sectors globally over the past three years. Alarmingly, the amount of financing rose in each of the past two years. Of this $1.9 trillion total, $600 billion went to 100 companies that are most aggressively expanding fossil fuels, including J-Power.

  • MUFG and Mizuho are among the top 10 global financiers of all fossil fuels and of the 100 companies most expanding fossil fuels.
  • MUFG is the largest Japanese financier of all fossil fuels and therefore the worst banker of climate change in Japan, having provided $80 billion to fossil fuels since Paris.
  • MUFG and Mizuho are among the top 10 global financiers of the world’s top 30 coal power companies, having provided $3.5 billion and $3 billion, respectively, since Paris.
  • SMBC is the 3rd largest global financier of Arctic oil & gas, threatening the fragile Arctic ecosystem and the livelihood and culture of local Indigenous Peoples.
  • SMBC is the 3rd largest global financier of LNG import/export terminals and is financing a major export terminal in Mozambique that has forcibly relocated thousands of people and threatens a UNESCO biosphere reserve.

The report also assessed Japanese banks’ recently adopted corporate financing policies and found none aligned with Paris Agreement goals. For restrictions on financing fossil fuel expansion, SMBC scored a D- for partial coal exclusion, while MUFG and Mizuho scored a F for having no clear exclusions. For restrictions on financing coal power specifically, the banks’ scores showed slight improvement from last year, but it has glaring loopholes that allow the continued financing of coal. SMBC scored only a C- for partial coal power project exclusion, while MUFG and Mizuho scored a D+ for merely committing to undertake due diligence. “The Japanese banks’ new financing policies are completely inadequate to deal with the climate emergency. This should be a major red flag for investors,” said Hana Heineken of Rainforest Action Network.  

 

While Japanese banks’ have continued to fund coal and other fossil fuel development both domestically and overseas, the trend towards fossil fuel divestment has gained more speed and significance globally. “Over 100 globally significant financial institutions have divested from or restricted financing of thermal coal, including 40% of top 40 global banks and 20 globally significant insurers. At the same time, the criteria which the progressive institutions are setting for divestment decisions are becoming increasingly strict. Currently, Japanese banks are behind this trend,” said Martin Norman, Finance Campaign Director of Greenpeace Nordic.

 

Last year, all three Japanese banks endorsed the Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). However, none of the banks have disclosed the extent of fossil fuel financing in their portfolios nor how they will shift their investments to align with the Paris Agreement [ 2]. “Aligning bank policies with the Paris Agreement means ceasing any new finance for coal or other fossil fuel development and funding a fair and just transition towards a renewable energy society in line with scientific knowledge” said Shin Furuno of 350.org.   

 

Last month, the WMO found extreme weather in 2018 hit 62 million people worldwide and forced 2 million people to relocate, as man-made climate change worsened.[3] The IPCC Special Report on Global Warming of 1.5 °C clearly outlined the critical need for a rapid phase-out of fossil fuels and estimated that the world’s clean energy investment needs are $2.4 trillion per year up to 2035. [4] Given the urgency of climate protection, major investors in the Japanese banks must demand an overhaul of the banks’ policies such that they prohibit all financing for all fossil fuel expansion projects and for companies expanding fossil fuel extraction and infrastructure, and commit to a phase out of financing for fossil fuel extraction and infrastructure on an explicit timeline that is aligned with limiting global warming to 1.5°C. [5]


Notes to Editors:

[1] Banking on Climate Change was written by Rainforest Action Network, BankTrack, Indigenous Environmental Network, Oil Change International, Sierra Club, and Honor the Earth, and endorsed by over 160 organizations around the world, which includes 350.org Japan and Greenpeace Japan. To download the full report: ran.org/bankingonclimatechange2019
[2] 350.org Japan analysis of Japanese bank disclosures vs. TCFD recommendations (in Japanese): https://drive.google.com/file/d/1PBq4ePlMfDUdkH3WpamMu57t8FSE74Ix/view?usp=sharing  
[3] World Meteorological Organization (WMO), State of the Global Climate 2018 report, https://public.wmo.int/en/media/press-release/state-of-climate-2018-shows-accelerating-climate-change-impacts
[4] IPCC, 2018, “Summary for Policymakers,” in “Global Warming of 1.5°C: An IPCC Special Report on the Impacts of Global Warming of 1.5°C Above Pre-Industrial Levels and Related Global Greenhouse Gas Emission Pathways, in the Context of Strengthening the Global Response to the Threat of Climate Change, Sustainable Development, and Efforts to Eradicate Poverty,” edited by Valérie Masson-Delmotte et al. World Meteorological Organization, Geneva, Switzerland. https://www.ipcc.ch/site/assets/uploads/sites/2/2018/07/SR15_SPM_version_stand_alone_LR.pdf
[5] Greenpeace and CoalSwarm’s report A Coal Phase-Out Pathway for 1.5℃ outlines a scenario for phasing out coal power plants globally by 2050.