July 24, 2018 Tokyo, Japan — Sumitomo Mitsui Trust Bank signaled its intent to restrict project financing for new coal plant projects regardless of their location in its annual report released on July 23, making it the first Japanese bank to make such a commitment. A group of Environmental NGOs – 350.org Japan, Japan Center for a Sustainable Environment and Society (JACSES), Friends of the Earth Japan (FoE Japan), Kiko Network, Greenpeace Japan, and Rainforest Action Network issued the following statement in response to this development:
“Sumitomo Mitsui Trust Banks’s plan to restrict project finance for new coal-fired power plants regardless of their geographic location has the potential to be one of the strongest policies announced by any financial institution headquartered in Asia, matching the recent announcement by Nippon Life Insurance (1).
In recent months, the three largest banks in Japan – Mitsubishi UFJ Financial Group, Mizuho Financial Group, and Sumitomo Mitsui Banking Corporation, have all announced updated policies for lending to the coal-fired power sector, but all stopped short of discontinuing financing for coal power projects. (2)
There is, however, reason for concern. Sumitomo Mitsui Trust Bank’s policy states that “in the case that exemptions are considered, lending decisions will be made carefully on a case-by-case basis under strict standards which address environmental impact, such as the OECD Guidelines and energy efficiency of the projects.” The OECD Guidelines provide inadequate safeguards on coal, and it is clear there is no space to build any more new coal-fired power plants – no matter how efficient – in order to keep global temperature rise well below 2 degrees Celsius as stipulated by the Paris Agreement. This exemption may prove to be a loophole that could defeat the purpose of this policy. We call on Sumitomo Mitsui Trust Bank to fully implement the policy without exceptions.
We have high hopes that Sumitomo Mitsui Trust Bank will show leadership and continue to set an example by going further and restricting corporate finance to companies involved in new coal development and divesting from companies dependent on coal power and coal mining.”
Notes to the Editor:
1: Major insurer Nippon Life sets new benchmark in Japan by dropping coal power project finance (7/13/2018)
2: NGO Statement on MUFG Policy Announcement (5/25), NGO Statement on MizuhoFG Policy Announcement (6/15), NGO Statement on SMBC Policy Announcement (6/21)
Shin Furuno, 350.org Japan: [email protected]
+81(0)3 3230 7600 / +81(0)70-2793-3648