On the day of Mizuho\u2019s AGM, we take stock of the progress made so far on coal by the three big Japanese banks, covering also MUFG and SMBC. All three megabanks have updated their coal policy in the past few months, but they are still far from aligned with the climate goals of the Paris Agreement. The exclusion policies only apply to coal project financing (and with too many exceptions) and still allow the three banks to support coal companies and their expansion plans through corporate financing<\/strong>.<\/span><\/b><\/span><\/p>\n<\/div><\/div><\/div> The three banks have all stopped the financing of new coal plants \u201cin principle\u201d, but with varying degrees of \u201cexceptions\u201d. Although these exceptions diminish with each policy update, Mizuho, MUFG and SMBC still potentially allow the direct financing of new coal plants, refusing to join the <\/span>49 banks and insurers<\/span><\/a><\/span> that have committed to \u201cno new coal mines and plants\u201d across the world.<\/span><\/p>\n<\/div> On the coal mining front, Mizuho <\/b>is the first of the three banks to now also exclude direct financing for new coal mines, but allows for caveats when it comes to existing coal mines \u201cthat contribute to the stable supply of energy in countries where they have policies aligned with the Paris Agreement.\u201d <\/span><\/p>\n<\/div> Even more worryingly, the bulk of the coal issue remains untouched since most of the financing provided by the big Japanese banks to the coal sector goes through indirect general corporate finance to coal companies rather than direct financing to specific coal projects. Since the coal exclusion policies don\u2019t apply to corporate financing, the three banks can still actively support the coal industry and its developers, despite the climate and health emergencies. <\/span><\/p>\n Mizuho<\/b>, <\/span>MUFG <\/b>and <\/span>SMBC <\/b>ranked respectively second, third and sixth in the latest ranking of commercial banks financing companies on the <\/span>Global Coal Exit List (GCEL)<\/span><\/a>, <\/span>published last February<\/span><\/a><\/span>.<\/span> With respectively $39bn, $36bn and $32bn provided to dozens of coal companies globally between October 2018 and October 2020, these three big banks play a crucial role in propping up the coal industry worldwide.<\/span><\/p>\n In fact, they are enabling further coal developments by supporting companies planning to expand the coal industry around the world. Over the 2016-2018 period tracked in the latest financial data published:<\/span><\/p>\n These striking figures stress the urgent need for these global financial players to catch up with many of their European peers, which have adopted robust coal policies that cover both project and corporate financing. We can only urge the Japanese banks to follow the lead of French bank Credit Agricole: the policy excludes all coal developers and companies deriving more than 25% of their revenues from thermal coal. Cr\u00e9dit Agricole has also committed – at the corporate level – to phase out coal in the OECD by 2030 and worldwide by 2040, a <\/span>mandatory requirement<\/span><\/a><\/span> for any coal policy to be aligned with the climate goals of the Paris Agreement. This is much stronger than Mizuho, MUFG and SMBC\u2019s current pledges to phase out their coal power project finance portfolio by 2040, or than the transition risks analysis for fossil fuels that Mizuho mentions in its updated policy. <\/span><\/p>\n<\/div> The mobilization targeting the three big Japanese banks is growing on all sides. MUFG <\/b>is being targeted for the first time this year by a shareholder resolution<\/a><\/u> at its AGM on June 29th requiring it \u00ab\u00a0to adopt and disclose a plan to align its financing and investments with the Paris Climate Agreement.\u00a0\u00bb, with targeted actions by activist groups across the world in the last few days<\/a><\/u>. This follows the first ever climate-related resolution lodged at a financial institution in Japan with Mizuho <\/b>last year, garnering 34.5% investor support<\/a><\/u>. SMBC <\/b>has also been targeted publicly recently for its application to become a bank accredited to the Global Climate Fund<\/a><\/u>. And the three banks face an ongoing global petition to end fossil finance<\/a><\/u>. <\/p>\n It is high time for these three banks to stop adopting measures \u201ctoo little, too late\u201d, and to show some leadership instead by adopting robust coal policies before COP26 in Glasgow if they want to become credible on climate. <\/b><\/span><\/p>\n<\/div><\/div><\/div><\/div><\/div>Only excluding the direct financing of projects<\/b><\/b><\/h1><\/span>
Regarding coal power plants:<\/span><\/b>
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Still supporting coal expansion\u00a0<\/b><\/b><\/h2><\/span>
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Under growing pressure to align with the Paris climate agreement\u00a0<\/b><\/h2><\/span>