Japan’s three ‘mega banks’ hit with climate proposals

NGO coalition files six shareholder resolutions at Japanese firms including Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group.

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Japan’s three largest banks have been hit with shareholder resolutions calling on them to issue and disclose a transition plan to align their lending and investments with the Paris Agreement.  

Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group have all received climate proposals in the past, but this is believed to be the first year all three have been targeted at once.  

A coalition of environmental NGOs – including Australia’s Market Forces and Japan’s Kiko Network – are behind the banking proposals and three additional proposals at energy giants Mitsubishi Corporation, Tokyo Electric Power Company Holdings (TEPCO) and Chubu Electric Power Co.

The Japanese utilities are asked to disclose how their capital expenditure aligns with a 2050 net-zero pathway. Mitsubishi is also facing an additional proposal from the coalition calling on it to adopt and disclose short and medium-term greenhouse gas emission reduction targets aligned with the goals of the Paris Agreement.   

Climate proposals are still a relatively new feature of the Japanese corporate governance landscape. The first was filed in 2020 at Mizuho by Kiko Network, securing 34 percent support.   

Last year, similar proposals on setting Paris-aligned emission reduction targets and aligning capital expenditure with 2050 net-zero pathways achieved 20 percent and 16 percent, respectively, at Mitsubishi. 

More than a quarter of shareholders also backed a proposal at Sumitomo Mitsui calling on the financial group to disclose Paris-aligned short and medium-term greenhouse gas emissions reduction targets. But just 10 percent supported a resolution on aligning financing with the International Energy Agency’s net-zero scenario.  

The filing of climate proposals has been the preserve of NGOs in Japan but last year saw European investment heavyweights Amundi, Man Group and the asset management arm of HSBC co-file three at J-Power, urging the Japanese coal powered utility to ramp up its decarbonisation efforts. 

Those resolutions – the first to be filed by institutional investors in Japan – attracted support of between 18 percent and 26 percent in June.