Joint Statement: Mitsubishi UFJ tightens its financing for coal-fired power, but it’s still not aligned with Japan’s 2050 Net-zero Emissions target
Joint Statement:
Mitsubishi UFJ tightens its financing for coal-fired power
But it’s still not aligned with Japan’s 2050 Net-zero Emissions target
Japan Center for a Sustainable Environment and Society (JACSES)
Kiko Network
Friends of the Earth Japan
350.org Japan
Mekong Watch
On April 26, Mitsubishi UFJ Financial Group (MUFG) revised its “MUFG Environmental and Social Policy Framework (※1)” and announced that regarding the coal-fired power generation sector, the policy will apply to financing new and existing power generation facilities. MUFG also stated that exceptions will be limited to coal-fired power generations equipped with technologies such as CCUS and mixed combustion. As environmental NGOs, we welcome MUFG’s policy as a step forward, but we believe that further improvement is needed since this revised policy is still far from the goal set by the Japanese government to achieve net-zero emissions by 2050.
According to the World Energy Outlook 2020 released by the International Energy Agency (IEA) in October 2020, if all existing fossil fuel energy infrastructure and power plants currently under construction were to be used in similar ways as in the past until the end of their lifetimes, the emissions would lead to a 1.65 degrees Celsius increase in global average temperatures by 2070 (※2). In order to achieve the 1.5 degrees Celsius goal of the Paris Agreement, which is an international framework for climate change countermeasures, it is necessary to end public support not only for coal but also for other fossil fuel projects, including oil and gas.
On April 16, the U.S. and Japanese government announced the “Japan-U.S. Climate Partnership on Ambition, Decarbonization, and Clean Energy (※3)”, which states that “Japan and the United States will align official international financing with the global achievement of net zero greenhouse gas emissions no later than 2050 and deep emission reductions in the 2020s, and will work to promote the flow of public and private capital toward climate-aligned investments and away from high-carbon investments.” It is clear that MUFG’s policy still falls behind the target level set by the Japanese government.
It is necessary to declare a withdrawal policy not only for project finance but also for corporate finance, holding and underwriting of stocks/bonds for companies that are engaged in fossil fuel expansion projects. For the plants equipped with CCUS, mixed combustion and other technologies, there should be a standard to strictly determine whether they are consistent with the 1.5 degrees Celsius goal of the Paris Agreement, rather than simply treating it as an exception.
In addition to MUFG, other megabanks such as Mizuho Financial Group, Sumitomo Mitsui Financial Group, and Sumitomo Mitsui Trust Holdings, and non-life insurance companies such as Tokio Marine Holdings, MS&AD Holdings, and SOMPO Holdings should declare a comprehensive policy that includes all the points stated above.
Footnotes:
※1: https://www.mufg.jp/dam/pressrelease/2021/pdf/news-20210426-001_en.pdf
※2: International Energy Agency (IEA), (2020), World Energy Outlook 2020, pp. 102, IEA, Paris, https://www.iea.org/reports/world-energy-outlook-2020/achieving-net-zero-emissions-by-2050
※3: https://www.mofa.go.jp/mofaj/files/100178078.pdf
For more information, please contact:
Yuki Tanabe, Japan Center for a Sustainable Environment and Society (JACSES)
tanabe@jacses.org
