Energy

NGOs Lay Blame on Japanese Banks for Fossil Fuel Funding

Wednesday, April 10, 2019

Tokyo-(PanOrient News) Climate-focused NGOs pointed fingers at Japanese banks for not doing more to stop fossil fuel financing on Monday, following the release of a report examining the role of major banks around the world in supporting the fossil fuel sector.

“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,” said Greenpeace Japan, Rainforest Action Network and 350.org in a joint statement. The organizations warned that Japanese banks were falling behind global green trends and faced reputational and financial risks as a result.

The report, titled Banking on Climate Change 2019, found that two of Japan’s largest banks, Mitsubishi UFJ Financial Group (MUFG) and Mizuho Financial Group, were among the top 10 global financiers of fossil fuels, which include coal, oil and gas.

Because MUFG was Japan’s top fossil fuel backer, the NGOs called it “the worst banker of climate change in Japan” and noted that the bank had provided over $80 billion to the sector since the 2016 Paris Agreement. They also said that although Japan’s top three banks had updated their financing policies, none met Paris Agreement goals, and that the banks hadn’t disclosed the extent of fossil fuel financing in their portfolios.

“The Japanese banks’ new financing policies are completely inadequate to deal with the climate emergency,” said Hana Heineken of Rainforest Action Network, which helped author the report. “This should be a major red flag for investors.”

The NGOs placed blame on Sumitomo Mitsui Financial Group (SMBC) for being the third largest global financier of Arctic oil and gas, which they said threatened the ecosystem and livelihood of local peoples. They also rebuked the bank for financing a liquified natural gas terminal in Mozambique which they said forcibly relocated thousands of people and threatened a biosphere reserve.

Because Japan’s three biggest banks have together provided $186 billion in fossil fuel funding since the Paris Agreement was adopted three years ago, the NGOs said the banks were not keeping up with other institutions that have more aggressively pursued fossil fuel divestment.

“Over 100 globally significant financial institutions have divested from or restricted financing of thermal coal,” said Martin Norman of Greenpeace Nordic. “At the same time, the criteria which the progressive institutions are setting for divestment are becoming increasingly strict. Currently, Japanese banks are behind this trend.”

The NGOs pointed to reports saying that as man-made climate change worsened last year, over 60 million people were hit by extreme weather, and that a rapid phase-out of fossil fuels is needed to limit global warming to 1.5 degrees Celsius.

“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,” said the NGOs.



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