"Six companies in Tokyo Prime Market, including all 3 “Mega-banks” face climate shareholder resolutions" 11 April 2023

Today, climate-related shareholder resolutions have been announced targeting Japan’s largest banks and energy corporations.

A coalition of environment organisations and shareholders have filed the resolutions calling for greater disclosure by the companies on how they will meet their net zero commitments.

Resolutions have been filed to Japanese mega banks, Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group, Mizuho Financial Group, and energy giants: Mitsubishi Corporation, and Tokyo Electric Power Company Holdings (TEPCO) and Chubu Electric Power Co who jointly own JERA, the largest thermal power generator in Japan.

The shareholders include civil society organizations or their representatives, including Market Forces, Friends of the Earth Japan, Kiko Network and Rainforest Action Network.

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The following is a summary of the key issues facing these companies (by industry);

■ MUFG, SMFG, and Mizuho FG

The megabanks’ climate policies, targets and transition plans lack credibility, as they fail to align with a net zero emissions by 2050 pathways such as the International Energy Agency’s Net Zero Emissions scenario and the Net Zero Banking Alliance (NZBA) which the megabanks are signatories. In particular, megabanks lag far behind their global peers, which have policies to limit support for new oil and gas development projects. To fulfill their own commitments, they must act immediately to set short- and medium-term targets and investment and financing policies that are aligned with their long-term net-zero goal.

— Eri Watanabe, Japan Energy Finance Campaigner of Market Forces

The land-use sector is also important in addressing climate change. The NZBA guidelines call for setting reduction targets for absolute emissions and/or intensity in the agricultural sector, which is considered a carbon-intensive sector, but Japanese megabanks do not. And, despite the greenhouse gas emission factor of woody biomass power plants being higher than that of coal-fired power plants at the time of combustion, CO2 emissions from the combustion of woody biomass fuel are not reported in banks’ financed emissions reporting. It will make it difficult to achieve a transition that limits temperature rise to 1.5°C in the power sector.

— Dr. Toyoyuki Kawakami, Japan Representative, Rainforest Action Network

■  Mitsubishi Corporation

Mitsubishi Corporation’s current climate targets and disclosures are entirely insufficient for investors to conclude it has a viable pathway to meet its own net zero by 2050 commitment. The company’s monster Scope 3 emissions are larger than either France or the United Kingdom’s annual carbon pollution. Mitsubishi must set Scope 3 emission targets so that investors can see how the company will meet its net zero commitment.

— Meg Fukuzawa, Energy Finance Campaigner, Market Forces

■  TEPCO HD and Chubu Electric Power

TEPCO Group and Chubu Electric Group, and their most carbon intensive joint venture JERA cannot claim to be net zero companies while continuing to invest in new fossil fuel projects. These companies must show the integrity of their transition plans by aligning the capital allocation with the critical pathway to limit global warming to 1.5 degrees.

— Dr. Sachiko Suzuki, Japan Energy Finance Analyst, Market Forces

JERA, Japan’s largest power generation company, has stated its commitment to a low-carbon society with “Zero CO2 Emissions 2050”. While there are some arguments that it is not easy to switch to sustainable energy from fossil fuel energy in today’s society, companies in the same industry in the U.S. and Europe are steadily moving toward zero emissions as the time limit is coming every minute. If JERA, TEPCO/Chuden continue their strategies, they should make information available to determine the “true” effectiveness of their strategies in an accurate and timely manner.

— Yasuko Suzuki, Program Coordinato, Kiko Network

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