May 17, 2018 Read More →

Japan’s Mitsui Group To Reconsider Financing Policies For Coal Projects

Bloomberg:

Japan’s Sumitomo Mitsui Financial Group Inc. has signaled it may rethink its financing of coal-fired power projects, a small step for the nation’s banking industry, which lags global rivals shifting away from one of the most-polluting fuels.

The Tokyo-based bank indicated this week that it may become the first major Japanese bank to tighten its stance on such funding. “Coal-fired power generation is relatively low cost and has a big impact on climate change, so we are considering to make our financing policy stricter,” President Takeshi Kunibe told reporters during an earnings briefing on Monday.

Japanese firms have lagged efforts across global finance to align their businesses with climate change goals. Sumitomo Mitsui and its two main domestic rivals remain among the world’s biggest funders of coal power projects, according to transparency advocacy group BankTrack, even as a growing number of global lenders move away from the practice. HSBC Holdings Plc said last month it will stop funding new power plants using the fossil fuel, joining similar pledges by Societe Generale SA and Deutsche Bank AG.

[Kunibe’s] remarks come after Japan’s Dai-Ichi Life Insurance Co. said last week that it won’t provide financing for overseas coal works. That marked the first time a Japanese financial institution has announced such a policy, according to environmental groups including Greenpeace Japan.

Japanese banks have been faulted by groups including 350.org and Kyoto-based Kiko Network for their support for coal-fired power projects, especially ones in developing countries. Sumitomo Mitsui’s main lending unit was ranked fifth among lenders to coal plant developers globally, according to BankTrack. Mizuho Financial Group Inc. was top on the list and Mitsubishi UFJ Financial Group Inc. was second.

More: Sumitomo Mitsui Signals It May Curb Coal-Fired Power Financing

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