Appendix: Comparison of Climate Related Policies of three Japanese megabanks
June 11, 2021
This is a comparison of climate related policies of three megabanks in Japan, as of 8 June 1 2.
Top runner among JP 3 megabanks in each field has a star mark. If there’s no top runner, no bank isgiven a star. From the comparison of ten different categories, Mizuho is overall the top runner among thethree megabanks.
1. Targets to decarbonize their financing and investment portfolio
MUFG became the first Japanese bank to join Net Zero Banking Alliance.
MUFG ★

SMBCMizuhoLong term goalLong term goalLong term goal
- Aims to achieve carbon- Will establish a long-term- Will create a flow ofneutrality by 2050
funds to achieve the goal
action plan to contributeof curbing the global
to a carbon neutral- Participates in Net Zeroaverage temperature risesociety by 2050 andBanking Allianceunder the Parisdetailed initiatives
Agreement, andMedium term goal
Medium term goal
Willsetmediumto
longgradually shift to a- Will set and disclose anterm targets regarding
interim milestone forfinance portfolio that is2030 in FY2022
those emissions
consistent with that goal.
Short term goal
Medium term goal
Short term goal
- None- None- None
Short term goal
- None2. Commitment to measure its portfolio-wide financed emissions (Scope 3)
Only SMBC clearly committed to measure its financed emissions.

12

MUFG

SMBC ★

MizuhoNot explicitly mentioned

Yes

Not explicitly mentioned

See details at NGOs joint statements: MUFG April, May/ SMBC / Mizuho
Mizuho, Strengthening our sustainability action, May 13, 2021
SMBC, Management of Environmental Risks (accessed June 8)
MUFG, Policies and Guidelines (accessed June 8)1

3. Coal power policy
All three banks have a 2040 coal phase out target and banned new coal projects, but have loopholes toallow coal power equipped with technologies such as CCUS and mix combustion. Mizuho steps up towiden the scope to corporate finance to reduce transition risks. MUFG expressed intention to disclose
portfolio reduction targets of corporations involved in coal power generation, but unclear when and how.
MUFG

SMBCMizuho ★

Project-tied finance
Project-tied finance
Project-tied finance- Stop financing for new- Stop financing for new- Stop financing or
and expansion of existingand expansion of existing
investment for new coal
coal-fired power plantscoal-fired power plants
fired power plants withwith exceptions (CCUS,with exceptions (CCUS,exceptions (relevant
Mixed combustion, andMixed combustion etc
country’s stable energy
other technologies
that contributes tosupply, replacement ofnecessary to achieve thetransition toan existing power plant,
3
Paris Agreement target)
decarbonized society )innovative, clean, andefficient next generation
technology.)- Reducing its credit- Reducing its credit
balance of loan for coalbalance of loan for coal
fired power plants to zero
- Reducing its credit
fired power plants to zero
by FY2040
balance of loan for coalby FY2040
fired power plants to zero
by FY2040
General corporate finance- Will aim to disclose theportfolio reduction
target for corporate
customers whosebusiness largely
involves coal-fired
power generation.

General corporate finance- Not explicitly mentioned

General corporate finance- Enhanced engagementon transition risk withcompanies reliant oncoal fired power
generation as theirmain business4. Coal mining sector policy
Mizuho banned coal mining in principle and enhanced engagement with corporations highly involved in
the mining sector.

3MUFG

SMBC

Mizuho ★

Project-tied finance- Stop financing for coalmining with MountainTop
Removal Method

Project-tied finance- Stop financing for coalmining with MountainTop
Removal Method

Project-tied finance- Stop financing orinvestment for newthermal coal mining
projects with

These exceptions were mentioned during the exchanges between the SMBC Group and NGOs.

2exceptions on existing
projects
General corporate finance- Not explicitly mentioned

General corporate finance- Not explicitly mentioned

General corporate finance- Enhanced engagementon transition risk withcompanies reliant oncoal mining as theirprimary businesses

5. Oil and Gas sector policy
SMBC’s enhanced due diligence includes oil and gas pipelines. Mizuho covers these sectors forenhanced engagement with corporations reliant on the sectors to reduce transition risks.
Mizuho ★

MUFG

SMBC

Project-tied finance- Enhanced due diligence(social andenvironmental risk
assessments) on 1) Oil
Sands extraction, notpipelines, and 2) oil andgas extraction in theArctic

Project-tied finance
Project-tied finance- Enhanced due diligence- Enhanced due diligence(social and(social andenvironmental risk
environmental risk
assessments) on 1)Oilassessments) on 1) oil orSand, 2) Shale Oil andgas extraction projects in
Shale Gas, 3) Oil andthe Arctic Circle, 2) oil
Gas Mining Projects insands projects, and 3)
the Arctic, and 4) Oil andshale oil or gas projects
Gas Pipelines

General corporate finance- Not explicitly mentioned.

General corporate finance- Not explicitly mentioned.

General corporate finance- Enhanced engagementon transition risk withcompanies reliant on
oil-fired power
generation, gas-fired
power generation,
and/or other oil andgas operations as theirprimary businesses

6. Palm Oil Sector Policy
All banks require certification, with Mizuho having the strongest requirement. MUFG has the clearest
requirement for clients to commit to NDPE, but this policy does not apply to its Indonesian subsidiary
Bank Danamon (as explained below) despite Danamon being a conduit for palm oil financing.
MUFG

SMBC

MizuhoClients must certify relevant

For palm oil development

All plantations must be certified3

operations and publicly commit projects, palm oil must be
to No Deforestation, No Peatcertified and confirmed to haveand No Exploitation (“NDPE”). protection of forest resources
and biodiversity during newplantation development andno human rights violations.

by the Roundtable on
Sustainable Palm Oil (RSPO),
with some exceptions.
Clients urged to formulate
sustainable environmental andhuman rights policy, such as No
Deforestation, No Peat, and No
Exploitation (NDPE), andrespect Free, Prior, andInformed Consent (FPIC) in
relation to local communities.

7. Other Forest-Risk Commodity Policies
Each bank has strengths and weaknesses in their policies. MUFG’s policy is limited to forestry (timberand pulp & paper), while SMBC and Mizuho’s policy cover forestry and other forest-risk commodities.
MUFG

SMBC

MizuhoForestry clients must certify
relevant operations; illegal
logging and deforestation inHigh Conservation Valueareas are prohibited.

For projects that involve
deforestation, confirms illegal
logging and incineration are
not carried out and the laws
and regulations of each country
are observed.

For large-scale agriculture (i.e.
soy and rubber), timber, andpulp, clients urged to formulate
sustainable environmental
and human rights policy, suchas No Deforestation, No Peat,and No Exploitation (NDPE),
and respect Free, Prior, andInformed Consent (FPIC) inrelation to local communities.

8. Overarching Human Rights Policies(*note: some sector policies have additional human rights protections)
While there is no clear winner, MUFG’s policy is weaker than that of SMBC and Mizuho because there is
no requirement for clients/investees to respect the right to Free, Prior and Informed Consent (FPIC).
MUFGSMBCMizuho

Prohibits transactions involving
child labor and forced labor.

Requests that project operators
obtain Free, Prior andInformed Consent (FPIC) fromindigenous peoples impacted
by the project and to give due
consideration to working
conditions of the project

Prohibits transactions involving
child labor and forced labor.

Enhanced due diligence fortransactions that involve impacts
on Indigenous Peoples
Communities and Land
expropriation leading toinvoluntary resettlement.

Avoids transactions that conflictwith SMBC GROUP's humanrights responsibilities or could
contribute, directly or indirectly,
to exploitative labor practices.

Enhanced due diligence forprojects with adverse impacts on
indigenous peoples’ local
communities and projects
involving land expropriation thatcauses forced relocation ofresidents.

4

9. Application of the sector policies
MUFG

SMBC

Mizuho ★

Not all group companies (Apply
only to core subsidiaries; MUFG
Bank, Mitsubishi UFJ Trust andBanking, and Mitsubishi UFJSecurities Holdings)

All group companies

All group companies

It only says “credit” in thepolicies and not clearly defines
its scope.

Financing and investment
activity

Credit and underwritings ofbonds and stocks

Among Japanese banks, MUFG is the worst financier of all fossil fuels. It is even the worst banker offossil fuels in all of Asia and the 6th largest fossil fuel financier in the world since the Paris Climate
Agreement. Mizuho ranked the 8th largest financier while SMBC ranked 18th.

Source: Banking on Climate Chaos: Fossil Fuel Financing 2021, March 2021 4 ( *All Fossil Fuel Financing includes loans &underwriting issued between 2016-2020.

All Fossil Fuels

100 top fossil fuelexpanders

Tar Sands (Top 35companies)

Arctic Oil & Gas(Top 30 companies)

Offshore Oil & Gas(Top 30 companies)

Fracked Oil & Gas

4

MUFG

MizuhoFG

SMBC GroupAll Fossil Financing$147.7 B ­$123.5 B ­$86.3 B ­Fossil Financing Rank

6818

Fossil Fuel Policy

6/200

5/200

6.5/200

All Fossil Financing$60.1 B ­$53.4 B ­$36.1 B ­Fossil Financing Rank

61018Fossil Fuel Policy

2.5/82

2.5/82

2.5/82All Fossil Financing$1.6 B ­$0.7 B$0.5 B ­Fossil Financing Rank

121822

Fossil Fuel Policy

0.5/180/180.5/18

All Fossil Financing$1 B ­$0.8 B ­$0.9 B ­Fossil Financing Rank

121514

Fossil Fuel Policy

0.5/180/18

0.5/18All Fossil Financing$10.5 B ­$12.6 B ­$11.2 B ­Fossil Financing Rank

13911

Fossil Fuel Policy

0/180/180/18

All Fossil Financing$21.8 B ­$19.8 B ­$7.2 B ­https://www.ran.org/wp-content/uploads/2021/05/Banking-On-Climate-Chaos-2021-Summary.pdf, page.4.

5

(Top 40 companies)

LNG (export/importterminals)(Top 40 companies)

Coal Mining(Top 30 companies)

Coal Power(Top 30 companies)

Fossil Financing Rank

6717

Fossil Fuel Policy

0/18

0/18

0.5/18All Fossil Financing$5.1 B ¯$6.5 B ­$6.5 B ­Fossil Financing Rank

865

Fossil Fuel Policy

0/18

0/18

0/18

All Fossil Financing$0.5 B ­$0.4 B ­$0.3 B ­Fossil Financing Rank

263844

Fossil Fuel Policy

1/18

1/18

1/18

All Fossil Financing$5.7 B$4.2 B$2.1 B ­Fossil Financing Rank

121322

Fossil Fuel Policy

3.5/183.5/183.5/186