ANNOUNCEMENT: Expert Investor is now PA Europe. Read more.

Mizuho first Japanese firm to be hit with climate resolution

The second bank this year, after Barclays was targeted by shareholders


Elena Johansson

A Japanese environmental non-profit organisation has filed a proposal against Mizuho Financial Group, which calls on the bank to align its investments with the Paris Climate Agreement.

Kiko Network’s decision comes after Mizuho failed to reduce its exposure to climate-related risks.

It came to this conclusion after Kiko reviewed the bank’s current disclosure, lending and underwriting, and the trajectory set by Mizuho’s policies and prospective lending.

Top coal lender

“As the world’s largest private lender to coal developers, Mizuho is uniquely exposed to climate risk,” said Kimiko Hirata, international director of Kiko Network, who is also the Japanese representative of the Climate Action Network (Can).

According to a 2019 report by Banktrack, Mizuho has provided the world’s largest loans to coal plant developers – with a total of $16.8bn (€15.3bn) between 2017 and 2019.

“Mizuho is well behind the curve, which is a dangerous place to be, especially in times of rapid change,” Hirata commented.

The network said that Mizuho has fallen behind other Asian banks, including Singapore’s DBS, OCBC Bank and UOB Bank, which all created policies in 2019 to stop lending to new coal-fired power plants, globally.

Oil crash

Hirata’s comments come as financial markets are shaken by the impact of the coronavirus and an oil price war.

“Even though many see the coronavirus as a cyclical factor, it has especially resonance at a time of structural change. And [this] means we remain confident, in our view, that the 2020s will see peak fossil fuel demand,” commented Kingsmill Bond, energy strategist at Carbon Tracker.

The Kiko Network-led shareholder resolution demands that Mizuho disclose how its business strategy and investments are aligned with the goals of the Paris Agreement.

This would enable investors to appropriately assess and price climate-related risks, consistent with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), it said.

It is understood that Barclays faced the first climate shareholder resolution against a European bank in January.