Japanese Megabanks Hit Over Coal Financing at Davos
SNA (Davos) — As world leaders are convening at the the World Economic Forum in Davos, critical attention is being drawn to the Japan’s largest financial institutions’ continued investments in coal, one of the main contributors to the climate crisis.
The talks at Davos, scheduled to continue until Friday, are focused on a topic somewhat different from the Forum’s business as usual. According to the organizers, the first and foremost theme on the annual meeting’s agenda is “how to address the urgent climate and environmental challenges that are harming our ecology and economy.”
Discussion about this topic has been called for by environmental organizations and activists, including Greta Thunberg, who has articulated the climate movement’s expectations clearly: “We demand that at this year’s forum, participants from all companies, banks, institutions, and governments immediately halt all investments in fossil fuel exploration and extraction, immediately end all fossil fuel subsidies and immediately and completely divest from fossil fuels.”
If this demand were met by the Davos participants, it would mark a huge transformation in the current business operations of financial institutions, including those with their headquarters in Japan.
Among the Davos meeting’s participants are representatives of Japan’s three megabanks: Mizuho Financial Group, Mitsubishi UFJ Financial Group (MUFG), and Sumitomo Mitsui Financial Group (SMBC). Last month, a report revealed that these three banks have become the world’s top three lenders for corporations that are still developing coal power and mining infrastructure globally. Together, they provided US$39.3 billion in loans to coal plant developers between 2017 and 2019.
Though these three institutions are now the world leaders in coal lending, they are not alone. A new report by Greenpeace International revealed that 24 banks represented at Davos have financed the fossil fuel industry to the tune of US$1.4 trillion since the signing of the Paris Agreement of 2015 through to 2018.
“The banks, insurers, and pension funds here at Davos are culpable for the climate emergency. Despite environmental and economic warnings, they’re fueling another global financial crisis by propping up the fossil fuel industry. These money men at Davos are nothing short of hypocrites as they say they want to save the planet, but are actually killing it for short term profit,” said Greenpeace International Executive Director Jennifer Morgan.
In recent years, the fossil fuel business has started to become a reputational burden for those involved in it. At the annual UN climate meeting COP25 in Madrid last December, Japan’s top representative to the event, Environment Minister Shinjiro Koizumi, were heavily criticized for their failure to address Japan’s addiction to coal, both as a user and exporter.
In Davos, similar criticism is again being pointed to Japan’s megabanks.
The issue is clear: financing coal means financing the climate crisis, and major Japanese banks are the world’s largest lenders to coal right now. Mizuho, MUFG, and SMBC have to develop new energy financing policies soon if they want to be seen as part of the climate solution, rather than financiers of the climate crisis.
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