Mitsubishi UFJ Financial Group to cease coal financing

The banking group added forestry, palm oil and coal mining to its restricted transactions list.

Japan’s Mitsubishi UFJ Financial Group (MUFG) will cease financing new coal-fired power generation projects after 1 July after revising its environmental and social policy framework, a report by Reuters revealed.

MUFG, one of the world’s largest banks by assets, said the decision will gradually reduce the balance of its exposure to coal power station projects although the company could make exceptions where governments need to build plants to meet local electricity demand, an MUFG spokesman said.

Also read: Can Japanese banks hold onto their coal-free promises?

The 2018 Banking on Climate Change report estimates that MUFG along with Japan’s other two megabanks -SMBC and Mizuho - have provided a combined $8.6b in financing aid to the coal power sector from 2015 to 2017.

In an original policy framework issued in 2018, MUFG said it would provide financing to coal-fired power projects in line with international guidelines.

In the revised policy, the banking group added forestry, palm oil and coal mining to its “restricted transactions” list, saying it may ask clients to obtain globally recognised certification.

Read the full report here.