The reasons behind Climate demonstrations against Japanese banks

The fight against climate change requires a radical shift in the energy sources we use. Changing to sustainable energy is a massive undertaking. Investing in green energy and withdrawing investments from fossil fuels are both crucial. The goals stated in the Paris Agreement indicate that we must move to a carbon-free future by 2050 in order to avoid the worst effects of global warming.

Japanese banks have been major financiers in coal over the past five years, though many companies in Japan and the rest of the world have started planning and implementing climate change policies. Major Japanese financial institutions such as Mizuho Bank, Sumitomo and Mitsubishi UFJ Financial Group have outlined limited policies to reduce or withdraw investments from fossil fuels. Some activist groups and NGOs, including those who are shareholders in these banks, have protested in the last year, demanding more impactful changes.

Mizuho rejects shareholders’ proposal to combat climate change

The first such instance occurred with Mizuho in 2020. A resolution was put forth for Mizuho to strengthen its climate change policy and stop financing coal projects in Asia. One of the sponsors of the resolution was Kikonet, an NGO which is also a Mizuho shareholder.

Demonstrations were held in front of Mizuho Headquarters by NGOs and activist groups such as Fridays for Future and Greenpeace. These groups were not the only ones in support of the proposal. Several major investment groups also voiced their support. Unfortunately, the resolution failed to pass, though it did attain 34.5% of the votes in advance of Mizuho’s general shareholder meeting. Two-thirds of votes are required to pass a resolution.

However, in 2021, Mizuho’s updated long term plan accelerated its climate change goals, moving its target to 2040-2041 fiscal year instead of 2050-2051.

Japanese banks have set climate change-related targets but have also expressed the need for flexibility regarding fossil fuels projects as part of their business strategies. Sumitomo CEO Masayoshi Hyodo expressed these sentiments amidst similar pushback and demonstrations in 2021. Groups such as the Japanese branch of Friends of the Earth (FoE) protested climate change policies that they felt did not go far enough. The NGO Market Forces put forth a resolution for Sumitomo to strengthen its climate commitment. Much like 2020’s Mizuho resolution, it failed to pass, gaining only 20% of the vote.

Much of the pushback related to these climate plans is about the exceptions and loopholes in them. For example, Sumitomo has already been involved in financing coal plants in Bangladesh and has plans to continue with that project.

More pressure needed to force powerful banks to take action

Mitsubishi UFJ also had its shareholders’ meeting in 2021, which was met with more demonstrations. Once again, NGOs and some shareholders appealed for further strengthening of climate-related policy. Nonetheless, MUFG commented, “It is not appropriate [for shareholders] to stipulate specific matters related to business execution,” dismissing the appeal entirely. They also claimed that the bank has already made efforts in line with the Paris Agreement. Ultimately, the resolution failed to pass in the shareholders’ meeting, though it did get 23% of the vote.

The policies have stepped in the right direction. However, it’s understandable that many groups feel that we need even stronger efforts due to the severity of global warming. We are already starting to feel its effects with extreme weather becoming more common. Bold and comprehensive action is needed, and open discussions and people making their voices heard are keys in facing climate change head on.