MUFG says to stay with some coal lending, at the same time as inexperienced strain mounts By Reuters

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© Reuters. FILE PHOTO: A signboard of MUFG Financial institution is seen in Tokyo

By Takashi Umekawa and Yuki Nitta

TOKYO (Reuters) – Japan’s Mitsubishi UFJ (NYSE:) Monetary Group Inc will not utterly cease financing for coal-fired energy crops, at the same time as exterior strain has pressured it to tighten its lending coverage, the chief government of its fundamental banking unit stated.

Like its rivals, Japan’s largest lender is coming underneath extra strain from international traders and environmental teams over its ties to coal. A shareholder proposal final month known as on MUFG to stipulate the way it will align its enterprise with the targets of the 2015 Paris local weather accord, based on a duplicate seen by Reuters.

Smaller rival Sumitomo Mitsui (NYSE:) Monetary Group Inc is contemplating halting new financing for any coal-fired energy crops, with out exceptions, Reuters beforehand reported.

Nevertheless, MUFG is unwilling to desert lending to “transition initiatives” that would turn out to be extra environmentally pleasant down the road, Junichi Hanzawa advised Reuters in an interview on March 26 that was embargoed for launch on Tuesday.

“Realistically, it might be very tough to get rid of all financing of transition initiatives, given Japan’s power scenario,” Hanzawa stated.

Regardless of pledges to scale back carbon emissions underneath the Paris settlement, coal stays a mainstay for Japan. It accounts for round a 3rd of the power provide combine, a Ministry of Economic system, Commerce and Business official stated in 2020.

MUFG has already stated it might not finance new coal-fired crops in precept, however there have been exceptions to that, resembling newer crops that burn coal extra effectively.

A brand new lending coverage, prone to be introduced this month, will see the financial institution slim down these exceptions, Hanzawa stated, with out giving examples.

If the financial institution have been to think about new coal financing, it must be for initiatives that will ultimately result in a discount in carbon dioxide emissions, he stated.

“We have heard our coverage regarded unfastened due to such exceptions, so we’re in dialogue to vary it,” he stated.

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