Today, media sources reported that Sumitomo Mitsui Trust Bank is signaling its intent to restrict financing for new coal plant projects regardless of their location, making it the first Japanese bank to move forward on this.

Shin Furuno, 350.org Japan Divestment Campaigner, issued the following statement on this development:

“Sumitomo Mitsui Trust Banks’s plan to  restrict project finance for new coal-fired power plants regardless of their geographic location has the potential to be the strongest policy announced by any bank in Asia(1), matching the recent announcement by Nippon Life Insurance (2).This policy, if fully implemented, places Sumitomo Mitsui Trust Bank ahead of other financial groups in Japan in aligning their lending policies with the Paris Agreement.

The record breaking rains and heat we have been experiencing in Japan and across the globe are stark reminders of the worsening impacts of climate change and tell us in no uncertain terms that fossil fuels need to be phased out immediately, starting with cutting their funding lines

In recent months, the three major banks, Mitsubishi UFJ Financial Group, Mizuho Financial Group, and Sumitomo Mitsui Banking Corporation, have all announced updated policies for lending to coal-power plants, but all stopped short of discontinuing financing for these projects. (3)

There is, however, reason for concern, as project financing for coal-fired power plants currently under negotiations may be exempted from this policy and others on a case-by-case basis. This may prove to be a loophole that could defeat the purpose of this policy, so we call on Sumitomo Mitsui Trust Bank to fully implement the policy without exceptions.

We will be keeping a close watch on the implementation of this policy and have high hopes that Sumitomo Mitsui Trust Bank will show leadership and continue to set the example by moving to divest from companies dependent on coal power and mining.”

Notes:
(1) HSBC announced in April 2018 that the company “will now stop financing new coal-fired power plants globally apart from Bangladesh, Indonesia and Vietnam, where projects may be given specific dispensation if no reasonable energy alternative can be found.” Read more here: https://www.hsbc.com/news-and-insight/insight-archive/2018/hsbc-strengthens-energy-policy

(2) In July multiple media sources reported Nippon Life Insurance Company, the biggest life insurer by revenue in Japan, purporting to restrict new project finance for coal plant projects regardless of their location. Read more here: http://world.350.org/ja/press-release/nipponlifecoal-en/

(3)  NGO Statement on MUFG Policy Announcement (5/25); NGO Statement on MizuhoFG Policy Announcement (6/15);  NGO Statement on SMBC Policy Announcement (6/21)