Banks
Disclosure to manage Megabanks’ financial and climate risks
Published: 14 April 2025 | Updated: 15 April 2025
These shareholder proposals on credible transition plans and audit committee disclosure aim to protect investor value. Investors in the megabanks face risk because:
- Megabanks are exposed to financial risks through inadequate scrutiny of fossil fuel clients and unreliable governance mechanisms
Currently more exposed than many of their peers but do not have adequate policies and other risk controls. - Megabanks are not managing these risks by setting clear requirements for their clients’ transition plans
Investors must ensure Megabanks set timelines for requiring credible, 1.5 degree-aligned transition plans from all fossil fuel customers and defined consequences where the expectations are not met. - Megabanks have failed to heed investors’ calls for further disclosure on client transition plan assessments
Ignoring significant votes can lead to escalating investor pressure, especially considering the increasing climate-related financial risk exposures facing the Megabanks’ investors. - Megabanks’ audit functions of the board need to disclose reasons for assessment given the systemic issues facing Megabanks
Megabanks’ Audit Committees are responsible for ensuring the directors and executive officers are performing their duties. These committees must disclose a basis of audit outcomes, covering how directors are monitoring the risk controls, including but not limited to climate risk.
Download the documents
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Disclaimer
Informational purposes only – This communication is provided solely for informational purposes only and is not, and should not be construed as, investment advice or investment recommendations for the purposes of the Financial Instrument Exchange Act of Japan.
No joint-exercise of voting rights – Nothing in this written communication, nor in any related oral discussion, is intended to be, nor should it be construed as, an offer, an acceptance or a consent, to enter into an agreement for the joint exercise of voting rights or any other shareholder’ rights for the purposes of the Financial Instrument Exchange Act and Foreign Exchange and Foreign Trade Act of Japan. If needs be, it is hereby emphasised that each shareholder exercises its shareholder’s rights independently based upon its own decision and shall not be held liable for its exercise of its shareholder’s rights in any event or in any result, as a breach of any discussion between the shareholders.
No proxy solicitation – Nothing in this written communication, nor in any related oral discussion, is intended to be, nor should it be construed as, a “solicitation for proxies” for the purposes of the Financial Instrument Exchange Act of Japan. The shareholder is not soliciting or seeking any authorization by any other shareholders to exercise their voting rights or any other shareholders’ rights on their behalf or as their agent at the annual shareholders’ meeting. This is a non-commercial product for public dissemination only. Not for sale.
Analysis featured in this briefing does not substitute analysis and disclosure from the companies themselves with primary information. The purpose of the information featured here is to demonstrate to investors the substantial climate-risks the companies are exposed to, and encourages them to undertake their own detailed, forward-looking analysis to demonstrate to investors how they are managing these risks.