MUFG,SMBC Group, Mizuho (collectively megabanks)


The megabanks’ climate policies, targets, and transition plans lack credibility, as they fail to align with  net zero emissions by 2050 pathways such as IEA NZE and global climate measures standard-setting initiatives such as the Net Zero Banking Alliance (NZBA) which the megabanks are signatories.

Key points

  1. Megabanks are actively involved in carbon-intensive sectors such as fossil fuel-related businesses, which pose significant financial risk, but have not set or disclosed sufficient targets or investment and financing policies in those sectors consistent with a 2050 net zero emissions pathway. Current targets and policies are not in line with widely recognized net-zero scenarios such as the IEA, the NZBA’s requirements, or their own commitments.
  2. None of the megabanks have provided sufficient disclosure of their financed emissions trajectories to achieve net zero by 2050, which renders investors unable to assess the credibility of banks’ strategies including reliance on unproven technologies such as ammonia/hydrogen co-firing and CCUS.
  3. The megabanks have indicated they are engaging with their clients in order to help them transition, but without clear expectations for clients’ transition plans such as timelines, metrics, targets, and feasibility evaluation, investors are unable to assess the effectiveness and progress of this engagement.
  4. Peer financial institutions are placing more effective restrictions on finance to companies and projects expanding fossil fuels, leaving MUFG, SMBC Group and Mizuho behind.

Download the documents

MUFG Shareholder proposal April (EN/JA)

SMBC Shareholder proposal April (EN/JA)

Mizuho Shareholder proposal April (EN/JA)

Investor briefing Apr 10

2nd investor briefing May 31

Webinar: Climate related shareholder proposals 〜How should companies consider ESG engagement?〜

[70 minutes]

Frequently asked questions

Why do you rely on the IEA NZE scenario in your briefings?

There are other energy scenarios beyond the NZE that are consistent with limiting global warming to 1.5°C, including those published by the IPCC. However, we refer primarily to the NZE for several reasons:

    • It’s up to date: The IEA updates its scenarios annually with fresh data. This is important because the energy transition is happening at breakneck speed. IPCC assessment reports, by contrast, are only published every few years. Because of its annual publication, IEA scenarios can be adjusted to take into account rapidly changing circumstances such as Russia’s invasion of Ukraine. 
    • It’s widely used: The fact that many large companies and investors already use the NZE, for instance when stress-testing their investments, means that it’s well understood by a wide range of stakeholders.
    • The IEA is a trusted source: As an intergovernmental organisation with a long history of working with the fossil fuel industry - it was originally formed to ensure adequate oil supplies in developed countries - the IEA can hardly be accused of bias against fossil fuels. That’s important, because energy scenarios like the NZE are the product of many assumptions, some of them politically contentious. For instance, the IEA NZE allows for substantially more coal and gas use in the coming years than the UN Production Gap Report, with significant portions of emissions reductions coming through carbon capture and storage (CCS).


    Why do you propose shareholder proposals in Japan as amendments to the articles of incorporation?

    Under Japanese corporate law, the sole legal pathway for a shareholder proposal on climate change is via an amendment to a company’s articles of incorporation. Amending the company’s articles of incorporation is also the most commonly used approach to make shareholder proposals in Japan. Around two-thirds of the shareholder proposals filed in Japan in 2021 took this form

    The legal effect of such shareholder proposals is the same as the “special resolutions” on climate change filed and passed at UK-listed companies including Barclays, BP, Royal Dutch Shell, Rio Tinto and Anglo American, which take binding effect as part of the companies’ constitutions.

    Why do you want companies to stop investing in gas? Isn’t it an effective transition fuel?

    The only way to stop climate change is to stop the burning of fossil fuels, and that includes fossil (“natural”) gas. Calling gas a “transition” fuel obscures its enormous impact on the climate. Between 2010 and 2021, gas consumption contributed nearly 40% to the rise in global CO2 emissions - more than coal. 

    The gas investments that companies like Mitsubishi and GE are planning today will have long-lived impacts on the climate. Mitsubishi’s LNG Canada project is planned to operate for at least 40 years, meaning it’s meant to export gas until at least 2065, long after the world will need to have reached net zero CO2 emissions. Similarly, new gas-fired power plants such as those being built by GE have a lifetime of around 30 years.

    Gas needs to be rapidly phased out if we’re to meet the goals of the Paris Agreement - according to the International Energy Agency (IEA), gas use should fall 63% by 2040 in order to keep global warming below 1.5°C. The IEA has made clear that this means no new oil or gas fields can be approved for development. Humanity is well past the point of using one fossil fuel to transition off another.

    Isn’t stopping fossil fuel development or finance right away going to lead to blackouts and energy shortages?

    According to a range of sources, including the IPCC and the IEA, the world already has enough coal, oil and gas available from existing fields to meet demand in a world that moves towards limiting global warming to 1.5°C. Market Forces’ goal is to stop the flow of finance to companies and projects that seek to expand the fossil fuel industry. It is not a case of “turning off the taps overnight” - it’s about recognising that increasing fossil fuel production is both at odds with a safe climate.

    The fossil fuel industry, on the other hand, wants us to think that coal, oil and gas are essential for energy security, but that isn’t the case. The global energy crisis sparked by Russia’s invasion of Ukraine has shown this very clearly, with countries like Bangladesh facing rolling blackouts because of sky-high imported gas prices. Changing out fossil fuels for renewable energy will make energy systems more secure and less exposed to price fluctuations. It’s also one of the most cost-effective ways to slow down climate change according to the IPCC.

    Is it possible to have 100% renewable energy? Isn’t it safer to diversify with fossil fuels and rely on them to provide “baseload” power?

    To meet the aims of the Paris Agreement and limit global warming to 1.5°C, fossil fuel power generation needs to be rapidly phased out. Globally, power and heat generation accounts for 39% of CO2 emissions. Fortunately, this is also where we have the most readily available substitutes in the form of solar and wind power which, combined with energy storage technologies like large-scale batteries, can and should replace fossil fuel power. Dozens of academic studies have found that relying on renewable energy for 100% of our energy needs is feasible globally at low cost.

    Importantly, renewables will also improve energy security and affordability. Renewables are now the cheapest form of energy in 90% of the world, and will save consumers huge sums of money; according to energy think tank Ember, rapid growth in solar power saved EU countries a whopping €49bn in avoided gas costs in 2022. 80% of the world’s population lives in countries that import fossil fuels, meaning most countries stand to gain from eliminating coal, oil and gas use as quickly as possible.

    Why shouldn’t hydrogen and ammonia co-firing be used in the electricity sector?

    Japanese companies like JERA (owned by TEPCO and Chubu) are pushing hydrogen and its sibling fuel, ammonia, as a low-carbon replacement for coal in power generation, arguing it can be used in existing power plants. However, this approach is riddled with problems.

    First, hydrogen and ammonia are unlikely to reduce power emissions enough. One study of power systems across emerging Asia found that substituting coal with ammonia at a 50/50 rate would still not achieve a lower emissions intensity than typical gas plants, or come close to what’s needed to limit global warming to 1.5°C. Furthermore, the manufacture of hydrogen and ammonia has the potential to be extremely emissions intensive - in fact, some production methods being pushed by fossil fuel companies today result in a higher emissions intensity than just burning coal.

    Generating power from hydrogen and ammonia is also expensive compared to almost every alternative. One study on the Japanese power system forecast that the majority of renewable energy technologies will be cheaper than coal by 2030, with hydrogen and ammonia a “distant second”. 

    For these reasons and others, well-known energy expert Michael Liebreich has ranked power generation as one of the least financially competitive or essential uses for hydrogen and ammonia in the future.

    Is it possible for Japan to meet its energy demand solely with renewables?

    Multiple studies (such here and here) have found that basing Japan’s electricity system on renewable energy is both technically achievable and economically rational. Japan spent 3.9 trillion yen on importing coal and gas for power generation in 2020. Geopolitical uncertainties around Russia’s invasion of Ukraine have caused fossil fuel prices to soar, worsening Japan’s trade deficit and draining national wealth. One study found that Japan will be able to save around 3.3 trillion yen in 2035 by reducing coal and gas imports. Multiple sources suggest renewable energy will be able to supply between 80 and 90% of Japan’s electricity demand in 2035 without coal power and with minimal (1% or less) use of hydrogen/ammonia. The rest can be supplied by existing gas power plants without needing new and replacement plants until achieving 100% renewables. 

    To deliver on a fossil-free electricity system by 2050 and the interim milestones mentioned above, Japan needs swift and strong policy and market reform. Non-state actors, especially market leaders including the corporates targeted by Asia Shareholder Action, play a key role in shaping national policies and markets that drive a fossil-free energy system in Japan.



    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.

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