“Lending for coal-fired power is a risk.” Shareholder proposal for climate change countermeasures

“Loans to Coal-Fired Power Are Risks” Shareholder Proposal on Climate Change Measures March 16 6:23

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There is growing interest in the role of financial institutions in advancing climate change. Financing for coal-fired power generation will become a risk as the value of the business declines as global warming countermeasures progress, and a shareholder proposal to disclose future policies and the like to a major Japanese financial group has been issued. It will be submitted and will be watched if it leads to acceleration of environmental measures.

The shareholder proposal was submitted by the Japanese environmental NGO Climate Network to the Mizuho Financial Group, which holds shares by 15 days.

The proposal points out that lending to coal-fired power generation, which emits relatively high amounts of carbon dioxide, could become a risk if global warming countermeasures were to be taken to reduce the value of the business. In addition, based on Mizuho's support for the International Task Force on Climate Change Financial Information Disclosure (TCFD), which encourages companies to disclose information on climate change, we will discuss future policies for financing coal-related businesses. Seeking disclosure.

"Is it the first time in Japan to seek disclosure of climate change-related information through a shareholder proposal?" Said Shuichi Osawa, a Daiwa Securities Equity Research Dept. familiar with corporate disclosure.

At the United Nations Conference on Climate Change (COP26) in the United Kingdom in November, discussions on information disclosure on the risks of climate change are likely to be one of the focuses, and attention will be paid to whether this will accelerate environmental measures.

NGO "Japanese financial institutions are very slow."

Mr. Hitoko Hirata, Director of the Environmental NGO "Climate Network" who submitted the shareholder proposal, commented on the reason for the proposal: "The role of financial institutions is very important in the midst of climate change and a shift toward a decarbonized society. Information is not disclosed, so we are seeking information disclosure in our shareholder proposal this time. "

He added, "The movement of financial institutions in Japan is generally very slow compared to Europe and the United States, and investment and lending in fossil fuels and coal is continuing as before. We want to reach more financial institutions and address the risks of climate change in response to shareholder proposals. "

Coal business is a “grounding asset”

In recent years, lending and investment for coal-fired power generation has been reconsidered around the world, and the role of financial institutions in promoting global climate change measures is increasing.

In Europe, Deutsche Bank and Standard Chartered Bank of the United Kingdom have announced plans not to finance new coal-fired power plants, and BNP Paribas in France will provide all financing for coal-fired power generation by 2040. Announced to stop.

In Australia, which relies on coal-fired power for about 70% of its electricity, Commonwealth Bank, a major financial company, has decided to withdraw from lending to coal-related businesses by 2030 following a shareholder proposal.

And in January, Fink, chairman of BlackRock, the world's largest U.S. asset manager, said that "climate risk is an investment risk," and said it would release stocks from companies with high incomes from the coal business. And it was big news.

Behind this move is the entry into force of the Paris Agreement, which aims to reduce greenhouse gas emissions to virtually zero in the latter half of this century. As a result, businesses that emit large amounts of greenhouse gases, such as coal-fired power plants, are also called “grounding assets,” and there is concern that their asset values ​​will decline.

Also, the Global Risks Report, published by the World Economic Forum, which hosts the Davos Conference, which gathers leaders from the political and business circles, reports on the top five risks that will occur over the long term. Occupied.

Following the resignation of the governing body of the Central Bank of the United Kingdom and the Bank of England on Tuesday in connection with the establishment of the TCFD: Task Force on Climate-Related Financial Disclosure, Mark Kearney, a special envoy of the United Nations, said They are calling for an economy that is not dependent on fossil fuels.

At a meeting in Davos in January, Kearney said, "I want to make disclosure on climate change mandatory by COP26," and before COP26 to discuss the United Nations' climate change measures in the UK in November this year, companies said. Advocates considering climate change risks in all investment and lending decisions.