Japan: Mizuho Financial Group faces shareholder resolution to halt coal financing

Several high-profile global investors introduced a shareholder resolution to halt Mizuho Financial Group's financing of coal projects. As part of the proposal, Mizuho would be required to disclose climate risks and publish a plan to ensure its investments are aligned with the Paris Agreement. The first of its kinds in Japan, the resolution was supported by major investors, including Institutional Shareholder Services, Glass Lewis, PKA Pension, AP7, Nordea Asset Management (a unit of Nordea Bank Abp), Storebrand ASA, and Kommunal Landspensojonskasse.

The bank responded that the resolution is inappropriate, and investors ultimately rejected the resolution in June 2020.  

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29 June 2020

Mizuho investors reject shareholder resolution on coal financing

Author: Bloomberg

"Mizuho Investors Reject Shareholder Climate Resolution", 24 June 2020

Mizuho Financial Group Inc. investors rejected a shareholder climate resolution at a annual general meeting...that had placed Japan’s third-largest bank in the spotlight for its financing of coal power projects.

The resolution, which its sponsor said was the first of its kind in Japan, would have required Mizuho to disclose climate risks and publish a plan to ensure its investments are aligned with the Paris Agreement. The Tokyo-based lender said in a statement...it already discloses goals based on the climate pact and that the proposal was “inappropriate.”

The initiative garnered 34.5% of votes cast in advance of the meeting, short of the two-thirds required to pass...Several high-profile global investors supported the motion, including Nordea Asset Management, a unit of Nordea Bank Abp with 235 billion euros ($265 billion) in assets under management, and Norwegian investment giants Storebrand ASA and Kommunal Landspensjonskasse.

...Lenders including Mizuho are financing the construction of plants in Southeast Asia that could lock in coal use for decades...

...[Anti-coal activist group] Kiko Network said it filed the resolution in March because at the time it felt Mizuho had the weakest climate policy among Japan’s megabanks, which include Mitsubishi UFJ Financial Group Inc. and Sumitomo Mitsui Financial Group Inc. Mizuho strengthened its policy in April and Kiko says it now believes it is the strongest among its domestic peers, while still lagging behind those of global rivals.

Mizuho said in April that it plans to halve its 300 billion yen ($2.8 billion) in outstanding coal energy project finance by the year starting April 2030 and bring it to zero by 2050. It also aims to stop providing new loans for coal-fired power plants from this month...

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29 June 2020

Mizuho responds to shareholder resolution on coal financing

Author: Mizuho Financial Group

"Proposal 5 at the 18th Ordinary General Meeting of Shareholders", 10 June 2020

The Board of Directors opposes shareholder Proposal 5 (hereafter “the Proposal”) 1 which was submitted for the 18th Ordinary General Meeting of Shareholders.

We have been proactively disclosing our business strategy, including goals which are based on the Paris Agreement, in our TCFD Report in addition to our annual Integrated Report. The Proposal calls for our company to stipulate in the Articles of Incorporation a provision stating that the business strategy “be disclosed in its annual reporting”. However, we have already stipulated similar provisions in our Environmental Policy, one of our key policies with equivalent weight to our Human Rights Policy. We oppose the Proposal as we believe it is inappropriate in light of the conventional positioning of the Articles of Incorporation describing the company’s purpose, name, and other such matters.

...The Proposal states "Currently, the company is the largest lender in the world to coal power developers” as the reason for the Proposal. Similar statements are cited in proxy advisory reports issued by two proxy advisors (Institutional Shareholders Services Inc. and Glass Lewis & Co., LLC). To the best of our company's knowledge, this is based solely on the Report 2 published by the German NGO Urgewald, and other authors. The statement in this Report that “we have provided USD 16.8B in direct loansto coal plant developers since January 2017” does not reflect the reality, and we believe that there are problems with the accuracy and appropriateness of such amounts

...Therefore, we have disclosed our credit balance of project finance to coalfired power generation facilities as of the end of FY2019 as JPY 299.5B, and have set targets to reduce this balance to 50% by FY2030 and to zero by FY2050...

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23 June 2020

Mizuho Financial Group investors propose shareholder resolution to restrict coal projects in Asia

Author: Reuters

"Environmental shareholder activism comes to Japan as Mizuho faces climate resolution", 22 June 2020

More investors are publicly backing a resolution to curb coal project lending that shareholders of Mizuho Financial Group are expected to consider this week, the first time such a step is to figure at the annual meeting of a Japanese listed company.

As a new front of stakeholder activism opens up in Japan, advisory groups such as the Institutional Shareholder Services group and Glass Lewis, which advise funds worth more than $35 trillion, back the proposal...

If Thursday’s resolution is passed, it could push Japanese banks, one of the last remaining major holdouts on financing coal, to live up to recent commitments to end lending for the dirtiest fossil fuel as climate concerns grow...

[Danish pension fund] PKA has about $50 billion under management and will vote in favour of the Mizuho resolution...

Swedish pension fund manager AP7, with $64 billion in assets under management, also supports the resolution...It joins three investors who reiterated their support...

Blackrock, which holds about 5% of Mizuho, a stake worth about $1.3 billion), declined to comment.

Ostensibly aimed at getting Mizuho to align its business to goals of the Paris Agreement to counter global warming, the resolution seeks to push the bank to halt backing for coal projects around Asia, a priority for Japan’s government and big business...

Japanese banks have been among the biggest financiers to coal over the last five years...

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