29 January 2020

A new report published today by Rainforest Action Network (RAN) exposes how Japan’s largest banks have been furthering the climate crisis through their financing of agribusiness companies implicated in Indonesia’s 2019 fire and haze crisis as well as companies illegally clearing forests and peatlands for plantation development.

“While Japan’s three largest banks are financing the construction of more coal plants around the world, they’re simultaneously financing the destruction of some of the most critical carbon sinks on this planet: tropical forests and peatlands. It’s a double whammy on the climate,” said Hana Heineken, Responsible Finance Senior Campaigner at Rainforest Action Network (RAN).

The report titled “Will Japan’s Megabanks Stop Financing Rainforest Destruction?” details the financing practices of Japan’s three largest banks: Mitsubishi UFJ Financial Group (MUFG), Mizuho Financial Group (Mizuho), and Sumitomo Mitsui Financial Group (SMBC Group). Analysis found that between 2017 and August 2019, the three megabanks combined provided over 1 billion USD in loans and underwriting to the agribusiness operations of companies who had their plantations sealed by the Indonesian Government in 2019 due to the fires…

“By endorsing the UN Principles for Responsible Banking, the three Japanese megabanks have publicly committed to align their business strategies with the Sustainable Development Goals and the Paris Climate Agreement. However, their financing practices show their internal compliance mechanisms aren’t working, and these risks are barely being disclosed to their investors. It’s time the three banks put their money where their mouth is,” said Heineken…

The report provides detailed case studies of how the Japanese megabanks have been financing major Southeast Asian conglomerates – Sinar Mas Group, Jardine Matheson Group, and Salim Group – despite evidence of tropical forest and peatland destruction, illegality, corruption, and land and labor rights violations.

[Rainforest Action Network has reached out to Mitsubishi UFJ Financial Group, Mizuho Financial Group (Mizuho), Sumitomo Mitsui Financial Group, Sinar Mas Group, Jardine Matheson Group and Salim Group for comments. Only Indofood Agri Resources, Salim Group’s main listed plantation entity, responded. In response to evidence of labor violations found by the Roundtable on Sustainable Palm Oil (RSPO) auditors in 2016, IAR stated that they hired a law firm to conduct a review of the findings and found them unsubstantiated. In response to allegations that shadow companies operated in clear violation of regulations and company commitments prohibiting further peat clearance and deforestation, IAR stated that neither of these companies are affiliates or subsidiaries of the group.]