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Japanese megabanks

Mizuho

World’s top financier of the LNG sector

Last updated: March 2024

Photo credit: 350 Japan

Mizuho is a globally regressive bank when it comes to funding fossil fuels, providing USD 189.6 billion to fossil fuels since the signing of the Paris Agreement.

Mizuho’s Liquified Natural Gas (LNG) finance keeps increasing even though new LNG projects are not needed in a climate safe world. Mizuho was the world’s top financier to the LNG sector in 2022.

This is a bank that isn’t taking climate action seriously.

Mizuho needs to strengthen its climate risk management and align its financing policies and targets with a 1.5 degrees warming pathway.

Specifically, Mizuho needs to:

  • Exclude any finance to companies expanding the coal industry (thermal and metallurgical), including lending and underwriting
  • Exclude finance to new and expanded oil and gas projects and the companies developing them
  • Set targets for fully decarbonised power sector portfolios by 2035 in advanced economies and by 2045 globally
  • Set and disclose clear requirements for its clients to demonstrate alignment with 1.5 degrees pathways, and exclude finance to those that fail

Take Action

Tell your bank to stop financing for fossil fuel industry expansion

Fossil fuel funding since Paris Agreement

  • LNG: USD 6.81 B
  • Coal mining: USD 0.66 B
  • Coal power: USD 0.98 B
  • Financing for top fossil fuel expanders: USD 42.18 B
  • Financing for fossil fuels: USD 189.61 B

Case studies

Adaro Energy Indonesia (Adaro)

Adaro Energy Indonesia (Adaro) is a thermal coal mining company, with a poor environmental record and no credible plans to reduce its dependency on polluting coal. The bank has previously financed Adaro, and has no policy to exclude further finance to companies expanding coal such as Adaro.

Adaro’s Decarbonisation Journey is not credible or Paris Agreement-aligned. Adaro derived 98% of its 2022 revenue from coal. Despite evidence from the International Energy Agency (IEA) and other experts that the rapid decline and eventual phase-out of coal by 2050 are necessary to meet climate goals, and a recent IEA study which casts doubt on the long-term prospects of Indonesian coal exports, Adaro insists that global coal demand will be sustained at least until 2050.

» Find out more

Whitehaven

Whitehaven is one of Australia’s largest thermal coal miners. The company says it is “diversifying” into metallurgical coal, but it still has three thermal coal projects in development, in addition to two largest greenfield metallurgical coal mine proposals in Australia, Winchester South and Blackwater South. If Blackwater South goes ahead, this could see Whitehaven mining coal until 2121.

The bank has previously financed Whitehaven and has no policy to rule out funding companies expanding coal.

If Whitehaven is able to move forward with all of its planned projects, over their lifetimes they would release 3.58 billion tonnes of CO2 emissions, equivalent to nearly three times Japan’s annual emissions. Not only is WHC wrecking our climate, it has a long history of destroying the local environment and harming the communities that it operates in.

» Find out more

Chattogram

The bank can keep funding fossil gas projects in Bangladesh, including a carbon bomb in Chattogram of close to 20GW that the world and Bangladesh can’t afford, threatening the climate, local ecosystems and communities.

» Find out more

JERA

Japan’s biggest power company JERA, a 50-50 joint venture of TEPCO and Chubu Electric Power, is pushing polluting fossil fuels in Japan and around the world while trying to brand itself a global clean energy leader. The bank can keep funding companies, such as JERA to expand fossil gas and prolong the life of coal-fired power plants.

JERA is facing global protests as well as greenwashing complaints creating significant reputational risks for its financiers.

» Find out more

A woman holds an umbrella as she waits with her family to be evacuated by the rescue team on a bamboo raft in front of her flooded house in South Kalimantan, Indonesia.

Image: JERA’s Hekinan Power Station, which is being targeted for ammonia co-firing. Source: Wikimedia Commons

Barossa LNG

The bank has lent to projects which are threatening First Nations cultural heritage and our shared climate. The Barossa gas field is proposed for the pristine waters north of the Tiwi Islands in the Northern Territory, Australia. There has been serious regulatory uncertainty about this project, which was stopped for over a year by legal challenges over the adequacy of consultation with Traditional Owners. New emissions reduction regulation also poses increased costs and risks for the project.

Walk With Us tells the story of Tiwi Islands Traditional Owners coming together to escalate the fight against the Barossa gas project.

A woman holds an umbrella as she waits with her family to be evacuated by the rescue team on a bamboo raft in front of her flooded house in South Kalimantan, Indonesia.

Image: Walk With US. Traditional Owners send a powerful message to super funds: stop investing in Santos

Cameron LNG

The bank has no policy to exclude finance to new oil and gas fields and associated infrastructure, despite such projects being out of line with Paris-aligned scenarios.

Cameron LNG Expansion (Train 4) is a pre-FID export project located in Louisiana. The project is facing regulatory uncertainties due to recent US Department of Energy (DOE) policy change to ensure the stability of gas prices in the wake of the Ukraine crisis.

 Policy scorecard

 New fossil fuels

Coal mines

The science

  • IEA Net Zero Emissions by 2050 scenario (NZE): No new thermal or metallurgical coal mines or extensions
  • IPCC (AR6): Emissions from existing fossil fuel infrastructure without additional abatement would exceed the total limit of emissions in 1.5°C pathways with no or limited overshoot

Project-level finance policy: Rules out project-level finance to new and expansion of existing thermal coal mines, including infrastructure linked with thermal coal mining

Corporate finance policy: Doesn’t rule out financing companies building expanded coal mines (even though most finance to the sector is corporate finance)

Which banks are they lagging behind?
Lots of banks including:

UniCredit excludes coal developers (companies that have developed, expanded or bought thermal coal mines since 2020, or are planning to do any of these things).

JP Morgan: “We will not provide project financing or other forms of asset-specific financing where the proceeds will be used to develop a greenfield coal mine or expansion of an existing coal mine.”
“We will not provide financial services to clients deriving the majority of their revenues from the extraction of coal. By the end of 2024, we will also phase out our remaining credit exposure to such clients.”

HSBC will not provide new finance to any client for the specific purposes of, or new advisory services in connection with, activities that include new or expanded thermal coal mines and new metallurgical coal mines. (Source: HSBC Thermal Coal Phase-Out Policy, January 2024).
“Will seek to withdraw, as soon as possible, any financing and advisory services with a client that has made or makes a new commitment to thermal coal expansion; or has proceeded or proceeds with thermal coal expansion.”
“In addition, for EU and OECD markets only, HSBC will not provide new finance or new advisory services where the client’s thermal coal related revenues are greater than 40% of total revenues (or 30% of total revenues by 2025),”

Commbank will only provide project finance for new or expanded Metallurgical Coal Mines after an assessment of the environmental, social and economic impacts of such activity, and if in line with the goals of the Paris Agreement.
Will not provide corporate or trade finance, or bond facilitation,
to new clients who derive 25% or more of their revenue from the
sale of thermal coal. Will reduce its corporate and trade finance exposure to existing clients who derive 25% or more of their revenue from the sale of thermal coal to zero by 2030. Will cease providing bond facilitation to existing clients who derive 25% or more of their revenue from the sale of thermal coal by 2030.

OCBC will not finance (or underwrite) new financing or refinancing to clients where more than 50% of their mines comprised of thermal coal or more than 50% of revenue comes from thermal coal mines.

Coal power plants

The science

  • IEA NZE: No new coal power projects
  • IPCC (AR6) limited overshoot 1.5°C pathways: No new fossil fuel infrastructure (See above)

Project-level finance policy: Rules out project-level finance to new and expansion of existing coal power plant, but has exclusions around unproven decarbonisation technologies

Corporate finance policy: Doesn’t rule out financing companies building coal power

Which banks are they lagging behind?
Lots of banks including:

UniCredit excludes coal developers (companies that have developed, expanded or bought thermal coal mines since 2020, or are planning to do any of these things).

OCBCwill not provide new lending or refinancing (including syndicated loans), as well as debt issuance and debt underwriting activities to

  • coal-fired power plants (CFPPs), including existing/operating CFPPs.
  • clients where more than 50% of their total power generation capacity / revenue comes from CFPPs.
Gas fields

The science

  • IEA NZE: No new gas fields
  • IPCC (AR6) limited overshoot 1.5°C pathways: No new fossil fuel infrastructure (See above)

Project-level finance policy: No policy to rule out financing to new and expansionary oil and gas fields

Corporate finance policy: No policy to rule out financing to companies pursuing new and expansionary oil and gas fields

Who are they behind?

Project finance: Lots of banks including OCBC, UOB, HSBC, BNP Paribas, Credit Agricole, Société Générale, ING, Commonwealth Bank, Westpac.

UOB: No new project financing for upstream oil and gas projects approved for development after 2022.

OCBC: We will not extend project financing to upstream Oil & Gas projects that obtained approval for development after 2021.

Corporate finance:

Danske Bank has decided not to offer long-term financing or refinancing to E&P oil and gas companies that intend to expand supply of oil and gas beyond what was approved for development by 31st of December 2021.

Westpac: Subject to national energy security:

  • We will not provide project finance or bond facilitation for the development of new (greenfield) or expansionary oil and gas fields, including new associated dedicated infrastructure, unless in accordance with the IEA NZE scenario (2021).
  • We will continue to provide corporate lending and bond facilitation where the customer has a credible transition plan(*) in place by 30 September 2025.

(*) A credible transition plan(…)should include Scope 1, 2 and 3 emissions and actions the company will take to achieve GHG reductions aligned with pathways to net-zero by 2050, or sooner, consistent with 1.5°C warming.

Gas power plants

The science

  • IEA NZE: Without relying heavily on expensive and unproven carbon capture and storage technology, global gas power generation falls by 56% by 2035 and 83% by 2040. There are currently no CCS-equipped gas plants either operating or under construction globally.
  • IPCC (AR6) limited overshoot 1.5°C pathways: No new fossil fuel infrastructure (See above)

Project-level finance policy: No policy to rule out financing to new and expansionary gas power projects

Corporate finance policy: No policy to rule out financing to companies pursuing new and expansionary gas power projects

Which banks are they lagging behind?

HSBC will not provide new finance, or new advisory services, to any client for the specific purposes of:

  • a new oil-fired power plant;
  • a new unabated gas-fired power plant unless the client demonstrates to HSBC that the new power plant is part of the client’s overall transition plan to achieve abated power generation, consistent with HSBC’s targets and commitments(*); or
  • conversion of existing coal-to-gas-fired power plants, unless the client demonstrates to HSBC its intention to transition to abated power generation, consistent with HSBC’s targets and commitments.

(*) Any new peaker gas-fired power plants would be expected to achieve abated power generation, consistent with HSBC’s targets and commitments.

LNG infrastructure

The science

  • IEA NZE: “a global [LNG] supply glut forms in the mid-2020s and under construction projects are no longer necessary.” (p. 139)
  • IPCC (AR6) limited overshoot 1.5°C pathways: No new fossil fuel infrastructure (See above)

Project-level finance policy: No policy to rule out financing to new and expansionary LNG projects

Corporate finance policy: No policy to rule out financing to companies pursuing new and expansionary LNG projects

Which banks are they lagging behind?

Westpac: "For upstream oil and gas – subject to national energy security, no project finance or bond facilitation for the development of new (greenfield) or expansionary oil and gas fields, including new associated dedicated infrastructure(*) unless in accordance with the IEA’s NetZero by 2050 (2021) scenario."
(*) This includes direct finance for new LNG plants and pipelines. See more for our analysis here.

Commbank: "Provide no project finance to (i) new Floating Production Storage and Offloading infrastructure dedicated solely to new oil extraction projects; (ii) new transmission pipelines dedicated solely to new oil or new gas extraction projects; or (iii) new oil ships or new gas vessels."

Mizuho target scorecard

Decarbonisation sector Science says Megabanks’ targets wdt_ID Which banks are they lagging behind?
Power

IEA NZE: “By 2030, global power sector emissions are down about …45% in the NZE Scenario” and down to net zero by 2045 (World Energy Outlook 2023, p.128)

NZBA: “Use the best available scientific knowledge to set targets that are in line with credible 1.5°C low/no overshoot scenarios.”(NZBA 2023 Progress Update, p.9)

2030 FE reduction target only covers power and upstream energy sector lending ( not underwriting)

Megabanks have set only intensity targets and no absolute targets for the power sector. MUFG: 156-192g CO2e/kWh / SMBC Group: 138-195g CO2e/kWh / Mizuho: 138-232kg CO2 /MWh
80

Lots of banks - including OCBC, UOB, DBS

Eg. UOB committed to reduce emissions intensity by 61 per cent by 2030.

Coal power

IEA NZE: No new coal-fired power plants are approved from 2021.

By 2030, with new construction slowing and efforts to transition away from coal underway in many countries, the share of unabated coal in electricity generation falls below …15% in the NZE Scenario” (World Energy Outlook 2023, p. 127)

NZBA: “Use the best available scientific knowledge to set targets that are in line with credible 1.5°C low/no overshoot scenarios.”

Reduce coal power loan balance to zero by 2040 82

BNP Paribas will only provide financial products and services to power companies that meet the following requirements. The company has the strategy to reduce coal power generation in its mix under a regularly monitored plan including a timeline, which results in no longer owning or operating coal fired power generation capacities by 2030 in EU and OECD countries and by 2040 in the rest of the world.

DBS: Stop financing customers who derive more than 50% of revenue from thermal coal from January 2026, except for their non-thermal coal or renewable energy activities, and lower the threshold as time progresses.

Coal mining

IEA NZE: NZE: “In the NZE Scenario, global coal production declines by 45% to 2030 and a further 85% between 2030 and 2050.” (World Energy Outlook 2023, p.143) 

NZBA: “Use the best available scientific knowledge to set targets that are in line with credible 1.5°C low/no overshoot scenarios.”

 

MUFG has no 2030 target. Mizuho and SMBC have targets to reduce thermal coal mining FE or loan balance to zero in 2030 for OECD countries and in 2040 for the rest of the world 85

Westpac: Zero lending to institutional customers with a high portion of their revenue (≥15%) coming directly from thermal coal mining by 30 September 2025. Zero scope 1, 2 and 3 absolute financed emissions to companies with >5% of their revenue coming directly from thermal coal mining by 2030.

Oil and Gas

IEA NZE: Compared to 2022, emissions from oil and gas fall 26% by 2030 53% by 2035  

NZBA: “Use the best available scientific knowledge to set targets that are in line with credible 1.5°C low/no overshoot scenarios.”

2030 FE target ranges set by Mizuho and SMBC start from just 12% and MUFG from 15%. All of them are limited to upstream business (excluding significant midstream and downstream emissions) 86

Eg. OCBC: A 35% reduction in their upstream and integrated oil and gas financed emissions by 2030, and ultimately a 95% reduction in their upstream and integrated oil and gas financed emissions by 2050.

Assessment of company policy

Mizuho is piloting a framework for assessing customer transitions, but is yet to disclose details. In order to be credible, this framework must include

 

  • Requirements that clients’ short-, medium- and long-term plans and targets, including scope 3 emissions, align with a 1.5 degree pathway
  • Assessment by a third party to ensure these targets are science based
  • Clear consequences where the client does not meet these requirements

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