COALITION TARGETS JAPANESE BANK BOARDS

Groups seeking to pressure mega lenders on climate change, say sources

ACOALITION of climate groups filed shareholder proposals with Japan’s top three banks, including Mitsubishi UFJ Financial Group, calling for stricter board oversight of climate-related risks, said people familiar with the matter.

The proposals from Australia’s Market Forces, Japan’s Kiko Network and a representative of Rainforest Action Network mark the first time climate groups have targeted the boards of the banks as a way to pressure the lenders on climate change.

The proposals focus on board oversight of climate-related business risks and seek to make the megabanks — Mitsubishi UFJ, Sumitomo Mitsui Financial Group and Mizuho Financial Group — disclose how they evaluate director competency for such oversight, said the people.

It represents a strategy shift from last year when the climate groups sought to mandate banks disclose credible transition plans to meet 2050 carbon neutral targets.

This year’s proposals reflected governance standards set by the International Sustainability Standards Board requiring disclosure around how governance bodies oversaw sustainability-related risks, added the people.

Sumitomo Mitsui and Mizuho confirmed they had received the proposals. Sumitomo Mitsui said it would review them, while Mizuho declined to comment further. Mitsubishi UFJ declined to comment.

While there has been some backlash against so-called green shareholder activism abroad, pressure on Japanese companies has continued unabated, with some activists and shareholders saying corporate Japan has been too slow in moving away from fossil fuel and its financing.