Sumitomo Mitsui Financial Group Inc. may become the first major Japanese bank to cut back on coal-fired power financing, Bloomberg News reported May 16.
The president of the Tokyo-based company indicated during a May 14 earnings briefing that it is considering tightening its policy on such projects, the report said, adding that the bank's credit policy already states that it will not fund projects that carry "the risk of a significant negative impact" on the environment.
HSBC Holdings PLC said in April that it will not fund new power plants that use coal, joining other financial institutions that have made similar pledges to tighten financing projects dependent on fossil fuel.
Japanese insurer Dai-ichi Life Insurance Co. Ltd. also said that it will not be providing financing for overseas projects dependent on coal. The insurer told Bloomberg that it had not previously loaned money for coal power projects and the policy does not apply to other companies under its parent, Dai-ichi Life Holdings Inc.
Transparency advocacy group BankTrack said Sumitomo Mitsui Financial and its two main domestic rivals count among the world's top financiers of coal power projects, the report said. BankTrack ranked Mizuho Financial Group Inc. and Mitsubishi UFJ Financial Group Inc. as first and second in a list of lenders providing funding for coal plant developers globally, according to the report. Sumitomo Mitsui Financial's main lending unit came in at fifth.
MUFG's primary lending and trust banking units will make financing decisions "following recognition of both the local and the international circumstances surrounding coal-fired power generation." Bloomberg noted that MUFG CEO Nobuyuki Hirano said "there is still demand for coal power and it is a mission of a financial institution to address such needs."
Meanwhile, Mizuho President Tatsufumi Sakai said the bank is "aware that environmental issues are becoming more important socially... we will take measures taking into account what’s important for Japan's energy policy."