Bank’s New Coal Policy Welcomed by Environmental Groups

Wednesday, July 25, 2018

Tokyo – (PanOrient News) Sumitomo Mitsui Trust Bank said it would no longer finance new coal-fired power plants, no matter where they are located, in its annual report released July 23. Six environmental NGOs reacted positively to the news in a joint statement.

The NGOs said that the plan “has the potential to be one of the strongest policies announced by any financial institution headquartered in Asia.” The policy matches one announced earlier in July by Nippon Life Insurance Company.

The six NGOs are 350.org Japan, Japan Center for a Sustainable Environment and Society, Friends of the Earth Japan, Kiko Network, Greenpeace Japan and Rainforest Action Network.

While Japan’s three largest banks – Mitsubishi UFJ Financial Group, Mizuho Financial Group and Sumitomo Mitsui Banking Corporation – all announced updated guidelines concerning lending to the coal-fired power sector in recent months, none had gone so far as to discontinue funding coal power projects altogether.

However, the text of Sumitomo Mitsui Trust Bank’s new policy does leave some wiggle room, stating that “in the case that exemptions are considered, lending decisions will be made carefully on a case-by-case basis under strict standards which address environmental impact, such as the OECD Guidelines and energy efficiency of the projects.”

The NGOs expressed concern that this potential loophole could defeat the purpose of the policy. They also stated that the Organisation for Economic Co-operation and Development (OECD) Guidelines cited by the bank provide inadequate safeguards on coal and that the bank should implement its new plan without exception.

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