Japan’s Sumitomo Mitsui Financial Group ends financing for coal-fired power plants.

Japan’s Sumitomo Mitsui Financial Group Inc (SMFG) said on Thursday it would no longer lend to new coal-fired power plants from May 1, a day after peer Mizuho Financial Group Inc said it would stop financing new coal power projects.

The policy change comes as the sector faces pressure from activist investors and environmental groups to help tackle climate change.

SMFG said in a statement that the movement toward decarbonization has been progressing globally since the Paris climate accord, adding it “would not provide financial support in principle to new coal-fired power plants.”

Japanese banks are among the few major lenders who have stuck to backing coal projects even as other banks worldwide have cut their exposure to coal.

The country’s three major banks – SMFG, Mizuho and Mitsubishi UFJ Financial Group (MUFG) – are among the world’s top five lenders to coal power and mining over the last five years, according to Refinitiv SDC Platinum data.

Mizuho said on Wednesday it would halve its 300 billion yen ($2.8 billion) in loans to coal power projects by 2030 and reduce it to zero by 2050. MUFG said in 2019 it would not finance new coal-fired power plants.

16 April 2020

IEEFA