Kiko Network stands firm:Gaps in Mizuho’s policy require a shareholder proposal on climate

22 May 2020
Kiko Network

Kiko Network, which filed a shareholder proposal in March urging Mizuho Financial Group (Mizuho) to disclose in its annual reporting a plan outlining the company’s business strategy, including metrics and targets, to align its investments with the goals of the Paris Climate Agreement, is pushing ahead with its proposal despite opposition from Mizuho.

Kiko Network does not agree with Mizuho’s claims in its notice of meeting, released today, that the Mizuho’s 2020 Environmental Policy addresses Kiko Network’s proposal.

“Mizuho’s new policy is a good first step, but it falls well short of the expectations set out in the shareholder proposal, both in terms of scope and ambition.” said Dr. Hirata, International Director of Kiko Network. “Investors require more from Mizuho to better understand its business strategy and determine whether it is Paris-aligned.”

Kiko Network’s May 2020 investor briefing notes that Mizuho’s 2020 policy only provides targets regarding a tiny percentage of Mizuho’s loan book, project finance to coal power projects in FY2019, representing approximately 0.38% of the Mizuho’s total credit balance in FY2018. Meanwhile, Mizuho’s lending to coal and other fossil fuel developers is a large proportion of its credit exposure and is not addressed by the targets in Mizuho’s new policy.*

“There is no plan for how Mizuho will align the rest of its investments with the goals of the Paris Agreement,” said Dr. Hirata. “Mizuho can’t just get away with providing targets for a third of a percent of its credit balance, especially when we know that Mizuho’s exposure to coal power through corporate finance and underwriting is significant.”

Moreover, the targets provided in the policy are themselves not aligned with the goals of the Paris Agreement. While Mizuho commits to achieve a zero credit balance for coal power plants by 2050, experts such as Climate Analytics states that coal needs to be phased out by 2040 globally if we want to limit global warming to 1.5°C.

“Mizuho’s current actions also fail to demonstrate that it fully grasps and is planning for the climate crisis”, said Dr. Hirata. “Mizuho remains involved in project finance for controversial projects, such as the proposed Vung Ang 2 coal-fired power station in Vietnam. Mizuho claiming that the targets are based on the goals of the Paris Agreement shouldn’t be funding new coal power projects like Vung Ang 2.”

Therefore, Kiko Network stands firm to push ahead with the proposal to urge Mizuho to set a business strategy, with metrics and targets, to align its investments with the goals of the Paris Agreement, and disclose a plan in its annual reporting.

* The 2020 Banking on Climate Change report by Rainforest Action Network and other NGOs has found that from 2016 to 2019 alone, Mizuho provided US$4.24 billion in lending and underwriting to coal power.

For your reference

[Press Release] Kiko Network set to proceed with shareholder proposal (2020/5/1)
[Press Release] Kiko Network, as Mizuho Financial Group shareholder, files first ever climate resolution in Japan (2020/3/16)