Japan’s Mitsubishi UFJ Financial Group on Tuesday laid out emissions-cutting targets for lending to the real estate, steel and shipping sectors, and said emissions from its oil and gas business had fallen as loans were repaid.
As Japan’s top lender and a significant funder of carbon-intensive industries, MUFG is increasingly in activists’ crosshairs and is set to face a shareholder vote on its climate efforts at an upcoming annual meeting.
The need for faster climate action was reiterated by U.N. climate scientists last month, with the world on track to blow past a goal of limiting global warming to 1.5 degrees Celsius above the pre-industrial average by mid-century.
While MUFG and other banks have committed to get to net-zero carbon emissions across their financing by that date, the focus is increasingly on shorter-term steps they plan to get there.
After previously setting targets for the oil and gas and power sectors, MUFG said it had also set targets for shipping, steel and real estate.
For commercial property, the bank said it would target a cut in emissions intensity to 44-47 kilograms of carbon equivalent per square meter by 2030, against 2020 results of 65 kilograms. For residential, it targets a drop from 27 kilograms to 23 kilograms.
For steel, which accounts for 7% of global emissions, MUFG said it would target a 22% reduction in emissions compared with 2019. In shipping, the bank aims to align with an International Maritime Organization target to halve emissions from a 2008 baseline.
After previously targeting a 15-28% cut in oil and gas emissions by 2030, MUFG said in a progress report that as of March emissions were 76 million tonnes of carbon equivalent, down 9% from 2019.
The bank said “changes in the external environment due to the situation in Ukraine” and other factors could impact future emissions linked to the sector.
Emissions from the power sector also fell 9% over the same period, it added, as the bank’s customers shift to greener forms of ener-gy.
MUFG, with some $2.8 trillion in assets, is one of the world’s largest lenders.
Source: Reuters reported by Simon Jessop and edited by Jan Harvey