As activists falter in Japan, MUFG board vetoed climate resolution Reuters

(Corrected to change the title to MUFG instead of MUFJ)

By Takashi Umekawa and Aaron Sheldrick

TOKYO (Reuters)-Mitsubishi UFJ Financial Group’s shareholders on Tuesday rejected a proposal requiring the bank to align its business with global climate change goals, which allowed the board of directors to win investors pushing for more action on the environment Victory.

Activist investors in Europe and the United States trying to stop climate change succeeded in forcing companies to divest their fossil fuel assets, but the strategy has so far failed in Japan. This is the fourth time since 2020 that a so-called shareholder climate resolution has been rejected after being submitted to a Japanese listed company.

The Japanese board has benefited from the support of domestic institutional investors who tend to obey management.

Mitsubishi UFJ Bank (NYSE:) is Japan’s largest lender and supports numerous coal and fossil fuel projects.

A Mitsubishi UFJ spokesperson confirmed via email that the resolution failed at the annual general meeting and received approximately 23% of shareholders’ votes.

The Mitsubishi UFJ Board of Directors opposed the resolution, stating that the “basic content” of the proposal “has been incorporated into the company’s management strategy” and recently made a commitment to carbon neutrality and other policy changes.

The NGOs Kiko Network and Rainforest Action Network proposed this resolution, which was supported by many shareholders, including Federated Hermes (NYSE:), which focuses on sustainable investment.

“Although we welcome the latest update of company policies and the 2050 net zero commitment, we believe that these policies are not sufficient to limit global warming to 1.5 degrees Celsius,” Sachi Suzuki, deputy director of participation at Federated Hermes EOS, said in a letter Said in the email.

The 2015 Paris Agreement requires countries to control carbon emissions to keep the average temperature rise within 1.5 degrees Celsius (2.7 degrees Fahrenheit) before industrialization to avoid the worst effects of climate change.

Mizuho Financial Group is the first Japanese listed company to face a climate resolution, and shareholders voted to veto the resolution last year. In the past two weeks, Sumitomo and Kansai Electric have resisted similar resolutions.