Case study: How MUFG takes action on its PRB targets: climate change and natural capital and biodiversity

Stakeholder identification and consultation

Please describe which stakeholders (or groups/ types of stakeholders) you have identified, consulted, engaged, collaborated or partnered with for the purpose of implementing the Principles and improving your bank’s impacts. This should include a high-level overview of how your bank has identified relevant stakeholders, what issues were addressed/results achieved and how they fed into the action planning process.

MUFG classifies its stakeholders involved in its business operations into the following groups: customers, business partners, employees, shareholders and investors, communities and society, and the environment. MUFG engages in constructive dialogue with each stakeholder group to gain valuable insights and foster a deeper understanding of MUFG. By considering stakeholders’ interests and addressing the social issues they face, MUFG aims to build trusting and cooperative relationships that support its sustainable growth and enhance MUFG’s corporate value over the medium to long term.

External Advisors
Furthermore, MUFG has appointed three external experts specializing in environmental and social issues as permanent advisors. MUFG’s board members regularly exchange views with these advisors and incorporate their expertise into MUFG’s sustainability initiatives through their advice and recommendations.

International Initiatives
MUFG actively participates in and supports various international initiatives to fulfill its responsibilities as a financial institution, respond to global expectations, and contribute to building a sustainable society. After announcing its Carbon Neutrality Declaration in May 2021, MUFG joined the United Nations Environment Programme Finance Initiative (UNEP FI) NetZero Banking Alliance (NZBA) in June of that year. MUFG also became a member of the Partnership for Carbon Accounting Financials (PCAF), an international effort to standardize the measurement and reporting of financed emissions. MUFG is one of 12 banks in the NZBA Steering Group, responsible for strategic decision-making, and in December 2021, was appointed Chair of the Financing and Engagement Work Track, leading the development of a global transition finance framework. In addition, MUFG participates in all global and APAC working groups of the Glasgow Financial Alliance for Net Zero (GFANZ), the largest pan-financial sector initiative worldwide. Masamichi Kono, Senior Advisor at MUFG Bank, has served as an Advisor for GFANZ Japan since its inception in 2023, and MUFG President & Group CEO Hironori Kamezawa was appointed Chair in July 2024. Regarding efforts related to natural capital and biodiversity, MUFG took part in the TNFD Forum in February 2022—a platform that provides technical support for sharing information and developing a TNFD framework. As an active member, MUFG participates in discussions within the TNFD Forum to promote initiatives around natural capital and biodiversity. Additionally, MUFG was registered as a TNFD Early Adopter in January 2024, demonstrating its commitment to providing disclosures aligned with TNFD recommendations at an early stage.

What actions were taken by MUFG on its PRB targets, climate change and natural capital and biodiversity?

In its 2024 PRB Reporting and Self-Assessment Template MUFG reports that it took the following actions on its PRB targets, climate change and natural capital and biodiversity:

• SMART Target 1: Climate change
• Examples of achievements related to MUFG’s action plan are presented below:
  • Power Company A (Japan): MUFG enhanced its understanding of the company’s decarbonization strategy by engaging in ongoing discussions with senior management and conducting site visits to power plant facilities. The strategy focuses on accelerating renewable energy development and transitioning to hydrogen power generation. Additionally, using the insights gained from the development of the Transition Whitepaper, MUFG issued transition-linked loans that set power generation emission reductions as the sustainability performance target.
• Furthermore, the FY2022 results for the emission intensity for the power sector and absolute emissions for the oil & gas sector indicators were 313 gCO₂e/kWh and 81MtCO2e, respectively.

• SMART Target 2: Natural capital and biodiversity
• Examples of achievements related to MUFG’s action plan include the following:
  • Metawater Co., Ltd.: MUFG served as the joint lead manager to facilitate the issuance of blue bonds, which are used to finance investments and loans to special purpose companies (SPCs) involved in concession projects, as well as to domestic and international companies operating in the water treatment sector.
  • Republic of Indonesia: MUFG supported the issuance of its first blue bond as a samurai bond. These bonds are designated for projects focused on marine and coastal protection, biodiversity and ecosystem restoration, sustainable fisheries, and related areas.
  • Chiba City: MUFG acted as bookrunner for the first blue bond issuance by a Japanese municipality. The proceeds were allocated to maintain sewerage facilities and equipment, such as pumping stations and purification centres, to help prevent water pollution.

UN Principles for Responsible Banking: Accelerating a positive global transition for people and the planet

With over 300 signatory banks representing almost half of the global banking industry, the Principles for Responsible Banking are the world’s foremost sustainable banking framework. Through these Principles, the banking community takes action to align core strategies, decision-making, lending and investment with the UN Sustainable Development Goals and international agreements such as the Paris Climate Agreement.

FBRH Principles for Responsible Banking (PRB) Assurance:

First class PRB assurance services: The result of solid, hands-on ESG/ Sustainability experience

• FBRH is a GRI Certified Training Partner (Global), ISEP Training Centre and a member of CPD.
• FBRH builds trust. Over 200 reviews from top professionals from around the world demonstrate our ability to build strong, trusting business relationships.
• FBRH possesses a unique skill set that combines ESG/sustainability certified training, experience in advisory services and report preparation, and ESG/sustainability report assurance.

The combination of all the above empowers FBRH to provide first class Principles for Responsible Banking (PRB) assurance services.

References:

This case study is based on published information by MUFG, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:

https://www.mufg.jp/dam/csr/report/indices/prb2024_en.pdf

Note to MUFG: With each case study we send out an email requesting a comment on this case study. If you have not received such an email please contact us.