Case study: How MUFG works with its clients and customers to encourage sustainable practices

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 the stakeholders involved in its business operations into the following groups: customers, business partners, employees, shareholders and investors, communities and society, and the environment. By engaging in constructive dialogue with each stakeholder, MUFG seeks to gain fresh insights and enhance their understanding of the company. Considering the interests and societal challenges faced by stakeholders, MUFG aims to build relationships of trust and collaboration that will drive sustainable growth and improve corporate value over the medium to long term. Additionally, three external experts in the environmental and social fields serve as permanent external advisors. These advisors regularly exchange views with the Board and provide expertise that informs MUFG’s sustainability initiatives.

After announcing the MUFG Carbon Neutrality Declaration in May 2021, MUFG joined the Net-Zero Banking Alliance (NZBA), established by the United Nations Environment Programme Finance Initiative (UNEP FI) in June 2021. Furthermore, MUFG became part of the Partnership for Carbon Accounting Financials (PCAF), an international initiative that standardizes the measurement and disclosure of financed emissions. MUFG is also one of the 12 banks on the NZBA Steering Group, responsible for coordinating strategy and decision-making in the NZBA. In December 2021, MUFG was appointed Chair of the Financing and Engagement Work Track group, leading efforts to create a global transition finance framework.

In addition, MUFG participates in and endorses various initiatives to fulfill its social responsibilities as a financial institution, address the needs of the global community, and contribute to building a sustainable society. In January 2021, MUFG endorsed and committed to the Stakeholder Capitalism Metrics, a set of indicators proposed by the World Economic Forum to measure the level of stakeholder capitalism.

How did MUFG work with its clients and customers to encourage sustainable practices and enable sustainable economic activities?

In its 2023 PRB Reporting and Self-Assessment Template MUFG reports that it works with its clients and customers to encourage sustainable practices and enable sustainable economic activities as follows:

MUFG’s Credit Committee has established a qualitative framework to assess clients’ transition efforts, which began pilot operations in FY2022. The key components of this framework are outlined below, with plans to integrate risk quantification and management models in the future.

Strategy

• Commitment to achieving net-zero emissions from operations and setting ambitious reduction targets.
• Clear roadmap with defined goals and interim targets.

Execution and Feasibility

• Solid financial foundation and ability to secure necessary financing for investments.
• Realistic and viable business plan.
• Specific actions have been implemented to reduce emissions.

Governance

• Strong leadership commitment to emission reduction.

This framework is also used to verify projects in carbon-intensive industries and to support customers’ transition efforts.

Power Project Team (Domestic)

• Monitor GX policy trends and identify client needs and challenges. Use this understanding to verify and discuss projects.
• Discussions are conducted at the general manager level, led by directors, and supported by an internal advisor familiar with the power system and business.

ESG Consultation Process (Overseas)

• Implement a consultation process for projects, tailored to regional characteristics. Confirm the projects’ importance to the client’s transition strategy and conduct ongoing monitoring.

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/prb2023_en.pdf

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