Mizuho Financial Group Inc, Japan’s third largest bank by assets, said on Thursday it would stop financing new thermal coal mining projects from June 1, as global investors and environmental groups urge banks to unload coal-related exposure.
The move comes after Prime Minister Yoshihide Suga announced last month that the country aims to nearly double its target for cutting carbon emissions, leading to rival banks tightening their lending policy in coal.
While Mizuho had previously said it would not lend funds for ‘mountaintop removal’, a technique that involves using explosives to expose coal seams, it is haulting financing any project for thermal coal mining, according to its updated policy. The bank didn’t mention metallurgical coal.
Mizuho is the first major Japanese lender to make such a pledge, while bigger rivals Mitsubishi UFJ Financial Group Inc (MUFG) and Sumitomo Mitsui Financial Group Inc (SMFG) have only ruled out mountaintop removal so far.
Japan’s biggest banks are under pressure from global investors and environmental groups over coal funding, and Mizuho’s annual general meeting last year was the first time a climate motion had been put to shareholders of a listed company in Japan. Shareholders rejected the proposal.
SMFG said on Wednesday it would suspend new financing for all coal-fired power plants without exception.