MUFG to quit climate group as Japanese banks join Wall Street exits

[LONDON, TOKYO] Mitsubishi UFJ Financial Group (MUFG) plans to leave the banking industry’s largest climate alliance, joining domestic peers in walking away from a group abandoned by US and Canadian heavyweights.

Japan’s biggest lender is withdrawing from the Net-Zero Banking Alliance (NZBA), according to sources familiar with the matter, who asked not to be named discussing a sensitive matter. An MUFG spokesperson said the bank has yet to come to a decision, and will continue to work diligently on addressing climate change.

MUFG follows Tokyo-based rivals Nomura Holdings and Sumitomo Mitsui Financial Group in quitting the climate group. The latest exits have emerged after a wave of NZBA defections by the largest banks in the US and Canada, including JPMorgan Chase, Bank of America and Royal Bank of Canada, that started in December.

Since Donald Trump won back the White House in the Nov 5 election, US finance firms have been seeking to adjust to a new reality in which environmental policies are ripped up and lambasted. That has since spilt out beyond US borders, forcing lenders in other nations to consider their approach to global warming.

NZBA was convened by the United Nations and once represented over 40 per cent of global banking assets. The group is currently consulting members on a drastic overhaul that would see it remove a requirement for signatories to align their portfolios with a goal of limiting global warming to 1.5 degrees Celsius.

MUFG was also one of 11 member banks on NZBA’s steering group. BLOOMBERG