After its broadly welcomed public statement warning Korean utility KEPCO over the continued funding of controversial overseas coal-fired power stations, the world’s largest asset manager faces another test of its climate credentials later this month.
This will come at the 25 June AGM of Japanese bank Mizuho, which faces a first ever climate resolution.
The resolution, lodged by Japanese shareholder Kiko Network, sets the relatively low bar of calling on Mizuho disclose a plan outlining its business strategy to align its investments with the climate goals of the Paris Agreement.
According to reports, investors worth over $200bn have already come out in support of the resolution, but Blackrock’s decision will be critical.
Mizuho: world’s largest coal power funder
Since 2017, Mizuho has lent US$16.8bn to coal plant developers, making it the world’s biggest private lender to the sector.
However, on 14 April, shortly after the resolution was lodged, Mizuho announced a new policy signalling a change of direction.
“Climate change is one of the most important global issues that can affect financial market stability,” Mizuho said. “Responding to the environment and climate change is a key issue in our business strategy.”
Major gaps in new policy
Despite this, the bank remains involved in coal projects, including Vung Ang 2, one of the controversial coal plant deals singled out by Blackrock as part of its criticism of KEPCO.
Furthermore, according to Kiko Network, Mizuho’s the policy falls well short of the expectations set out in the shareholder proposal, both in terms of scope and ambition.
Specifically, the new policy only provides targets regarding a small fraction of Mizuho’s lending, and does not provide a plan on how Mizuho will align the rest of its investments with the goals of the Paris Agreement. Additionally, the targets provided in the policy are not aligned with the climate goals of the Paris Agreement.
Blackrock’s decision on 25 June is a critical one not just in terms of its own growing reputation as a smart investor on climate risk, but in determining the trajectory of the energy transition.