FinanceMap scores this financial institution in the following areas. Please navigate to the relevant tab for in-depth analysis
FinanceMap assesses these portfolios for this financial institution. Please navigate to the relevant tab for in-depth analysis.
Mitsubishi UFJ Financial Group (MUFG)’s board committees appear to incorporate climate-related issues in guiding corporate strategy and its risk management processes and policies, though descriptions lack detail. It has also assigned climate-related responsibilities to management-level committees, including the Sustainability Committee, and there are descriptions of how senior management are involved in the implementation and management of climate-related issues and strategy.
MUFG has previously clearly defined different transition and physical risk drivers across various risk categories and time horizons, however it does not disclose information on the climate-related risks and opportunities over different time horizons in its 2024 Climate Report. The organization has defined some processes used to determine which risks and opportunities could have a material financial impact on the organization, however the scope of these processes is limited. MUFG also considers climate-related risks and opportunities across various business activities, including corporate financing and products and services that contribute to decarbonizing the economy.
The organization has provided some examples of how it has considered the impact of climate-related risks and opportunities on corporate strategy planning, including its own net-zero ambitions and enhancement of its capability to provide solutions that support clients' decarbonization. MUFG disclosed in its 2022 TCFD Report that it has tested the resilience of its business strategy across a robust range of scenarios, participating in the UNEP FI pilot project and scenario analysis of transition risks up to 2050 and physical risks up to 2100. However, it has not updated its scenario analysis in its 2023 or 2024 TCFD Reports, and it has not disclosed the implications of scenario analysis on its strategy and business model.
MUFG references processes used to identify and assess climate risks, including its transition assessment framework and Environmental and Social Policy Framework. The organization has processes in place to manage climate-related risks, including its use of its Risk Appetite Framework, Top Risk Management, Equator Principles and Environmental and Social Policy Framework, and it integrates climate-related risks into its overall risk management, listing climate change as a top and emerging risk, but descriptions lack detail.
MUFG is transparent about some key metrics used to measure and manage climate-related risks, incorporating material climate-related risks into remuneration policies, and disclosing financing towards climate-related opportunities. MUFG discloses Scope 1 and 2 emissions, as well as Scope 3 Categories 1 through 14. The organization also discloses Scope 3 Category 15 emissions for a wide range of sectors in absolute emissions in its reporting.
In May 2021, MUFG announced its net zero by 2050 commitment it would become the first Japanese bank to join the Net-Zero Banking Alliance. The organization has set 2030 financed emissions targets for some high emitting sectors which are consistent with a 1.5 degree scenario, however these targets only appear to apply to lending activities. MUFG has set targets for oil & gas and power, coal-fired power generation, real estate, steel and shipping, and in its 2024 Climate Report, set targets for the automotive, aviation, and coal sectors.
MUFG will not provide finance to companies planning the construction or building of new coal mines or plants or expansion of existing facilities, however the organization does not outline exclusions for companies with existing transactions. It has also set an interim financed emissions sector target for coal, and has a coal phase out policy, committing to reduce its loan amount for coal mining in OECD countries to zero by FY2030 and in non-OECD countries to zero by FY2040, and its credit exposure to coal-fired power generation to zero by FY2040.
The organization will provide financing, given due diligence, for expanding both conventional oil and natural gas, and unconventional 1348560 and natural gas infrastructure with no criteria around climate transition plan expectations of companies. MUFG has set an absolute interim financed emissions reduction target for the oil and gas sector of 15-28% by FY2030.
MUFG is increasing its financing of renewables through its environmental finance target of 50 trillion yen by 2030, and has outlined its approach to categorizing, assessing and reporting its progress toward its target in its 2024 Sustainable Finance Framework.
FinanceMap’s Climate Governance and Policies analysis assesses statements financial institutions (FIs) are making on how they are incorporating climate issues into their decision-making and operations using FinanceMap’s matrix methodology. This methodology is adapted from the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations and guidelines, Net-Zero Banking Alliance (NZBA) or equivalent Glasgow Financial Alliance for Net-Zero (GFANZ) initiative reporting, and IPCC and IEA technology statements. The TCFD provide guidance on 11 recommendations across four areas which are reflected in our matrix: Governance, Strategy, Risk Management, and Metrics and Targets. Additional benchmarks have been introduced to strengthen the ambition of scoring criteria in the assessment of targets, which are supplemented by guidance from the NZBA or equivalent GFANZ initiatives.
Additionally, Science-Based Policy (SBP) benchmarks are used to measure alignment of an FIs technology positions with the science of climate change. These benchmarks are applied to an FIs internal policies on technologies including coal, oil, gas, nuclear, and renewables and also assesses its engagement with broader climate and energy policy issues such as advocacy on the role and importance of different strategy types in the future energy mix.
For each TCFD recommendation and technology, FIs statements are applied to a five point scoring scale ranging from +2 to -2, measuring alignment with the relevant benchmarks. The detailed scores for this FI are displayed below within each matrix cell.
The following table outlines the key queries and data sources, which FinanceMap uses to assess financial institutions climate governance, targets and policies. Every evidence piece is assessed on a five-point scale of -2,-1,0,1,2 or NA (not applicable)/NS (not scored). All queries, data sources, and evidence pieces are weighted against one another in a matrix system to arrive at a final top-level score. Clicking on specific cells will load the underlying evidence and information on how it has been assessed.
Fossil fuel companies are those whose primary sector falls within coal mining and services, or up-, mid-, and downstream oil and gas sectors. Green companies are defined as companies having over 75% revenue deriving from Substantial Contribution to Mitigation activities under the EU Taxonomy.
Portfolio Paris Alignment analysis of this institution's activities in this portfolio area assesses deals in 2020–2024.
Value Assessed: $547B
Sector Paris Alignment scores for the sectors to which this portfolio has exposure. FinanceMap Paris Alignment analysis is limited to the automotive, upstream fossil fuel, and power sectors.
Fossil fuel companies are those whose primary sector falls within coal mining and services, or up-, mid-, and downstream oil and gas sectors. Green companies are defined as companies having over 75% revenue deriving from Substantial Contribution to Mitigation activities under the EU Taxonomy.
Portfolio Paris Alignment analysis of this institution's activities in this portfolio area assesses deals in 2020–2024.
Value Assessed: $244B
Sector Paris Alignment scores for the sectors to which this portfolio has exposure. FinanceMap Paris Alignment analysis is limited to the automotive, upstream fossil fuel, and power sectors.
Fossil fuel companies are those whose primary sector falls within coal mining and services, or up-, mid-, and downstream oil and gas sectors. Green companies are defined as companies having over 75% revenue deriving from Substantial Contribution to Mitigation activities under the EU Taxonomy.
Portion of AUM Assessed: $92.7B
| Holding Name | Contribution to Sector Production |
|---|---|
| Kansai Electric Power Co Inc | 16.7% |
| Electric Power Development Co Ltd | 11.5% |
| Kyushu Electric Power Co Inc | 9.6% |
| Tokyo Electric Power Company Holdings Inc | 5.9% |
| Duke Energy Corp | 5.8% |
| Tohoku Electric Power Co Inc | 5.6% |
| RWE AG | 5.0% |
| Xcel Energy Inc | 4.9% |
| Chubu Electric Power Co Inc | 4.9% |
| American Electric Power Company Inc | 4.8% |
| Holding Name | Contribution to Sector Production |
|---|---|
| Toyota Motor Corp | 29.6% |
| Honda Motor Co Ltd | 21.8% |
| Suzuki Motor Corp | 19.3% |
| Nissan Motor Co Ltd | 7.8% |
| Mahindra and Mahindra Ltd | 7.0% |
| Mazda Motor Corp | 6.6% |
| Subaru Corp | 4.4% |
| Mitsubishi Motors Corp | 1.7% |
| General Motors Co | 0.2% |
| Hyundai Motor Co | 0.2% |
| Holding Name | Contribution to Sector Production |
|---|---|
| Coal India Ltd | 27.4% |
| Glencore PLC | 25.1% |
| China Coal Energy Co Ltd | 13.9% |
| Yankuang Energy Group Co Ltd | 11.5% |
| Alamtri Resources Indonesia Tbk PT | 8.7% |
| Exxaro Resources Ltd | 4.6% |
| China Shenhua Energy Co Ltd | 3.9% |
| Whitehaven Coal Ltd | 3.0% |
| United Tractors Tbk PT | 1.2% |
| Adani Enterprises Ltd | 0.6% |
| Holding Name | Contribution to Sector Production |
|---|---|
| Inpex Corp | 25.0% |
| Japan Petroleum Exploration Co Ltd | 11.4% |
| Mitsui & Co Ltd | 9.8% |
| ENEOS Holdings Inc | 7.1% |
| Chevron Corp | 5.8% |
| Tokyo Gas Co Ltd | 5.4% |
| PetroChina Co Ltd | 4.9% |
| Osaka Gas Co Ltd | 3.9% |
| Idemitsu Kosan Co Ltd | 3.8% |
| Petroleo Brasileiro SA Petrobras | 3.4% |
Mitsubishi UFJ Financial Group’s (MUFG) Responsible Investment Report states that the asset managers of MUFG Financial Group include: Mitsubishi UFJ Trust and Banking, Mitsubishi UFJ Kokusai Asset Management (MUKAM), MU Investments and Mitsubishi UFJ Asset Management (UK) Ltd (MUFG AM UK). These entities appear to operate combined engagement approaches, so have been scored as one entity in this assessment and are referred to as MUFG. This report also references that MUFJ Trust Bank uses abrdn (which scores an A- in InfluenceMap's system) as a service provider for conducting engagements on foreign investee companies.
MUFG appears to be engaging with companies on climate. The asset manager has a strategy for climate engagements that includes how it prioritizes companies based on several ESG indicators. It follows a broad structure for tracking engagements which divides progress into four categories, but these stages lack detail. The asset manager appears to have an escalation response but also lacks details on what actions it is willing to take following unsuccessful engagements.
MUFG does appear to be actively engaging companies around climate change. For example, it has engaged with an automobile company and led the company to set emissions reduction targets in line with net zero, as well as with Daikin through a collaborative effort on the company’s disclosures and a climate action plan. The asset manager does not appear to engage with companies on climate policy lobbying. MUFG has served in leadership roles in CA100+ and AIGCCC and is an active collaborative engager on climate.
MUFG has described its Stewardship Committee’s role and how it reviews stewardship activities. It has limited transparency on its engagements, providing mostly anonymous case studies in its reporting, but does provide all proxy voting data with rationale for voting decisions.
The asset manager does not appear to use shareholder authority to file Paris Aligned shareholder resolutions.
Insightia data indicates that MUFG did not meet the minimum threshold to assess support of AGM resolutions InfluenceMap categorizes as in line with the Paris Agreement. Therefore, the asset manager has not been scored on InfluenceMap's climate-relevant voting query.
FinanceMap's methodology to measure the engagement process on climate was developed in consultation with several of the world's leading asset managers and uses key aspects of the UK Financial Reporting Council's 2020 Stewardship Code . The Stewardship Code was chosen to benchmark engagement quality as it provides an ambitious framework and detailed definitions of what constitutes effective engagement. FinanceMap defines the term ‘engagement’ as referring to all investor actions undertaken to influence the management strategy of the companies they own including private communications with corporate management and appointed advisors; questions at AGMs/other company meetings; comments on the company in the media; escalation and the shareholder resolution process (filing, voting behavior). FinanceMap’s methodology breaks the engagement process down into a set of sub-activities and looks for evidence associated with these across publicly available data sources.
Climate-relevance categorization of shareholder resolutions is based on the IPCC’s Special Report on 1.5°C and its concluded need for “rapid and far-reaching transitions in land, energy, industry, buildings, transport, and cities.” FinanceMap scored voting on any resolution where the intent and likely outcome is consistent with this IPCC stated need. The voting data is drawn from asset managers' disclosures to the US Security Exchange Commission (SEC), asset manager websites (including third-party websites they link to), directly from the asset managers, and through specialist voting data provider Insightia. The full list of resolutions assessed is available here.
The following table outlines the key queries and data sources, which FinanceMap uses to assess asset managers' corporate engagement programs. Every evidence piece is assessed on a five-point scale of -2,-1,0,1,2 or NA (not applicable)/NS (not scored). All queries, data sources, and evidence pieces are weighted against one another in a matrix system to arrive at a final top-level score. Clicking on specific cells will load the underlying evidence and information on how it has been assessed.
