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.
The Sumitomo Mitsui Financial Group (SMFG) is the parent holding bank of Sumitomo Mitsui Banking Corporation (SMBC). TCFD reporting for the organization appears to be at the SMBC Group level, which is the focus of this analysis.
The board has oversight of measures related to TCFD recommendations. In 2021, the Sustainability Committee was established inside the board to lead on sustainability promotion measures including climate change. Management-level positions and committees such as the Chief Sustainability Officer are assigned various climate-related responsibilities and there are processes to ensure the board are informed of climate-related issues.
SMBC considers climate-related risks on its lending and investment activities. It clearly defines the climate-related opportunities it considers relevant to its business over different time horizons and has defined what it considers to be short, medium, and long term time horizons in its CDP response.
It has provided some examples of how it has considered the impact of climate-related risks and opportunities on its corporate strategy planning in its TCFD report and CDP disclosure. In its 2021 TCFD report, it highlights numerous climate-related opportunities and responses made in line with its Roadmap Addressing Climate Change.
SMBC has tested the resilience of its business strategy to climate-related risks and opportunities using various scenarios including a transition scenario focused on the energy and electricity sectors and a physical scenario focused on the impact of water disasters on the group's customers. In 2021, it expanded its transition analysis to include a 1.5C scenario and expanded its target geography of its physical scenario from domestic to global.
SMBC outlines some processes used for identifying and prioritizing climate-related risks in its reporting, but it is unclear if the same process is applied to climate-related risks and how certain climate-related risks are prioritized. It considers climate-related risk in its assessments of credit risk, market risk, liquidity risk, operational risk, and reputational risk.
SMBC highlights some processes in place to manage climate-related risks in its TCFD reporting, including a risk appetite framework, risk register, sector-specific policies likely to have an impact on climate change, and internal training programs. The organization is aligned with TCFD guidance on integrating climate-related risks into overall risk management. Climate change is considered as a Top Risk within the group’s Risk Appetite Framework.
SMBC is transparent about key metrics used to measure and manage climate-related risks, providing metrics for group companies within SMBC. It discloses the expenditure towards managing climate-related risks and opportunities including green financing and loan balance in coal, energy, and utilities.
The organization discloses Scope 1 and Scope 2 emissions data, however, it does not appear to disclose Scope 3 emissions data with the exception of employee business trips. SMBC has committed to disclosing financed emissions using the PCAF methodology and has calculated the financed emissions of portfolio companies in the power sector and the energy sector. In November 2021, it joined the PCAF Japan coalition.
The organization has set various targets to manage climate-related risks and opportunities, highlighting long-term goals within the group’s GREENxGLOBE 2030 initiative. In October 2021, SMFG joined the Net Zero Banking Alliance and has released a 2030 interim target for the power sector. In its 2022 TCFD Report, it outlined additional 2030 targets for the oil and gas and coal sectors, covering lending and investment activities.
It is unclear if SMBC is aligned with IPCC guidance on the role of coal in the energy mix up to 2050. It is phasing out of coal-fired power plants by 2040 but does not appear to have set a phase out date for mining. SMBC updated its policy in May 2021 and again in May 2022 which states it will not provide new project finance and corporate finance tied to facilities for new or existing coal-fired power generations and will not provide support for new or expansion of existing thermal coal mining projects.
With regard to natural gas and oil, SMBC will continue to provide financing assuming clients meet due diligence, paying close attention to particular activities including oil sands, fracking, pipelines, and oil and gas projects in the Arctic.
It appears that SMBC is advocating a position that is not aligned with IPCC guidance on the role of nuclear in the energy mix. The organization has excluded nuclear power generation in its green bond framework and does not mention nuclear energy in its sector specific policy.
The organization has communicated support for a low-carbon economy and has committed to net zero emissions by 2050. Additionally, it has set a target of JPY 20 trillion by 2030 for green financing. However, it does not appear to be committing to aligned its energy financing portfolio with the IPCC guidance across all technologies to support the transition to a renewables-based energy system on a short and medium timescale.
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.
Portfolio Paris Alignment analysis of this institution's activities in this portfolio area in 2020–2021.
Value Assessed: $162B
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.
Portfolio Paris Alignment analysis of this institution's activities in this portfolio area in 2020–2021.
Value Assessed: $118B
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 production companies are defined as those with primary sector of operations in the up-, mid-, and/or downstream segments of fossil fuel production. 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: $21.6B
| Holding Name | Contribution to Sector Production |
|---|---|
| Nextera Energy Inc | 11.8% |
| Kyushu Electric Power Co Inc | 11.5% |
| Electric Power Development Co Ltd | 8.9% |
| Enel SpA | 6.6% |
| Tohoku Electric Power Co Inc | 6.5% |
| Okinawa Electric Power Co Inc | 6.3% |
| Kansai Electric Power Co Inc | 5.8% |
| Iberdrola SA | 5.1% |
| Tokyo Electric Power Company Holdings Inc | 4.5% |
| Chubu Electric Power Co Inc | 2.6% |
| Holding Name | Contribution to Sector Production |
|---|---|
| Toyota Motor Corp | 63.3% |
| Subaru Corp | 9.4% |
| Honda Motor Co Ltd | 8.8% |
| Suzuki Motor Corp | 6.7% |
| Nissan Motor Co Ltd | 3.0% |
| Ford Motor Co | 2.4% |
| Mazda Motor Corp | 1.8% |
| BYD Co Ltd | 1.0% |
| Tesla Inc | 0.9% |
| General Motors Co | 0.7% |
| Holding Name | Contribution to Sector Production |
|---|---|
| Glencore PLC | 36.0% |
| China Shenhua Energy Co Ltd | 30.5% |
| Coal India Ltd | 13.9% |
| Yankuang Energy Group Co Ltd | 6.4% |
| Exxaro Resources Ltd | 5.1% |
| Adaro Energy Indonesia TBK PT | 3.4% |
| United Tractors Tbk PT | 3.0% |
| Washington H Soul Pattinson and Company Ltd | 1.5% |
| Adani Enterprises Ltd | 0.1% |
| Holding Name | Contribution to Sector Production |
|---|---|
| Chevron Corp | 15.9% |
| TotalEnergies SE | 14.6% |
| Conocophillips | 10.4% |
| Exxon Mobil Corp | 10.2% |
| Mitsui & Co Ltd | 5.6% |
| Inpex Corp | 4.8% |
| CNOOC Ltd | 4.7% |
| BP PLC | 4.3% |
| Shell PLC | 3.8% |
| ENEOS Holdings Inc | 2.9% |
Sumitomo Mitsui DS Asset Management (SMDAM) is majority owned by Sumitomo Mitsui Financial Group, and appears to be the main subsidiary offering asset management services.
SMDAM appears to be engaging companies on climate, however it is not robustly engaging on the topic. The asset manager has a climate engagement framework that focuses on net-zero targets and climate disclosures. It also appears to be encouraging companies to achieve net-zero by actions such as acquiring SBT certification for reduction targets. It uses clearly defined milestones to track engagement progress, however it does not outline a defined escalation response if engagements are unsuccessful.
SMDAM appears to be engaging companies on climate, in particular on net-zero targets and disclosure, although examples in its reporting lack details. The asset manager does appear to consider climate policy influence in its engagement strategy, but it is unclear if it is actively engaging on this and again lacks details on its approach. It is involved with several climate-related investor initiatives, such as TCFD and CA100+, although it is unclear how much SMDAM is engaging collaboratively through these initiatives.
SMDAM has described its stewardship governance structure and how it reviews and assesses stewardship policies and activities. It has limited transparency on engagements, only providing some anonymous case studies in its reporting. The asset manager is transparent about its voting record, providing all proxy voting data as well as rationale for decisions against management. SMDAM does not appear to use shareholder authority on climate to support its engagement approach.
Insightia data indicates that SMDAM 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.
Sumitomo Mitsui Financial Group (SMFG) and subsidiary Sumitomo Mitsui Banking Corporation (SMBC) do not appear to meaningfully engage with sustainable finance policy and regulation, except for some limited engagement on mandatory disclosures in Japan.
SMFG has stated support for the Paris Agreement and has advocated for action to achieve zero-carbon economies by 2050 in Japan. However, in its 2021 TCFD report, group CEO Jun Ohta cautioned against categorizing projects as ‘brown’ or ‘green’ to determine whether they should be financed, and SMBC CEO, Makoto Takashima, suggested that banks in Europe have rushed divestment of large emitters in a 2021 Bloomberg article.
In a working group meeting with the Financial Services Agency in 2022, SMBC appeared to support enhanced disclosures of climate change-related information, but did not take a clear position on the need for a regulatory approach.
SMFG has not disclosed any positions on sustainable finance policy or engagement through trade associations on its website.
InfluenceMap’s methodology for assessing lobbying on sustainable finance policy closely follows InfluenceMap’s established methodology on climate policy engagement, which is used extensively by investors, including via the Climate Action 100+ investor engagement process. Our full methodology can be found here.
Under our assessment of sustainable finance lobbying, InfluenceMap considers engagement on all financial policies which intersect with climate and/or other sustainability issues. The analysis takes into account both the engagement of the financial institution and the activities of industry associations they hold membership of.
InfluenceMap’s methodology covers seven publicly available data sources, searching for evidence of engagement and corporate positioning since 2017. To determine the policy issues within the scope of the analysis, InfluenceMap breaks down sustainable finance policy engagement into a series of subcategories, or 'queries'. These are designed to cover high-level issues relating to the importance of sustainable finance, as well as more specific areas of sustainable finance policymaking. InfluenceMap’s research process searches for evidence of an organization's engagement with each sustainable finance policy issue, across each of the data sources.
The following table outlines the key queries and data sources, which FinanceMap uses to assess financial institutions’ sustainable finance policy engagement. 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.
In this section, we depict graphically the relationships the corporation has with trade associations, federations, advocacy groups and other third parties who may be acting on their behalf to influence climate change policy. Each of the columns above represents one relationship the corporation appears to have with such a third party.
In these columns, the top, dark section represents the strength of the relationship the corporation has with the influencer. For example if a corporation's senior executive also held a key role in the trade association, we would deem this to be a strong relationship and it would be on the far left of the chart above, with the weaker ones to the right. Click on these grey shaded upper sections for details of these relationships. The middle section contains a link to the organization score details of the influencer concerned, so you can see the details of its climate change policy influence. Click on the middle sections for for details of the trade associations. The lower section contains the organization score of that influencer, the lower the more negatively it is influencing climate policy.
InfluenceMap Data Point on Corporate - Influencer Relationship
(1 = weak, 10 = strong)
Sumitomo Mitsui Trust Asset Management and Nikko Asset Management Europe is a member of The Investment Association, which is a national association member of EFAMA (last checked September 2023).
InfluenceMap Data Point on Corporate - Influencer Relationship
(1 = weak, 10 = strong)
Sumitomo Mitsui Trust Asset Management and Nikko Asset Management Europe is a member of The Investment Association, which is a national association member of EFAMA (last checked September 2023).
InfluenceMap Data Point on Corporate - Influencer Relationship
(1 = weak, 10 = strong)
Makoto Takashima (President and CEO, SMBC) is a board member of the IIF. As of October 2023, Akihiro Fukutome (President & CEO, SMBC) is on the board of the IIF
Makoto Takashima
--no extract--
InfluenceMap Data Point on Corporate - Influencer Relationship
(1 = weak, 10 = strong)
Sumitomo Mitsui Financial Group is a Member of the IIF
InfluenceMap Data Point on Corporate - Influencer Relationship
(1 = weak, 10 = strong)
Makoto Takashima (President and CEO, SMBC) is a board member of the IIF. As of October 2023, Akihiro Fukutome (President & CEO, SMBC) is on the board of the IIF
Makoto Takashima
--no extract--
InfluenceMap Data Point on Corporate - Influencer Relationship
(1 = weak, 10 = strong)
Sumitomo Mitsui Financial Group is a Member of the IIF
InfluenceMap Data Point on Corporate - Influencer Relationship
(1 = weak, 10 = strong)
As of Apriil 2023, FUKUTOME Akihiro is Vice Chairman of the Japanese Bankers Association
FUKUTOME Akihiro（President & CEO, Sumitomo Mitsui Banking Corporation）
InfluenceMap Data Point on Corporate - Influencer Relationship
(1 = weak, 10 = strong)
As of March 2023, TAKASHIMA Makoto is Vice Chairman of the Japanese Bankers Association
TAKASHIMA Makoto（President & CEO, Sumitomo Mitsui Banking Corporation）
InfluenceMap Data Point on Corporate - Influencer Relationship
(1 = weak, 10 = strong)
TAKASHIMA Makoto is Chairman of the Japanese Bankers Association
TAKASHIMA Makoto（President & CEO, Sumitomo Mitsui Banking Corporation）
InfluenceMap Data Point on Corporate - Influencer Relationship
(1 = weak, 10 = strong)
As of Apriil 2023, FUKUTOME Akihiro is Vice Chairman of the Japanese Bankers Association
FUKUTOME Akihiro（President & CEO, Sumitomo Mitsui Banking Corporation）
InfluenceMap Data Point on Corporate - Influencer Relationship
(1 = weak, 10 = strong)
As of March 2023, TAKASHIMA Makoto is Vice Chairman of the Japanese Bankers Association
TAKASHIMA Makoto（President & CEO, Sumitomo Mitsui Banking Corporation）
InfluenceMap Data Point on Corporate - Influencer Relationship
(1 = weak, 10 = strong)
TAKASHIMA Makoto is Chairman of the Japanese Bankers Association
TAKASHIMA Makoto（President & CEO, Sumitomo Mitsui Banking Corporation）
InfluenceMap Data Point on Corporate - Influencer Relationship
(1 = weak, 10 = strong)
Sumitomo Mitsui Banking Corporation Europe Limited is a member of UK Finance, which is a member of EBF (last checked September 2023).
not specified
--no extract--
InfluenceMap Data Point on Corporate - Influencer Relationship
(1 = weak, 10 = strong)
Sumitomo Mitsui Banking Corporation Europe Limited is a member of UK Finance, which is a member of EBF (last checked September 2023).
not specified
--no extract--
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