23% of shareholders backed a resolution to align MUFG with the Paris Climate Agreement

July 2, 2021

Mitsubishi UFJ Financial Group (MUFG) shareholders have defeated a proposal to better align the business with global climate change targets, but the 23% of shareholders who voted in favour of the resolution have sent a “stark climate warning” to MUFG’s board.

The proposal, instigated by Japanese NGO policy group Kiko Network with backing from three other NGOs, was voted on at the company’s AGM on June 29. It called on the company to disclose and adopt a plan to align its financing and investments with the Paris Climate Agreement.

The resolution was co-filed by three other organizations: Market Forces, Rainforest Action Network, and 350.org Japan, and was supported by a number of MUFG shareholders.

Despite two major proxy advisors recommending that investors vote against the proposal, Kiko Network welcomed the positive signs of gaining almost a quarter of shareholder’s support.

“This filing serves as a testament to the impact of investor pressure,” said Kimiko Hirata, international director of Kiko Network. “Today’s vote is a significant rebuke to management and a clear warning that it must immediately up its game or face even greater pressure.

“Faced with the crystallizing physical and financial impacts of the climate crisis, investors are making it plain that MUFG needs to move further and faster.”

In May, MUFG announced plans to achieve net-zero financed emissions by 2050. It is the world’s sixth-largest banker of fossil fuels, resolution co-filers Rainforest Action Network claim.

Japanese listed companies have, so far, been successful in defeating shareholder climate resolutions, with MUFG’s resolution being the fourth since 2020 to be fended off by a majority of shareholders. However, given Japan government's recent announcement of new decarbonisation objectives, such listed companies may not be able to stave off change for long.

In the US, activist investors have been more successful in securing victories against high-carbon emitting companies.