Sumitomo Mitsui likely to halt financing all kinds of coal-powered plants

Japan’s Sumitomo Mitsui Financial Group (SMFG) is likely to stop providing new financing to coal-fired power plants, including more environmentally friendly projects, due to growing pressure from global investors and environmentalists.

Prime Minister Yoshihide Suga is also pursuing zero greenhouse gas emissions, on a net basis, by 2050.

While SMFG announced it would not finance new coal-fired power plants in principle, it hasn’t ruled out funding more efficient coal-burning plants, such as the so-called “ultra-supercritical" or USC power plants.

It is now likely to remove that exception from its lending policy.

An SMFG spokesman said that while nothing had been decided, it would review its policy for businesses and industries that could have a major environmental impact.

Rival Mitsubishi UFJ Financial Group Inc has ceased funding coal power projects except under “special circumstances” based on a country’s energy policy and international agreements signed by Japan.

Meanwhile, No.3 lender Mizuho Financial Group Inc. would still fund coal projects that will be transformed into highly-efficient power plants.

Mizuho shareholders last year rejected a proposal, backed by Nordic funds including Nordea Asset Management, which sought to rein in the financing of coal projects in Asia.