Mitsubishi UFJ Financial Group (MUFG)

MUFG identified and prioritised its impacts through a materiality assessment process which included feedback from external stakeholders.

As a member of Net-Zero Banking Alliance and Net Zero Asset Management Initiative, MUFG has set a target of net-zero financed emissions by 2050. It discloses absolute financed emissions for its portfolio of equities and bonds related to its subsidiaries MUFG Asset Management and First Sentier Investors and publishes the underlying data quality. It also discloses the key sectors it has identified as priorities to engage with on climate change and that it collectively engages with its investees on the topic of climate change. MUFG discloses the aggregate amount of finance it devotes to climate solutions, specifies what they include and has set a 2030 target of JPY 18 trillion for its environmental sustainable finance. The financial institution provides evidence that it requires clients in some sectors to have a strategy addressing their nature- and biodiversity-related impacts.

MUFG has a publicly available policy statement committing it to respect human rights and respect the ILO core labour rights. It discloses the categories of stakeholders whose human rights have been or may be affected by its activities and has a grievance mechanism accessible to all workers, external individuals and communities to raise human rights complaints or concerns. MUFG discloses the proportion of its total direct operations workforce for each employee category by gender and age group. It also publishes a global tax strategy and has a policy prohibiting bribery and corruption. The financial institution discloses the amount of finance it directs towards SMEs in Japan.

In terms of its approach to senior leadership accountability, MUFG could assign responsibility for sustainability to the group’s board of directors. It could also link the remuneration of its executive or management teams to sustainability performance criteria. Furthermore, the financial institution could commit to gender equality and women’s empowerment, it has an opportunity to increase the proportion of women in senior leadership roles as well as to disclose how it addresses any gender pay gaps across the group. MUFG could describe its engagement approach on sustainability themes and impact topics with clients and investees, across its financing activities.

While MUFG set interim targets for power and the oil and gas sector, it has an opportunity to disclose an interim absolute emission reduction target which covers all its financing activities. It also has an opportunity to specify that it engages with companies on the topic of 1.5°C alignment, rather than climate change in general. Furthermore, it could align its sustainable finance devoted to the environment with internationally recognised frameworks. No evidence was found regarding MUFG’s approach to fossil fuels that spans across the fossil fuel value chain and its financing activities, such as the amount or share of finance it directs towards fuels, or its stance on financing companies with new fossil fuel projects. Additionally, the financial institution could commit to minimising the negative impacts it has on nature and biodiversity, across its financing activities.

MUFG has an opportunity to describe a comprehensive process for identifying its human rights risks and impacts across all its activities, especially its financing activities. To provide transparency on financial inclusivity, the financial institution has an opportunity to disclose the amount of finance directed towards, for example, women-owned businesses or low-income developing countries.