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[Strategy] Opportunities Related to Climate Change

Opportunities Related to Climate Change

Capital Investment Expansion and Financing Opportunities

■ Demand for Capital Investment is Expected to Rise as a Result of the Acceleration of Net Zero Initiatives in Various Industries

According to the IEA(note), global decarbonization-related investment is expected to reach approximately USD 4 trillion annually from 2026 to 2030. In addition, the Ministry of Economy, Trade and Industry estimates decarbonization-related public and private investment of approximately ¥150 trillion in Japan over the next 10 years in sectors including energy, automobiles, and construction, within which it forecasts ¥20 trillion in government-funded support through GX Economy Transition Bonds.

In addition to Green Bonds and Green Loans to underpin investment plans, support for transition innovation in industries will also become a significant business opportunity for financial institutions.

  1. October 2021 IEA Report, "World Energy Outlook 2021"
Demand for Capital Investment is Expected to Rise as a Result of the Acceleration of Net Zero Initiatives in Various Industries
Source: Prepared by MUFG from materials released by the Ministry of Economy, Trade and Industry

MUFG's Approach to Carbon Neutralization

While making policy recommendations in cooperation with industry and government agencies, MUFG will grasp new needs and issues through the provision of solutions. We will strengthen relationships with customers, local governments, and industry associations as we provide industry and government agencies with feedback on new needs and issues, working responsibly with these parties to achieve carbon neutrality for customers.
MUFG's Approach to Carbon Neutralization
  1. Asia Transition Finance Study Group: An initiative led by private-sector financial institutions, launched to promote transition financing in Asia with a focus on major financial institutions operating in ASEAN countries under the Asia Energy Transition Initiative (AETI)
  2. Just Energy Transition Partnership: A partnership led by the G7 to accelerate the early retirement of emission-intensive infrastructure and support investment in renewable energy generation and relevant infrastructure
  3. Including: Introduced 300 companies to Zeroboard Inc. (100 companies registered as partners of Zeroboard); Proposed TCFD consulting services (collaborating with Tokio Marine & Nichido Fire Insurace Co.,Ltd) to 85 companies and signed contracts with 11 companies; Domestic discussions and proposals for introducing new ESG financing (approx. 120 companies); Overseas discussions and proposals for transition strategy and short / mid-to-long term financing needs (approx. 960 companies)
  4. Project Team

Involvement in Discussions to Develop International Frameworks in Cooperation with Policy Makers and Industry

Through participation in climate change-related initiatives, MUFG is actively involved in discussions to develop international frameworks. Given that no pathway toward carbon neutrality will be identical among Europe, the U.S., Japan, and Asia, we advocate on behalf of a leading financial institution based in Asia.
■ Net-Zero Banking Alliance (NZBA)
NZBA is an international industry-led initiative, convened by the United Nations Environment Programme Finance Initiative (UNEP FI) with banks committing to aligning their lending/investment portfolios with net-zero GHG emissions by 2050. MUFG became the first Japanese bank to participate in NZBA in June 2021 and became one of the NZBA Steering Group member representing Asia. Also, as the Chair of the NZBA Transition Finance Working Group (formerly known as the "Financing & Engagement" Working Group), we led discussions to develop the NZBA Transition Finance Guide (published in October 2022). The Guide provides NZBA member banks with principles to use as a reference for their approach to transition finance and proposes policy measures to expand transition finance. In 2023, we are still chairing the WG and lead discussions to develop frameworks to further mainstream transition finance.
NZBA Transition Finance Guide
■ Asia Transition Finance Study Group (ATFSG)

Led by private-sector financial institutions, this initiative was launched to promote transition finance in Asia with a focus on major financial institutions operating in ASEAN countries under the Asia Energy Transition Initiative (AETI).

MUFG has led discussions with more than 30 participating financial institutions, based on which the ATFSG has compiled practical guidelines to be used by financial institutions when they consider transition finance along with the ATFSG activity report and a list of recommendations  for support from governments and other stakeholders. These documents were then publicized at the Asia Green Growth Partnership Ministerial Meeting (AGGPM) hosted by the Ministry of Economy, Trade and Industry in September 2022.

Asia Transition Finance Study Group（ATFSG）
■ Net Zero Asset Managers initiative (NZAM)
Centered on asset management firms, this initiative aims for net-zero GHG emissions by 2050, a target consistent with international initiatives to restrict temperature rise to 1.5℃. MUFG AM has participated since November 2021, and in October 2022 set an interim target for 2030 covering 55% of assets under management, to reduce GHG emissions per unit of economic intensity (absolute emissions amount (tCO2e) / balance of the assets under management) by 50% compared to 2019 level.
■ GFANZ (Glasgow Financial Alliance for Net Zero)

GFANZ is the largest pan-financial sector initiative in the world, bringing together independent, sector-specific Alliances such as NZBA and Net Zero Asset Managers initiative (NZAM). MUFG is the only Japanese bank participating in all five GFANZ workstreams (re)structured in 2023, where we have actively contributed to discussions to promote the various net-zero initiatives in GFANZ.

The GFANZ Japan Country Chapter was launched in June 2023 as the first GFANZ Country Chapter. Masamichi Kono, Senior Advisor of MUFG Bank, Former Deputy Secretary General of the OECD, was appointed as GFANZ Japan Advisor. MUFG will contribute to discussions in GFANZ Japan and two-way communication between GFANZ Global and GFANZ Japan.

■ JETP (Just Energy Transition Partnership)
JETP is the G7-led partnership to accelerate the early retirement of high-emitting infrastructure and expansion of renewable energy and related infrastructure. MUFG is the only Japanese bank participating in both JETP Indonesia and Vietnam. We will consider structuring and investing in the projects with leveraging the frameworks such as blended finance to support the energy transition of Indonesia and Vietnam.
■ MUFG Transition Whitepaper 2022
In October 2022, we published the MUFG Transition Whitepaper 2022 to communicate the importance of recognizing different regional characteristics, interdependency among industries, and individual efforts in maximizing renewable energy to achieve carbon neutrality in Japan.
MUFG Transition White Paper
In September 2023, we published the MUFG Transition Whitepaper 2023, to present the list of technologies in supply chains that are important in advancing the path to carbon neutrality in Japan’s “electricity and heat” segment. MUFG will also steer its activities towards clarifying Japan’s transition plan to seek for new opportunities ahead of us.

＜Transition Whitepaper 2023＞

 

・Published in September 2023, the Whitepaper 2023 was developed in collaboration with partner companies and government authorities.

・Based on policy analysis in Europe, the US, China, and ASEAN, the Whitepaper 2023 presents the list of technologies and supply chains that will play important levers in advancing the path to carbon neutrality in Japan’s “electricity and heat” segment. The Whitepaper also highlights the need to extend financial support covering broader spectrum. We incorporated detailed information on various technologies explaining about their backgrounds, roles in the Japanese policy, and current development status.

・By summarizing the initiatives of the Japanese government and leading companies in English, the Whitepaper 2023 aims to improve global stakeholders’ understanding of Japan’s transition plan and financing opportunities entailed. Among the technologies outlined in the Japan's Basic Policy for Realizing GX, the Whitepaper highlights seven technologies related to carbon neutrality in “electricity and heat”.

 

7 technologies
■ COP27
MUFG hosted a side event at the Japan Pavilion as the first Japanese financial institution. Public sector representatives such as the World Bank, OECD, private financial institutions (BlackRock, HSBC), and academia (London School of Economics) joined the event. Panelists from Asia and Africa also participated and provided the regional perspectives. We discussed challenges and opportunities related to “just and orderly transition” (Event title: Financing a just and orderly transition～Filling the gaps to pave the way to a credible transition path).
COP27
■ Contributions to initiatives in Japan and internationally, etc.
MUFG is actively involved in discussions to realize carbon neutrality through participating in various Japanese and international initiatives and committees hosted by the public sector, such as governments.
Additionally, MUFG shares the content discussed in committees internally, particularly ensuring alignment between the policies of industry associations related to climate change response and MUFG's own policies. In cases of discrepancies, adjustments are made through discussions in various committees. Through this process, consistency with the stance of industry associations towards achieving carbon neutrality is maintained.
Name of Initiative MUFG’s Role Operating body
ESG Finance High Level Panel Committee members Ministry of the Environment
Expert Panel on Sustainable Finance Members Financial Services Agency
Sustainability Standards Board of Japan Committee members Financial Accounting Standards Foundation
TCFD Consortium Planning Committee Committee members Ministry of Economy, Trade and Industry; Financial Services Agency; Ministry of the Environment; etc. (observers)
Working Group on Financial Institutions’ Efforts towards the Decarbonization of the Economy Members Financial Services Agency
Central Environment Council, Global Environment Committee, Comprehensive Policy Subcommittee, Carbon-Neutral Economic and Social Transformation Subcommittee Committee members Ministry of the Environment
Taskforce on Preparation of the Environment for Transition Finance Committee members Ministry of Economy, Trade and Industry; Ministry of the Environment; Financial Services Agency
Study Group on Financing from the Public Sector to Help Corporate Initiatives for GX (Green Transformation) in Industries Committee members Ministry of Economy, Trade and Industry
GX League Members Ministry of Economy, Trade and Industry
GSG The Japan National Advisory Board Committee members Social Innovation and Investment Foundation
National Movement for New and Prosperous Lifestyles toward Decarbonization Members
 Ministry of the Environment
Monetary Authority of Singapore (MAS) Sustainable Finance Advisory Panel Member MAS
PRB2030 Core Group Members
 UNEP-FI
NZBA Steering Group Member
 UNEP-FI
NZBA Transition Finance Work Track Chair UNEP-FI
GFANZ Asia-Pacific Network

Advisory Board

Member

 GFANZ
  • (Excerpts of major items, including past items)

Strengthening Capabilities to Provide Solutions that Support Client Decarbonization in Line with Government Policies and Strategies

■ Sustainable Finance Targets (As of April 2024)

We have set a cumulative sustainable finance target for the period of FY2019 and FY2030 to address environmental and social issues. We steadily accumulated results of ¥24.5 trillion (including ¥8.9 trillion in the environmental area) through the end of FY2022.

In the environmental field, including response to climate change, we aim to deliver ¥50 trillion in financing for projects connected to the reduction of GHG emissions and preservation of the global environment. We will support a transition to a decarbonized society through the underwriting of MUFG Green Bonds for which proceeds from issuance are allocated to finance qualified Green Projects, provision of products and services aimed at reducing environmental impacts, and the promotion of renewable energy through project finance.

Sustainable Finance Targets

Definition of Sustainable Finance

The term "Sustainable Finance" refers to the provision of finance for the following businesses (including loans, equity investment in funds, arrangement of project finance and syndicated loans, underwriting of equities and bonds, and financial advisory services) with reference to the relevant external standards (e.g. the Green Loan Principles, Green Bond Principles, and Social Bond Principles).

 

Environmental Area  

・Businesses contributing to the adaptation to and moderation of climate change, including renewable energy, energy efficiency improvement, and green buildings (e.g. arrangement of loans and project finance for renewable energy projects, underwriting and distribution of green bonds).

 

Social Area

・Businesses contributing to the development of startups, job creation, and poverty alleviation

・Businesses contributing to the energizing of local communities and regional revitalization

・Fundamental service businesses, including those involved in basic infrastructure such as public transport, waterworks, and airports, and essential services such as hospitals, schools and police. (e.g. Emerging Industrial Technology Support Program, loans for regional revitalization projects such as MUFG Regional Revitalization Fund, arrangement of loans and project finance for public infrastructure, underwriting and distribution of social bonds).
＜Breakdown of Sustainable Finance Targets and Results＞
Breakdown of Sustainable Finance Targets and Results
■ Products and Services that Support the Promotion of Our Customers' Sustainability
MUFG supports the promotion of sustainability through the provision of products and services to customers who aim to address climate change and other environmental concerns.
Main Products and Services
■ Transition Finance
MUFG supports clients’ transitions with the understanding that transition finance is vital in achieving carbon neutrality in 2050.
Main Transition Finance Projects
■ Development and Provision of Solutions for Carbon Neutrality Based on the Needs of Customers
With an aim to address issues and needs identified through customer engagement, we develop and provide a diverse range of solutions, including those designed to help visualize the volume of GHG emissions, strategy formulation assistance through TCFD disclosure-related consulting services, investment and financing assistance, and the introduction of overseas carbon credit to Japanese corporations.

＜Engagement Activities to Assist Decarbonization Efforts of Customers. According to Bank-client engagement model introduced by UNEP FI.*1＞

Customer Engagement and Support —Activities in line with the Customer Service Model
Initiatives by MUFG
■ Pushing Ahead with Support for Innovation

Through participation in various councils in new fields such as hydrogen, ammonia, and CCUS, MUFG will expand its contribution to the carbon neutrality for customers.

To support the realization of a sustainable society through a virtuous cycle of the environment and the economy, together with customers we will study and execute support for new businesses through financial services, from the stages of R&D to demonstration, with the aim of realizing innovative technologies such as renewable energy, hydrogen, next-generation energy, and carbon recycling.

Content of Initiatives
■Green Deposit
Managed by the Bank, Green Deposit is a foreign currency time deposit that is procured only for the purpose of funding projects that contribute to improvement of environmental issues. In addition to Japan, we also offer Green Deposit in the United States, Australia, China, Hong Kong, Singapore and the United Kingdom. Other overseas bases are also planning to gradually start offering the product.
■ESG Investment

Investments that take into account ESG factors are expected to support companies and various organizations working to achieve a sustainable society and improve their long-term returns; thus, there is a growing interest in it, especially among institutional investors, such as public pension funds.

MUFG's treasury business diversifies the investment target to government bonds, foreign bonds, stocks, and corporate bonds, as well as green bonds and other types of investments. In order to strengthen MUFG's financial earnings and contribute to sustainable economic growth through ESG investments, MUFG is going to promote ESG investments by finding the right balance between risks and returns.

Using Relationships with Customers, Local Governments, and Industry Organizations to Grasp New Needs and Issues

■ Support for the Implementation of Carbon Neutrality Technologies in Japan and the Creation and Development of New Industries

Accelerating Japan's carbon neutrality will require enhancing the credibility of Japan's initiatives, attracting investment from within and outside the country, and implementing effective technologies and supply chains for Japan's carbon neutrality at an early stage.

Although Hokkaido faces social issues such as population decline, it has the greatest potential for introducing renewable energy in Japan and is the regions with one of the highest potentials for the implementation of effective technologies to achieve carbon neutrality, as described in MUFG Transition White Paper 2.0.

In 2022, we hosted "MUFG Hokkaido Oshigoto Audition," a contest for municipalities-led projects with a purpose of solving social issues in Hokkaido to apply for donations to fund the project. In the process of project screening and publicizing projects from municipalities by using social media, we acted in collaboration with Boku to Watashi and. Inc, a company engaged in next-generation marketing.

To highlight the potentials for carbon neutrality in Hokkaido and motivate investment in Hokkaido, we published the "Hokkaido Carbon Neutrality Report" in Japanese and English in May 2023. At the same time, we entered into a partnership agreement in the GX area with the Hokkaido Government, which is advancing "Zero Carbon Hokkaido" measures. We will work with Hokkaido to build a model case that achieves both a carbon neutrality and revitalization of the local economy by developing new industries in the region and creating a human resource development framework through donations to a new GX promotion fund set up by Hokkaido.

In June 2023, we participated in the new "Team Sapporo-Hokkaido", a consortium consisting of industry-academia-government-finance organizations, to accelerate GX initiatives in Hokkaido by attracting GX-related projects, human resources, and funds from around the world. This is a model case of a promotion council bringing together local government, regional companies, financial institutions, and other parties to encourage local GX investment and financing. 

Support for the Implementation of Carbon Neutrality Technologies in Japan and the Creation and Development of New Industries

In FY2022, we made a donation to a subsidy framework run by Osaka prefecture. The framework subsidizes a portion of necessary expenses for business operators that will develop or demonstrate carbon neutrality technologies for the Osaka-Kansai Expo 2025 and for a decarbonized society. In FY2023, the budget for the subsidy was increased to support business expansion associated with transition from development stage to the demonstration stage and to enhance support for new businesses. MUFG therefore made additional donations to the framework, as it had in the previous year. We will support the creation and promotion of energy businesses based in Osaka, raise recognition of efforts initiated from Osaka for carbon neutrality, and the further implementation of technologies for carbon neutrality.

 

MUFG will continue to work with its varied stakeholders to support the implementation of carbon neutrality technology in Japan and the creation and development of new industries and will undertake construction of sustainable social models that contribute to the vitalization of local economies.

■ Blended Finance – Exploring the Establishment of a Public-Private Partnership Debt Fund to Promote Decarbonization in Asia

The Bank signed an agreement with Nippon Export and Investment Insurance (NEXI) on blended finance at the ASEAN-Japan Business Week event with the aim to support decarbonization in Asia.

Blended finance is a financing method that combines public and private funding and is viewed as an effective means of support initiatives aiming to resolve challenges   emerging countries are facing.

Under the agreement, NEXI and the Bank will explore the establishment of a blended finance scheme to tackle climate change issues in line with the Asian Zero Emission Community (AZEC)’s objectives.

At the event, Minister of Economy, Trade and Industry Yasutoshi Nishimura said, "We want to advance a carbon-neutral society together with ASEAN. We will do so through the AZEC concept and other means, and through specific projects such as the introduction of renewable energy, construction of a hydrogen-ammonia supply chain, and decarbonization on the demand side including factories and industrial parks."

The Asia Energy Transition Initiative (AETI) put forth by the Japanese government is studying ways to provide comprehensive support towards Asia’s decarbonization, such as launching the Asia Transition Finance Study Group (ATFSG) which consists of major financial institutions in ASEAN countries. As a member of the ATFSG Secretariat, MUFG has led discussions with financial institutions and government agencies and has worked on the formulation of international guidelines.

The initiatives outlined in the agreement aligns with the goals of the Japanese government led AZEC and AETI. We will further contribute to the sustainable development of Asia and support the region’s step-by-step approach to achieve energy transition by providing financing and utilizing our risk management capabilities towards resolving environmental and social issues alongside leveraging our knowledge and expertise gained through ATFSG.

Blended Finance – Exploring the Establishment of a Public-Private Partnership Debt Fund to Promote Decarbonization in Asia
■ System for Promoting Engagement
・Green Transformation Strategy Project Team (GXPT)

In November 2020, the Bank launched the Energy Transformation (EX) Strategy Project Team (PT) to develop the climate change-related business. Since then, the Bank has striven to strengthen its capabilities to engage with customers pursuing carbon neutrality, understand their needs and provide them with high-quality products and services by periodically holding meetings at EXPT with relevant executives and managements to consolidate and share internal insights.

Meanwhile, in February 2023, the Cabinet approved on the Basic Policy for the Realization of Green Transformation (GX) , announcing national strategies to realize investment in GX through the mobilizing more than ￥150 trillion funding from both government and private sources. Against this backdrop in April 2023 the Bank rebranded the EX Strategy PT as the GX Strategy PT, updating its role to facilitate the creation of tangible business and the delivery of information required to GX-related investment and financing. This PT currently consists of around 500 members, including relationship managers in both Japan and overseas. individuals from Product Offices (POs), credit division and corporate planning departments.

・Support movements toward carbon neutrality throughout Japan by conducting dialogue with customers, industry organizations. and government agencies

・Provide added value throughout the value chain, from research functions to solution proposals

・Explore visions for transition support aligned with reality in Japan and Asia

・Leverage group companies' and global knowledge to support customers' business transitions through collaboration among sales departments, the Solutions Unit (including the Sustainable Business Department), Sustainability Office, and other related departments
・Assignment of Sustainable Business Promotion Leaders

The Bank has assigned "Sustainable Business Promotion Leaders" (hereinafter "Promotion Leaders") at corporate sales branches nationwide. Information on sustainable business collected at headquarters as well as in-house tools for sustainable business, are propagated throughout Japan by the Promotion Leaders who serve as hubs connecting headquarters and branches.

In FY 2022 the Promotion Leaders periodically organized, study sessions on sustainable finance and other solutions in collaboration with headquarters to reinforce expertise of relationship managers at branches and enhance capabilities for engagement.

・Organizational Structure to Promote Global Sustainable Business
MUFG provides solutions, with the aim to resolve environmental and social issues, for our clients to support necessary structural transformation and innovation. Since assigning ESG Heads and ESG specialists in the three regions (Europe, the Americas, and Asia) in 2021, MUFG has continued to strengthen its ESG teams in each region. Some team members, including overseas members, are seconded to Sustainable Business Division established in FY2021 and work across the organization to promote sustainable business and customer engagement in line with MUFG's sustainable management and carbon neutrality policies. Through Global ESG Conference and other means, MUFG is building a structure to consolidate intelligence and capture business opportunities based on promoting engagement and providing solutions to our customers both in Japan and overseas. Additionally, through participating in international initiatives, MUFG has access to various information and also contribute to rule-making process, business commercialization and market creation in order to capture future business opportunities and promote these initiatives globally.

Initiatives by Partner Banks

In response to the MUFG Carbon Neutrality Declaration and carbon neutrality declarations by the governments of Thailand and Indonesia, our Asian partner banks Krungsri (Bank of Ayudhya) and Bank Danamon are also advancing initiatives to achieve a sustainable environment and society in their respective countries.
■ Initiatives by Krungsri
Krungsri has been enacting measures to realize the commitments proclaimed in the Carbon Neutral Vision announced in 2021.
Support for Decarbonization by Customers
・Sustainable finance target by 2030
Krungsri has committed to growing the Social and Sustainable Finance portfolio by 50 - 100 billion baht by 2030, compared to 2021. As of 2022, their social and sustainable finance portfolio increased by 44,204 million baht, reaching a total 154,594 million baht, and are steadily progressing to realize their target.
・Support for Green Bond issuance by Export-Import Bank of Thailand
Krungsri supported Export-Import Bank of Thailand in issuing Green Bonds totaling THB 5 billion, through the role of Green structuring advisor/ Bookrunner/ Lead manager. The use of proceeds from the bond issuance is to finance and refinance funds for the renewable energy loan portfolio of the Export-Import Bank of Thailand.
・Support for Installation of Rooftop Solar Panels

The Solar Roof Lending Program was launched in 2022, which provides financial support to customers in installing solar panels in their factories, offices, and homes to promote decarbonization in a wide range of customer segments.

・Support for Visualization of Customers' Emissions
In partnership with Zeroboard Inc., a Japanese startup versed in the calculation and visualization of GHG emissions, Krungsri is aiding decarbonization by customers not only through support for the real economy to achieve a low-carbon society but also by promoting GHG emission management solutions for enterprise customers.
Staged Phase-out of Investment and Financing for Coal-fired Power Plants
Krungsri plans a staged phase-out of investment and financing for coal-fired power plants within 2030. By making financial services more environmentally friendly, Krungsri is supporting Thailand's transition to a low-carbon economy. 
Decarbonization of GHG Emissions from Own Operations by 2030

Krungsri’s Race to Net Zero Action Plan was established, which entails digital transformation, efficient resource management, and greater use of renewable energy as the key pillars to decreasing GHG of own emissions.

■ Initiatives by Bank Danamon
Bank Danamon has been promoting initiatives to realize a sustainable environmental and social society.
Support for Decarbonization by Customers
・Setting of Sustainable Finance(note1) Targets

Bank Danamon established a target to increase their Sustainable Finance (SF) loan portfolio ratio(note2) to 25% by 2027. In 2022, the SF loan portfolio ratio has increased to 21%, and are steadily progressing to realize their target.

・Sustainability-Linked Loans with the KPI of CO2
Reduction through Alternative Fuels Bank Danamon supported local cement companies through participation in syndicated sustainability-linked loans totaling IDR 2.74 trillion. As a KPI, the loans used reduction of CO2 emissions through the replacement of coal by refuse derived fuel. 
Contribution to the Achievement of Net-Zero GHG Emissions from Own Operations at MUFG by 2030

Installed solar panels in branches to promote decarbonization of own emissions.

Enhancement of Environmental and Social Policies and Guidelines
Expanded Bank Danamon’s Environmental and Social Policy Framework in alignment with MUFG through prohibition of financing directly related to coal-fired power generation projects(note3), and addition of Oil and Gas Sectoral Guideline.
  1. Aligned with local regulations
  2. Ratio of Sustainable Finance in the overall portfolio
  3. Excluding projects equipped with environmentally friendly technologies

Investments Aimed at Solving Environmental and Social Issues

■ Sustainable Business Investment Strategy

Under our Sustainable Business Investment Strategy (hereinafter “the Investment Strategy”), we invest in funds that contribute to solving environmental and social issues. Through the Investment Strategy, we seek to acquire knowledge and explore new business opportunities. In addition, we aim to solve issues through our fund investment activities by creating positive impacts and innovation, and nurturing of new industries.

The internal carbon pricing(note) used in our investment decisions was US$40/tCO2 (as of FY2022). Going forward, we will assess investment opportunities based on the international impact measurement methods while considering their updates in a timely manner.

  1. This concept is used by organizations to independently price their own CO2 emissions and to reduce the carbon footprint of their corporate activities. It is used mainly by business corporations for investment decisions.
・Investment Projects Based on the Sustainable Business Investment Strategy

Investment

(fund name)

 Asset manager Target of investment
MPower Partners Fund L.P.

MPower KK

 Domestic and overseas venture companies in the fields of healthcare/wellness care, fintech, next-generation work styles/education, next-generation consumers/retail, and the environment
Carbon Neutral Fund 1 Investment Limited Partnership Z Energy Co., Ltd. Renewable energy generation business in Japan
・Establishment of a Growth Investments Fund in Climate Tech-related Startups (Marunouchi Climate Tech Growth Fund L.P.)

In May 2023, together with Mitsubishi Corporation and Pavilion Private Equity Co., Ltd., the Bank established Marunouchi Climate Tech Growth Fund L.P. (hereinafter "the Fund"). The Fund has Marunouchi Innovation Partners Co., Ltd. as its general partner, and will invest mainly in climate-tech-related startups for growth(note).

Formed with a US$400 million commitment by investors, the Fund plans to engage in further investor recruitment to eventually expand to a scale of US$800 to 1,000 million.

In the area of climate tech, the development of advanced technologies and proliferation of solutions are essential in achieving a carbon neutral society, and high demand for funding is expected in the medium to long term.

Through growth investments in climate tech-related startups by the Fund, the Bank will promote commercialization and scaling up for these companies' advanced technologies and the penetration of their technologies into society, enhancing the corporate value of investee companies while providing support for the achievement of a carbon-neutral society.

  1. Press release of May 2, 2023: About the Establishment of Marunouchi Climate Tech Growth Fund L.P.
・Investment in PowerX
The Bank has invested in startup company PowerX, Inc. to support the spread of natural energy and the evolution of power storage and transmission technologies. Through the investment, we are contributing to the development of the next generation of industries that will strengthen the competitiveness of Japan's economy, delivering new options to customers aimed at the proliferation of renewable energy and storage batteries and promoting initiatives aimed at carbon neutrality.
Column: Natural Capital and Biodiversity
(As of April 2024)

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