Coming Clean on Coal


May 23, 2019

Yenning for a Coal-Free Future

Mizuho Bank Promises New Coal Policy Hours After Hoax Impersonation Pressures Them to Stop Financing Coal

TOKYO -- A press release announcing a new edition of the Equator Principles (EPs) was a big deal for the finance industry experts and journalists who received it on May 21. It linked to an alleged new edition of the EPs, featuring improvements to the social and environmental guidelines that banks agree to uphold, and adding a stringent enforcement clause to punish them for human rights and environmental offenses.

Most notable was the announcement that three major Japanese banks (Mizuho, Mitsubishi UFJ, and Sumitomo Mitsui) had been ejected from membership for their roles in financing the highly contested coal-fired power plants Van Phong 1 and Nghi Son 2 in Vietnam and Cirebon 2 in Indonesia. Each of these projects violates multiple Equator Principles, stemming from inadequate community consultation, failure to conduct alternative project analyses to minimize greenhouse gas emissions, evidence of bribery to quell community resistance, unlawfulness, and a lack of independent review.

Mizuho Bank seemed to respond with uncharacteristic clarity: "This is not true - Mizuho is still a member of the Equator Principles... Most managers of Mizuho oppose climate change and firmly believe mass extinction to be undesirable."

Then, what appeared to be the Equator Principles Secretariat apologized for the premature release. "The rough-draft Equator Principles 4 was the result of human error and misplaced hopefulness."

The announcement as well as both responses, of course, were part of a hoax by anti-extinction activist group the Yes Men intending to highlight the hypocrisy of banks claiming to be socially conscious while financing coal plants in foreign countries.

"We want banks to stop financing fossil fuel projects that violate their international commitments, such as the EPs. And we want the EPs to walk their talk about disclosure and community consultation," said Jeff Walburn of the Yes Men. "Without effective grievance mechanisms and requirements for disclosure, the EPs are simply a greenwashing cover for banks like Mizuho to continue to profit off the dirtiest fossil fuels that are accelerating the climate crisis."

Just hours after the hoax impersonation shamed Mizuho Bank for financing coal power plants, the real bank quietly told press that it will update its financing norms for coal power plants. Without mentioning the activist pressure, Mizuho claimed they will "tighten lending standards for coal-fired power plants with high emissions of carbon dioxide."

The timing of the Mizuho announcement seems to be a direct response to the hoax, but the real cause of the bank's public-image play is a result of longstanding pressure by activists and communities affected by coal plants. Despite some Asian banks announcing moves to limit coal finance in recent months, Japan's major commercial banks continue to finance multiple coal power plants in countries most vulnerable to the environmental and social effects of the climate crisis, such as Indonesia, Vietnam, and Bangladesh, among others.

"Beyond the obvious fact that we need to stop building new coal plants, this action was intended to shine a light on how coal plants are a mother lode of other environmental, human rights and governance impacts, with little to no accountability for the projects' owners or investors. That needs to end, now," added Walburn. "We can't allow their empty promises to distract from their inaction. They need to stop financing human rights abuses and climate destruction."

The real fourth edition of the Equator Principles is slated to be released later this year. Interested stakeholders (i.e. concerned Earthlings) should submit feedback for the real EP4, encouraging the Equator Principles Association to add effective grievance mechanisms, increase transparency, and build in consequences for members like Mizuho, MUFG, and SMBC who break their own industry-standard rules.

Read the fake EP4 and press releases here. Follow and engage on Twitter.

Read the real EP response here, and an industry account here.