Japanese bank MUFG rethinks policy on coal-fired power projects

A pedestrian walks next to a logo of the Mitsubishi UFJ Financial Group Inc. (MUFG) outside a branch of its bank, The Bank of Tokyo-Mitsubishi UFJ in Tokyo, Japan, May 15, 2015. REUTERS/Yuya Shino

TOKYO (Reuters) - Japan’s Mitsubishi UFJ Financial Group will no longer provide financing for new coal-fired power generation projects after July 1, it said on Wednesday in a revised environmental and social policy framework.

MUFG, one of the world’s largest banks by assets, said the decision will gradually reduce the balance of its exposure to coal power station projects.

The company could make exceptions where governments need to build plants to meet local electricity demand, an MUFG spokesman said.

It will take a cautious approach to the coal-fired power generation projects for which the bank has started considering financing before July 1, it said in a statement.

In an original policy framework issued a year ago, MUFG said it would provide financing to coal-fired power projects in line with international guidelines.

In the revised policy, the banking group added forestry, palm oil and coal mining to its “restricted transactions” list, saying it may ask clients to obtain globally recognized certification.

Reporting by Yuka Obayashi; Editing by David Goodman