Centre for Global Disaster Protection

20 July 2017 – Today, International Development Minister Lord Bates is speaking at a Global Insurance Forum event. He will outline the UK’s partnership with the World Bank and Germany for the Centre for Global Disaster Protection in London that will support the poorest countries to strengthen their disaster planning and get finances in place before disaster strikes so they can better manage the economic impact of emergencies and build their resilience.

The Centre will draw on UK and international expertise to provide neutral advice, innovation and cutting edge science to help build cheaper, faster and reliable finance in emergencies that delivers the most benefit for the poorest people and can halve the cost of disasters.

Hygiene kits and tarpaulins for temporary shelter supplied by UK aid being distributed in Haiti in 2016. Picture: Carey Wagner/CARE
Hygiene kits and tarpaulins for temporary shelter supplied by UK aid being distributed in Haiti in 2016. Picture: Carey Wagner/CARE

Why is this important?

New research shows that disasters like hurricanes and severe droughts cost $30 billion a year across 77 of the poorest countries. While in high-income countries almost half of these costs are covered by insurance, in poorer countries less than 5% are covered and humanitarian appeals remain grossly underfunded. With little financial protection, vulnerable people face devastating hardship – they stop sending their kids to school and in many cases are left with nothing. Every year, natural disasters force 26 million people further into grinding poverty.

Natural disasters are not surprises – more can be done before a disaster strikes to build resilience and reduce the impacts on people. This will not only save lives and reduce poverty, but makes good financial sense. Every £1 spent on working to actually prevent a drought or flood turning into a disaster saves around £3 in humanitarian assistance. The outbreak of Ebola in West Africa would have cost $5 million to contain when it was first detected in Guinea in 2014, but that cost spiraled to $1 billion eight months later.

To end poverty and help countries stand on their own two feet, we must take a new approach.

How will this work in practice?

UK aid is already supporting well over 20 million people to build their resilience to natural disasters and is investing in disaster preparedness and early warning systems across 20 countries. The new Centre will help ensure disaster responses are:

  • faster – time costs lives. If finance is prearranged before a disaster strikes, it can arrive in days whereas a humanitarian appeal can take months to mobilise funds needed.
  • reliable – prearranged finance is more reliable, allowing better planning in advance of a disaster and better preparedness and delivery of support.
  • cheaper – an earlier response can halve the costs of a disaster response and help countries and people recover more quickly.

The Centre will do this by:

  • investing in data, science and research needed to design systems that work for the poorest;
  • providing training and sophisticated risk analyses and financial analytics to help developing countries’ better understand and make informed decisions about how to manage risks; and
  • bringing together experts from finance, science and humanitarian communities to provide neutral advice and design new, innovative financial tools – including insurance – that are right for disaster planning and deliver the most benefit for the poorest when disaster strikes.

We’ve already seen this work in practice. Last year, the Caribbean Catastrophe Risk Insurance Facility paid out to four countries, including Haiti, after Hurricane Matthew. And now we are expanding this to more places in Africa too.

Linking this prearranged finance insurance cover to existing national systems that deliver public services, like health, nutrition, water, education, sanitation and hygiene, means in times of crises, governments are able to provide increased services to help people rebuild their lives and stand on their own two feet.

The Centre will also work to build insurance markets in developing countries through supporting improvements in regulation, data and capacity. These could generate billions of pounds each year in additional national investment to boost economic development, and in turn global prosperity, which is in all our interests.

Insurance Development Forum Applauds UK and Germany Leadership To Address Disaster Coverage Gap

Government Agencies Commit Support to Build Financial Resilience of Poorest and Most Vulnerable Economies

LONDON, July 20, 2017 – The Insurance Development Forum (IDF), a partnership of the World Bank Group, the United Nations Development Programme, and global insurers, applauds announcements by the development ministries of the United Kingdom and Germany to dedicate support to narrow the disaster protection gap for communities in the poorest countries.

Speaking at the IDF Session at the International Insurance Society Global Forum in London, Stephen Catlin, chair of the IDF commented: “This is a big step toward activating our common mission as a critical public-private partnership empowered to take on the enormous problem of under-insurance in at-risk developing economies.” He added that the lack of an insurance safety net in much of the world “is a global problem no one organization, company or individual can solve alone.”

Building on Prime Minister Theresa May’s announcement at the recent G20 summit, Lord Bates, Minister of State at the U.K. Department for International Development, outlined plans for the UK partnership with the World Bank Group and Germany for creating a Global Partnership for Climate and Disaster Risk Finance and Insurance Solutions. The UK and the World Bank Group are setting up a Centre for Global Disaster Protection in London, which will support the poorest countries to strengthen their disaster planning and get finances in place before disaster strikes so they can better manage the economic impact of emergencies and build their resilience.

The UK is providing £30 million for the Centre for Global Disaster Protection, which will draw on UK and international expertise to provide neutral advice, innovation and cutting edge science to help build cheaper, faster and reliable finance in emergencies that delivers the most benefit for the poorest people and ensures losses are not borne by people, business and government, which can slow growth and trap people in grinding poverty.

As part of the Centre for Global Disaster Protection, the World Bank Group will establish staff presence in London to support the Centre and benefit from closer connectivity to insurance and reinsurance market institutions. Germany will contribute €20 million as a first step to a linked World Bank Multi-Donor Trust Fund for country specific technical assistance and smart support with the aim to assist vulnerable countries to tailor disaster risk financing mechanisms.

Joaquim Levy, the World Bank Group’s Managing Director and CFO and Co-Chair of the IDF, who spoke at the meeting, said, “With climate posing an ever-greater risk, we can use insurance and risk financing solutions to strengthen developing countries’ financial resilience to a wide range of threats. By using well-designed financial instruments, we can ease the impact of disasters on the most vulnerable societies, reducing the cost and damage to development progress.”

Dr. Gerd Müller, Federal Minister for Economic Cooperation and Development (BMZ) welcomes the cooperation: “Climate risk insurance helps – in a fast and cost-efficient manner. Together with the United Kingdom, the World Bank Group and other partners, Germany is working on creating the Global Partnership on Climate and Disaster Risk Finance and Insurance Solutions, which the G20 leaders have welcomed at the Hamburg Summit.”

Ms. Ingrid Hoven, Director General for Global issues, sector policies and programmes at BMZ outlined at the International Insurance Society Global Forum in London the design of a €15 million InsuResilience Solutions Fund to support public and private sector collaboration on climate risk insurance programmes in developing countries.

These announcements by DFID and BMZ will contribute to the creation of a Global Partnership for Climate and Disaster Risk Finance and Insurance Solutions. This was welcomed by G20 leaders at the Hamburg Summit this month. The IDF welcomes DFID, BMZ, and the World Bank Group joining forces to contribute first elements to such a Global Partnership and want to engage many more countries and stakeholders.

The Global Partnership builds on the G7 InsuResilience commitment to increase climate risk insurance protection to an additional 400 million people in emerging and developing countries by 2020. The V20, a forum of 48 developing countries vulnerable to climate change, which is supported by UNDP, as well as civil society and the insurance industry have all called for further improving such risk finance and insurance instruments and collaborating towards this goal. The announced developments are fully aligned with the World Bank Group’s mission of eliminating extreme poverty by the year 2030 and building shared prosperity by focusing on the needs of the people in the bottom 40 percent of each country’s income distribution. The impact of natural disasters and climate change are projected to have their most severe impact on the world’s poorest people and most vulnerable countries.

“The creation of the Centre for Global Disaster Protection is a critical step forward in realizing the promise of the IDF,” remarked Jo Scheuer, UNDP’s Director for Climate Change and Disaster Risk Reduction. “Insurance is central in helping countries deliver development and achieving the Sustainable Development Goals. We must build on the momentum created and look to further and deepen partnerships.”

As an early priority of the IDF Working Groups, more than 200 people from industry, NGOs, regulators, academia and international institutions have donated more than 5,000 hours of their input to support the design and development of these critical facilities. The Forum will continue to support their progress. These new facilities will be closely linked to the science and academic communities, to help develop best practices and transparency in the role of financial tools, like insurance, in sustainable development and disaster resilience.

Rowan Douglas, Chair of the Implementation Committee of the IDF said: “The IDF looks forward to working with the newly formed Centre of Global Disaster Protection, and the German efforts by BMZ such as the InsuResilience Solutions Fund, to develop and implement plans to deliver the services necessary to proactively prepare for and insure against disasters – a far more effective approach than rushing aid to the scene after devastation occurs.”

Download the report: Understanding risk to create resilient platforms for sustainable growth and human dignity

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The Insurance Development Forum (IDF) is an unprecedented public-private partnership led by the insurance industry with the United Nations Development Programme and the World Bank Group. Its initial focus is to contribute to closing the protection gap — the gap between insured disaster losses and the actual economic costs of disasters — by optimizing and extending the use of insurance and its related risk management capabilities to build greater resilience for people, communities, businesses and public institutions that are vulnerable to climate change, disasters and related economic shocks.

The IDF is chaired by Stephen Catlin. It is co-chaired by the UN Development Program (UNDP) and Joaquim Levy, the World Bank Group Managing Director and Chief Financial Officer. The Steering Committee includes industry leaders, UN agency leaders, international institutions and others to establish priorities and mobilise resources, and the International Insurance Society (IIS), Geneva Association, International Cooperative and Mutual Insurance Federation (ICMIF) and Association of Bermuda Insurers and Reinsurers (ABIR) are ex-officio members. The Implementation Committee of the IDF is chaired by Rowan Douglas, Willis Towers Watson and co-chaired by UNDP and Samuel Munzele Maimbo, World Bank Group.

Follow the IDF on Twitter at @InsDevForum. For more information contact David.Rylatt@XLCatlin.com or visit www.theidf.org.

Climate Progress Dashboard forecasts global warming of more than 4°C

Climate change will be a defining driver of the global economy, society and financial markets over the coming years, decades and beyond. Schroders has developed a Climate Change Dashboard to measure progress towards a decarbonised world.

Global temperatures are on course to rise by up to 4°C, twice as far as safe levels, according to a Climate Progress Dashboard developed by the Schroders Sustainability team.

The unique dashboard tracks the progress governments and industries are making towards meeting the 2°C temperature rise commitment global leaders made in the Paris Agreement, which came into force in November.

It looks past headline noise and rhetoric to provide an objective gauge of change across the breadth of fields that will matter to addressing the climate challenge.

How the dashboard works

The dashboard measures progress across political, industrial, technology and energy indicators, to create a unique, comprehensive view of change. The 12 individual indicators are shown below; some measure aspiration while others gauge action.

“Political ambition”, for example, captures the pledges governments have made to reduce carbon emissions. The dashboard points to a 2.8°C rise in temperatures based on current ambitions.

The dashboard also captures actual progress – the implementation of policies – under “political action”. Slower action here would lead to a 3.6°C rise in temperatures, underlining differences between headline statements and tangible action.

Least progress has been made on oil and gas production, which points to a rise of over 6°C, implying major changes will be needed to hit long term targets. Use of these fossil fuels will have to fall significantly in future, ultimately to zero.

Production of coal – typically cast as the villain of climate discussions – has already started falling, although not far enough to meet the two-degree target.

The full dashboard, designed for use by professional investors, also opens up to chart recent progress and scenarios of what it means for future trajectories of global warming.

The basic dashboard will be published quarterly at www.schroders.com/sustainability

Climate change dashboard

Why climate change should matter to investors

Andy Howard, Head of Sustainable Research, led the work on the dashboard. Here, he explains why it was developed:

“Climate change will be a defining driver of the global economy, society and financial markets over coming years, decades and beyond. While the issue has moved up investment agendas, the change in strategies has not kept pace.

“The danger is that investors think the problem is being tackled, and that their exposure to climate change risks is reduced, when this is not necessarily the case.

“We developed the Climate Progress Dashboard as part of our efforts to manage the risks and identify the opportunities climate change presents. It provides an objective and transparent view of change to help investors base decisions on the outcomes that are likely, rather than those they would like to see.

“It’s worth noting the dashboard is a snapshot of where we stand, not a forecast of where we will end. We are in the early stages of changes that will play out over several decades. Estimates could change quickly with small changes in direction over coming years.

“As a result, the dashboard conclusions must be seen as measures of the paths we are currently on, rather than conclusions on where we will end up.”

Andy Howard explains the dashboard in more detail in the video above.

The climate change challenge: a 30-second guide

Greenhouse gases (GHG), such as carbon dioxide, methane and nitrous oxide trap heat in the Earth’s atmosphere.

Emissions of these GHGs have grown in tandem with the world’s economic expansion, prompting a rise in temperatures. The late 1800s is usually taken as the pre-industrial baseline. Since then, atmospheric concentrations of GHGs have risen 50% from 270ppm to more than 400ppm. Average temperatures are up almost 1°C.

Scientific and political consensus has settled on 2°C as the acceptable limit for temperature rises, requiring concentrations to stay below 450ppm. On current trends, that limit will be breached within two decades.

Andy Howard said: “In short, there is no single silver bullet. Meeting global leaders’ commitment to limit temperature rises to two degrees over pre-industrial levels means cutting greenhouse gas emissions per person by 80% by 2050, a period in which global incomes are set to triple.

“This is not going to be easy. Every part of the global economy, every industry and every company will be affected to some extent. We need new ideas to make sure investors are prepared for those changes.”

Source: Schroders Sustainable Investment Team

Banks worth $7 trillion pledge to calculate costs of climate risks

TORONTO, July 11 (Thomson Reuters Foundation) – Eleven of the world’s biggest banks pledged on Tuesday to find out how much exposure they have to risks related to climate-change, a move backed by environmentalists who say better information on the costs of global warming will push lenders to transition towards green investments.

With more than $7 trillion under management, some of the biggest names in global finance have signed onto the United Nations-backed disclosure effort for information on new risks presented by climate change.

Information on banks’ climate risks could eventually be reviewed by regulators as part of their financial disclosures, said Simone Dettling, a researcher with the U.N. Environment Programme working on the transparency plan.

“The goal is to shift lending away from carbon intensive sectors that are becoming risky towards green technologies that are becoming more attractive,” Dettling told the Thomson Reuters Foundation in a phone interview.

Before banks can change their lending patterns they need to understand how their portfolios will be impacted by climate change. Most currently do not have this information, Dettling said.

“They have committed to finding these numbers,” she said of the voluntary scheme.

Once banks have information on their exposure to climate risks they can begin disclosing how these risks will impact investors while looking for new sustainable alternatives, she said.

That disclosure could happen within the next year, she said, although banks and U.N. officials are still hammering out the details.

Information on investments in fossil fuel firms, renewable energy businesses and transportation companies is likely to be among the data disclosed as part of banks’ climate-risk assessments, Dettling said.

Banks backing the plan for new research into climate risks include ANZ, Barclays, Bradesco, Citi, Itaú, National Australia Bank, Royal Bank of Canada, Santander, Standard Chartered, TD Bank Group and UBS, said the U.N. Environment Programme.

“The scale and sophistication of climate risk and opportunity continue to grow,” Citi Bank spokesman Ed Skyler said in a statement on Tuesday.

“Working together to refine our approaches to enhanced disclosure will help accelerate the transition to a low-carbon economy.”

Reporting by Chris Arsenault @chrisarsenaul, Editing by Ros Russell.; Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women’s rights, trafficking, property rights, climate change and resilience. Visit http://news.trust.org)

After The Storm: The Rising Risk Of Floods

Natural disasters and extreme weather events are on the rise. The impact of droughts, extreme temperatures, hurricanes and wildfires have all increased over the last 60 years. But it is floods that has taken the biggest toll on the world in recent times.

According to the UN Office for Disaster Risk Reduction (UNISDR), flooding accounted for 43 percent of all natural disasters between 1995 and 2015. In this period, there were over 3,000 flood disasters, affecting around 2.3 billion people.  In 2016 alone, flood peril caused $62 billion worth of damage worldwide.

In its The Human Cost of Weather Related Disasters report, UNISDR warns that the impact of flood disasters is becoming more severe, affecting ever wider areas while the population living in these vulnerable regions rapidly rises.

The likely rise in sea levels due to climate change will further exacerbate this threat. Scientists predict that there will be a 10cm-20cm rise in sea levels by 2050, doubling the frequency of coastal flooding across the tropics.

This is particularly a threat in lower and middle-income countries where socio-economic development has seen mass urbanization and deforestation. It is no surprise that of the 20 cities most vulnerable to flooding, 14 are in the developing world, five of which are in China and four in India. These countries are also vulnerable to weather-related flooding, especially in the summer months as rainy season and tropical storms like the annual Atlantic hurricanes hit, devastating communities. But the developed world can also be hit hard – in August 2016, floods in the U.S. cost $10-15 billion in economic damage, while the floods that hit northern Europe earlier that summer caused damage in excess of $5 billion.

In Depth

A serious flooding event impacts society on many levels, both in the short-term devastation it causes and the long-term recovery that follows. And the consequences of floods are often hard to predict.

“The ripple effects are tremendous,” says John Dickson, President of NFS Edge Insurance, Aon. “When you think about a flood impacting a community, it is not just property that is damaged – everyone is affected. Where are you going to get groceries for your family? How do delivery trucks or emergency vehicles get to the area when the roads are washed away?

“The impact of floods extends far beyond risk of loss to physical structure and threatens the infrastructure that enables the daily interaction of individuals and makes communities possible.”

This may mean long-term disruptions not only to a community’s transportation network but also its supplies of clean water, food, electricity, and communications. This in turn can lead to disease, malnourishment, and further long-term human consequences that can have an economic impact far beyond short-term supply chain and business interruption.

The Economic Cost

The financial impact of flooding also continues to grow. Beyond the initial damage to property, destruction of crops, or loss of livestock, the long-term economic costs can be wide-ranging and hard to predict.

Damage to public infrastructure affects a far greater proportion of the population than those directly inundated by the flood. Loss of livelihoods, reduction in purchasing power and loss of land value in flood zones can leave whole communities economically vulnerable.

Aon estimates that global natural disasters in 2016 combined to cause economic losses of $210 billion, an amount 21 percent above the 16-year average of $174 billion. Flood peril alone caused $62 billion worth of damage – on top of the $560 billion in economic losses caused by floods between 2006 and 2016. This makes flooding the most expensive type of natural disaster over the last decade.

It is of course the most densely populated areas that suffer the largest economic impact. The costliest weather event of 2016 was the summer floods along the Yangtze River basin in China, which caused damage of upwards of $28 billion. The floods threatened up to 80 million people.

On the other side of the globe, in the past 15 years we have seen the two costliest natural disasters in U.S. history during the Atlantic hurricane season. In 2012 Superstorm Sandy caused an estimated $65 billion in damage, while the cost of Hurricane Katrina in 2005 is believed to be greater than $100bn.

 The Humanitarian Cost

The greatest toll of a flood disaster on society is always any loss of life that might occur. As the world’s population grows and becomes increasingly centered in large cities, the potential for a humanitarian catastrophe grows.

The UNISDR estimates that between 1995 and 2015, 157,000 people died as a result of floods, and that death tolls from flooding rose in many parts of the world during this period. In 2007, floods killed 3,300 people in India and Bangladesh alone. In 2010, flooding killed 2,100 people in Pakistan and another 1,900 in China, while in 2013 some 6,500 people died due to floods in India.

While floods strike Asia and Africa more than other continents, they pose an increasing danger elsewhere. In South America, for example, 560,000 people were affected by floods on average each year between 1995 and 2004. By the following decade (2005-2014) that number had risen to 2.2 million people, nearly a four-fold increase.

Rapid urbanization in these regions has significantly increased surface run-offs, while recurrent flooding of agricultural land, particularly in Asia, has taken a heavy toll in terms of lost production, food shortages and undernourished people in rural areas.

In rural India, for example, children in households exposed to recurrent flooding have been found to be more stunted and underweight than those living in non-flooded villages. Children exposed to floods in their first year of life also suffered the highest levels of chronic malnutrition due to lost agricultural production and interrupted food supplies.

Managing The Risk

The nature of the flood peril is highly changeable, with flash floods, acute river and coastal flooding increasingly frequent.

But new data tools, analytics and modelling help us to improve our predictions and prepare for and mitigate these events. The highly flood-prone country of Cambodia is one region where these new tools have been put to good use.

By analyzing flood patterns along the Mekong River delta and combining them with a range of other key risk indicators from topography to population to soil saturation levels, sophisticated analytical tools have been able to help relief workers better predict where the worst of the flooding is going to be and provide a more effective response. Similarly, sophisticated analytics are also beginning to be used by insurers to get a more accurate understanding of the likely impact of flooding on businesses and individual properties, improving pricing and community resilience.

Even companies such as Facebook are forward-thinking how their platforms can use data collected from users to help communication during disasters. The social network recently introduced ‘disaster maps’ to help organizations better respond when such events occur

Ultimately, as the world’s population continues to grow and is increasingly centered in vulnerable urban areas, the risk and impact of flooding will inevitably rise. The number of people affected by river flooding around the world could almost triple over the next 15 years to 54 million because of climate change and population growth.

As Steve Bowen, Director & Meteorologist at Aon, points out: “The combination of more people, more vulnerable exposure and more intense weather events poses a unique challenge for the insurance industry and beyond.” And the ability to cope with the growing risks that each of these factors bring will be key, as “flooding, both coastal and inland will remain as one of the riskiest perils.” If these trends continue, Bowen further explains, it is increasingly likely that we will see further growth of catastrophe losses around the world on an economic and insured scale for all perils – not just flood.”

Talking Points

“The rapid growth of urban populations along the world’s coastlines – a result of natural population growth and economic migration – combined with the increasing threats from climate change, are set to expose more than a billion people to coastal flooding by 2060.” –Dr Alison Doig, Christian Aid

“Even small changes in mean sea level can significantly increase the frequencies with which critical thresholds are exceeded. For coastal communities that means they need to adapt in order to prevent flood events from happening much more often.” – Thomas Wahl, professor of coastal risks at the University of Central Florida

“Talk to any flood industry participant, be it policymakers, FEMA officials or insurance companies, and (regrettably) they will be able to recite one of the best-kept secrets in the country: flooding is the most catastrophic and costly natural disaster in the United States.” – Louis Hobson, CEO of Aon National Flood Services (NFS)  

Further Reading

Banks Failing to Respond to Climate Risks, New Reports Find

TOKYO, June 22, 2017 — A report released today by four NGOs – Rainforest Action Network, BankTrack, Sierra Club and Oil Change International – revealed that the world’s biggest banks, including Japan’s three megabanks, are failing to respond to climate risks through their continued financing of extreme fossil fuels.

The report,Banking on Climate Change, provides analysis of 37 banks from around the world that are fueling climate change by funding some of the most carbon-intensive, financially risky, and environmentally destructive sectors of the fossil fuel industry: coal mining, coal power, extreme oil (tar sands, Arctic, and ultra-deepwater oil), and liquefied natural gas (LNG) export. Japanese banks, including Mizuho, MUFG and SMFG, are among the guilty institutions. Banking on Climate Change gives the three Japanese megabanks an F grade (the lowest score possible) based on their lack of any meaningful commitment to address climate change risks in these sectors.

Of the three large Japanese banks, Mizuho is the only one to have increased its exposure to extreme fossil fuels after the Paris Climate Agreement, highlighting its disregard for the global goal to keep temperature rise to well below 2 degrees. In 2016 alone, Mizuho contributed over 2.9 billion USD to some of the largest and most carbon-intensive fossil fuel companies in the world. Half of those investments were related to coal power, the dirtiest and most carbon-polluting energy sources. In aggregate, Mizuho has increased its fossil fuel financing by 60% since 2014, despite the Paris Agreement and the global trend toward carbon reduction.

In light of these findings, Rainforest Action Network, 350.org Japan, Friends of the Earth Japan, and Japan Center for Sustainable Environment and Society published the 2016 ESG Performance Report of Mizuho Financial Group as an independent review of Mizuho’s financial practices. In addition to Mizuho’s significant international exposure to extreme fossil fuels, the report finds that Mizuho is the top financier of Japanese fossil fuel and nuclear related companies and provides significant financing to companies driving tropical deforestation in Southeast Asia. Between 2011 and 2016, Mizuho provided over 38 billion USD in loans and underwriting to fossil fuel related companies in Japan, far exceeding its peers Mitsubishi UFJ Financial Group (MUFG) and Sumitomo Mitsui Financial Group (SMFG). In the same period, Mizuho contributed over 4 billion USD (adjusted) in loans and underwriting to companies threatening rainforests in Southeast Asia, and nearly 8 billion USD to nuclear-related companies in Japan.

Mizuho is well behind its peers in adopting strong Environmental, Social, and Governance (ESG) policies with respect to addressing climate change, deforestation and human rights, and has failed to adequately disclose the material risks of its investments to shareholders. The inadequacy of Mizuho’s social and environmental safeguard policies has the financial group currently involved in major ESG controversies worldwide. These include the Dakota Access Pipeline in the United States, a project that has been condemned by UN officials due to its abuse of Indigenous rights; palm oil company Indofood, which has been linked to use of child labor in Indonesia; and the Cirebon-coal fired power plant in Indonesia which faces community opposition due to health and livelihood impacts. Without sector-specific ESG policies, Mizuho risks becoming embroiled in more corporate scandals, misplaced capital allocation into carbon-intensive industries that may become stranded assets, rainforest destruction or corporate liability for financing human rights abuses, any of which can impact shareholder value.

At a press conference held at the press club of the Bank of Japan, Toyo Kawakami, Japan Director at Rainforest Action Network said, “Fossil fuel burning and tropical deforestation are the leading drivers of climate change, and Mizuho is funding both with billions of dollars. Shareholders need to hold Mizuho accountable for its reckless financial practices.”

“Mizuho’s increasing financing of fossil fuels is contrary to the global goal set out in the Paris Climate Agreement. Mizuho should make full disclosure of climate related financial risks as part of its lending and investment policy and commit to decarbonization of its portfolio in line with the 1.5-2 degree temperature goal. Continued financing of projects like the Dakota Access Pipeline will make Mizuho an international target for divestment based on human rights and climate concerns,” said Shin Furuno, Japan Divestment Campaigner from350.org Japan.

“Mizuho is currently financing several major coal-fired power plants in Indonesia, which have only brought misery to the local communities. Mizuho needs to take cues from its peers and quit coal for good,” said Ayumi Fukakusa from Friends of the Earth Japan.

To download the Banking on Climate Change report: www.ran.org/bankingonclimatechange

To download the ESG Performance Report of Mizuho: www.ran.org/mizuho_riskyinvestment

About the Organizations:

Rainforest Action Network has a 30+ year history challenging power and systemic injustice to preserve forests, protect the climate and uphold human rights through frontline partnerships and strategic campaigns. For more information, please visit:www.ran.org

350.org Japan was established in April 2015 as the Japan office of 350.org, a global environmental organization. 350.org Japan is working to spread fossil fuel divestment in Japan, mainly through the My Bank My Future campaign. 350.org Japan is creating a people-driven movement to demand banks adopt sustainable investment policies that keep global warming well below 1.5-2℃ — a target codified in the Paris Agreement. 350.org’s global network extends to more than 180 countries. For more information please visit: http://350.org/ja

Friends of the Earth Japan tackles problems such as climate change and energy, forests and biodiversity, development finance and environment, Fukushima support and nuclear phase-out, and more. As a member of Friends of the Earth International, it have been active in Japan since 1980. Its ultimate goal is to create a world in which all people may live peacefully and equitably. For more information, please visit: www.foejapan.org/