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Growing Resilience—Environmental Stewardship at MUFG Americas


At MUFG we recognize that protecting our precious natural resources is vital to the health, well-being, and prosperity of entire populations, of nations and even the global corporate sector. We view this as an internal imperative – within our global company and subsidiaries, and external imperative – to drive us toward a low-carbon and greener future in our own operations as well as for our clients. We exist as part of an ecosystem comprised of stakeholders which includes clients, institutional investors, parent company shareholders and bondholders, colleagues, the communities where we operate and increasingly, the communities where our clients operate.

In June 2020, we expanded our commitment to sustainability in welcoming Dr. Tobi Petrocelli as Director of Environmental Stewardship, MUFG Americas. We will continue to support climate solutions by following industry best practices in sustainability, improving our own operational performance, and by collaborating with multiple stakeholders to advance innovation.

Collectively, we will all benefit from the mitigation of and adaptation to climate change through supporting areas such as renewable energy, energy efficiency, green affordable housing, mass-transit systems, agricultural operations that conserve natural resources and public water infrastructure. Our dedication to environmental stewardship is aimed at helping society build toward a more equitable low carbon future.

Our Approach


At MUFG Americas, sustainability means conducting business in a way that seeks to meet the needs of the present in ways that do not compromise the ability of future generations to meet later needs. Key to this approach is managing risks to our natural environment, our business and other risks relevant to our broad set of stakeholders.

In May 2019, MUFG committed to achieving a cumulative total of approximately $180 billion in sustainable finance between FY2019 and FY2030. With this money, we aim to help build a sustainable society and meet the United Nations’ Sustainable Development Goals through the provision of financial services to our clients. Forty percent of this amount is specifically earmarked for the environment.

To help guide environmentally responsible financing in our lines of business, we are a member of the Taskforce on Climate-related Financial Disclosures and a signatory of the Equator Principles. Equator Principles recently recognized MUFG for going “above and beyond” as a result of the bank’s work on the recent revision of the Principles, the environmental and social risk management framework for project finance that is based on World Bank standards and has been adopted by more than 100 financial institutions in 38 countries. MUFG has been a member of the Equator Principles since 2005 and is on the Steering Committee. We ensure compliance with internal experts and as required through third-party experts. Relevant data and implementation reporting can be found on our website.

Environmental and Social Risk Management


MUFG revised its global Environmental and Social Policy Framework in 2020 to tighten our policy on certain large projects, including restrictions on financing for Arctic development, oil sands, and large hydropower projects, adding to the existing policies of no longer financing new coal-fired power plants, limiting certain coal-mining projects, and requiring international certifications for forestry and agribusiness clients announced in 2019.

MUFG regards climate change as a top risk across our enterprise. As a member of the Taskforce on Climate-related Financial Disclosures, since Summer 2019 MUFG has been a part of the pilot project with the UN Environment Program Finance Initiative to develop the methodology used to measure the impacts of the physical and transition risks posed by climate change within lending portfolios. In 2020 MUFG announced the results of its initial scenario analysis of climate impacts attributable to clients in our loan portfolio, starting with the energy and power utility sectors.

We are currently updating Environmental, Social and Governance (ESG) policies throughout the bank’s operational locations and supply chain to ensure transparency through standardized metrics and frameworks. Additionally, this year we will be conducting a materiality assessment with reference to the Sustainability Accounting Standards Board (SASB).

Our approach to ESG not only provides clarity and transparency, but also outlines the parameters for how we identify, measure, monitor and control business risks related to these environmental and social issues,

Tobi Petrocelli, Director of Environmental Stewardship, MUFG Americas.

MUFG Americas’ ESG and CSR team also works with the organization’s Reputational Risk Committee and business lines to develop products and services that serve the burgeoning green bonds market, sustainability linked loans and other offerings to enable efficient and effective low-carbon infrastructure. Additionally, we are partnering with our real estate partner CBRE Group to effectively aggregate our energy data, as well as our efforts to expand carbon tracking across all MUFG offices in the Americas.

We also engage with clients on ESG-related risks and opportunities. We are proud to invest in renewable energy, green technologies and practices, and in our clients who actively engage in waste minimization solutions as a part of our overall environmental initiatives. We believe these investments generate positive returns for our stakeholders while yielding positive benefits to the environment overall.

In August 2019, MUFG launched the Sustainable Business Office (SBO) in Tokyo to actively support clients in this context. The SBO held a global conference on sustainability in February 2020. MUFG America’s Beth Waters (project finance) and Todd Gray of MUFG Securities Americas (debt capital markets) were appointed by the SBO to contribute their expertise and lead.

A new Sustainability Working Group in the Americas also aims to increase awareness and collaboration among colleagues, clients, investors, and ratings agencies — all of whom are key partners in achieving our sustainability goals.

Our Environmental Goals

In May 2019, MUFG announced it is aiming to achieve 100% utilization of renewable energy sources for its in-house electricity needs by 2030. Aligned with this goal, MUFG Americas has reduced our greenhouse gas emissions from our own operations by 28% from our 2013 baseline. Looking ahead, we are working to do our part to transition 100% to clean energy and contribute net zero emissions across our operations, which includes carbon tracking for all MUFG Americas offices by 2030.

Since April 2019 MUFG has completed installation of LED lighting in 17 of its locations, including its New York Headquarters for the Americas and several retail branches in California, which is reducing our electricity use at the annual rate of approximately 1.8 million kWh, resulting in the avoidance of about 3.7 million pounds of carbon dioxide per year.

We also recently hit a milestone of ten years (as of 2019) in the top tier of global lending for clean energy. More than half of MUFG Americas’ overall power financing is for clean power.

For our clients, MUFG aims to provide a cumulative ¥20 trillion in sustainable finance by 2030. Of this, 8 trillion is for environment projects between FY2019 and FY2030 to help build a sustainable society and attain the Sustainable Development Goals (SDGs) through our client services. 

In 2019, MUFG achieved its USD $25 billion, five-year environmental finance goal, one year ahead of schedule, for projects including green affordable housing, solar and wind-energy projects, agricultural operations that conserve natural resources, green and social bonds and sustainability-linked bonds and loans, mass-transit systems, and public water infrastructure.

Our water use for FY2019 decreased by 22.5% from FY2018 to FY2019 due to our water conservation efforts including installing ‘smart watering systems’ that reduce the amount of watering required for landscaping, upgrading evaporative cooling towers, and assessing landscape requirements.

We also partner with nonprofit organizations contributing to the development of clean tech startups, green job creation and training, green housing, smart growth, and environmental conservation and education, including those that:
 

  • Contribute to revitalizing local communities and alleviating poverty
  • Provide emergency relief and strategic assistance for long-term, sustainable recovery from natural disasters such as hurricanes and wildfires that are intensified by climate change

While significant work remains for us to do on this front, we are committed to our role in being responsible stewards of our natural resources. We will continue to do our part to protect the environment through conservation and sustainable practices throughout our business and operations and explore ways to increase our impact in these areas and more.

Sustainable Product and Services Innovation

On a global scale, MUFG serves businesses contributing to the mitigation of and adaptation to climate change – including renewable energy, improving energy efficiency, green buildings, and sustainable agriculture – through arranging sustainability-linked loans, project finance for renewable energy, and underwriting and distribution of green bonds. We are proud to be the first Japanese bank accredited by the United Nations (UN) Green Climate Fund, advising our first deal in Chile in 2019. In 2019 alone, we have received the following rankings:
 

  • Renewable energy project finance: MUFG global lead arranger #2 2019 (Bloomberg New Energy Finance)
  • Green bonds: MUFG global corporate #7 2019 (Dealogic)
  • Social bonds: MUFG global lead manager of Year 2019 (Environmental Finance)
  • Sustainability Linked Loans: MUFG global #8 2019 (Refinitiv)

In the first half of 2020, Dealogic ranked us as a global bookrunner for green and social bonds, about $1b in total. And Bloomberg New Energy Finance has once again ranked us as a leader in clean energy financing for the 1st quarter of 2020.

In the Americas, we are proud to have completed our five-year environmental finance goal one year early, contributing $28.1 billion to projects that promote environmental sustainability from 2016 to 2019. We are excited to help finance highly energy-efficient projects that not only decrease electric bills and dependency on the grid but also decrease global warming. Multiple business lines throughout the bank contributed toward achieving this goal.

Sustainable Financing for Affordable Housing

MUFG has financed affordable housing for RCD, a California based real estate developer that has long incorporated green building concepts into its developments. The commitment to sustainable building is driven not only by their interest in reducing the external environmental impacts of their developments, but also by the concern for the building’s impact on the health of its residents.

Victory Village is a senior affordable rental community slated for completion this summer in downtown San Francisco with 53 one-bedroom apartments, in a serene oak woodland with open courtyards and lush grounds for residents.

Financing Sustainable Design and Construction

Victory Village will be a model of green design, showcasing ecologically friendly features that not only reduce environmental impact but also support healthy environments for residents.

The building will be 15% more energy efficient than 2016 Title 24 Guidelines with the use of solar PV and solar thermal. Solar PV will offset 75% of the common area load.

The development is intended to incorporate the latest building methods and technologies to achieve a superior level of energy and environmental performance. The landscape design follows Bay-Friendly landscaping guidelines for durability and low water use, and the selection of Bay-friendly plants and high-efficiency irrigation system serve to further conserve resources. On-site bioswales will avert storm water from entering the over-capacity drainage system. Other green features include advanced site lighting, high-efficiency appliances and fixtures, environmentally preferable materials, recycled content insulation and other materials, moisture preventative and durable construction, and construction waste reduction. The window frames, glazing, and building insulation are designed to exceed the stringent energy standards set forth in the latest California Building Code.

As such, Victory Village will complete certification and meet requirements to be GreenPoint rated.

Spotlight: Beth Waters: Driving Innovation in Renewable Energy

In May 2019, Beth Waters, who is a Managing Director for Project Finance, MUFG Americas, was elected to serve on the Board of Directors for the American Wind Energy Association (AWEA). Beth has been a central figure in the success of MUFG's renewables business and a leader in the advancement of renewables in North America. With the rise of renewable energy and the potential for a low carbon economy, MUFG is proud to support AWEA's mission and the commitment Beth has undertaken in joining its Board of Directors.

In her 12 years with MUFG, Beth has helped drive the origination and structuring of $33 billion in non-recourse debt, including the financing of nearly 26,015megawatts of wind, solar, and gas-fired assets, as well as 330 miles in transmission lines, and in 2018 led the deal team that underwrote $2.1B in acquisition financing of 51 project finance loans for Starwood Property Trust’s (STWD) acquisition of GE’s project loan portfolio.. Eight of her transactions captured “Deal of the Year” awards from industry publications and trade associations, as well as Beth herself ranking at No. 17 in A Word About Wind’s 2018 inaugural Top 100 North American Power List and again ranked #20 in A Word About Wind’s 2020l Top 100 North American Power List.

As a banking veteran with over two decades of experience in power and project finance, Beth is an important leader and advocate for the Renewables industry (including wind, solar, energy storage, and more.)

Sustainable Finance: Transitioning to a Low-Carbon Economy

In order to support the transition to a low-carbon economy, MUFG Americas serves businesses contributing to the mitigation of and adaptation to climate change – including renewable energy, improving energy efficiency, green building, and sustainable agriculture – through arranging sustainability-linked loans, project finance for renewable energy, and underwriting and distribution of green, social, and sustainability-linked bonds.

In 2020, MUFG Americas underwrote $750 million in green bonds for Avangrid, Inc. (NYSE: AGR), a leading sustainable energy and infrastructure company that is part of Spanish firm Iberdrola, which is the number one wind producer in the world. This funding is being used to invest in the development and construction of onshore and offshore wind farms, photovoltaic and concentrated solar power plants, as well as in electricity transmission and distribution networks. This is significant because Avangrid was the first domestic renewable energy producer and utility-holding company to publish a Green Bond Financing Framework on its website and obtain a second party opinion regarding its green financing structure.

The issuance was oversubscribed and attracted a significant portion of dedicated green investors as well as transitional investors. The financing framework is also in line with the Green Bond Principles (“GBP”) administered by the International Capital Market Association with a view to promoting consistency across financial markets and a second party sustainability opinion anchored the best-in-class green bond structure for the transaction. The GBP are the internationally recognized voluntary issuance guidelines that promote transparency, disclosure and reporting in the green bond market.

“Green bonds are a core part of MUFG’s platform, and MUFG is at the forefront of green bond market development,” explained Todd Gray, Sustainable Finance Capital Markets, MUFG Securities Americas. Helping partners and society build infrastructure for a low carbon future is an important component of our CSR commitments. It is reflected in both the projects we fund and in our global green rankings, driving progress on MUFG America’s announced goal to reach ¥20 trillion in sustainable finance by 2030.

In November 2019, MUFG Americas financed the development, construction, and operations for three wind assets and one solar asset in Chile with Mainstream Renewable Power. The deal will help support Chile’s renewable energy target of supplying 20% of the country’s electricity from renewable sources by 2025. The respective projects will deliver power under three 20-year power purchase agreements with 25 local distribution companies.

Spotlight: Los Angeles Cleantech Incubator.

The Los Angeles Cleantech Incubator (LACI) is currently supported through our Foundation’s Advancing Communities Forward program, which gives multi-year grants to strategic partners on the West coast. LACI received $90k in 2019 and $45k this fiscal year from the Union Bank Foundation.

LACI works with startups to accelerate the commercialization of clean technologies, and aims to transform markets through partnerships with policymakers, innovators and market leaders in transportation, energy and sustainable cities. Their work enhances our local communities through workforce development, pilots and a focus on equity and diversity & inclusion initiatives. Their goal is to build a regional innovation ecosystem that supports the discovery and commercialization of clean technologies by creating new companies, de-risking the go-to-market process, and helping companies successfully deliver market-ready cleantech solutions along with accompanying jobs in Southern California and beyond.