Filipino and Japanese clean energy groups, environmental advocates, and communities called attention to some of Japan’s biggest financial institutions including Mizuho, Osaka Gas, Mitsubishi UFJ Financial Group (MUFG), and Sumitomo Mitsui Banking Corporation (SMBC) demanding that they end their financial support to destructive fossil gas projects in a biodiversity hotspot in the Philippines, and follow the example of institutions who already withdrew their support after having learned of risks and impacts of said projects.
In May and June, environmental advocacy groups Protect VIP (Protect Verde Island Passage) and Center for Energy, Ecology, and Development (CEED) spoke with financial institutions in Europe and the United States to call for the end of their fossil gas financing in the Verde Island Passage (VIP). VIP is a marine corridor encompassing five provinces, which houses more than 300 coral species and about 1,736 shorefish species. It is the most biodiverse marine habitat in the world and is dubbed as an Amazon of the Oceans. Over two million Filipinos depend on VIP as their source of livelihood and sustenance. However, VIP is under threat from the massive expansions of fossil gas and liquified natural gas (LNG).
As a result of these engagements, DWS, a German asset management company, during its Annual General Meeting (AGM) around mid-June publicly announced that they’ve divested in San Miguel Corporation as of April 30, 2023, taking into account the latest environmental, social, and governance data, among other reasons. DWS also asked a question about how Shell is applying environmental and social standards in its proposed LNG terminal in Batangas in Shell’s AGM last month. US financiers, meanwhile, responded favorably to the call to turn attention to investing renewable energy instead of gas to genuinely assist the energy transition in the Philippines while sparing VIP and its dependent stakeholders from negative impacts.
“These developments highlight the increasing momentum and the growing urgency in protecting VIP. We’ve made the case that fossil gas as no rightful place in VIP and anywhere else. We will persist in our efforts until VIP is no longer in peril,” said Fr. Edu Gariguez, Convenor of Protect VIP.
Gerry Arances, Executive Director of Center for Energy, Ecology, and Development added, "Fossil gas is not only economically unsound, but also poses significant risks of stranded assets – and has absolutely no place in our energy future. What we need is for banks to throw their weight behind genuine renewable energy sources that are abundantly available, ready to be harnessed and finally end their fossil gas financing.”
In time for the annual general meetings (AGM) of Mizuho, Osaka Gas, MUFG, and SMBC, impacted communities and environmental organizations appealed to these financiers to take immediate action to Protect VIP and withdraw financing in fossil gas projects.
A letter from Protect VIP to the Japanese fossil financiers stated various inquiries and complaints filed against SMC Global Power Excellent Energy Resources, Inc. (SMC-EERI) and Atlantic Gulf & Pacific Linseed (AG&P-Linseed), revealing serious lapses regarding the projects’ compliance with government permitting requirements such as premature land conversion and illegal tree cutting.
MUFG, Mizuho, and SMBC are among the largest financiers of San Miguel Corporation (SMC), as reported in Banking on Climate Chaos. SMC is the largest gas developer in the Philippines, with one of its fossil gas power plant projects situated in Batangas. Additionally, Osaka Gas has investments in AG&P-Linseed’s liquified natural gas (LNG) terminal.
“Japanese financiers like Osaka Gas, MUFG, Mizuho, and SMBC are pouring vast amounts of money into the gas expansion in the Philippines, thus worsening the climate crisis, and destroying fisherfolks’ livelihood and local marine biodiversity. In the AGM season, their investors should also be aware that their finance for fossil gas infrastructure entails a significant stranded asset risk due to the projected low gas demand. Their fossil gas finance put both the Earth and investors’ share in jeopardy,” said Hiroki Osada of Friends of the Earth Japan.
MUFG and SMBC hold their AGMs today, following the recent AGMs of Mizuho and Osaka last week.