Spotlight on MUFG

LNG:

MUFG is among the top banks worldwide that finance LNG projects. LNG is composed of methane, a greenhouse gas 80 times more harmful than CO2 over a 20 year period. (UNEP) For example, MUFG finances the contentious Rio Grande LNG project in Texas, USA, which is facing potential legal violations in addition to harming the climate. (Sierra Club) Construction could infringe upon the rights of local Indigenous Peoples as well as harm local community health and endangered species. The climate impact from the project is comparable to the emissions from 43 coal power plants. (RAN)

Palm Oil and Forest-Risk Commodities:

MUFG is a leading financier of forest-risk commodities among OECD member countries, significantly contributing to the deforestation of Southeast Asian rainforests and peatlands through its funding of conflict palm oil and the pulp and paper sector. (Forest and Finance) This financing impacts the climate, biodiversity, and Indigenous communities. It enables funding to problematic clients by exploiting loopholes in MUFG’s own policies, which restrict the application of international standards (such as No Deforestation, No Peat, and No Exploitation) only to logging and plantation development. (MUFG) From 2016 to June 2024, MUFG financed about US$6.6 billion worth of these commodities, ranking it 13th among top financiers. (Forest and Finance)

The Rio Grande LNG terminal financed by MUFG is located in South Texas, a haven for wildlife, fishing, tourism, recreation and home to Latine and Indigenous communities. The proposed site would be located on an ancestral burial and village site of Indigenous Peoples. Despite failing to obtain the free, prior and informed consent of the Carrizo/Comecrudo Tribe of Texas, MUFG provided NextDecade’s Rio Grande LNG with US$2.67 billion. (Sierra Club) Providing financing without consent is in direct violation of the Equator Principles, an international framework that MUFG voluntary has committed to uphold. (Equator Principles)

In October 2024, Gulf Coast community leaders visited Tokyo to demand that Japan’s financial institutions stop supporting LNG/methane projects in the Southern Gulf Coast region of the United States. Juan Mancias, Tribal Chair of the Carrizo/Comcrudo Tribe of Texas said, “These companies are trying to occupy this land–all for fossil fuel riches. These projects will ruin our air, pollute our water, and desecrate our ancestral lands.” (RAN)

In addition, a SpaceX rocket facility is situated near the planned site. Local residents have expressed concerns about vibrations during launches and the risk of debris scattering toward the LNG facility. In May 2025, a referendum approved converting the facility into a municipality, sparking public debate. (AFP)

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MUFG’s Indonesian banking subsidiary, Bank Danamon, is continuing to finance a plantation group that has converted vast areas of Indonesian’s carbon-rich peatlands. From 2020-2023, it provided over US$280 million to Tunas Baru Lampung, and during this period, companies under its control converted 7,800 hectares (19,274 acres) of peatlands, driving vast greenhouse gas emissions and increasing fire risk. In 2023, two neighbouring concessions saw huge peatland fires spread over 14,500 hectares (35,830 acres) of land. These financing activities are not aligned with the bank’s own palm oil policy, adopted two years prior, which required clients to commit to No Deforestation, No Peatland, and No Exploitation. (MUFG) In 2024, the Indonesian government sued a TBL-affiliated company for US$41.5 million in ecological damages and economic losses.

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The United States President Donald Trump and his administration have made bold moves to assert America’s “energy dominance” with oil production and LNG exports. (US Department of Energy)

Global banks are also backsliding on their climate commitments, with a large exodus by major banks in Australia, Canada, Japan and the U.S. from the Net Zero Banking Alliance. (IEEFA)

Banks must act urgently and decisively to align capital flows toward climate-safe, deforestation-free, and socially just supply chains in the energy, food, and agriculture sectors. By proactively phasing out high-risk, high-carbon financing and accelerating financing for future-proof business models, institutions will not only mitigate systemic risks but also position themselves as leaders in a more resilient global economy.