Mitsubishi Corporation’s investment in new LNG and gas projects should cause investors some concern about the assumptions the company is making around stranded assets and other climate risks. Two shareholder proposals seeking disclosure of (1) short- and medium-term emission reduction targets aligned with the Paris Agreement and (2) an evaluation of the consistency of new capital expenditure with the International Energy Agency’s Net Zero by 2050 Roadmap have been tabled at Mitsubishi’s AGM at the end of June. Mitsubishi’s new medium-term strategy does not address the resolutions’ concerns and further disclosure is needed to assure investors that the company can meet its stated net zero by 2050 commitment.
We urge investors to vote for these climate-related shareholder proposals.
Despite its net zero emissions by 2050 commitment, Mitsubishi Corporation (Mitsubishi) is undermining this goal with its pursuit of new gas production and infrastructure projects.
The International Energy Agency finds in its Net Zero Emissions by 2050 Roadmap that there is no room for new oil and gas fields, significant stranded asset risk for liquefied natural gas (LNG) facilities, and that gas use for power must rapidly decline. Yet Mitsubishi is pursuing new projects to significantly expand its LNG and gas power operations, and has no policies to rule out or in any way restrict their development, effectively betting shareholder capital against the net zero by 2050 energy transition it claims to support.
The company has also set a medium-term emission reduction target that fails to manage the significant exposure to transition risk represented by its Scope 3 emissions. Without effective and comprehensive short- and medium-term emission targets covering Scope 1, 2 and 3 emissions, and a capital allocation framework aligned with the company’s own net zero by 2050 commitment, Mitsubishi is at significant risk of contradicting the goal and the timeline of net zero emissions by 2050, which it claims to support.
Extensive engagement with Mitsubishi by Market Forces, Kiko Network, and Friends of the Earth Japan (among others) has not led to adequate changes from the company. As a result, shareholder proposals making the following requests of Mitsubishi have been filed:
- Adopt and disclose short- and medium-term greenhouse gas emission reduction targets aligned with the climate goals of the Paris Agreement.
- Disclose an assessment of how a net zero by 2050 pathway would affect the assumptions, costs, estimates, and valuations underlying capital expenditure investments in the development of new upstream, midstream and downstream oil and gas assets.
Investors should vote for these proposals at Mitsubishi’s AGM at the end of June 2022.