Addressing Climate Change (Initiatives based on TCFD Recommendations)

The TCFD Recommendations call for disclosures on corporate governance, strategy, risk management, and indicators and targets relevant to climate change–related risks and opportunities.

At Mizuho, we have supported the intent and aims of the TCFD Recommendations since December 2017, and we are working to engage in initiatives and enhance disclosures in accordance with the recommendations. The current status of our response to the TCFD Recommendations is as follows.

Climate & Nature-related Report

Governance

  • Mizuho has established a supervisory and business execution governance framework, centered on the Board of Directors.
    • Supervisory: The Board of Directors and the Risk Committee conduct oversight on reported and deliberated matters.
    • Business execution: The Sustainability Promotion Committee, the Risk Management Committee, the Executive Management Committee, and other committees hold deliberations and discussions, which are reported to the Board of Directors.
  • The Group Chief Sustainability Officer (CSuO) and the Group Chief Risk Officer (CRO) lead initiatives in their respective areas under the Group CEO's supervision.
  • Mizuho has adopted sustainability-related indicators for evaluating executive compensation.

Strategy

  • Mizuho has developed the Net Zero Transition Plan (formulated in 2022, revised in 2023) to promote the Group's climate change responses in an integrated manner.
  • Recognition of opportunities and initiatives to capture opportunities:
    • We recognize transformations in industrial and business structures toward the transition to a decarbonized society and investments in and implementation of practical applications of new technologies as opportunities.
    • Based on sustainable business strategies, we actively support clients' transitions to a decarbonized society and their measures to address climate change.
      • Support for steady transitions by clients: We promote support for clients' business portfolio restructuring and social implementation of next-generation technologies. We have strengthened our financing capacity toward our sustainable finance target of JPY 100 trillion over the FY2019 to FY2030 period.
      • Promotion of future-oriented actions by clients: We have strengthened efforts in the focused areas of hydrogen, carbon credits, and impact, and we have expanded new business domains. We support the establishment of technologies and business models in the development, demonstration, and commercialization stages through the Transition Equity Investment Facility and Value Co-creation Investments.
  • Engagement
    • To improve the effectiveness of client engagement, Mizuho developed the “Grand Design” and enhanced dialogue using GHG emissions as a starting point.
    • We have enhanced our communications with policy makers and our involvement in international rule making, making use of our industrial insight.
  • Capability building
    • We are shifting from establishing framework and knowledge accumulation to a stage focused on creation of output.
    • We promote capability-building initiatives both within and outside Mizuho, such as enhancing stakeholder collaboration and co-creation, raising employee awareness, and consolidating employee capabilities.
  • Risk recognition: We comprehensively ascertain the risks associated with climate change by assessing the importance in each risk category.
    • We recognize credit risk (deterioration of client business performance) to be of particularly high consequence.
  • Scenario analyses and strategy resilience assessments:
  Transition risks Physical risks
Analysis method
  • We analyze the increases in credit costs caused by transition risks based on an outlook for the impact on clients' financial results under the scenarios.
    (Targeted sectors: Electric utilities, oil and gas, coal, steel, automotive (OEM and suppliers), maritime transportation, aviation, cement, and chemicals)
  • Acute risks: We analyze damage to assets, business stagnation associated with changes in natural disasters caused by temperature increases.
  • Chronic risks: We analyze asset deterioration, labor capacity reductions, and other impacts associated with temperature increases.
Implications
  • The cumulative increase in credit costs by 2050 is approximately JPY 1,910 billion under the Net Zero 2050 scenario. This increase may have a certain level of financial impact in the medium to long term, but the impact on Mizuho’s short-term financial soundness will be limited.
  • The analysis found that if a stress event were to materialize, cyclones and floods would have the largest impact of the disaster types covered in the calculation targets, with additional losses of approximately JPY 90.0 billion in a single year. The analysis confirmed that the impact of other disaster types is less than half of that of cyclones and floods.

 

Risk management

  • As part of the Top Risk Management framework, where top management recognizes risks with significant impacts on Mizuho, worsening impacts of climate change and inadequate environmental responses has been designated as a top risk, and we strengthened control measures.
  • Based on the Basic Policy for Climate-related Risk Management, we recognized risks and assessed risks related to materiality. For material risks, we identify and manage quantitative impacts through scenario analysis and credit risk assessments.
  • Risk control in carbon-related sectors:
    • We have established a risk control framework to assess and monitor the degree of risks for each client along two axes — (1) the client's sector and (2) the status of the client's transition risk responses. (We added GHG emissions reduction performance and alignment of targets and results with the 1.5℃ pathway to axis (2).)
    • We control exposure in high-risk areas by promoting transition through engagement and assistance.
  • We have established and operate the Environmental and Social Management Policy for Financial Activities*(ES Policy). The following aspects of the ES Policy were revised in February 2025:
    • Conduct due diligence when considering financing or investing in regions with high conservation value, and prohibit financing or investing in projects that involve illegal logging (revisions to be implemented in July 2025).

      * In 2025, the name was changed from the previous " Environmental and Social Management Policy for Financing and Investment Activity" to " Environmental and Social Management Policy for Financial Activities."

Metrics and targets

Monitoring metrics Targets Recent results
Scope 1 and 2 emissions Carbon neutral by FY2030 FY2023: 64,643 tCO2
Scope 3 (emissions from financing and investment) Net zero by 2050 (Targets and results disclosed by sector)
– Electric power FY2030: 138 to 232 kgCO2e/MWh FY2023: 317 kgCO2e/MWh
– Oil and gas FY2030: Scope 1,2: 4.1 gCO2e/MJ
Scope 1,2 and Scope 3: –12% to –29% (from  FY2019 levels)		 FY2023: Scope1,2: 5.4 gCO2e/MJ
Scope 1,2 and Scope 3: –53% (31.8 MtCO2e)
– Coal mining
(thermal coal)		 OECD countries: Zero by FY2030
Non-OECD countries: Zero by FY2040		 FY2023: 0.5 MtCO2e
– Steel FY2030: –17% to –23% (from FY2021 levels) FY2023: –28% (12.5 MtCO2e)
– Automotive FY2030: 
Scope 1,2: –38% (from FY2021 levels)
Scope 3: –31% to –43% (from FY2021 levels)		 FY2023: 
Scope 1,2: –23% (719 ktCO2e)
Scope 3: –10% (178 gCO2e/vkm)
– Maritime transportation FY2030: Portfolio climate alignment score ≤ 0% FY2023: -7.0%
– Real estate FY2030: 33 to 42 kgCO2e/m2 FY2023: 55 kgCO2e/m2
Sustainable finance amount Total for FY2019 to FY2030: JPY 100 trillion of which JPY 50 trillion is earmarked for environment and climate-related finance FY2019 to FY2024 Total: JPY 40.3 trillion
of which JPY 20.5 trillion on environment and climate-related finance
Outstanding credit balance of coal-fired power generation plants1 Reduce the outstanding credit balance to 50% of the FY2019 balance by FY2030, and achieve an outstanding credit balance of zero by FY2040 March 31, 2025: JPY 220.5 billion
(Down 26.4% from March 31, 2020)
Exposure to high-risk areas in transition risk sectors2 Reduce over the medium to long term March 31, 2025: JPY 1.4 trillion
(Down 0.4 trillion JPY from March 31, 2021)
Status of clients' transition risk responses ― March 31, 2025: Steady progress in the targeted sectors
SX talent
- Sustainability management experts
- Environment and energy sector consultants		 FY2025
- 1,600 experts
- 150 consultants		 As of March 2025:
- Approx. 1,850 experts
- Approx. 140 consultants

 

Data for disclosure aside from monitoring metrics:

  • Sector-by-sector credit exposure in line with the TCFD Recommendations
  • GHG emissions from financing and investment / capital market activities (financed emissions / facilitated emissions)

 

  • Expansion of disclosure metrics
    • The scope of Scope 1 and 2 reduction targets has been expanded from seven group companies to include all domestic and international consolidated subsidiaries.
    • For oil and gas sector of Scope 3 targets, the targeted value chain has been extended to include gas liquefaction and oil refining, in addition to the initial targets for upstream production (exploration, development, and production).
  1. The funds used for the construction or expansion of coal-fired power plants, which is prohibited under the ES policy.
  2. See p.45 "Risk Control in Carbon-related Sectors" (PDF/3,926KB) for the definition of exposure to high-risk areas
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