Continued momentum for climate-related shareholder proposals in Japan in 2024

In Japan, shareholder proposals related to climate issues have been gaining prominence since the landmark filing at Mizuho Financial Group in 2020. We have observed climate-related shareholders proposals filed at no less than seven companies in the 2024 annual general meeting (AGM) season. The range of topics covered this year is large, including:

• resolutions focusing on Paris alignment of short- and medium-term decarbonisation targets and capital expenditure (Nippon Steel),
• existence of credible transition plans (Nippon Steel, Mizuho, SMBC and MUFG),
• climate competencies of board members and adequate incentivisation to achieve climate targets (Nippon Steel, Chubu, Mizuho, SMBC and MUFG), and
• adequate reporting on alignment of lobbying activities with climate targets (Toyota, Nippon Steel).

We see the continued value of robust and maintained engagement with corporations. Even if a shareholder proposal related to climate issues has not received enough support to be adopted at the AGM, it can have a direct effect on a company’s behaviour.

For instance, in 2024, after multiple years of engagement by a coalition of institutional investors regarding the company’s management of climate risks and its decarbonisation strategy, J-Power announced that it would close five coal power generation units in domestic coal plants by 2030. The Australasia Centre for Corporate Responsibility (ACCR) estimates that these closures would collectively avoid 16.2 mega tonnes of CO2 per year.

ClientEarth has been supporting filing of climate shareholder proposals by civil society organisations (CSOs) and institutional investors in Japan since 2020. We have supported a great diversity of topics of engagement, including implementation of existing decarbonisation pledges, climate lobbying and adequacy of director competencies to address climate-related risks and opportunities.

Shareholder proposals in the form of amendments to articles of incorporation of Japanese companies are now common. The legal effect of these shareholders’ proposals is the same as “special resolutions” on climate change filed and passed at UK companies.

The UN Principles for Responsible Investment (PRI) has put in place a platform where investors can pre-declare their voting intentions, including regarding the climate-related shareholder proposals filed in Japan this season.

Asahi Yamashita, interim Head of Japan, ClientEarth, remarked “Robust and maintained engagement with corporations is an important process that has allowed us to see real progress and actions taken by some companies to adopt a more credible decarbonisation strategy. Our 2023 publication, "Net Zero Engagement in Asia - a guide to shareholder climate resolutions, “aims to provide  a practical reference for investors looking to understand the range of stewardship options at their disposal, as part of holistic engagement with companies.”

For more information, please download the table showing a non-exhaustive list of climate-related shareholder proposals filed in 2024 at blue chip Japanese companies.

Disclaimer:

In this document, we are not soliciting or requesting the joint exercise of voting rights or any other shareholder’s rights, and do not have the intention to be treated as any of “joint holder” (kyoudou hoyuu-sha) or “Specially Related Persons” (tokubetsu kankei-sha) under the FIEA, or “closely related parties” (missetsu kankei sha) under the FOREX.

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