HONG KONG/SINGAPORE/TOKYO -- For Japan and its big banks, investing in coal-fired power plants has appeared to be a surefire way to profit from Southeast Asia's explosive economic growth. Along with the nation's development agencies, Japan's banks have pumped billions of dollars into coal plants across Asia in recent years, from Vietnam to Indonesia. Their investment logic was clear: Coal would give developing nations the plentiful, cheap power they needed to grow.
But there are signs that formula may be changing. In May, Mitsubishi UFJ Financial Group became the second major Japanese bank to announce that it would quit loaning money for coal-fired power plants. Its move followed Sumitomo Mitsui Trust Bank's decision, made in July 2018, to stop funding coal plants, citing environmental concerns. "We could not resist the big trend of preventing global warming," Tsukasa Kanai, Sumitomo's chief sustainability officer, said at the time.