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ClientEarth Communications

26th March 2021

Climate finance
Asia & the Pacific

The legal pathway for Japanese shareholder proposals on climate change

ClientEarth lawyers have prepared a legal briefing explaining how shareholder proposals related to climate change can be filed under Japanese company law.

Last year, one of Japan’s largest banks, Mizuho Financial Group, became the first company in the country to face a climate change-related shareholder proposal.

It received 34% of shareholder votes – a considerable show of support despite being short of the two thirds necessary to pass – and sent a clear signal to Japanese corporations that climate proposals were on the agenda.

But to some investors the structure of these proposals, which must be filed via an amendment to a company’s articles of incorporation, can appear heavy handed.

ClientEarth’s briefing explains why their form is in fact the only legal pathway to file a shareholder climate proposal under Japanese corporate law.

It also clarifies that they are similar to the special resolutions faced by major UK companies including Barclays, BP, Royal Dutch Shell, Rio Tinto and Anglo American, and have the same legal effect.

Asahi Yamashita, an external legal advisor to ClientEarth in Japan, said: “The Mizuho proposal proved that climate change shareholder proposals can be hugely effective in encouraging Japan’s biggest financial institutions and corporations to take critical action to reduce their carbon footprint.

“Filing these proposals via an amendment to a company’s articles of incorporation is the only legal pathway to do so under Japanese law. They should be seriously considered and weighed by boards and investors alike in order to encourage Japan’s private sector to strengthen its response to climate change risk and leverage the opportunities of the net zero transition.”

ClientEarth’s legal briefing can be found here. The contents are for general information purposes only and do not constitute legal advice. Specialist legal advice should be taken in relation to specific circumstances.  

Asahi Yamashita is a lawyer at Tokyo Surugadai Law Offices and Legal Advisor to ClientEarth in Japan. Asahi is licensed to practice law in Japan and California.