Thanks so much for joining me on stage. As Japan’s largest financial group, Mufg. I can safely say it has its fingers in almost every pioneer shows energy transition from renewable energy financing to the just energy transition partnerships and the early retirement of coal powered coal fired power plants. Sure. And you’ve raised a good amount of sustainable finance and story 19 about $250 billion. You’ve done this job for for four years plus now. What’s keeping you up at night currently? Yeah. Thank you for that question. When you get to my advanced age, many things keep me up at night. But I suspect that you’re asking me more in relation to what I do know. And. And I can safely say trajectories. And what trajectory are we on in terms of approaching our net zero targets? What trajectory are all the countries in a pack on and what we are doing in terms of approaching these things? So for what I think about on a daily basis or nightly basis is are we doing enough and are the governments enabling us to do enough? And if we don’t do enough, what happens? So the trajectories are important. They they vary from year to year and from administration to administration. I wouldn’t mention which country, but it does affect us and it does affect how we approach these issues. Speaking of administrations, of course, the US tariffs, the deal with Japan, all of that, the impact it will have on interest rates. Right. Right. Are you seeing the clarity around deals in the region with the US and potentially the chance that we could have lower interest rates over the next 12 months, improving the bankability of any projects in the clean energy sector in this part of the world? Yeah. So we see deals being announced almost on a daily basis and sometimes twice a day. So the answer is, I hear a lot about these deals. I see the broad headlines, but when I go into the details, they are a little bit more unclear. So I, I think on two aspects at least the governments have got some direction in terms of reaching deals with the US government. Let’s not forget they drive a lot of trade issues and then but the problem is, will these deals continue as we suspect, as we fear sometimes they change and they might change tomorrow, or the negotiators have not realized that somebody meant something else. But the other aspect of the of your question is whether they would lead to more deals. Deals are, especially in a pack, are driven by several factors, obviously. One is clearly the interest rates that will make the deals doable, but also it also is driven by demand and demand from the from the individual governments are different from country to country. Asia is not one sort of anonymous mass. It is several countries and I mean two of them, China and India represents like a quarter of the world. So they have a significant impact on what these deals get done. I think that deals being done purely on the basis of cheaper interest rates are not a good way of doing that. They should be driven by demand. They should be driven by the need to do these deals. So I think while we can get a flurry of deals overall on a larger scale, we will see the continued sort of take up of more sustainable views coming forward. So you’re saying that the the impact of tariffs and deals or lack thereof hasn’t really changed the outlook for a lot of the clean energy related companies in the region yet or I think that they have in a certain aspects. If we look on a long term basis, they will not have because you know the countries and and and desires of the the aims are long term. They last more than, you know, four years as an example. And that would mean that people need to be concerned about the next administration if that’s what they’re concerned about. And then the other one that’s coming up, because infrastructure deals take a long time to build. If you I mean, you looked at that bird’s nest of wires earlier. I mean, that was a matter of like not planning people just to demand build up. I’ll put a couple of extra wires. But if you don’t if you do that, then you you will get that business. And that is not a sustainable sort of scenario you’re looking at. So they do need planning. Governments in Asia plan for a long time. I mean, the turnover maybe except for a few countries for for governments is not so hard. And that means that we can get a decent sort of road forward. What about that US fund the 550,000,001 that Japan has has decided upon with the US is that you have to you’re going to participate in any way in that. I think we have to look at all these funds in the same way. They support the national agenda and perspective. And in this case it’s the Japanese government perspective. So we will support them. But how we support them is still being decided. And whether it’s through cash or through support in terms of doing more, more the agenda, that that is still being decided. I see. I want to turn your attention to just Beano. Oh, my favorite. So of course we all know it. 25 billion combined between Indonesia and Vietnam that was pledged by the US, Germany, Japan and other countries. So the portfolio website of the jet be in Indonesia says that $1.2 billion has been approved in jet financing. Right. Can you tell me what the new reality is of jet me in Indonesia now? Because I think everyone’s waiting for big bang numbers to come out of it and we haven’t really seen that yet. Yeah. Yeah. Okay. So I think for those in the audience who don’t know, Jet Peace stands for Justice Energy Transition Partnership. And while most people focus almost entirely on the energy transition part, it’s very important that that everybody understands that the just part is equally important, if not more important. And I will give you an example. If you look at part of the agenda on jet PE, So there are two jet PS in in Asia at the moment. One is for Indonesia that was originally led by the US and Japan and now is by Germany and Japan and the other one is by the UK, European Union and Japan. So Japan figures quite prominently in both when we decide on financing a transition project. So that could be, that could be transitioning from. It’s sort of fossil fuel. Right. So that’s one of the criteria, one of the aims of Jed P, We need to understand that it’s just not shutting down the power station. If you ask a person sitting in Europe, they said the fastest way to decarbonize is to shut everything down. But it doesn’t work that way because there are people involved in the plants. Very importantly, there’s the availability of power. So the just part is in order to design the program where you not only shut down and achieve your decarbonisation, but you have a fair outcome for the people on the ground and also allow people to develop. So the answer is it takes a while for for, for this agenda to get into place. There are many programs on on the ground. You are looking at big numbers. So the mobilization is clearly just the mobilization. It isn’t it isn’t putting in from all those people, participants involved in GP. It is really enable people to see that there is progress. There is hope for people to to to do these transactions and other people join in. It’s meant to sort of engender and to get people to do more transactions on that ground. So to to to come back to your point. It’s taken a bit longer and than than we initially sort of hoped for, but it’s getting there. So it’s coming online. If you ask the Indonesian government, there was a change in government recently, as you know, they are still working on it. There are many programs that we were looking at and we are considering them. How have things changed since Germany and Japan sort of took over the leadership in Indonesia or has on the Indonesians that be that is? Or has there been no difference to when the US was leading things? There is a difference. I mean, Japan was always there. So in Indonesia, Jet P was pushed off by both the Japanese side and, and the US initially. And as you know, the US has now sort of de-emphasized that part of the agenda. So Germany’s come in, Germany is part of the European Union, so they need to look at things from that perspective as well. I think that it it had a hiccup in the sense that you’ve changed leadership. So the style is different. The programs are looking at is not vastly different. And it will pick up speed again for the Japan side with the only Japanese back on the Indonesian jet be we we haven’t seen any slowdown from the Japanese government. They can they remain committed to providing help and providing financing in that respect. Do you think we can see the shuttering of the coal plant before 2030? We will see. Okay. So I think. As you know, fundamental to growth is availability of power. And the reason I say that is because the requirement for power is growing in Asia. If you look at what is available in terms of power and you just look at the cost for thermal power and the cost for renewable power, it looks very competitive for renewable power. But the nature of renewable power is different. So I think that what we are realizing is that if you go, like I said, if you go to a country and you tell them, shut down all your coal plants, it just can’t work. It needs an ability to understand how the coal plants work, how baseload coal plant works and how that affects the country. The other point I heard recently was about, Oh, I could just transfer power from this end of the country to the other end of the country. That may be attractive and and viable, but it only happens when you have a network, when you have transmission network. And the bank itself is part of the working group, which is the group which is in the SFA looking at the RCA network and that will allow us to bring power from one end of the grid to where it’s needed the most. So where it is effective, even if there’s a cost of building transmission, it makes sense, thereby slowing down the increase in the in thermal power plant. But back to your question. In terms of shutting down coal power plants, there are various programs. I mean, the ETM, which is been promoted by the ADB, is still under progress. It is a difficult question to answer because, you know, there are many aspects to it. You have the sanctity of contracts within that. You have people on the ground. My expectation is that it will eventually get done. And with that, we have a model of how to do these early shutdowns. But we need to get that done. Yeah. And it involves innovative financial structures. Right. Including the transition credits that that Singapore is trying to try. So. Correct. So the the aspect of it is that it’s all a matter of risk allocation. Mm hmm. And how you you approached risk allocation and how you sort of spread the pain, as it were. Because there are many parties involved as Indonesian government. You shut down the plant early. How are they going to replace the power loss in that case if the equity holders are going to be taken out? Are they compensated and the debt holders and also the people in the ground? Don’t forget there are people on the ground that work in these plants and receive the power. Mm hmm. More broadly for your business, right. Where are you expecting to see more innovation be, be it and blended finance that for development swaps, are you looking at more innovative structures and products within sustainable finance? And where are you building up the team or products for? Yeah. Okay. Thanks for that. I think I’ll just pick up on your point on blended finance. I mean, blended finance is in its concept is not fantastically new. It’s just a matter of risk allocation and finding who is the best person to put in the in at particular risk. The end product is what drives the structures. You can’t have a structure driving the end product. If you do that, then you will come out with the wrong structure because you got the wrong answer. So you want to look at that. So what we we think is that the countries which we think have the ability to do these runs, first of all, in terms of looking at high risks will be the countries that need the most development. So, for example, I’m not picking on any country in particular, but if you have a vast amount of coal that you need to do, then you need to understand how to structure it down. So what you look at is the end product. So you want to only shut down. If you want to shut down on these things, the structures have to match that, right? And the risks have to match the structures. Yeah. So are you going to be hiring fire for any particular. Not that I’m looking for a job, but are you going to be. I’ll make a note of that. Yes. Who not to hire? Yeah. So will you be adding to your product shelf in any way you’re hiring for? Because we’re seeing banks start to talk more and more about blended finance and actually build up their capabilities in that. Yeah. So, yeah. So as a result, the blend of finances. It’s a very active and it’s something that we’re looking at in terms of what of what the bank wants to do. So we will really have a team looking at that and that’s driving that scenario. We’ve we’ve started a blend of finance fund called Gaia. So Gaia is already being kicked off and that’s that’s going on for now. We are looking at what we need to do. So the answer is as the ramp up of of demand comes, we will be looking at adding 13. Okay. For the established products, right, in green bonds and social bonds. I know we were talking about this and you mentioned that social bonds are doing well for you. Yeah. Can you talk to us a bit more about what work you’re doing in the social space and how you see that that product segment grow? All right. So you know, the word ESG, again, people just concentrate on the E part of it. The S part is the social part. So within our own framework, we believe in trying to drive the whole thing out because they they they feed on each other in order to get things done. We are looking at the kind of transactions that are done. Most in Asia tend to be infrastructure, So infrastructure tends to be the energy portion of it. However, a lot of financial institutions and old governments try to drive the social part. A lot of our loans that that we’re looking at in terms of the social of facilities or social link facilities tend to be based on the frameworks provided by the government. Okay. Do you have any numbers that you can share with us? What increase or what growth are you seeing? Well, I have a big number, which is the ¥100 trillion number. So that is the number which our bank has committed to raising in sustainable finance. And that number has been raised three times since we started the team. I don’t take any credit for raising that number, but it is, you know, clear to us that that is something that the bank needs to do that is supporting our clients in terms of getting to the net zero numbers. The bank itself also has a net zero target for 2050. And we want we aim to continue to to to to reach that target. And that is well within our ability to do. And speaking of supporting clients, are you planning on changing the baseline scenario or temperature for for transition pathways for your clients from 1.5 degrees to do something else to three? Where are you at right now? Okay, so the answer is we we stick to the frameworks and then so the science based frameworks as well as the net zero targets that were set, which is still at 1.5, the Paris Agreement, that at 1.5, they haven’t adjusted it. We continue to work to that. I don’t think we’ve reached 2050 yet. And, you know, there is still hope for us to be able to move that trajectory. That trajectory is the one that keeps me awake, as I said before, and that’s the one that we’re working towards. Are you assessing or how far are we from having a situation where banks assess companies on their physical climate risks and include that in the credit risk assessment to decide how much to lend to them or how many bonds to underwrite or what volume of bonds to underwrite as a result of physical climate risks that companies face. We are quite close to that. So you’re not doing it yet, but you’re working on it? We’re working on it. And it you know, it’s partly driven by regulatory requirements, partly driven by what our clients tell us. But yes, I think there will come a time quite soon that we will be looking at that scenario. Okay. I know we’ve run out of time, but very quickly, what can companies do in response to that? They do. Should they be setting up assets or factories elsewhere? Like how should they be thinking about making sure that they’re high up on your your scoring or the assessment? Besides having a conversation within myself and the team, they should be looking at their trajectories. Like I said, it’s all about the trajectories and mapping out what they need to achieve net zero. And then we have that conversation about how that is met and how we can help them. So anything we do to help them is part of our sustainable finance targets. So that’s what I believe should be done.