Yoshihiro Fujii
Professor, Graduate School of Global Environmental Studies, Sophia University
For the financial sector, 2008 was an ordeal that threatened to bring back the nightmare of the "lost decade." The financial crisis originating in the United States shook the global financial system to its core. The Mizuho Financial Group CSR Report 2009 reaffirms Mizuho's commitment to CSR during these tough times.
In his "Top Commitment," President and CEO Takashi Tsukamoto made an extremely clear pledge. He confirmed a return to the roots embodied in the Basic Principles of the Consolidation and The Mizuho Code of Conduct. Instead of cowering in the face of the adversities arising from economic stagnation, this suggests the group is ready for proactive actions that recognize anew the importance of the financial institution's public mission and social responsibilities.
This year's report attaches top priority to actions associated with the environment. The writer describes efforts to resolve financial issues through financial mechanisms as "environmental finance." It is clear that Mizuho is taking the lead in environmental finance, whether it is a matter of environmentally-friendly international project finance based on the Equator Principles, investment support for wind power generation projects, or initiatives addressing domestic credit schemes to support SMEs in Japan.
I visited Mizuho Corporate Bank to gather materials when it became the first Japanese bank to adopt the Equator Principles in Oct 2003. Taking a first step like this requires courage. I believe the people in charge at the time were not merely concerned with the immediate novelty, but made the decision believing in the responsibility and potential of finance. The wide-ranging results described in this report show how far things have come in the six years or so since then. When I look back, I feel this really demonstrates the "Mizuho spirit."
What is this "Mizuho spirit"? Born through a consolidation of three banks in the midst of Japan's financial crisis, Mizuho has from the beginning been asked to fulfill its public mission and social responsibilities. The success or failure of the consolidation into a megabank does not depend on strengthening earning power alone, although that is important. I think it also depends on the assessment as to whether the results obtained through financial mechanisms are restored to the people and economic society. What is necessary to achieve this is the "Mizuho spirit," the ability to make one's own decisions and accumulate honest results instead of playing catch-up.
This "spirit" is not just a matter of environmental initiatives. The long-standing commitment to financial education is also a results-oriented initiative that, amongst other things, deepens ties with a university specializing in training teachers. The reliability of Mizuho's financial education is enhanced by its adherence to its firm management stance on being the only megabanking group not to have a consumer finance company under its umbrella.
Like other banks, it is striving to prevent financial crimes such as bank transfer fraud. Here, the "Mizuho spirit" is apparent from the clear declaration to disavow anti-social elements that appears in the group's basic policies. I believe this determination to exclude anti-social elements led to the decision to become the first Japanese bank to adopt a money laundering prevention system.
Of course, there are problems. To start with, the "Mizuho spirit" has proven effective, but the question now is how to take this forward and how to develop "typical Mizuho strength" on the earnings side. Although tighter policies for lending to SMEs have become an issue in Japan, Mizuho Bank increased its lending to smaller businesses by JPY 500 billion in half a year. Rather than asking how this compares with JPY 24 trillion in outstanding loans, the question is how to assess it from the perspective of public mission and social responsibility.
It is not a question of simply increasing the amounts lent. Today, the public mission that financial institutions are expected to accomplish, and the public responsibilities they should fulfill through their core business lie in supporting management reforms. These include strengthening the management capabilities of their customers, discovering new technologies and markets and offering solutions for overseas expansion. I suspect Japan's financial sector, not just Mizuho, has yet to fulfill its potential in these respects.
Once the Japanese economy gets through its current trials, I would hope that Mizuho shows the courage and wisdom to lead the way in taking the first step.
Yoshihiro Fujii
Professor, Graduate School of Global Environmental Studies, Sophia University
