MUFG launches EU green deposit product with Subaru Europe as first client

MUFG Bank said on Oct. 6 it is making its Green Deposits product available to corporate clients in the EU, adding a market to a structure introduced in the US in 2021 and the UK in 2023. Clients place term deposits with MUFG, and the bank says those balances are used to finance assets that align with its Green Deposit Framework.

The framework, developed with support from Morningstar Sustainalytics, covers a long list of eligible categories: renewable energy, energy efficiency, clean transportation, biodiversity, sustainable land use and natural-resource management, water and wastewater management, green buildings, eco-efficient and circular-economy products and technologies, and climate-change adaptation.

Term deposits are the plainest instrument on a treasurer's list; the client keeps a deposit rather than buying a security, and the sustainable-finance claim arrives as an attribute of the account.

The environmental claim rests on criteria a bank administers rather than on a named asset the depositor can point to, and a green deposit sits at the far end of the shift from label trades toward project-level milestones, verification and unlabeled project finance: the buyer gets the framework, while which assets the money reaches is a call the bank makes on its own book. The announcement does not say whether the EU offering applies the same framework unchanged or a localized version, or what continuing verification, if any, attaches to the allocations.

Mamoru Shibata, head of transaction banking for the EU and EEA at MUFG Bank (Europe) N.V., said sustainability remains an important priority for businesses across the European market and that the bank sees strong value in offering clients a product with financial and non-financial returns. Subaru Europe is the first client to place funds through the EU version, according to the announcement, and vice president Keigo Ino said the company was pleased to be first into an initiative it expects to produce environmental benefits for its customers in Europe.

The announcement gave no figure for how much deposit volume MUFG expects the EU offering to attract. The US version has now run for five years and the UK for three, so the EU sale extends an existing framework rather than introducing one, and with a single named client at launch the open question is whether more European treasurers follow Subaru.