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E28 - Megumi Muto, Deputy Group Chief Sustainability Officer at Mizuho Financial Group (Japan)
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What if financiers started thinking like finance ministers? In this episode of Women Changing Finance, Megumi Muto, Senior Managing Executive Officer and Deputy Group Chief Sustainability Officer at Mizuho Financial Group describes what it means to integrate impact into one of Japan’s largest financial institutions. Megumi brings a rare dual perspective: decades in development finance, including at JICA, and now as a sustainability executive inside a large bank, financing industrial transformation. From hydrogen and carbon credits to adaptation finance and blended finance, Megumi explains how Mizuho is working to transform industries like energy, steel, chemicals, and automotive, and make them more sustainable. She shares how Mizuho is embedding impact across $14 billion in assets, and we explore:
- What “transition finance” looks like in practice
- Why impact-related decisions must take future impacts into account
- Why public and private actors must collaborate from the very beginning
- How Japan leads regional efforts on adaptation and transition finance across Asia.
This episode is about bridging worlds: public and private, short-term and long-term, profit and purpose.
Please review the episode, share your feedback, and subscribe to the podcast!
You can also
- Visit our website: womenchangingfinance.org
- Read Megumi's full bio
To go further, here are some of the references mentioned during the episode:
- Mizuho Financial Group — https://www.mizuhogroup.com
- Japan International Cooperation Agency (JICA) — https://www.jica.go.jp
- Impact Driven Finance Initiative (IDFI) — https://idfi.jp
- Development Bank of Japan (DBJ) — https://www.dbj.jp
- Asia Capital Markets Forum (ACMF) — https://www.theacmf.org
- ASEAN Taxonomy for Sustainable Finance — https://www.theacmf.org/sustainable-finance/publications/asean-taxonomy-for-sustainable-finance-version-4
- Asia Transition Finance Study Group — http://atfsg.org/
- Sendai Framework for Disaster Risk Reduction — https://www.undrr.org/implementing-sendai-framework/what-sendai-framework
- GSG Impact Japan - https://impactinvestment.jp
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Transcript
Introduction to Women Changing Finance Podcast
00:00:05
Speaker
Hi, welcome to the podcast Women Changing Finance, where you will discover amazing women from all around the world who are making finance become a force for good.
00:00:21
Speaker
Welcome to the podcast Women Changing Finance.
Meet Megumi Muto: Sustainability Leader at Mizuho Financial
00:00:24
Speaker
I'm Krisztina Tora and I'm welcoming today Megumi Muto, Senior Managing Executive Officer and Deputy Group Chief Sustainability Officer at Mizuho Financial Group, where she leads sustainability integration and business development.
00:00:39
Speaker
Before that, Megumi spent decades shaping development finance and including at the Japan International Cooperation Agency, JICA, where she served as Vice President and Chief Sustainability Officer.
00:00:52
Speaker
Megumi, it is a real honor to have you on the show. Welcome. Thank you very much.
Japan's Impact-Driven Finance Initiative
00:00:57
Speaker
As we begin, could you please give a sense of how you see the Japanese impact ecosystem from your perspective?
00:01:05
Speaker
Thank you The impact finance ecosystem in Japan is really thriving. About that three years ago, the private financiers interested in impact got together and created something called impact-driven finance initiative.
00:01:24
Speaker
Initially, it was just a few institutions, but now I think it ah surpassed 80 or even ah plus. Thank you. That's really wonderful. And if I gather correctly, Mizuho is also one of the members of this initiative.
Mizuho's Sustainability Vision and Carbon Neutral Goals
00:01:40
Speaker
Besides, Mizuho is one of Japan's most influential banks.
00:01:44
Speaker
So tell us more. What does sustainability look like from the inside of an institution like that? Mizuho is a global financial group with 152 years of history.
00:01:57
Speaker
We are deeply rooted in Japan and Asia, supporting development through industrialization. That's our DNA. So it is at the root of our culture.
00:02:09
Speaker
There is this motto, challenge and partake together with our client. Mizuho's aim includes creating long-term benefits that does not necessarily appear on today's corporate balance sheet.
00:02:23
Speaker
We believe that enhancing such benefits, or I should say positive externalities through business and industry transformations will enable the realization of positive corporate value in the long run.
00:02:37
Speaker
One good example of that is this challenge towards Japan's carbon neutrality. As mentioned, our DNA has been in supporting industrialization.
00:02:48
Speaker
So in a way, Mizuho sustainability is supporting the next round of industrial transformation. For this, Mizuho has created the vision for the transformation of the key industries by 2050, a grand design.
00:03:04
Speaker
This is what ah guides the engagement with our clients. This grand design is a manifestation of the world where carbon neutrality and economic growth go hand in hand, maximizing the well-being of the people.
00:03:19
Speaker
When I joined Mizuho in April, I yeah discovered about this grand design and I was telling to my yeah colleagues, wow, this is like the World Bank or the Asian Development Bank. It's not commercial bank.
00:03:34
Speaker
And from this grand design, we backcast what are the necessary actions today and in the long term.
Focus on Sectoral Challenges in Sustainability
00:03:40
Speaker
This is how we structure our engagement journey with our clients.
00:03:45
Speaker
In terms of actions today, our team's efforts are really on sustainable finance. And plus for our clients with cross-border supply chains, working together on supply chain carbon neutrality and resilience is really becoming a priority.
00:04:01
Speaker
In the longer run, Mizuho is focusing on four areas, hydrogen, carbon credit, and the juncture of nature and circularity. Plus, last but not least, impact.
00:04:14
Speaker
When we dig deep into these issues, we try to avoid single issue type of approach. When you think about any particular locality, community, the issues of carbon neutrality, nature and circularity are obviously intertwined with synergies and tradeoffs.
00:04:32
Speaker
And as for impact, which is a forward-looking metrics, there is ah so much that to be that can be learned from development. Avoiding future carbon emission, for example, is one type of impact, but there are many other aspects such as well-being or of patients or children, income generation of farmers.
00:04:54
Speaker
Impact is future-oriented, feel over benefit to the ecosystem, but not very compatible to the inventory type framework of corporate balance sheet.
00:05:04
Speaker
Impact can be a common language with the young and future generations in particular. so Looking from inside Mizuho, sustainability here is one keyword, industrial transformation, and the second keyword, forward-looking impact.
00:05:22
Speaker
This will enable the whole ecosystem to grow together over time. That's amazing. I love the comparison, you know, between your experience at the World Bank and and this experience now.
00:05:34
Speaker
What are the four industries that Mizuho is looking at? The industries that we are looking at, in in particular, the difficult hard to obey type of ah sectors, ah ah power, and then steel, chemicals, and ah automotive industry.
00:05:53
Speaker
So does it mean that you specifically target working with clients in those industries or do you have also clients in other industries? In other industries as well. It's just that when we think of ah the real ah impact, we started with at these four industries.
00:06:11
Speaker
Okay, that's very clear. Thank you so much. You covered already a lot of ground. So maybe can you give maybe an example of a decision or a project where you implemented something really transformative in any of these areas?
00:06:27
Speaker
And if you can explain how that had impact positive impact on both the people, so the the communities and the planet. Thank
Transition Finance and Long-term Carbon Neutrality
00:06:39
Speaker
you. Maybe I first mentioned ah transition finance.
00:06:43
Speaker
We care our corporate clients who are relatively yeah speaking in heart to obey the sick this Yes, the the ones that I just mentioned, power, automotive industry, steel, and chemicals.
00:06:57
Speaker
In the engagement journey with such clients, we dive into many potential long-term pathways to transitioning towards carbon neutrality and trying to find together what is best for the business. That's the real bottom line.
00:07:12
Speaker
Our 60 plus cases of transition finance to gas and power ah sector, for example, is a proof of such efforts. And of course, when we look at each and every ah project, we look into the impact for the environment as well as the community side.
00:07:33
Speaker
And also, maybe I mentioned about impact business and finance. This is something that is still at early stage, but that my colleagues are ah really at changing the way you're thinking inside Mizuho.
00:07:47
Speaker
Mizuho believes that impact, both positive and negative, must be a key consideration for all aspects of our business. That is how Mizuho's impact business Compass starts. There is a guideline to all of our business lines, bank, trust, securities, research, technologies, asset management.
00:08:10
Speaker
We intend to add impact into decision making around all asset class. And so this movement is going on right now. And while building our internal capabilities, we are building up impact finance cases.
00:08:26
Speaker
starting with startup funds covering themes such as green and deep tech. In addition to positive impact debt, some teams are specifically targeting SMEs for positive impact finance and sustainability-linked loans. So again, with inclusive community impact, the lens is here.
00:08:48
Speaker
Transition finance is such an important dimension of, well, actually for all financial institutions that are working with clients, corporate clients, but it seems that it's it's really kind of written into your core business as a financial institution.
00:09:05
Speaker
Can you perhaps dive deeper and explain maybe one If you can, only if you can, but one case for one of those four industries that you mentioned around power, around chemicals, around automotive, just to, I think it's really interesting because the audience can understand better what does actually in real life transition finance mean?
00:09:30
Speaker
Because it's very conceptual and it would be really interesting if you can explain how you work with the client and then what happens as a result. Yeah, thank you very much.
Technical Analysis in Transition Strategies
00:09:43
Speaker
but For transition finance, yes, when I joined Mizuho in April 2025, I started really ah learning how my colleagues ah are working on that.
00:09:55
Speaker
In the ah research and technology ah team, there are people who are really doing in-depth analysis of, for example, ah power utility companies, not just the balance sheet of the company, but digging into each and every plant as well as the equipment that there is, including the capacities as well as the technology and then even the age of each and every equipment.
00:10:27
Speaker
And with that knowledge, the engagements include what are the assets that can be ah replaced in the coming few years, and what is the new technology that should be ah replacing ah these existing assets towards this long path towards carbon neutrality. So these are the kind of like ah details that eventually lead into the formation of ah transition finance.
00:11:02
Speaker
Thank you. And it's interesting because it means that you have inside your organization, people who are really experts in these very technical matters, which are actually not financial matters.
00:11:15
Speaker
And that's a really interesting insight for the audience to understand the diversity of kind of experts that work within within your institution.
00:11:26
Speaker
I also want to ask you something around what we were talking about, risk and return and impact. So as a former economist, how do you now think about risk and return differently in this era of climate change, inequality and demographic shifts?
00:11:43
Speaker
How do you integrate all of this into your work at Mizuho? Yeah. Do you see that perhaps one day there will be the new paradigm of risk, return and impact?
00:11:57
Speaker
Thank you very much.
Integrating Social Issues into Financial Assessments
00:11:58
Speaker
Maybe because I come from ah development finance, I try to think in two stages. The first stage is thinking about in terms of impact return. And there i incorporate the social issues.
00:12:15
Speaker
And then I think about financial risk and return. And this second part is really financial. If the chosen project If the financial IRR is high, go for it.
00:12:29
Speaker
If it's not in the range of of a pure private finance, but impact return is high, then there is a role for blended finance. ah In the impact investment community, we have been talking about blended finance.
00:12:44
Speaker
It is not just a technical a financial kind of tool, but it is tool that is helpful in such circumstances when the impact return is high, but the ah financial return is low.
00:12:57
Speaker
right So we have to celebrate that week we are talking about this. and exploring. In Mitsuho, I'm starting to share ah knowledge about blended finance, but thank you. You made me realize that I also need to mention first to my colleagues, we have to think with the heart of finance ministers, right? And really think about the resource distribution inside the society, and then think about ah financial risk and return.
00:13:29
Speaker
That's so interesting because you really blend in your experience from the development finance world to where you are today. It's fantastic. It should be two-stage thinking, not mixing everything together. No. but Yes, but you bring that perspective, which is unique.
00:13:45
Speaker
Yes. What is, from your perspective, one SDG or perhaps an issue area where you feel that Japanese financial institutions can be more bold or ambitious or have a unique value add in this situation?
Japan's Disaster Risk Reduction and Finance Resilience
00:14:02
Speaker
big financial globalized financial sector today? If you are asking me about one issue, then it will be adaptation and resilience.
00:14:14
Speaker
You may recall that in 2015 at the UN level, there were three big, big agreements. So most notably SDGs, But then Addis Abbaba Action Agenda on Financing for Development, we had Sevilla this year, right?
00:14:30
Speaker
And then we have the Sendai Framework for Disaster Risk Reduction that Japan has hosted. This Sendai Framework message is that ex-ante disaster risk reduction is hugely important.
00:14:45
Speaker
making the best mix of self-help so you protect yourself, community day health together with others, and public support. For example, in Japan, the Development Bank of Japan has long been a champion of rating companies and providing finance based on the business continuity management framework.
00:15:06
Speaker
ah While in my previous hat in JICA, I have worked with them sharing that concept to power distribution cooperatives and financiers in the Philippines.
00:15:18
Speaker
And you know, Philippines is frequently devastated by strong wind of the typhoons and rain as well. So all the electricity falls down.
00:15:30
Speaker
So resilience is super, super important in that context. This kind of thinking is very unique. And when adaptation and resilience are increasingly in need, Mizuho can play a role by extending that thinking into our finance.
00:15:49
Speaker
Actually, that's a great way to bridge to my next question. What role does Japan play in financing sustainable development in Asia-Pacific? And how is it different from other approaches?
00:16:01
Speaker
Thank
Adaptation and Transition Finance in Asia-Pacific
00:16:02
Speaker
you. Maybe I start talking about what Mizuho is doing up for like sharing experience in the Asia-Pacific. Mizuho is engaged in two fronts, adaptation finance and transition finance.
00:16:17
Speaker
For adaptation finance, we chair the Adaptation Working Group of Asia Capital Market Forum, aimed to provide guidance to the operationalization of ASEAN taxonomy, including mitigation and adaptation, together with authorities and peer ah players in the region. We are trying to be a very specific on what constitutes adaptation finance. For transition finance, this year we are chairing the Asia Transition Finance Study Group, comprised of of financial institutions in Asia, to foster understanding and share good practices of transition finance.
00:16:57
Speaker
And then ah with regard to can the uniqueness of Japan is I personally think that the line of thinking is to encourage new investments, innovative investments, rather than ah trying to put a narrow definition.
00:17:15
Speaker
restrictive interpretation of taxonomies. So innovation welcome and inclusiveness is key. I love that. That's great. Okay. So Megumi, I have a really, I'm very curious. I have a question.
00:17:30
Speaker
about your transition. So you have led major initiatives at JICA and other development finance institutions, and you joined Mizuho April. What was the decision? What made you decide to step into the private sector and why now?
Megumi's Transition from Development Finance to Mizuho
00:17:47
Speaker
Yeah, thank you. While was doing development finance, we have been redefining development finance. It's not the sole provider of financing for development, but it will become the catalyzer for private sector involvement, not just in terms of capital, but more in terms of entrepreneurship and business-led development.
00:18:14
Speaker
While doing that, I was thinking, Maybe JICA and MDBs and others, the ah function is to create the environment and be the catalyzer.
00:18:25
Speaker
Okay, what if if I go to the other side, private finance, coming to the private sector finance, We can really work together with the private sector, entrepreneurs that are at the center stage of development. And not just development in development countries, but even development in Japan. that That's very interesting.
00:18:49
Speaker
And other markets as well. So it's a new, exciting role for me. Seeing both sides has been ah a real good experience. And I try to be a useful interpreter for both sides.
00:19:02
Speaker
This beautiful, the bridge between private finance and development finance. What has surprised you? I mean, it's it's two completely different worlds. What has surprised you? What have you learned from this transition?
00:19:16
Speaker
Thank you very much. I think... yeah I mean, both sides, the public development side and the private finance side, we are human beings in the same social context, right? That we are really caring about the future, environment, the communities.
00:19:37
Speaker
It's the same. It's just that when we approach people, Actual like ah actions, they are different, yes, taxonomies, terminologies, as well as ah modality yeah getting into i mean modalities of organizing ourselves and actions.
00:19:58
Speaker
It's just that if they there are several out like good interlocutors, we can cooperate. a lot better. Yes. And I'm trying to be a president for that.
00:20:09
Speaker
Great. And are there any, new I guess, lessons that maybe two ways? Did you integrate lessons from the development finance into your work at Misuho?
Public-Private Collaboration in Closing Financing Gaps
00:20:22
Speaker
And vice versa, are there lessons from your work now that you would like to share with the development finance sector, given your new position? Okay, so so both directions.
00:20:33
Speaker
I think it boils down into ah who is on at the driver's seat, right? Yes, for the private sector, private financiers, it's easier to understand yeah businesses as well as projects with the ah private sector ah on the driver's seat, right?
00:20:56
Speaker
And ah from that perspective, if there's a kind of like a little kind of like a financing gap, a return gap, or kind like a risk to be managed, it's the time to invite the public sector.
00:21:09
Speaker
and hey but But then the public sector, if they are they are invited at the very end, they are at a loss because ah the motivations are not aligned, the KPIs are not aligned. I mean, so that's the usual kind of ah problem.
00:21:25
Speaker
It's exactly the same thing but for public-led projects, inviting private sector at the later stage. Public sector the projects,
00:21:36
Speaker
ah structured in a way that it really at state takes at most care, attention to accountability, I mean, all the public sector processes.
00:21:47
Speaker
And then, but but you find this thing like a gap that needs to be a fulfilled by the private sector. And then you call the private sector. But but then there's no kind of like a return or anything, a reward for the private sector there, right? And then it stops.
00:22:05
Speaker
So I think boils down to how the public sector and the private sector can can work together at since the very beginning. And for example, this is just very technical, but if you're in the public sector, at one point of time, you have to go into public tender, you know, open bidding, right? that that That's how our public sector money is ah used. But then maybe... ah There should be institutions, mechanisms to exchange ideas even before that.
00:22:35
Speaker
i mean, it this is sensitive, you know, because sometimes it involves misincentives. But we have to create a good fora platforms is so that we can cooperate from the very beginning. And I think at GSG, is are doing a good job.
00:22:54
Speaker
ah finish Thank you so much. And yeah, thank you, Megumi. This is such a good insight to bring people together from the start. Yeah. ah did this May maybe I just go back to our impact finance numbers?
00:23:09
Speaker
Right now, in terms of assets, we have around 14 billion U.S. dollars. It's 7 billion around the environment issues, 1 billion around the social issues, and 6 billion and mix of both.
00:23:27
Speaker
So that that's the kind of like a general landscape. That's amazing. That's really huge. So we are looking to you as ah as a leader in this field. Look, this is also, I mean this podcast is also an opportunity to reflect on achievements.
00:23:42
Speaker
So what do you consider as your biggest achievement or achievements? What are the things that make you proud and, or maybe things that you still want to achieve in the future? Hmm?
00:23:56
Speaker
Eh, it's quite difficult. kish But maybe i think my personal motivation is in, again, connecting ah public and private.
00:24:12
Speaker
It just so happens that I've been to both a public policy school and business school, right? And I like the friends but in both schools, right? And I always wanted if you can do a case study together with ah these two two types of ideas.
00:24:28
Speaker
bunch of students. It will
Career Reflections on Public-Private Partnerships
00:24:30
Speaker
be super. It will be so so relevant for real cases. But it just happens that public policy people are on um one side and the the business people on the other side.
00:24:40
Speaker
So it has been such a joy working with both sides and trying to be making the most of both are thinking. Yeah, that's great. Thank you so much.
00:24:52
Speaker
Perhaps, I mean, if you can share a little bit about your journey, because you have these different experiences, perhaps just like a few milestones of how you got here. we We got you at kind of this transition phase, but you have done so much before. If you can just share a few highlights of of your journey, because you have a real commitment to this public-private partnerships and and impact as well.
00:25:20
Speaker
Okay. Maybe ah him like some experience that really ah changed my viewpoint. Okay. Okay. Maybe ah more than 10 years ago, i was covering the the cooperation relationship with Philippines in JICA, Development Agency and DFI of Japan, right? Okay.
00:25:42
Speaker
And, well, if you learn development finance from textbook, you kind of like ah have this vision that the public sector is decides everything in in development, right?
00:25:55
Speaker
But no, i in some countries or many countries, the big businesses are real big players, right? They beat like ah urban development or social development, even like a community development.
00:26:11
Speaker
When I was working from the public point of view, yeah, I thought they were competitors, you know, in a good way. But then coming to the private sector, my customers are these big ah businesses with ah high and good ambitions.
00:26:27
Speaker
And I think connecting both would be even more productive for for everyone in the in the society. So that's my journey.
00:26:38
Speaker
my dear Yes. I like this anecdote. It's a great illustration. i also want to ask you a question that I am ah asking all my guests. But I'm actually really curious also about the answer.
Being a Woman in Finance: Advantages and Impact Issues
00:26:52
Speaker
How does it feel to be a woman doing this job? You were vice president at JICA. You now have an executive role at one of the largest financial institutions in zep in Japan.
00:27:04
Speaker
How does it feel to be a woman? Okay. I think being in development finance, commercial banking, yeah, I mean, not too easy to build a career a woman as well as having kid.
00:27:23
Speaker
But on the other hand, when I work on impact issues, community issues, environment, green, something That is an ambition that can be shared by people.
00:27:38
Speaker
i feel that ah being a woman is a plus. I cannot explain why, but it looks like a being a woman has a bit more and like a power in connecting people with same purpose.
00:27:53
Speaker
That's great. And well, definitely it works really well from what you were describing I also imagine that it's not always super easy.
00:28:04
Speaker
So to manage all of these different aspects of of your work, what keeps you to be your best self?
Maintaining Balance and Finding Optimism
00:28:11
Speaker
None. Thank you. It's really enjoy.
00:28:15
Speaker
Enjoy yeah life and work. Friends, doing exercise, walking around early in the morning oh late at night.
00:28:27
Speaker
Yeah, chatting. That keeps me going. That's wonderful. And I know that Japan has so many beautiful scenes and gardens. It's a real pleasure to walk around, actually.
00:28:41
Speaker
Thank you, thank you. This morning I was walking around, I saw 6.30. I saw people gathering in in a small park, exercising together. That's nice. Maybe next time I join. her Yes. So as we are ending this podcast episode, three questions, three quick questions.
00:29:04
Speaker
What is keeping you optimistic? Ah, the power of working with friends. Yeah, no no matter where you are. a Yeah, we care about the same things.
00:29:16
Speaker
that That keeps me going. Yeah, powerful. That's amazing. Yes, absolutely. What or who is inspiring you? Who is inspiring you?
00:29:28
Speaker
Many people. Yes, Christina included. As a final conclusion, do you have any final thoughts or advice to fellow changemakers or maybe specific ask or request?
00:29:43
Speaker
Thank you. We just keep going on Yes, with cheerful minds. Yes. Well, Megumi, it was such a pleasure to have you for the episode.
00:29:56
Speaker
Thank you so much for your time. It was really, really wonderful to have this conversation. Thank you so much, Christina.
00:30:08
Speaker
If you'll stay with us, thank you so much for the time that you took to discover one of the amazing women changing finance. If you enjoyed this episode, please share it with your friends, colleagues, and on social media.
00:30:20
Speaker
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00:30:31
Speaker
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00:30:46
Speaker
Women Changing Finance is part of the Impact Alpha podcast network. Smart conversations by and for impact investing professionals.