Press release

Legal groups caution Japan's largest bank over controversial LNG project that threatens World Heritage Site

8 July 2025

Los Angeles – As UNESCO prepares to assess mounting threats to the Gulf of California World Heritage Site, environmental legal groups ClientEarth USA and the NRDC (Natural Resources Defense Council) have cautioned Japan’s largest bank, MUFG, that its support for a major fossil gas export project in the sensitive ecological region could expose the bank to serious legal, financial, and reputational risks.

The proposed Saguaro Energia liquified natural gas (LNG) terminal would export U.S. fracked gas, from Mexico to Asian markets, with large tankers navigating a route that cuts through the ecologically sensitive Gulf of California – an area known as the “aquarium of the world” for its extraordinary marine biodiversity. 

UNESCO and marine scientists have raised the alarm over the Gulf’s health, warning that increased industrial shipping through the area could harm blue and fin whales, both endangered species, along with sea lions and other vulnerable marine life. The Gulf is a known habitat or migratory route for 11 species of whales. Almost 40% of all marine mammal species are present in the Gulf.

The bank, known as Mitsubishi UFJ Financial Group and part of the Mitsubishi corporate group, is acting as a financial advisor on the Saguaro Energía project, which is being developed by U.S.-based firm Mexico Pacific.  

The project is currently blocked by a court injunction and faces strong opposition from impacted communities and Mexican civil society more broadly, as well as scrutiny from international bodies. With cost overruns, executive instability, permitting failures, and shifting LNG market conditions, the project has been characterized by experts as financially unviable and in danger of becoming a stranded asset long before it generates returns. The project’s principal investor, Quantum Capital exited its stake in early 2025.

“The Gulf of California is one of the most extraordinary marine ecosystems on Earth, and UNESCO has already listed it as ‘in danger’,” said Hana Heineken, attorney at ClientEarth USA. “Now, MUFG is backing an LNG export terminal that would send massive tankers through this fragile habitat. It’s hard to see how that aligns with the bank’s sustainability policies, or how it can justify the legal and reputational risks of supporting a project that threatens a World Heritage Site already on the brink.”

“This massive LNG project presents an existential choice between protection of nature at its best on earth or an industrial sacrifice zone for the production and transport of fossil fuels that are killing the planet,” said Joel Reynolds, senior attorney for the NRDC. “With our Mexican partners, NRDC and its 3 million members and activists choose nature.”

The letter from ClientEarth and NRDC warns that MUFG is at risk of breaching its internal environmental and human rights policies, the Equator Principles, and international standards on responsible business conduct. It also flags potential exposure to legal claims, especially if MUFG proceeds with financing the project.

Key concerns outlined in the letter include:

  • Potential violation of MUFG’s own sustainability policies and commitment to international standards, including the Equator Principles and standards on business and human rights.
  • Potential legal exposure under Japanese and U.S. laws for greenwashing and misleading investors.
  • Significant project delays caused by a court injunctions. 
  • High stranded asset risk due to legal uncertainty, growing public opposition, and its long-term incompatibility with climate and biodiversity goals.

Each year the terminal would emit 5.7 million metric tons of CO₂ and lifecycle emissions equivalent to 17.4 million cars. It would make Mexico the fourth largest LNG exporter in the world.

The UNESCO World Heritage Committee transmitted third-party concerns about the Saguaro Energia project to Mexico in February 2025. A draft decision on the Gulf of California, expected to be voted on at the 6–16 July World Heritage Committee meeting, recommends that Mexico conduct a full Environmental and Social Impact Assessment (ESIA) and submit detailed project information before allowing any irreversible decisions on the controversial fossil fuel project.

The Committee has listed the Gulf as “in danger” since 2019 due to biodiversity loss, illegal fishing, and the rapid decline of the vaquita porpoise. The vaquita is the world’s most endangered marine mammal and the smallest cetacean on Earth. Found nowhere else, it is listed as critically endangered by the International Union for Conservation of Nature, with recent surveys estimating that only six to eight individuals remain. Illegal fishing and inadequate enforcement of protections in the Upper Gulf continue to drive the species toward extinction.

ENDS

Notes to editors:
  • A copy of the letter sent to MUFG is available here.
  • In response to the letter, a MUFG spokesperson said: "Generally, MUFG conducts environmental and social risk assessments based on the 'MUFG Environmental and Social Policy Framework' and the ‘Equator Principles,’ which are frameworks for considering environmental and social impacts when engaging in transactions with clients… If environmental and social risks are identified, we confirm avoidance, prevention, and mitigation measures with clients and continue to monitor whether these risks have materialized even after financing the project.”
  • The UNESCO World Heritage Committee is meeting in Paris from July 6-16, 2025 to review the endangered status of the Gulf of California and other sites. The Gulf has been listed as “in danger” since 2019.
  • The Saguaro Energia LNG project is being developed by Mexico Pacific and is reportedly being advised by MUFG, JPMorgan Chase, and Santander. ClientEarth USA and NRDC have separately sent cautionary letters to JPMorgan Chase.
About ClientEarth

ClientEarth is a non-profit organisation that uses the law to create systemic change that protects the Earth for – and with – its inhabitants. We are tackling climate change, protecting nature and stopping pollution, with partners and citizens around the globe. We hold industry and governments to account and defend everyone’s right to a healthy world. ClientEarth teams in Europe, Asia and the USA work to shape, implement and enforce the law, to build a future for our planet in which people and nature can thrive together.

About NRDC

NRDC (Natural Resources Defense Council) is an international nonprofit environmental organization with more than 3 million members and online activists. Established in 1970, NRDC uses science, policy, law and people power to confront the climate crisis, protect public health and safeguard nature. NRDC has offices in New York City, Washington, D.C., Los Angeles, San Francisco, Chicago, Beijing and Delhi (an office of NRDC India Pvt. Ltd).