Third Party Comments / Response to the Third Party Comments

Third Party Comments on Our CSR and Sustainability Initiatives

Hideto Kawakita

CEO, International Institute for Human, Organization and the Earth
Publisher, Socio Management Review

IIHOE: An NPO established in 1994 "for the democratic and balanced development for all the lives on the Earth." While their main focus is providing management support to civil society organizations and social business operators, IIHOE also provides support for social responsibility initiatives by major companies.

These third-party comments are based on the content of the CSR/Sustainability section of the Sompo Holdings website as well as interviews with personnel from its Administration, Human Capital and CSR/Sustainability Departments. The comments concern activities that took place in fiscal year 2020 and those ongoing in fiscal year 2021. In addition to the steady implementation of existing CSR and sustainability initiatives, the Sompo Group has defined policies for medium- and long-term material issues. I am of the opinion that the Group has reached the stage where it should work across departments and deepen cooperation with external parties to promote value creation, including business model development.

Areas Evaluated Highly

- Group-wide commitment to CSR/sustainability activities (SDGs in Business Management), including by the top management:

The Group’s purpose clearly states the value to be delivered to society, and key performance has clarified his commitment to delivering value to society with “a theme park for security, health and wellbeing,” and to creating value through the use of real data platforms. CSR-Eco Facilitators have been appointed to all workplaces at each Group company, and initiatives are being taken in line with workplace characteristics based on the CSR action plan. I look forward to seeing the expansion of the KPIs to include reductions in greenhouse gas emissions and respect for human rights so that such indicators can also be put into practice at each workplace and linked to the creation of business partners in its value chain to implement initiatives relating to fundamental CSR issues, such as the environment and human rights, and promote collaboration on its theme park platform with various companies and civil society organizations for the development, provision and evolution of solutions.

- CSR/sustainability initiatives in the long-term care and healthcare business and initiatives that can create social value::
The Group has tackled the spread of COVID-19 and is promoting the use of real data, including the introduction of the Nemuri SCAN sleep scanning technology. In the future, I hope that the information obtained will be utilized to quantitatively grasp the contribution to the optimization of services to users and the improvement of employee motivation, and then evolve into a platform that can be provided to the entire industry. I am also keen to see the Group pool its strengths to lead the way in developing businesses related to risk preparedness, including insurance products and risk consulting in the nursing care and senior business, BCP/BCM planning and training of human resources to respond to natural disasters and infectious diseases in particular.

Initiatives Progressing Well but Requiring Further Effort

-Climate change mitigation and adaptation initiatives:
I commend the Group for continuing to reduce its paper consumption, introducing renewable energy, launching an organic waste power generation business, responding to climate change risks and opportunities by providing risk consultations and agricultural and weather index insurance services to customers, proactively participating in international initiatives, and continuing long-term programs in collaboration with civil society, such as public seminars on environmental issues and wildlife conservation activities. Going forward, in order to achieve the Japanese government’s pledge to reduce greenhouse gas emissions by 46% by 2030 (compared to 2013), I strongly urge you to extend shared service centers to include Group companies, assist clients in introducing renewable energy and improving business efficiency and insulation, and promote initiatives to conserve biodiversity and other resources at your paper suppliers. To this end, I would like to see the Group’s Task Force on Climate-related Financial Disclosures (TCFD) scenarios to be quantitative and more accurate. Furthermore, I hope to see active collaboration with agencies, business partners and civil society organizations, which is one of the Group’s major strengths, to evolve the related services such as supporting the formulation of scenarios for each industry.

-Human rights initiatives:
I commend the Group for identifying and working on material issues, including employee health and safety and long working hours, based on the Group’s human rights materiality assessments in line with the Group Policy for Human Rights, and for promoting consultation service at Sompo Risk Management using the UNEP FI Human Rights Guidance Tool for the Financial Sector. In the future, to promote human rights transformation and financing that respects human rights (and prevents infringements) in the P&C insurance sector and at other business partners, I hope to see the development of business models starting from industries expected to have a large impact, relating to human rights due diligence, avoidance of adverse impacts, and access to remedy in the event of issues arising. I also hope to see the United Nations Guiding Principles on Business and Human Rights (Ruggie Framework) being put into practice at the entire Group, and more opportunities for the Group’s executive and employees as well as those of its agencies to receive relevant training.

-Building an organization that draws on diversity:
While the defining of the human capital core values and the formulation of a succession plan for 88 key posts in the Group are positive developments, I hope the Group will continue to clarify its long-term personnel portfolio targets. I also expect that the Group continues to expand its system for nurturing the next generation senior management who will be active globally by providing training to test hypotheses in preparation for the future market and business environment. I would also like to see the Group encouraging the creation of communities where people with disabilities and other minority employees can exchange views and ideas.

-Maintaining and improving the health of employees and providing a supportive workplace:
It is positive that 51% of employees now use career breaks, shorter working hours and home working schemes designed to accommodate childcare, elderly care and nursing commitments. In the future, I strongly hope that the Group will continue to provide support to young female employees to prevent illness and manage their health in order to reduce the gender gap in the years of service to a more reasonable level.

Response to the Third Party Comments

Ryoko Shimokawa

Chair, Group Sustainable Management Committee
Group CSuO, Senior Vice President and Executive Officer

The spread of COVID-19 has had a major impact on people’s lives and behavior, and has brought to light a number of issues facing society. I sense that companies are now placing greater emphasis on how to go about providing solutions to these social issues and on their raison d’etre or purpose.

When formulating our new mid-term management plan that started in fiscal year 2021, we established SOMPO’s Purpose by engaging in rigorous management discussion about what SOMPO is aiming to achieve over the next 20 to 50 years, the society we can realize, and the kind of value that we can deliver to society. The mission of the Group Chief Sustainability Officer (CSuO), established in August 2021, is to ensure the purpose takes hold throughout the Group. As the Group CSuO, I am promoting a variety of initiatives to fulfill this mission.

Mr. Kawakita has been providing third-party comments to our Sustainability Report since 2001. He has engaged in two-way dialogues with our business divisions, through which he has gained a deep insight into our work. We are deeply grateful for his advice, which is given from a medium- to long-term perspective. We will fast-track our initiatives to achieve a sustainable society, taking his opinions and expectations into account and promoting concrete discussions.

We will continue to focus on the aspects that he evaluated highly as our strengths, and we will make improvements to meet even higher expectations. As part of the SDGs in Business Management strategy, which is positioned as one of the Group’s management foundations in our new mid-term management plan, we have set materiality and KPIs for the social issues facing the Group, our strategies and actions in order to realize our purpose. While implementing a surefire PDCA cycle to realize our purpose, we will consider making concrete contributions to the development and provision of solutions in collaboration with various stakeholders, as suggested by Mr. Kawakita.

On the subject of the use of real data, Mr. Kawakita commented that he expects us to gather data quantitatively from the perspective of the outcome of nursing care services and the improvement of working environment for employees, giving a ripple effect on the industry as a whole. In order to meet his expectations, we will use a Real Data Platform (RDP) to promote early external sales and monetization of nursing care services such as for promoting behavioral change through risk visualization and providing health support that contributes to improving users’ quality of life (QOL). We will also strive to provide new customer value by developing and offering relevant solutions in the areas of disaster risk reduction, mobility, agriculture and healthy aging.

Mr. Kawakita also made some suggestions regarding future issues relating to a net-zero carbon society, human rights transformation and financing that prevents infringements of human rights. Being keenly aware that we can contribute to solving social issues through our core business, P&C insurance and risk consulting, we will actively work to develop and provide products and services in collaboration with multi-stakeholders.

We have less than ten years left to meet the Sustainable Development Goals (SDGs), and it is time for businesses to take concrete action. We will steadily promote the permeation of our purpose throughout the Group to accelerate initiatives towards its realization. In addition, the Group has contributed to the SDGs through our core business as part of our SDGs in Business Management strategy. By making maximum use of this experience as well as our network of diverse stakeholders and RDPs, we will work to solve social issues and create value through partnerships.