Since our participation in the Earth Summit held in Rio de Janeiro in 1992, when the Sompo Group became the first Japanese financial institution to establish a department dedicated to addressing global environmental issues, we have been actively working to resolve global environmental issues through collaboration with NPOs and other organizations. In recent years, in addition to climate change, nature-related environmental issues such as biodiversity loss, ecosystem collapse, and natural resource shortages have become increasingly recognized as global risks. We are promoting initiatives related to nature.
Nature-Related Initiatives
OECM 100 Project
The 30 by 30 target — which aims to effectively preserve at least 30% of land and sea areas as healthy ecosystems by 2030 — was incorporated into the Kunming-Montreal Global Biodiversity Framework adopted at the 15th Conference of the Parties to the Convention on Biological Diversity (COP15). This goal has also been included in the National Biodiversity Strategy of Japan (2023-2030) based on cabinet approval. Given the strong relevance to the P&C insurance business, Sompo Japan Insurance Inc. is making an effort to promote the creation of other effective area-based conservation measures (OECMs), which contribute to achieving the 30 by 30 initiative and are also aligned with ecosystem-based disaster risk reduction (Eco-DRR). Sompo Japan Insurance Inc. is implementing a project that aims to build disaster-resilient communities by supporting applications for, and promoting the registration of, OECMs for green spaces, forests and coastal areas owned and managed not only by the Sompo Group, but also by other corporations and local municipalities.
SAVE JAPAN Project
Sompo Japan Insurance Inc. is collaborating with the Japan NPO Center, regional NPO support centers, and grassroots environmental NPOs to conduct community-based biodiversity conservation activities, which are funded by the cost savings generated from the customers choosing web-based insurance policies and terms and conditions, instead of paper. This project began in 2011, the year after the adoption of the Aichi Biodiversity Targets at the 10th Conference of the Parties to the Convention on Biological Diversity (COP10). As of the end of March 2024, we have successfully protected over 300 rare species, and engaged more than 66,000 participants in a total of 1,088 events held across all 47 prefectures of Japan. In fiscal 2023, we expanded the scope of activities as part of the "OECM 100 Project" to support Eco-DRR and the OECM application process. We are making every effort to increase understanding and awareness in society of the importance of achieving a nature-positive world and the conservation of biodiversity. Two projects were submitted for certification as so-called “nature symbiosis sites”* in the first half of fiscal 2024.
- As protected areas are also included in the areas designated by Japan’s Ministry of the Environment where biodiversity conservation is being achieved through private sector initiatives and other means, the ministry certifies these as Nature symbiosis sites and then registers the non-overlapping portions with protected areas as OECMs in international databases.
Sompo’s Forest
Sompo Japan Insurance Inc. has signed agreements with local municipalitiesin eight locations across Japan to support forest maintenance activities, and is conducting volunteer forest maintenance activities and environmental education together with local residents, Group employees, insurance agents and their families. Through the Sompo’s Forest initiative, we are communicating information about the relationship between forest conservation and improving disaster resilience of the area, and ultimately building disaster-resilient communities.
Japan’s first compensation scheme for forest-derived carbon credits
Since December 2022, Sompo Japan Insurance Inc. has been providing compensation for forest-derived carbon credits*1, the first initiative of its kind in Japan, for the voluntary credit market*2 aimed at reducing GHG emissions with the utilization of natural capital.
With the aim of promoting the introduction of forest credits, this compensation addresses the risk associated with reduced CO2 absorption in the event that a forest owned by a credit creator is damaged, potentially resulting in the inability to obtain expected credits. We also take part in the Natural Capital Credit Consortium (NCCC) since its inception. We are contributing to the conservation of natural capital through our participation in this organization, which focuses on the creation of voluntary carbon credits. Professor Shunsuke Managi of Kyushu University serves as chairperson of the NCCC.
- A system that allows companies to issue credits (emission credits) for reductions in CO2 and other greenhouse gases (amount reduced or absorbed) through forest protection, afforestation, introduction of energy-saving equipment, etc., and to trade them with other companies.
- A credit that certifies reductions in carbon dioxide or other greenhouse gases through forest protection, afforestation, and similar activities.
TNFD Disclosure Support Service (Nature-related Risk Analysis)
The disclosure of information on natural capital and biodiversity is gaining traction among corporations, and in September 2023, the TNFD released a framework for companies to follow when disclosing such information. Coinciding with the release of the TNFD framework, Sompo Risk Management Inc. launched the “TNFD Disclosure Support Service (Nature-related Risk Analysis)” in September 2023 in order to assist companies with their efforts to analyze risks and disclose information about natural capital and biodiversity.
Sompo Japan Green Open (“Buna-no-Mori”)
Sompo Asset Management Inc. manages a fund called “Sompo Japan Green Open”, launched in September 1999. The fund invests in companies actively tackling environmental issues, which means that investors can expect their contributions in the fund are indirectly contributing to environmental conservation efforts. As a pioneer in ESG investment in Japan, Sompo Risk Management Inc. conducts an environmental management analysis, in which it surveys and evaluates the company's environmental initiatives, before selecting the stocks to be included in the analysis, including biodiversity initiatives and TNFD disclosures.
Policy for ESG-related Underwriting, Investments and Loans
We identify businesses that warrant caution when the underwriting of insurance and the provision of investments and loans could have a negative impact on the environment and society. For example, projects thought to be detrimental to natural or cultural heritage sites protected under the UNESCO World Heritage Convention, or projects that threaten the destruction of wetlands designated under the Ramsar Convention (of which there are 53 sites in Japan), are subject to evaluation by Sompo Risk Management Inc. to assess their negative impacts on the environment. In this way, we adopt a cautious approach to insurance underwriting and financing for such projects.
