Tokyo, 22 November 2023 – On November 21, MS&AD Insurance Group Holdings (hereafter MS&AD), one of Japan’s three major property and casualty insurers, announced a greenhouse gas (GHG) emission reduction target of 37% for the underwriting and investment portfolio of its domestic clients by 2030, using 2019 as a baseline year* (PR in Japanese). This significant step marks the first time an Asian insurer has set a GHG emission reduction target for its underwriting portfolio.
“We welcome the MS&AD initiative as the first Asian insurers to set a 2030 target. It represents a move towards achieving net-zero by 2050, however the target should be strengthened, since 37% is not ambitious enough nor is it in line with the Paris Agreement’s 1.5C maximum warming goal.”
"MS&AD has taken a first step in setting an emission reduction target, and other Japanese insurers like Tokio Marine and Sompo should build on it. All three insurers also need to take practical steps to move away from insuring fossil fuel projects to turn their targets and commitments into reality."
MS&AD withdrew from the Net-Zero Insurance Alliance (NZIA) in May, and is one of a handful of companies out of over 30 original members to have announced intermediate targets for emissions reduction, which had been a key focus of the NZIA. Others include Tokio Marine, Allianz and AXA.
MS&AD’s new target is arguably slightly more ambitious than AXA’s GHG emission reduction target, and Allianz’s contains some serious loopholes as it uses an intensity target instead of an absolute target like MS&AD and AXA. In September, Tokio Marine released an intermediate target, however the company once again failed to show leadership by avoiding committing to a GHG emission reduction target, and instead choosing to focus on an engagement target.
Although MS&AD’s announcement is a step in the right direction, it does not go far enough. MS&AD should strengthen it further by 1) including its overseas customers in the target; and 2) increasing the threshold to 43% to align with the minimum reduction target by the Intergovernmental Panel of Climate Change, in order to achieve the global 1.5C goal.
We urge major Japanese insurers Tokio Marine and SOMPO to follow MS&AD’s initiative and take immediate steps to create and publish intermediate GHG emission reduction targets for their underwriting portfolios.
*GHG emissions from major domestic trading partners of approximately 3,300 companies, selected based on premium income