In a new Fair Finance Guide, four Japanese environmental organizations have for the first time rated the investment and lending policies of the country’s eight leading insurance companies. The guide, which was published in Tokyo on July 25, awarded the highest scores to MS&AD ahead of SOMPO.
In recent weeks some Japanese insurers have initiated modest efforts at greening their lending policies. With a maximum score of 2.4 and an average score of 1.0 out of 10, Japanese insurers however still have a long way to go to bring their businesses in line with international social and environmental standards.
"We hope that the guide will inform Japanese citizens and consumers about the performance of their insurance companies and create a race to the top within the sector. Compared with the Netherlands, where many insurers have reached average scores of more than 5, the social and environmental performance of Japanese insurers is currently still inadequate.”
Initiated by Dutch NGOs and supported by the Swedish International Development Cooperation Agency, Fair Finance Guides currently rate the corporate social responsibility of financial institutions in nine countries. Using a shared methodology, the guides score lenders and investors on issues such as climate change, corruption, gender, health, human rights, labor, natural environment and arms trade. After the Netherlands, the new Japanese Fair Finance Guide is the second guide to rate insurance companies rather than banks. The report scores the lending and investments but not the underwriting policies of insurers.
Japanese public and private financiers are among the biggest financiers of new coal projects around the world. In recent weeks, Nippon Life and Dai-ichi Life have announced policies to end or limit project finance for coal projects. So far, no Japanese insurance companies have divested their current assets from the coal sector or adopted any limits on insuring coal projects. According to the new Fair Finance Guide the average climate score of the Japanese insurers, like their average overall score, is 1.0.
"Given that Japanese financiers are funding 1000s of megawatts of new coal power around the globe, we welcome the initial steps by Japanese life insurers. As the Fair Finance Guide shows, these steps are however completely insufficient, and Japanese insurers need to adopt much bolder measures to bring their businesses in line with the Paris Agreement.”
The Japanese Fair Finance Guide analyzes the policies of MS&AD (average score: 2.3), SOMPO (1.0), Tokio Marine (0.9), Nippon Life (0.8), Dai-ichi Life (0.8), Meiji Yasuda Life (0.6), Sumitomo Life (0.5) and Japanese Post Insurance (0.5). The guide was published by A SEED Japan, the Asia-Pacific Resource Center (PARC), the Japan Centre for a Sustainable Environment and Society (JACSES), and PLA (Alternative People’s Linkage in Asia).