31 August, Tokyo – (First published via JACSES) SOMPO Holdings, Inc. (SOMPO) has announced a policy of not underwriting insurance for large-emission companies that do not have a net-zero transition plan by 2035 (*1). However, with Tokio Marine Holdings, Inc. (Tokio Marine) having a similar policy with a deadline of 2030 (*2), SOMPO is required to bring its deadline forward from 2035 to 2030 and ensure that its customers’ transition plans are consistent with the Paris Agreement’s 1.5-degree goals.
According to the “Sustainability-related Policy for Underwriting, Investments and Loans” announced by SOMPO on August 31, to ensure the achievement of net-zero GHG emissions by 2050 and the effectiveness of a just transition, SOMPO have stated the following: “we are calling on 30 priority companies, which account for over 80% of GHG emissions in our insurance underwriting portfolio, to formulate a “transition plan” towards net zero by 2050. We will, in principle, phase out business relationships with companies that have not formulated such a plan following dialogue through the end of FY 2035.”
On the other hand, Tokio Marine has announced a policy that it will require its 200 client companies to formulate decarbonization plans and will not conduct business (insurance underwriting, investment, and financing) with companies that do not have a decarbonization plan by 2030, setting 2030 as the deadline. It must be said that SOMPO’s policy deadline is far too late.
Furthermore, while SOMPO’s policy refers to customers’ transition plans as “transition plan towards net zero by 2050” it does not explicitly require that these transition plans be aligned with the Paris Agreement’s 1.5-degree goals. It is necessary to establish criteria for verifying whether plans are aligned with the Paris Agreement, such as requiring the setting of reduction targets based on scientific evidence, such as SBTs (Science Based Targets).
Therefore, SOMPO is required to bring forward the deadline from 2035 to 2030 in this policy and to ensure that customers’ transition plans are consistent with the Paris Agreement’s 1.5-degree goals. In addition, it is necessary to stop underwriting new insurance for fossil fuel businesses and to adopt an insurance underwriting policy that is consistent with the Paris Agreement.
Notes:
*1: SOMPO “Sustainability Vision and Policy”
https://www.sompo-hd.com/en/csr/system/vision/
*2: Revision of “Tokio Marine: Our Climate Strategy” Concerning Japanese Clients
https://www.tokiomarinehd.com/en/newsroom/release/2024/o1ckc9000001514u-att/20240317_Climate_Strategy_e.pdf
