Today, Sompo, one of the top three Japanese non-life insurers, updated its coal policy. Sompo committed to stop underwriting and investing in new and existing coal-fired power plants and coal mines, and new tar sands and energy exploration projects in Arctic National Wildlife Refuge in Alaska. Sompo is the first Japanese insurer to rule out insurance for development of new oil sands and exploration in the Arctic Refuge. However, the policy contains a major loophole on coal by giving exemptions for new and existing coal power plants and mines using technologies, such as Carbon Capture and Storage (CCS), Carbon Capture, Usage and Storage (CCUS) or ammonia co-firing, as is the case in Tokio Marine’s policy.
The latest IPCC report (AR6 Working Group III) indicated that we must peak emissions by 2025. Both the International Energy Agency (IEA) Net Zero scenario and the One Earth Climate Model (OECM) Decarbonization Pathway identified that there can be no investment in new coal, oil, and gas projects. The OECM goes further to say that Bioenergy with Carbon Capture and Storage (BECCS) and Carbon Capture, Utilisation and Storage (CCUS) lack commercial viability and we will have 100% of electricity generation from renewables in the no overshoot 1.5C scenario.
Japanese insurance companies are still lagging far behind the international trend on coal insurance and the benchmark for responsible insurers. While 14 insurers have ruled out insuring new coal and committed to phase-out support for existing coal operations, none of the leading Japanese insurance companies – Tokio Marine, MS&AD and Sompo – have adopted policies to phase out coal insurance across the board.
"It’s great that Sompo became the first Japanese insurer who committed to end some extreme oil and gas projects. However, Sompo didn’t commit anything about phase-out timing of renewal contracts for existing coal projects. Now, Sompo needs to follow its competitors outside of Japan, and phase out all coal projects from its portfolio.”
"The latest climate science is telling us we need to peak emissions by 2025 and that there is no room for new coal, oil and gas development in the 1.5C pathway. Sompo’s new commitment is far from the bold climate action we need. We urge Sompo and other Asian insurance companies to make meaningful contributions to our climate by moving away from the fossil fuel business and scaling their underwriting for renewable energy as fast as possible.”
Together with other Japanese insurance giants, Tokio Marine and MS&AD, Sompo failed to demonstrate an ambitious commitment to achieve a low-carbon economy. We demand that Tokio Marine, MS&AD and Sompo:
- Close the loophole to underwrite new coal power plants and mines
- Include a phase-out mechanism of existing coal underwriting
- Stop underwriting new oil and gas projects to limit the global temperature rise to 1.5℃.