Japanese insurers lagging behind on climate action, says eco group

Japanese insurers lagging behind on climate action, says eco group | Insurance Business

Japanese insurers lagging behind on climate action, says eco group

Despite Japanese insurance giant Sompo’s adoption of a coal policy, the nation’s insurers are still not doing enough, according to an environmental campaign centring on the insurance industry.

According to a statement by Insure Our Future (formerly Unfriend Coal), Sompo is the first Japanese insurance company to adopt a position on coal. The company said that it “will not insure and invest in new construction of coal-fired power plants in Japan, except for projects for which underwriting, investment and financing has already been expressed.”

Insure Our Future, however, said that Sompo’s policy comes with significant loopholes, as it only applies to coal projects inside Japan, and comes with exemptions, such as projects with high power efficiency.

According to Yuki Tanabe, program director at the Japan Center for a Sustainable Environment and Society (JACSES), the Vung Ang 2 coal-fired power project in Vietnam may be in the pipeline for underwriting by Sompo. Tanabe called on the insurer to completely stop underwriting coal projects with no exceptions.

For international projects, Sompo will follow ESG practices “in anticipation of changes in global investors and international public opinion,” as outlined in a report by Nikkei.

“Sompo’s announcement of the coal policy is appreciated as the first one among Japan’s general insurers,” said Takayoshi Yokoyama, team leader of 350.org in Japan. “We, however, urge Sompo to increase its commitment to complete abolishment of coal fired power plants that is required to meet the 1.5 degree goal of the Paris Agreement as a responsible insurance company.”

Insure Our Future said that none of the top Japanese P&C insurers, namely Sompo, Tokio Marine, and MS&AD – have totally phased out insurance for coal projects. The group singled out Tokio Marine, which is a member of the Japan Climate Leaders Partnership and the Japan Sustainability Forum, and co-chair of the climate change working group of the Geneva Association, a think-tank of insurance CEOs.

“Tokio Marine undermines the actions of other insurance companies through its continued underwriting of coal projects,” said Tanya Roberts-Davis, East Asia finance adviser for the Insure Our Future campaign. “Such projects are not aligned with the Paris Agreement and typically fail to meet the concerns of local people for livelihoods and a healthy environment.”