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ESG Investment and Financing

Nippon Life has been proactively investing in and financing environmental, social, and governance bonds (ESG bonds) as well as renewable energy projects. In March 2017, we signed the United Nations Principles for Responsible Investment (hereinafter “PRI*”) and formulated the “Policy on ESG Investment and Financing” to express globally once again our efforts to meet social responsibilities as a life insurance company.

*PRI is a set of principles aiming to realize a sustainable society by proposing that institutional investors incorporate environmental, social and corporate governance (ESG) issues in their investment decisions.

We have set a quantitative target for investment of JPY 200 billion into ESG bonds, etc. under the new Mid-term Management Plan (Fiscal 2017 -2020). We are working to further enhance our initiatives in ESG investment and financing by leveraging Group capabilities.

Nippon Life Insurance Group Initiatives

In the Nippon Life Group’s, both Nippon Life and Nissay Asset Management Corporation (hereinafter “NAM”) signed PRI to form a sustainable society. In particular, NAM, as an industry leader in ESG investments, acquired the highest assessment grade, “A+,” for the comprehensive assessment category of “Strategy and Governance” in the annual PRI assessment for 2016 by the United Nations for a second consecutive year.

ESG Investment and Financing Policy

Given its social responsibilities as a life insurance company, Nippon Life will coexist with the environment, communities and society, and achieve stable growth with companies and the global economy, managing its assets with consideration to ESG issues according to asset characteristics.

  • 1.Nippon Life will strive to consider ESG issues in its investment process based on its asset characteristics, such as confirming whether the use of proceeds of the ESG related bonds and financing will help to resolve environmental or social issues, and considering environmental and social perspectives on real estate investments.
  • 2.Nippon Life will conduct constructive dialogues with the investee companies regarding ESG issues as needed and appropriately conduct stewardship activities as well as requesting disclosure of non-financial information including ESG issues where necessary.
        Furthermore, as a bond investor, Nippon Life will also conduct dialogues with investee companies about ESG issues where necessary.
  • 3.Nippon Life will make efforts to enhance and share its investment process through sharing ESG investment and financing expertise with its subsidiaries and information exchange with other PRI signatory companies, and industry groups, as well as studying advanced case of ESG investment and financing.
  • 4.Nippon Life will contribute to stimulating activity in the ESG investment and financing market by publicly disclosing the status of its ESG investment and financing and proactively communicating opinions related to ESG investment and financing through participation in international conferences and so on.

Main initiatives for ESG Investment and Financing in the New Mid-Term Management Plan (Fiscal 2017 -2020)

Quantitative Target JPY 200 billion of investment into ESG bonds, etc.**
Stewardship Activities Continue dialogues with investee companies
Cooperation with
Affiliates
ESG investment cooperating with NAM and overseas subsidiaries
Case Studies Study advanced investment methods through investment in funds, etc.

**In addition, aim for cumulative investment in ESG bonds of JPY 350 billion

Major ESG Financing and Investment Examples

<Environment>
Environmentally Considerate Real Estate Investment
Nippon Life actively installs facilities for limiting CO2 emissions when new buildings are constructed or building facilities are upgraded. In fiscal 2014, NIPPON LIFE MARUNOUCHI GARDEN TOWER received DBJ Green Building Certification “Five Stars***” as a real estate property with high environmental and social awareness. In fiscal 2015, the building acquired LEED-CS Certification**** “Gold”.

(Fiscal 2014, Fiscal 2015)

Investment in Green Bonds Issued
by the City of Paris and Transport for London.
The funds have been used for environmentally conscious projects such as the Green Project promoted by the City of Paris (involving the introduction of energy-efficient trams and other matters), introduction of solar power generation systems on London Transportation Bureau station buildings and introduction of hybrid buses and electric buses.

(July 2014 and April 2015)


From: London Transit
Authority
Annual Report
2013/14 pp. 68-69
Wind Power Project Financing
This financing was used for a wind power generation project in Kawazu Town, Kamo District, Shizuoka Prefecture being advanced by Eurus Energy Kawazu Corporation, a special purpose company wholly owned by Eurus Energy Holdings Corporation.

(March 2016)


Source: Eurus Energy
Holdings Co., Ltd.
Investment in Domestic Renewable Energy Fund
We invest in domestic large-scale photovoltaic power generation business through investment in domestic renewable energy fund which GE EFS Energy Japan affiliated with General Electric Company owns.

(June 2017)


Source: Pacifico Energy
Corporation
CSR Loan
We provide interest rate incentives to support individuals and corporate customers undertaking environmentally considerate initiatives.

***DBJ Green Building Certification “Five Stars” is a certification system for real estate showing consideration for the environment and society and carried out by the Development Bank of Japan and Japan Real Estate Institute. “Five Stars” is the highest rank in the five stages of certification.

****“LEED-CS Certification” refers to the Core & Shell Division of Leadership in Energy & Environmental Design (LEED), one of the most popular environmental indicators in the world. LEED is sponsored by the U.S. Green Building Council, and tenant buildings are under this category.

<Society>
Investment in a Woman Bond Issued
by the Banco del Estado de Chile
The funds raised are used to support programs for women’s empowerment and offer loans to female entrepreneurs.

(August 2016)

Investment in Social Bonds Issued
by Japan International Cooperation Agency (JICA)
The funds raised are used to projects that contribute to resolving social issues in developing countries (reducing poverty, sustainable economic growth, etc.)

(September 2016)


Photo:KenshiroImamura/JICA
Investment in Theme-type Bonds Issued
by the African Development Bank
The funds financed by this bond are used for such projects as improving access to drinking water and public health for people in Africa.

(December 2016)

Investment in a Healthcare Bond Issued by BPCE S.A.
The funds raised are used to provide financial services for regional medical institutions, health facilities and social accommodation, as well as to support residential medical care and nursing care activities in France.

(July 2017)

CSR Loan
We provide interest rate incentives to support small and medium-sized business customers who are actively engaged in childcare support.
<Corporate Governance>
Initiatives Related to Japan’s Stewardship Code
In undertaking stewardship activities, Nippon Life engages in dialogues with investee companies on a variety of topics including management plans, business strategy, shareholders returns policy, and corporate governance.
<Other>

Investment in Global Equity ESG Fund
 We invest in Nissay Asset and global stock ESG fund managed by overseas subsidiary.
 The fund is managed by NAM in conjunction with the Nippon Life Group’s overseas subsidiaries,
 further promoting the Group's ESG initiatives.