In light of our social responsibilities as a life insurance company, we will manage all asset classes in our portfolio taking into account adequate asset class characteristics and regional specificities. We will also take mid-to long-term approach considering environmental, social and governance perspectives (*). Taking into consideration the mission and public nature of life insurance business, as well as our approach to important social challenge, we do not invest into certain companies and businesses. Through our investment and stewardship activities, we will seek to shape sustainability outcomes to realize a sustainable society, while also strive to secure long-term stable investment returns.
*ESG themes (including stewardship activities)
Climate change is one of the priority issues that we must confront globally. According to research by the Intergovernmental Panel on Climate Change (IPCC), which consists of scientists from around the world, and other studies, a significant reduction in greenhouse gas emissions will be required. In order to achieve our 2030 GHG emission reduction target as well as to achieve net zero by 2050, Nippon Life will provide finance to business that supports decarbonization and also engage with high emitting companies to encourage their decarbonization effort.
Human rights issues refer to actions that violates the human rights with which all people are inherently endowed, and these include forced labor, discrimination, and harassment. Since the United Nations formulated its Guiding Principles on Business and Human Rights in 2011, there has been an international outcry for human rights conscious corporate management and government around the world are working to establish standards. In Japan, the government published guidelines for respecting human rights in 2022. In Nippon Life's investment activity, initiatives reflecting those guidelines will be implemented.
Human capital management is a management approach that views human resources as capital and seeks to maximize their value for the sake of enhancing corporate value over mid-to long-term. In particular, we recognize the importance of linking corporate strategy and human resource strategy, regardless of industry sector, and will support efforts related to corporate human capital management.
Other ESG topics includes nature & biodiversity, sustainable well-being, diversity, local communities, executive remuneration, minority interests, takeover defense measures, and independence of directors. Nippon Life provides regular updates on these topics through our ESG Investment Report, website and other disclosure material.
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1.Nippon Life integrates ESG factors into all asset classes in order to contribute to solving social issues. Specifically, we conduct proprietary ESG evaluation (assignment of ESG ratings) for all asset classes and use it for investment decisions.
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2.For equities, corporate bonds, loans, and real estate, we apply proprietary portfolio allocation rule which limits the investment into lower rated investments. The rule aims to prioritize capital allocation to higher rated investments as well as to encourage positive ESG developments through engagements to companies that has greater room for improvement.
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3.ESG-themed investment, which we define as investments which the use of proceeds contributes to the attainment of SDGs goals, Nippon Life will prioritize investment opportunity that will deliver superior sustainability outcomes.
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4.In our engagement activity, Nippon Life requests disclosure of non-financial information encompassing ESG perspectives and conduct dialogue with a focus on the ESG topics we deem important, as well as implementing appropriate stewardship activities. Through these efforts, we support the sustainable growth of investee and the creation of sustainability outcomes. In addition, we also participate in ESG initiatives including collaborative engagement initiatives. In cases when engagement is unsuccessful after multiple years, we consider options such as voting against the company’s proposals in accordance with the Guidelines for Exercise of Voting Rights, as well as revisiting our investment view which may trigger reduction of investments.
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5.Nippon Life's basic stance of ESG investment is to take a mid-to long-term perspective as well as to respect the diversity of country, industry sector, and company. We are generally not in favor of taking a short-term, one size fit all approach. However, from the perspective of the mission and public nature of the life insurance business, and our responses to important social issues, we do not invest in certain companies and businesses (Negative screening). Considering factors such as trends in international treaties, and standards formulated by various initiatives both domestic and international, we will continue to revise the target scope regularly update through our ESG Investment Report, website and other disclosure material.
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6.As part of our customer-centric business operation, Nippon Life will engage with our customers (policyholders) to grasp awareness and values around ESG. This will allow us to reflect our beneficiaries' view into our ESG investment and strengthen the customer’s confidence.
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7.Nippon Life participates in various ESG related initiatives as well as government sponsored committees and working groups, both domestic and international. We provide feedback reflecting the regional specificities of Japan when adequate. We also conduct policy engagement so that there is an alignment between our sustainability outcomes goals and the policy actions.
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8.Nippon Life actively builds relationships and communicates about its ESG activity with a wide range of stakeholders around the world, including financial institutions, governments, and local communities so that we contribute to the expansion of ESG investment and furthermore the sound development of financial markets.
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9.In order to enhance ESG investment and create synergies within the Group, Nippon Life actively shares ESG expertise and challenge throughout the Group.
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10.From the standpoint of preventing conflicts of interest, Nippon Life has implemented a structure of splitting sales unit and investment management unit. Regardless of business relationships, investment management unit can make an independent decision in proxy voting.
