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ESG Investment and Financing

We are actively investing in and financing ESG bonds, etc. that contribute to building a good Japanese society and solving environmental problems from the perspective of our harmonious coexistence with local communities, society as a whole, and the environment. We are also aiming to participate in the stable growth of the Japanese economy and Japanese companies.

We are working to enhance our initiatives regarding ESG investment and financing in line with the worldwide trend of various entities promoting efforts aimed at the realization of a sustainable society, such as the Paris Agreement and SDGs*.
We signed the United Nations Principles for Responsible Investment (hereinafter “PRI*”) in March 2017, and formulated our "Policy on ESG Investment and Financing". In our Medium-Term Management Plan (2017-2020), we have set up quantitative targets of JPY 200 billion and implemented inter-Group collaborations regarding ESG investment and financing. We are working to further enhance our initiatives.

As for investment and financing ESG bonds, etc. we invested and financed over JPY 200 billion in fiscal 2017 and achieved our target. To enhance our initiatives, we have increased the target by JPY 500 billion and set a new quantitative target of investment and financing JPY 700 billion in ESG bonds, etc.
*SDGs (Sustainable Development Goals) are international goals adopted by the UN General Assembly in September 2015, consisting of 17 targets shared by the world for sustainable development and 169 targets.
*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.

As an institutional investor, we will continue to contribute to the realization of a sustainable society by continuing to financially support climate change and the achievement of the various goals listed in the SDGs.

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

Quantitative Target JPY 700 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.

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.

Major ESG Investment and Financing Methods

Under our ESG Investment and Financing Policy, we utilize various ESG investment and financing methods.

<ESG Investment and Financing by Nippon Life Insurance>

【Theme of Investments and Financing】

As an institutional investor, we will provide financial support in order to achieve the various goals listed in the SDGs. Specifically, in our Mid-Term Management Plan (2017-2020) we have set up a quantitative target of JPY 700 billion for investment and financing ESG bonds.

<Progress status of our quantitative target>

Fiscal Year 2017 Approximately JPY 202.2 billion

【Integration】

We consider a company's non-financial information such as ESG information in the process of deciding investments and financing of equities, bonds and loans.

【Engagement】

Through equity investment, we will contribute to the development of companies by conducting constructive dialogue with investee companies in the form of stewardship activities. In addition, as an institutional investor who makes long-term investments, we aim to grow our profits through improving corporate value. Looking ahead, we will promote dialogue activities that have ESG as the main theme from the viewpoint of more than ever supporting sustainable corporate growth.
Through bond investment, in addition to dialogue activities on the theme of ESG issues, we will also encourage issuers to issue ESG bonds, etc. in order to create investment opportunities.

【Negative Screening】

Maintaining an awareness of the mission and public nature of the life insurance business, we prohibit investing in or financing companies that manufacture cluster munitions, biological weapons, antipersonnel landmines or chemical weapons.

【Other】


〇Environmentally-Friendly Real Estate Investment
We are investing in environmentally-friendly office buildings, including by conducting zero emissions activities at the construction sites and by introducing energy-saving equipment. Moreover, we are not only promoting energy conservation in newly built buildings but also in existing buildings by means of conducting renovation work. Furthermore, we acquire the third-party certification of BELS* for each building in order to visualize its energy-saving performance and to promote environmental initiatives.

*Based on the guidelines summarized by the Ministry of Land, Infrastructure, Transport and Tourism and abbreviated as Building an Energy-efficient Labeling System, third-party organizations objectively evaluate and display the energy consumption data related to buildings such as offices.

〇CSR Loans
We support CSR loans by offering preferential interest rates for loans to individuals and companies that are engaging in activities that take into consideration the global environment, and for loans to corporate customers that are actively engaged in providing child-rearing support.

Nippon Life Insurance Group Initiatives

<Nippon Life Signs The United Nations Principles For Responsible Investment>

Nissay Asset Management, one of our Group companies, signed The United Nations Principles for Responsible Investment (“PRI”) in 2006 to realize a sustainable society. Subsequently, Nissay Asset Management has acquired the highest assessment grade, "A+," in the comprehensive assessment category of "Strategy and Governance" for the fourth consecutive year in the annual comprehensive evaluation "PRI" in 2018, and acquired “A+” in the assessment category of "ESG Integration" for listed equity (direct operation) for the third consecutive year. In addition, this year we also acquired the highest assessment grade, "A+," in the assessment category of "Active Ownership" of listed equity (direct operation) that evaluates engagement in and exercise of voting rights for listed shares.

<Collaboration between Nissay Asset Management and overseas asset management services>

We are investing in funds for which Nissay Asset Management collaborates with overseas asset management services of our Group in managing them. Through this initiative, we will share our know-how about ESG investment and financing with Group companies, and share and improve operational processes. Moreover, as a Nippon Life Group we will contribute to the realization of a sustainable society.

【Examples of Investments】


・Nippon Life Announces Investment in a Global Equity Investment Fund(February 2017)
・Nippon Life Announces Investment in the Global SDGs Equity Investment Fund (June 2018)

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
Investment in SRI Bond Issued by Landwirtschaftliche RENTENBANK

The funds raised are used to make finance loans that help promote renewable energy such as wind power and solar power in Germany.

(September, 2017)


Source: gettyimages
Investment in Tokyo Green Bonds

The funds raised are used to develop smart energy cities, to develop cities that are comfortably cool and clean, and to adapt to the effects of climate change.

(October, 2017)


Source: The Tokyo Metropolitan Government
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)

Financing to PPP Project to Develop Healthcare Campus in Turkey

This financing was used for the largest hospital complex in the country where the number of beds is insufficient.

(July, 2017)


Source: Renaissance Group
Investment in Social Bond Issued by the International Financing Corporation

The funds raised are used to support low-income people in developing countries who cannot fully access the necessities and services of daily life. In addition, the funds are used to provide support to women-owned enterprises in emerging markets.

(July, 2017)

Financing of Desalination Project in Australia

This financing was used to provide a drought control measure in Australia, which has experienced a number of severe droughts in its history.

(October, 2017)


Source: AquaSure PtyLtd.
Investment in Overseas Farmland Investment Fund

The funds raised are being used to contribute to resolving the social issue of “Food Security” by achieving the stable supply of food, the stabilization of farmers’ incomes, and environmentally-friendly farmland operations.

(April, 2018)


Source: Hancock Natural Resource Group, affiliated to Manulife Asset Management Group
Investment in Overseas Strategic Venture Fund

The funds raised are used to make investments in FinTech (Insurance, Asset Management, Wealth Management, Investment Infrastructure, etc.) and “Insurance + α” (Childcare, Care of the Elderly, Healthcare, etc.)

(April, 2018)

CSR Loan
We provide interest rate incentives to support small and medium-sized business customers who are actively engaged in childcare support.

*The logo attached to the above case symbolizes our belief in the main goal of contributing to SDGs through investment and financing.

<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.