ERM supports Nippon Life with development of Nature Finance Approach

Japanese corporate Nippon Life – locally known as Nissay – has introduced the ‘Nippon Life Nature Finance Approach’, a set of measures designed to evaluate the effect of corporate activities on nature restoration.

The new approach aims to integrate considerations around nature restoration into both operational decisions and investment strategies. The move is part of Nippon Life’s environmental priorities under its broader sustainability strategy, which includes the objective of “Passing on indispensable Earth to the future”.

The framework uses indicators based on the ‘Biosphere Integrity’ concept from the ‘Planetary Boundaries’ model, which outlines the ecological limits for sustaining human well-being. The model focuses on terrestrial plant life, such as forests and flora & fauna.

Key metrics tracked by the model include:

• Net primary production (NPP), which measures the energy plants use for growth and survival
• Human appropriation of net primary production (HANPP), indicating the share of NPP consumed by humans
• Population figures for (endangered) species

The approach also applies the “do no significant harm” principle to ensure that no other significant negative environmental or social impacts arise from Nippon Life’s activities.

“We have developed a nature finance approach that includes a new concept of evaluation indicators for nature recovery, referring to the concept of the Planetary Boundaries and international agreements such as the Global Biodiversity Framework,” said Yasutoshi Miyamoto, General Manager of Responsible Investment Strategy Office at Nippon Life.

“Using this approach as a starting point, through dialogue and research with various stakeholders in industry, government, and academia, we intend to refine the approach to make it more robust and expand its application to investment and financing practices.”

With support from ERM

Nippon Life developed the methodology with support from sustainability consultancy ERM, which previously also helped the insurer develop its climate change strategy.

Kosuke Kanematsu, Partner at ERM in Japan, commented: “We developed the framework for this Nature Finance Approach in alignment with the latest scientific guidance around nature. We look forward to seeing Nippon Life’s ambitious vision for accelerating efforts around nature restoration and regeneration spark dialogue and action among companies, financial institutions and investors committed to driving a nature-positive future.”