ERM Supports Nippon Life Nature Finance Approach
Nippon Life and ERM Launch innovative Nature Finance Approach Aligned with Planetary Boundaries
Nippon Life Insurance Company (Nippon life) has partnered with ERM, the world’s largest specialist sustainability consultancy, to develop a groundbreaking “Nippon Life Nature Finance Approach” designed to integrate nature conservation and restoration into corporate investment and financing strategies.This initiative aims to align business activities with the urgent transition towards a nature-positive economy.
The new approach leverages the concept of Planetary Boundaries, as originally proposed by the Stockholm resilience Centre, to evaluate a company’s impact on nature and biodiversity within the context of Earth’s critical ecological limits. This framework moves beyond traditional environmental considerations, focusing on systemic risk and the long-term health of the planet.
Key Indicators for Assessing Nature Impact
The Nippon Life Nature Finance Approach utilizes a set of specific indicators to assess a company’s performance:
Net Primary Production (NPP): This basic metric represents the total amount of energy utilized by all living organisms for survival,serving as a core indicator of ecosystem health.
Human Appropriation of Net Primary Production (HANPP): Measuring the extent of human use of global terrestrial NPP, this indicator directly links to Global Biodiversity Framework (GBF) Target 14, which emphasizes integrating biodiversity into all decision-making processes.* Species Population & endangered Species: The approach also considers the health and stability of species populations, specifically tracking the number of endangered species as a critical measure of biodiversity loss.
To ensure a holistic assessment, the Approach incorporates the Do No Notable Harm (DNSH) principles, guaranteeing that investments and financing activities do not create unintended negative environmental or social consequences.
A Step Towards Robust Nature Finance
“As a long-term institutional investor, we believe it is crucial that the global habitat be maintained within a safe and stable operating space,” stated Yasutoshi Miyamoto, General Manager of Responsible Investment Strategy Office at Nippon Life Insurance Company.”Building on our methodology for transition finance, developed last year with ERM’s support, this Nature Finance Approach introduces new evaluation indicators for nature recovery, referencing the Planetary Boundaries and international agreements like the GBF.We intend to refine this approach through ongoing dialog and research with stakeholders across industry, government, and academia, ultimately expanding its application to our investment and financing practices.” (Read Nippon Life’s transition finance methodology here.)
Kosuke Kanematsu, Sustainable Finance Partner at ERM, added, “We developed this Nature Finance approach in alignment with the latest scientific guidance on nature. we anticipate that Nippon Life’s aspiring vision for accelerating nature restoration and regeneration will inspire dialogue and action among companies, financial institutions, and investors committed to a nature-positive future.”
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