The Sompo Group has announced a new scheme called SOMPO Climate Action as part its medium-term management.
The proposed action is to help in adapting to and mitigating climate change while contributing to a societal transformation, beginning this year. The firm said that it has also joined the Net Zero Insurance Alliance (NZIA). It underlined its commitment to fighting climate change by announcing that it was becoming the first Asian insurer to rule out insurance and investment in coal companies.
It said in a statement: “In order to accelerate the implementation of “SOMPO Climate Action”, the Sompo Group joined NZIA which aims to achieve net-zero GHG emissions from its insurance underwriting portfolio by 2050. Through our membership in NZIA, the Sompo Group will accelerate its efforts to achieve net-zero GHG emissions of the group, and will contribute to the transformation of society by leveraging its financial functions.”
It added: “In addition, the Sompo Group has already been a member of Net Zero Asset Managers’ Initiative and Net Zero Asset Owners’ Alliance, so with its recent membership in the NZIA, the company has become the first Japanese company to join three net zero alliances under the umbrella of the Glasgow Financial Alliance for Net Zero (GFANZ), a global alliance of financial institutions aiming to achieve net-zero GHG emissions by 2050.”
However, some were critical of Sompo’s move, saying that its policy was ‘silent on how it plans to evaluate the credibility of transition plans at coal companies’, while failing to mention oil and gas.
Minyoung Shin, Asia coordinator of the Insure Our Future campaign, said: “Sompo’s enhanced coal policy is a statement that the company is serious about its net zero commitment unlike its Net Zero Insurance Alliance peers, Tokio Marine and MS&AD, who continue to drag their feet on coal. The UN-backed Race to Zero campaign has made it clear that you can’t commit to net zero while continuing to support the development of new fossil assets. We urge all Asian insurers to enhance their fossil fuel policies in line with the global standard.”
Climate, energy and environment ministers from the Group of Seven countries on 27 May issued a communique and committed to end public finance for fossil fuels by the end of 2022. This commitment was followed by the Japanese Government’s announcement to stop providing yen loans for the coal power plants, the Indramayu plant in Indonesia, and the Matarbari plant in Bangladesh on 23 June, as a result of increasing pressure from climate NGOs and participating countries.
Insure our Future said that this global movement will keep demanding Japan to take further actions to end its support for coal industries. It added that Tokio Marine, MS&AD and Sompo, should follow this movement and close loopholes and phase-out of coal from their portfolios.
