ERM, the world’s largest specialist sustainability consultancy, has helped Nippon Life Insurance Company (Nippon Life), to develop its “Nippon Life Nature Finance Approach” to support corporate efforts to conserve and restore nature.

The Nippon Life Nature Finance Approach applies the concept of the Planetary Boundaries proposed by the Stockholm Resilience Centre into investment and financing practices, with the aim of aligning corporate activity with the transition to a nature-positive economy.

The Approach evaluates a company’s impact on nature and biodiversity in the context of the Earth’s critical thresholds using the following indicators:

  • Net Primary Production (NPP), which represents the amount of energy that all living organisms use for their survival and is considered the most fundamental function of an ecosystem.
  • The use of NPP by humans (known as Human Appropriation of global terrestrial Net Primary Production or HANPP), which is one of the indicators in the Global Biodiversity Framework (GBF) Target 14, aimed at integrating biodiversity into decision-making.
  • The species population including the number of endangered species.

In addition, the Approach uses the Do No Significant Harm (DNSH) Principles to ensure that no other significant negative environmental or social impacts would arise from a company’s activities.

Yasutoshi Miyamoto, General Manager of Responsible Investment Strategy Office at Nippon Life Insurance Company, commented: "As a long-term institutional investor, we believe it is important that the global environment be maintained within a safe and stable operating space. With this vision, regarding climate change, we developed and published a methodology for transition finance last year with the support of ERM. This time, in the field of nature, 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 GBF. 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."

Kosuke Kanematsu, Sustainable Finance Partner at ERM, 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.”

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