Nippon Life: Managing risk not enough to fulfil ESG responsibility
Nippon Life Insurance is urging its asset owner peers and the investment industry to reconsider the meaning of "responsibility" for responsible investors.
“Managing ESG risks alone is no longer sufficient to fulfil our responsibility to beneficiaries and clients. We need to change the norm of finance and evolve the way capital markets operate,” Takeshi Kimura, special advisor to the board at Nippon Life Insurance, told AsianInvestor.
Kimura together with senior executives at Nippon Life discussed what practices that should be implemented at the United Nations’ Principles for Responsible Investment (PRI) PRI in Person 2023 in Tokyo, where global investors gathered from October 3-5 for one of the world's largest conference on responsible investing.
The insurance giant which has around ¥70 trillion ($520 billion) in assets under management (AUM) was the main sponsor of the event, and Kimura is also the insurer’s representative on the board of directors at the UN PRI, elected by asset owner peers.
“The global society has not made sufficient progress toward achieving the 2030 SDGs (sustainable development goals). We investors shared a sense of urgency, and affirmed that any commitments must be backed by quantifiable actions,” Kimura said.
Also read: Nippon Life to expand ESG engagement with portfolio companies
Kimura also said there was a need for members of the global responsible investment community to work together to make a real difference. The biggest theme for asset owners currently is how to contribute to shaping real-world sustainability outcomes on a variety of issues, including climate change, human rights, and biodiversity.
POLICY PUSH
The importance of policy engagement was also emphasised at PRI in Person in Tokyo.
“Policy has a vital role to play in creating the right conditions for responsible investment to thrive. Japan’s PM Kishida highlighted his support of sustainability outcomes in his address, which set a new benchmark for government commitment to responsible investment. This was very encouraging to investors,” Kimura said.
Also read: How asset owners can play a pivotal role in green bonds
As of June 2023, 732 asset owners globally were signatories of PRI, with the newest addition being Singlife, a Singapore-based financial services firm. Latest data indicates the signatories represent $121.3 trillion as of end March 2021.
With this scope in mind, Nippon Life took on the role as main sponsor with a belief that the insurer has a responsibility to make PRI in Person a successful conference, Kishida explained.
“The success of PRI in Person encourages global investors to shape sustainability outcomes and contribute to building a better world for all including Nippon Life’s customers. Supporting the conference as a lead sponsor is aligned with Nippon Life’s management philosophy to act in the best long-term interests of its customers,” he said.
In October 2022, sovereign wealth fund Korea Investment Corporation became another signatory among asset owners based in Asia Pacific
Also read: KIC to ramp up ESG efforts by signing UN-supported framework
These asset owners include several other Japanese life insurers and Australian superannuation funds, New Zealand Super, Japan’s Government Pension Investment Fund, Korea’s National Pension Service as well as Malaysia’s Khazanah Nasional Berhad and KWAP.