Issue Awareness

The awareness that environmental concerns, climate change in particular, are issues for the international community as a whole has increased with the Paris Agreement going into effect in 2016. The Dai-ichi Life Group, which operates life insurance and asset management businesses globally, also recognizes climate change as an important management issue that could significantly affect the lives and health of its customers, corporate activities, and social sustainability.

Based on such awareness, we positioned tackling climate change as one of the areas we will continually strengthen in CONNECT 2020¹, our medium-term management plan, and we are working on a variety of initiatives. Moreover, in addition to boosting management resilience through an assessment of the risks and opportunities posed by climate change, we announced our endorsement of the TCFD² Recommendations in September 2018 in order to enhance corporate value through sound dialogue with stakeholders based on such disclosure.

¹ Determined by the Board of Directors of Dai-ichi Life Holdings in March 2018
² Task Force on Climate-related Financial Disclosures

Stance on Governance/Risk Management

The Dai-ichi Life Group practices ERM with the aim of enhancing capital efficiency and corporate value based on strategies that are in accordance with the status of profit, capital, and risk. As a part of this, we identify foreseeable risks that could have a major impact on our business, formulate business plans that take these risks into account, and engage in risk management that responds appropriately to early signs of risk. We treat climate-related risk as a risk with the potential to have a serious impact on the Group in the future due to changes in the environment. The Group ERM Committee, which is composed of the officers responsible for the Risk Management Department and the Corporate Planning Department among others, conducts analysis and assessments, and then reports to the Executive Management Board and the Board of Directors periodically and monitors.³

In addition, Dai-ichi Life undergoes an annual assessment based on PRI⁴, which is the global standard for ESG investment. The initiative policy based on the results of this assessment is discussed at the Responsible Investment Committee, by majority comprised from external experts, and reported to the Executive Management Board to continually upgrade ESG investment.⁵

Stance on Governance/Risk Management

Climate-related risks

(1) Climate-Related Risks and Opportunities and the Impact on Our Business
(Results of Trial Scenario Analysis at Dai-ichi Life, a core Group company)

Main Risks and Opportunities Affecting Business and Impact (Dai-ichi Life)

Climate-related risks		Main impacts on business
Physical risks	Risks that consist of chronic physical risks (rise in average temperatures and sea levels, etc.) and acute physical risks (increase in abnormal weather, such as typhoons and flooding, etc.) which are associated with physical changes due to climate change →Impacts could increase under the scenario of significant long-term increase in temperatures due to inadequate climate change countermeasures by each country	Main impacts on business Increase in insurance claims and benefits paid due to increase in heat strokes and infectious diseases associated with warming Increase in insurance claims and benefits paid associated with increase in flooding due to typhoons, etc.
Transition risks	Risks that consist of market and technology risks (changes in consumption behavior, failure of investments in new technologies, etc.), policy and regulatory system risks (tightening of regulations on greenhouse gas emissions, etc.), and reputational risks (criticism of industry, changes in consumer choices, etc.), which are associated with the transition to a low carbon society →Impacts could increase under the scenario of reductions in long-term increase in temperatures due to adequate climate change countermeasures, such as the development of new technologies and utilization of carbon recovery and storage technology	Main impacts on business Decrease in value of investment in, and loans to companies with inadequate responses to environmental change, including the introduction of carbon taxes, damage to assets due to market and social environment changes, development of new technologies, and response to changes in consumer behavior

Climate-related opportunities		Main impacts on business
Resource efficiency,products and services, Markets, etc.	Corporate revenue opportunities associated with climate change, such as an expansion of the market contributing to solving climate change problems	Main impacts on business Increase in investment and loan opportunities in businesses and companies that contribute to solving the climate change problem, such as renewable energy businesses Reduction in business costs due to the introduction of business infrastructure with high resource efficiency

(2) Specific Initiatives

As an operating company and an institutional investor, Dai-ichi Life is boosting the resilience of its business against climate change as well as encouraging the enhancement of overall social resilience, which includes financial markets.

Initiatives as an Operating Company

Dai-ichi Life will strengthen resilience in the life insurance business through measures such as researching the impact of climate change on the life insurance business. Moreover, in addition to initiatives to reduce CO₂ emissions, Dai-ichi Life will contribute to enhancing overall social resilience through initiatives such as environmental protection.

Resilience of the Life Insurance Business

• Provisional estimates of increase in payments, including insurance claims, due to heat strokes and infectious diseases in Japan
• Going forward, continue to research other impacts in regions outside of Japan

Overall Social Resilience
(CO₂ reduction, etc.)

• Established a CO₂ emission reduction target in 2011. Promoting reductions in energy consumption associated with business site activities through introduction of energy-saving equipment, etc. to achieve target
• Introduced renewable energy (switched all electricity for the Hibiya Head Office building in Tokyo to renewable energy derived from hydro-electricity in April 2019 with an expected annual reduction in CO₂ emissions of approximately 3,600t)
• Donated a 41,966t credit for excess CO₂ emission reductions to Tokyo Metropolitan Government under the Cap-and-Trade Program to help with Tokyo Metropolitan Government efforts aiming for a Zero Emission Tokyo, a sustainable city with no CO₂ emissions

Initiatives as an Institutional Investor

Based on the awareness that climate change could have a medium- to long-term impact on investment performance, Dai-ichi Life is upgrading its climate-related risk analysis and promoting initiatives to reduce that impact, obtain opportunities for profit, and boost overall social resilience.

Asset Management Resilience

• As a general rule, we have a policy of not investing in, or loaning to, coal-fired power generation project financing given the risk that the asset value of investee companies will decline due to the transition to a low carbon society (no record of investment in, or loans to, such projects to date)
• Introduced climate change factors into corporate evaluation processes to increase resilience of owned assets against climate change

Overall Social Resilience

• Proactively investing in assets, etc. that help solve the climate change problem
• Promoting disclosure of information based TCFD Recommendations through dialogue with investee companies

Indicators and Targets

Dai-ichi Life, which operates a large-scale business, has established medium- to long-term CO₂ emission reduction targets of 40% by fiscal 2030 and 70% by fiscal 2050 (both compared to fiscal 2013). The Dai-ichi Life Group is also working toward a target of 1% year-on-year reductions in CO₂ emissions. Performance in fiscal 2018 was approximately 155,300t (Scope 1: 12,500t and Scope 2: 142,800t), maintaining the target pace of a 1% year-on-year reduction.