Nippon Life Insurance Co. will reject investments and loans related to coal-fired power plants, both in its home market of Japan and abroad.
This was revealed by a company source in a report by The Asahi Shimbun, which added that the move by Japan’s largest life insurer could have a domino effect across the nation’s financial industry.
Coal-derived energy is regarded by experts as one of the largest contributors to global warming due to its massive emission of greenhouse gases.
“It was difficult,” the Nippon Life executive said. “But we, as a life insurance company, which is supposed to offer society a huge public benefit, decided not to do that.”
Since the Paris Agreement took effect in 2016, many financial institutions in the US and Europe have stopped investing in coal-related projects as a response to public criticism towards these companies’ support for an activity that causes great harm to the environment.
Three major banks in Japan are set to implement stricter regulations regarding investments in coal-fired power. Another insurer, Dai-Ichi Life Insurance, earlier announced that it would stop investing in coal projects overseas.
However, the Japanese government regards coal as an important power source, which leads to hesitation among financial institutions to fully abandon coal.
