Sompo, one of the three largest Japanese general insurers, has updated its coal policy, committing to stop underwriting and investing in new and existing coal-fired power plants and coal mines.
The insurer also said it will not insure and invest in new tar sands and energy exploration projects in the Arctic National Wildlife Refuge (ANWR).
According to insurance industry environmental group Insure Our Future, while Sompo is the first Japanese insurer to abandon fossil fuel exploration in the ANWR, its policy contains a major loophole on coal.
Insure Our Future said that Sompo’s policy has exemptions for new and existing coal power plants and mines using technologies such as carbon capture and storage, carbon capture, usage and storage or ammonia co-firing, as is the case in Tokio Marine’s policy.
Both the International Energy Agency Net Zero scenario and the One Earth Climate Model (OECM) Decarbonization Pathway have said that there can be no investment in new coal, oil, and gas projects to avoid overshooting the 1.5oC threshold. The OECM also said that technologies such as bioenergy with carbon capture and storage and carbon capture, utilisation and storage are not commercially viable and 100% of electricity generation must be from renewables.
According to Insure Our Future, Japanese insurance companies are still lagging far behind the international trend on coal insurance and the benchmark for responsible insurers. Unlike their overseas competitors, none of the leading Japanese insurance companies – Tokio Marine, MS&AD and Sompo – have adopted policies to phase out coal insurance across the board, the group said.
“The latest climate science is telling us we need to peak emissions by 2025 and that there is no room for new coal, oil and gas development in the 1.5oC pathway,” said Minyoung Shin, Asia coordinator of Insure Our Future. “Sompo’s new commitment is far from the bold climate action we need. We urge Sompo and other Asian insurance companies to make meaningful contributions to our climate by moving away from the fossil fuel business and scaling their underwriting for renewable energy as fast as possible.”
