【Environment】 Promotion of Climate Change Countermeasures
We will contribute to realizing a decarbonized society by working to reduce CO2 emissions from our business operations as well as our reinsurance underwriting and asset management.
Climate-related Financial Disclosure
Climate change poses a threat to the safety and security of society, including the intensification of natural catastrophe, and addressing it is a critical challenge for the whole world.
Addressing climate change is also one of the greatest challenges inevitable for the Toa Re Group, which upholds the mission of “Providing Peace of Mind,” as articulated in the Toa Re Mission Statement, through providing long-term and stable reinsurance capacity for natural catastrophe risk.
Therefore, the Group has been working to contribute to the transition toward a decarbonized society by working to reduce CO2 emissions from our business operation as a business entity, in addition to various initiatives in its core reinsurance business and asset management.
Governance
The climate-related governance structure of the Group consists of the Board of Directors, the SDGs/ESG Committee, and the ERM Committee.
- The Board of Directors discusses and establishes our Group-wide policy related to sustainability encompassing its initiatives for addressing climate change and various plans related primarily to the promotion of climate change countermeasures, and also monitors the status of such initiatives.
- The SDGs/ESG Committee is chaired by the Executive Officer in charge of the Communication & Coordination Department, which is the sustainability promotion department.
The SDGs/ESG Committee consists of the General Managers of related departments. It discusses the Group’s sustainability-related policies, plans, and strategies, including climate change countermeasures.
The Committee also exchanges opinions and coordinates with group companies to promote the sustainability of the Group.
The matters discussed by the Committee are resolved by the Board of Directors as appropriate. And in principle, the Board of Directors is informed of the progress twice a year as a part of the overall progress of the initiatives of medium-term management plan, and once a year as the progress of sustainability measures.
In fiscal 2022, the Board of Directors resolved the formulation of the Group ESG investment policy and the establishment of group-wide CO2 emissions reduction targets after discussions at the Committee. - The ERM Committee is chaired by an Executive Officer appointed by the Executive Officer in charge of the Management Planning Department after the discussions at the Executive Management Committee established to discuss important matters concerning overall management.
The ERM Committee consists of the General Managers of related departments. It discusses various matters related to enterprise risk management (ERM) for the Group. Material matters concerning risk management, including climate change, are reported to the Board of Directors periodically.
Strategies
The Group recognizes the following climate-related risks and opportunities.
Physical Risks
- In our non-life reinsurance business, risk of substantial reinsurance claim payments exceeding assumptions due to the increased frequency and severity of natural catastrophe, such as typhoons and floods.
- In our life reinsurance business, risk of substantial reinsurance claim payments exceeding assumptions for mortality and morbidity due to increased heat stroke and infectious diseases as a result of higher average temperatures.
Transition Risks (Risks related to laws and regulations and to social reputation with respect to addressing climate change)
- In our non-life reinsurance business, risk of impairment of corporate value or impediments to business operations due to reputational damage caused by providing capacity for fossil fuel-related businesses or delays in responding to laws and regulations.
- In our asset management, risk of a decline in the corporate value of investee companies due to their inability to respond appropriately to changes of laws and regulations and/or changes in the market and social environment to make the transition toward a decarbonized society.
Opportunities
- Increase in reinsurance needs related to the renewable energy business in the course of transition to a decarbonized society.
The Group takes appropriate measures to address each of the above climate-related risks and opportunities based on the degree of impact entailed by each individual risks and opportunities. In particular, we recognize that the impact of natural catastrophe, a physical risk related to non-life reinsurance, is a significant threat from the perspective of business continuity in the Group, as mentioned above. Therefore, we are taking the following measures towards the realization of a decarbonized society.
(1) Initiatives in Reinsurance Underwriting
From the perspective of promoting the transition toward a decarbonized society, we do not, in principle, engage in facultative reinsurance transactions related to coal-fired power plants and coal mining business (thermal coal) planned in the future. We will contribute to solving the social challenge of climate change through reorganizing our reinsurance portfolio by screening clients and contracts, and through research and study activities related to the renewable energy business.
(2) Initiatives in Asset Management
In addition to management aimed at improving the risk/return of the portfolio held on a long-term and stable basis, we also manage our investment portfolio in consideration of public and social nature in accordance with the Group ESG investment policy.
When executing an investment, we obtain ESG (Environmental, Social, and Governance) information on candidate companies to determine whether or not to invest. From the perspective of promoting the transition toward a decarbonized society, we do not, in principle, make any new investments related to coal-fired power plants or coal mining businesses (thermal coal). In addition, as part of our efforts to promote climate change countermeasures, we will contribute to the transition toward a decarbonized society, which is proceeding on a global scale, by investing in green bonds and other such investments.
(3) Initiatives to Reduce CO2 Emissions in Operations
By supporting the transition toward a decarbonized society through our business activities, we will contribute to curbing global warming. Specifically, we are promoting power conservation and are switching to electricity derived from renewable energy sources at our head office building and a part of our overseas bases. We will continue to promote various measures to reduce CO2 emissions, including the introduction of renewable energy on a group-wide basis.
As part of our social contribution and global environment protection activities, we also conduct environmental awareness-raising activities, such as donating environment-related books to local elementary schools and co-hosting a series of lectures on environmental issues with the General Insurance Institute of Japan, a public interest incorporated foundation. Going forward, we will consider new environmental awareness-raising activities.
Risk management
The Group has established an ERM structure, as described above, with the aim of improving corporate value in a sustainable manner through the integrated management of risks in achieving its strategic goals.
We consider climate-related risks to be factors that have significant impacts on the reinsurance risks we manage, and therefore manage them by integrating them into ERM. In particular, climate change (primarily physical risk) is closely related to business concerning natural catastrophe, which constitutes the Group's core business portfolio, and therefore, the Group is working to strengthen and upgrade management of this risk.
With regard to reinsurance underwriting risk related to typhoons and other natural catastrophe, we are working to provide stable capacity to our clients by controlling risk in the event of a large-scale natural catastrophe by procuring retrocession and accumulating catastrophe loss reserve.
Metrics and targets
The Group has set medium- to long-term targets of achieving a 50% reduction in CO2 emissions in fiscal 2030 relative to those of fiscal 2019*, and carbon neutrality by fiscal 2050*. In addition, as metrics for achieving the targets, we have newly set renewable electricity use at 70% or more in fiscal 2030 and 100% in fiscal 2050 at our group's all facilities.
For each of the initiatives in promoting the transition toward a decarbonized society in the reinsurance business and in asset management, we have set specific targets and have been promoting activities to achieve them.
* Based on measurement in accordance with GHG protocols.
Environmental Performance Data
From the perspective of promoting environmental protection, including climate change countermeasures, the Group has set medium- to long-term targets of achieving a 50% reduction in CO2 emissions in fiscal 2030 relative to those of fiscal 2019, and carbon neutrality by fiscal 2050.
In addition, as metrics for achieving the targets, the Group has set renewable electricity use at 70% or more in fiscal 2030 and 100% in fiscal 2050 at the Group’s all facilities.
The measurement results of the Group's CO2 emissions and environmental load data are as follows. In fiscal 2022, the Group has reduced CO2 emissions by 52.7% compared to fiscal 2019, with 60.9% of renewable electricity usage.
1. Measurement results
(1) CO2 emissions
| Units | Fiscal 2019 (Base year) |
Fiscal 2022 | ||
|---|---|---|---|---|
| Scope 1 | Direct emissions | t-CO2 | 157 | 187 |
| Scope 2 | Indirect emissions | t-CO2 | 989 | 353 |
| Scope 3 | total | t-CO2 | 623 | 297 |
| Category 1 | t-CO2 | 25 | 11 | |
| Category 3 | t-CO2 | 165 | 152 | |
| Category 5 | t-CO2 | 2 | 1 | |
| Category 6 | t-CO2 | 335 | 66 | |
| Category 7 | t-CO2 | 97 | 68 | |
| Scope 1-3 total | t-CO2 | 1,769 | 837 | |
(2) Renewable electricity usage
| Units | Fiscal 2022 | |
|---|---|---|
| Renewable electricity usage rate | ％ | 60.9 |
| Renewable electricity usage | kWh | 1,273,554 |
(3) Environmental load data
| Units | Fiscal 2019 | Fiscal 2022 | |
|---|---|---|---|
| Electricity usage | kWh | 2,226,688 | 2,090,834 |
| City gas usage | N㎥ | 48,653 | 57,153 |
| Propane gas usage | ㎥ | 6,184 | 5,198 |
| Gasoline usage | ℓ | 5,020 | 7,298 |
| Kerosene usage | ℓ | 120 | 80 |
| Paper usage | t | 13 | 6 |
| Water usage | ㎥ | 7,577 | 6,262 |
| Waste generation | t | 33 | 23 |
2. Methods of calculation for CO2 emissions and environmental load data
◎ Coverage
| Coverage of data collection | |||
|---|---|---|---|
| CO2 emissions | Scope 1 | The Toa Reinsurance Group | |
| Scope 2 | The Toa Reinsurance Group | ||
| Scope 3 | Category 1 | The Toa Reinsurance Group | |
| Category 3 | The Toa Reinsurance Group | ||
| Category 5 | Toa Reinsurance Domestic Group Companies | ||
| Category 6 | The Toa Reinsurance Group | ||
| Category 7 | The Toa Reinsurance Group | ||
| Fuel usage | The Toa Reinsurance Group | ||
| Electricity usage (Including renewable electricity usage) | The Toa Reinsurance Group | ||
| Paper usage | The Toa Reinsurance Group | ||
| Water usage | Toa Reinsurance Domestic Group Companies | ||
| Waste generation | Toa Reinsurance Domestic Group Companies | ||
◎ CO2 emissions
| Calculation methods | Emission coefficients | ||
|---|---|---|---|
| Scope 1 Direct emissions | Fuel usage amounts of each environmental load data item × emission coefficient | Emission coefficient list provided by Ministry of the Environment, Government of Japan (*1) | |
| Scope 2 Indirect emissions | Electricity usage amounts of each environmental load data item × emission coefficient | Domestic: Emission coefficient for each electricity provider (*2) and Emission coefficient list (*1) provided by Ministry of the Environment, Government of Japan Overseas: Emission coefficient provided by IEA (*3) |
|
| Scope 3 | Category 1: Purchased goods and services |
Purchased paper amount ×emission coefficient | Emission coefficient database provided by Ministry of the Environment, Government of Japan (*4) |
| Category 3: Fuel and energy related activities not included in Scope 1 and 2 |
Fuel and electricity usage amounts of each environmental load data item × emission coefficient | Electricity: Emission coefficient database provided by Ministry of the Environment, Government of Japan (*4) Fuel: IDEA (*5) |
|
| Category 5: Waste generated in operations |
Waste generation amount × emission coefficient | Emission coefficient database provided by Ministry of the Environment, Government of Japan (*4) IDEA (*5) |
|
| Category 6: Business travel |
Business travel distance by air × emission coefficient | IDEA (*5) | |
| Category 7: Employee Commuting |
Person-day of commuting ×emission coefficient (Person-day of commuting : Number of employees × average office attending days ratio) (*6) |
Emission coefficient database provided by Ministry of the Environment, Government of Japan (*4) | |
◎ Environmental load data
| Data | ||
|---|---|---|
| Fuel | City gas/propane gas usage amount | Gas usage amount in notification of gas provider |
| Gasoline usage amount | Gasoline usage amount on the voucher of the gasoline provider | |
| Kerosene usage amount | Kerosene usage amount on the invoice of the kerosene provider | |
| Electricity/Heat | Electricity usage amount Renewable electricity usage amount |
Electricity usage amount on the invoice of the electricity provider, etc. |
| Paper usage amount | Weight per package x number of purchases of paper (package) | |
| Water usage amount | The amount of water used on the invoice from the Bureau of Waterworks | |
| Waste generation amount | The amount of waste reported based on the Waste Management and Public Cleansing Act, etc. | |
Other Initiatives
Offering Sustainable Seafood Lunches
Sustainable seafood refers to seafood products that are caught through sustainable fishing that accord consideration to resource management as well as environmental and social impacts, and is called MSCcertified seafood products. Our cafeteria acquired the Chain of Custody (CoC) certificate from the Marine Stewardship Council (MSC) for a management system for lunch menus prepared using MSC-certified seafood products, and periodically offers sustainable seafood lunches.
Book Donations
Wishing to inspire children to take an informed interest in environmental issues, Toa Re donates books on environmental themes to the eight public elementary schools in Chiyoda-ku every year on Earth Day (April 22).
Lectures on Environmental Issues
To contribute to protection of the global environment, Toa Re and the General Insurance Institute of Japan have been jointly holding a series of lectures on environmental issues.
In fiscal year 2022, Honorary Professor Nobuo Fukuwa at Nagoya University was invited as lecturer to an event held on October 28, 2022 under the theme of “Past Disasters and Japan’s Future” via a Zoom live stream.
Promotion of Power Saving
Toa Re is working to reduce power consumption by implementing power saving promotion measures such as controlling the temperature of air-conditioning systems installed in offices, setting no overtime days, and using heat storage with midnight power. In fiscal 2022, we reduced power consumption by 1.4% compared to the previous year.
Switching to Electricity Derived from Renewable Energy
From March 2022, we switched to essentially CO2-free electricity for use at our head office building, utilizing environmental value derived from renewable energy sources that do not emit CO2.
Donation through the Collection of PET Bottle Caps
As an initiative realized through the ideas of employees, Toa Re is supporting a system to make donations for medical assistance for developing countries through the collection of PET bottle caps. In fiscal 2022, we collected approximately 50,000 caps.