Nippon Life Insurance, the largest Japanese insurer by revenue, has said that it will introduce ESG ratings for all investments across its ¥70trn ($663bn) portfolio from April 2021. The initiative aims to improve investment returns and reduce risks by increasing positions in companies with leading sustainability performance.
The insurer said it will directly engage with domestic portfolio companies to assess their sustainability performance in areas such as carbon emissions, and will consider selling off shares and bonds from companies who do not improve on poor performance.
For sovereign bonds, Nippon Life will use data from the World Bank and other sources to reduce the amount of holdings with low ESG ratings, while property holdings will be assessed through external environmental certifications.
The announcement comes after an internal analysis of the insurer’s holdings since 2008 found that investee companies with high ESG ratings perf…