January 18, 2023
Dear Shareholders of MS&AD Insurance Group Holdings,

A Request to Engage with MS&AD
to stop underwriting Fossil Fuel Projects
Japan Center for a Sustainable Environment and Society (JACSES)
Kiko Network
Friends of the Earth Japan
Mekong Watch
Insure Our Future
As environmental NGOs, we have urged domestic and overseas financial institutions to stop
supporting new fossil fuels projects, in order to align with long-term goals of the Paris Agreement.
This time, we send this request letter to 50 financial institutions which are major shareholders of
MS&AD Insurance Group Holdings (hereinafter referred to as MS&AD), to ask you to engage
with MS&AD to withdraw from underwriting and investing in fossil fuel projects, as MS&AD lags
behind domestic and overseas insurers in terms of policies on underwritings and investments infossil fuel projects.
In November 2022, MS&AD announced that it plans to reduce 6,300 employees by the end of
March 2026. According to media reports, the reason behind the personnel cut is to reduce costs
in order to improve profitability, as frequent and intensified natural disasters due to climatechange has induced insurance payments to soar. While it has been reported that insurance
payments for natural disasters that have occurred frequently in recent years are the major crisisin the non-life insurance industry, MS&AD has supported fossil fuel projects, which accelerate
climate change, through a huge amount of underwritings and investments, and policies on its
underwriting and investment are also extremely weak and not consistent with the long-term goalsof the Paris Agreement.
In October 2022, Insure Our Future, an international network of environmental NGOs, publishedthe 2022 version of the scorecard, ranking world’s 30 major insurance companies on theirunderwriting, divestment and climate actions for coal, oil and gas (*1). According to thescorecard, MS&AD ranked 18th out of 30, the lowest among the Japanese three major insurers(the other two are Tokio Marine and SOMPO).
MS&AD lags behind other insurance companies in the following respects.
1. There is no policy to restrict underwriting and investing in oil and gas projects.
Globally, 13 insurers, including Allianz and Swiss Re, have already set restrictions onunderwritings for oil and gas projects. Due to the increasing risks in underwriting and investing in
oil and gas projects, in recent years there has been a growing number of insurers globally to stop
new business transactions on oil and gas projects. As for Japanese two competitors, in May
2022, SOMPO Holdings (hereinafter referred to as SOMPO) became the first Japanese financial
institution that has announced to stop underwriting and investing in oil sands and energy
extraction projects in Arctic National Wildlife Refuge (ANWR) (*2), and in September 2022, Tokio

Marine Holdings (hereinafter referred to as Tokio Marine) announced to prohibit new business
transactions on oil sands minings, as well as Arctic oil and gas extractions in all areas north oflatitude 66°33, including the ANWR (*3).
However, MS&AD has not set any restriction on its underwritings and investments in oil and gas
projects. It was revealed that MS&AD was one of the international insurers who insured theconstruction phase of the Ichthys LNG projects between 2012 and 2017, which is reported to be
the most carbon-intensive LNG project in Australia. MS&AD has also failed to rule out thepossibility of insuring Ichthys’s expansion project currently planned (*4).
According to the report “Net Zero by 2050, A Roadmap for Global Energy Sector” released byInternational Energy Agency (IEA) on May 18, 2021, no new fossil fuel extraction projects should
be approved and the power generation sector needs to reach net zero greenhouse gas
emissions globally by 2040 (*5). To reach net zero by 2050, insurers should not be underwriting
or investing in new fossil fuel projects, including oil and gas projects, as well as coal projects.
Table 1. MS&AD, Tokio Marine and SOMPOʼs policies on underwriting coal, oil and gas
projects
MS&AD

Tokio Marine

SOMPO

Coal
(project-based)

MS&AD will not provide
Regardless of newly
insurance for, nor makeconstructed or existing, Tokio
investments in new coal-fired Marine will not provide new
power plants. MS&AD will
insurance underwriting
not newly provide insurance capacities to or financing for
for, nor make investments in coal-fired power generation
the existing coal-fired power projects or thermal coalplants or steam coal mines
mining projects (however,(however, MS&AD may
Tokio Marine may grant
carefully consider andexceptions for projects withhandle the cases that
innovative technologies andincorporate decarbonizing
approaches, such astechnologies and techniques CCS/CCUS and mixed
toward achieving the Paris
combustion, after careful
Agreement targets).
consideration, aiming toachieve the goals of the Paris
Agreement).

Regardless of newly
constructed or existing,
SOMPO will not underwrite
new insurance or make newinvestments in or loans forcoal power plants or thermal
coal mine projects (SOMPO
may carefully consider andrespond to cases where
there are innovativetechnologies such as
CCS/CCUS, carbon
recycling, ammonia co-firing,or other innovativetechnologies in palace thatare expected to reduce GHG
emissions and contribute to
the realization of the Paris
Agreement).

Coal(company-based)

No restriction

SOMPO will not insure or
make investments or loans tocompanies whose primarybusiness is coal (companies
that derive at least 30% of
their revenues from coal-fired
power generation, thermal
coal mines, or oil sands, orelectric utilities companies
that generate at least 30% of
their energy from coal),
unless they establish a GHG
reduction plan by January2025.

No restriction

Oil and gas(project-based)

No restriction(Regarding oil sand mining
and, oil and gas extraction in
the Arctic, MS&AD only
states that it will carefully
determine whether or not toprovide insurance or makeinvestments.)

Tokio Marine will not provide SOMPO will not underwrite
new insurance underwriting
new insurance or make newcapacities to or new financing investments in or loans for oil
for oil and gas company
and gas extraction projects inextraction projects in all areas the oil sands or the Arctic
north of latitude 66°33,
National Wildlife Refuge
including ANWR and oil(ANWR).
sands mining (Exemptions for
projects with decarbonizationplans that are aligned with theParis Agreement).

Oil and gas(company-based)

No restriction

No restriction

SOMPO will not insure or
make investments or loans tocompanies whose primarybusiness is oil and gas
extraction projects in the
ANWR, unless they establish
a GHG reduction plan by
January 2025.
Source: created based on press releases by MS&AD, Tokio Marine and SOMPO on their underwriting andinvestment policies, and various news reports.

2. There is no policy to stop underwriting and investing in companies highly dependent on coalprojects.
In June 2022, SOMPO announced that it will not insure or invest in “companies whose primarybusiness is coal (*6)”, unless they establish a greenhouse gas reduction plan by January 2025(*7). Although there are still challenges in the policy, in terms of threshold settings (*8) and lackof specific requirements in companies’ GHG emission reduction plans, SOMPO became the firstJapanese financial institution to announce the company-based restriction on its underwritingsand investments. However, MS&AD have not set any policies to restrict its underwriting andinvestments on a company basis. Globally, 7 insurers, such as Allianz, AXIS Capital and Zurich,have set company-based restrictions on coal.
3. There is no policy to phase out existing underwritings for coal projects.
According to the report released by Insure Our Future and Solutions for Our Climate (SFOC), an
environmental NGO in Korea, it was revealed that MS&AD provided approximately $1,216 millionof insurance coverage for the construction of Vung Ang 2 coal-fired power plant in Vietnam, andis the largest insurer of the project (*9). Just before the start of the Vung Ang 2 contract in
October 2021, MS&AD strengthened its coal policy in June 2021, announcing it “will not provide
insurance for, nor make investments in new coal-fired power plants.” MS&AD argued afterwards
that the policy did not apply to projects which had been already under negotiation. It became
clear that MS&AD had prepared a loophole in the policy. Although it is still not clear whether
MS&AD will continue to be an insurer when Vung Ang 2 starts its operation, it does not have any
policy to phase out existing insurance coverage for coal projects. The 14 insurers, such as AXA,
Swiss Re, Allianz, AXIS Capital and Zurich, have already committed to reduce their exposure tocoal projects from their portfolios to zero by 2040 globally.
4. There are loopholes in policy to stop coal and mining projects.
Although MS&AD announced in June 2022 that it will not underwrite or invest in the existingcoal-fired power plants or stream coal mines, it sets an exception that “we may carefully consider
and handle the cases that incorporate decarbonizing technologies and techniques towardachieving the Paris Agreement targets.” MS&AD leaves a possibility for future underwriting of
coal-fired power plants which apply technologies such as ammonia co-firing, even though there
have been a rise of criticisms concerning that they have limited emission reduction effects andare highly likely to be inconsistent with the goals of the Paris Agreement (*10).
Moreover, on June 15, 2022, MS&AD announced its new membership in the Net-Zero Insurance
Alliance (NZIA), an international initiative aiming to achieve net zero greenhouse gas emissions
in underwriting portfolios by 2050, as well as joining Glasgow FInancial Alliance for Net Zero
(GFANZ). According to updated criteria by Race to Zero Campaign which is UN-lead climate
campaign (*11), it requires to phase down and out all unabated fossil fuels to limit the average
global temperature rise to 1.5°C, and its members are expected to set an interim target toachieve in the next decade, which covers all greenhouse gas emissions, including all portofolio,
financed, facilitated and insured emissions. The updated criteria comes into effect immediately
for companies joining GFANZ umbrella alliances from June 15th, 2022, and member companies
of GFANZ are encouraged to follow it.
According to the recommendations published in November 2022 by High-Level Expert Group on
the Net-Zero Emissions Commitments of Non-State Entities led by United Nations
Secretary-General António Guterres (*12), net zero targets and transition plans of all financial
institutions must include an immediate end of lending, underwriting and investments in any
company planning new coal infrastructure, power plants and mines. Regarding coal phase out
policies from financial institutions, it must include a commitment to end all financial and advisory
services and phase out exposure to the entire coal value chain no later than 2030 in OECD
countries and by 2040 in non-OECD countries.
We are requesting you, as a MS&AD’s major shareholder to engage with MS&AD to establish; 1)a policy to stop underwriting and investing in oil and gas projects, 2) to remove exceptions in coal
policy, 3) to stop underwriting and investing in coal-related companies, 4) to set a target to phaseout existing coal projects, in order to align its underwriting policy with the goals of the Paris
Agreement.
We would appreciate it if you could send us your institution's policies regarding this request andthe result of your engagement to the contact person below by 17th February. If you wish to
discuss or exchange opinions on these issues further, we also welcome the opportunity toarrange a follow-up conversation online at your convenience.
Thank you for your consideration and we look forward to receiving your response.
Note:*1: https://global.insure-our-future.com/2022-scorecard/*2: https://www.sompo-hd.com/-/media/hd/en/files/doc/pdf/e_ir/2022/e_20220527.pdf?la=ja-JP*3:https://www.tokiomarinehd.com/en/release_topics/release/k82ffv000000efol-att/20220930_Climat
e_Strategy_e.pdf*4:
https://reclaimfinance.org/site/en/2022/10/05/will-major-insurers-rule-out-support-for-ichthys-lngsexpansion/*5: International Energy Agency (IEA), (2021), Net Zero by 2050, A Roadmap for the Global
Energy Sector, p. 20, IEA, Paris,

https://iea.blob.core.windows.net/assets/0716bb9a-6138-4918-8023-cb24caa47794/NetZeroby2
050-ARoadmapfortheGlobalEnergySector.pdf*6: SOMPO defines companies “whose primary business is coal” as “companies that derive atleast 30% of their revenues from coal-fired power generation, thermal coal mines, or oil sands, orelectric utilities companies that generate at least 30% of their energy from coal.”*7: https://www.sompo-hd.com/-/media/hd/en/files/news/2022/e_20220628_1.pdf?la=ja-JP*8: A German environmental NGO, Urgewald, has tightened the threshold of companies to belisted in Global Coal Exit List (GCEL), a database of companies involved in coal projects, from
30% to 20%, since the 30% threshold only covers about half of companies that are actually
expanding coal projects. Please see below for the details. https://www.coalexit.org/methodology*9:https://global.insure-our-future.com/wp-content/uploads/sites/2/2022/05/IOF-KEPCO-Briefing.pdf*10: https://www.kikonet.org/info/publication/hydrogen-ammonia-English*11: https://climatechampions.unfccc.int/criteria-consultation-3-0/*12: https://www.un.org/sites/un2.un.org/files/high-level_expert_group_n7b.pdf
Contact:
Japan Center for a Sustainable Environment and Society (JACSES)
Yuki Tanabe
tanabe@jacses.org
Marika Kita
kita@jacses.org

Appendix 1. Ranking of the world’s 30 major insurers on their underwriting policies forcoal businesses
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
24
25

Insurance company and headquarter location

Score(out of 10)

Allianz (Germany)
5.3
AXA (France)
4.8
Aviva (UK)
4.4
Swiss Re (Swizerland)
4.2
AXIS Capital (Bermuda)
4.2
Generali (Italy)
3.8
Zurich (Swizerland)
3.8
Hannover Re (Germany)
3.7
Munich Re (Germany)
3.4
Mapfe (Spain)
3.2
SCOR Re (France)
2.6
QBE (Australia)
2.5
HDI Global (Germany)
2.3
AIG (USA)
2.0
SOMPO (Japan)
1.6
Tokio Marine (Japan)
1.6
The Hartford (USA)
1.5
MS&AD (Japan)
1.5
Travelers (USA)
1.3
Samsung FM (Korea)
1.1
Convex (Bermuda)
1.0
Chubb (USA), Ping An (China)
0.5
Liberty Mutual (USA)
0.4
Lloyd’s (UK)
0.2
Berkshire Hathaway (USA), Everest Re (Bermuda), PICC (China), Sinosure
260(China), Starr (USA)
Source: Insure Our Future (2022), “Insuring Our Future: 2022 Scorecard on Insurance, Fossil Fuels and Climate
Emergency”

Appendix 2. List of financial institutions that received this letter
1. Nippon Life Insurance Co
2. Nissay Asset Management
3. Mitsubishi UFJ Trust and Banking Corporation
4. Nomura Asset Management
5. JPMorgan Chase & Co
6. BlackRock Inc
7. First Eagle Investment Management
8. Norges Bank
9. The Vanguard Group Inc
10. State Street Bank & Trust/Boston
11. Sumitomo Mitsui Trust Asset Management
12. Nikko Asset Management
13. Daiwa Asset Management
14. Barclays PLC
15. Baillie Gifford & Co
16. BANK OF NEW YORK MELLON CORP
17. Sumitomo Life Insurance Co
18. Credit Agricole Group19. Fidelity Investments (FMR LLC)
20. UBS AG
21. Asset Management One
22. BNP Paribas SA
23. Hachijuni Bank Ltd
24. Charles Schwab Corp
25. Dimensional Fund Advisors LP
26. The Hokuriku Bank
27. The Hokkaido Bank
28. Credit Suisse Group AG
29. Deutsche Bank AG
30. WisdomTree Investments Inc
31. Teachers Insurance and Annuity Association of America (TIAA)
32. Geode Capital Management LLC
33. Keiyo Bank Ltd
34. AXA SA
35. FRANK RUSSELL COMPANY
36. St James's Place PLC
37. The Senshu Ikeda Bank
38. Hartford Financial Services Group
39. HSBC Holdings PLC
40. Legal & General Group PLC
41. Tokio Marine Asset Management
42. Norinchukin Zenkyoren Asset Managent
43. Sumitomo Mitsui DS Asset Management
44. Storebrand Fonder AB
45. Meiji Yasuda Life Insurance Co
46. Meiji Yasuda Asset Management
47. Sompo Asset Management
48. DekaBank Deutsche Girozentrale
49. Resona Asset Management Co Ltd
50. Danske Bank A/S