company name : tokio marine & nichido fire insurance co ... · retirement of carbon credits and...

Tokio Marine & Nichido Fire Insurance Co., Ltd.

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Company Name: Tokio Marine & Nichido Fire Insurance Co., Ltd.

Company Overview: The core company of Tokio Marine Group, a Japan-based group of full-line insurance companies

active in 37 countries and regions worldwide (Asia, the Americas, Middle East and Europe), operating non-life insurance,

life insurance, re-insurance, and financial and general businesses.

Reporting Year: FY2015 (April 1 2015 - March 31 2016)

Business Category: B - Insurance

Reporting content: Please see below.

Principle 1: Lead in Risk Analysis

Key CDP: Carbon Disclosure Project GRI: Global Reporting

Initiative PRI: UN Principles for Responsible Investment

Sub-principle

1.1

Support and undertake research on climate change to

inform our business strategies and help to protect our

customers’ and other stakeholders’ interests. Where

appropriate share this research with scientists, society,

business, governments and NGOs in order to advance a

common interest.

Tokio Marine Group’s Climate Strategy

Major changes in the frequency of natural disasters and the scale of damage due to climate

change and global warming make it very difficult for insurance companies to calculate

appropriate insurance premiums, set up adequate liability reserves against the payment of

insurance claims in the future or make proper arrangements for reinsurance should they

continue to rely only on the assessment of climate change and natural disaster risks (i.e. tropical

cyclone, heavy rain, flood, earthquake and tsunami, etc.) based on past statistical data.

Accordingly, Tokio Marine Group has set “Responding to Climate Change and Natural Disasters”

as one of its material CSR issues of the Tokio Marine Group’s medium-term CSR Management

Strategy (2015-2017) and has been promoting research into future natural disaster risks by

utilizing "climate models" which enable us to forecast future climate conditions based on


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Physics-based computer simulations, in addition to forecasts mainly utilizing past statistical

data.

Tokio Marine Group contributes to the realization of a sustainable society by linking research

findings to the improvement of enterprise risk management (ERM) and the development and

provision of products and services, while disseminating this information to society in pursuit of

building a safe, secure and resilient society.

Joint Research with The University of Tokyo: Forecasting Future Changes in Typhoons Using

Climate Model Data

TMNF/TMRI(Tokio Marine Research Institute) have been working with the Atmosphere and

Ocean Research Institute at the University of Tokyo from April, 2006. They have been engaged

in typhoon risk assessment and other studies of medium-term (to 2035) and long-term

(2001-2100) climate risks. Using climate change projection simulations by running climate

models on supercomputers, and Monte Carlo simulations using statistical models and

high-speed computers, the study team is scientifically analyzing how typhoon risks will be

affected by future climate conditions associated with global warming.

Joint Research with Nagoya University: Typhoon and Heavy Rain Simulation using High-Spatial

Resolution Models

Using simulations by Nagoya University’s cloud resolution models and supercomputers, TMNF/

TMRI are scientifically analyzing how typhoon risk will be affected by changes in typhoon risk

trends (scale and frequency of occurrence) in the vicinity of Japan due to future climate

conditions associated with global warming. They have evaluated the risk of typhoons under

changing climate conditions for the near future to 2030. According to the findings, typhoons will


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tend to (1) be stronger (minimum core atmospheric pressure of 850 hectopascals), (2) shift their

paths eastward, and (3) be generated in the northeastern region of the northwestern Pacific

Ocean.

Joint Research with Kyoto University on Assessment of Water Disaster Risks under Future

Climate Conditions

TMNF/TMRI initiated risk assessment on flood risk associated with global warming with Kyoto

University in October, 2012. There has been growing concern that the occurrence and

frequency of flood risk is possibly exacerbated by climate change. The research team aims to

develop a "Distributed Flow Routing Model" that forecasts the amount of flowing water after

rainfalls. Subsequently, the Model is expected to produce estimation for flood risk and water

damage assessment. Research results will be used to assist the Tokio Marine group companies

in terms of risk management and insurance underwriting, while offering useful information to

the public.

Earthquake and Tsunami Risk Research in Collaboration with Tohoku University

Tokio Marine Group has been bolstering its earthquake and tsunami risk research, making use

of its underwriting and risk management expertise and accumulated data. TMNF has signed an

industry-academia partnership agreement with Tohoku University. TMNF is supporting the

Earthquake and Tsunami Risk Research Team through a corporate sponsorship.

The research team analyzing wave height distribution, arrival time, and other aspects of

tsunamis following major past earthquake such as the Great East Japan Earthquake, and is

researching more reliable damage estimates (simulations) that take into consideration

vulnerabilities and disaster readiness capabilities in society both in Japan and overseas, as well

as tsunami risk assessment approaches that factor in the probability of occurrence. In addition,


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the laboratory is working to make recommendations for disaster readiness and mitigation,

including the provision of basic information and disaster readiness education in the disaster

mitigation planning of coastal areas.

Please see the following websites.

http://www.tokiomarinehd.com/en/sustainability/environmental/index.html

http://www.tokiomarinehd.com/en/sustainability/environmental/riskresearch.html

Industry-Academia Collaborative Research Project on Earthquake-Induced Tsunami Risks

Recognized as “Good Practice “ of “Principles for Financial Action for the 21 st Century

The earthquake-induced tsunami risk research project conducted by Tohoku University and

TMNF has been recognized as the 3rd annual “Good Practice (Insurance Category)” (*1) of

“Principles for Financial Action towards a Sustainable Society (Principles for Financial Action for

the 21st Century)” (*2) at the Annual General Assembly on March 11, 2015 led by the Ministry

of the Environment.

(*1) “Good Practice”

Activities aimed at creating a sustainable society conducted by financial institutions that have

signed the “Principles for Financial Action for the 21st Century” are selected through a mutual

voting system; a program attracting the highest number of votes in each category is selected as

“Good Practice” every year.

(*2) “Principles for Financial Action for the 21st Century”

A set of principles developed as guidelines for action in 2011 based on the proposals of the

Expert Committee on Environment and Finance under the Central Environmental Council, for

which the Ministry of the Environment served as Secretariat. Currently, the Principles have


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been signed by about 190 financial institutions seeking to fulfill their responsibilities and roles

to create a sustainable society (as of March 2015). TMNF has been participating as a member

since the drafting stage, and signed the principles when they were first introduced.

http://www.tokiomarine-nichido.co.jp/en/news/150311e.pdf

(6) Economic value of ecosystem services by Tokio Marine & Nichido’s Mangrove Planting

Project

TMNF announced that The economic value of ecosystem services (cumulative total from April

1999 to March 2014) generated by TMNF’s mangrove planting project in Asia-Pacific Region in

collaboration with reforestation NGOs was worth USD 338.8 million in January 2016. The

assessment was conducted by a third-party research entity “Mitsubishi Research Institute, Inc.”

by applying internationally recognized methodologies.

TMNF has been involved in mangrove planting activities since 1999 and has planted 8,994 ha of

mangrove forests in nine countries in the Asia-Pacific region. As a result, it has achieved “carbon

neutral*” in domestic operations every year since Fiscal 2009. Tokio Marine Group as a whole

also achieved “carbon neutral” in Fiscal 2011, 2013, 2014 and 2015.

In recent years, valuation techniques for natural capital such as biological diversity and

ecosystem services have been advanced and more attentions are paid to business entities’

initiatives to evaluate the social values/impacts generated by CSR projects.

In the light of this circumstance, TMNF evaluated the economic value of ecosystem services

generated by its mangrove planting project conducted from April 1999 to March 2014, by

referring to “Millennium Ecosystem Assessment” and “The Economics of Ecosystems and

Biodiversity (TEEB)” developed through international initiatives on biodiversity and ecosystem

services.


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* A “carbon neutral” state means that CO2 emitted in the course of business activities is

equivalent to the volume of CO2 removed or reduced by way of use of natural energy, the

retirement of carbon credits and mangrove tree planting.

Economic benefits generated by TMNF’s mangrove planting project are as below.

(Unit: USD million)

Ecosystem Services Cumulative Value

1.Mangrove product harvests Approx. 84.2

2.Support to off-site fisheries productivity Approx. 78.8

3.Shoreline stabilization & erosion control Approx. 71.1

4.Shelter against extreme weather Approx. 55.8

5.Water quality regulation Approx. 45.6

6.Carbon sequestration Approx. 3.3

TOTAL Approx. 338.8

In addition to aforementioned quantitative values, various benefits for local communities and a

global society such as an improvement of local people’s lives, disaster risk reduction, climate

change mitigation are generated by the mangrove planting projects.


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Improvement of

local people’s lives

Approximately 1.25 million people (approx. 320,000 households) reside in and around the

planting sites and about 130,000 people depend on mangrove fish, crustaceans, molluscs,

worms and other aquatic fauna as a primary source of income and/or employme

least 35,000 people (9,000 households) depend partially or wholly on mangrove firewood as a

domestic energy source.

Disaster risk

reduction

At least half a million people are protected from storms, tidal surges, erosion, saltwater

intrusion and water pollution by mangroves.

Climate change

mitigation

People around the world benefit from the climate change mitigation offered by the storage of

half a million of tons of CO2 in mangrove forests and its soils.

http://www.tokiomarinehd.com/en/release_topics/topics/2015/20160127.html

1.2

Support national and regional forecasting of future

weather and catastrophe patterns affected by changes in

the earth’s climate.

Research results are published in academic journals and presented at domestic and

international conferences and seminars such as the Geneva Association's 5th CR+I Seminar in

Sendai Japan on 28-29 October 2013.

The Geneva Association's 5th CR+I Seminar in Sendai Japan on 28-29 October 2013

Tokio Marine Group's research results and lessons learned from the Events of March 11 -the

Earthquake and Tsunami and its Impact on Human Life, Terrestrial Infrastructure and


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Consequential Losses were shared internationally and domestically with global disaster risk

prevention and insurance communities including United Nations Office for Disaster Risk

Reduction, the Government of Japan, World Bank , Asian Development Bank, World

Meteorological Organization, and other experts.

Please see the following presentation slides on the Geneva Association's website.

- Tropical Cyclone Genesis in the Northwest Pacific Ocean by Haruthoshi Tagaya of Tokio Marine

Research Institute.

- The Status of Stochastic Tsunami Hazard Assessment by Yo Fukutani of Tohoku University

(Tokio Marine & Nichido Risk Consulting).

https://www.genevaassociation.org/search?Search=&FromMonth.Month=10&FromYear.Year=

2013&ToMonth.Month=10&ToYear.Year=2013&TopicFilter=1126&OutputTypeCategoriesFilter=

11977&OutputTypeSubCategoriesFilter=31807&ResearchProgrammeFilter=1119&DocumentFilt

er=&SubSearch=&sort=ranked

1.3

Use research and improve data quality to inform levels of

pricing, capital and reserves to match changing risks.

Reflecting Climate Risk in Corporate Management

Climate Risk Management

Tokio Marine Group sees risks associated with natural disasters including the impact of climate

change, as an important factor in insurance underwriting. At Tokio Marine Holdings, risks are

controlled by allocating management resources to match net assets (i.e., keeping the level of

insured risk within allowable limits), in order to adequately absorb losses within the scope of its

net assets, even in the event of catastrophes.

TMNF has received a “strong” rating from Standard & Poor’s for enterprise risk management


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(ERM) practices as part of credit rating processes. We are striving to maintain the rating, and

sustain profitability in a consistent and efficient manner.

Collaborative Risk Research with Risk Management Solutions

TMNF and Risk Management Solutions (RMS) agreed to share information on Japanese

earthquake and typhoon risk over a long-term period, in July 2012.

The companies will enhance the quality of natural catastrophe risk analysis. Through the

partnership, RMS' models utilize TMNF's information and knowledge to build a resilient risk

management strategy, enhance risk analysis, and strengthen the accountability for risk

management.

The Climate Change Business Research Working Group

Tokio Marine Group established the Climate Change Business Research Working Group (CCWG)

under the Global Warming Research Project in fiscal 2006, in order to conduct qualitative and

quantitative analysis of climate change risk, clarify the risks and opportunities for business by

climate change, and evaluate the extent of impacts on business.

Business Continuity Plan

TMNF has also upgraded its own business continuity plan for major natural disasters after the

Great East Japan Earthquake. The BCP is activated under the following conditions:

- Earthquakes

(a) Metropolitan area (including Tokyo) – Intensity 5 or greater,

(b) Other areas – Intensity 6 or greater (on Japanese seismic intensity scale)

- Typhoons

Core atmospheric pressure of 960 hectopascals or less, in cases where a typhoon has made


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landfall on a major island in Japan

- Influenza pandemic

Cases of phase 4 or greater (WHO criteria) outbreaks in Japan

- Others

Accidents, fires, etc., on company premises, or other cases equivalent to any of the above.

* Fiscal 2014 Activities in Emergency Response Office of TMNF

TMNF is determined to undertake the following initiatives with the aim of becoming a more

disaster-resilient company.

Trainings

- Comprehensive training for senior managers and employees stationed in headquarters

(annually)

- BCP simulation training by core members of disaster response headquarters

Activities

- Review of business continuity plans and business sustainability plans (BCP/BSP) (action plans,

risk scenarios, manuals) for natural disasters and influenza pandemic

- Trial use of safety confirmation system for employees, staff and agents

- Review of disaster response headquarters (main offices, disaster zones)

- Review of service continuity structure in disaster area

Improve to continue operations in disaster areas including delivery of emergency supplies,

damage-response services, business continuation, etc.

Tokio Millennium Re

When underwriting catastrophic risks, Tokio Millennium Re uses leading international risk

models. Also, Tokio Marine Technologies conducts intensive technical reviews of models


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developed by modeling companies, and supports Tokio Millennium Re’s provision of sound

underwriting. The two companies jointly hold an annual “Global Warming and Climate Change

Summit.” Internationally-renowned researchers and modeling companies are invited to the

Summit to stimulate the participants as they exchange views about risk research, in the interest

of facilitating improvements in risk modeling.

1.4

Evaluate the risks associated with new technologies for

tackling climate change so that new insurance products

can be considered in parallel with technological

developments

Tokio Marine Research Institute

Tokio Marine Research Institute, Tokio Marine Group’s think-tank, conducts researches on

future climate and society prediction and its business impacts on Tokio Marine Group’s

management in order to help the group top management to formulate business strategies and

make a critical business decision making. Its research covered climate risk modeling

technologies and smart-community-related technologies, etc. in FY2015.

http://www.tmresearch.co.jp/ (in Japanese)

http://www.tokiomarinehd.com/en/sustainability/theme1/risk_research.html

Principle 2: Inform public policy making


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2.1

Work with policy makers nationally and internationally to

help them develop and maintain an economy that is

resilient to climate risk. This should include supporting the

implementation of emissions reductions targets and where

applicable supporting Government action that seeks to

enhance the resilience and reduce the environmental

impact of infrastructure and communities.

Public Policy Making

Tokio Marine & Nichido works with policy makers nationally and internationally by itself and

through domestic and international initiatives.

http://www.tokiomarinehd.com/en/sustainability/group_csr/initiative.html

Tokio Marine & Nichido works closely with Ministry of the Environment of Japan (MOE) and has

been approved as one of the Eco-First companies by the ministry.

https://www.env.go.jp/guide/info/eco-first/commitment.html (in Japanese)

http://www.japanfs.org/en/news/archives/news_id028505.html

Tokio Marine & Nichido became a signatory to the MOE-led initiative, the Principles for

Financial Action for the 21st Century (Financial Action Towards a Sustainable Society) in 2012.

It works closely with MOE by actively participating in the Insurance Working Group (IWG)

activities for creating a safe, secure and sustainable society. At its IWG discussion session in

January 2016, Masaaki Nagamura, Division Head of CSR at TMHD/TMNF, gave a speech on

COP21 and its consequences to the insurance industry. The meeting was attended by approx.

50 experts from life/non-life insurance industry and MOE officials.

http://www.env.go.jp/policy/keiei_portal/kinyu/gensoku-en.html

The 3rd United Nations World Conference on Disaster Risk Reduction

The 3rd United Nations World Conference on Disaster Risk Reduction (WCDRR) was held from

March 14th to 18th in Sendai and adopted new people-centered "Sendai Framework for DRR." During WCDRR, Tokio Marine held three public forum events; "Lecture Presentation of Tohoku

University and TMNF: Industry-Academia Collaborative Research Project", "The Geneva


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Association(GA)'s event: Insurance

as Contributors to Problem Solving and Impact Reduction" and "Creating Disaster-Resilient

Societies from a Business Perspective." Each event was attended by approximately 100

participants. Chairman Sumi of TMNF said "I am convinced that insurance will play a more

significant role in mainstreaming disaster risk reduction under the new framework." in his

opening remarks at the GA event. Tokio Marine Group aims to contribute to create a safe,

secure and resilient future by proactively enhancing DRR worldwide.

Contribution to the international policy-making discussions on disaster risk financing and

insurance (DRFI) among the Asia-Pacific Economic Cooperation(APEC)’s member economies

Tokio Marine is leading the discussion on reducing the climate change and disaster risk

related insurance-related protection gaps in disaster-vulnerable APEC economies through the

Asia-Pacific Financial Forum (APFF)/APEC Business Advisory Council (ABAC) which serves the

APEC’s Finance Ministers Process (FMP). Tokio Marine led the APFF’s drafting process in the

Forum’s proposal to promote DRFI in the APEC region. The proposal made its way to the

APEC-FMP, and its recommendations were incorporated in the “Cebu Action Plan,” a ten-year

roadmap to strengthen financial resiliency in the APEC region which was agreed by FMP, with

the leadership of the Philippine presidency. Under the Cebu Action Plan, DRFI was recognized as

a priority issue at APEC’s FMP.

During the preparatory stage, and in response to the request of the Philippine Ministry of

Finance, the host for 2015 APEC year, Tokio Marine assisted in planning a two-day seminar on

DRFI and micro-insurance in Bacolod City, the Philippines, on 29-30 April, 2015. Tokio Marine

reported on APFF’s proposal to promote DRFI in the region, in addition to moderating a session

on disaster risk modeling. The seminar was attended by approx. 80 finance ministry officials,

regulators and international organizations.


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Even after the APEC presidency was transferred to Peru for its 2016 APEC year, DRFI continues

to stay in its priority list. In fact, the Peruvian Ministry of Economy and Finance hosted a

two-day seminar on DRFI with a focus on how to advance disaster risk data collection and the

designing of domestic risk pooling mechanism. As an APFF sherpa to promote DRFI discussions,

Tokio Marine contributed to the planning of the workshop by inviting risk modeling firms and an

insurance regulator from Chile to substantiate the discussion, on top of presenting private

sector perspective in designing a risk pooling mechanism with public-private sector

collaboration. The workshop was attended by approx. 50 finance ministry officials from the

APEC member economies.

2.2

Promote and actively engage in public debate on climate

change and the need for action.

Public Debate on Climate Change and Natural Disaster and the Need for Action

Tokio Marine & Nichido hosted the Geneva Association's 5th Climate Risk and Insurance

Seminar in Sendai Japan in October 2013. Ms. Margareta Wahlstrom, the United Nations Special

Representative of the Secretary-General for Disaster Risk Reduction, Mr. Soichi Nakajima,

Director for International Disaster Management Cooperation in the Cabinet Office, the

Government of Japan, representatives of World Bank, Asian Development Bank, World

Meteorological Organization, Tohoku University and insurance experts participated.

Shuzo Sumi, Chairman of Tokio Marine & Nichido made an inspiring opening speech expressing

“there is much room for insurance to be explored as a useful social measure to better prepare

for the next large scale disaster.” Mr. Harutoshi Tagaya, Managing Director of Tokio Marine

Research Institute, spoke on “Tropical Cyclone Genesis in the Northwest Pacific Ocean” and Mr.

Masaaki Nagamura, General Manager of Tokio Marine & Nichido presented on “Review of the

Insurance Industry Responses to March 11. “

https://www.genevaassociation.org/search?Search=&FromMonth.Month=10&FromYear.Year=


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2013&ToMonth.Month=10&ToYear.Year=2013&TopicFilter=1126&OutputTypeCategoriesFilter=

11977&OutputTypeSubCategoriesFilter=31807&ResearchProgrammeFilter=1119&DocumentFilt

er=&SubSearch=&sort=ranked

Contribute to the UNISDR/ The Geneva Association NAT-CAT Case Study Report

The Geneva Association produced a case study report on natural catastrophes in spring 2013.

The project served the efforts of the United Nations Office for Disaster Risk Reduction (UN ISDR)

to pave the way for creative discussions among the public and private sectors on how insurance

mechanism can effectively enhance disaster risk resiliency of the society. TMNF contributed to

the report by submitting an article on how the Japanese residential earthquake insurance

system responded to the 11 March 2011 Tohoku earthquake and tsunami.

Contribution to the Development of the UNEP FI Principles for Sustainable Insurance

As a member of the Insurance Commission of the UNEP Finance Initiative (UNEP FI) and a Board

Member for Asia, TMNF has been participating in UNEP FI's sustainability research and policy

development for the insurance industry.

TMNF supported and became a founding signatory member of the Principles for Sustainable

Insurance (PSI) which UNEP FI launched to coincide with the United Nations Conference on

Sustainable Development (Rio + 20) in June 2012.

As a PSI signatory, TMNF participated in "A dialogue with the Indian insurance industry on the

PSI", which was jointly organized by the Insurance Institute of India (III) and UNEP FI in January

2013. TMNF presented its experience in responding to the environmental and social needs, in

an attempt to drive the interest of Indian insurance market players towards sustainable

business conduct. In addition, as a board member of the UNEP FI-PSI, TMNF is participating in

the development of strategies to promote the PSI.


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Currently, PSI is running a project to enhance global resilience, in which TMNF is involved.

http://www.unepfi.org/psi/

Supporting National Government/Agencies, Local Governments

Following the Great East Japan Earthquake, Japanese national, prefectural, and municipal

governments are in the process of major revisions of their tsunami disaster scenarios in coastal

regions, and updating their business continuity plans (BCPs).

Tokio Marine & Nichido Risk Consulting Co. (TRC) provides catastrophe risk assessments for

local governments as well as consulting for BCPs in response to disasters.

ClimateWise “Thought Leadership”

Kunio Ishihara, TMNF’s ex-Chairman of the Board, submitted an article to ClimateWise on “the

role of insurers in strengthening business resilience to climate risk,” in February 2013. Building

on the lessons from the Tohoku Earthquake and Thai floods, the article highlighted examples of

how insurers can mobilize expertise to help society recover from disaster in the aftermath of a

catastrophe.

http://www.climatewise.org.uk/issue-three/

Contribution to the Caring for Climate report “The Business Case for Responsible Corporate

Adaptation”

The United Nations Global Compact (UNGC), the secretariat of the United Nations Framework

Convention on Climate Change (UNFCCC) and the United Nations Environmental Programme

(UNEP) published A Caring for Climate Report “The Business Case for Responsible Corporate

Adaptation: Strengthening Private Sector and Community Resilience in December 2016. Tokio

Marine Nichido helped the secretariat to publish this report by providing its Green Gift and


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Mangrove Planting Project titled “ Protecting Natural Resources and Building Local Resilience to

Natural Disasters” is on Page67-69.

https://www.unglobalcompact.org/library/3701

Contribute to public debate on climate change through The Geneva Association’s seminar

In the run up to COP21, SCOR Foundation, Toulouse School of Economics, and The Geneva

Association co-organized a two-day seminar on climate risks entitled “Decision making and

insurability in a context of climate uncertainty” on 9-10 June, 2015 in Paris. Tokio Marine

participated as a panelist at a roundtable on climate risks insurability. The speech was featured

in the Insurance Day.

http://scor-climaterisks-2015.com/seminar-content

https://www.insuranceday.com/ece_incoming/tokyo-facing-increased-typhoon-risk.htm

In December 2015, to coincide with COP21, the Geneva Association hosted a one-day seminar

with the OECD to discuss climate change and its impact to the insurance industry. Tokio Marine

participated in the event to offer its views reflecting the Japanese insurance industry’s

experience in dealing with extreme weather events. Subsequently, the EE+CR WG wrote up a

report entitled“COP21 Paris Agreement: What Does It Mean for the (Re)

insurance Sector?”Tokio Marine participated in the drafting process.

https://www.genevaassociation.org/media/942906/whatdoescop21meanforinsurance

Participating in the Financial Stability Board(FSB)’s Taskforce on Climate-related Financial

Disclosure (TCFD)

In January 2016, Masaaki Nagamura, Division Head of CSR, became a member of the TCFD

under the auspices of the FSB. The Phase 1 report was completed in March 2016, and was

subsequently submitted to the FSB’s plenary meeting on 31 March, 2016. Mr.Nagamura took


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part in the reporting session as one of three TCFD members, as a result of which, the report was

welcomed by the FSB plenary. Later in the day, a stakeholder outreach event was co-hosted by

Bloomberg LP (Tokyo) and Tokio Marine, where briefing was made to the audience of approx.

120, representing financial/non-financial industries, government offices, NGOs, academia and

media.

https://www.fsb-tcfd.org/

Principle 3: Support climate awareness amongst our customers

3.1

Inform our customers of climate risk and provide support

and tools so that they can assess their own levels of risk.

Activities supporting climate awareness amongst our Societies

Tokio Marine Group holds seminars related climate risks mainly for public.


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TMNF and Tokio Marine Research Institute hosted the natural disaster risk seminar entitled

"Frontier of natural disaster research ―How Business Community responds to the future

explosion of Mt. Fuji" on November 4 2015.

-Seminar Presenters:

Dr. Masato Koyama, Professor, Center for Integrated Research and Education of Natural

Hazards, Shizuoka University

Dr. Takayoshi Iwata, Professor, Center for Integrated Research and Education of Natural

Hazards, Shizuoka University

Mr. Yasuhiro Takahashi, General Manager, Toyota Motor Corporation

http://www.tmresearch.co.jp/seminarresult/seminar_10/ (in Japanese)

Climate Change-related Consulting Services

Tokio Marine & Nichido Risk Consulting offer climate change consulting services to a diverse

range of corporations.

Examples:

・Integrated consulting in the environmental field

(Consulting on environmental risk analysis, support to develop ISO environmental management

systems, soil contamination and environmental liability)

・Consult for business risk on solar power plant projects - Soil contamination consulting,

・Consult environmentally friendly and safe driving

・Consult carbon management (lifecycle assessment) for products and services

・Publication of Talisman magazine, organization of environmental seminars


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3.2

Encourage our customers to adapt to climate change and

reduce their greenhouse gas emissions through insurance

products and services.

“Green Gift” Project

Since May 2009, TMNF has been promoting paperless business conduct by recommending

policyholders to choose online insurance policy wording for core products such as personal auto

and fire policies. When a customer selects the internet option instead of receiving paper

wordings, the company donates the cost of planting two mangrove trees for each policy (which

is known as the “Green Gift” project).

- Results for fiscal 2015

- Ratio of paperless auto insurance policy wordings to total: approximately 74%

- Reduction in the annual amount of paper used: approximately 2,600 tons

As articulated in the Sustainability Report, the project has covered nine countries in the

Asia-Pacific, with a total coverage of 9,474 hectares. Conceptually, TMNF offers its customers an

opportunity to satisfy their inherent desire to behave environment-friendly by pledging to plant

mangrove on their behalf, while exercising its traditional function as an insurance company.

TMNF initiated this project in the hope to work together with customers to protect the global

environment.

The planting process requires the involvement of national or rural forestry authority, NGOs with

credible knowledge and experience, and the local community. With 17 years of continuous

collaborative efforts, the project has reached a stage where local communities are running their

lives enriching the bio-diversity surrounding the mangrove forest and harvesting from the

revived natural system.

In the wake of March 11, 2011 earthquake and tsunami which hit Japan’s Tohoku Region, a

number of TMNF’s production offices heard voices of expectation from their customers and

agents to introduce an initiative to preserve the nature of Japan, its home country, in addition


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to the mangrove planting activities that take place overseas. In response, TMNF launched the

“Green Gift II” project effective October 2013. While maintaining its flagship mangrove planting

activities, “Green Gift II” broadened the scope of qualified insurance products and expanded

the scope of subject materials from policy wordings to include policies and renewal instructions,

thus enabling support to promote domestic nature conservation efforts taking place in various

parts of Japan. By dividing Japan into 16 regional blocks, TMNF’s branch operation in charge of

each regional block is entitled to plan environmental activities intended to serve local

community residents to learn the importance of nature conservation. The planning and

organization is conducted with the involvement of regionally active NPOs which specialize in

environmental issues, and with the assistance of regional Environmental Partnership Offices,

which are administrative arms of the Ministry of the Environment, along with the Nippon NPO

Center, which functions as the national coordinator of the program. It marked the first

opportunity for TMNF to engage with a group of NPOs to put in place a program which linked

insurance products with local communities on a nationwide scale. By the end of fiscal 2013, all

16 blocks successfully initiated their activities. The “Green Gift II” is run in line with the Act for

the Promotion of the Environmental Activities through the Enhancement of Environmental

Education, which encourages private sector to work with local communities and the public

sector to promote awareness on environmental protection. The project thus receives official

“support” from the Minister of the Environment.

http://www.tokiomarinehd.com/en/sustainability/theme2/productservice02.html

Provision of Insurance Products and Services Related to Solar Power Plants

Japanese Government launched the feed-in tariff scheme for renewable energy in July 2012.

Tokio Marine group companies provide a variety of insurance products, investment funds and

consulting services related to renewable energy.


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TMNF launched a package program which combines insurance coverage (e.g. property, liability,

warranty) and risk consulting services for solar power plant facilities in July 2012.

- Planning stage

・Regulatory risk: Consulting on environmental regulations

・Litigation risk: Environmental/natural disaster hazard surveys, soil contamination surveys

・Weather risk: Diagnosis of sunshine and wind condition risks

- Construction stage


・Litigation risk: Contractors’ liability insurance, facility managers’ liability insurance, product

liability insurance, directors’ and officers’ liability insurance

・Accident and disaster risk: Contractors’ all risks insurance, disaster-recovery assistance

services

-Operational stage


・Litigation risk: Contractors’ liability insurance, facility managers’ liability insurance, directors’

and officers’ liability insurance

・ Accident and disaster risk: Property insurance, miscellaneous pecuniary loss insurance,

disaster-recovery assistance services, extreme weather insurance, weather derivatives

http://www.tokiomarinehd.com/en/sustainability/theme2/productservice02.html

3.3

Seek to increase the proportion of non-life claims that are

settled in a sustainable manner.

The Disaster Recovery Support in collaboration with BELFOR

The services of BELFOR contribute to the reduction of waste by promoting the cleaning and


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repair of buildings and facilities as part of disaster recovery support. In partnership with BELFOR

Japan, TMNF is offering disaster recovery support services for corporate comprehensive

property insurance. Under these riders, in the event a client experiences damage, BELFOR

immediately dispatches personnel to the site and takes steps to protect the damaged property.

TMNF responds to pay out insurance claims to cover the costs for the restoration of the

equipment and facilities. After the Great East Japan Earthquake and flooding in Thailand, TMNF

provided support for many corporations for the early recovery of their business activities.

The Use of Recycled Parts in Auto Insurance Claims Services

We encourage customers to accept repairs as a first choice to deal with damage from

automobile accidents. If replacement parts are required, we urge customers to accept recycled

parts. In fiscal 2015(2014), approximately 26,893 (25,849) parts were recycled in this way.

3.4

Through our products and services assist markets with

low insurance penetration to understand and respond to

climate change.

Weather Insurance and Micro-insurance in Developing Countries

Since 2004, IFFCO-TOKIO General Insurance (ITGI) in India has been offering index-type weather

insurance to compensate farmers for revenue losses due to drought. ITGI provides

approximately 1.5 million farmers with micro insurance products related to climate risks.

In FY 2012 results: "Barish Bima Yojna" for summer crops was distributed to 1,140,000 farmers,

whereas "Mausam Bima Yojna" for winter crops offered coverage to 420,000 farmers

throughout India.

Gross written premium for Crop & weather insurance for FY2015 was Rs 912 Million.

ITGI has provided approximately 1.7 million low-income households with medical insurance


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products “Rashtriya Swasthya Bima Yjna” since 2011.


http://www.tokiomarinehd.com/en/sustainability/theme1/productservice01/poverty.html

Principle 4: Incorporate Climate Change into our investment strategies

4.1

Evaluate the implications of climate change for

investment performance and shareholder value.

Implication of climate change for investment performance and shareholder value

Tokio Marine Group evaluated the implications of climate change for investment performance

and shareholders value and found that it should prioritize support services for Japan’s

renewable energy implementation and expansion among various climate change issues.

Signing United Nations Principles for Responsible Investment

Tokio Marine Asset Management (TMA) established the Responsible Investment Committee


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internally in July 2010, for specialists to conduct research and analysis related to environmental,

social, and governance topics (ESG). TMA agreed to the principles and concepts of the United

Nations Principles for Responsible Investment (UN PRI) and became a signatory in April 2011.

TMNF signed the UN PRI in its position as an insurance company in August 2012.

In addition, Tokio Marine Capital signed the UN PRI in its position as a private equity fund in

April 2013. TMA, TMNF and TMCap are working toward initiatives that consider ESG issues in

carrying out their respective activities. These companies participated in various PRI Japan

Network activities to promote ESG investment.

http://www.tokiomarinehd.com/en/sustainability/group_csr/evaluation/index.html

Signing CDP climate Change Investor and Water Disclosure Initiatives

TMNF supports CDP, and endorsed CDP3 in 2005 as an institutional investor. TMNF also

endorsed CDP Water as an institutional investor in 2010.

4.2

Incorporate the material outcomes of climate risk

evaluations into investment decision making.

Tokio Marine Group’s climate risk evaluation into investment decision making

TMA began providing Japanese equity SRI funds and Global SRI investment trusts in fiscal 2006,

based on its own independent ESGR (environment, social, governance, risk management)

analysis and evaluation.

According to Tokio Marine Group’s climate risk evaluations, renewable energy is a priority in

developing its business and tackling climate change.

(1) Investment in Environmental Technologies (Renewable Energy)

TMA launched TM Nippon Solar Energy Fund 2012 managing 9 billion yen in 2012, TM Nippon

Solar Energy Fund 2013 managing 13.5 billion yen in 2013, and TM Nippon Solar Energy Fund

2014 managing 7.9 billion yen in 2014 for large-scale photovoltaic installations in Japan. These

funds are for large investments in domestic photovoltaic installations for the national “Feed-in


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Tariff Scheme for renewable energy,” which started operating in July 2012.

(2) Investing in Clean Energy

TMNF is investing in environmental venture businesses such as clean energy development

projects, industrial waste treatment businesses, and so on. Total investment in this area since

2,000 has amounted to several billion yen.

4.3

Communicate our investment beliefs and strategy on

climate change to clients and beneficiaries.

Communication

For institutional investors, TMA launched a socially responsible investment (SRI) fund targeting

Japanese companies in January 2006. Leveraging the comprehensive risk management

know-how of Tokio Marine Group, this fund aims to obtain long-term and stable added value

based on the Group's unique environmental, social, governance and risk management (ESGR)

analysis and evaluation. In March 2010, the company also launched mutual funds for overseas

institutional investors.

http://www.tokiomarinehd.com/en/sustainability/theme1/susinvestmen.html

TMA intends to fulfill its social responsibilities as an institutional investor and improve

investment performance over the long term while giving due consideration to ESG issues in its

asset management operations.

TMA discloses Investment philosophy, investment process, risk management system,

investment team and Exercise of the Voting Rights on the website.

http://www.tokiomarineam.com/investment_approach/voting_rights.htmlhttp://www.tokioma

rineam.com/about_us/pri.html

Japan’s Stewardship Code

In May 2014, TMNF announced its acceptance of “the Principles for Responsible Institutional


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Investors (Japan’s Stewardship Code) - To promote sustainable growth of companies through

investment and dialogue -. TMNF disclosed the policy on how it fulfilled the stewardship

responsibilities in August 2014 and September 2015.

http://www.fsa.go.jp/en/news/2014/20140610-1/01.pdf

http://www.tokiomarine-nichido.co.jp/company/about/policy/stewardship.html (in Japanese)

http://www.fsa.go.jp/en/refer/councils/stewardship/20140407.html

http://www.tokiomarinehd.com/en/sustainability/environmental/investfinan.html


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Principle 5: Reduce the environmental impact of our business

5.1

Engage with our supply chain to work collaboratively to

improve the sustainability of their products and services.

The Group Code of Conduct

Tokio Marine & Nichido Group formulated the Group Code of Conduct and the Principle of

Transactions, which outlines the items that should be followed in terms of conducting

transactions. In doing so, the Group and business partners fulfill their social responsibilities

while also mutually achieving sustainable development.

Please see Section 4 of the code as indicated below.

“4. Consideration for the environment

Tokio Marine & Nichido Group promotes the purchase of products with the least impact on the

environment (purchase of green products) and works in cooperation with business partners to

promote the creation of a recycling-oriented society.”

http://www.tokiomarinehd.com/en/sustainability/governance/valuechain.html

Support for taking Eco-Action 21 certification

For insurance agents operating auto maintenance shops, TMNF Auto Support Center provides

support for certification and registration of Eco-Action 21(environmental system for small- and

medium-sized enterprises), the environmental management system for small- and

medium-sized enterprises formulated by the Ministry of the Environment. Specifically, the

company holds business seminars for interested agents to explain the necessary steps for

certification and offers practical support. Through the company's support, the auto

maintenance shops have acquired certification.

Promoting the use of recycled auto parts


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From the perspective of creating a recycling-based society and reducing the burden on the

environment (i.e., constraining CO2 emissions from the manufacture of parts*), Tokio Marine

Group is calling on its value-chain partners to engage in actively using recycled auto parts when

repairing vehicles used by Group companies.

Furthermore, TMNF, Nisshin Fire & Marine Insurance and E. design Insurance are taking action

in calling for the use of recycled auto parts and proposing the use of these parts to individual

and corporate customers that have met with accidents.

Number of instances of use of recycled auto parts (FY2015, TMNF): approximately 26,893

(+4.0% compared with the previous year)

Recycled parts are said to have an effect in reducing CO2 emissions compared with new parts:

for example, 23.1 kg for a bumper, 97.3 kg for a door, etc. (Source: Survey by the General

Insurance Association of Japan)

With the approval of customers, TMNF is making efforts to expand the use of recycled parts.

The company's actions include distributing pamphlets to boost awareness of the Recycled Parts

Usage Promotion Campaign among agents and auto repair shops, as well as creating content for

tablet devices to aid these businesses in easily explaining the merits of recycled parts to

customers.

5.2

Measure and seek to reduce the environmental impact of

the internal operations and physical assets under our

control.

Environmental Impact Reduction Activities

Tokio Marine Group continues working to reduce the environmental impact arising from its

business activities.

TMNF installed or upgraded energy efficient equipment and devices in offices, and applied

energy-saving practices for lighting and air conditioning, installed teleconferencing systems in


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major locations, converted to “thin client” ICT system network design for in-house intranet,

introduced smaller vehicles, fuel-efficient vehicles, hybrid vehicles and electric vehicles to

company fleet, and purchased renewable energy certificates (Wind Power).

In addition, not only TMNF but also the entire Group achieved carbon neutrality and carbon

positive status for the fiscal 2015 by having the CO2 absorbed and fixed through mangrove

planting in the Asia-Pacific region and the purchase and use of green electricity certificates to

offset CO2 emissions arising from its business activities.

29 major environmental reduction projects are implemented. Major activities are as follows.

- Electricity usage reduction activities

- Set air-conditioning room temperature at 28 degree Celsius during summer season and 19

degree Celsius during winter season

- Turn off lights of vacant meeting and floor rooms

- Go Go challenge Initiatives to eliminate overtime work

- Gasoline usage reduction activities

- Eco-friendly safety driving Initiative

- Promote use of public transportation

- Paper usage reductions activities

- Promote 2 in 1 paper-printing practice

- Promote conducting less-paper and paper-less meetings

- Visualization of number of papers printed and copied

Tokio Marine Group promotes group-wide environmental reduction activities to achieve its

medium-term emission reduction target of -3% from the FY2014 level. Each group company

sets emissions reduction targets or energy consumption reduction targets to contribute to


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achieving group emission reduction targets.

http://www.tokiomarinehd.com/en/sustainability/theme2/reduction.html

5.3

Disclose our direct emissions of greenhouse gases using a

globally recognised standard.

Tokio Marine’s CO2 emissions for FY2015

Tokio Marine Group continues working to reduce GHG emissions arising from its business activities.

Please see Tokio Marine’s CO2 emissions as follows.

Tokio Marine Group (Global) - CO2 emissions in FY2015

・ Scope 1: 14,954 tons ( +0.8% from the previous year)

・ Scope 2: 77,854 tons ( -0.5% from the previous year)

・ Scope 3 (Business Travel): 5,992 tons (+7.5% from the previous year)

・ Sub-Total: 98,800 tons (+0.5% from the previous year)

・ Scope 3 (Others): 23,480 tons

・ Grand-Total: 122,280 tons

TMNF (Japan) - CO2 emissions in FY2015

・ Scope 1: 7,756 tons (-2.9% from the previous year)

・ Scope 2: 44,177 tons (-7.5% from the previous year)

・ Scope 3 (Business Travel): 1,658 tons (+6.9% from the previous year)

・ Sub-Total: 53,590 tons (+6.9% from the previous year）

・ Scope 3 (Others): 17,041 tons

・ Grand-Total: 70,631 tons

Tokio Marine Group’s CO2 emissions slightly increased in FY2015 from the previous year mainly due

to the expansion of international insurance operations in U.S.A. and UK.


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Tokio Marine’s Emission Reduction Target against baseline

Tokio Marine’s CO2 Emission reductions targets and results are as follows.

- Group’s medium-term absolute target for FY2015-2017: -3% compared with the FY2014 level

(Emission reduction initiatives are in progress.)

- Group’s short-term absolute target for FY2015: -1% compared with the FY2014 level (This target

was not achieved mainly due to business expansion in international insurance business.)

- TMNF’s long-term absolute target for FY2050: -60% compared with FY2006


- TMNF’s long-term absolute target for FY2020: -40% compared with FY2006


http://www.tokiomarinehd.com/en/sustainability/theme2/reduction.html

http://www.tokiomarinehd.com/en/sustainability/library/pdata.html

Initiatives Toward Becoming Carbon Neutral

Mangrove forests have an effect on the prevention and mitigation of global warming by

absorbing and fixing a significant volume of CO2. Under the concept of "Insurance for the

Future of the Earth," Tokio Marine Group has engaged in the Mangrove Planting Project since

1999. As of March 2016, 9,474 hectares

of mangrove forest have been planted through this project in nine countries, primarily in Asia.

Each Group company strives to reduce the environmental burden through energy conservation

and resource conservation. At the same time, Tokio Marine Group aims to achieve carbon

neutral status on a global basis, offsetting the CO2 emissions generated by its business activities


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with CO2 absorption and fixation through means such as mangrove planting* and Tradable

Green Certificates (wind power).

CO2 emissions from Scope 1+2+Scope 3 Business Travel in fiscal 2015 amounted to 98,800 tons,

or 100.5% of emissions in the previous year. On the other hand, the CO2 absorption and fixation

effects through mangrove planting amounted to 133,447 tons and the entire Tokio Marine

Group (domestic and overseas) thus became carbon neutral.

* The calculations of the amount of CO2 emissions, CO2 absorption and fixation through

mangrove planting and CO2 reduction through the purchase of renewable energy have been

verified by a third-party organization (Ernst & Young Sustainability Co., Ltd.). (Amounts of CO2

absorption and fixation through mangrove planting are based on evaluations and calculations by

the Central Research Institute of Electric Power Industry (CRIEPI).

5.4

Engage our employees on our commitment to address

climate change, helping them to play their role in

meeting this commitment in the workplace and

encouraging them to make climate-informed choices

outside work.

Encourage Employees to Reduce Environmental Footprints

The key environmental impact of Tokio Marine Group’s business activities is CO2 emissions

(electricity and gasoline) and paper consumption. Each Group company has introduced an

environmental management system (EMS) to reduce the environmental impact of its business

activities, and encouraged its employees to reduce environmental footprints.

CSR Communication Meetings

Not only Tokio Marine & Nichido but also Tokio Marine Holdings hold CSR Communication

Meetings across domestic and international subsidiaries to promote the exchange of opinions

with employees, with the goals of deepening employees’ understanding of CSR initiatives and

implementing these initiatives throughout the organization as well as reflecting these opinions

in future CSR initiatives and measures. These meetings feature a straightforward exchange of

opinions on Tokio Marine Group's CSR initiatives and CSR activities conducted in respective


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workplaces. Comments received from participants included, "Understanding the significance

and purpose of CSR activities and ‘CSR through our core businesses’ has led to increased

motivation."

CSR Training

TMNF conducts CSR training in the form of e-Learning for all employees once a year to

promote understanding and sharing of the philosophy behind the company's CSR

activities. In addition to affirmation of the CSR Charter, the training includes topics such

as confirmation of environmental impact reduction targets and the environmental

management system and confirmation of the company's community and social

contribution initiatives. Key persons in each workplace promote participation in the

training.

http://www.tokiomarinehd.com/en/sustainability/group_csr/promotion.html

Marunouchi Citizen Environment Forum

Collaborating with Mitsubishi Corporation(MC), TMNF hosts “Marunouchi Citizen Environment

Forum” annually to raise environmental awareness of Marunouchi (in which head offices of

TMNF and Mitsubishi Corporation are located) people including employees of TMNF and MC, at

least once a year. In the FY2015 forum, Mr. Takeshi Okada, a former head coach of the Japan’s

national football team, gave a lecture about future of earth and significance of the global

environmental protection. This forum functions an enlightening opportunity for employees.


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Principle 6: Report and be accountable

6.1

Ensure that the organisation is working to incorporate

the Principles into business strategy and planning by

encouraging the inclusion of the social and economic

impacts of climate risk as part of the Board agenda.

Person Responsible for climate strategy

Takayuki Yuasa, Managing Director, is supervising Corporate Planning Department, and

responsible for Corporate Social Responsibility of Tokio Marine Group.

http://www.tokiomarinehd.com/en/company/officers/


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Dedicated Division

Tokio Marine Group has a dedicated CSR Division (CSR Division, Corporate Planning

Department) to work on incorporating the Principles into business strategy and planning by

encouraging the inclusion of the social and economic impacts of Climate risk as part of Board

agenda.

CSR Board and CSR Key Person Conference

Tokio Marine Group regularly convenes CSR Board (Presidents of TMHD/TMNF and group

companies participate) as well as CSR Key Person Conference (TMHD and the group companies'

managers in CSR participate). These bodies evaluate various types of CSR initiatives and discuss

response measures for CSR issues (important issues to be shared by each Group company) for

the entire Group.

CSR Dialogue

TMHD also convenes CSR Dialogue inviting external experts. The dialogues give us opportunities

to hear outside opinions about our awareness and approaches concerning Group CSR issues.

These opinions and other ideas are then reflected in our CSR strategy and our approach to each

individual CSR issue.

Board of Directors

The Company's Board of Directors is reported on the CSR activities of the entire Group while

formulating the Overall Group CSR Strategy (medium-term plan and single fiscal-year plans).

CSR promotion officers at each group company play leading roles in promoting and handling

common CSR issues to be addressed by the entire Group as well as in implementing CSR

activities based on the characteristics of each business and local communities.


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Risk Management

TMHD promotes the enhancement and sophistication of the risk management system for the

entire group. The Company also checks and examines the capital allocation plans to make sure

that they are appropriate in terms of equity capital and manages quantitative risks (including

insurance risk related to natural hazard) for the Group in order to retain credit ratings and

prevent financial distress.

Stakeholder Engagement

In implementing high-quality CSR management, Tokio Marine Group has various types of

relationships to customers, employees, agents, shareholders and investors, SRI rating agencies,

Media, NGOs and NPOs, academia and external experts to identify ESG issues of group

companies based on opinions and evaluations through stakeholder engagements.

http://www.tokiomarinehd.com/en/sustainability/group_csr/engagement.htmlProgress reports

on our CSR strategy are given regularly to corporate management at least once a year.


http://www.tokiomarinehd.com/en/sustainability/group_csr/approach.html

http://www.tokiomarinehd.com/en/sustainability/group_csr/promotion.html

http://www.tokiomarinehd.com/en/sustainability/management/internalcontrol/risk.html

6.2

Publish a statement as part of our annual reporting

detailing the actions that have been taken on these

principles.

Please see the above and our Sustainability Report 2015.

http://www.tokiomarinehd.com/en/sustainability/

http://www.tokiomarinehd.com/en/sustainability/group_csr/evaluation/index.html

http://www.tokiomarinehd.com/en/sustainability/library/report.html


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