Nippon Life Unveils Nature Finance Approach With ERM Backing

• New Nature Finance framework applies Planetary Boundaries science to investment and financing.
• Uses biodiversity metrics including Net Primary Production (NPP), human ecosystem use (HANPP), and endangered species.
• Case studies span palm oil supply chains, alternative proteins, cobalt recycling, urban housing, and reforestation.

Tokyo-Based Insurer Steps Into Nature Finance

Nippon Life Insurance Co. has launched a “Nature Finance Approach” to measure how corporate activity affects ecosystems, with development support from sustainability consultancy ERM.

The framework adapts the Planetary Boundaries concept, developed by the Stockholm Resilience Centre, into financing decisions. It gauges impacts using Net Primary Production—the energy sustaining ecosystems—alongside human appropriation of that energy and endangered species data.

Case Studies Bring Finance Into the Forest

To ground the methodology, Nippon Life mapped out case studies that link business operations directly to ecosystem outcomes:

• Palm Oil Farmers: Helping smallholders in Indonesia raise yields could avoid deforestation, cutting human appropriation of ecosystem energy (HANPP).
• Alternative Proteins: Startups producing beef substitutes could reduce pastureland expansion in Latin America, easing deforestation pressures.
• Cobalt Recycling: Recovering metals from used electronics avoids new mining and the associated forest loss in the Democratic Republic of Congo.
• Urban Housing: High-rise residential development in Africa was modeled as a way to meet population growth needs without expanding into forests.
• Reforestation Funds: A Brazil-based fund planting native trees both increases Net Primary Production and supports endangered species.

The approach also enforces Do No Significant Harm principles, checking that projects don’t create new environmental or social risks.

Investor Push Into Biodiversity

“As a long-term institutional investor, we believe it is important that the global environment be maintained within a safe and stable operating space,” said Yasutoshi Miyamoto, general manager of Nippon Life’s Responsible Investment Strategy Office. “Using this approach as a starting point, through dialogue and research with various stakeholders in industry, government, and academia, we intend to refine the approach to make it more robust and expand its application to investment and financing practices.”

ERM’s Kosuke Kanematsu added: “We developed the framework for this Nature Finance Approach in alignment with the latest scientific guidance around nature. We look forward to seeing Nippon Life’s ambitious vision for accelerating efforts around nature restoration and regeneration spark dialogue and action among companies, financial institutions and investors committed to driving a nature-positive future.”

A Potential Template for Global Markets

With roughly ¥85 trillion ($540 billion) in assets under management, Nippon Life is among Japan’s largest institutional investors. Its move is one of the first attempts by a global insurer to quantify biodiversity impacts with the same discipline used for climate finance. If replicated, the approach could set a new baseline for how capital flows into sectors tied to forests, land use, and biodiversity.

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