With People x Planet, Nippon Life Insurance steps up to system-level

With more than 15 million policyholders and $675 billion in assets, Nippon Life Insurance Company sits at the center of Japan’s economic life.

Its balance sheet of nearly 100 trillion yen makes Osaka-based Nippon Life Japan’s largest private asset owner. Its investment decisions affect the financial security of policyholders who make up at least 12% of Japan’s population.

Nippon Life invests in roughly 3,300 companies across Japan, with significant positions in major companies, giving it unusual leverage over the country’s business ecosystem.

With those household savings at stake and that “system-level” responsibility, Nippon in recent years has had to reconsider what its sustainable investing portfolio should look like. The inflation and economic hardships of the last few years has caused the insurance giant to emphasize the ‘S,’ for social, along with the ‘E,’ for environment. 

“When financial well-being is under strain, people have to prioritize today’s bills over tomorrow’s sustainability.” Nippon’s Takeshi Kimura tells ImpactAlpha. “Climate policies struggle to gain public support if people’s well being does not improve.”

Kimura, a special adviser to Nippon’s board, laid out a new framework for what Nippon Life calls P-squared investing, short for People times Planet. The thesis: Social and environmental outcomes are interconnected and must be addressed together, including through investment policies. P-squared is part of Nippon Life’s broader embrace of “system-level investing” across its portfolio, as outlined this month in a case study produced with The Investment Integration Project.

Nippon aims to invest ¥5 trillion ($35 billion) by 2030 to investment opportunities aligned with the United Nation’s Sustainable Development Goals. As of the end of fiscal year 2024, the insurer had deployed ¥3.3 trillion toward that strategy.

All told, impact investing assets in Japan reached ¥17.3 trillion ($120 billion) in 2024. Most impact investing activity came from venture funds, banks, and large asset owners like Nippon Life. 

Japan’s largest pension fund, the Government Pension Investment Fund, or GPIF, last March published a sustainability investment policy that explicitly incorporates impact – and appointed Nissay Asset Management, Nippon Life’s asset management arm, to research Japan’s impact investing market.

People times planet

For much of the last decade, Japan’s institutional investors have been among the world’s most active adopters of environmental, social, governance, or ESG, considerations, spurred by the 2015 decision of the GPIF,  to integrated ESG principles (for background see “Hiro’s Journey: Japan’s pension fund chief rallies ‘universal owners’ around sustainable finance”). Nippon Life had embedded environmental and social screening across much of its portfolio. Most of their ESG strategy focused on climate…