Japanese insurers take sound approach toward ESG goals: Fitch Ratings

Insurers may invest in ESG assets only when they offer attractive risk-return profile.

Fitch Ratings described Japanese insurers to have a “well-balanced approach to Environmental, Social, and Governance (ESG) factors.”

This approach reconciles pressures from ESG activists and government strategies with policyholder interests. Environmental issues are particularly important for Japanese insurers, aligning with Japan's goal of net-zero carbon dioxide emissions by 2050. 

They monitor progress on similar goals in Europe and North America and actively participate in prominent ESG initiatives to shape ESG criteria.

Fitch expects Japanese insurers to continue integrating ESG considerations into their risk management frameworks. 

They are anticipated to navigate ESG complexities by considering factors like pro- and anti-ESG movements, the government's stance on "transition finance," and the risk-return profiles of ESG investments. 

Japanese insurers will likely invest in ESG assets only when they offer an attractive risk-return profile.