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Aioi Nissay Dowa Insurance is collaborating with a UK-based startup to develop an app that assesses the impact of corporate activities on the natural environment and biodiversity, and quantifies these risks in economic terms. This initiative comes amid growing pressure from investors and stakeholders for businesses to adopt environmentally conscious practices. By enabling client companies to visualize their risks through the app, Aioi Nissay Dowa aims to support informed management decisions that balance business activities with environmental conservation.
Leveraging Oxford University's Expertise
Interest in biodiversity conservation is increasing among Japanese companies. In response to the global call by the Taskforce on Nature-related Financial Disclosures (TNFD) for businesses to disclose nature-related risks, 320 companies worldwide made an "Early Disclosure Statement" this January, with Japanese companies accounting for 80 of these, or one-fourth of the total. In April, Japan enacted the "Act on the Promotion of Biodiversity Enhancement Activities," establishing a framework for government approval of conservation plans formulated by companies.
Despite the rising demand for tools to assess nature-related risks, such tools are currently limited. Recognizing this gap, Aioi Nissay Dowa reached out to Professor Kathy Willis, a biodiversity expert at Oxford University. The company decided to partner with Natural Capital Research Ltd. (Natcap), founded by Professor Willis in 2018, to co-develop the app.
Natcap, a collective of environmental science experts, specializes in evaluating the economic value of natural environments and ecosystems. The company provides data, tools, and consulting services to support sustainable business practices. "We gather the best data from around the world," said CEO Sebastian Leape, referencing the use of satellite data from NASA, on-site surveys, and databases from United Nations agencies.
Economic Valuation of Risks
The app allows companies to input data related to specific regions or business activities, with a predictive model calculating the economic value of the associated risks. This enables businesses to anticipate the environmental impact of their projects.
Aioi Nissay Dowa plans to leverage its experience from developing its "Telematics Auto Insurance," which uses driving data to influence insurance premiums, to enhance the app’s feedback mechanism for customers. The app is expected to be used by industries such as energy, food and beverages, and semiconductor manufacturing, particularly those that consume large amounts of water. The company aims to complete development by fiscal 2024 and offer the app to its corporate clients.
Ikuko Hyodo, Managing Executive Officer and Director of Aioi Nissay Dowa, highlighted the significance of the app’s development, stating:
"While many companies recognize the issue of climate change and can easily visualize metrics like greenhouse gas reduction, biodiversity remains a challenge. As Europe leads in this area, Japan will also face increasing demands for nature-related risk disclosure, making this app a necessary tool for the future."
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