MS&AD is a major contributor to coal financing: the first non-life insurance in the ASEAN region, and a major investor in coal: US$ 233 million invested in 12 coal companies listed in the Global Coal Exit List, as of January 2021. These companies operate coal plants with a combined capacity of 17 GW (and plan 2.3 GW additional ones) and extract annually 37.8 million tons of coal.
Its decision to stop the underwriting of all new coal plants is a step in the right direction. MS&AD is the first Japanese insurer to take such decision, before SOMPO and Tokio Marine, its two main national competitors, which still have such exceptions in place. However, the fact that this policy does not fully cover coal expansion, as Allianz, and AXA already do, is extremely disappointing. Stopping insuring new coal plant projects is one thing, but MS&AD must also stop insuring companies developing such projects. Committing to end the underwriting of coal mine and coal infrastructure projects and ending all financial support towards coal developers should be the bare minimum for any serious commitment on coal. It’s worth repeating that any new coal project is inconsistent with a 1.5°C trajectory, as demonstrated by the latest IPCC and IEA reports.
Moreover, MS&AD’s policy falls even shorter of what climate science requires for the coal sector to align with a 1.5°C trajectory. Research from Climate Analytics demonstrated that coal power must be fully phased-out by 2030 in all European & OECD countries, and by 2040 worldwide, and the IEA’s recent net zero scenario shows the need to quickly reduce coal production and consumption. Yet, MS&AD fails to commit to fully exit the coal sector or to set a Paris-aligned trajectory and plan to progressively end all underwriting and financing for coal by these deadlines. In this, MS&AD should follow AXA and Allianz, which both committed to end coal underwriting by 2030 In Europe and OECD countries, and by 2040 worldwide.
Clearly, MS&AD lags behind its peers internationally: AXA already adopted a robust coal policies planning both an immediate end to any supports towards coal expansion and to exclude companies highly dependent on coal.
MS&AD’s scores in the Coal Policy Tool
This table presents the coal scores of MS&AD based on five criteria of the Coal Policy Tool