Asset Management

　Sumitomo Life manages assets with safety and security in mind so that we can continue to reliably pay insurance claims and benefit payments to our customers into the future. As the existence of a sustainable society is a prerequisite, we engage in asset management that takes into account sustainability over the medium to long term, including ESG (Environment, Social and Governance) factors(responsible investment)

Safe and secure asset management

　Sumitomo Life applies Asset and Liability Management (ALM) considering the long-term characteristics of life insurance liabilities. Our basic policy is to secure stable earnings while controlling risks appropriately by investing mainly in long-term interest-bearing assets including public and corporate bonds and loans under ALM. Furthermore, we aim to sustainably improve corporate value by managing stocks and other risk assets within an acceptable risk amount.

Sustainable asset management (responsible investment)

　By promoting responsible investment that takes into account ESG and other factors that support
sustainability over the medium to long term, we aim to both contribute to the realization of a sustainable society as a responsible institutional investor, and to ensure stable investment returns over the medium to long term.

【Actions】

　Responsible investment specifically refers to ESG investment and stewardship activities.

【Basic Principles on Responsible Investment】

　It shows our approach with regard to responsible investment. We are promoting responsible investment under these principles.

　Basic Principles on Responsible Investment

【Domains of contribution to well-being】

　As an institutional investor, Sumitomo Life is committed to domains of contribution to well-being as indicated in "Sumitomo Life Group Vision 2030." The areas we focus on are listed below. We believe that by investing in these areas, we will also contribute to the growth of our business partners.

Domain of contribution to well-being	Description	Related SDGs
Improvement of the Global Environment	・An urgent issue for the whole world and an important issue that could cause damage to the asset value. We will encourage the transition to a carbon-free society through responsible investment.
Contribution to Health Promotion	・As a life insurance company, we will address the challenges of health promotion and welfare.
Revitalization of Human Resources/Higher Engagement	・We will address human rights issues and the leverage of human capital, including diversity.
Support for a Quality of Life	・We will provide medium- to long-term funding for the development of social infrastructure and the growth of regional economies.

【Responsible Investment Report】

　Please see the report for more information.

　Responsible Investment Report

ESG investment

　ESG investment takes into account non-financial information including ESG factors as well as
financial information. We focus on (1) ESG integration, (2) ESG thematic investment, (3) Impact investment, and (4) Negative screening. 

    [Method 1] ESG integration: A method that incorporates ESG perspectives in addition to
quantitative financial information in the investment decision-making process. As non-financial
information including ESG initiatives impacts the corporate value of investees in the medium to long term, we assess them upon identifying material ESG issues (“materiality”) by industry for stocks and credit assets (bonds and loans).

   We have implemented ESG integration for all assets since FY 2021. 

＜ESG integration＞

  [Method 2] ESG thematic investment: We study and invest in bonds and other assets aimed at solving
ESG issues not only to gain investment returns but also to contribute to achieving the SDGs. We are
promoting ESG thematic investment and have achieved the target amount set in the three-year medium-term
business plan (including Impact investment), which started in fiscal 2020.   

＜Major investments to date＞

Major projects	Related SDGs Items※1
◆Investment in Sustainable Development Bond We invested in a Sustainable Development Bond issued by the International Bank for Reconstruction and Development (IBRD) to support the health care sector, including COVID-19 response measures. (May 2020)
◆ Investment in green bond (1) We invested in a green bond issued by Société Nationale SNCF SA (SNCF) to finance projects related to the maintenance, upgrades, and energy efficiency of the high speed lines and rail systems. (March 2021)
◆Investment in green bond (2) We invested in Tokyo Green Bonds issued by the Tokyo Metropolitan Government aiming for the creation of a “smart city,” to finance environmental projects. (October 2019, etc.)
◆Investment in social bond We invested in a social bond issued by the International Finance Corporation (IFC) to support private companies in developing countries that have been affected by economic downturn caused by the spread of COVID-19. (June 2020)
◆Investment in sustainability bond We invested in a sustainability bond issued by the Japan Railway Construction, Transport and Technology Agency (JRTT) to finance railway construction projects and joint ownership shipbuilding projects. (May 2020, etc.)
◆Investment in a scheme to tackle COVID-19 We invested in a credit line scheme to support those tackling COVID-19 set up by the African Export-Import Bank. (December 2020)
◆Investment in positive impact financing We extended corporate loans that screen corporate activities by analyzing and assessing their impact on the environment, society and economy so as to provide them continuous support. (August 2020, etc.)
◆Investment in solar power project financing in Japan We extended investments and loans to several solar power generation projects in Japan.
◆Investment in environment-friendly real estate properties About 100 tenanted buildings owned by Sumitomo Life across the country promote energy conservation by installing energy-saving equipment and carefully setting the temperature of air conditioners.

※1 The above SDG logos represent the main goals to which Sumitomo Life believes it contributes through its investment activities.

Major projects	Related SDGs Items※1
◆Investment in microfinance fund We invested in the Japan ASEAN Women Empowerment Fund which was formed to support women’s entrepreneurship in ASEAN countries by extending investments and loans to microfinance institutions. (September 2019, etc.)
◆Investment in renewable energy fund We invested in the Global Renewable Power Fund III, an infrastructure fund that specializes in investing in renewable energy-related facilities. (November 2020)
◆Investment in listed equity fund We invested in the Global Sustainable Equity Open Investment Trust, a fund investing in companies that actively promotes sustainability over the medium to long term. (July 2022)
◆Investment in PE fund specializing in decarbonization We invested in a private equity fund "Energy Environment Investment Fund 5 Innovation and Impact Investment." Through this investment, we aim to both create social impact, such as the spread of renewable energy and progress in energy conservation and earn financial returns through the growth of the startup companies. (March 2023)

[Method 4] Negative screening: A method to exclude specific industries and uses of funds from the
scope of investments. We prohibit investments in the manufacturers of certain weapons (biological
and chemical weapons, anti-personnel landmines, cluster munitions, specific conventional
weapons), as well as investments to finance coal-fired power generation projects.^※2
※2 Excludes projects that contribute to the transition toward decarbonization.

Stewardship activities 

　We believe that constructive engagement, or purposeful dialogue that takes sustainability into
consideration will lead to an increase in corporate value and the sustainable growth of investees,
which in turn will contribute to expanding investment returns over the medium- to long-term.
Therefore, we endorsed the Principles for Responsible Institutional Investors (Japan’s Stewardship
Code) and actively engage in stewardship activities to fulfill our stewardship responsibilities.
　For more information, see the following documents:
　Basic Principles on Responsible Investment (Attachment)

External Recognition (Result of the PRI Assessment)

【PRI Assessment (Fiscal 2020) 】

 The PRI receives annual reports on responsible investment initiatives from member institutions and evaluates the content of these initiatives.
 The evaluation results for fiscal 2020 turned out in September this year as below.  

※3 The evaluation system was reviewed by the PRI Secretariat and changed from a 6-level evaluation (E to A+) to a 5-level evaluation (☆1 to 5).

Governance

　From fiscal 2021, Sumitomo Life established a responsible investment structure under the
supervision of the Responsible Investment Team of the Investment Planning Department, and
appropriately implements the PDCA cycle through the framework of the Responsible Investment
Committee (※4) and the Responsible Investment Meeting. (※5) We are also working to improve our
responsible investment by making use of annual assessment results based on the PRI and the
frameworks and expertise of external initiatives. 

※4 The Committee is composed of outside experts and was reorganized from the former Third-party Committee Regarding Stewardship
Activities.

※5 Newly established as a meeting body to discuss and improve the level of responsible investment activities throughout the asset
investment division.

External Initiatives

Task Force on Climate-Related Financial Disclosures	・A private sector-led task force established by the Financial Stability Board (FSB) in December 2015. In June 2017, TCFD released its final report (TCFD recommendations) providing a framework for companies’ voluntary disclosure of information regarding climate-related risks and opportunities ・Sumitomo Life announced the endorsement of the TCFD recommendations in March 2019.
Principles for Responsible Investment	・A set of investment principles launched by the United Nations in 2006 that calls for institutional investors to incorporate ESG perspectives into their investment decision-making processes. ・Sumitomo Life signed the PRI in April 2019.
Climate Action100+	・An initiative to seek the reduction of greenhouse gas emissions through engagement with companies. ・Sumitomo Life signed the initiative in December 2020.
CDP	・An initiative to encourage major companies around the world to disclose information on climate change, water, forests, etc., and to engage in collaborative engagement. Launched in 2000. ・Sumitomo Life signed the CDP in December 2020.
PCAF	・A global partnership of financial institutions launched in 2019,working to develop and implement a standardized approach to assess and disclose the greenhouse gas emissions associated with loans and investments. ・Sumitomo Life joined PCAF in September 2021.
JSI	・An initiative established for considering countermeasures for practical issues across industries and sharing best practices from the perspective of the development of stewardship activities. ・Sumitomo Life joined JSI in November 2019.
Net-Zero Asset Owner Alliance (AOA)	・An international initiative that aims to achieve the Paris Agreement's goal of limiting temperature rise to 1.5°C through the cooperation of asset owners. Under the leadership of the United Nations Environment Programme Finance Initiative (UNEP FI) and the Principles for Responsible Investment (PRI), the AOA has been active since 2019. ・Sumitomo Life joined AOA in October 2021.
Japan Impact-driven Financing Initiative	・A Japanese initiative launched in November 2021 to promote the practice and promotion of impact investment by financial institutions that seek to resolve environmental and social issues through investment activities. ・Sumitomo Life joined the Initiative in April 2022.
Task Force on Nature-Related Financial Disclosures Forum	・Organizations that support TNFD's activities that formulate frameworks for biodiversity. ・Sumitomo Life joined the TNFD Forum in September 2022.
Advance	・The Advance is a five-year project launched in May 2022 under the leadership of the PRI (Principles for Responsible Investment) and is an initiative in which institutional investors encourage companies to resolve social issues, mainly related to human rights, through collaborative engagement. ・Sumitomo Life signed on the Advance as an “Endorser” to support the activities of the initiative in December 2022.