Aioi Nissay Dowa Insurance (hereafter referred to as ADJ), part of the MS&AD Insurance Group, in collaboration with the UK's Natural Capital Research (hereafter referred to as natcap), is starting the development of an application that quantifies the economic value of business risks arising from corporate activities' impacts on the environment and biodiversity. The application is expected to be available within the fiscal year 2024.

1. Background

In recent years, the maintenance and improvement of the environment and biodiversity have become global challenges. Following recommendations by the TNFD, Japan has established the "National Biodiversity Strategy 2023-2030" in March 2023, and in March 2024, the "Bill for Promoting Activities to Enhance Biodiversity in Regions" was decided upon by the Cabinet. The coexistence of biodiversity with the sustainable development of the economy and society is being sought.

Our group aims to support the realization of a resilient and sustainable society and has established the Aioi R&D Lab - Oxford (hereafter Lab) in November 2022 with the UK's Mind Foundry, to explore measures for the maintenance and enhancement of biodiversity. Together with natcap, Lab, and Mind Foundry, we have decided to develop an application equipped with an AI model that quantifies the economic value of business risks from corporate activities' impacts on the environment and biodiversity.

2. Overview of the AI Model and Application Being Developed

- Intended users: ADJ’s client companies

- Function: Quantification and level display of the economic value of business risks arising from corporate activities' impacts on the environment and biodiversity

- Usage scenarios: Evaluation of risks to the environment and biodiversity in urban, resource, and agricultural land development, assessment of potential risks for companies considering investments

- Launch date: Within the fiscal year 2024

- Roles in development:

·Lab: Planning and overseeing the application development, collecting and providing client companies' needs

·natcap: Developing the risk quantification application, including the assessment of impacts and dependencies on nature, providing expertise on risks to biodiversity from corporate activities supplying data related to biodiversity dependencies, impacts, and values

·Mind Foundry: Developing the AI model for predicting economic damages based on data related to biodiversity

3. Future Developments

We will provide the developed application to ADJ’s client companies and other partner companies, facilitating business selection and investment evaluation with consideration to impacts on biodiversity, thus contributing to the maintenance and enhancement of biodiversity. In collaboration with MS&AD InterRisk Research & Consulting, Inc., which conducts biodiversity-related consulting within our group, we will contribute to the transition towards a nature-positive society across the group.

<Reference>

1. natcap website

www.natcapresearch.com

We support the world's leading companies to prioritise, measure and act on nature impacts, dependencies, risks and opportunities.

2. Comments from Professor Baroness Kathy Willis, CBE

" I am delighted to see this collaboration between Aioi Nissay Dowa Insurance and Natcap Research realised. This work is critical to advancing nature-positive action to improve biodiversity and address the nature crisis, allowing businesses to integrate nature into their strategic planning and risk assessment frameworks. "

*Co-founder of natcap, member of the House of Lords, member of the UK Government's Natural Capital Committee