Capital and Business Alliance with Oxford University Spin-out "Natural Capital Research"

February

Aioi Nissay Dowa Insurance Co., Ltd. (President & CEO: Keisuke Niiro) of the MS&AD Insurance Group is pleased to announce a capital and business alliance with Natural Capital Research (hereinafter referred to as "Natcap"), a UK-based company that supports corporate natural capital and biodiversity-related disclosures and decision-making.

1. Background and Purpose

The conservation and preservation of natural capital and biodiversity have become critical global challenges. In Japan, the publication of Taskforce on Nature-related Financial Disclosures (TNFD) guidelines and the approval of related legislative proposals by the Cabinet have emphasized the need for sustainable economic and social development that incorporates these environmental factors.

However, companies often face challenges in data accessibility and selecting appropriate evaluation methods when disclosing information in line with the TNFD-recommended LEAP approach—which includes Locate (Identify), Evaluate (Diagnose), Assess (Analyze), and Prepare (Plan).

Additionally, biodiversity loss and the depletion of natural capital significantly increase various risks, driving expectations for insurance companies to develop solutions leveraging their risk management expertise.

To address these challenges, Aioi Nissay Dowa Insurance, AIOI R&D Lab - Oxford (hereinafter, "R&D Lab"), and Natcap have been conducting joint research since April 2024.This research was focused on developing new technologies to diagnosing business risk associated with natural capital and biodiversity.

Through this capital and business alliance, we aim to accelerate joint research, enhance our respective solutions for biodiversity risk management, and strengthen sales collaboration. As the first step, we will begin offering a natural capital and biodiversity risk disclosure support service as outlined below.

2. Overview of the Capital and Business Alliance

(1) Scope of Collaboration

Joint Research & Development

●        Develop and enhance Aioi Nissay Dowa and Natcap’s respective natural capital and biodiversity-related products and services in alignment with TNFD, evolving regulatory trends, and customer needs.

Provision of Natural Capital & Biodiversity Risk Disclosure Support Services

●        Aioi Nissay Dowa Insurance will introduce Natcap to clients, enabling Natcap to provide consulting services using Natcap solutions (service launch: February 2025).

●        MS&AD InterRisk Research & Consulting, which possesses advanced expertise and consulting experience in natural capital and biodiversity, will also begin offering Japanese-language consulting services utilizing the solutions(service launch: June 2025).

●        In the future, we plan to enhance the usability of the solutions and offer it as a standalone licensed product to clients.

Appointment of a Board Director

●        As a key shareholder of Natcap, Aioi Nissay Dowa Insurance will appoint one board director to the company.

●        This appointment will enable deeper engagement in Natcap’s networks and expertise, ensuring swift progress in joint research and development.

(2) About Natcap

●        Company Name: Natural Capital Research Ltd.

●        CEO: Sebastian Leape

●        Founder: Prof. Baroness Kathy Willis, CBE

●        Established: September 20, 2018

●        Headquarters: Office 2.01 - 2.03, 31 - 35 Kirby Street, London, England, EC1N 8TE

●        Website: https://www.natcapresearch.com/

Business Overview

●        Founded by Prof. Baroness Kathy Willis, CBE, of the University of Oxford, who also serves as an advisor on nature and biodiversity at AIOI R&D Lab. The company supports businesses in assessing, managing, and disclosing natural capital and biodiversity risks.

●        Provides data, technology, and consulting services necessary for assessment, risk mitigation, and disclosure of biodiversity-related risks.

●        Recognized as a nature-related data provider on the TNFD website, particularly for the Locate (Identify) and Evaluate (Diagnose) stages of the LEAP approach.

(3) Investment Details

●        Investment Execution Date: February 25, 2025

●        Investment Overview: Third-party allotment of new shares

3. Future Outlook

A rich and biodiverse ecosystem plays a crucial role in mitigating climate change, reducing the impacts of natural disasters such as floods and landslides, and maintaining environmental stability. As the frequency and scale of climate-related and natural disasters continue to rise, these ecosystems are becoming increasingly significant.

Aioi Nissay Dowa Insurance will continue to closely monitor trends related to natural capital and biodiversity, while actively developing risk management solutions. By supporting businesses in their natural capital and biodiversity initiatives, we aim to contribute to a more resilient, disaster-resistant, and sustainable society.