Framework integrates Planetary Boundaries into investment decision-making
New indicators track ecosystem health, endangered species, and biodiversity impact
Aims to align capital flows with nature-positive economic transition
ERM has partnered with Nippon Life Insurance Company to design the “Nippon Life Nature Finance Approach,” a framework that embeds biodiversity and ecosystem thresholds into financial decision-making. The initiative seeks to channel investment toward companies that conserve and restore nature while minimizing environmental harm.
The framework draws on the Planetary Boundaries model developed by the Stockholm Resilience Centre, applying scientific thresholds to assess how businesses interact with natural systems. Key indicators include Net Primary Production (NPP), human appropriation of terrestrial NPP (HANPP)—a Global Biodiversity Framework (GBF) Target 14 measure—and species population data, particularly endangered species counts. It also incorporates the Do No Significant Harm (DNSH) principles to prevent unintended environmental or social risks.
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Yasutoshi Miyamoto, General Manager of the Responsible Investment Strategy Office at Nippon Life, said: “As a long-term institutional investor, we believe it is important that the global environment be maintained within a safe and stable operating space. With this vision, regarding climate change, we developed and published a methodology for transition finance last year with the support of ERM. This time, in the field of nature, we have developed a nature finance approach that includes a new concept of evaluation indicators for nature recovery, referring to the concept of the Planetary Boundaries and international agreements such as the GBF.”
Miyamoto added that the insurer will refine the methodology through engagement with stakeholders across industry, government, and academia to strengthen its application to investment and financing practices.
Kosuke Kanematsu, Sustainable Finance Partner at ERM, said: “We developed the framework for this Nature Finance Approach in alignment with the latest scientific guidance around nature. We look forward to seeing Nippon Life’s ambitious vision for accelerating efforts around nature restoration and regeneration spark dialogue and action among companies, financial institutions and investors committed to driving a nature-positive future.”
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