Tokyo, March 15, 2024 - NEC Corporation ("NEC", President & CEO: Takayuki Morita) and Mitsui Sumitomo Insurance Co. ("MSI", President & CEO: Shinichiro Funabiki) established the "Japan Consortium for Adaptation Finance" ("the Consortium") on March 15, 2024.

The Consortium will apply digital technology to predict and analyze adaptation value (disaster mitigation and environmental effects) and provide investors with quantitative and easy-to-understand information, such as promoting the structuring of financial products, including insurance, bonds, and loan schemes, based on various adaptation measures and value evaluation methods with its members and global partners.

1. Background

In recent years, measures to counter climate change, which is becoming increasingly serious, have become an urgent issue. However, while progress has been made in mitigation measures to reduce greenhouse gas emissions, adaptation measures to reduce the effects of climate change have not been sufficient. Expectations are now increasing for the value of adaptation to become more transparent and for funds to be introduced based on such transparency. Against this backdrop, NEC and MSI, which are collaborating in addressing growing climate change risks, such as the intensification of natural disasters, have established this consortium for the social implementation of adaptation finance(*), aiming to drive the expansion of investment markets to reduce disaster risks and help realize a resilient and sustainable society.

2. About the Consortium

(1) Outline

The Consortium will apply digital technology to quantify the disaster mitigation and environmental benefits that serve as adaptation value, and propose new adaptation finance approaches based on this value for social implementation.

(2) Organizational Structure

3. Endorsements

Natural disasters, including the recent earthquake in Hokuriku, have posed various challenges for Japan. Although a variety of technological innovations have contributed to overcoming these difficulties, they have mainly provided post-disaster reconstruction assistance and have yet to play a preventive role. It is important to design and develop a new business environment to stimulate innovation in new fields. Based on the discussions in this consortium, we will build a cross-disciplinary integrated system that can accurately confront various future disasters and propose a social design that promotes the production of technology to minimize both hardware and software damage in the daily lives of citizens. To ensure that this proposal does not end at the idea level and to accelerate its implementation, private funding must be attracted. However, the circulation of funds does not function well in a conventional business model. It is necessary to build a new business model based on non-monetary value such as reputation, which will enable us to address diverse social issues, including not only disaster prevention but also maintenance and management of social infrastructure and green infrastructure, including agriculture. In addition, we will use the results of the implementation of such a new business model in various regions of Japan as a showcase to support the resolution of social issues in other countries. We strongly hope that the results of this consortium will contribute to the creation of a society in which the word "future" can be spoken with dreams and hopes.

Yusaku Okada
Professor, Keio University
Chairman, Japan Consortium for Adaptation Finance

I am pleased to have been appointed as the Consortium's Representative Director. Through this consortium, I would like to find a way to increase investment in climate change adaptation measures and realize a new vision of a resilient society, and I would like to make further efforts for its social implementation.

Soichi Noguchi
Director, Institute for International Socio-Economic Studies
Representative Director, Japan Consortium for Adaptation Finance

Digital solutions are essential in helping us make better decisions in the face of enormous climate adaptation challenges. GeSI is honored to play a convening and co-creation role, with NEC and our colleagues at the UN, in this consortium to quantify impacts, both societal and financial, as communities around the world face the consequences of climate change.

Luis Neves
CEO, GeSI

4. Future Prospects

The Consortium believes that it is important to introduce private funds into the financial framework for addressing climate change in developing markets. Therefore, in collaboration with the Global Enabling Sustainability Initiative (GeSI), a global business association leading the creation of value-added digital solutions in sustainability, the Consortium aims to launch a coalition to establish a framework for international climate adaptation efforts by the end of this year. This coalition will use digital technology to quantify the range of social value of disaster mitigation measures and to provide investors with easy-to-understand information to facilitate greater inflows of funds into adaptation.

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About NEC Corporation
NEC Corporation has established itself as a leader in the integration of IT and network technologies while promoting the brand statement of “Orchestrating a brighter world.” NEC enables businesses and communities to adapt to rapid changes taking place in both society and the market as it provides for the social values of safety, security, fairness and efficiency to promote a more sustainable world where everyone has the chance to reach their full potential. For more information, visit NEC at https://www.nec.com.