If a corporation's financial statements are its skeleton, its sustainability report is its flesh and blood, the face it presents to the world. The Daiwa Securities Group's report, with its photos of sweetly smiling infants on the cover, draws the eye. The future of these children, after all, depends on sustainability.

  Daiwa's 2008 sustainability report begins with a very personal message from President and CEO Shigeharu Suzuki.
  The major focus of my third-party opinion is whether Daiwa has met its goals in the four areas it has identified as material issues.

1. Adding a Social Perspective to Investment

  One major initiative in this direction this year is the start of sales of vaccine bonds, through which Daiwa contributes to raising funds for vaccinations through the International Finance Facility for Immunization (IFFIm) public-private partnership. Even though denominated in South African rands, these bonds are selling well. Daiwa also sells the Russell Global Environmental Technology Fund. Daiwa deserves credit for these clear first steps on the road to investment with a social perspective.
  This initiative is also held in positive regard by society. But although I can identify with the importance of investing from a social perspective, the question of whether the SRI products that Daiwa sells are good products from a financial viewpoint is a different issue. It is also essential to train people within the company in the necessary expertise. I would like to see more information on these background factors in Daiwa's sustainability report. My impression is that only a minimum of such information has been provided to describe emissions trading.
  The Daiwa SRI Fund Assistance Program, while small in scale, is an interesting experiment. This program provides funding for training staff in NPOs involved in activities relating to life and human dignity.

2. Commitment to the Development of a Sound Securities Market

  This issue relates to the health of the core business of securities companies. This report describes the measures implemented by Daiwa to meet the requirements of the Financial Instruments and Exchange Law which went into effect in September 2007. It further communicates the message that the Sales Department and the Compliance Department are working together to enhance internal control, but few concrete details are provided as to what they have actually done.
  I also noted that consumers were not included among stakeholders, and I hope that Daiwa will give this point further thought. I would like to know how Daiwa positions its Call Center and its handling of consumer complaints or requests for advice within the context of commitment to the development of a sound securities market.

3. Contributing to the Global Environment

  Daiwa has made eye-opening progress with the shift in its business model to IT and paperless systems. The company said it wants to demonstrate a model case in solving resources issues, and I hope it will do so.
  The information about the Daiwa CI Biodiversity Conservation Fund, funded by a part of Daiwa's profit earned from the sale and management of the Daiwa Eco Fund, should be highlighted much more prominently in this report. Contributing to the global environment is also connected with adding a social perspective to investment.

4. Communicating Information for a Sustainable Society

  This report describes Daiwa's economics and finance education initiatives, its policy recommendations and other communication activities, but information on this topic should be expanded overall. The core of this type of communication of information for a sustainable society should be initiatives regarding disclosure, such as in the Management Report, and Daiwa should communicate this information to society through its website and sustainability report.

  Further improvements are needed concerning CSR issues/performance and targets, which are evaluated solely from the company's perspective. The second half of this report carries management, social, environmental and economic reports; this information overlaps with that in the report's first half. I hope that Daiwa will focus more closely on respect for people and utilization of human resources from now on. The Daiwa Group has begun taking active initiatives regarding temporary workers, work-life balance and other issues, and its actions in these areas should be emphasized more prominently.
  I hope that Daiwa will improve its ability to communicate information to society in the future.