Recognizing that the impact of the operations of the Daiwa Securities Group on the global environment is not inconsequential, we continue striving to reduce our environmental impact and raise employee awareness.

  We believe that all executives and employees should be aware of global environmental issues and conduct themselves as set out below.
 ● Everyone should think of environmental problems as their own problems and act voluntarily and proactively to conserve energy and improve administrative flow.
 ● Everyone should strive to promote and raise awareness of socially responsible investment (SRI) and through the securities market, support companies that are environmentally aware.
  Through these efforts, we are committed to contributing to economic growth and environment conservation.

  Energy consumption at the Daiwa Securities Group's domestic offices (on a CO₂ emissions basis) rose 3.4 percent in fiscal 2007 compared to fiscal 2006. The main factors responsible for the increase are analyzed below.

■Analysis of Higher Energy Consumption Breakdown

  Between December 2007 and March 2008, the Daiwa Securities Group moved its main offices, including Daiwa Securities Group Inc., to Gran Tokyo North Tower (9-1, Marunouchi 1-chome, Chiyoda, Tokyo). Use of both our former and our new offices during the relocation period was responsible for higher electricity consumption and more environmental impact.

■Offices Relocated to the New Head Office Building (Gran Tokyo North Tower)

  In addition to the above, relocation of the Daiwa SB Investments Ltd. head office also occasioned duplicated use of buildings.
  We estimate that the higher environmental impact generated by duplicated use due to office relocation was 1,868MWh for electricity consumption, equivalent to 1,603 tons of CO₂ emissions.

  Due to the higher volume of data processing work entrusted to the Daiwa Institute of Research Ltd., use of servers and other IT equipment increased, which led to more electricity consumption for the equipment itself and the cooling it requires.

  Thanks to appropriate control of office temperatures at Daiwa Securities Group domestic offices other than those listed above, energy consumption at those offices fell by 1.5 percent compared to fiscal 2006.

■Energy Consumption by the Daiwa Securities Group (Table 1)

* At overseas offices, only figures for electricity consumption were tabulated.
* For scope of data, see the "Scope of Environmental Impact Data" table on our

■Daiwa Securities Group's CO₂ Emissions (Details of Table 2) (Unit: kg-CO₂)

* Shows data for consumption of electricity, gas, gasoline, heavy oil and diesel fuel at our domestic offices and electricity consumption at our overseas offices converted to CO₂ emissions (kg).
* For all fiscal years and regions, the emissions coefficient used for converting to CO₂ emissions is based on the ministerial ordinance related to the calculation of greenhouse gas emissions arising from the business activities of specified emitters (Ministry of Economy, Trade and Industry and Ministry of the Environment, Ordinance No. 3, March 2006).
* For scope of data, see the "Scope of Environmental Impact Data" table on our

*For scope of data, see "Scope of Environmental Impact Data" on the

  In July 2007, the Daiwa Securities Group adopted the "Cool Biz" policy group-wide and began setting office temperatures at appropriate levels. All employees wore badges promoting the "Cool Biz" style. Additionally, posters were displayed in all our departments and branches, and we used in-house broadcasting to promote "Cool Biz." Through these efforts, we have ensured that all Group employees are acquainted with and understand our commitment to contributing to solving global environment problems.

  Encouraging personnel to leave the office before 7 p.m. in the interest of work-life balance means that lights and heating/cooling are used for shorter periods, thus contributing to reducing environmental impact.

  In addition to converting statements, etc. into electronic format (see"Contribution to Global Environment"), we are promoting measures to reduce the amount of copying paper we use.
  In January 2008, all Daiwa Securities Group Inc. departments appointed staff members in charge of reducing paper use. The duties of these individuals include gathering information about why it is necessary to use paper to produce documents for business operations and the amount of paper used, and promoting awareness of reducing paper use within their respective departments. These individuals are also responsible for tabulating the amount of paper used at regular meetings held by their departments and encouraging the use of projectors to reduce paper use during meetings.

  The Daiwa Securities Group's new head office building in the Gran Tokyo North Tower uses energy-saving technologies such as an automatic lighting control system and high-efficiency air flow windows.* Among other environment conservation measures unique to the Daiwa Securities Group are the use of recyclable carpeting over 15,000 square meters of space on 14 floors, a paper recycling system that can dissolve discarded documents, and halon gas-free fire-fighting equipment.
  During the move to our new quarters, we used re-usable packing boxes and tried to re-use and recycle unneeded items as much as possible, aiming to achieve a "zero waste" move. As of June 2008, disposal of fixtures and equipment from our former head office building has not been completed. We plan to report on status of disposal in the next Sustainability Report.

* Air flow windows: double-glazed windows equipped with an air intake slit in the interior panes that allows indoor air to circulate between the glass panes, thus reducing the external temperature load from windows.

  The Daiwa Securities Group is now a tenant in its new head office at Gran Tokyo North Tower, which limits availability of environmental impact data. The only electricity consumption that can be calculated is that used through electrical outlets on the floors occupied by the Daiwa Securities Group and electricity consumed for lighting. The Group's electricity consumption does not include electricity used for heating, cooling and ventilation and for elevators and common areas of the building. No data are available for the Daiwa Securities Group's consumption volume of potable water, gas, heavy oil or diesel fuel. For waste generated, figures are for the volume of paper and non-paper waste generated through the Group's business activities, volume recycled and volume disposed of.

  Since fiscal 2005, the Daiwa Securities Group has calculated the volume of copying paper it purchases in bulk, and the volume of forms purchased by Daiwa Securities Co. Ltd and Daiwa Securities SMCB (in kilograms), as a yardstick for the volume of paper used in our businesses. Although the Daiwa Securities Group encourages sales branches and departments to buy copying paper in bulk through Group company Daiwa Sanko Co. Ltd., it is not mandatory to do so, and the selection of suppliers is left to their discretion. We estimate that in fiscal 2007 a significant proportion (over 80 percent) of copying paper was purchased in bulk. Additionally, all offices that moved to Gran Tokyo North Tower when the head office relocated there in fiscal 2007 now source all their paper through bulk purchases.
  In fiscal 2007, the Group purchased 6.5 percent more copying paper (on a bulk purchase basis) than in the previous fiscal year. We believe that this increase was due to the increased size of our workforce due to increased hiring of new graduates, and a higher proportion of paper being purchased in bulk, as a result of our continued efforts to encourage use of this source.

■Volume of Copying Paper/Forms Purchased by the Daiwa Securities Group (Calculated for Bulk Purchases Only) Total Weight (Kg)

Changes in Waste Generated and Recycling Volume (Table 4) (Unit: tons)

■Graph 1: Changes in electricity consumption at domestic offices

*For scope of data, see the "Scope of Environmental Impact Data" table on our

■Graph 2: Changes in potable water consumption

*For scope of data, see the "Scope of Environmental Impact Data" table on our

■Scope of Environmental Impact Data (Fiscal 2007)

* 114 branch offices, excluding headquarters and the Osaka and Nagoya branch build 23.