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Response to Climate Change
(Disclosure Based on the TCFD Recommendations 2022)

Daiwa Securities Group recognizes that responding to climate change is an important management issue for the early realization of a carbon-neutral society. In April 2018, the Group expressed its support for the Task Force on Climate-related Financial Disclosures (TCFD). Based on the TCFD recommendations, the Group disclosed information on "Governance," "Strategy," "Risk Management," and "Metrics and Targets" regarding climate-related risks and opportunities.

(July 2022)

Summary of disclosure for FY2022, progress, and future responses

(Note) Underlines indicate updates from FY2021
TCFD recommendations Summary of disclosure for FY2022 Future responses
Governance
  • Board's oversight
    (Reporting process, oversight of risk management, management of progress in KPI, external experts)
  • Executive compensation system linked to sustainability KPIs
  • Role of Executive Management Committee, etc.
    (Reporting process, delegation of responsibility)
  • SDGs Promotion Committee/promotion system
    (Organizational system, external experts, process reflected in management)
  • Strengthen the board's oversight of climate-related issues
Strategy
  • Qualitative analyses based on climate change scenarios (Impacts on businesses)
    (Short-/medium-/long-term time horizon, identification process)
  • Approaches to climate change, initiatives
  • Quantitative analysis based on climate change scenarios (Amount of estimated losses)
  • Transition plan (Net Zero Carbon Declaration and roadmap)
  • Scenario analysis using 1.5℃ scenario (Update in-house scenario)
  • Review and refine climate change scenarios
  • Continuously consider the financial impacts of climate-related risks
Risk management
  • Process of identifying, assessing, and managing risks
    (Environmental and Social Policy Framework, engagement)
  • Process of managing risks
    (Addition to risk appetite framework, top risk management)
  • Continuously review the Environmental and Social Policy Framework
  • Continue to consider integrating climate-related risks into existing risk management system
Metrics and targets
  • Disclosure of cross-industry, climate-related metrics and targets, and performance
    • -Greenhouse gas (GHG) emissions (Scopes 1, 2 and 3)
    • -Metrics for transition risks (Carbon-related assets)
    • -Metrics for climate-related opportunities (Balance of investment in SDGs-related business)
  • Performance of energy usage
  • Consider GHG emissions management methods for investment and loan portfolios
  • Establish intermediate targets to align with the Paris Agreement by utilizing science-based targets (SBT)
  • Build Group-wide monitoring structure for Scope 3 Category 15

In the area of "governance," the TCFD recommends disclosure on the board's oversight of climate-related risks and opportunities and management's role. The disclosure of Daiwa Securities Group is in line with this recommendation.

In the area of "strategy," the TCFD recommends disclosure on the actual and potential impacts of climate-related risks and opportunities on the organization's businesses, strategy, and financial planning. The disclosure of Daiwa Securities Group is in line with this recommendation.

In the area of "risk management," the TCFD recommends disclosure on how the organization identifies, assesses, and manages climate-related risks. The disclosure of Daiwa Securities Group is in line with this recommendation.

In the area of "metrics and targets," the TCFD recommends disclosure of the metrics and targets used to assess and manage relevant climate-related risks and opportunities. Based on the strategy and risk management process described above, Daiwa Securities Group has established and disclosed the metrics and targets below.

Future

The Group will continue to further enhance information disclosure based on the TCFD recommendations and strive to strengthen communication with stakeholders, and contribute to the realization of a carbon-neutral society

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