Support for Asset Building
While the importance of asset management in the "100-year life era" is increasingly gaining attention, Daiwa Securities considers the development and provision of superior products to be one of our major missions in society, and strives to develop new products and improve their quality.
Products offered to pursue shared value
Initiatives through Business Activities Such as the Underwriting and Sale of SDG Bonds
Climate change has become a serious threat to all countries. It is said that developing countries are being impacted first and with the gravest results. Climate change may destroy the social initiatives for poverty reduction that have been steadily carried out over the last several decades, and it is impossible to separate it from poverty issues.
In the past few years, initiatives for sustainability have spread worldwide, and along with the expansion of the market for related bonds, customers' interest in sustainability has been growing. As a pioneer for SDG bonds in Japan (including conventional Impact Investment bonds), Daiwa Securities provides customers with opportunities to invest in bonds issued by public organizations, financial institutions, and other issuers for the purpose of solving social issues.
Daiwa Securities Group will continue to contribute to solving social issues through its business activities, including the underwriting and sale of Green Bonds and other SDG bonds.
|Use of funds
|AEON MALL Co., Ltd.*
|Sustainability Link Bond
|NH Foods Ltd.*
|Yamaguchi Financial Group, Inc.*
|Tokyo Metropolitan Government*
|Japan International Cooperation Agency (JICA)*
- *Sold by multiple companies including Daiwa Securities (the sales amounts shown above are those underwritten by Daiwa Securities).
ESG funds are investment trusts that place an emphasis on ESG factors when selecting companies to invest in, including companies that are working to achieve ESG and SDG targets toward a sustainable society. These funds can disclose ESG information.
By investing in these funds in the financial market, investors can indirectly support countries and companies that are actively working on sustainability.
We are expanding our product lineup to meet diverse customer needs.
Initiatives in Funds for Decarbonization (Daiwa Asset Management)
Daiwa Asset Management has established and manages a carbon neutral technology equity fund (nicknamed "Carbon ZERO"). The fund invests primarily in solution companies that contribute to a decarbonized society from among global equities and have a low carbon footprint relative to the MSCI All Country World Index. Candriam S.C.A., which provides investment advice, aims to achieve zero carbon as a fund by contributing a portion of the fees earned from fund advice to green projects aimed at reducing CO2. The fund's ESG information is disclosed in its Impact Report.
Candriam and some of its sales companies, including Daiwa Securities, donate a portion of trust fees to tree-planting activities in Japan through NPOs. In this way, we create opportunities to walk together with the beneficiaries toward a decarbonized society.
Initiatives of Fund Wrap Services
In the era of living 100 years, managing assets for the medium to long term is critical. Daiwa Fund Wrap is a service that enables customers with no investment experience or too busy to make investment decisions themselves to start long-term diversified investment by having Daiwa Securities invest in and manage assets on their behalf under a discretionary investment agreement. In providing our services, we strive to communicate closely with our customers to build a relationship of trust.
To keep attracting customers over the long term, we will continue our initiatives to implement better structures and systems so as to improve our performance and the quality of our services.
- Balance of domestic Wrap accounts: ¥ 14,647.2 billion (As of March 31, 2023)
- *Source: Data released by the Japan Investment Advisers Association
- Balance of Wrap accounts at Daiwa Securities: ¥3,095.5 billion (As of March 31, 2023)
- *Source: Data released by the Japan Investment Advisers Association
- Daiwa Social Contribution Wrap - Daiwa Fund Wrap with a donation service
Amount donated in FY2022: ¥7.58 million (cumulative donations in the last 3 years: ¥59.67 million yen)
- *Total donated amount from customers and from Daiwa Securities
- *Donated to: Food aid (UN WFP), medical care (Doctors Without Borders Japan), child support (Japan Committee for UNICEF), environment (WWF Japan), and disaster recovery (Japan Platform)
Initiatives for Solutions Business
Many small- and medium-sized companies and small-scale enterprises are now facing the issue of business succession due to the aging of their management team or owners. It is said that about half the managers exceeding the age of 70-the average retirement age-in the next 10 years are yet to decide on their successors. Moreover, even the continuity of their business activities, which support regional economies, has recently been at risk. Daiwa Securities recognizes that it is its duty, as a financial institution, to firmly support, in financial terms, small- and medium-sized companies' efforts to pass down their valuable business resources, employment, and technologies to the next generations, thereby helping to maintain regional supply chains. We will support the sustainable development of local communities and the Japanese economy by encouraging the continuation, development, and growth of small- and medium-sized companies of good standing by providing solutions to inheritance, business succession, M&A, and other issues.
System Product WEB Service
System Product WEB Service is offered as a support tool for customers building assets. Its aim is to realize a prosperous era of the 100-year life.
The service enables customers to centrally manage their stock-based employee benefit plans (such as stock ownership plans, workplace NISA, and defined contribution pension plans) and stock-based compensation plans (such as specified transfer-restricted stock (RS) and stock options) on a single online platform. The service enables us to support asset-building to help our customers realize their life plans and to actively encourage participation in a company's employee benefit plans, such as stock ownership plans and installment-type investment plans.
Utilizing the latest technologies in the context of digital transformation (DX), for companies and their employees, we are working to build highly flexible coordination based on an application programming interface (API), to provide a high degree of convenience, such as making use of cloud services to make opening accounts more effortless and less time-consuming, and to completely eliminate the need for paper and personal seals in various procedures.
Expansion of Services for Asset-Building Customers through Smartphone-only Securities Company, "Daiwa Connect Securities"
Smartphones and other technical innovations are changing the common perception that securities companies are used only by affluent customers and that securities transactions require an advanced level of financial knowledge. We recognize that generating securities services available to all people in consideration of financial inclusion is an issue facing not only Daiwa Securities Group but also the securities industry as a whole.
Daiwa Connect Securities, which launched its services in July 2020, is a new type of securities company established by the Daiwa Securities Group. It features services that allow everything from account opening to securities trading and asset management to be completed via smartphone and allows beginners to start investing with small amounts easily.
Daiwa Connect Securities also partners with external companies to provide a game app that allows people to learn about investing in a fun way, a reward point investment service that allows people to use the reward points they earn from other services to invest, and a credit card regular investment service where cardmembers pay for their investments by credit card, allowing them to earn reward points from card use. These services provide opportunities to easily learn financial literacy with a small amount of money and diversify access to financial services.
Daiwa Connect Securities will continue to develop and provide its services so that all people will be able to access better financial services.
Initiatives Using REITs, Funds and Other Structures to Solve Social Issues
Investment in Healthcare Facilities
Daiwa Real Estate Asset Management managed Nippon Healthcare Investment Corporation, which was Japan's first REIT focusing on healthcare facilities. On April 1, 2020, that REIT was merged with Japan Rental Housing Investments Inc., a REIT focusing on housing that was also managed by Daiwa Real Estate Asset Management, and Daiwa Securities Living Investment Corporation ("DLI"), the J-REIT with the largest amount of healthcare facility assets under management in Japan, was established. DLI invests in prime healthcare facilities that are likely to see stronger demand from society over the medium to long term as the population continues to age. Through such investment, it will contribute to the "Achievement of Good Health and Longevity," a priority issue in Japan identified in the SDGs Implementation Guiding Principles formulated by the government's SDGs Promotion Headquarters.
DLI has also established a social finance framework to provide ESG investment opportunities to investors through social financing and received a Social 1 (F) rating, the highest rating, from Japan Credit Rating Agency, Ltd. (JCR). Based on this framework, DLI has borrowed ¥9,920 million through a social loan as of March 2023 and issued ¥2.0 billion of social bonds in January 2022, using the funds raised to acquire healthcare facilities.
Total amount of investment in healthcare facilities
- Approximately ¥108.2 billion (as of May 31, 2023)
Investment in Renewable Energy
With regard to infrastructure assets, Daiwa Real Estate Asset Management has been managing photovoltaic power stations since FY2014, and was entrusted in FY2017 with the management of a biomass power generation plant invested in by Daiwa Energy & Infrastructure. In September 2021, the company was entrusted with management of DSREF Amaterasu Core Fund, Investment Limited Partnership, a private fund targeting investment in a solar power project which was established by soliciting investments from domestic institutional investors. The company will continue to expand the balance of its assets under management while striving to accumulate knowledge of investment and management in the renewable energy field.
Management results of renewable energy power plants
- Number of deals: 23
(Hokkaido, Tohoku, Hokuriku, Kanto, Chubu, Kansai, Chugoku, and Shikoku regions)
- Output: Approximately 252MW from solar power plants (excluding output from assets on land with leasehold interest), 13 MW from biomass power plants
- Annual energy output (April 2022 to March 2023): 331,977MWh
(Assumed CO2 reduction of 152,290 t-CO2, calculated using emission factors of each regional electric utility)
- Balance of assets under management: Approximately ¥87.5 billion
FY2022 Initiatives Taken by the Group's Overseas Offices
Underwriting diverse ESG bonds to help solve global environmental and social issues
Serving as the lead manager of four key ESG Bonds in 2022, Daiwa Capital Markets America ("DCMA") is helping to solve social issues and protect the global environment. In July 2022, DCMA underwrote a sustainable development bond issued by the International Bank for Reconstruction and Development (IBRD). The raised funds will be used to build a road safety support system. In September, DCMA underwrote a forest conservation bond issued by the Inter-American Development Bank, realizing investments in forest conservation projects. In December, DCMA underwrote a green bond issued by Aguas Andinas, a Chilean water utility company, and the first blue bond issued by the Central American Bank for Economic Integration (CABEI). The funds raised by these bonds were used for water utility enhancement and marine conservation, respectively.
DCMA will continue contributing to the SDGs achievement and ESG investments through its activities.
Supporting ESG bonds and contributing to the SDGs
As a member of the Daiwa Securities Group, Daiwa Capital Markets Europe Limited ("DCME") is committed to the SDGs. It combines investments with the SDGs, recognizing the importance of its role as a securities firm that can positively impact society.
DCME has supported the issuance of ESG bonds since 2008 and has led more than 100 transactions that are aligned with the SDGs. Daiwa Securities Group and DCME will continue to support the financing of environmental and social initiatives.
Key webinars and conferences in the Asia region
In September 2022, Daiwa Capital Markets Singapore hosted Daiwa ESG Conference 2022, a webinar on Asian ESG bonds. Speakers from Daiwa Securities' Sustainability Solutions Department, bond issuers, and ESG rating agencies were invited to discuss the current status and outlook of ESG bond markets in Japan and Asia.
In November of the same year, at the Daiwa Capital Markets Conference (DCMC), held face-to-face with audience for the first time in three years, we arranged a speech on blue bonds (samurai bonds) by the Director of Government Bonds, Ministry of Finance of Indonesia. This led to the country's first blue bond issuance in May 2023.
Structuring and selling green bonds issued by Aguas Andinas to Hong Kong investors
In December 2022, Daiwa Capital Markets Hong Kong and DCMA structured and sold green bonds issued by Aguas Andinas, a public service company engaged in the sale of drinking water and wastewater treatment services in Chile, to Hong Kong investors. The bonds were issued under the Green Bond Framework, which aims to improve water and wastewater services in Chile, which in turn will contribute to social and economic development. The raised funds will be used for infrastructure projects in Chile, including drinking water supply, wastewater treatment, and water distribution systems.
Providing Analysis/Proposals on the Economy, Society, and Investment Information
Daiwa Securities Group as an integrated securities group provides, in addition to investment information, a wide range of information on the economy and society. We hope that the measures we propose from a long-term perspective will be helpful to customers, investors and a variety of stakeholders.
Initiatives to Provide Information on ESG (Daiwa Securities)
Daiwa Securities' Equity Research Department is a group of analysts and strategists. They analyze and evaluate information released by companies, and provide stock price information and investment strategies and ideas to institutional investors (such as asset management companies, banks, insurance companies, pension funds).
International agendas, such as the SDGs and the Paris Agreement, have gained much attention in recent years. Against this backdrop, a growing number of investors are using nonfinancial information in relation to the environment, society, and corporate governance when making medium to long term investment decisions. Therefore, in May 2019, Daiwa Securities established the ESG Research Section, which specializes in handling ESG information, within the Equity Research Department, thereby putting in place a system for comprehensively analyzing and evaluating financial and nonfinancial information. The ESG Research Section works on writing analysis reports focusing on topics such as climate change, human rights and gender issues, corporate governance systems, and social impact, as well as holding ESG seminars and other activities.
ESG information will become more and more important for companies and society as a whole for achieving sustainable growth over the long term. We strive to provide appropriate ESG information in a timely manner so that institutional investors will be able to expand their investment returns in the medium to long term through responsible investment and purposeful dialogue (engagement).
In October 2021, Securitization and SDG bonds Group was formed under Fixed Income, Currency and Commodities (FICC) Research Dept., which focuses on sustainability in the bond market. The aim of the Section is to meet the growing information needs of institutional investors, including trends in the SDG bond market, climate change and bond markets, and ESG investment performance.
Comprehensive Provision of Information and Policy Proposal Activities
Daiwa Institute of Research (DIR), which assumes the think-tank role of Daiwa Securities Group, provides wide-ranging analysis and information to the public. At DIR, we consider it our mission to engage in comprehensive provision of information and policy proposal activities concerning the financial and capital markets and the real economy. We have always sought to provide up-to-date and in-depth information and a unique viewpoint that has not been presented by others. In order to provide information that satisfies the needs of the public, we also exchange information and hold discussions with businesses, investors, public institutions including governments and municipalities, and various economic groups, as well as overseas think-tanks and media. In this way, we are able to analyze the currents and trends of society and disseminate information.
We also actively deliver ESG information, with the ESG Research Section playing a central role in researching, analyzing, and disseminating related information. In recent years, sustainability disclosure frameworks have evolved rapidly worldwide, with growing interest from both issuers and investors. In FY2022, the Section published 25 reports related to the SDGs and ESG and visited 65 financial companies and business companies to provide SDG/ESG information.
Provision of information by DIR through diverse media
- Number of reports posted on the website: 506 reports (Results for FY2022)
- Full texts of reports available on the website
- Number of recent hits on the research division's page: 4.26 million hits (Results for FY2022)
The DIR Research Division conducts a wide range of information dissemination activities, including reports, media appearances, and book publications. The Research Division provides clear explanations of complex economic and social issues and produces high-quality reports, which has increased opportunities to communicate with clients.
The Research Production Dept. of Daiwa Securities publishes Daiwa Investment Information Monthly and other periodicals to provide information to the general public. It uses many other means to dispatch information to the general public, including books published by publishing houses, desktop calendars with information on financial events, and market charts for wall-hanging.
Daiwa Securities Group hosts live webinars by popular strategists and analysts and provides interactive information to many customers through the chat function. Approximately 43,000 people participated in FY2022. The Group will continue efforts to disseminate information in an easy-to-understand manner.