Daiwa Securities Group is advancing disclosure of information related to "Governance", "Strategy", "Risk Management" and "Metrics and Targets" in accordance with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) in order to realize a carbon-neutral society.

Executive Summary (FY2023)

(Note) Underlined items are additions or updates from FY2022.

Item Summary
  • Progress in Promoting Sustainability
  • Approach to Climate Change
    (Management Vision and Materiality, Environmental Basic Policy and Net Zero Carbon Declaration)
  • Board’s Oversight
    (Reporting process, conducts main deliberations on the composition and attendance status of the three committees)
  • Executive Framework
    (Reporting process, conducts main deliberations on the areas of expertise of external experts and the working group)
  • Executive Remuneration System Linked to Sustainability KPIs
  • Qualitative Analysis Based on Climate Change Scenarios (Impact on Business)
    (Qualitative analyses based on climate change scenarios to identify specific risks and their relation to the categories of integrated risk management, and opportunities, corresponding measures and engagement examples for each business division)
  • Transition Plan to Realize Carbon Neutrality
    (Roadmap and progress toward Scope 1, 2, and 3 net zero emissions)
  • Quantitative Analysis Based on Climate Change Scenarios (Estimated Loss)
    (NGFS scenario analysis)
Risk Management
  • Process for Managing Climate Change Risks
    (Risk Appetite Framework, Top Risks)
  • Response to Climate Change Risks in investment and loan Activities
    (Environmental and Social Policy Framework)
Metrics and Targets
  • Greenhouse Gas (GHG) emissions within Our Own Operations
  • GHG Emissions within Our Investment and Loan Portfolios
  • Investment Balance in SDGs-Related Businesses
  • Carbon-Related Assets
Response as an Asset Manager
  • Status of Response in the Asset Management Division
  • Measurement Method for GHG Emissions within Investment and Loan Portfolios

Progress in Promoting Sustainability

The group is committed to various climate change initiatives and is advancing efforts to address climate change. In 2018, we became the first domestic securities company to express support for the TCFD recommendations, and have since disclosed annually based on the TCFD recommendations.

Figure 1-1 Our history

Figure 1-1 Step

Approach to Climate Change

Management Vision and Materiality

In May 2021, the Group formulated and announced its management vision, "Vision 2030", which outlines the Group's goals for achieving the SDGs by the deadline of 2030. Based on communication with stakeholders, social demands, and the impact the Group has on society, we have positioned "Green & Social: Promoting the transition to a carbon-neutral society and realizing a resilient society" as one of our priority areas of focus (materiality) and are advancing our efforts in this area.

In our medium-term management plan, "Passion for the Best" 2023, positioned as the strategy for the first three years towards achieving "Vision 2030", we have set sustainability KPIs to manage the progress (Figure 2-6). A sustainability officer in each organization manages the progress of these KPIs, and the system reports to the Sustainability Promotion Committee and the Board of Directors.

Environmental Vision, Environmental Principles and Basic Environmental Policies

The Group has established an "Environmental Vision", "Environmental Principles" and "Basic Environmental Policies" in May 2012, in order to contribute to the resolution of environmental issues, including responding to the risks posed by climate change.

Figure 1-2 Environmental Vision, Environmental Principles and Basic Environmental Policies

Environmental Vision

The Group is dedicated to protecting the precious global environment and preserving it for future generations by leveraging financial capabilities.

Environmental Principles

The Group recognizes the importance of environmental principles such as the effort to combat global warming, recycling and reuse of raw materials, and preserving biodiversity, in order to create a sustainable society for the 21st century. The Group pledges to contribute to solving environmental issues through its business as a financial services company and, to constantly seek new ways to reduce its environmental impact as a responsible corporate citizen.

Basic Environmental Policies

  1. 1.Make positive environmental contributions through our core business activities
    We shall seek to develop and provide financial products and services that promote a low-carbon, recycling-oriented, and symbiotic society.
  2. 2.Implement an environmental management system
    We shall implement an environmental management system and constantly seek new ways to improve environmental activities. In addition, we shall support environmental education and publicity efforts, while promoting environmental protection efforts by employees.
  3. 3.Take steps to save natural resources, reduce energy consumption, and promote biodiversity system
    We shall continue to progress in our efforts to reduce the use of natural resources and energy, and seek ways to improve materials and energy efficiency (including efforts to improve business efficiency). We shall also take steps to reduce water use and reduce, reuse, and recycle other materials to contribute to a more environmentally friendly society. Furthermore, considering the importance of biodiversity, we shall seek a symbiotic relationship with the environment and use safe, clean methods of materials procurement.
  4. 4.Promote environmental communication
    Working in concert with business partners, the local community, NGOs and NPOs, we shall actively disseminate information about environmental issues, and communicate our concern for the environment to customers and society at large.
  5. 5.Strictly observe environmental regulations
    We shall always endeavor in environmental preservation, observing environmental laws and regulations in addition to the Group's environmental policies.

The Daiwa Securities Group Net Zero Carbon Declaration

The Group recognizes the importance and urgency of addressing climate change, one of the most serious issues facing the world, in order to realize a carbon-neutral society as soon as possible. To that end, we have formulated and implemented the "Daiwa Securities Group Net Zero Carbon Declaration" (see Figure 1-3) to make a medium- to long-term contribution to the fight against climate change.

Based on this declaration, we aim to achieve Scope 1 and 2 net zero GHG emissions by 2030 and Scope 3 net zero GHG emissions by 2050 for our investment and loan portfolios etc. In addition, we will continue to support our customers' efforts to decarbonize their businesses and new technologies that contribute to the realization of a decarbonized society in order to support a smooth transition to a decarbonized society through our financial business.

Figure1-3 The Daiwa Securities Group Net Zero Carbon Declaration, The Daiwa Securities Group’s main priority areas

  1. (1)Achieve net zero greenhouse gas emissions within our own operations* by 2030 (Scope 1 and Scope 2)
  2. (2)Achieve net zero greenhouse gas emissions within our investment and loan portfolios, etc. by 2050 (Scope 3)
  3. (3)Support the smooth transition to a carbon-neutral society through our business activities
  • *The company's emissions will be calculated on a consolidated basis

Sustainable finance for the delivery of a carbon-neutral society

  • Promote green finance / transition finance
  • Expand business investment in the renewable energy sector
  • Strengthen engagement with investee firms

Support for new technologies and promote business solutions that contribute to the delivery of a carbon-neutral society

  • Promote innovation (hydrogen, CCUS, etc.) and provide support for new technologies
  • Expand our advisory business within the renewable energy sector

Provide investment opportunities that contribute to the delivery of a carbon-neutral society

  • Expand our lineup of related products and services
    • -Expand investment trusts with an environmental theme
    • -Arrange SDGs bonds including green bonds
    • -Promote SDGs-IPO in the environmental sector

Reduce the environmental footprint of the company

  • Shift to 100% renewable energy
  • Continue efficient use of energy
  • Consider carbon offsetting

Set targets to align with the Paris Agreement goals and expand transparent information disclosure

  • Analyze greenhouse gas emissions management methods for investment and loan portfolios
  • Set intermediate targets for Scope 3 to align with the Paris Agreement goals by utilizing SBT, etc. (in FY2023)
  • Ensure appropriate disclosures related to our climate change response (TCFD, etc.)

Strengthen our management system to achieve net zero carbon

  • Revise and embed the Daiwa Securities Group "Environmental and Social Policy Framework"
  • Embed sustainability elements into Corporate Executive Officers’ compensation