1. Introduction
Daiwa Securities Group is committed to enhancing climate-related disclosures in pursuit of a carbon-neutral society.
This report presents information on governance, strategy, risk management, and metrics and targets, with reference to IFRS S1 and S2 issued by the International Sustainability Standards Board (ISSB) in June 2023, as well as the Sustainability Disclosure Standards published by the Sustainability Standards Board of Japan (SSBJ) in March 2025.
| Governance |
Supervision
- The Board of Directors oversees strategies and policies related to sustainability, including climate change.
- The Board includes both internal and external directors with deep expertise in sustainability.
In accordance with the Board of Directors'regulations,
the Board makes decisions on core management matters and other issues it deems important.
- To strengthen executive incentives related to sustainability initiatives,
sustainability KPIs have been incorporated into performance-linked remuneration.
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Execution
- Sustainability Promotion Committee: Chaired by the President and CEO,
it discusses climate-related strategies and policies and reports
to the Executive Committee and the Board of Directors as necessary.
- Group Risk Management Committee: Chaired by the President and CEO,
it discusses policies and measures related to risk management, including climate change. CRO also attends.
- Group-Wide Working Group: Under Sustainability Managers at each division and Group company,
it promotes sustainability-related businesses and monitors KPIs.
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| Strategy |
Climate-related Risks and Opportunities
- Risks: We carry out climate-related scenario analysis to identify risks that may affect our businesses,
such as reduced earnings from investees, declining asset values, and reputational risks.
- Opportunities: Through scenario analysis and internal interviews,
we identify opportunities, such as increased demand for sustainable investments,
financing, and new financial products.
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Climate-related Strategies
- We promote sustainable finance, investment opportunities in alternative assets, and renewable energy.
- Under the Net Zero Carbon Declaration, we are committed to reducing GHG emissions,
enhancing stakeholder engagement, and contributing to rule-making.
Resilience Assessment
- Although the energy transition brings certain negative impacts,
the growth of new energy sources creates opportunities, resulting in a net neutral impact.
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| Risk Management |
Risk Management Framework
- Climate-related risks are managed within our existing risk management framework.
Since FY2021, they have been included in the Risk Appetite Statement and are effectively monitored.
- Effects on trading positions are assessed through stress tests using the shortened NGFS scenarios.
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Environmental and Social Policy Framework
- We have established the Environmental and Social Policy Framework,
which is regularly updated based on domestic and international developments.
- For projects with potential climate impact, such as coal-fired power generation,
coal mining, and oil and gas development, we carry out ESG due diligence to determine whether to provide financing.
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| Metrics and Targets |
Sustainability KPI
- As part of the Medium-term Management Plan "Passion for the Best" 2026,
new sustainability KPIs were set in FY2024, including targets for GHG emissions
(our own operations*1 and investment portfolio*2).
Our Own Operations*1
- Under the Net Zero Carbon Declaration, we aim to achieve net zero by FY2030.
- In FY2024, we achieved approximately a 70% reduction through switching to
renewable energy and implementing energy-saving efforts at all domestic offices of
Daiwa Securities and Daiwa Institute of Research. Strong progress has been made.
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Investment Portfolio*2
- Under the Net Zero Carbon Declaration, we aim to achieve net zero by 2050.
- For project finance in the power generation sector—
the largest source of emissions in our portfolio—we set interim targets for FY2030. In FY2023,
the financed emissions declined due to improved efficiency and increased renewable investments.
Carbon-intensive Assets
- As carbon-intensive assets may lose value during the transition, we continue to monitor them.
- As of December 2024, total carbon-intensive assets stood at approximately 550 billion yen.
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- *1Total of Scope 1 and Scope 2
- *2The targets cover project finance in the power generation sector. Include some estimated values.
(2) FY2024 Highlights*1(Group KPI)
GHG emissions within our
own operations*2
2,725t-CO2e
GHG emissions within
our investment and
loan portfolios*3
| Interim Target*4 |
| 186～255 g-CO2e/kWh |
243g-CO2e/kWh
SDGs bond league table*5
| FY2026 Target |
| In the top 2 |
1st
- *1As of March 31, 2025
- *2Total of Scope 1 and Scope 2 (market-based)
- *3FY2023 results. The targets cover project finance in the power generation sector. Include some estimated values.
- *4FY 2030
- *5Scope: Straight bonds, Fiscal Investment and Loan Program Agency bonds, local government bonds, Samurai Bonds that are issued for the purpose of resolving environmental and social issues in line with the context of the sustainability strategy of the issuer *excludes the company's own bonds
Calculation methods: Prepared by Daiwa Securities based on LSEG data and analytics data
We support various initiatives and continue to advance our efforts. In 2018, we became the first domestic securities company to endorse the TCFD and have published climate-related disclosures annually since then.
| 2018 |
- Established the SDGs Promotion Committee (Currently the Sustainability Promotion Committee)
- Endorsed the TCFD
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| 2019 |
- Joined the TCFD Consortium
- Partnership with Green Giraffe
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| 2020 |
- Established a dedicated team for sustainable finance
- Appointed the Head of SDGs (Currently the Head of Sustainability)
- Disclosed the results of scenario analysis
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| 2021 |
- Established Vision 2030
- Established the Environmental and Social Policy Framework
- Published the Net Zero Carbon Declaration
- Joined PCAF
- A director was appointed as a trustee of the IFRS Foundation
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| 2022 |
- An employee was appointed as a member of the SSBJ
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| 2023 |
- Appointed as product design advisor for the Japan Climate Transition Bonds
- Joined the GX League
- Set interim targets for Investment portfolio
- Began climate-related disclosures in the annual securities report
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| 2024 |
- Established the Medium-term Management Plan "Passion for the Best" 2026
- Updated Vision 2030
- Held a Sustainability Meeting with institutional investors
- Received the Good Market Maker Award for the carbon credit market for the second consecutive year
- Switched to renewable energy at all domestic offices of Daiwa Securities and Daiwa Institute of Research
- Expanded the scope of portfolio emissions to include all sectors
- Added renewable energy facilities to the scope of physical risk assessments
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