Metrics and Targets

In the "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, the Group has established and disclosed the following metrics and targets towards realizing a net-zero society. The progress of these metrics and targets is regularly reported and monitored by the Sustainability Promotion Committee, Executive Board and Board of Directors.

Figure 5-1 Metrics and Targets Related to Climate Change

Item Metrics Target Recent Performance (FY2022)
net zero greenhouse gas emissions within our own operations Scope1・2 emissions* net zero (2030) 17,104 tCO2
net zero greenhouse gas emissions within our investment and loan portfolios, etc Scope3 emissions net zero (2050) -
Promotion of decarbonization through finance Investment balance in SDGs-related businesses Over 150 billion yen (FY2023)  130.5 billion yen
Enhancement of climate-related risk management Carbon-related assets - Approximately 390 billion yen
  • *The company's emissions will be calculated on a consolidated basis

GHG Emissions within Our Own Operations

Towards the achievement of a carbon-neutral society, we are required to reduce our GHG emissions. Under the Daiwa Securities Group Net Zero Carbon Declaration, the Group aims to achieve net zero GHG emissions within our own operations (consolidated basis) by 2030 (Scope 1 and Scope 2). We are monitoring GHG emissions every year towards achieving these targets (see Figure 5-2). Please refer to section 3, Strategy, "Transition Plan to realize Carbon Neutrality" concerning the future transition plan for net zero carbon emissions.

Figure 5-2 Trends in GHG Emissions

(Unit: t-CO2)

  FY2018 FY2019 FY2020 FY2021 FY2022
Scope1 944 868 842 954 840
Scope2 30,732 29,878 24,739 18,790 16,265

Scope of aggregation for actual values and calculation methods

Two companies, Daiwa Securities Co. Ltd. and Daiwa Institute of Research Ltd., which are required by law to report on the amount of energy consumption and the volume of CO2 emissions. The data on GHG emissions from the GranTokyo North Tower, which the Group rents as an office, and the Daiwa Yaesu Building, which is owned by the Group, includes data for Group companies other than those mentioned above.

London, New York, Hong Kong, Taipei, Singapore, Seoul, Washington D.C., Mumbai and Manila offices.

(Calculation methods)
Calculations have been made for the CO2 released from the use of electricity, utility gas, heavy oil, diesel fuel, kerosene, steam and cold water in accordance with the methods stipulated in the Act on the Rationalizing Energy Us and the Act on Promotion of Global Warming Countermeasures. Disclosed figures have been rounded off to the nearest whole number.

GHG Emissions within Investment and Loan Portfolios etc.

For financial institutions, GHG emissions from investment and loan portfolios (Financed Emissions) are said to account for a large proportion, and reducing them is an important challenge. The Group aims to achieve net-zero GHG emissions from our investment and loan portfolios (Scope 3) by 2050, as stated in the "Daiwa Securities Group Net Zero Carbon Declaration".

As described in the "Strategy", the Group is conducting experimental measurements of GHG emissions from investment and loan portfolios based on "The Global GHG Accounting & Reporting Standard Part A (Second edition, December 2022)" established by PCAF. Based on the results of these measurements, we will set and disclose intermediate targets by the end of the FY 2023.

For more details, please refer to "Strategy, Transition plan to realize carbon neutrality" and "Approach for measuring GHG emissions within our investment and loan portfolios".

Investment Balance in SDGs-Related Businesses

As stated in the "Strategy," the Group regards investing in new industries and companies that contribute to the transition to a carbon-neutral society as a business opportunity and is making progress in this area. Based on this, we have set a target for the investment balance in SDGs-related businesses (see Figure 5-1).

In addition, we have separately set goals for SDGs bond league tables (top three) to monitor the status of SDGs-related businesses, in conjunction with the above.

These KPIs will be reflected in executive compensation.

Carbon-Related Assets

As we transition to a carbon-neutral society, there is a risk that the value of carbon-related assets with high GHG emissions will significantly decrease in the future, and continuing to hold them may also result in reputational risks. As an indicator of vulnerable assets, we disclose the status of carbon-related assets based on the definition of carbon-related assets in the TCFD supplementary guidance. The total amount as of the end of FY2022 is approximately 390 billion yen (see Figures 5-3 and 5-4).

The Group has announced the "Daiwa Securities Group Net Zero Carbon Declaration" and is working towards net-zero. We plan to examine the level of risk associated with carbon-related assets and consider measures for the medium to long-term reduction of particularly high-risk carbon-related assets.

Figure 5-3 Total amount of carbon-related assets

Metrics Carbon-related assets*
Performance Approximately 390 billion yen
  • *Total amount of carbon-related assets, which includes CLOs (Collateralized Loan Obligations), investments, and LMS (Loan Management System). The targeted industries are 22 out of the 33 industries listed on the Tokyo Stock Exchange, including energy, transportation, materials and construction, and agriculture, food and forestry.

Figure 5-4 Breakdown of Carbon-Related Assets

  Investment and Capital Contribution Daiwa Next Bank
Daiwa Securities
Energy 11% 6% 0% 17%
Transportation 2% 7% 2% 12%
Materials and Construction 26% 30% 6% 62%
Agriculture, Food, and Forestry 0% 8% 0% 9%
Total 40% 52% 8% 100%
  • (Note)The composition ratio is rounded to the first decimal place, so the total of individual values may not necessarily match the total.