Sustainability Promotion Structure・Materialities

Sustainability Governance Structure

The Group has established the Group Sustainability Policy as its basic company-wide policy on sustainability for local communities. Under this policy, the Group has established the Group Environmental Policy as action guidelines for the conservation and protection of the local environment, the Group Human Rights Policy as action guidelines for respecting the human rights of all stakeholders in local communities, and the Group Social Contribution Activity Policy to encourage voluntary, proactive participation by the Group and its employees in activities that contribute to society.

To promote specific initiatives based on these sustainability-related policies, the Group examines and discusses various issues related to sustainability in local communities from the perspective of their importance to stakeholders and priorities for the Group, and identifies materialities (priority issues to be resolved) through deliberations by the Board of Directors. Specifically, six materialities have been identified: Measures against Global Warming and Climate Change, Support for Sustainable Growth of Local Businesses, Revitalizing Local Economies, Lifestyle Support in the Age of Centenarians, Promotion of Financial Digitalization (DX), and Workplace Reform and Promotion of Diversity. We aim to become “a solution company rooted in communities and selected as a partner to walk together” by reflecting risks and opportunities based on these materialities in our business strategies and by achieving sustainable development of local communities and sustainable growth of our group through value creation with our stakeholders.

The Group Sustainability Committee, chaired by the President, deliberates on various sustainability-related policies and business risks and opportunities, as well as other important matters related to sustainability in light of domestic and international conditions.
The activities of the Group Sustainability Committee are reported to the Board of Directors approximately once every three months, and the Board of Directors supervises the status of sustainability-related initiatives.

Invitation and use of outside experts

Since FY2022, we have invited external experts in the field of sustainability to serve as outside members of the Group Sustainability Committee so that we can receive their advice and recommendations on matters to be deliberated and reflect their outside expertise in our sustainability efforts.

Outside experts: Kotaro Fukai
  • Nomura Research Institute, Ltd.
  • Financial Consulting Department
  • Sustainability Management & Finance Group
  • Group Manager

Initiatives for Raising Sustainability Literacy

We held study sessions with outside experts and others for our directors, Audit & Supervisory Board members, executive officers, and other management-level personnel, and had meaningful exchanges of opinions with these outside experts and others. In addition, study sessions have been held in FY2022 on the following themes.

Study group theme

  1. Current status and challenges of our ESG evaluation indicators (Lecturer: Partner in a sustainability consulting firm)
  2. Current assessment and expectations for our sustainability management from an investor’s perspective (Lecturer: ESG analyst from a major Japanese asset management company)

We are also providing internal training for all employees through e-learning and other means, and distributing videos of managementlevel study sessions to deepen understanding of sustainability throughout the organization and improve the level of our knowledge.

Establishment of the director in charge of Group Sustainability Promotion

In order to strengthen our company-wide commitment to sustainability, we have established the director in charge of Group Sustainability Promotion. Nobuo Onodera serves as the director and oversees the sustainability management of the entire Group. Nobuo Onodera has broad knowledge and experience in the area of sustainability, including climate change measures.

Executive compensation system reflecting ESG factors

We are working to strengthen our management foundation by establishing sustainability management for the sake of solving community issues and by upgrading governance. In order to realize these initiatives, we have added ratings by ESG rating organizations (FTSE and MSCI), and the status of initiatives for non-financial items and qualitative items in “Sustainability”, which is one of the basic themes of the medium-term management plan (FY2022-FY2024), to the judgment targets for determining the performance-linked coefficient for stock compensation (Trust II). Directors (including the president, but excluding non-executive and outside directors) and executive officers are eligible to receive executive compensation that incorporates ratings by ESG rating organizations.

  • *1
    Evaluation Indicators: FTSE Overall ESG Score, MSCI ESG Ratings
  • *2
    Non-financial items (Data Collection)

Materiality (priority issue to be solved) identification process

1.Identifying issues
We have identified over 60 issues based on the SDGs, issues related to the realization of our management philosophy,engagement with stakeholders, and various guidelines*1.
2.Discussion of issues
The Board of Directors and executive divisions discussed and narrowed down issues based on the “needs of customers and local communities” in order to determine what issues to address and what value to create given the Group’s priorities and resources.
3.Evaluating the priority and importance of issues

In addition, we analyzed and evaluated on two axes: priorities for the Group*2 and importance to stakeholders*3.

  • *1
    GRI Standard, SASB, etc.
  • *2

    Group priorities (evaluated from the following perspectives)

    • (1)
      Degree of contribution to problem-solving for regional companies and to regional revitalization
    • (2)
      Contribution to enhancement of the Group’s corporate value
  • *3

    Level of importance to stakeholders (evaluated from the following perspectives)

    • (1)
      Medium to long-term impact on stakeholders (social and economic value)
    • (2)
      Stakeholders' contribution to sustainability
4.Identification of materialities

The issues analyzed and evaluated were organized and integrated from the perspective of the Group’s management strategy and sustainability, and deliberated on by the Group Sustainability Committee. Finally, through the Board of Directors, six materialities were identified as key issues to be resolved as a priority.

  • *
    Governance-related items are not included in materialities, since they are items that companies will naturally take care of.
5.PDCA Practice
The identified materialities are incorporated into the medium-term management plan and KPIs are set for each materiality. By managing the progress of these activities, identifying issues, and taking corrective measures, we are implementing the PDCA cycle for the achievement of sustainability management.