Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• Society
• Governance
• SDGs

Environmental Achievements

• Reduced CO2 emissions by 25.4% compared to the year ended March 31, 2010 (3,840 tons)

Social Achievements

• Established Daishi Hokuetsu Career Bridge, Ltd. to support human resource issues faced by corporations in Niigata Prefecture.
• Established Bridge Niigata, Ltd. to expand corporate sales channels and engage in business matching.
• Held the Niigata Food and Comprehensive Business Talks Conference (Shoku Biz!), the largest such business conference in Niigata Prefecture.
• The Hokuetsu Bank won the Special Award at the 7th Bank of the Year Awards Ceremony for its efforts towards M&As.
• Donated 14.35 million yen from Private Placement Bonds to Support Childrearing, Education, and Personal Development.
• Presented banners featuring a traffic safety slogan to all elementary and junior high schools in Niigata Prefecture.
• The Daishi Bank received the special Platinum Kurumin certification and Eruboshi Accreditation III certification.
• The Hokuetsu Bank received the special Platinum Kurumin certification and Eruboshi Accreditation III certification.

Governance Achievements

• Established governance organizations such as the Board of Directors, Audit and Supervisory Committee, Executive Committee, Nomination and Compensation Committee, ALM & Risk Management Committee, and Compliance Committee.
• Participated in the Niigata Prefecture Financial Institutions Cybersecurity Information Committee.
• Formulated the Basic Policy on Anti-Money Laundering and Counter-Terrorism Financing Measures.

Climate Goals & Targets

Environmental Challenges

• Shrinking Japanese economy caused by population decline and aging population.
• Lengthening of monetary-easing policy.
• Growth of digitalization.
• Increased competition in the banking industry.

Mitigation Strategies

• Formulated the 1st Medium-Term Management Plan (October 2018 to March 2021) to respond to changes in the management environment.
• Implemented three basic strategies: improving financial intermediary function, increasing management efficiency, and increasing the sophistication of the Group management system.
• Implemented three-structure reform for administrative duties, branches, and channels.
• Increased efficiency and improved convenience through digitalization.

Supply Chain Management

Climate-Related Risks & Opportunities

UN Sustainable Development Goals

• Goal 1
• Goal 2
• Goal 3
• Goal 4
• Goal 5
• Goal 8
• Goal 13

Various initiatives contribute to these goals through regional revitalization, support for the elderly, financial services, diversity promotion, environmental protection, job creation, and CO2 emission reduction.

Environmental Metrics

ESG Focus Areas

• Climate Change
• Regional Development
• Human Capital
• Diversity & Inclusion
• Sustainable Finance

Environmental Achievements

• Reduced Scope 1 and Scope 2 CO2 emissions by 30% compared with fiscal 2013 by fiscal 2021.
• Set a target of reducing Scope 1 and Scope 2 emissions by 65% compared with fiscal 2013 by fiscal 2030.
• Active financing for renewable energy projects (Biomass power generation).

Social Achievements

• Launched Daishi Hokuetsu SDGs Consulting Service, supporting 58 companies in creating SDGs declarations by June 30, 2022.
• Offered Sustainability Linked Finance and SDGs Support Loans for SMEs.
• Continued support for business succession, startups, and re-startups (1,704 cases in FY2022).
• Provided support for resolving human resources issues faced by regional companies through Daishi Hokuetsu Career Bridge (1,104 consultations, 187 leading to hiring/job offers).
• Opened environmentally friendly branches with energy-saving and solar power generation facilities.
• Active participation in regional social contribution activities (financial education, scholarships, sports and culture promotion, volunteer activities).

Governance Achievements

• Established Sustainability Promotion Committee and formulated the Basic Sustainability Policy.
• Implemented the 2nd Medium-Term Management Plan with “practicing sustainability management” as a basic strategy.
• Established Investment & Financing Policies that consider environment and society.
• Enhanced information disclosure on climate change in line with TCFD recommendations.
• Improved corporate governance structure, including the establishment of the Nomination and Compensation Committee.
• Appointed the Group's first female executive officer.

Climate Goals & Targets

Environmental Challenges

• Declining birthrate and aging population in Niigata Prefecture.
• Population decline.
• Low startup rate.
• Intensified competition from other banks.
• Prolonged ultra-low interest rate environment.
• Climate change risks (physical and transition risks).

Mitigation Strategies

• Achieving three synergies (merger, group, and TSUBASA Alliance synergies) to strengthen profitability and productivity.
• Developing and enhancing human resources with strong consulting capabilities.
• Improving risk management systems, including those for climate change risks.
• Practicing sustainability management to create new value and contribute to a sustainable regional society.
• Providing consulting solutions and financial support to customers addressing environmental and social issues.
• Supporting business succession, startups, and DX initiatives to improve productivity and competitiveness.

Climate-Related Risks & Opportunities

Physical Risks

• Damage to customers' assets owing to floods
• Market turmoil owing to extreme weather events

Transition Risks

• Negative impact on customers’ businesses from inability to respond to regulations and social changes
• Fluctuations in the value of financial instruments affected by the transition to a decarbonized society

Opportunities

• Differentiation through consulting capabilities
• Expansion of new profit opportunities through cross-industry collaboration

Reporting Standards

Frameworks Used: International IR Framework, Ministry of Economy, Trade and Industry's Guidance for Integrated Corporate Disclosure

Certifications: Eruboshi Level III, Platinum Kurumin

Sustainable Products & Innovation

• Sustainability Linked Finance
• SDGs Support Loans

Awards & Recognition

• One of 2020’s 39 “Distinctive Efforts by Financial Institutions and Other Organizations Contributing to the Revitalization of Local Communities”

Environmental Metrics

ESG Focus Areas

• Regional Issues
• Environmental Issues
• Building Trust of Society
• Developing Talented People and Improving Workplace Environment

Environmental Achievements

• Target setting for reduction of CO2 emissions (-65% decline (Scopes 1&2) vs. FY2013 by FY2030)
• Three projects adopted by Ministry of the Environment (FY2022/3)
• Project Finance initiative for renewable energy business (28 billion yen total amount)
• Project Finance initiative for biomass power generation business (plan to start commercial operation in October 2024)

Social Achievements

• Start of “Sustainability Linked Finance” services (August 2021)
• Start of “SDGs Support Loan” (March 2022)
• Start of “Daishi Hokuetsu SDGs Consulting Service” (September 2021)
• Shoku no Kizuna (Food Relationship) in Niigata Project -Supporting organizations affected by COVID -19
• Increase the ratio of women in management positions (47.2% in 2021/3 to 73.3% planned for 2023/3)
• Double acquisition of “Platinum Kurumin ” and “L-Boshi III”

Governance Achievements

• Establishment of “Sustainability Promotion Committee” chaired by FG President
• Establishment of “Sustainability Promotion Office” to oversee cross-organizational efforts
• Endorsement of TCFD Recommendations
• Appointment of women officers (Scheduled to appoint the Group’s first woman Executive Officer as of June 16, 2022)

Climate Goals & Targets

Environmental Challenges

• Prolonged impact of COVID-19
• Emergence of geopolitical risks
• Sharp rise in resource prices
• Decrease in interest and dividends on securities due to the prolonged ultra-low interest rate environment

Mitigation Strategies

• Conservatively factor in net credit costs
• Further accelerate the reallocation of management resources through Office Integration and Operation Reform of Sales Offices
• Strengthen the top line through the implementation of consulting sales by leveraging the Group’s comprehensive strengths
• Continue to focus on supporting clients’ business improvement and revitalization, while closely monitoring the prolonged impact of COVID-19, the cash flow situation after the termination of zero-zero financing, the emergence of geopolitical risks, the sharp rise in resource prices, etc.

Supply Chain Management

Responsible Procurement

• Specified projects, etc. that are considered to impact sustainability of society (Logging business, Coal-fired power generation, Weapon manufacturing, Palm oil plantation development)

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: TCFD

Sustainable Products & Innovation

• SDGs Support Loan
• Daishi Hokuetsu SDGs Consulting Service

Awards & Recognition

• Accredited as “Excellent Health and Productive Management Corporation 2022” (White 500) for 5 years in a row

Environmental Metrics

ESG Focus Areas

• Active efforts to address global environmental issues
• Revitalizing regional economies and society by solving community and customer issues
• Strengthening trusted relationships with stakeholders through improved governance, including ensuring diversity

Environmental Achievements

• CO2 emissions reduction rate (vs. fiscal 2013): -54.8%
• Launched ZEH Housing Support Plan to encourage environmentally friendly housing
• Collected and recycled approximately 25,000 used plastic document sleeves

Social Achievements

• Donation to Niigata Prefecture to assist those affected by drought
• Received Medal with Dark Blue Ribbon for donation
• Appointed first female Director from within the Group
• Increased proportion of female managers to 26.0%
• Supported 1,968 business startups or re-startups
• Supported 1,743 companies in business succession

Governance Achievements

• Established Sustainability Promotion Committee chaired by the President
• Enhanced information disclosure based on TCFD recommendations
• Revised shareholder return policy targeting a 40% total shareholder return ratio

Climate Goals & Targets

Environmental Challenges

• Decreasing population, declining birthrate, and aging society in Niigata Prefecture
• Changes in social and industrial structures due to DX
• Growing importance of sustainability management
• Acceleration of globalization
• Further increase in geopolitical risks
• Shift in monetary policies
• Intensification of competition with other banks
• Climate change risks (physical and transition risks)

Mitigation Strategies

• Implemented four basic strategies under the 3rd Medium-Term Management Plan: Demonstration of Group comprehensive capabilities, Pursuit of productivity improvement, Enhancement of human capital value, and Deepening risk management
• Deepening and exploring Group management
• Strengthening risk management systems
• Providing information, consulting services, and solutions for customers
• Actively supporting customers' efforts against climate change
• Upgrading risk management system to account for climate change risk
• Established subcommittees and working groups under the Sustainability Promotion Committee

Supply Chain Management

Responsible Procurement

• Investment & Financing Policies that consider environment and society

Climate-Related Risks & Opportunities

Physical Risks

• Damage to customers' assets owing to floods
• Market turmoil owing to extreme weather events
• Withdrawal of deposits by flood-affected customers
• Suspension of business operations due to flood damage

Transition Risks

• Negative impact on customers’ businesses from inability to respond to regulations
• Fluctuations in the value of financial instruments affected by decarbonization
• Lowering of external ratings due to delayed decarbonization
• Reputational risk from delayed decarbonization

Opportunities

• Providing financing for measures to help customers transition to a decarbonized society
• Working with customers for sustainable growth

Reporting Standards

Frameworks Used: International Integrated Reporting Framework, TCFD (formerly)

Certifications: Platinum Kurumin Plus, Platinum Eruboshi, Health & Productivity Management Outstanding Organization for 2024, Sports Yell Company 2024, DX-Certified Operator, Information Processing Support Institutions (Smart SME Supporters)

Sustainable Products & Innovation

• ZEH Housing Support Plan
• Biz-Ecology loan product

Awards & Recognition

• Medal with Dark Blue Ribbon
• Area Award for the Kanto/Koshinetsu region in CYBOZU AWARD 2024