Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental Protection
• Healthcare / Social Welfare
• Education / Culture
• Diversity
• Creating shared value with clients

Environmental Achievements

• Reduction in energy consumption rate (compared to the previous fiscal year) by 3.5%
• Supported environmentally-oriented businesses and the environmental growth field through financial products and services

Social Achievements

• Launched Hokku Fund to protect Hokkaido’s biodiversity, offering grants amounting to 60 million yen to 87 organizations.
• Hosted medical seminars and courses open to the public.
• Supported Bone Marrow Bank Hokkaido.
• Implemented measures to make branches safer and more convenient for elderly and disabled customers (e.g., ATMs with audio guidance, braille statements).
• Offered various types of financial education to 721 students from 51 schools.
• Hosted classical concerts and supported cultural projects.
• Became the first financial institution in Hokkaido to be named an outstanding childcare support enterprise (Platinum Kurumin).
• Supported parasports through private-placement funding.
• Engaged in various projects to support children's sports participation.

Governance Achievements

• Established an ESG Approach Policy and a set of Principal SDG Themes.
• Elected three external directors to enhance management transparency.
• Elected three external Audit & Supervisory Board Members.
• Established a Nomination and Remuneration Management Advisory Committee.
• Implemented robust internal control systems, including internal and external whistleblower systems.
• Established Basic Policies for Dealing with Organized Crime.
• Established a Basic Policy on Countering Money Laundering and the Financing of Terrorism and a dedicated Financial Crime Prevention Office.

Climate Goals & Targets

Environmental Challenges

• Declining interest rates impacting net interest income.
• Hokkaido's aging population and declining birthrate.
• High rate of businesses without successors in Hokkaido (70%).
• Need to support Hokkaido's manufacturing industry.
• Maintaining water-tight security against money laundering and terrorist financing.

Mitigation Strategies

• Reduced expenses, predominantly for equipment.
• Deployed healthcare business specialists to strengthen customer support services.
• Offered comprehensive M&A and succession support.
• Provided continuous support to manufacturing corporations through various funds and business matching.
• Established a dedicated Financial Crime Prevention Office and enhanced risk-based approach.

Supply Chain Management

Climate-Related Risks & Opportunities

Awards & Recognition

• Platinum Kurumin

Environmental Metrics

ESG Focus Areas

• Creating shared value with clients
• Environmental protection
• Healthcare/social welfare
• Education/culture
• Diversity

Environmental Achievements

• Established the Hokku Fund for Biodiversity Conservation in 2010, subsidizing organizations working to protect rare species in Hokkaido.
• Issued Hokuyo Eco Bond private placement bonds supporting environmentally considerate initiatives.
• Designated by the Ministry of the Environment as a financial institution with interest subsidies to promote regional ESG loans (311 million yen/seven cases in fiscal 2019).

Social Achievements

• Comprehensive partnership agreements with four educational institutions in Hokkaido to improve residents' physical and mental health.
• Support for the Hokkaido Bone Marrow Bank Promotion Association.
• Various initiatives to create a pleasant work environment for both men and women, including work-life balance programs.

Governance Achievements

• Added one more external director, currently having 12 directors (including four external directors) and five Audit & Supervisory Board Members (including three external Audit & Supervisory Board Members).
• Established a Nomination and Remuneration Management Advisory Committee, more than half of which is composed of independent external directors and auditors.
• Implemented robust measures to prevent money laundering and other financial crimes, including establishing a dedicated Financial Crime Prevention Office.

Climate Goals & Targets

Environmental Challenges

• Declining population and prolonging of ultra-low interest rate policies creating a difficult business environment for regional banks.
• Sharp decline in tourism in Hokkaido due to the COVID-19 pandemic.
• Deterioration of market conditions under the COVID-19 pandemic impacting securities held.

Mitigation Strategies

• Formulated a new unified management philosophy and a concrete code of conduct.
• Launched a new Medium-Term Business Plan, "Deepening the Creation of Shared Value", focusing on customer orientation, human resource development, and efficient use of digital technology.
• Undertook expense reductions, primarily due to decreased personnel expenses and reductions in property expenses.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Climate Change
• Community Development
• Healthcare/Social Welfare
• Education/Culture
• Diversity

Environmental Achievements

• Endorsed TCFD recommendations
• Established Hokku Fund for Biodiversity Conservation
• Issued Hokuyo Eco Bond
• Participated in regional ESG loan program
• Offered preferential interest rates for environmentally considerate construction

Social Achievements

• Launched Hokuyo SDGs Promotion Fund
• Launched Hokuyo Agricultural Region Revitalization Fund
• Supported medical professionals during COVID-19 pandemic (Hokuyo Northern Medical Support Bond)
• Supported SMEs impacted by COVID-19 pandemic (over 460 billion yen in loan support)
• Engaged in regional beautification activities
• Comprehensive partnership agreements with four educational and research institutions
• Supported bone marrow transplant activities
• Offered products supporting peace of mind in emergencies
• Offered Braille notification services for visually impaired customers
• Sponsored classical music concerts
• Co-sponsored PMF (Pacific Music Festival)
• Handled Parasports Aid Bond
• Supported sports for children, including those with disabilities
• Became the first financial institution in Hokkaido to handle housing loans for same-sex partners and common-law marriages

Governance Achievements

• Added one external director, resulting in 11 directors (including four external directors) and five Audit & Supervisory Board Members (including three external Audit & Supervisory Board Members)
• Established a Sustainability Committee chaired by the president
• Established a Nomination and Remuneration Management Advisory Committee
• Adopted an Audit & Supervisory Board, separate from the Board of Directors
• Established an Internal Whistleblower System
• Established a Compliance Committee
• Established Basic Policy on Countering Money Laundering and the Financing of Terrorism
• Launched a dedicated Financial Crime Prevention Office
• Established Combined Security Policies and Security Standards
• Announced a Personal Information Protection Declaration (Privacy Policy)
• Established Customer Protection Management Policies and Solicitation Policies
• Established Conflict of Interest Management Policies and Rules for the Prevention of Conflicts of Interest
• Formulated Action Guidelines for the Realization of Stable Asset Formation and Asset Succession of Customers

Climate Goals & Targets

Environmental Challenges

• Unprecedented negative economic growth due to COVID-19 pandemic and other factors
• Harsh economic circumstances in Hokkaido due to factors including decline in inbound tourism and population decline
• Continued development of a harsh business environment with ultra-low interest rates, new competitors, and digitalization
• Climate change risks (physical and transition risks)

Mitigation Strategies

• Formulated a new unified groupwide Management Philosophy and Medium-term Business Plan emphasizing “Deepening the Creation of Shared Value.”
• Undertook a developmental overhaul of its Basic CSR Policy and formulated a Sustainability Policy.
• Endorsed TCFD recommendations and defined and evaluated climate-related risks and opportunities.
• Implemented various programs and revised repayment conditions on existing loans to support customers impacted by the COVID-19 pandemic.
• Focused on business matching facilitation to help business operators establish new business styles.
• Implemented comprehensive risk management framework to address climate change risks.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Increased flooding
• Worsening abnormal weather
• Rising average temperatures and sea levels

Transition Risks

• Strengthened regulations regarding decarbonization, carbon taxes, CO2 emissions
• Failure of investments related to replacement of existing products with low-carbon technologies
• Changes in consumer behavior, increased raw materials costs

Opportunities

• Supplying financing and solutions to support the transition to a decarbonized society

Reporting Standards

Frameworks Used: TCFD

UN Sustainable Development Goals

• Various SDGs

The report outlines initiatives aligned with five Principal SDGs Themes: creating shared value with customers, environmental protection, healthcare/social welfare, education/culture, and diversity.

Environmental Metrics

ESG Focus Areas

• Climate Change
• Sustainable Finance
• Community Development
• Healthcare/Social Welfare
• Education/Culture
• Diversity

Environmental Achievements

• Established Hokuyo SDG Promotion Fund No. 2 to invest in Hokkaido companies aligned with SDGs.
• Launched Hokuyo Sustainable Loans (Green Loans and Sustainability-Linked Loans) to support customers' decarbonization efforts.
• Aimed to reduce CO2 emissions to 50% of fiscal 2013 levels by fiscal 2030 and achieve carbon neutrality by 2050.

Social Achievements

• Provided SDG Declaration Support and SDG Consulting services to help Hokkaido businesses address the SDGs.
• Launched initiatives to support the food and farming, tourism, and manufacturing sectors in Hokkaido.
• Implemented inter-industry human resource matching to address labor shortages.
• Supported medical professionals in Hokkaido through SDG (Healthcare Support) Private Placement Bonds.
• Engaged in various community activities, including litter clean-up and cultural initiatives.

Governance Achievements

• Formulated a Sustainability Policy and endorsed the TCFD recommendations.
• Established a Sustainability Committee chaired by the president.
• Added one external director, resulting in four external directors and three external Audit & Supervisory Board Members.
• Implemented robust internal control systems, including internal audits and a whistleblower system.

Climate Goals & Targets

Environmental Challenges

• Declining population, falling birthrate, and aging population in Hokkaido.
• Shrinking market in Hokkaido due to structural issues.
• Prolongation of ultra-low interest rates and increased competition.
• High resource prices and accelerating inflation.
• Climate change risks (transition and physical risks).

Mitigation Strategies

• Implemented a Medium-term Business Plan emphasizing “Deepening the Creation of Shared Value”.
• Strengthened partnerships with subsidiaries to meet diversified customer needs.
• Developed various support programs for businesses, including consulting, business matching, and financial assistance.
• Conducted scenario analyses for transition and physical risks associated with climate change.
• Set targets for environment-related investments and loans to support the transition to a decarbonized society.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Increased flooding and worsening extreme weather events

Transition Risks

• Carbon taxes and tighter regulations on CO2 emissions
• Failure of investment in low-carbon technologies
• Changes in consumer behavior

Reporting Standards

Frameworks Used: TCFD

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 8 (Decent Work and Economic Growth)
• Goal 9 (Industry, Innovation, and Infrastructure)
• Goal 11 (Sustainable Cities and Communities)
• Goal 13 (Climate Action)

Various initiatives support these goals through sustainable finance, community development, and environmental protection.

Sustainable Products & Innovation

• Hokuyo Sustainable Loans (Green Loans and Sustainability-Linked Loans)
• SDG (Eco) Private Placement Bonds
• SDG (Healthcare Support) Private Placement Bonds
• SDG (Parasports Support) Private Placement Bonds
• SDG (Education) Private Placement Bonds

Environmental Metrics

ESG Focus Areas

• Climate change
• Biodiversity
• Financial and economic education
• Social issues
• Diversity
• Human rights

Environmental Achievements

• Reduced CO2 emissions (Scope 1+2) by 42.1% from FY2013 levels by FY2022; aiming for 60% reduction by FY2030 and carbon neutrality by 2050.
• Established Environmentally and Socially Considerate Investment and Loan Policy in December 2022.
• Offering SDGs (Eco) Private Placement Bonds to support environmentally considerate initiatives.
• Participating in Team Sapporo-Hokkaido to contribute to Hokkaido's overall growth.

Social Achievements

• Launched Hokuyo Financial Classroom project in April 2022 for financial education, reaching 10,207 participants in FY2022.
• Distributed Hokkaido milk to foreign travelers at New Chitose Airport to promote exports.
• Concluded comprehensive partnership agreements with four research and educational institutions to improve residents' health and promote industry-academia cooperation.
• Supported medical professionals in Hokkaido through SDG (Healthcare Support) Private Placement Bonds, donating 1.56 million yen in FY2022.
• Supported parasports activities in Hokkaido through SDG (Parasports Support) Private Placement Bonds.

Governance Achievements

• Established Sustainability Policy in FY2021, endorsing TCFD recommendations.
• Established a Sustainability Committee chaired by the President.
• Improved transparency in personnel evaluations through 360-degree evaluations.
• Elected four external directors to enhance management transparency.

Climate Goals & Targets

Environmental Challenges

• Accelerating price increases
• Severe labor shortage
• Rapidly advancing digitalization in the financial industry
• CO2 emissions reductions and other responses to environmental issues
• Prolongation of the elder phase of life
• High transition and physical risks associated with climate change

Mitigation Strategies

• Developed a Medium-Term Business Plan (FY2023-FY2026) focusing on growth and environment/society balance.
• Strengthened consulting functions through partnerships with Hokkaido Kyoso Partners Co., Ltd. and North Pacific Securities Co., Ltd.
• Implemented scenario analyses for transition and physical risks related to climate change.
• Established Environmentally and Socially Considerate Investment and Loan Policy to avoid investments with negative environmental and social impacts.
• Set targets for CO2 emissions reduction and carbon neutrality.
• Strengthened risk management framework, including credit, market, liquidity, and operational risk management.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Damage to collateral properties due to increased flooding
• Deterioration of customer business performance due to business stagnation

Transition Risks

• Changes in macroeconomic environment associated with decarbonization
• Legal and regulatory risk
• Technological risk
• Market risk
• Reputation risk

Opportunities

• Supplying financing and solutions to support customers' transition to a low-carbon society

Reporting Standards

Frameworks Used: TCFD

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 13 (Climate Action)
• Goal 3 (Good Health and Well-being)
• Goal 4 (Quality Education)
• Goal 8 (Decent Work and Economic Growth)
• Goal 15 (Life on Land)

Various initiatives support these goals through sustainable finance, community development, education, and environmental protection.

Sustainable Products & Innovation

• SDGs (Eco) Private Placement Bonds
• SDGs (Healthcare Support) Private Placement Bonds
• SDGs (Education) Private Placement Bonds
• SDGs (Biodiversity) Private Placement Bonds
• Sustainability-Linked Loans
• Green Loans

Awards & Recognition

• Outstanding Organization for Health and Productivity Management 2023 (large enterprise category)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Biodiversity Conservation
• Financial and Economic Education

Environmental Achievements

• Achieved a 57.3% reduction in Scope 1 and 2 GHG emissions from FY2013 in FY2023, aiming for 80% by FY2030 and carbon neutrality by 2050.
• Began calculating estimates for corporate borrowers' Scope 3 emissions (Category 15).

Social Achievements

• Launched the Hokuyo Financial Classroom project in April 2022, providing financial education to various groups.
• Established the Hokku Fund in 2010, providing subsidies totaling 92.6 million yen to 185 recipients for biodiversity conservation.
• Became the first company in Hokkaido to receive Platinum Eruboshi Certification in June 2024 for promoting women's active engagement.

Governance Achievements

• Shifted from a company with an Audit & Supervisory Board to a company with an Audit and Supervisory Committee on June 26, 2024.
• Appointed one external director (not an Audit and Supervisory Committee member) and three external directors who are Audit and Supervisory Committee members to enhance management transparency and audit effectiveness.

Climate Goals & Targets

Environmental Challenges

• High commodity prices and labor shortages.
• Economic impact of the end of the Bank of Japan’s negative interest rate policy and geopolitical risks.
• Insufficient efforts to support wealth-building.
• Inability to meet the loan target for SMEs in Hokkaido due to higher-than-expected prepayments of COVID-19 support loans.
• Transition risks and physical risks associated with climate change.
• Concerns about sustainability due to stagnation of the Hokkaido economy.
• High cost structure based on branches and over-the-counter services.
• Depopulation and lack of successors in Hokkaido.

Mitigation Strategies

• Implemented the Medium-term Business Plan with three pillars: improving sustainability, developing human resources, and boosting productivity.
• Increased loans to individuals and yen-denominated bonds to increase core business profit.
• Introduced the North Pacific Bank personal portal app and TSUBASA Smile system to improve productivity and customer convenience.
• Promoting digitization and DX to improve productivity.
• Revised personnel system and launched intra-bank contests for business ideas to foster a culture of pioneering.
• Conducting scenario analyses for transition and physical risks associated with climate change.
• Established Environmental and Socially Considerate Investment and Loan Policy in December 2022.
• Set a target of 500.0 billion yen for environment-related investment and financing from FY2021 to FY2030.
• Upgrading to energy-saving equipment and introducing carbon-free electricity to reduce Scope 1 and 2 emissions.
• Strengthening life planning support services to help customers resolve concerns about wealth as they age.
• Established a Diversity Promotion Office to support female employees.
• Introduced a work-life balance support system, including childcare leave programs for both male and female employees.
• Strengthening mid-career recruitment and hiring foreign nationals.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Increased flooding and worsening extreme weather events

Transition Risks

• Changes in macroeconomic environment associated with decarbonization
• Changes in consumer behavior, rising raw material costs
• Condemnation of specific sectors

Opportunities

• Growth in GX-related industries in Hokkaido

Reporting Standards

Frameworks Used: TCFD

Certifications: Platinum Eruboshi Certification

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 13 (Climate Action)
• Goal 8 (Decent Work and Economic Growth)
• Goal 4 (Quality Education)
• Goal 5 (Gender Equality)

Initiatives such as GX-related financing, GHG emission reduction, financial literacy programs, support for women's career development, and biodiversity conservation contribute to these goals.

Awards & Recognition

• Platinum Eruboshi Certification