Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Formulated “Green Procurement Guidelines” to promote environmentally conscious purchases.
• Adopted environmentally conscious office designs and business operations (solar and wind power equipment, LED lighting, environmentally friendly buildings, permeable asphalt pavement, environmentally friendly vehicles).

Social Achievements

• Launched trust products (Higo Bank/Kagoshima Bank) to address growing inheritance and asset succession needs.
• Established Glocal Crowdfunding Inc. to provide growth capital for businesses in Kyushu.
• Launched personnel placement service (Higo Bank) to address business succession problems.
• Supported the foundation of the Kyushu Asia Human Resources Development Cooperative (Kagoshima Bank) to address labor shortages.

Governance Achievements

• Formulated the “Guideline for Investments and Loans” to incorporate ESG elements into investment and loan services.
• Announced support for the TCFD Recommendations.
• Established a dedicated department and formulated a “Sustainability Declaration” to strengthen the viewpoint of SDGs.

Climate Goals & Targets

Environmental Challenges

• Declining birthrate and aging population.
• Advent of a digital society.
• Increase in natural disasters.
• COVID-19 pandemic.
• Business succession problems.
• Labor shortages.

Mitigation Strategies

• Implementing DX initiatives to achieve dramatic productivity improvements.
• Supporting customers in their response to the “New Normal” (including digitalization efforts).
• Promoting the Sustainable Development Goals (SDGs).
• Formulating the “Guideline for Investments and Loans” to incorporate ESG elements into investment and loan services.
• Launching various initiatives to support business continuity and maintenance of living during the COVID-19 pandemic.
• Establishing the Committee to Combat COVID-19 to facilitate groupwide information sharing and initiatives.

Supply Chain Management

Responsible Procurement

• Green Procurement Guidelines

Climate-Related Risks & Opportunities

Physical Risks

• Large-scale natural disasters

Reporting Standards

Frameworks Used: International Integrated Reporting Framework (IIRC), Guidance for Integrated Corporate Disclosure and Company-Investor Dialogues for Collaborative Value Creation (METI)

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 13 (Climate action)

Initiatives such as ESG financing for renewable energy projects and environmentally conscious management practices contribute to these goals.

Awards & Recognition

• Silver prize in the lending service category of the 1st ESG Finance Awards Japan (Ministry of the Environment)
• Japan Quality Award (leading company category) (Higo Bank)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Environmental Sustainability
• Social Impact
• Governance
• Disaster Recovery
• Digitalization
• SDGs

Environmental Achievements

• Higo Bank and Kagoshima Bank stopped using plastic bags for handing out little gifts or other materials.
• Kagoshima Bank started handing out reusable bags to local customers to reduce plastic shopping bag use.
• ¥7.93 billion in loans executed for renewable energy projects.

Social Achievements

• Sent 671 volunteers and deployed mobile ATM vans and special consultation desks to support local recovery efforts in the Kumamoto region affected by the 2020 Kyushu Floods.
• Glocal Crowdfunding Inc. (funded by the Group) launched a donation-style crowdfunding project supporting Kumamoto spirits and local tourism, raising approximately ¥4 million.
• Launched a side-job human resource referral service matching local companies with urban workers.
• Kyushu FG Securities launched IPO support services for Kyushu-based regional companies.

Governance Achievements

• Established the Committee to Combat COVID-19 to enhance risk management, support customers, and revitalize the regional economy.
• Endorsed the Task Force on Climate-related Financial Disclosures (TCFD) Recommendations.
• Higo Bank selected as a participant institution for a project supporting scenario analysis of climate-related risks and opportunities in line with TCFD Recommendations.

Climate Goals & Targets

Environmental Challenges

• Declining birthrate and aging population.
• Continuing ultra-low interest policy.
• Frequent natural disasters.
• Spread of COVID-19 causing dramatic changes in the economic environment and lifestyle.

Mitigation Strategies

• Practicing “field-oriented management based on our management philosophy” and thoroughly implementing initiatives to provide support.
• Established the Committee to Combat COVID-19.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: TCFD

Environmental Metrics

ESG Focus Areas

• Sustainable growth of the regional economy
• Addressing climate change
• Securing human resources and workforce
• Response to declining birthrate and aging population
• Respecting human rights and diversity
• Establishing a digital society

Environmental Achievements

• 15.0% (5,066 t -CO2) reduction in CO2 emissions compared to FY2019

Social Achievements

• ESG investments and loans cumulative execution amount: ¥446.2 billion (incl. ¥137.9 billion for the environment-related) from FY2021 to FY2023
• Provided SDGs consulting services to 103 (Higo Bank) and 96 (Kagoshima Bank) customers in FY2023

Governance Achievements

• Established the Sustainability Promotion Committee, chaired by the President and Representative Director, reporting every three months.
• Implemented a system to use the reduction of paper consumption as one of the business performance metrics at Higo Bank.

Climate Goals & Targets

Environmental Challenges

• Client Engagement
• Assessing negative environmental and social impacts
• Access to resources

Mitigation Strategies

• Deepening dialogue with customers and the local community
• Established the Sustainability Promotion Office at Higo Bank and Kagoshima Bank to support customers' transition to sustainable business models.
• Joined PCAF to enhance calculation and disclosure of CO2 emissions of investees.
• Introduced initiatives like the “Wakuwaku Yuden (Oilfield) Project” (Higo Bank) and “STOP Global Warming!! Decarbonization Challenge” (Kagoshima Bank) to foster awareness and reduce emissions.

Supply Chain Management

Climate-Related Risks & Opportunities

Opportunities

• Investments and loans in renewable energy business

Reporting Standards

Frameworks Used: GRI, SASB, TCFD

Third-party Assurance: Ernst & Young ShinNihon LLC (starting FY2024)

Sustainable Products & Innovation

• SDGs consulting services (including carbon neutral consulting)
• SDGs Declaration Preparation Support Service