Climate Change Data

Environmental Metrics

ESG Focus Areas

• Regional revitalization
• Environmental conservation
• Social contribution
• Corporate governance
• Human rights
• Sustainable Development Goals (SDGs)

Environmental Achievements

• Established “Hyakujushi Bank’s Environmental Policy” and “Hyakujushi Bank’s Human Rights Policy” in April 2020.
• Established the “Environmental and Social Management Policy for Financing and Investment Activity” in December 2020.
• Engaged in project financing of a biomass power generation project.
• Offered private placement bonds geared to supporting achievement of SDGs (nickname: 114 SDGs Loan).

Social Achievements

• Launched the “114 Tenohina Project” (August-December 2020) contributing proceeds from digital transactions to Kagawa Prefecture to help prevent the spread of COVID-19.
• Established area-based career-track positions and an evaluation framework for specialists in April 2021 to provide rewarding opportunities for diverse human resources.
• Shikoku Alliance (joint investment with four Shikoku banks) established SHIKOKU BRAND inc. for branding and promotion of Shikoku resources.

Governance Achievements

• Strengthened governance framework through various reforms including increasing the proportion of Outside Directors on the Board, appointing a female Outside Director as Chairperson of the Nomination and Remuneration Governance Committee, appointing a CCO, and improving Board of Directors meeting administration.

Climate Goals & Targets

Environmental Challenges

• Continued low interest rate environment
• Intensifying competition with neighboring banks
• Entry of companies from other industries
• Shrinking population, declining birthrate, and aging population
• Impact of COVID-19 on local economy
• Need to adapt to new lifestyles under the “new normal”

Mitigation Strategies

• Transformation to a general consulting group offering one-stop services
• Development of human resources with high market value
• Structural reforms leading to a more robust earnings structure
• Customer-centered consulting practices
• Strategic investment in key areas
• Channel reform (reorganizing branch networks and upgrading non-face-to-face channels)
• Operational efficiency improvement and thorough low-cost management

Supply Chain Management

Responsible Procurement

• Investment and lending policy focusing on endeavors that help reduce climate change risks and resolve social issues, while avoiding highly detrimental endeavors.

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• 114 SDGs Loan
• SDGs Medical Institution Bonds

Environmental Metrics

ESG Focus Areas

• Efforts to revitalize the local economy
• Respond to the era of 100-year lifetimes
• Establish an environment where diverse human resources can participate and grow
• Digital transformation of our operations and local communities
• Initiatives to address environmental issues such as climate change
• Establish a sustainable management foundation

Environmental Achievements

• CO2 emissions (Scope 1 & 2): 43.6% reduction vs. FY 2013 by FY 2022
• Annual reduction in CO2 emissions is expected to be 480 tons (8% of Group’s annual emissions) through self-utilization of electricity generated by solar power generation facility
• New branch (scheduled for construction and relocation in the fall of 2023) expected to achieve ZEB status, reducing CO2 emissions to zero

Social Achievements

• Introduced a side job system and career-return system in April 2023
• Strengthening support of employees who take maternity and childcare leave through the “Hyakujushi Childcare Support Program”
• Became the first company in Kagawa prefecture to be certified with “Platinum Kurumin Plus” in November 2022 for efforts focused on infertility treatment
• Established a career consultation service in February 2023 to support the autonomous career development of employees

Governance Achievements

• Strengthened governance through the shift to a Company with an Audit and Supervisory Committee, establishment of a Nomination and Remuneration Governance Committee chaired by an Outside Director, and appointment of a CCO
• Achievement of sustainability management targets (reduction of CO2 emissions, increase in the share of females in management, etc.) will be taken into account with respect to executive remuneration from FY 2023 onward

Climate Goals & Targets

Environmental Challenges

• Poor regional economic growth
• Declining population, declining birthrate and aging population
• Shift to decarbonization and a circular economy
• Social and economic digital shift
• Ongoing low interest rate environment
• Intensified competition due to entrants from outside the industry
• Expansion of business areas due to deregulation
• Climate change risks (physical and transition risks)

Mitigation Strategies

• Business deployment based on Hyakujushi Group Material Issues
• Three transformations (SX, HRX, DX) as growth engines
• Strengthening initiatives for improving ROE
• Reducing cross-shareholdings
• Strengthening governance
• Scenario analysis of climate change risks and preparations to manage these risks through an integrated risk management framework
• Strengthening energy-saving and energy-creating activities to ease the burden on the environment
• Promoting sustainable finance and providing non-financial support to help customers decarbonize their businesses

Supply Chain Management

Responsible Procurement

• Switching the garbage bags we use within the Hyakujushi Group to garbage bags made from 99% recycled materials

Climate-Related Risks & Opportunities

Physical Risks

• Credit risk due to damage to customers’ assets resulting from abnormal weather conditions
• Operational risk due to damage to the Bank’s branches

Transition Risks

• Increase in credit risk for customers affected by factors such as more stringent climate-related policy/regulation and the advance of technological innovation aimed at decarbonization

Opportunities

• Supporting our customers and communities in their efforts to combat climate change and transition to a decarbonized society
• Financing renewable energy businesses, assisting customers to reduce their greenhouse gas emissions, and providing services aimed at alleviating environmental burden

Reporting Standards

Frameworks Used: International Integrated Reporting Framework, TCFD

Certifications: Platinum Kurumin Plus

Third-party Assurance: Ernst & Young ShinNihon LLC

Awards & Recognition

• Platinum Kurumin Plus

Environmental Metrics

ESG Focus Areas

• Regional revitalization
• Responding to the era of 100-year lifetimes
• Establishing an environment where diverse human resources can participate and grow
• Digital transformation of operations and local communities
• Addressing environmental issues such as climate change
• Establishing a sustainable management foundation

Environmental Achievements

• Achieved a 58.1% reduction in CO2 emissions (Scope 1 & 2) compared to the FY 2013 level.
• Takamatsu Higashi Branch certified as a net-zero energy building (ZEB).
• Reduced energy consumption by 52% at Takamatsu Higashi Branch through energy-saving features.
• 50% of energy at Takamatsu Higashi Branch derived from solar power.
• Received the Kagawa Decarbonization Excellence Award.
• Certified as a model business under the Kagawa Prefectural Environmental Consideration Model Certification Initiative.
• Introduced eco-friendly garbage bags made from 100% biomass materials.

Social Achievements

• Provided financial education to 4,132 people.
• Increased share of females in junior management to 29.0%.
• Increased share of females in management to 14.0%.
• Introduced the 114 Reskilling Support System.
• Implemented an intra-bank exchange system with 59 participants.
• Certified as a KENKO Investment for Health Outstanding Organization for six consecutive years.
• Introduced 1-on-1 meetings across all branches to improve employee engagement.
• Introduced side-job and career-return systems.
• Opened “#114base” in Takamatsu Station to contribute to regional revitalization.
• Concluded an agreement with Takamatsu City regarding the Corporate Version of Hometown Tax Donation System.

Governance Achievements

• Established the Digital Innovation Division.
• Revised officer remuneration system to incorporate achievement of sustainability-related metrics.
• Reduced cross-shareholdings by ¥4.2 billion in book value.
• Strengthened auditing and supervising functions.
• Established the Nomination and Remuneration Governance Committee.

Climate Goals & Targets

Environmental Challenges

• Poor regional economic growth
• Declining population, declining birthrate, and aging population
• Shift to decarbonization and a circular economy
• Social and economic digital shift
• Ongoing low interest rate environment
• Intensified competition
• Labor shortages
• Soaring prices
• Depreciation of the yen
• Climate change transition and physical risks
• Cyberattacks

Mitigation Strategies

• Long-term Vision 2030 and medium-term management plan "Let's Create a Good 114"
• Three growth engines: SX (Sustainability Transformation), HRX (Human Resources Transformation), and DX (Digital Transformation)
• Evolution of the general consulting group
• Strengthening human resource capabilities
• Fostering employee engagement
• Dramatic improvement of productivity
• Establishment of a sustainable management foundation
• Risk Appetite Framework
• Business continuity plan (BCP)
• Cybersecurity measures and 114 CSIRT
• Compliance Program and whistleblower hotline

Supply Chain Management

Responsible Procurement

• Use of eco-friendly garbage bags made from 100% biomass materials

Climate-Related Risks & Opportunities

Physical Risks

• Damage to customers’ assets resulting from abnormal weather conditions
• Increase in credit risk due to stagnation of business activities
• Operational risk due to damage to the Bank’s branches

Transition Risks

• More stringent climate-related policy/regulation
• Increase in credit risk for customers affected by factors such as the advance of technological innovation aimed at decarbonization

Opportunities

• Financing renewable energy businesses
• Assisting customers to reduce their greenhouse gas emissions
• Providing services aimed at alleviating environmental burden

Reporting Standards

Frameworks Used: International Integrated Reporting Framework, TCFD

Certifications: ZEB (Net Zero Energy Building)

Third-party Assurance: Japan Quality Assurance Organization

UN Sustainable Development Goals

• SDG 7 (Affordable and clean energy)
• SDG 8 (Decent work and economic growth)
• SDG 9 (Industry, innovation, and infrastructure)
• SDG 11 (Sustainable cities and communities)
• SDG 13 (Climate action)
• SDG 17 (Partnerships for the goals)

Various initiatives contribute to these goals through regional revitalization, sustainable finance, employee well-being, digital transformation, and environmental protection.

Awards & Recognition

• Kagawa Decarbonization Excellence Award
• Kagawa Prefectural Environmental Consideration Model Certification