CHUGIN FINANCIAL GROUP, INC.
Climate Impact & Sustainability Data (2022-04 to 2022-09, 2023)
Reporting Period: 2022-04 to 2022-09
Environmental Metrics
ESG Focus Areas
- Regional Revitalization
- SDGs
- Decarbonization
- Sustainable Finance
- Diversity & Inclusion
Environmental Achievements
- Initiatives for "SDGs through our core business" including private placement bonds for social contribution and Chugin Sustainable Loans.
- Established Task Force on Climate-related Financial Disclosures (TCFD).
Social Achievements
- Obtained a “Platinum Kurumin” certificate for supporting employees in their childcare period.
- Proactively hired personnel with special skills from diversified industries.
- Established the Job Return system for retired employees.
- Launched Chugin app and Chugin Business Portal.
Governance Achievements
- Established the Sustainability Committee.
- Independent outside director ratio: 44.4% (four out of nine, of whom one female director).
- Established the Nomination and Compensation Committee.
Climate Goals & Targets
Medium-term Goals:
- Execute loans equivalent to 1.5 trillion yen for sustainable finance by the end of 2030.
Short-term Goals:
- Reduce Scopes 1 and 2 emissions to Net Zero by the end of 2030.
Environmental Challenges
- Risk that local companies may fall behind in decarbonization.
- Risk of occurrence of natural disasters.
- Risk of stranded assets such as loans and securities.
Mitigation Strategies
- Review of portfolio and risk management.
- Improvement of the promotion system mainly by the Sustainability Committee.
- Reflected on the evaluation of risk and opportunity, and the sustainability management strategy.
Supply Chain Management
Climate-Related Risks & Opportunities
Physical Risks
- Impact of flood disaster
Transition Risks
- Decarbonization transition risk for local manufacturing companies
Reporting Standards
Frameworks Used: TCFD
Certifications: Platinum Kurumin
Reporting Period: 2023
Environmental Metrics
ESG Focus Areas
- Regional Revitalization
- SDGs
- Decarbonization
- Diversity, Equity, and Inclusion (DE&I)
- Sustainability Transformation (SX)
Environmental Achievements
- Net zero for Scope 1 and 2 emissions target by FY2030
- ¥641.8 billion in sustainable financing executed by the end of FY2022 (¥215.3 billion environment-related)
Social Achievements
- Personnel system overhaul promoting DE&I
- Establishment of various Group companies providing comprehensive services
- Increased customer satisfaction (Corporate Survey FY 2022: 69%; Individual Survey FY2021: 65%)
- Initiatives in regional revitalization, including supporting start-ups and business succession (222 customers supported in total over three years)
Climate Goals & Targets
Long-term Goals:
- Create with our community, customers, and employees a rich future that we can all share
Medium-term Goals:
- Achieve carbon neutrality by FY2030
- Execute ¥1.5 trillion in sustainable financing by FY2030 (¥1 trillion environment-related)
Short-term Goals:
- Achieve ¥30.0 billion in net income attributable to owners of parent by FY2026
- Increase the percentage of female managers and supervisors to 25% by FY2026
Environmental Challenges
- Rapidly changing external environment (population shrinkage, digitalization, decarbonization, geopolitical risks, rising commodity prices)
- Differences in awareness and approach to decarbonization among local SMEs
- Low PBR (Price-to-Book Ratio)
- Low percentage of female managers and supervisors (13.4% in FY2022)
Mitigation Strategies
- Long-term management plan "Vision 2027: Plan for Creating the Future Together"
- Medium-term management plan "Plan for Creating the Future Together: Stage III"
- Transition to a holding company structure
- Establishment of various Group companies to provide comprehensive solutions
- Accelerating DX initiatives to improve efficiency and customer convenience
- Investments and loans supporting social and environmental issues (¥1.5 trillion target by FY2030)
- Overhaul of sales system with voluntary target system and Regional Headquarter System
- Promoting DE&I through personnel system reforms and internal awareness-raising activities
- Active mid-career recruitment to secure specialized human resources
- Collaboration with various partners (industry-government-academia-financial institutions-press-civil society)
Supply Chain Management
Climate-Related Risks & Opportunities
Opportunities
- Development of energy-efficient products and services
- Growth in renewable energy sector
Sustainable Products & Innovation
- Renewable energy generation (solar PPA)