Climate Change Data

Aichi Financial Group, Inc.

Climate Impact & Sustainability Data (2024)

Reporting Period: 2024

Environmental Metrics

Total Carbon Emissions:Not disclosed
Scope 1 Emissions:Not disclosed
Scope 2 Emissions:Not disclosed
Scope 3 Emissions:8,037,060 t-CO2
Renewable Energy Share:Not disclosed
Total Energy Consumption:Not disclosed
Water Consumption:Not disclosed
Waste Generated:Not disclosed
Carbon Intensity:Not disclosed

ESG Focus Areas

  • Contributing to the Prosperity of Local Communities
  • Sophistication of Financial Services
  • Environmental Conservation
  • Improving Employee Engagement and Advancement of Diverse Human Resources
  • Strengthening Governance

Environmental Achievements

  • 58.8% GHG reduction rate (relative to FY2013)
  • 70% reduction target for SCOPE 1 and 2 GHG emissions from FY2013 levels by FY2030
  • Aiming for carbon neutrality by 2050

Social Achievements

  • 410 strategic talents trained (91.1% progress rate against KPI of 450)
  • 957 IT/digital foundational talents developed (as of March 31, 2024)
  • 78.3% paid leave acquisition rate (FY2023)
  • Initiatives of the Diversity Promotion Committee (Ai Team)

Governance Achievements

  • Established Aichi Financial Group Human Rights Policy
  • Implemented process to confirm human rights compliance upon loan application
  • Established internal reporting system for compliance issues
  • No disciplinary measures or termination due to acts of corruption in FY2023

Climate Goals & Targets

Long-term Goals:
  • Carbon neutrality by 2050
  • Aim to become the No. 1 regional financial group in Aichi Prefecture
Medium-term Goals:
  • ROE consistently exceeding capital cost (approx. 6%)
  • Achieve integration synergy goals of 8.0 billion yen in FY2027 and 10.0 billion yen in FY2030
  • Reduce the percentage of cross-shareholdings to around 20% of consolidated net assets on market value basis by the end of FY2030
  • Cumulative total of 1 trillion yen in sustainability-related investments and loans (of which, 500.0 billion yen are related to the environment) from FY2022 to FY2030
Short-term Goals:
  • 200,000 banking app registrations by March 31, 2025
  • 45,000 smart bankbook registrations by March 31, 2025
  • 450 strategic talents developed by March 31, 2025
  • 1,000 IT/digital foundational talents developed by March 31, 2025

Environmental Challenges

  • Expanding the lineup of consulting solutions
  • Balancing profitability and maintaining financial soundness as a regional bank
  • Improving PBR and ROE to meet shareholder expectations
  • Addressing climate change risks (transition and physical risks)
  • Reducing cross-shareholdings to enhance corporate value
Mitigation Strategies
  • Accelerating group strategy and utilizing strengths of Group companies
  • Transitioning to a consulting solutions-based business model
  • Implementing management conscious of capital cost and share price
  • Conducting scenario analyses of climate change risks
  • Setting a goal to reduce the percentage of cross-shareholdings to around 20% of consolidated net assets on market value basis by the end of FY2030

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement
  • Regular verification of security levels of contractors after contract conclusion

Climate-Related Risks & Opportunities

Physical Risks
  • Damage to the Group’s sales offices due to increasing severity of weather phenomena such as typhoons and flooding
  • Impact on business activities of clients and devaluation of pledged assets due to increasing severity of weather phenomena such as typhoons and flooding
  • Impact on business activities of clients and devaluation of pledged assets due to increased average temperature and rising sea levels
Transition Risks
  • Impact on business activities of clients due to increased costs resulting from the introduction of the carbon tax
  • Impact on business activities of clients due to increased raw material prices resulting from the transition to a decarbonized society
  • Price fluctuations of held securities related to industries affected by the transition to a decarbonized society
  • Lowering of corporate value due to delay in appropriate response and disclosure of climate change and environmental conservation
Opportunities
  • Demonstrate financial intermediation functions in response to increased demands for funds for clients engaged in environmental conservation measures
  • Demonstrate consulting functions for clients that face issues related to decarbonization and environmental conservation responses
  • Lowering business costs through the utilization of energy-saving options, renewable energy and new technologies
  • Increase in corporate value due to appropriate response and disclosure of climate change and environmental conservation

Reporting Standards

Frameworks Used: International Integrated Reporting Framework (IIRC), Ministry of Economy, Trade and Industry’s Guidance for Collaborative Value Creation

Certifications: DX Certified Company

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

  • Not disclosed

Not disclosed

Sustainable Products & Innovation

  • Sustainability-Linked Loans
  • SDGs/ESG Goal-Setting Contributory Loan
  • Positive Impact Finance

Awards & Recognition

  • Certified Health & Productivity Management Outstanding Organizations (The Aichi Bank and The Chukyo Bank)
  • Aichi Women’s Brilliance Company (The Aichi Bank)