Climate Change Data

Fukuoka Financial Group, Inc.

Climate Impact & Sustainability Data (2023)

Reporting Period: 2023

Environmental Metrics

Total Carbon Emissions:24,596 tCO2e/year (Scope 1 & 2)
Scope 1 Emissions:2,834 tCO2e/year
Scope 2 Emissions:21,762 tCO2e/year
Scope 3 Emissions:20,077,259 tCO2e/year

ESG Focus Areas

  • Climate Change
  • Regional Economic Development
  • Changing Industry Structure
  • Aging Population
  • Diversity, Equity & Inclusion (DE&I)

Environmental Achievements

  • Set a Group CO2 emissions (Scope 1,2) reduction target of net zero by FY2030 (achieved 41% reduction from FY2013 to FY2022)
  • Established the Kyushu Ryutsu Sustainability Salon to promote decarbonization in the distribution industry
  • Disclosed CO2 emissions attributable to investment and loan portfolio (Scope 3) for the first time

Social Achievements

  • Launched Minna Bank, Japan's first digital bank, expanding customer base nationwide
  • Achieved 15% women in management positions (target 25% by 2028, 35% by 2030)
  • Implemented various initiatives to improve employee engagement (scored 59.0 and rating A in the first engagement survey)
  • Established the Regional Co-creation Division to collaborate with local communities on revitalization projects
  • Supported sales channel expansion for local products using digital technology

Governance Achievements

  • Appointed four highly independent External Directors to enhance supervisory functions
  • Established a performance-linked compensation plan for Directors (excluding those serving on the Audit & Supervisory Committee, External Directors, and non-Japanese residents)
  • Implemented third-party assessments to evaluate organizational culture and psychological safety
  • Established a robust risk management framework including stress tests and strategy risk assessment

Climate Goals & Targets

Long-term Goals:
  • Achieve 35% women in management positions by 2030
  • Achieve an ROE of 10% (future goal)
Medium-term Goals:
  • Achieve 25% women in management positions by 2028
  • Achieve an ROE of 8% (next Mid-Term Management Plan)
Short-term Goals:
  • Achieve net zero CO2 emissions (Scope 1 & 2) by FY2030

Environmental Challenges

  • Shrinking regional economy due to depopulation and aging population
  • Rapid development of digital society and competition from non-financial businesses
  • Climate change and its impact on customers and FFG's operations
  • Securing sufficient human resources, especially in digital and specialized fields
  • Making Minna Bank profitable
Mitigation Strategies
  • Transformation of existing business model through digitalization and business reforms
  • Goal-based sales approach to better understand and serve customer needs
  • Strengthening solution capabilities through strategic subsidiaries and specialized human resources
  • Active engagement with local governments and business partners for regional revitalization
  • Investing in human capital development and employee engagement
  • Implementing various risk management measures, including stress tests and scenario analysis

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks
  • Increased damage to customers and FFG branches from natural disasters
Transition Risks
  • Deterioration of financial conditions of customers due to transition to decarbonized society
  • Decrease in value of loans for carbon-intensive businesses
Opportunities
  • Increased sustainable financing opportunities
  • Increased consulting services related to GHG emission reduction

Reporting Standards

Frameworks Used: TCFD

Sustainable Products & Innovation

  • Minna Bank
  • Sustainable Scale Index