[NEWS RELEASE]
May 13, 2022
Sumitomo Mitsui Financial Group, Inc.
Strengthening Efforts against Climate Change
Sumitomo Mitsui Financial Group, Inc. (President and Group CEO: Jun Ohta; hereinafter the Group iscollectively referred to as “SMBC Group”) hereby announces the progress in advancement of its climatechange response as the “Strengthening Efforts against Climate Change”.

(URL) “Strengthening Efforts against Climate Change”
https://www.smfg.co.jp/news_e/pdf/e20220513_04.pdf

SMBC Group will make every effort in addressing environmental and social issues the world is facing,including actions to climate change, conservation of biodiversity, and the protection of human rights.
Moreover, SMBC Group will further expand its support to customer’s efforts and innovative technologies, andby doing so, contribute to the realization of sustainability.

1(Appendix) Points of “Strengthening Efforts against Climate Change”
1. Expansion of phase-out strategy for coal-fired power generations
SMBC Group has set a target of reducing the balance of loans in project finance for coal-fired power
generations to zero by FY2040.
In addition, we will set a new target of reducing the loan balance of corporate finance tied to facilities to zero
by FY2040.
2. Efforts to achieve net zero greenhouse gas emissions in loan and investment portfolios
SMBC Group joined the Net-Zero Banking Alliance (NZBA) in October 2021 and is committed to achieving
net zero greenhouse gas (GHG) emissions across its loan and investment portfolios by 2050. As part of its
efforts to achieve net zero emissions, Sumitomo Mitsui Banking Corporation (President and CEO: Makoto
Takashima; hereinafter “SMBC”) has begun calculating emissions in the power and energy sectors and is
working to set reduction targets.
In addition to setting a mid-term reduction target for GHG emissions in our loan and investment portfolios(Financed Emissions) in the power sector, SMBC will also disclose the current financed emissions for theenergy sector.
(i) Establishment of mid-term financed emissions reduction target in the power sector
We will set a target to reduce emissions intensity from the current 332gCO2e/kWh to 138-195g CO2e/kWhby 2030.
(ii) Current financed emissions in the energy sector
The absolute emissions is calculated for the oil & gas and coal mining sectors. The current emissions
amount is 87.6Mt CO2e. The mid-term reduction target will be set in the “SMBC Group TCFD Report2022” (to be released in August 2022).
3. Organizational changes
We have established the “Sustainability Division” and the “Environmental and Social Risk Management
Department” to enhance our approach to sustainability. We will reinforce our management structure byconsolidating our sustainability-related functions and expertise across the Group, strengthening and increasing
our capacity to address environmental and social issues and improving risk management systems which are
the backbone of our business promotion.
4. Adoption of “ESG evaluation” as a quantitative evaluation indicator to determine executive
compensation
Since FY2020, SMBC Group has incorporated “ESG initiatives” as a qualitative evaluation indicator todetermine medium-term performance-linked compensation to reflect the degree of achievement of long-termtargets related to sustainability including climate change response.
In addition, we will expand the scope of application of ESG evaluation to annual performance-linked
compensation starting from FY2022. Specifically, the Compensation Committee where majority members areoutside directors will determine the evaluation of ESG initiatives for the fiscal year in question in accordancewith the achievement of internal KPIs specified in “SMBC Group GREEN×GLOBE 2030” during the fiscalyear and reflect the evaluation on annual performance-linked compensation within the range up to ±10%.
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5. Revisions of Rules and Policies
Expected roles for financial institutions regarding actions to climate change, conservation of biodiversity,
protection of human rights and the solution of environmental and social issues are ever-expanding. Against
this backdrop, we formulated the “SMBC Group Environmental and Social Framework” to organize our basic
stance and approach to these issues and to improve our accountability to stakeholders.
6. Reduction of GHG emissions (Scope 1, 2) of our own operations
SMBC Group is committed to achieving net zero GHG emissions in its own operation by 2030.
As part of our efforts to achieve net zero emissions for Scope 1 and 2, we switched all the power used at ourfour head office buildings (Head Office, East Tower, Osaka Head Office, Kobe Head Office) to renewableenergy. In addition, we have installed megawatt class solar generation equipment in the idle spaces owned by
SMBC Group for the first time as a Japanese major bank and plan to commence operations during the current
fiscal year.
7. Enhancement of the analysis of climate change scenarios
SMBC conducts the analysis of climate change scenarios related to transition risks targeting the energy andpower sectors.
We have enhanced the scenario analysis by adding the automobile and iron and steel sectors to the scope ofanalysis. As for the scenarios, we used the Net Zero Emissions by 2050 Scenario by the International Energy
Agency (IEA) and Net Zero Emissions Scenario by the Network for Greening the Financial System (NGFS).
After taking into account the anticipated impact on credit risks by sector under each scenario, we calculated
the amount of expected total credit cost by 2050. As a result of the calculation, credit cost is expected toincrease by 2.5 to 28 billion yen in total for the four sectors each year.
8. Initiatives to strengthen sustainable businesses
The amount of sustainable finance extended by SMBC Group during FY2021 amounted to 5.4 trillion yen,increasing 78% (excluding the effect of the exchange rates) from the level in FY2020.
We have also launched the “Sustainability Investment Fund” of 20 billion yen with the aim of developing newsolutions related to sustainability. As the first project of this fund, we will participate in “Carbonplace,” apayment platform for carbon credit trading.
9. Initiatives to achieve net zero emissions through responsible investment
Sumitomo Mitsui DS Asset Management Company, Limited (President and CEO: Takashi Saruta; hereinafter“SMDAM”) jointed the Net Zero Asset Managers Initiative (NZAMI), an initiative by global asset
management companies with the goal of achieving net zero GHG emissions across the entire investment
portfolio by 2050. As a responsible institutional investor, SMDAM will support efforts by its investee
companies to realize a decarbonized society.

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