Promoting Regional Revitalization and SDGs-related Finance〜Generating an Autonomous Virtuous Circle by Financial Framework〜

Hachijuni Bank’s Efforts
Towards Regional Revitalization
Report as of January 2020

Company Profile (as of Sept 30, 2019)
The Hachijuni Bank, LTD.

Company Name

Nagano City, Nagano Prefecture

Head Office
Date of Establishment

Management
Philosophy

Network

August 1st, 1931
“Stick firmly to the sound banking principles, thereby contributing
to the development of the regional community”

Domestic：151（in Nagano:131, outside Nagano:20）
Overseas：Branch 1 (Hong Kong)
Representative Offices 4（Dalian, Shanghai, Bangkok, Singapore）

No. of employees

Consolidated
subsidiaries

3,217

Capital stock¥52.2bn

Hachijuni Staff
Service Co., Ltd.

Hachijuni Securities
Co., Ltd.

Hachijuni Credit
Guarantee Co., Ltd.

Yamabiko Services
Co., Ltd.

Hachijuni Lease Co.,Ltd.

Hachijuni Card Co.,Ltd.

Hachijuni System
Development Co., Ltd.

Hachijuni Capital Co.,Ltd.

Hachijuni Auto Lease
Co., Ltd.

Head OfficeTotal assets¥10,672.6bn

Net assets¥736.6bn

Deposits¥6,738.6

Loans¥5,372.5

Total capital ratio(Basel Ⅲ)
Ratings

Consolidated: 20.71％

Non-consolidated: 19.85％

S&P Global Ratings： AR&I： A+JCR： AA①

Environmental Management (Environmental Conservation Activities)
Overview of Environmental Management and Activities
1991

Established “used paper recycling system”（the first case in the Japanese banking sector）

1992

Started the use of recycled paper for “CD/ATM journal”（the first case in the Japanese financial industry）

1999

Received ISO14001 certification（Head Office)（the first case in the Japanese regional banks）

2005

Disclosed “Environmental Accounting”（FY2004)（the first case in the Japanese banking sector）

2006

Introduced “Solar power generation system” into Koumi Branch（the first case in the banking sector in Nagano Prefecture）

2009

Started “Hachijuni-no-Mori Activities (The Forests of 82) ”

2014Started biodiversity volunteer “extermination of bur cucumber”

2017

Started the reuse of used uniform “Chemical Recycle” （the first case in the Japanese financial industry）

Awards/External Evaluation
2005
2009

Awarded the prize of the Minister of the Environment for global warming prevention activities（the first case in the Japanese banking sector）
Received “eco-commuting office” certification at Ministry of Land, Infrastructure, Transport and Tourism （the first case in the Japanesefinancial industry)

2010

Awarded the prize of the Minister of Land, Infrastructure, Transport and Tourism for the Traffic-Related Environmental Preservation
Excellence Company（the first case in the Japanese financial industry）

2017

Awarded Excellent Prize of "Human Resources Development Corporation Award for the Environment 2016" by Ministry of Environment

2018

Received “Eco-first company” certification of the Ministry of the Environment

2019

Received rating “B (management)“ in CDP 2018 (climate change) (the first rank in the Japanese banking sector for three consecutive years）

2019

Ranked first in the Japanese banking sector in the Environmental Management Survey ranking of the Nihon Keizai Shimbun(Ranked first in the Japanese regional banks for five consecutive years)②

Business/Market Environment
Population

Industry

Population and No. ofHouseholds in Nagano

Gross Prefecture Production inNagano by Industries (nominal)
GPP(¥100mn)

85,902

Hotel,
restaurant
Construction

4,503

Wholesale, 8,766
retailHouseholds

Forecasts(10,000 households)

41,166
40,533

1,338
2,725
3,670

1,423
2,483
3,549

8,134

8,678

20,13020,014

2009

2012

1,612
3,101
4,676

33.4％
1,790,641

23,760

2016

87.3％
592,517

Ratio to over 20years old population

35.1％

Customers receiving pension

252,997

Ratio to over 65
years old population

39.0％

For reference

8,407

Year2006

Deposit share

Ratio to total population

Manufacturing

23,84542.7％

Depositors

76,68044,240

1,467
3,081

Population

Loan share

Payroll-credit service
contractors
41,719Agriculture,forestry, andfishery(10,000)

82,722
77,716

OthersThe Bank’s Share in Nagano

Source: Statistics Bureau of Japan, National Institute of Population and Social Security
ResearchPopulation in Nagano
Pref.（as of Oct 1, 2019)

2,049,653

Over 20 years old1,684,066

Over 65 years old647,787(as of Sep 30, 2019)③

Charm of Nagano Prefecture
Nature/Environment
No. of 3,000ｍ mountains

No. of top 100 mountains

1st1stWorldwide Mountain Resort
Nagano Prefecture is called as a Japan’s roof, surrounded by 3,000
meter mountains and famous for mountain resort.

Life
Popular prefecture for migration

Average longevity

1st1st (Woman)
2nd (Man)（13 consecutive years）

Culture full of Individuality
77 cities, towns, and villages have original culture and character, thelifestyle leading to health and longevity attracts attention.

TourismNo. of hot springs

No. of camping ground

2nd2nd(Ranking in Japan)

Abundant Tourist Attractions
Nagano Prefecture has a lot of tourist attractions such as clear water,clean air and beautiful nature. The number of tourists of 2018 was
about 40 times of the population of Nagano prefecture.

Protecting wonderful nature, aiming at sustainable development of regional
economy through tourist industry④

Efforts to Regional Revitalization 【Tourism】
An Example of Horizontal Revivalof Sightseeing SpotVision/Direction

Background/Problems①Main industry=Tourism: No. of tourist of 2016 decreased by 55% from 1990

Arranging comfort stays for inbound tourists
through support for startup②Declining ryokan street: Increase of non-operation facilities in central area due to（Town planning/human resources creation）（Change of tour style: change from group tour to individual tour）

manpower shortage③Growing inbound tourists: No. of foreign overnight guests of 2016 was 46 times of 1999
Sightseeing spots

Financial institutions

Funds

Repayment

Acquisition/Renovation

RentalAFTER(Café)①The Bank gives loans to young company managers.
②Young company managers repay funds by this loan,
the Bank continues transactions with them.

Town Planning

Information
spreadingRental charge

Dispatching staff

Exit of funds (Exit）

Young
peopleImproving the stay environment for
inbound tourists by renovation ofunutilized properties in ryokan
streetYoungpeopleLocal visitors）
Tourists（ inbound

ExitFunds

property
managementcompanies

Funds/Experts

Revitalization
fundREVICBEFORE(Boutique)Town
planning
company

Human Resources Creation

Finding young human resources
who can lead businesses for thefuture, nurturing them throughbusinesses⑤Efforts to Regional Revitalization 【Forestry】
Advanced Model of ForestryRevitalization and Renewable Energy

Vision/Direction

Forest maintenance by tree thinning

Background/Problems①Abundant forest resource: 3rd-ranked in Japan②Stagnant wood prices due to the competition with imported wood
③Deteriorating profitability of forestry④Devastating mountainous areas due to declining forestry（Maintenance of “multifunctional roles of forest” such as cultivation ofvarious ecosystem, preventing a landslide disaster）“Promoting forestry” “Establishment of a recycling-basedsociety” through woody biomass electric power generation

Government

AcademiaNation: Business support
Prefecture: Controlling projects, implementingsupport, arrangement of each regulation
City: Providing land, coordinating local situation,utilizing remaining heat

Financial & non-financial
supportCurrent situation in Nagano

Thinning

Thinning not to use
for building materials

Industry

Woods Processing Factory
Timberoffcuts

Utilizingfor fuel

Woody Biomass ElectricPower Station

Products made by
Nagano’s woods

Electric power

Consumers

Despite abundant forest
resources, forestry declined by
the slump of the wood
consumption and abandoned
forest increased.

Tokyo University：Advice of technics
Shinshu University：Grasping forest resourcesand proposing utilization system of them⑥

Efforts to “Regional Revitalization and Activation”
Startup/Entry
Supporting customers
who are interested instartup by speedy andone-stop manner

Management
Improvement/Business
Revitalization

Growing Period
Through business matching andbusiness fair, supporting
customers for the sales channels
development, new business entry,
increase of business efficiency

The 31st Long-Term Management Plan

Supporting customers tackling
management issues to draw up
management improvement planand to implement the plan

No. of cases through businessmatching（sales channel development etc.)

No. of business successions, M&As
and change/discontinuation ofbusinesses

1,000

By cooperating with groupcompanies and externalexperts, responding togrowing needs of businesssuccession/growth of company

Nagano Economic ResearchInstitute, a Hachijuni Bank groupcompany, provides consulting
services for ISO14001
certification

April 2018 ~ March 2021

Environmental Targets (Excerpt)374（over 3 years）（FY2018)

6,0002,064（over 3 years）（FY2018)

1,000435（over 3 years）

Hachijuni Bank Group
Support“Dare to Change; Create the Next Generation”

Regional Vitality Targets (Excerpt)
No. of new business launches:companies

Business
Succession/M&A（FY2018)

Amount of greenhouse gas
emissions reduced（compared to FY2013）
No. of new contracts for andrenewals to e-livret: cases（e-livret: ordinary depositwithout passbook）

No. of environmental
investments and loans:
cases

15％

（FY2020）

100,000（over 3 years）

3,000（over 3 years）

14.4％（FY2018）

44,876（FY2018）

982（FY2018）

Tackling and solving regional issues to achieve the “sustainable society”
of the SDGs target⑦

Efforts to “Regional Revitalization and SDGs-related Finance”
Hachijuni “Regional Revitalization and SDGs Support PPBs”● In 2019, Hachijuni Regional Revitalization Support PPBs (private placement bonds) were renewed
as SDGs-related factors were added.

Regional Revitalization Support PPBsIssuers donated school equipment or teaching materials to local schools etc. by utilizing discounted amount of underwriting fees.

Result from 2016 to Oct 2019507 cases / ¥34.01bn（※approx. ¥68mn for donation）“Regional Revitalization and SDGs Support PPBs”
Type

Regional revitalization typeCompany support type

Characteristic

Supporting SDGs-related “businesses and activities”

Supporting financing of “companies” to contribute to SDGs

RequirementsCompanies contributing to regional revitalization

Registration to “SDGs Promotion Company Registration
System”
Acquisition of ISO14001 certification etc.

・The Bank discounted underwriting fees by “bond issuance
Guarantee fees
Underwritingfeesamount ×0.2％” and this discounted amount is donated to
the following destination.

・Guarantee fee is discounted by 0.05% per year.

・Underwriting fee is discounted by “bond issuance amount【Donation to】
×0.25%.”①Education: schools (elementary school, junior high schooletc.), educational and cultural facilities etc.
②Welfare: designated public-service promotion corporations etc.
③Sports: designated public-service promotion corporations etc.

⑧To Promote “Regional Revitalization and SDGs-related Finance”
Nurturing Young Company Mangers/Successors● The Hachijuni Bank has organized membership club for young company
managers/successors from 1987. By holding seminars to instructmanagement know-how which is element vital to operate companies, theBank has nurtured next generation business leaders.
● New curriculums, which started in Oct 2019, include new seminars tofacilitate the understanding of “SDGs.”

Promoting the Understanding of “SDGs” of SMEs
● Nagano Economic Research Institute, a Hachijuni Bank group company,
issues “Economic Monthly Report” to support the improvement of SDGs
awareness of 7,000 member companies.
● Presenting examples in which SMEs utilize SDGs as a management tool,
NERI promotes the registration to “SDGs Promotion Company Registration
System of Nagano.”

Promoting “Regional Revitalization and SDGs-related Finance” by collaboratingwith “SDGs Promotion Company Registration System of Nagano”⑨