TCFDREPORT
2024〜Contribution to a sustainable society
from the perspective of SPEED 〜
The Shoko Chukin Bank, Ltd.

TCFD REPORT 2024

1

CONTENTS

2

Message from the President

3

Overview

5Main efforts

6

Corporate Philosophy（PURPOSE・MISSION）

15

Strategy

29

Risk Management

16

Overview

30

Top risk management

16

Risk

31

Basic approach to investments and loans(Environmental and social considerations
policy)32

Metrics and Targets

33

Results and targets of CO2 emissions(Scope 1 and 2)

16
17

8

Basic Approach to Climate
Change9

Basic approach9

Perspective of SPEED

10

Materiality

Carbon-related assets
17

20

Risk identification

Conducting scenario analysis

Opportunity
20

Sustainable management support(customer support policy)

33

Estimation of CO2 emissions (Scope 3)

21

ESG diagnosis

34

Introduction of solar off-site PPA

21

Happiness design survey

35

Inquiries

22

Decarbonization management support

23

Awareness survey on carbon neutrality of SMEs

12

Governance24

Sustainable finance13

Overview

26

Cooperation with regional financial institutions

Supervision/execution

26

Impact deposits

13

28

Efforts to resolve environmental and social issues

framework
14

28

Practice of sustainable management to improve corporate value

28

Learning beyond generations and efforts for the future

Main discussions

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TCFD REPORT 2024

2

Message from the President
I would like to express my sincere
appreciation for your continued supportof the Shoko Chukin Bank.

1．Transition to a decarbonizedsociety
Efforts to address issues of climate change

The Shoko Chukin Bank is taking steps

are progressing rapidly around the world, andtoward the achievement of our PURPOSE,

SMEs in Japan are also being required to take

“Supporting the future of companies.
Making Japan more resilient to change.”
At the G7 Hiroshima Summit in May 2023,

decarbonization initiatives through various
supply chains.
In particular, for industries that we have

responses to the climate crisis wereidentified as being significantly affected bydiscussed as common and urgent global

climate change, we have conducted scenario-

2．To play a leading role

3. Together with SMEs

The Shoko Chukin Bank aims to play a

The Shoko Chukin Bank started

leading role toward the achievement of abusiness as a cooperative financial

sustainable society by actively supporting

institution in 1936, and has developed forthe business activities of our customers

more than 85 years since then as athat are considerate of the environment

specialized financial institution for SMEs.

and society.

For the Shoko Chukin Bank, a financial

In June 2023, we started
offering ”Impact

deposits“ for the first

institution by SMEs for SMEs, customers’
growth is our growth. In order to respondbased analysis to identify risks as well as

time in Japan. By allocating the impact

to the rapidly changing times together,

important management issue that will

worked to address industry-specific issues.

deposits entrusted to us by customers to

we will further strengthen our efforts that

affect the future of our approximately

We established the ”Industrial Strategy

positive impact financing for SMEs, we

contribute to resolving environmental andDivision” in April 2024 to address issues

will work to create an impact toward asocial issues, and work with SMEs tosurrounding industrial restructuring andsustainable society.

achieve sustainable development.

challenges. We also recognize it as an

70,000 companies throughout Japan.

The Shoko Chukin Bank has positioned

environmental and social sustainability. We

In addition, as an effort to maximize

one of our material issues and has worked

will continue to further enhance our support

positive impact on the local communities,

to resolve it through core business support

for SMEs facing a rapidly changing business

we are promoting business alliances andpatronage and look forward to yourand financial support. We will continue toenvironment.

cooperation with regional financial

continuing support of the Shoko Chukin

institutions in the implementation of

Bank in the future.

“Responses against climate change risks“ astake on challenges to realize a society that

Meanwhile, the business environmentis resilient to changes, together with oursurrounding SMEs is expected to changesustainable finance operations. Throughcustomers.

dramatically with the transition to athese efforts, we will leverage thedecarbonized society. The basic approach ofsynergies of our respective functions andthe Shoko Chukin Bank is to closely support

characteristics to meet the financial needs

our customers’ sustainable growth, includingof SMEs in the region, together withthose whose business environment is rapidly

regional financial institutions, thereby

changing, without being uniformly reluctant incontributing to the improvement of the

our approach to transactions, and together

value of SMEs.

with SMEs, we will work toward a
Copyright © SHOKO CHUKIN BANK All Rights Reserved.

decarbonized society.

We thank you for your continued

March 2024

The Shoko Chukin Bank, Ltd.
Masahiro Sekine, President(Representative Director)

3

CHAPTER 1

Overview

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TCFD REPORT 2024

4

Overview (Response to the
TCFD recommendations)
In recent years, the damage caused bysevere, and more and more countries▪

Management Meeting, which is attended by the President and Executive

climate change to achieve a sustainable

Officer. We also submit reports on climate-related developments to thesociety. Conserving and protecting the▪

▪

We have formulated our Sustainability Basic Guidelines in order to play anactivities is an important management

We have identified material issues for society (materiality) to which we willinconstructive

dialogue

andmutualwith the Environmental and Social Considerations Policy.
▪

We commit to appropriately recognizing risks (transition risks andphysical risks) that arise as a result of climate change, and striving tobuild a risk management approach that incorporates these risks.

Strategy▪

engageand society, as identified in the process, will be handled in accordanceissue.

to the achievement of a sustainable society

tobusinesses that are likely to have a negative impact on the environment

make a focused and effective contribution through our business activities.

The Shoko Chukin Bank will contributestrivewill continue to understand and provide information. Transactions with

the Board of Directors.
▪

will

understanding with our customers from the perspective of SPEED, andand to help realize a sustainable society, and they have been approved by

the achievement of a sustainable society

As a financial institution dedicated to facilitating the financing of SMEs,
weactive role in resolving material issues for society, including climate change,

humankind. For the Shoko Chukin Bank,

We recognize addressing climate change risk as one of our top
management risks.

▪

Board of Directors in order.

global environment is a common

through environmentally friendly business

Any matters that relate to the identification, evaluation, and managementof climate-related opportunities and risks are regularly discussed at ouraround the world are responding against

responsibility to be shared by all

Risk Management

Governanceextreme weather has become increasingly

We analyze qualitative and quantitative scenarios regarding theby supporting the efforts of SMEs as wellopportunities and risks that climate change poses to management of theas implementing our own initiatives.

Shoko Chukin Bank. Specifically, we analyze the impact of physical

Metrics and Targets

risks in light of recent natural disasters as a result of climate change,

The Shoko Chukin Bank has endorsed

We aim to reduce CO2 emissions at our offices in Japan by 50% by

the TCFD (*1) recommendations. We

and transition risks and opportunities caused by climate change

recognize the importance of disclosing

policies and technological innovations associated with the transition

fiscal 2030 from the fiscal 2013 level, and achieve carbon neutrality

to a low-carbon society.

by fiscal 2050 (Scope 1 and 2 to be covered)information on our efforts to address
climate change, and will continue to work
to enhance the information disclosure(governance, strategy, risk management,
and metrics and targets) in a mannerrecommended by the TCFD.
*1 TCFD: Task Force on Climate-related Financial Disclosures*2 From the perspective of SPEED: Shoko Chukin Bank’s
unique basic perspective on the sustainability efforts of ourorganization and staff
For details, please refer to page 9.

Copyright © SHOKO CHUKIN BANK All Rights Reserved.

▪

We will contribute to the realization of a sustainable society by▪

▪

The Shoko Chukin Bank’s CO2 emissions in fiscal 2022 calculated based

engaging in dialogue with our customers to overcome climate

on the amount of gas, electricity and other utilities used at its offices inchange risks together and supporting the implementation ofJapan totaled 9,736 tons, down 36% from the fiscal 2013 level.

necessary measures, starting from a business prospects
evaluation from the perspective of SPEED *2.

TCFD REPORT 2024

Main Efforts

5

The Shoko Chukin Bank will contribute to the achievement of a sustainable society by supporting the efforts of SMEs as well as implementing our own initiatives.

We will continue to aim to advance our efforts in each item and promote the enhancement of information disclosure.

Governance

Strategy

Metrics and Targets

Governance framework

Advancement of risk identification

Reduction and identificationof GHG emissions• The Board of Directors iscomprised of a majority of
external directors
9 directors, of which
5 external directors(as of March 2024)• Discussions at the Management
Meetings and the Board of
Directors
Sustainability-related issues:
more than 6 times a year
Issues regarding top risks:approximately 6 times a year(including responses against climatechange risks)•

Carbon-related assets: 44.4％ (balance as of March 31, 2023)••

Transition risk analysis: added the marine transportation sector
Physical risk analysis: added the impact of building collateral
damage amount•

Provision of ESG diagnosis: cumulative total of approximately 1,000
projects (as of September 30, 2023)•

Introduction of happiness design survey: cumulative total of 900
companies or more (as of September 30, 2023)•

Decarbonization management support recipients: cumulative total of 50
projects* Reviewed carbon-related sectors

Advancement of customer support*support for visualization, consulting, etc. (as of January 31, 2024)•

Balance of sustainable finance: cumulative total of ¥54.9 billion(as of September 30, 2023)•

Establishment of impact deposits for the first time in Japan: total amountof deposits of ¥10.0 billion (for fiscal 2023)

Establishment of partnerships•

Launched business alliances and cooperation with regional
financial institutions in sustainable finance: 8 partners(as of February 2023 to January 31, 2024)

Received the Special Award (selection committee chairperson’s award) in the

Indirect Financing Category of the 5th ESG Finance Awards Japan

Copyright © SHOKO CHUKIN BANK All Rights Reserved.

• CO2 emissions (Scope 1 and 2)
Medium-term targets: 50%
reduction in fiscal 2030
Long-term targets: achieve carbon
neutrality by fiscal 2050
Fiscal 2022 results: 36%
reduction (from fiscal 2013)• Use of renewable energy
Approx. 3.1 million KWｈ/year
Plans after solar off-site PPA (page 34)
starts operating• GHG emissions in the supply chain
Investments and loans recipients(Cat15)
Estimated to reduce approx. 90%

6

CHAPTER 2

C orporat e
P h i l os ophy

（PURPOSE・MISSION）

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TCFD REPORT 2024

7

Supporting the future of companies.
Making Japan more resilient to change.
We will continue to think together, create together, and change
together, as a partner in creating security and prosperity.

Statement

The Shoko Chukin Bank will continue to deepen and develop its DNA as a financial institution specializing in
SMEs and support the future by resolving issues faced by many companies.
In an ever-changing world, we will create a society where people can take on challenges without hesitation
and boldly change themselves. A society where people can calmly look at the current situation and take theright step forward, even when security and safety are undermined.
A society in which people in every region can demonstrate their unique strengths and feel affluent and fulfilled.
At the Shoko Chukin Bank, we are your partners in taking on the challenges of change, aiming for the hopethat lies ahead.

Copyright © SHOKO CHUKIN BANK All Rights Reserved.

8

CHAPTER 3

Basic Approach to
Climate Change

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TCFD REPORT 2024

9

Basic approach

Perspective of SPEED （customer support policy）

Current efforts will have a

Based on the perspective of SPEED, the Shoko Chukin Bank will strive to engage in constructive dialogue and mutual understand ing withsignificant impact on future climate.
The Shoko Chukin Bank feels that if
the status quo continues, theclimate will change dramatically,
threatening the sustainability of oursociety.

our stakeholders including SME customers.

In a rapidly changing social environment, such as the emergence of issues that challenge the sustainability of society itself , including therisk of climate change, we will be required to take various measures and sometimes great challenges for the future.
The Shoko Chukin Bank will place the utmost importance on “empathy” with our stakeholders including SME customers, and expand ourcircle of activities to “create empathy” from the perspective of SPEED.
The Shoko Chukin Bank will not be uniformly reluctant to support SMEs in a manner that is inconsistent with the facilitation of thefinancing of SMEs.

In March 2022, the Shoko Chukin
Bank established the Sustainability

S ustainability

P roductivity

E mpathyE cology

Enrich the present
without compromising
the future

Produce more with less

Gain the empathy of
stakeholders and builda fa n ba se

Do not harm others
including nonstakeholders, or takemeasures to prevent harm

Contribute to therevitalization of the local
economy throughemployment stability

Sustainably increase theresults of businessactivities within limited
resources

Pursue soc ia l
responsibility a s a
c o m p a ny tha t i s amember of soc iety

Continuously securemanagement resources
necessary for businessactivities

Accumulate and utilize knowhow related to businessactivities

Act in an ethically correctmanner, including respectfor human rights, such as
the health and appropriate
treatment of employees andfair dealings with business
partners

D igital

contribute to the achievement of asustainable society through ourduties with an awareness thatvarious environmental and social
issues are issues for each and every
employee.
The guidelines set the perspectiveof SPEED as the basic viewpoint forthe organization and officers andemployees of the Shoko Chukin
Bank, and define specific objectives
and actions.
Copyright © SHOKO CHUKIN BANK All Rights Reserved.

Objectives

human rights. The guidelines aim to

Actionand policy on the environment andPerspective of SPEED

Basic Guidelines, our basic approach

Improve business activities in
response to changes in theexternal environment

Reduce resources consumed
by production facilities

Contribute to the stability of
the global environment,
including weather, oceans,
and forests, which are thefoundation of all socioeconomic activities

Actively engage inenvironmentally friendly
activities
Implement risk management
for natural disasters, etc.

Create added value by
using more information

Provide services that meetthe needs of consumers
with diverse backgrounds
without material
constraints or consumptionof environmental resources

Utilize digital technologies
Create added value throughdata

TCFD REPORT 2024

Materiality

10

Value Creation Model

The Shoko Chukin Bank has identified material
issues for society as materiality, to which we will makea focused and effective contribution through ourbusiness activities. We identify materiality based on
two criteria: importance and degree of impact【Importance】 Important for sustainable growth of
the business model, both for the Shoko Chukin Bank

（2024年3月時点）（as of March 2024）

and our stakeholders【Degree of impact】 Have a positive impact on theenvironment or society through the effective use ofmanagement resources of the Shoko Chukin Bank.

The Shoko Chukin Bank has identified efforts
necessary to respond against climate change risks asmateriality, including the transition to renewableenergy.
We will review and revise the status of materiality
identified on a regular basis.

社会課題の解決へ

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TCFD REPORT 2024

11

Reference: Sustainability Basic Guidelines
1. Environmental
Consideration
Actively work to reduce
environmental impact including theclimate, while taking into consideration
the stability of the global environment,
which is the foundation of all our
activities

2. Respect for
Human Rights
Respect human rights, which isthe basis of a fair social order, andengage in fair and appropriate
business with all stakeholders

3. Improving Governancefor SMEs
Contribute to improving
governance of SMEs throughinvestments and loans, withbusiness prospects evaluations as
a starting point, and customer
support including the dispatch ofhuman resources

Environmental Policy

Human Rights Policy

Policy on environmentally friendly activities in light of
the recognition that conserving and protecting the
global environment is a common responsibility to beshared by all humankind

Policy on engaging in socially-conscious activities, given that respectfor human rights is an important management issue that should be
actively addressed in fulfilling the Shoko Chukin Bank’s social
responsibilities① Compliance with laws and regulations
Comply with all laws and regulations related to theenvironment as well as other requirements to which
the Shoko Chukin Bank agrees① Respect for international norms
Respect international norms, including the Universal Declaration of
Human Rights and the United Nations Global Compact② Environmental conservation through financial
services
Actively support business and other activities of SME
cooperatives and SMEs that engage in environmental
conservation and protection through the provision offinancial products and services, and other businessactivities while making the most of the Shoko Chukin
Bank’s nationwide network as well as coordinating with
policies of the national government and measures ofthe local government, to work to reduce risks related tothe environment of the entire society③ Reduction of environmental impact in the
Shoko Chukin Bank’s own business activities
Recognize the environmental impact of the Shoko
Chukin Bank’s business activities in terms of resource
consumption and waste emissions, and work toconserve the environment through resource circulation
initiatives and effective use of energy and resources④ Awareness-raising among officers andemployees
Promote environmental awareness-raising so thateach and every officer and employee can deepen theircorrect understanding and awareness of environmental
issuesCopyright © SHOKO CHUKIN BANK All Rights Reserved.

② Elimination of discrimination
The Shoko Chukin Bank will not discriminate or violate human rights
on the grounds of race, nationality, gender, sexual orientation, gender
identity, origin, social status, creed, religion, disability, physicalcharacteristics, etc. Furthermore, the Shoko Chukin Bank strives not
to be complicit, even indirectly, in discrimination or human rights
violations.
③ Fair and appropriate business with stakeholders
As a member of financial institutions, social public institutions thatare required to be transparent, as well as a member of the local
community, always be aware of the social responsibilities of the Shoko
Chukin Bank, and strive to engage in fair and appropriate businesswith stakeholders④ Consideration for employee health and working environment
Respect the human rights and diversity of all people, and strive toestablish an open work environment that is free from harassment anddiscrimination⑤ Conduct human rights due diligence and remedies
Conduct human rights due diligence to prevent and mitigate
negative human rights impacts on an ongoing basis, and strive toremedy any human rights violations that become apparent⑥ Awareness-raising among officers and employees
Promote human rights awareness training so that each and every
officer and employee can deepen their correct understanding andawareness of human rights issues

12

CHAPTER 4

Governance

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TCFD REPORT 2024

13

Overview

Supervision/execution framework

The Shoko Chukin Bank recognizes responses

Board of Directors

Management Meetings

The Board of Directors is comprised of a majority of

The Management Meetings deliberates on matters toagainst climate change risks as one of its top
management risks.
Specifically, it may affect the business of ourcustomers, which in turn may affect the businessstrategies and credit portfolio of the Shoko Chukin
Bank, thereby having a material impact on our
financial position and business performance.

The Board of Directors has in-depth discussions
on a regular basis, including the establishment of

external directors (five members). It deliberates on anddecides important matters pertaining to the execution of

the Bank’s business activities, including responses against

be submitted to the Board of Directors. The Meetings iscomprised of President and Executive Officer, Deputy

climate change risks, while at the same time supervising

President and Executive Officer, and other officers, andthe duties of directors and executive officers. Throughserves as a consultative body for the President andthese means, every effort is made to ensure that the

Executive Officer to make decisions on certain matters.

Bank’s overall operations continue to function in an
appropriate and effective manner.

the Sustainability Basic Guidelines, and shows its
Climate Change Risks Working Group (WG)

Sustainability Department

A cross-divisional organization with the Sustainability

Established in the Corporate Planning Division, theDepartment as a supervising office. It is comprised of three

Sustainability Department is a dedicated department that

support, risk management, and branch reform)

subcommittees (customer support, risk management, andsupervises and promotes matters related to sustainable

and disclosures based on the basic responsebranch reform), and conducts planning and development ofbusiness activities (sustainability) with consideration for thepolicy, and reports the results to the Board of

initiatives in a multifaceted and complex manner, based on

environment and society. It cooperates with the Climate

Directors.

trend surveys in various fields.

Change Risks Working Group to promote initiatives.

basic response policy both internally andexternally. In addition, the Management Meetings
regularly engages in discussions and makedecisions on specific efforts (such as customer

In June 2021, the Shoko Chukin Bank

The customer support subcommittee mainly shares

The Sustainability Department summarizes the progress

established a Climate Change Risks Working

issues with customers, and conducts research and planningof measures discussed by the Climate Change Risks

Group. In April 2022, the Sustainability

on support methods to resolve management issues. The

Working Group together with the domestic and

Department was established in the Corporaterisk management subcommittee mainly works on theinternational situation in this field, and discusses andPlanning Division, headed by an officer in charge

identification of risks caused by climate change andreports it at the Management Meetings, the Board ofof the Corporate Planning Division, to promotescenario analysis based on the climate change risks. The

Directors, and other meetings.

various initiatives throughout the organization.

branch reform subcommittee mainly calculates CO2
emissions and conducts planning and management related
to their reduction.

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TCFD REPORT 2024

14

Main discussions

Bo ar d of D ir e c tor s

A summary of the main topics discussed at the Board of Directors
and Management Meetings in fiscal 2023 is as follows (as of March
31, 2024). Matters regarding climate change risks were discussed at
Internal Auditing
Meetings

President

Compliance Meetings

least once a quarter at the Management Meetings and werereported to the Board of Directors in order.

Climate Change
Risks WG

《 Supervising Division 》《Customer Support
Subcommittee》《Risk Management
Subcommittee》《Branch Reform
Subcommittee》

Marketing Division,

Risk Management Division,

Business Process

etc.

etc.

Re-engineering Division,
etc.
(After April 2024)

Copyright © SHOKO CHUKIN BANK All Rights Reserved.

Ex e c ute

Sustainability Department,
Corporate Planning Division

Manag e me nt Me e ting s

S up e r vis eManagement Meetings

Bo ar d of D ir e c tor s

Meetingbody

Main topics discussed▪

Status of efforts to address climatechange risks(at least once a quarter, approximately
four times a year)▪

Regarding top risks in fiscal 2023
(approximately six times a year)▪

Issuance of TCFD Report▪

Regarding the formulation of humanrights policy and direction of our
responses▪

Status of efforts to address climatechange risks(at least once a quarter, approximately
four times a year)▪

Regarding top risks in fiscal 2023
(approximately six times a year)▪

Efforts to support decarbonization
management▪

Sustainability-related risk management▪

Issuance of TCFD Report▪

Regarding the formulation of humanrights policy and direction of our
responses

15

CHAPTER 5

Strategy

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TCFD REPORT 2024

Overview
For the Shoko Chukin Bank, a

16

Risk
Risk identification

financial institution by SMEs for

The following is an overview of the climate change risks assumed by the Shoko Chukin Bank.

SMEs, customers’ growth is our
growth.

Transition risksThis is the fundamental principle
business model and management

Strengthening of policies
and regulations

strategy.
risks (transition risks and physical▪
▪

risks) will affect many of ourIntroduction of carbon
tax
Strengthened regulations
related to greenhousegas emission targets

customers, and as a result, there

will be a risk of an increase in the
Many SME owners have created a
new “future” by having a desire forMarket and technology
changes▪

▪

Development, selection,and spread of newtechnologies such as
renewable energy and EVs
Obsolescence of existingproducts, changes insupply and demand

regardless of various changes in▪

Growing public interest in climate change issues

their business environment.

▪

Demands for corporate initiatives and disclosuresovercome climate change risks andcontribute to the achievement of asustainable society by realizing SME
owners’ desire and supporting thecreation of a new future.

Acute risks▪

Risk of reputational damage and difficulty in obtaining
financing if the Shoko Chukin Bank’s climate change
initiatives and disclosures are deemed insufficient

Occurrence of typhoons, torrential rains, floods, or otherwind or water disasters
Risk of customers’ business performance being
affected and credit costs increasing if a customer isaffected by a disaster
Risk that business continuity may be difficult, or costs
for countermeasures and recovery increase if the Shoko
Chukin Bank is affected by a disaster

Growing social demands

the “future” and realizing that desire,

together with our customers,

Risks that arise from increasingly severe natural disasters andclimate change

Risk of increased credit costs for the Shoko Chukin
Bank due to impact on customers’ business models andbusiness performance

Shoko Chukin Bank’s credit costs.

The Shoko Chukin Bank will,

Physical risks

Risks that arise in the process of transitioning to a lowcarbon societyof the Shoko Chukin Bank’s own

We recognize that climate change

We identify risks based on our assumptions of future social and environmental changes brought about by climate change.

Chronic risks▪

Gradual increase in average temperature and sea level
Risk of increase in heat strokes and infectious
diseases, ecological changes, etc., resulting inmacroeconomic deterioration and an increase in the
Shoko Chukin Bank’s credit costs

In particular, we consider credit risk*1 and reputational risk*2 to be important risks with significant management impact. We will seek toreduce these risks by providing support through customer engagement and other means, and by strengthening risk management throughmeasures such as scenario analysis.
*1 Risk of an increase in the Shoko Chukin Bank’s credit costs due to the negative impact on customers’ business models as the transition to a low-carbon society progresses*2 Risk of damage to the Shoko Chukin Bank’s reputation due to efforts and disclosures on climate change issues being deemed insufficient

Copyright © SHOKO CHUKIN BANK All Rights Reserved.

TCFD REPORT 202417

Carbon-related assets

Conducting scenario analysis

As an effort to identify climate change risks, the Shoko Chukin Bank has defined the following industries

With a view to enhancing the organization’s resilience to climate change, we usethat were identified as being significantly impacted by climate change as carbon-related sectors (*), andmonitored them. The Shoko Chukin Bank reviewed the scope of sectors based on the revision of the TCFD

scenarios (hypotheses) to analyze how the business environment will change and how

recommendations in October 2021.

management will be affected if transition risks and physical risks materialize.

The following four sectors were selected for transition risk analysis (page 18): automobiles andcomponents, land transportation, metals and mining, and marine transportation, which was newly added,
based on the climate change impact (transition risks) and the balance of the Shoko Chukin Bank’s
investments, loans and other factors of each segment.
*Based on the GICS codes, the applicable industries in the non-financial sector were identified. The classification method may

EnergyTransition risk

Ratio to total loans (%)

Petroleum and gas

High

1.6

Electricity

High

0.4

Medium8.3

Transportati
on

High

3.1

Marine transportation

Medium

1.9

Air transportation

Medium0.1

Automobiles andcomponents(Subtotal)

Materials
andbuilding

13.4

Building materials andcapital goods

Low

8.8

Real estate managementand development

Low

5.9

Metals and mining

High

4.7

Medium3.1

Chemical(Subtotal)

Agriculture,
Food, and
forestry

22.5

Food and beverage

Medium4.1

Paper manufacturing
and forestry

Low

2.1

Agriculture

Low

0.3

(Subtotal)

Total
Copyright © SHOKO CHUKIN BANK All Rights Reserved.

Three scenarios (net zero 2050, delayed transition, and current policies) formulated by
NGFS (Network for Greening the Financial System) are used in the scenario analyses of

2.0(Subtotal)

Land transportation

Scenarios usedtransition risks and physical risks. The worldview of each scenario is as shown in the figure.

be reviewed in the future.

Sector•6.5
44.4(Balance as of March 31, 2023)【Reference】NGFS Carbon Price Scenario（USD/t）

Delayed Transition

Net Zero 2050

Current Policies

TCFD REPORT 2024

18

Transition risks

Physical risks

The increase in credit-related expenses associated with transition risk is estimated by sectors

We identify potential inundation points due to water-related disasters caused by

selected in consideration of climate change impact and the size of exposure in the portfolio. The

typhoons, etc., based on location information for all loan recipients. For each loan

following four sectors were selected for transition risk analysis based on the climate change

recipient that could be flooded, financial condition is estimated based on theimpact (transition risks) of each sector and the balance of investments, loans and other factors.

probability of a water related disaster, and the increase in credit-related expenses is【Qualitative assessment of sectors in scope of analysis】

calculated based on changes in borrower category. From this analysis, the impact ofbuilding collateral damage amount was added.

Main transition risks

SectorAutomobiles
andcomponents

Metals andminingLandtransportation
Marinetransportation

Introduction ofcarbon tax

Carbon tax on
CO2 emissions,etc. in the
production andtransportation
processes

Downsizing of engine parts, etc. associated with conversion to electricvehiclesThe metals and mining sector also includes many automobile-relatedcompanies, such as casting and manufacture of stamped press metal
products, and abovementioned impact is taken into consideration.

Modal shift toward low-carbon conversion, etc.
Conversion to electric trucks (higher vehicle prices)
Decrease in haulage due to a decrease in fossil fuels in main haulage
Conversion to vessels compatible to stricter environmental regulations(higher ship prices)【Results of transition risk analysis】

Scope ofanalysis

Loan recipients among those who could be flooded and who
have collateral pledged on buildings, with the most recent
category

ScenariosusedCurrent policies of the NGFS scenarios

Period ofanalysis

By 2050

Analysis
results

Credit-related expenses: cumulative amount of approximately¥70.0 billion【Reference】 Results of collateral damage
amount estimation (¥100 million)

Based on the transition scenario for each sector, we estimate the financial condition of each loan③

recipient covered by the sector analyzed, and the increase in credit-related expenses is calculated【Reference】 Distribution of loan recipients that
could be affected by flood damage
Customers affected by Class-A rivers
Customers affected by Class-B andsmaller rivers

based on changes in the borrower category. We take into consideration transition risks associated withthe conversion of loan recipients’ main products (internal combustion engines, drives, etc.) to electricvehicles (EVs) for automobiles and components and metals and mining.

Scope of analysis

Loan recipients in the automobiles and components, metals and mining,land transportation, and marine transportation sectors, with the mostrecent borrower category

Scenarios used

Net zero 2050 of the NGFS scenarios

Period of analysis

By 2050

Analysis results

Credit-related expenses: cumulative amount of approximately ¥90.0 billion

Copyright © SHOKO CHUKIN BANK All Rights Reserved.

②①① Net Zero 2050 ② Delayed Transition ③ Current Policies

TCFD REPORT 2024

19

Case studies of support for the automotive industry

Held a study session for top management incooperation with a cooperative association to achieve carbon neutrality
In Ota-shi, Gunma Prefecture, where many of SUBARU CORPORATION’s suppliers are located, we conducted a joint questionnaire survey with Ota Machinery and Metalworking Industry
Cooperative Association among their member suppliers on EVs and initiatives for carbon neutrality.
A study session for top management was held with about 90 participants to provide feedback on the results of the questionnaire survey and explain the background and necessity ofcarbon neutrality.

Please click here towatch the video

In April 2024, the Shoko Chukin Bank newly established the “Industrial Strategy Division” to address

issues surrounding industrial restructuring and environmental and social sustainability. We will enhance
our support for SMEs facing a rapidly changing business environment.
Copyright © SHOKO CHUKIN BANK All Rights Reserved.

TCFD REPORT 2024

Opportunity
Sustainable management support(customer support policy）
The Shoko Chukin Bank was established
as a financial institution for SMEs in 1936.
Since then, the Shoko Chukin Bank has
existed on the strong trust of ourcustomers, with the goal of providing
close, hands-on support to customers.
As such, we will empathize with the

management’s aspirations throughdialogue with the management, draw up a
map for the future together, and support
the creation of a sustainable future(sustainable management support) basedon this map.
Specifically, the Shoko Chukin Bank will
provide diagnostic services from theperspective of SPEED, starting withbusiness prospects evaluation.
Based on that, we will further deepen

dialogue with the management, provide
support for plan formulation (“drawing a
map for the future”), and work together
to achieve the plan through sustainablefinance and other services, thereby
creating a sustainable society.

Copyright © SHOKO CHUKIN BANK All Rights Reserved.

20

TCFD REPORT 2024

21

[ESG diagnosis][Happiness design survey]

The Shoko Chukin Bank, together with Funai Consulting Incorporated, developed

The happiness design survey is a service in which employees are asked to fill out a

ESG diagnosis for middle-market enterprises and SMEs, the main customers for bothquestionnaire to provide an easy-to-understand report on the relationship between thecompanies.

company and its employees under the theme of happiness. The concept of the survey is

ESG diagnosis, which has been available since December 9, 2021, is a tool thatenables customers to easily diagnose the status of their ESG efforts.

to provide various support for improvement to address issues that have been visualized,
thereby aiming for happy management that enables employees to feel happier at work

In ESG diagnosis, middle-market enterprises and SMEs fill out a questionnaire

The Shoko Chukin Bank was one of the first financial institutions to focus on corporate

regarding environment, social, and governance, and a report is prepared thathappiness and launched this service in August 2020, with more than 900 companies

compares their scores to an average score that can be used to easily identify thehaving introduced the service as of September 30, 2023. We will continue to support

details of their efforts that need to be strengthened.

the sustainable growth of SMEs by providing a more enhanced service based on thevarious data we have obtained and our improvement know-how.

総合スコア

分類別スコア

自社スコア・・・・・・・
標準スコア・・・・・・・

項目

総合スコア

貴社

標準スコア

GAP

※評価

25.0 22.5

2.5

A

ガバナンススコア

環境スコア

方針・訴求
100.0%

労務管理体制エネルギー対応
80.0%
60.0%

環境

7.0

7.5

-0.5

B

財務・会計

廃棄物
40.0%

管理体制

リサイクル対応

20.0%
0.0%

社会

12.0

7.5

4.5

S

ガバナンス

6.0

7.5

-1.5

B

※評価

C
5点未満

経営管理体制緊急時対応

コンプライアンス

社会・地域

体制

への対応

組織環境

B
A
5～8点未満 8～12点未満

S
12点以上

労務環境

社会スコア

Approximately 1,000 companies have used the service as of September 30, 2023. Through dialogue basedon the results of the diagnosis, the Shoko Chukin Bank will enhance mutual understanding with customers,
share management issues and needs from the perspective of ESG, offer solutions to resolve these issues,and contribute to the sustainable enhancement of customers’ corporate value.

This service is only available to companies doing business with the Shoko Chukin Bank or Funai
Consulting Incorporated.
Copyright © SHOKO CHUKIN BANK All Rights Reserved.

会社の幸せを、組織としての「コミュニティ・コミュニケーション」、「チームパフォーマンス」、「マネジメント」と、個々の従業員の「カラダ」、「マインド(幸福度)」の5つの要素で示し、総合点を幸せ指数としています。

TCFD REPORT 2024

22

【Decarbonization management support】

To enhance the medium- to long-term corporate value of our customers and achieve a sustainable society, the Shoko Chukin Bank actively supports the efforts ofmiddle-market enterprises and SMEs to promote carbon neutrality.
In May 2023, we launched “Decarbonization management consulting services.” We will provide companies with support for the formulation of plans and other work for
decarbonization as well as hands-on support for the implementation of decarbonization measures.

Support for visualization of
CO2 emissions

Dialogue◼

Dialogue with customers◼

Provide ESG diagnosis◼

Seminars in collaboration with SME
cooperatives, etc.

◼

Shoko Chukin Bank ×◼

Support for companies introducing
services

Decarbonization management
consulting services

Support for implementation◼

Formulate reduction plans androadmaps◼

◼

Support for acquisition of SBT
certification

Sustainable finance and othersupport◼

Business matching

The Shoko Chukin Bank has a business alliance with booost
technologies, Inc., which develops the CO2 emissions visualization

Case studies of customer support

system “booost GX.”
Kahei Co., Ltd. is engaged primarily in the manufacture of synthetic leather for vehicles,

sportswear, furniture, and other products. To further promote decarbonization management,
the company planned to develop a decarbonization plan for 2030 and obtain SBT certification(international certification for reduction of greenhouse gas emissions) for SMEs.
Through its decarbonization management consulting services, the Shoko Chukin Bank

supported the company in visualizing its CO2 emissions, preparing data, and formulating aplan to achieve its reduction targets, while conducting on-site surveys and interviews withmanagement, thereby closely supporting the company’s acquisition of SBT certification.

Copyright © SHOKO CHUKIN BANK All Rights Reserved.

TCFD REPORT 2024

23

For details of the survey, please click here

Awareness survey on carbon neutrality of SMEs

The Shoko Chukin Bank announced the “Awareness Survey on Carbon Neutrality of SMEs” in July 2023 (previous survey was conducted in July 2021).
We conducted a questionnaire survey of our customer SMEs (approximately 5,000 companies) nationwide regarding the impact, specific countermeasures, andissues related to each event associated with carbon neutrality.

We will identify the impact toward carbon neutrality and continue to engage in dialogue with our customers.
1. Status of implementation and consideration of countermeasures against
the impact of carbon neutrality

２. Status of implementation and consideration of countermeasures against
the impact of carbon neutrality (by industry)
100%

100%

90%

90%

80%

80%

70%

55.8

70%
60%

79.9

50%

More than double compared to theprevious survey(Percentage of companies implementing
or considering countermeasures)

40%
26.9

30%

More than 60% of companies in the “transportationequipment” “paper and pulp” and “chemical” industries
have implemented or are considering countermeasures
Compared to the previous survey, companies are making
progress in their efforts

Restaurant and lodging

Information and communication

Service

Transportation

RetailReal estate and goods rental

Wholesale

Construction

Other

Transportation equipment

Copyright © SHOKO CHUKIN BANK All Rights Reserved.

Electrical equipment

4,903

More than 40% of all companies have
implemented or are consideringcountermeasures against the impact ofcarbon neutrality

General, production and industrial machinery

Number ofcompanies
responded

being considered

Metal products

Countermeasures already implemented

Countermeasures

Ferrous and non-ferrous

Countermeasures being considered0%

Printing(n=4,903)

No countermeasures have been implemented or considered

considered

implemented or

Ceramic, stone and clay productsThis survey(n=4,723)

10%
ChemicalPrevious survey

have been

Paper and pulp

17.3

countermeasures

20%

Lumber and wood products

10.8

No

30%

Textile

0%

9.2

40%

Food

10%

50%

Entire industry

20%

60%

Countermeasuresalready
implemented

TCFD REPORT 2024

24

Sustainable financeTo contribute to the sustainable enhancement of our customers’
corporate value and the achievement of a sustainable society, theShoko Chukin Bank has offered sustainable finance services since July 1,
2022.

Sustainable financebalanceFirst half of fiscal
2023

Cumulative(from June 2022)

56 projects,¥35.9 billion

107 projects,¥54.9 billion(Results as of September 30, 2023)

With addressing social issues such as climate change and population
decline becoming an urgent issue, the importance of the role played byfinancial institutions as partners to provide finance and information
services that contribute to resolving social issues is growing.
The Shoko Chukin Bank will play an active role to achieve asustainable society. Through this effort, we will provide hands-on
support from the perspective of sustainability, with business prospect
evaluations as a starting point, and support our customers’ sustainable
efforts.

Positive impact financing (*1)

Green loan/
Social loan/
Sustainability loan (*2)
Capital needed for businesses or
projects expected to have effects on

Use of funds

Working capital or facility capital

improving the environment or
resolving social issues, as recognizedby the Shoko Chukin Bank

Loan amountIn principle, ¥100 million or moreInterest rate

Interest rate prescribed by the Shoko Chukin Bank

Commission

Commission fees prescribed by the Shoko Chukin Bank
(Fees for scheme structuring and monitoring)
An impact assessment prepared by the

A green loan assessment

Shoko Chukin Bank and THE SHOKO

report/social loan assessment

CHUKIN BANK INSTITUTE of COMMERCE,Other

INDUSTRY & ECONOMICS, LTD., and athird-party opinion report prepared byreport/sustainability loan
assessment report prepared by theJapan Credit Rating Agency, Ltd. will be

Shoko Chukin Bank will beannounced

announced(*1) Positive impact financing
Positive impact financing is a hands-on support type of financing designed to enhance the “economic value,” “social value,” and the“happiness of workers” of companies in a comprehensive and sustainable manner, through comprehensive analysis and evaluation of
the impact (positive and negative) of corporate activities on the environment, society, and the economy, sustainability goal setting andmonitoring, and financing. This loan scheme complies with the Principles for Positive Impact Finance announced by the United Nations
Environment Programme Finance Initiative (UNEP FI), and we have obtained a third-party opinion report prepared by Japan Credit
Rating Agency, Ltd. for its suitability.
(*2) Green loan, social loan, and sustainability loan
Green loan, social loan, or sustainability loan is a loan that supports customers’ green or social projects (businesses or capital
investments that have a clear effect on improving the environment or resolving social issues). This is a loan scheme that conforms to
the Green Loan Principles, Social Loan Principles (Loan Market Association, and other organizations), and Green Loan and Sustainability
Linked Loan Guidelines (Ministry of the Environment), and its conformity is assessed by the Shoko Chukin Bank or an external
assessment body to ensure transparency. The Shoko Chukin Bank has established a green finance/social finance/sustainability financeframework and obtained a third-party opinion report prepared by Japan Credit Rating Agency, Ltd. that the loans made in accordancewith the framework are in conformance with each of the international principles, and other principles.
The Shoko Chukin Bank has obtained a third-party opinion report prepared by Japan Credit Rating Agency, Ltd., that theloans executed in accordance with respective loan frameworks are in conformance with each of the international principles
and other principles. For details of the opinion report and assessment report, please refer to the Shoko Chukin Bank’s website.

Copyright © SHOKO CHUKIN BANK All Rights Reserved.

TCFD REPORT 2024

25

Case studies of sustainablefinance support

Impact creation through PIF (Positive Impact Financing)Supporting Kuriyamabeika Co., Ltd.

through positive impact financing

The Shoko Chukin Bank has supported 119 companies (as of December 31, 2023) through PIF (Positive

Impact Financing). The table below shows KPIs established through PIF for each of SDGs items, and we areworking to create an impact on the environment and society through the achievement of these KPIs. By using the

The Shoko Chukin Bank (Niigata Office) provided a ¥1.0 billion loan to Kuriyamabeika Co., Ltd.
(head office: Niigata City, Niigata Prefecture; representative: Toshiaki Kuriyama) necessary forits sustainable management. Positive impact financing is applied to the loan.

impact deposits (page 26) entrusted to us by customers nationwide as a source of PIF, we aim to create avirtuous circle in society as a whole.
Number of KPIs
establishedThe company produces senbei (rice crackers) and arare (cubic rice crackers) and sells its

mainstay products such as “Bakauke” and “Hoshitabeyo,” and other products throughout Japan.

23

120

71

Zero occupational accidents, acquire
Certified KENKO Investment for
Health Outstanding Organizations
Recognition, increase the number ofpaid leaves taken, increase thenumber of group home sites

65

Develop new products forhousing equipment, increase
orders for EV and automateddriving-related parts

57

Make employees multi-skilled,
expand qualificationacquisition support system,
increase the number ofqualified employees

60

Increase the ratio of female
managers, increase the ratio of
female employees, increase
employment of people withdisabilities, accept foreign trainees

84

Visualize and reduce CO2
emissions, formulate BCP(Business Continuity Plan),obtain ISO14001

17

Cleaning and management offish tank (aquaculture), proper
management of regulating
reservoirs and implementationof water quality test

11

Change the floating
materials (prevent marine
pollution – aquaculture)

85

Introduce solar power
generation equipment,
increase LED usage ratio,
increase the ratio of battery
forklift truck

9

Increase sales of printed
materials using FSC(Forest StewardshipCouncil) certified paper

369

Happiness design survey,
increase sales in new sites/new
businesses, create local
employment, reduce annual
overtime work, etc.

11

127

Improve yield rate, new entry
into the semiconductor precision
processing business andincrease sales, entry into biogas
power generation businessThis time, the company has established KPIs on sustainability in order to achieve further
growth through efforts including the stable supply of safe and secure rice snacks and thepromotion of diversity. Through environmental management, the company will enhance thesustainability of its management to achieve the improvement of not only its economic value but
also its social value as well as the happiness of its workers.
The Shoko Chukin Bank conducted a business prospects evaluation through on-site visits anddialogue with management, and carried out an impact assessment in cooperation with THE

Examples of KPIs establishment
Increase the ratio of female
employees, obtain publiccertification such as P (privacy)
mark, hold study sessions onhuman rights DD (due diligence)

made from “okara (soy pulp)” and “sweet potato peels,” in addition to extending the expiration(*) Adding value to things that should have been disposed of and making them something of higher value

Number of KPIs
established

Expand warehouse for foodstorage, increase sales at
new sites for foodtransportation

The company is actively working to reduce food losses, and developed upcycled products (*)

date of products through the improvement of packaging materials, etc.

Examples of KPIs establishment

119

Reduce waste generation,
increase sales of eco-friendly
products, reuse food residues,
increase the volume of waste
accepted (recycling companies),
etc.

SHOKO CHUKIN BANK INSTITUTE of COMMERCE, INDUSTRY & ECONOMICS, LTD. We obtained

a third-party opinion report prepared by Japan Credit Rating Agency, Ltd. (JCR), and shared thecompany’s strengths, challenges and goals (KPIs). We provided the funds necessary to improvethe company’s corporate value through positive impact financing, and will provide hands-on
support for the company’ efforts to achieve its goals.

Please click here towatch the video

Copyright © SHOKO CHUKIN BANK All Rights Reserved.

Research and developmentof measures against marine
plastic litter through publicprivate partnerships(As of December 31, 2023)

TCFD REPORT 2024

26

Cooperation with
regional financial institutions

Impact deposits

Since February 2023, the Shoko Chukin

Through these efforts, we will leverage

Bank has promoted business alliances andthe synergies of our respective functions

cooperation with regional financial

and characteristics to meet the financial

institutions in the implementation ofneeds of SMEs in the region, together withsustainable finance operations in order toregional financial institutions, thereby

contribute to the revitalization of local

contributing to the improvement of theeconomies and the creation ofvalue of SMEs.

In June 2023, the Shoko Chukin Bank started offering “impact deposits.” By allocating
the impact deposits to PIF (positive impact financing) (page 24) we offer, we will
provide the appropriate financing to business operators throughout Japan that engage
in sustainable management, aiming to improve the sustainability of society as a whole.

Upon starting to handle the impact deposits, the Shoko Chukin Bank formulated an
impact deposit framework, after obtaining an opinion report prepared by the Japan

employment.

Credit Rating Agency, Ltd. (JCR) for the conformity with the items indicated in the

Regions
Revitalization of
local economies

ESG診断“Basic Approach to Impact Financing,” of the Ministry of the Environment.

SMEs andSME cooperatives

Our PIF framework tied to PIF and funded by impact deposits has been selected as amodel project for the Ministry of the Environment’s Green Finance Model Creation
Project for fiscal 2022.

Corporate value
improvement

For the future, for a connected society
Regional financial
Institutions

Collaboration incustomer support
Specialized know-how andsolution functions
Neutrality, domestic andinternational network

Mutual utilization offunctions
Cooperation in
strategic areas

Broad customer base in
the region

Virtuous circle ofimpact deposits
and PIF

Procurement

Aim to support theefforts of SMEs

Aim to contributeto environmental
and social issues

Extensive information

Impactdeposits

Contract signingandloan execution

Financing
PIF execution
Impactassessment andassessment
report preparation

Management
during the year
Monitoring
KPI achievement
supportand network in the region

Depositor

Let’s visualize
and reducegreenhouse gas
emissionsLet’s utilize
renewable energyーFinancial institutions with which we collaborate and cooperateー(Japanese alphabetical order, titles omitted, as of January 31, 2024)
KitaiseUeno Shinkin Bank, The Kuwanamie Shinkin Bank, THE BANK OF

KOCHI LTD., The Saitamaken Shinkin Bank, THE SENDAI BANK, Ltd., THE
TAIKO BANK LTD., North Pacific Bank, Ltd., The Yokohama Shinkin Bank
Copyright © SHOKO CHUKIN BANK All Rights Reserved.

Improve sustainability of society as a whole
For details of our efforts to create impact through PIF, please refer to page 25.

TCFD REPORT 2024

27

Customers who made impact
deposits (offered for fiscal 2023)

In June 2023, the Shoko Chukin Bank started offering

The Shoko Chukin Bank will use impact deposits as a source to“impact deposits” for corporations as time deposits to serve

further support the sustainability efforts of various companies.

as a source of PIF (Positive Impact Financing*).

For the latest information on impact deposits, please click here.

Thanks to the support of our customers, a totalof ¥10.0 billion (full amount for offering) has
been deposited by 71 companies nationwide.
* PIF (Positive Impact Financing) is a hands-on support type offinancing designed to help increase positive impacts and reduce
negative impacts by comprehensively analyzing and evaluating thepositive and negative impacts of corporate activities on theenvironment, society, and economy.

For details of our efforts to create impact through PIF, please referto page 25.

Video provides an overview of impact deposits and examples of
support provided.
Please click here towatch the video

Copyright © SHOKO CHUKIN BANK All Rights Reserved.

TCFD REPORT 2024

28

Efforts to resolve environmental andsocial issues
Practice of sustainable management toimprove corporate value
In November 2023, the Shoko Chukin Bank held a seminar titled “What is the

Learning beyond generations
and efforts for the future
As a project to connect local companies with theSeventeen students attended a class titled “SDGssustainable management that makes SMEs strong.” Mr. Mitsuhiro Minowa,

local communities, the Shoko Chukin Bank supports

Class Sponsored by the Shoko Chukin Bank-Managing Director of Allbirds, Japan, and Mr. Tetsuo Ohkawa, Representative

students who carry the future to learn how to

Sustainable Working Environment.” A group

Director and President of Ohkawa Printing Co., Ltd. were invited to give a lecture

achieve a “sustainable world.”

discussion was held with Mr. Morita, teachers inon management practices to improve corporate value.

On November 7, 2023, we held a special class tocharge, and the staff of the Shoko Chukin Bank, andlearn the SDGs at Seibu Gakuen Bunri Senior Highthey discussed the achievement of the SDGs, with a

School, in Sayama City, Saitama Prefecture, with thefocus on the themes related to working people.

cooperation of Moritasansho Co., Ltd., a steel

Many of the students who attended the classprocessing manufacturer headquartered in Saitama

commented that through the class, they could think

Prefecture (head office: Gyoda City, Saitama

about the SDGs as their own matters and realized

Prefecture; representative director: Mr. Hiroyoshi

the importance of taking action.

Morita).

Please click here towatch the video

Copyright © SHOKO CHUKIN BANK All Rights Reserved.

29

CHAPTER 6

Risk
Management

Copyright © SHOKO CHUKIN BANK All Rights Reserved.

TCFD REPORT 2024

30

Top risk management
The Shoko Chukin Bank has adopted “Toprisk management,” which, based on thediscussions of senior management, recognizes
risk events thought to have a particularly
significant impact on management as top risks.

In October 2023, considering the risk of not
being able to adapt to or missing the medium-

Top Risk

to long-term changes in industrial and social

Responses against
climate change risks

Changes in industrial structure

structures, which are advancing mainly in the

Risks of failure of businessstrategies

field of green and digital, the Board of Directors
decided to identify “risks of failure of businessstrategies,” which had been identified as one of

Occurrence of large-scale
natural disasters

the main risks other than top risks, as one of
top risks.

Risks related to cyber attacks

The Shoko Chukin Bank has identified“responses against climate change risks” as oneof top risks along with the other six risk events,
and is working to address it.
The Shoko Chukin Bank will continue to takeeffective countermeasures, as well as work to

Other main risks

Securing and developing humanresources
Inadequate measures againstmoney laundering and terrorist financing

further strengthen its risk management, basedon changes in the business environment.

（as of January 2024）

Copyright © SHOKO CHUKIN BANK All Rights Reserved.

TCFD REPORT 202431

Basic approach toinvestments and loans
The Shoko Chukin Bank is a

Environmental and social
considerations policy

Businesses in which the Shoko Chukin Bank will not
engage in investments and loans or other transactions

The Shoko Chukin Bank has

1．Businesses that produce inhumane weapons

financial institution dedicated tofacilitating the financing of SMEs.
To always be aware of thisobjective, and to conduct ethicalbusiness that is consistent withnational laws and regulations andinternational norms, we verifychanges in the environment
surrounding our customers and theirbusiness activities, and work to
resolve environmental and social
issues.

established a policy for transactions withbusinesses that are likely to have a

Cluster munitions are recognized as inhumane weapons by the international community. In
addition, we recognize that nuclear weapons, biological and chemical weapons, andantipersonnel landmines present as great a humanitarian problem as cluster munitions. Basednegative impact on the environment andon such recognition, we will not make any investments and loans or conduct othersociety as a result of our verification, andtransactions in the manufacture of these inhumane weapons.

will take action in accordance with the

2．Businesses that engage in child labor, forced labor, or human trafficking

policy.
Specifically, we will not engage in

The Shoko Chukin Bank respects the Universal Declaration of Human Rights and otherinternational norms. From the perspective of promoting responsible corporate activities andcontributing to the protection of human rights throughout society including the internationaltransactions with the three businesses

community, we recognize that we should not be complicit particularly in exploitative labor

listed on the right that are likely to havepractices. Based on such recognition, we will not make any investments and loans or conduct

a material negative impact on theother transactions in businesses that engage in child labor, forced labor, or human trafficking.

environment and society.

3．Businesses that are problematic from the perspective of maintaining ecosystem andprotecting World Heritage, etc.

Regarding “coal-fired power generation
business,” “deforestation business,” and“palm oil plantation development
business” that have a negative impact on

We are blessed with food, water, climate stability, and other benefits as a result of complex anddiverse ecosystems supporting each other. The Shoko Chukin Bank recognizes that it is important
to work to maintain and conserve the natural environment, etc. while taking into consideration thebiodiversity that supports ecosystems. Based on such recognition, we will not make any
investments and loans or conduct other transactions in businesses that fall under the following.

the environment and society, we will fully

・Businesses that have a negative impact on Ramsar Convention-designated wetlands

verify the details of the business, and・Businesses that have a negative impact on UNESCO-designated World Heritage (*1)

engage in dialogue and approach, based

・Businesses that violate the Convention on International Trade in Endangered Species of Wildon which we will consider our responses.

Fauna and Flora (or the Act on Conservation of Endangered Species of Wild Fauna and Flora ofJapan) (*2)(*1) Except where prior consent is obtained from the government of the country concerned and UNESCO.
(*2) Matters reserved for each country are taken into consideration.

Copyright © SHOKO CHUKIN BANK All Rights Reserved.

32

CHAPTER 7

Metrics andTargets

Copyright © SHOKO CHUKIN BANK All Rights Reserved.

TCFD REPORT 2024

33

Estimation of CO2 emissions (Scope 3)

Results and targets of CO2 emissions (Scope 1 and 2)
The Shoko Chukin Bank’s CO2 emissions in fiscal 2022 calculated based on the amount of gas,

electricity and other utilities used at its offices in Japan totaled 9,736 tons, down 36% from thefiscal 2013 level (CO2 emissions for the Shoko Chukin Bank’s Scope 1 (direct) and Scope 2(indirect) in the periodic report under the Act on Rationalization of Energy Use and Shift to Nonfossil Energy).

The Shoko Chukin Bank aims to reduce CO 2 emissions by 50% in fiscal 2030 and achieve

The Shoko Chukin Bank will calculate and identify GHG supply chain emissions (Scope 3)
in addition to our own CO2 emissions. We will continue to work to expand and refine thescope of calculation, and use the results for the sophistication of our own efforts to reduce
environmental impact and dialogue with and supporting of our customers. The results ofthe estimation are as follows.
This time, we calculated the overall estimation of Cat (Category) 15 (investments), andidentified approximately 90% of the total investments and loans (balance ratio).

carbon neutrality by fiscal 2050, as CO 2 emissions reduction target (for Scope 1 and 2).
In CO2 emissions, electricity purchased at branches and offices is the biggest factor, and we

As the discussion over international standards progresses, the current calculation
method may change in the future.

have strived to reduce the amount of electricity purchased by optimizing the size of our offices
through consolidation and relocation of sites, and by switching to LED lighting.
CO2 emissions in fiscal 2022 temporarily increased due to factors such as the emission factor ofelectricity purchased. The Shoko Chukin Bank will continue to make ongoing efforts to reduce CO 2
emissions to achieve our target, including the use of renewable energy (page 34) and relocation
to more environmentally friendly branches.

【Results of CO2 emissions】(t-CO2)•20,00015,000

11,227

10,93910,000

9,176

9,736

Cat１

Purchased goods and services

Approx. 21

Cat２

Capital goods

Approx. 7.5

Cat3

Fuel- and energy-related activities(not included in scope 1 or scope 2)

Approx. 1.5

Cat６

Business travel

Approx. 0.6

Cat７

Employee commuting

Approx. 1.1

Cat15

Investments

Approx. 8,200

For cat1, 2, 3, 6, and 7, we estimated CO 2 emissions based on the activity volume in fiscal

2022, in accordance with the Basic Guidelines on Accounting for Greenhouse Gas Emissions

Results:36％
reduction(from fiscal 2013)15,279(1,000t-CO2)

Throughout the Supply Chain Ver. 2.4 (Ministry of the Environment and Ministry of Economy,
Trade and Industry).
•

For Cat15, calculation was made for business loans, in accordance with the Global GHG
Accounting & Reporting Standard of PCAF (Partnership for Carbon Accounting Financials). The

numerator of the equity ratio is the loan balance as of March 31, 2023 and the denominator is

5,000

calculated using financial information, etc. held by the Shoko Chukin Bank.
•0

For the business loan recipients subject to the Ministry of Environment’s publication system
based on the Act on Promotion of Global Warming Countermeasures (approximately 11%*),

Fiscal 2013

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

estimation was made using data published under the system.

•

Reduction target: 50% reduction in fiscal 2030
achieve carbon neutrality by fiscal 2050

For the business loan recipients other than the above (approximately 78%*), estimation wasmade by estimating emissions per sale by industry based on publicly available data andinformation held by the Shoko Chukin Bank, and setting emission intensity, and multiplying by
the equity ratio of the Shoko Chukin Bank.
* Balance as a percentage of total investments and loans

Copyright © SHOKO CHUKIN BANK All Rights Reserved.

TCFD REPORT 2024

34

Introduction of solar off-site PPAIn June 2023, the Shoko Chukin Bank entered into a basic agreement regarding off-site corporate PPA services with SymEnergy Inc. (head office: Kobe City, Hyogo

Prefecture; representative director: Mr. Masahiro Inui) and TEPCO Energy Partner, Incorporated (head office: Chuo-ku, Tokyo; representative director and president: Ms.
Momoko Nagasaki). Under this agreement, we plan to switch some of the electricity to be used at our head office to electricity derived from renewable energy sources withadditionality *1 through off-site corporate PPA*2.
Specifically, we plan to utilize electricity (approximately 3.1 million kWh per year) generated at a high-voltage solar power plant (total installed capacity AC of 2,050 kW)
currently under development in Tochigi Prefecture.
*1 Corporate PPA (Power Purchase Agreement) is an agreement under which a company purchases renewable energy from a power producer at a fixed price over a long period of time.

Off-site PPA is a form of power procurement from a remote power generation facility through a general transmission and distribution grid.
*2 Additionality refers to direct involvement in increasing the total amount of renewable energy generation through the developm ent of new renewable energy sources.

【Location of demand】【Solar power plant】

Shoko Chukin BankPart of head office
SymEnergy Inc.
New solar power plant

Effectively CO2free electricity*3
Flow of electricity from a solar power plant

Flow of environmental value

Normal electricity*3 Excess electricity generated by a solar power plant during the day
will be used as “environmental value (non-fossil certificate).” It will be
used as effectively CO2-free electricity combined with normal electricity.

Flow of normal electricity
Copyright © SHOKO CHUKIN BANK All Rights Reserved.

Inquiries▪

This material has been prepared for information purposes only, and the opinions and forecasts contained herein are not designed to solicit offering, sales, or tradingof stocks or bonds.

▪

This material contains forward-looking statements. The forward-looking statements present matters only as of the date they are made (or as of the date separately
stated), and use premises, plans, expectations, judgments, and assumptions based on information available at that time. In addition, they are based on the content
and interpretation of laws and regulations or guidelines at that time.

▪

These forward-looking statements are subject to various risks and uncertainties. Accordingly, the actual results may differ significantly from the forecasts. Thesestatements are made solely for the purpose of this material, and the Shoko Chukin Bank does not have any obligation or policy to update them from time to time.

▪

The information contained herein is based on information that the Shoko Chukin Bank has determined to be reliable and accurate; however, as it is subject touncertain factors including economic environment, and the Shoko Chukin Bank does not guarantee its accuracy or certainty. In addition, the information contained
herein is subject to change without prior notice.

▪

This material was prepared in Japanese and translated into English. The Japanese version is the original and the English version is for reference only. If there is any
discrepancy between the two versions, the Japanese version shall prevail.

Supporting the future of companies.
Making Japan more resilient to change.
The Shoko Chukin Bank, Ltd.
Sustainability Department, Corporate Planning Division
Nakata, Niikura
TEL: 03-3246-9545

Copyright © SHOKO CHUKIN BANK All Rights Reserved.