2020

Integrated Report
Main Part

Mission

Design the Future withFinancial ExpertiseContinue to expand financial frontiers;
Provide the best solutions for customers and society;Pursue sustainable development for Japan and the world.

The realization of the DBJ Group’s mission can be traced to its four core corporate values of “long-term perspective,” “impartiality,” “public mindedness,” and “reliability,” which were created and passed down through the generations via the sharing and pursuit of DBJ’s corporate philosophy.
Moreover, the core corporate values underpin our business activities, representing a strength of DBJ.

A Long-term Perspective

Impartiality

1

Public-mindedness

Reliability

Due to the circumstances surrounding COVID-19 and our foremost priority of protecting the health and safety of our executives and employees, we have decided not to
conduct photo sessions for this year’s integrated report. Accordingly, the photos featured in this report were taken in the past for use in previous years’ reports.

2

Contents

Editorial
PolicyEnvironmental Report for a Sustainable Society (published in fiscal 2003) was the
DBJ Group’s first report dedicated to increasing such communication with
our stakeholders. Our latest Integrated Report 2020 is intended to provide financial
and non-financial information to explain the DBJ Group’s business activities andinitiatives in sustainable value creation to its broad spectrum of stakeholders.
The report’s content is decided upon by the Executive Committee.

The DBJ Group’s
Value Creation Story
A presentation of the DBJ Group’s corporate philosophy froma historical perspective, along with an explanation of its
management policies rooted in this philosophy

An explanation of the
DBJ Group’s sustainability
management initiatives

P 4

 he DBJ Group’s Corporate
T
Philosophy

P 6

Our History of Value Creation

P 10

Sustainability Management

P 12

Message from the President

P 18

Invigoration and Stabilization of
Financial Markets throughPartnerships and Collaboration
under the Medium-Term
Management Plan

P 19

Our Response to COVID-19

P 20

 ey Initiatives toward Realizing
K
Sustainability

An explanation of the
DBJ Group’s key initiatives forrealizing sustainability

Period Covered and Scope

Guidelines and Entities Referenced

Disclaimer•	Period: Fiscal 2019
(April 1, 2019–March 31, 2020)(Some information from outside thisperiod is also included.)•	International Integrated Reporting
Framework of the International
Integrated Reporting Council (IIRC)

Integrated Report 2020 contains
forward-looking statements. Forwardlooking statements are based on
information available at the time ofwriting and hypotheses or judgments
regarding uncertain factors.
Accordingly, actual results may differ
materially if conditions change.

•	Scope: In principle, the report covers
DBJ and its 12 main subsidiaries.

•	Guidance for Integrated Corporate
Disclosure and Company–Investor
Dialogues for Collaborative Value
Creation•	Date of Publication: October 2020

https://www.dbj.jp/en/
The latest news; detailed information
on DBJ’s financial services; casestudies regarding its investments andloans; various reports; and information
for investors can be found on the
Company’s website. Details about
CSR initiatives are also posted on the
DBJ website.

3

The DBJ Group’s
Strategy
A presentation of the DBJ Group’s various
sustainability management activities from theperspectives of its business and managementfoundation strategies

Business Strategy

 anagement Foundation
M
Strategy

P 22

Sector Strategy

P 28

Area Strategy

P 38

Financial Strategy

P 32

Function Strategy

P 40

 uman Resource
H
Development

P 42

 nowledge andK
Collaboration

Corporate GovernanceP 46

 essage from theM
Chairman

P 48

Corporate GovernanceP 52

 embers of the Board ofM
Directors, Audit &Supervisory Board
Members, and Executive
Officers

P 55

Messages from
Outside Members of theBoard of Directors

P 56

ComplianceAn explanation of
the DBJ Group’s
specific initiatives
toward the growth ofthe energy sector

Risk Management

Corporate Data
P 64

Financial and
Non-Financial Highlights

P 66

C onsolidated
Financial Summary

P 68

Timeline

P 69

Shareholder Information

P 69

 ummary of Changes to theS
DBJ Act after Conversion toa Joint-Stock Company

P 58

Risk Management System

P 58

 omprehensive Risk
CManagement

P 70

Organizational Structure

P 61

Stress Tests

P 71

P 61

 usiness Continuity
B
Initiatives

 orporate Information /CGroup Companies

P 62

Initiatives Related to
the TCFD’s
Recommendations

The DBJ Group’s
Corporate GovernanceA presentation of the DBJ Group’s corporate
governance and risk management efforts toward thesteady implementation of its strategies

An explanation of the
DBJ Group’s specificinitiatives and goals
in line with the Task
Force on Climaterelated Financial
Disclosures, which
has been drawing
significant attention
in recent years

4

The DBJ Group’s Corporate Philosophy
Design the Future with Financial Expertise

With due consideration paid to progress it has made thus far, projected changes in the business environment, and outstanding social issues, the DBJ Group has formulated a mission to relentlessly
pursue, core values to share, and its long-term vision, Vision 2030, to follow as a guide into the future.
In connection with these elements of its corporate philosophy, the DBJ Group has identified four
core corporate values—long-term perspective, impartiality, public-mindedness, and reliability—that
also embody its strengths and long-term vision, areas of differentiation.

MissionVision 2030

Leveraging the DBJ Group’s
unique strengths to pursue its
mission and realize its vision

Business strategy

Capital strategy

Sector strategy
Function strategy
Area strategy

Financial capital
Human capitalIntellectual capital
Relationship andsocial capital

Sustainability
management

Values put into
practice define
our strengths

Execute strategy
based on values

Action Guideline

Values5

Sharing Our Corporate Philosophy
Further propagating and applying our corporate philosophy will improve awareness ofour social responsibility, enhance the sense of unity in the DBJ Group, lower communication costs, andmotivate our employees to grow with intention and a sense of mission.

Our unwavering
purpose andour incessantdetermination toshape the future

Our vision for 2030,
embodied in
our mission andstrategies

Design the Future with Financial ExpertiseContinue to expand financial frontiers;
Provide the best solutions for customers and society;Pursue sustainable development for Japan and the world.

As industry and infrastructure professionals skilled in handling all types of risk,
we will play a unique role in the economy and society of 2030—leading new
business and market creation while responding to crises and other social needs.

Our strategy to reach our vision for 2030
Medium-Term Management Plan
The DBJ Group’s unique strengths assist with strategy execution
A long-term perspective, impartiality,
Core corporate
valuespublic-mindedness, and reliability
Our guidelines fortaking specificactions that
express our values

Our unwaveringvalues sharedby management
and employees(base component)

Responsibility to future generations• We fulfill our responsibility to the future by
pursuing both economic and social value.

The customer’s perspective• We devote unequaled thought to eachpossibility—from the customer’s point of view.

Outstanding service• We review and enhance our services while
improving productivity.

Commitment and cooperation• We work tirelessly to broaden frontiers andachieve best results.
• We respect diversity and work together for
greater shared value.

Initiative

Integrity

6

Our History of Value Creation

The DBJ Group has provided solutions intune with the times, contributed to thesustainable development of society, and,while changing itself, stayed true to its
values—initiative and integrity—amiddramatic changes in the economy, thefabric of society, and social issues.

Redevelopment ofmajor industries
Kawasaki Steel Corporation(currently JFE Steel Corporation):
Construction of Chiba Steelworks (Chiba Prefecture)
Modernization of steelmaking through constructionof the first postwar blast furnace

1951
The Japan Development Bank established1956
The Hokkaido Development FinancePublic Corporation establishedEconomic recovery

Roles played by DBJ

Rapid growth

Reconstruction and self-relianceof the economy

High-growth infrastructuredevelopment

After World War II, DBJ began toprovide financing for the rationalization, modernization and growthof key industries that would become
the foundation of economic andindustrial development.

Japan Development Bank (JDB)
expanded and reinforced the energy
and transportation capabilities
underpinning its industrial infrastructure, and provided loans todevelop and modernize chemical
fiber, machine tool, automobile, andother new industries, which steered
economic growth.

https://www.dbj.jp/en/co/info/history/

Please refer to our company website for more details on DBJ’s history
and timeline.

7

Expansion and reinforcement ofindustrial bases
Nippon Yusen Kabushiki Kaisha:Liner Sanuki Maru
Rebuilding Japan’s merchant shipping fleet withfinance under the government’s shipbuilding
programDevelopment ofdomestic technologies

Development of innovative financial products
focused on sources of corporate value

Sony Corporation:
Trinitron color television factory
Promotion of homegrown technologies through thecommercial application of new technologies

Stable growth

Strengthening of international
competitivenessImprovements to quality of life

Aiming to enhance international
competitiveness in accordance withthe transition to an open economic
system, JDB focused on support forindustrial system improvements
and the development of domestic
technologies.

In the 1970s, JDB engaged in
antipollution measures, regional
and urban development, and othersocial development efforts addressing quality of life and regional
inequality issues in tune witheconomic growth.

Promotion of
antipollution measures
Toyo Soda Manufacturing Co., Ltd.
(currently Tosoh Corporation):
Conversion of manufacturing method for caustic
soda (Yamaguchi Prefecture)
Promotion of conversion to non-polluting manufacturing method for chemical industry

Economic
bubblePost-bubble economy

Seamless transformation ofindustrial structure

Creation of an affluent society

From the mid-1980s, pressing
needs arose for increased domestic
demand and an industrial structuralshift against a background of
aggravating trade friction with othercountries. JDB focused on support
for social capital improvement,
creative technological development,
and industrial transformation andother issues.

JDB focused on ongoing improvements to social capital and environmental measures as areas ofpriority and the support of new
businesses (venture businesses).
It swiftly implemented reconstruction loans in the wake of the Great
Hanshin-Awaji Earthquake andloans to stabilize the financial
system.

Demonstration of safety net function(Reconstruction from the Great Hanshin-Awaji Earthquake)

Hankyu Corporation:
Earthquake reconstruction work (Hyogo Prefecture)
Recovery work on traffic infrastructure damagedby the earthquake

8

Financial solutions that support communities,
the environment, and technology

Stronger response to innovation
Japan H2 Mobility, LLC (JHyM):
Financial support for realization of a hydrogen-basedsociety

PASMO Co., Ltd.:
Development of the PASMO IC card that transformed
public transport convenience
Note: PASMO is a registered trademark of PASMO Co., Ltd.

Space One Co., Ltd.
Support for development of the domestic spaceindustry by commercializing a new generation ofsmall rockets

Photo provided by ENEOS Corporation

2008
Development Bank of Japan established

2015
Amendments to the Development Bank ofJapan Inc. Act

The global financial crisis
The Great East Japan Earthquake

Structural reform

Regional revitalization

Business regeneration

Through a united effort with
regional financial institutions, JDB
focused on providing long-term
solutions to such issues as economic growth, the establishmentof social infrastructure, and development of a wide business network, toward enriching the lifestyles
of local communities.

Amid issues concerning uncollectible loans arising from an increasing number of bankruptcies andunfavorable performances among
businesses as well as the instabilityof financial systems since the late
1990s, JDB invested in a businessrestructuring fund to support therecovery of businesses toward therevitalization of the Japanese
economy.

Financial crisis response,
post-earthquake reconstruction
The financial crisis in 2008 triggered a deterioration of corporate
cash flows and DBJ swiftly
addressed the situation throughFinancial Crisis Response
Operations. In regard to the Great
East Japan Earthquake in 2011,
DBJ teamed up with other financial
institutions to engage in Earthquake
Disaster Crisis Response
Operations and to provide risk
capital through its Great East Japan
Earthquake Reconstruction Fund.

Global pandemicof COVID-19

Provision of risk capital
DBJ established its Special
Investment Operations to provide
the growth capital needed topromote the competitiveness ofJapanese enterprises and regional
revitalization. Moreover, DBJ supported new businesses with theircommercialization efforts andcontributions to society by engaging
in projects with diverse players overthe long term.

Response to the2008 global financial crisis

Great East Japan Earthquake disasterand crisis response

Crisis response to impact
of COVID-19

The financial crisis in the autumn of 2008 precipitated a global financial crisis. As this situation
impaired the functioning of the bond markets,
corporate cash flows worsened. DBJ responded
promptly with financial Crisis Response Operations.

Joban Kosan Co., Ltd.:
Spa Resort Hawaiians (Fukushima Prefecture)
Support for a theme park that became a symbol ofreconstruction after the Great East Japan Earthquake

Through the designation of the COVID-19 pandemic
as a crisis by the Japanese government, DBJ, as adesignated financial institution, responded to theissues surrounding COVID-19 by conducting Crisis
Response Operations in a timely and optimal manner
through the cooperation of private financial
institutions.

9

Vision 2030
As industry and infrastructure professionals skilled in handling
all types of risk, we will play a unique role in the economy and society of2030—leading new business and market creation while responding tocrises and other social needs.

Future Changes in the External Environment
We have identified changes in the external environment that could have a major impact on the
DBJ Group’s stakeholders in the future. These sync with the United Nations Sustainable
Development Goals (SDGs) and we aim to contribute to realizing those goals.

Population
problems

Climate change,
natural resources,and energy

GlobalizationAI, fintech, andother technologicalinnovations

Government
budgets, finances,and regulations

Realizing a sustainable society
Our Three Priority Areas
The DBJ Group has established infrastructure, industry, and the regions as its three priority
areas based on the roles it has played and the functions it has undertaken to date, the social
value it has realized, and future changes in the external environment. Leveraging its professional strengths, the Group is assessing long-term changes in the external environment toprovide creative solutions to issues confronting clients in infrastructure, industry, and theregions and thereby play a part in creating a sustainable society.

Rebuilding andReinforcement ofInfrastructure

Rebuilding of energy
systems, more advanced
transportation networks,
creation of attractive
communities

Rebuild energy andtransportation infrastructure,
upgrade public infrastructure
Promote urban growth

Creation,
Conversion, and
Growth in
Industry

Self-Reliance andRevitalizationof LocalEconomies

Commercialization of
new technologies,
business restructuring to
improve productivity andhone competitiveness,business development inglobal markets

Industrial revitalization
based on regional
characteristics, overseas
business development,
response to inboundtourism, businesssuccession

New technologies andbusinesses(promote innovation)

Solve issues specific toeach region

Reorganization
Overseas expansion

Play a role connecting regions
to Tokyo, regions to regions,and regions to the world

10

Sustainability Management
Value Creation Process

MissionVision 2020

Our Three Priority Areas
Rebuilding and Reinforcementof Infrastructure

Creation, Conversion, and
Growth in Industry

Self-Reliance and Revitalizationof Local Economies

Commercialization of new technologies,
business restructuring to improve
productivity and hone competitiveness,business development in global markets

Rebuilding of energy systems, moreadvanced transportation networks,
creation of attractive communities

Industrial revitalization based on regional
characteristics, overseas businessdevelopment, response to inboundtourism, business succession

Sustainability Management
Integrated Investment and Loan
Services That Contribute to
Resolving Social and Client Issues

The DBJ Group’s Management
Capital Communication

Outcome of business activities

Risk Capital Finance

Financial Capital

Economic
Value
Creation

SocialValue
Creation

Creation of Diverse Financial
Deal Opportunities

Human CapitalIntellectual
CapitalProvision of Our Knowledge

Business
activities in tune
with risk
appetite

Increase andconversion ofcapital value

Crisis Response Operations

Sustainability
Management for Both
Economic andSocial Value

Relationship andSocial Capital• Financing• Investment• Consulting and advisory• Asset management• Special Investment Operations

Investment of management resources• Crisis Response Operations

Corporate Governance and Risk Management
Advisory Board
Special Investment Operations
Monitoring Board

Long-running, continuous
collaboration and dialogue

Communication with Stakeholders

Customers

Communities

Employees

Financial institutions

Investors

Shareholders

etc.

11

For customers in priority areas (infrastructure, industry, and theregions, which were decided in view of DBJ’s functions to dateand opinions received from stakeholders), the DBJ Group provides integrated investments and loans commensurate with risk
appetite along with consulting and advisory services. For ourinvestor clients, we offer syndication and asset management

services. As financial professionals offering creative solutions
for the different issues faced by its customers, DBJ contributes
to the creation of a sustainable society alignedwith the SDGs.

through Group measures to create new industries and support
while responding to crisis events, always taking the needs ofour customers and the community into consideration.
Implementing the DBJ Group’s business model requires unique
resources. While sound financial capital is a vital support, we
also strive for the integrated expansion of financial and nonfinancial capital, using clear definitions for the human capital,
intellectual capital, and relationship and social capital that
impact on our financial value creation in the long term.

Building a Foundation for Sustainability Management throughCommunication with Stakeholders
Communication with our stakeholders helps us continuously
improve our sustainability management, our unique value creation process. As part of this process, the Advisory Board, anadvisory body to the Board of Directors, and the Special
Investment Operations Monitoring Board, receive third-party
advice from outside experts and outside members of the Boardof Directors. Through communication in its daily operations
with stakeholders, including customers, regions, financial institutions, investors, and shareholders, the DBJ Group reaffirms
its functions and examines how those functions should evolvein the years to come.

Corporate Data

The DBJ Group works to promote industries and initiatives withthe potential to serve as pillars for Japan’s economy and society. We offer up solutions for current issues affecting industries
and our customers and examine hypothetical and envisioned
changes to both groups amid the rapid changes occurring in
our society.
As mandated under the DBJ Act, we also rapidly and accurately undertake Crisis Response Operations as required byevents such as major natural disasters and financial market
instability. We contribute to the sustained growth of society

The DBJ Group’s Corporate Governance

Balancing Economic and Social Value

The DBJ Group’s Strategy

Solving Challenges in Priority Areas throughSustainability Management

The DBJ Group’s Value Creation Story

As a leader in sustainability management, the DBJ Group seeks to promote sustainable development inJapan and worldwide by offering solutions to issues facing clients and society as a whole.
The sustainability management targeted by the DBJ Group consists of a business model that leverages
Group capabilities in fields including integrated investments and loans and consulting and advisory services.
Our business model is designed to raise economic and social value simultaneously in the pursuit of a sustainable society. We work constantly to improve our value creation process through collaboration and dialogue with stakeholders, seeking to refine our sustainability management and enhance the value we create.

12

Message from the President

In tune with the changing needs of society andour customers, the DBJ Group helps realize
a sustainable society by promoting sustainability
management while balancing economic andsocial value.

Hajime Watanabe
President and CEO
Development Bank of Japan Inc.

13

The DBJ Group’s Value Creation Story

As of the end of June 2020, we had already extended
130 Crisis Response Operations worth ¥1,621.2 billion
and, through the aforementioned Regional Emergency
Response Program, we had provided a total of ¥42.9
billion in financing to 20 entities. In Special Investment
Operations, meanwhile, we created the Growth Fund forCoronavirus Revival in May 2020 with the aim of backing
our customers’ initiatives to develop new businesses andcollaborate across different fields in order to grow andrecover from the impact of COVID-19. Through these andother measures, we are focusing on rapidly and properly
implementing Crisis Response Operations while collaborating and coordinating with private financial institutions toaddress the needs of customers adversely affected by
COVID-19.

Since the days of its predecessors, Japan Development
Bank and Hokkaido-Tohoku Development Finance Public
Corporation, the DBJ Group has worked to promote
Japan’s sustainable development. We have achieved thisby responding flexibly to the issues of the day, through theperiods of postwar reconstruction and high, stable growth,
the bubble economy and its collapse, globalization, thedeclining birth rate and aging population, and growing
environmental and disaster awareness. The past decadealone has seen dramatic change in the wake of the global
financial crisis and such major events as the Great East
Japan Earthquake. Against this backdrop, the DBJ Grouphas developed new initiatives to address social expectations with an eye on the future, and the Group itself has
undergone major changes.
Specifically, the DBJ Group has firmly established aunique, integrated investment- and loan-based businessmodel through the development of Crisis Response

Operations to cope with unprecedented events such as
earthquakes and global financial crises, and through­measures to enhance the supply of risk capital for­subsequent growth.
As we deal with the unprecedented, long-term impact
of COVID-19, the future is sure to present further changes
and challenges. In keeping with our unwavering mission,
we will take a flexible approach to issues faced by regions
and our customers as a whole, staying true to our corevalues and being mindful of our action guidelines.
Our Mission: Designing the future with financial expertise
Our Action Guidelines:		 • Responsibility to future generations		 • The customer’s perspective		 • Outstanding service		 • Commitment and cooperation
		 Our Values: Initiative and Integrity

Corporate Data

The Role of the DBJ Group and Our Achievements to Date 

The DBJ Group’s Corporate Governance

COVID-19, having become a pandemic since its outbreakin December 2019, has had an enormous impact on economic activity in Japan, restricting the movement of people
inside Japan and around the world. In response to theunprecedented crisis, the DBJ Group is leveraging the experience it has gained responding to other crises, such as the2008 financial crisis and the Great East Japan Earthquake.
DBJ set up consulting service counters in January 2020,
established the COVID-19 Special Response Headquartersin March, and prepared a support system by marshaling allof its resources. In February, DBJ initiated a unique
Regional Emergency Response Program to flexibly respondto the crisis as it unfolded. In March 2020, the Japanese
government designated the COVID-19 pandemic a crisis.
As a designated financial institution, the DBJ Group concentrated all of its energy on rapidly and appropriately
implementing Crisis Response Operations.

The DBJ Group’s Strategy

Our Response to the COVID-19 Crisis 14In the run-up to 2030, DBJ will continue to fulfill its uniquerole in the economy and society, enhancing the added value
we provide to customers as financial professionals throughcontributions in key areas and engaging in dialogue with
our stakeholders.

Vision 2030 and Priority Areas 
In 2015, with the aim of shaping our business vision arounda longer-term outlook, we gave fresh thought to the role of
DBJ in the years leading up to 2030. In the course of ourdebate, we identified a number of changes in the external
environment with a significant impact on our stakeholders:Japan’s declining population and its climate and energy
issues in the context of the global effort to build a sustainable society; intensifying global competition; and innovations in digital technologies such as AI and fintech. Basedon the roles we have undertaken and the value we haverealized over this time, we identified issues to be tackled in
the future and examined the best areas in which to use ourstrengths over the longer term in the interests of a sustainable society. Vision 2030 was the result. Drawn up in 2017,
this long-term vision sets infrastructure, industry, andregional economies as the three priority areas (materialities)

for the DBJ Group’s initiatives. Our contributions in theseareas will be consistent with the Group’s course so far, andwe believe they will be in line with what society and stakeholders expect from us in the future.
To fulfill our mission, we will work as financial professionals to enhance the added value provided to regional communities and our customers in industry and infrastructure,steadily implementing each initiative while respecting theviews of stakeholders. We will take the lead in businessand market creation by leveraging our ability to properly
evaluate and address a broad range of risks. At the sametime, as we respond to the COVID-19 crisis and look forward to 2030, we will fulfill our unique role in the economy
and society by taking action during times of crisis andotherwise responding to social demand.

Sustainability Management at the DBJ Group 
The DBJ Group practices sustainability management as ameans of creating value with a focus on the three priority
areas. By sustainability management, we mean working tocreate economic and social value by providing the solutions needed to create new industries and value throughinnovation, by responding during times of crisis, and by
making other contributions toward the building of asustainable society, all while being guided by the needs ofour customers and society as a whole.
To this end, we must accurately understand the current
issues affecting industries and our customers, in addition tolonger-term trends and issues in society and the impact
they may have on our customers and specific sectors.
Leveraging our knowledge to produce future visions

15

As we move ahead with these services, we are alsohoning our strengths in relationship capital (as exemplified
by robust networks in industry, government, and academia), sound financial capital, and human capital sharing
a common set of core values. We believe in the importanceof constantly improving our sustainability management
processes through dialogue with external stakeholders,
centering on the Advisory Board and the Special
Investment Operations Monitoring Board of DBJ.

Under its management foundation strategy, DBJ categorized its management resources into financial capital, humancapital, intellectual capital, and relationship and social capital. We promoted the growth and transformation of these
forms of capital by investing in our management resources
and improving our business activities to realize better results.
Owing to our withdrawal from major projects, results forfiscal 2019 saw a year-on-year decline in profits on investments and advisory services, while profits on loans also
decreased as borrowers repaid Crisis Response Operations
extended in the past. However, gross ordinary income on
investments remained at a high level compared with past fiscal
years, reflecting the stable returns from infrastructure and realestate, as well as capital gains on exits from ­individual projects.

Business Profit and Loss (Consolidated)(¥ billion)

Fiscal 2019

187.7

174.4

(13.2)

Loans

80.9

76.6

(4.3)

Investment

81.5

74.1

(7.3)

Fee and commission income

25.2

23.6

(1.5)

Operating expenses(64.8)(67.3)(2.4)

Net ordinary income

122.8

107.1

(15.6)

Other extraordinary items

(1.3)

4.0

5.4

Gains on reversal of reserves, depreciation,etc., of written-off claims

5.3(28.1)(33.4)

Gross ordinary income

YoY change

Loans

6.8

4.5

(2.2)

Investment(1.5)(32.7)(31.1)

Income before income taxes and minority interests

126.7

83.0

(43.7)

Total income taxes(33.5)(31.5)

2.0

Current net income

93.2

51.5

(41.7)Net income attributable to non-controlling interests

1.2

1.0

(0.2)

Net income attributable to owners of the parent

91.9

50.4

(41.4)

Note: Business categories are those used in business management.

Corporate Data

Fiscal 2018

The DBJ Group’s Corporate Governance

Under the Fourth Medium-Term Management Plan, spanning fiscal 2017 to fiscal 2019, DBJ advanced businessstrategies that centered on expanding integrated investment
and loan services to customers in industrial fields, including
new areas, and the three infrastructure fields of energy,transportation, and urban development. In our loan business, we provided high-value-added services in structured
and mezzanine finance, while with regard to investments wepromoted long-term investments in the three infrastructure
fields and growth investments in industrial fields. In theadvisory business, DBJ expanded asset management ininfrastructure and private equity. The DBJ Group also played
a role in connecting Japan’s regions to overseas markets bydeveloping the above activities both regionally and overseas.

The DBJ Group’s Strategy

Medium-Term Management Plan 

The DBJ Group’s Value Creation Story

through trial and error, and sharing these visions with customers and regional communities while offering financial
solutions such as risk capital to deal with related issues,
the DBJ Group will take the lead in creating industries andinitiatives that can serve as pillars of Japan’s economy andsociety in the years to come. At the same time, Crisis
Response Operations will play an important role, undertaken with flexibility and precision as required by events
such as major disasters and instability in financial markets.

16

The DBJ Group will continue to supply risk capital throughits integrated investments and loans, with the intention oftaking a leading role in the building of a sustainable society
while helping customers take on challenges in new initiatives.

The Fifth Medium-Term Management Plan, which isslated to begin in fiscal 2020, will be unveiled when the time
is right, given we are in the midst of the COVID-19 pandemic. Amid major changes in demographics and the fabricof society, social issues have become intertwined with the
management issues faced by our customers. DBJ therefore
aims to generate both economic and social value by creating new opportunities through investments and loans tocustomers, while leveraging its risk capital and knowledge
and collaborating and coordinating with financial institutions
and customers. Starting with these basic policies, we are
examining how best to revise our Fifth Medium-Term
Management Plan to reflect changes in industrial structuresdue to COVID-19, the accelerating advance toward digitaltechnologies, momentum toward sustainability, and theiroverall impact on value in regions.

Special Investment Operations 
The DBJ Group’s Special Investment Operations are conducted as mandated in revisions made in 2015 to theDevelopment Bank of Japan Inc. Act. Utilizing our experience in supplying risk capital, we decided to provide
investments and loans totaling ¥353.2 billion in fiscal 2019
for 19 projects that contribute to regional revitalization andthe strengthening of Japanese corporate competitiveness.
Since launching these operations, DBJ has used them toextend ¥717.1 billion in investments and loans to a totalof 100 projects. A total of ¥4,042 billion in private-sector
investments and loans have been triggered by DBJ's
investments and loans worth ¥590.2 billion. The DBJ Groupwill continue to supply growth capital in collaboration withprivate financial institutions. The Group also has an extensive track record in regional revitalization projects and iskeen to engage in future initiatives with local financial institu-

tions willing to help create distinctive regional communities.
In accordance with the Act for Partial Amendment of theDevelopment Bank of Japan Inc. Act (Act No. 29 of 2020),
which was enacted in May 2020, Special Investment
Operations shall extend the investment decision term andgovernment financing term from March 31, 2021 until
March 31, 2026, and extend the deadline for ending­operations from March 31, 2026 until March 31, 2031.
Furthermore, the Growth Fund for Coronavirus Revival has
been established to help Japan recover from COVID-19
and return to growth. In addition, the Special Investment
Operations Monitoring Board will continue to meet twice ayear to hear the opinions of stakeholders and reflect themin the DBJ Group’s operations.

Development of Human Resources for Better Sustainability
Management 
Sustainability management, a key to the DBJ Group’s value
creation process, relies above all on workers who share thecore values of initiative and integrity and who display thefour elements of our core corporate values in the pursuit ofbalancing economic and social value. Officers and employees of the DBJ Group have inherited the core corporate
values of long-term perspective, impartiality, public mindedness, and reliability, which have evolved over the years in
the course of our business. Bolstered by these corporate
values, the Group has consistently risen to meet thechallenges of the times. We always strive to enhance ourskills in corporate and project assessment. Our expertise inlong-term screening and assessment, based on a comprehensive view of regional and current issues, is equal toknowledge, capability, and developed networks as a DBJ
Group asset.
The employees embodying the Group’s values shouldbe able to pursue their activities creatively and in good
health, and we are promoting workstyle reforms for thispurpose. To bring more flexibility to working patterns, we

17

The DBJ Group’s Value Creation Story
The DBJ Group’s Strategy

home or coming to work on staggered schedules, because
the health and safety of our executives and employees areof paramount importance. We are also making every effort
to update our systems so that Crisis Response Operations
can be smoothly implemented.

Collaboration on a Broader Scale sustainable finance has increased. The DBJ Group has
made strides toward the realization of a sustainable society
by evaluating intangible assets through dialogue with customers in the course of our business, and especiallythrough DBJ’s various certification programs. Engaging in
dialogue with stakeholders will remain a crucial endeavor
as we continue to fulfill our mission as a front-runner insustainability management. It is our sincere hope that thisintegrated report will lead to greater dialogue with all of our
stakeholders.

President and CEO
August 2020

Corporate Data

The environment surrounding the world and Japan willcontinue to change drastically in the future, owing in part to
the COVID-19 pandemic, while uncertainties increase. Overthe next decade, Japan is likely to see a number of megatrends gain momentum. These include an aging anddeclining population, digital transformation affecting all
aspects of industry, and even more intense global competition. In the industrial field, we anticipate such changes as
new forms of cross-sector collaboration, an evolution inbusiness models, and the emergence of new ecosystems.
The DBJ Group will continue to supply risk capital throughintegrated investment and loan services for new initiatives
being undertaken by our customers, in an effort to lead thedevelopment of a more sustainable society.
Building a sustainable society is a global agenda, and it
is important that we continue working to make that
happen. The public and private sectors have joined forces
in a growing movement to contribute toward the SDG
global agenda for 2030. In financial markets, interest in

The DBJ Group’s Corporate Governancehave introduced telecommuting and a flex-time work
system, and we aim to enhance work and paid leave programs for child-rearing and caregiving.
As part of our response to COVID-19, we are encouraging employees to take a flexible approach to working at

18

Invigoration and Stabilization of Financial Markets through Partnerships
and Collaboration under the Medium-Term Management Plan

The DBJ Group provides unique solutions through optimal partnerships, emphasizing cooperation and collaboration with other financial institutions and non-financial companies.

Infrastructure

Government
investments
and loans

DBJ

EnergyTransportation
Urban
development

Special Investment Operations

Government

Crisis Response Operations
SRI bonds
Financing

Industry
New technologies
and businesses
Restructuring
Overseas expansion

Risk capitaland knowledge

Investments

Bonds andloans

Regional financial
institutions

Asset Management
Asset
management

Group Companies
Regions
Industry promotion
Overseasdevelopment
Business succession

Domestic andoverseas
institutional
investors

Consulting andAdvisory Services

Creation offinancing
opportunities

Collaboration

Leading financial
institutions

Cooperation

Collaborative
funds

Financial institutions andnon-financial companies

Procurement and Management of Funds 	DBJ receives funding in various formats, including the procurement and management of funds from institutional investors and financial institutions in Japan and abroad. We use
these funds to supply risk capital to domestic and overseas
customers in the industrial and infrastructure fields.

Crisis Response Operations andSpecial Investment Operations 	Crisis Response Operations and Special Investment
Operations are mandated by the DBJ Act and are properly
undertaken as operations backed by the unique strengthsof the DBJ Group.

Provision of Knowledge 	Backed by its experience and know-how in industrial andinfrastructure fields as well as in risk analysis and structuring, the DBJ Group creates added value through the provision of knowledge in such forms as surveys and analyses.

Supply of Risk Capital by the DBJ Group
DBJ’s financing operations address diverse risks. These operations include investments (balance of ¥1.4 trillion) and loans(balance of approximately ¥12.3 trillion), ranging from crisis
response loans for emergencies and risk-tailored project
financing to hybrid and mezzanine financing. DBJ AssetManagement Co., Ltd. (DBJAM) has ¥1.3 trillion in capital

entrusted by investors, regional financial institutions, and othercustomers desiring expert fund management. In its work inasset management, DBJAM focuses on assets that allow the
DBJ Group to best apply its strengths. We will continue toenhance the supply of risk capital in order to better meet thediverse needs of our customers.
Mezzanine financing¥0.6 trillion*

2

Loans

¥11.7 trillion(including Crisis Response Operations, structured-financing
and asset-financing projects)

Investments¥1.4 trillion*1 Portions entrusted by DBJ are eliminated from DBJAM’s assets under management (AUM).
*2 Overlapping portions for structured financing is eliminated from hybrid and mezzanine financing.

DBJAM (AUM)¥1.3 trillion*1(As of March 31, 2020)

19

Our Response to COVID-19

In response to the damage caused by the COVID-19 outbreak,the DBJ Group opened consulting service counters at the endof January 2020 and moved forward with its unique Regional
Emergency Response Program in February. On March 19, asa designated financial institution, DBJ concentrated on Crisis
Response Operations once the Japanese government designated the COVID-19 pandemic a crisis.
Led by the Coronavirus Response Headquarters, DBJ has
moved to rapidly and precisely implement Crisis Response

Operations as a designated financial institution. DBJ will­continue to collaborate and coordinate with private financial
institutions to meet the needs of businesses that have been
adversely affected by the COVID-19 outbreak. DBJ will
enhance collaboration with regional financial institutions andready its unique capital supply systems, including the Regional
Emergency Response Program, while considering the nature ofthis crisis in terms of securing jobs and maintaining credit.

• January 30: Opened consulting service counters

Timeline• February 12: Added this crisis to its unique Regional Emergency Response Program• March

16: Established Coronavirus Response Headquarters(headed by President and CEO Hajime Watanabe)• March

19: Started Crisis Response Operations upon the Japanese government’s declarationof a state of emergency over this crisis

The DBJ Group’s Strategy

State of Initiatives for Crisis Response Operations

The DBJ Group’s Value Creation Story

Implementation of Crisis Response Operations 

Agreements with Regional Financial Institutions • Cooperative agreements signed with 74 regional financial institutions with objective of
appropriately responding to this crisis and contributing to regional economic development
to Coordinate Disaster Response Operations*
Status of Crisis Response Operations*• Crisis Response Operations (total): 130 loans, ¥1,621.2 billion• Regional Emergency Response Program loans (total): 20 loans, ¥42.9 billion

Impact from and Response to COVID-19 
The global crisis that is caused by the COVID-19 pandemic
may lead to sweeping social changes. It is currently having amajor impact on existing social issues, accelerating the shift todigital technology, and increasing awareness of globalization,
sustainability, and the decline in the Japanese working-age
population.
Against this backdrop, the DBJ Group will continue to focus
on supplying risk capital, including through Special Investment

Operations, and on providing knowledge while collaborating
and coordinating with private financial institutions to directly
address the aforementioned issues and new changes in society. As a part of these measures, DBJ has set up the GrowthFund for Coronavirus Revival with the intention of advancing
initiatives to foster collaboration across different fields and help
companies develop new businesses through Special
Investment Operations.

Recent Impacts

Industries

Regions

Possible Changes Arising from COVID-19 (during and after COVID-19)

DemandSlump in economic activity
Sharp drop in demandBusiness rebuilding

SupplySupply chain disruption
Stall in logistics, labor shortages

Growth acceleration

Financial

Fund outflows, share pricedeclines

EconomySharp drop in demand in tourism
industry
Suspension of plant operations
Restrictions on people’s movement
Vulnerable IT infrastructure
Deterioration of regional finances

Government Measures to address existing
issues halted

Crisis Response Operations(Reference: Impact on economy during past crises)

Resilience

New possibilities inregional demandMore sophisticatedregional operations• Realignment of supply chains globally• Faster industry restructuring to strengthen business foundations•	Faster response to social changes, including remote and non-contact
servicesS witch to digital communications, non-contact services, laborsaving measuresand rationalization•	Strengthening of preparations for emergence of large-scale risks

E nsuring of redundancy in cash and inventories, responding to changes in capital
investment trends•	Refocus on supply chain realignment and reshoring•	Rapid spread and entrenchment of telecommuting and online
meetings
Potential for regional demand to rebound, necessity of creating
sustainable regions•	Promotion of public–private collaboration, broader regional
coordination, ties between industry, academia, government, andfinancial institutions

Supply of Risk Capital and Knowledge

Global financial
crisis

Sharp drop in overseas demand, credit crunch, drying
up of liquidity

Acceleration of structural reforms through overseas development backed by yen appreciation and rise of
emerging countries

Great East Japan
Earthquake

Supply chain disruption in Japan

Dispersion of supply chains overseas in context of revising business continuity plans

Corporate Data

Impact from COVID-19 on Industries and Regions

The DBJ Group’s Corporate Governance*As of end-June 2020

20

Key Initiatives toward Realizing Sustainability

At the DBJ Group, we engage in a variety of initiatives aimed at realizing a sustainable society througha business model built upon features such as integrated investments, and loans, and consulting andadvisory services.
Policy on Sustainability
To realize its mission of pursuing sustainable development for Japan and the world, the DBJ Group strives to achieveboth economic and social value through its unique business activities by embracing sustainability management. In 2017,
we formulated our Policy on Sustainability as a part of our efforts to continue to proactively engage in dialogue with all
stakeholders and to enhance our value creation process.
The DBJ Group’s main initiatives based on this policy are outlined below.
https://www.dbj.jp/en/sustainability/management/regular.html
Please refer to our company website for details on our Policy on Sustainability.

Main Initiatives
Renewable Energy Measures

With the aim of promoting the use of renewable energy, DBJ has engaged in solar and wind power generation projects in Japan since their implementation and participated in advanced case studies overseas.

See page 23

Establishment of DBJ Green
Building Certification

Established in 2011, DBJ Green Building Certification system recognizes buildings with exceptional consideration for society and the environment and provides support to those who own and operate such realestate.

See page 25

Issuance of Sustainability
Bonds

DBJ became the first issuer of green bonds in Japan (2014) and has also been issuing sustainability bonds
each year since 2015.

See page 39

Establishment of DBJ
Certification Programs

Through the use of its financing products that evaluate firms’ non-financial information via a proprietarily
developed screening system, DBJ provides support for the environmental-, disaster prevention-, andhealth-related initiatives of its customers.

See page 45

Adoption of Equator Principles

In accordance with the Equator Principles, DBJ will identify the environmental and social risks associatedwith a project, assess their impact, and request that the project operator take the necessary measures tomitigate such risks and impact.

See page 62

TCFD Scenario Analysis

Upon identifying five technologies relevant to its business activities—carbon capture and storage (CCS),
electric vehicles (EVs), biomass, hydrogen, and renewable energy—from those highly correlated to climatechange, DBJ analyzed and assessed the growth opportunities for each sector through separate scenarios
based on the development and proliferation of technologies.

See page 62

Corporate Governance Framework
Establishment of Sustainability
Committee

DBJ established the Sustainability Committee to identify important social issues from ESG and otherperspectives, and incorporate these matters into its financing, asset management, and other businessactivities.

See page 50

CASE STUDY
Support for Innovation toward the Sustainable Development of Energy Infrastructure
Ireland is currently facing energy supply instability due to the surging demand forrenewable energy. As a result, Exergy Power Systems, Inc. has partnered withenergy suppliers to help reduce the gap between supply and demand by supplying
its next-generation nickel-metal hydride batteries (Exergy batteries) to factories in
Ireland to serve as a backup power supply. By building a track record in Europe,
where the adoption of renewable energy is outpacing the rest of the world, androlling out services to Japan and other regions in the future, Exergy Power Systems
is expected to contribute to the creation of a resilient and sustainable society.
DBJ will support the activities of Exergy Power Systems by drawing on its
Society 5.0 Investment Program and through its collective efforts with stakeholders
to proactively promote the adoption of Exergy batteries in Japan and overseas, andhelp build a social infrastructure that facilitates sustainable energy supply.

https://www.dbj.jp/topics/dbj_
news/2020/html/20200706_202678.html
Please refer to our company website formore details (Japanese only) on theSociety 5.0 Investment Program.

21

A presentation of the DBJ Group’s various sustainability management activities from the­perspectives of its business and management foundation strategies

The DBJ Group’s Strategy

Business Strategy
P 22

Sector Strategy

		

P22

Energy Sector

		

P24

Transportation Sector
Urban Development Sector

		

P26

Industrial Sectors

P 28

Area Strategy

		

P28

Regions		

P31

Overseas

P 32

Function Strategy

		

P32

Special Investment Operations and Crisis Response Operations

		

P36

Syndication, Advisory, and Consulting Services

		

P37

Asset Management

The DBJ Group’s Corporate Governance		 P25

Corporate DataManagement Foundation Strategy
P 38

Financial Strategy

P 40

Human Resource Development

P 42

Knowledge and Collaboration

The DBJ Group
Working in unison, the DBJ Group provides diverse, high-value-added solutions for solving various issues faced by its­customers and for solving issues throughout society.

Overseas locations

Investments / Securities /Asset management• DBJ Singapore Limited• DBJ Capital Co., Ltd.

• DBJ Europe Limited• DBJ Investment Advisory Co., Ltd.

• Japan Economic ResearchInstitute Inc.

• DBJ Investment Consulting(Beijing) Co., Ltd.

• DBJ Securities Co., Ltd.

• Value Management Institute, Inc.

• DBJ Americas Inc.

The DBJ Group’s Value Creation Story

The DBJ Group’s Strategy• DBJ Asset Management Co., Ltd.

Research / Consulting

Real estate management /IT services• DBJ Real Estate Co., Ltd.
• Consist, Inc.

22

Sector Strategy
Priority Areas

Rebuilding and Reinforcement of Infrastructure

Energy Sector

Rebuilding of energy systems, more advanced transportation
networks, creation of attractive communities

The DBJ Group will contribute to the realization ofa decarbonized society worldwide and the globalization of Japanese energy companies by taking aleadership role in the financing of change inJapan’s energy markets.

Main Business Fields

Provision of financing and advisory
services to companies and projects inthe following sectors• Electricity
• Gas
• Oil

Balance of Loans in the Electricity, Gas, Oil Refinery,Heat, and Water Sectors
As of March 31, 2020

3.4 trillion¥
Longer-Term External Environment and Social Issues
Japan’s energy industry is at a major crossroads. With changes
in the macroeconomic structure, including the population
decline, and advances in energy conservation, DBJ must promote the reduction of CO2 emissions while dealing with deregulation in the electric power and gas markets.
Under these conditions, issues related to financial support
for the energy industry entail the supply of capital funding tospur the spread of renewable energy and other new technologies and to address growing risks. Moreover, risks in project
financing need to be clarified more clearly, and efforts should
be undertaken to allow market participation by a broader rangeof companies.
Strategy
While maintaining strong relationships with customers, DBJ will
focus on providing capital funding (risk money) and advisory
services based on its international experience and knowledge
to facilitate industry restructuring. Furthermore, DBJ will focus

on the smooth supply of capital by collaborating with a broad
range of financial institutions to meet demand for investmentsin the deregulated electric power market in Japan, in addition
to strengthening initiatives in project financing with clarified risk
allocation. DBJ will also contribute to the realization of a decarbonized society through assistance for innovations in initiatives
to develop and spread low-carbon technologies and achieve a
low-carbon socioeconomic structure.
By reinforcing its asset management business in the energy
field, the DBJ Group will nurture markets so that a broad rangeof financial institutions can participate in the domestic energy
infrastructure market.
Overseas, DBJ aims to become more involved in markets
that have taken the lead in fostering deregulation, and thenreturn any knowledge gained to the domestic market toadvance its development, while proactively supporting
Japanese companies in their efforts to develop business overseas. Through these and other efforts, we aim to contribute to
the realization of a decarbonized society on a global basis.

Efforts to Combat Climate Change in the Energy Field
Sustainability management means balancing economic value withsocial value. Based on this fundamental principle, the DBJ Grouphas worked for many years to ensure a reliable supply of energy
while reducing environmental impact.
In the renewable energy field, in particular, DBJ supplies
diverse risk capital, including project financing, mezzanine loans,and equity financing, to wind and solar power generation projects
in Japan from their initial stages. DBJ also finances offshore wind
power projects in Europe, with the aim of learning from cuttingedge initiatives overseas and applying those lessons in Japan.
In view of the global debate about climate change and theOECD’s Arrangement on Officially Supported Export Credits, aswell as Japan’s energy policy based on the 3E+S* strategic plan,
DBJ works to ensure reliable energy supply while combatingclimate change. In renewable and alternative energy, we plan toincrease the supply of risk capital for wind and solar power, newpower grid, and hydrogen projects in order to encourage theirintroduction. For new projects involving coal-fired power plants,
which emit large amounts of greenhouse gases, DBJ takes amore cautious approach. In the process for finance decisions, weevaluate each project from environmental perspectives, such aswhether generation efficiency is at or above the ultra-super-criticallevel, in order to reduce environmental burdens as much as
possible.
* Energy security, Economic efficiency, the Environment, and Safety, as stated inJapan’s Basic Energy Plan.

23

The DBJ Group’s Value Creation Story

Initiatives in the Renewable Energy Field
Renewable Energy* Investment and Loan Balance(¥ billion)
250

241.9
200

186.9
150

100

110.2

124.2

50

0

2016

2017

2018

2019

(Fiscal year)* Renewable energy: Solar power, onshore wind power, offshore wind power, biomass,hydropower, and power grids.

The DBJ Group’s Strategy

To increase the use of renewable energy, DBJ proactively supplies risk capital, and as of the end of fiscal 2019, the balanceof related investments and loans stood at ¥241.9 billion.
Through project financing, DBJ has contributed to the power
grid business, addressing the major problem of growth inrenewable energy stressing power grid capacity, while also
getting involved in the initial stages of wind power and solar
power installations in Japan. To bring back to Japan the benefits from leading initiatives overseas, DBJ also provides financing to offshore wind power plants in Europe.
In light of the trend toward decarbonization around theworld, and growing interest in renewable energy, DBJ will contribute on the financial side toward the government’s goal of
22–24% renewable energy in the power generation mix by
2030, while leveraging the special characteristics of solar
power, onshore wind power, offshore wind power, biomass,and hydropower.
Key Initiatives to Spread Renewable Energy in Japan 

MW
600

558
Onshore wind power

479

400

Hokkaido Hokubu Windpower grid project

307
200

185
Green Power Tsugaru
0

2016

2017

2018

2019 (Fiscal year)
Corporate Data

Wind
power
Solar power
Aoyama Kougen Wind Farm

Solar power

25%

DBJ’s equity
stake as ofend-fiscal 2019558 MW
Onshorewind power

Solar
power

75%
Participation in Leading Projects Overseas (U.K.) 

SDT Solar PowerCSD Solar
Offshorewind power

https://www.dbj.jp/case/list/?field=energy

To see examples and case studies (Japanese only) in the energy sector,
please go to DBJ’s website.

The DBJ Group’s Corporate GovernancePower grid

Capacity of DBJ’s Domestic Investment
Assets in Renewable Energy Facilities(derived from its equity stake)

Gunfleet Sands
Offshore wind power
Facility power generation
capacity: 172 MW(3.6 MW x 48 units)
COD (Commercial Operation
Date): Spring 2010

24

Sector Strategy
Priority Areas

Rebuilding and Reinforcement of Infrastructure

Transportation Sector

Rebuilding of energy systems, more advanced transportation
networks, creation of attractive communities

The DBJ Group aims to lead in a financial aspect
the growth of the transportation sector andadvancement of transportation networks in Japan.
DBJ will also act as a bridge between Japan’s
financial market and the global transportation
financing market.

Main Business Fields

Provision of financing tocompanies and for projects
in the transportation sector• Land transportation• Marine transportation• Air transportation

Balance of Loans in the Transportation
Infrastructure (Transportation Industry) Sector
As of March 31, 2020

2.3 trillion¥
Longer-Term External Environment and Social Issues
In the transportation sector, which has been heavily impacted
by the COVID-19 pandemic, markets have temporarily contracted, but over the longer term, the movement of people andcargo will continue to increase, and transportation infrastructure
will also continue to expand. In Japan, a country reliant on trade,
it is imperative to maintain the reliable transportation of goods,
address issues such as the declining and aging population,
facilitate the influx of overseas visitors, and lessen the impact
on the environment. Various issues await solutions for sustaining
growth in the transportation sector and increasing the sophistication of transportation networks.
Keen to help its customers solve these issues, the DBJ
Group will provide financial solutions tailored to diverse needs
while acting as a bridge between financial markets in Japanand the global transportation financing market.

Strategy
While maintaining relations with customers in the transportation
sector, we will refine our ability to respond flexibly to changes inthe external environment and society. More specifically, DBJ
will further strengthen its optimal financial solutions for quality
projects and assets in the land, marine, and air transportation
fields, as well as supply risk capital to Japanese companies for
sharpening their international competitiveness. Additionally,
DBJ will provide financing opportunities to Japanese regionalbanks and other financial institutions and investors in the global
transportation financing market through improved syndicatedloans and various investment and loan products that utilize
investment and securities functions.

Accomplishments and Initiatives to Date
Kawasaki Kisen Kaisha, Ltd.

Kanto Railway Co., Ltd.

Third Medium-Term Management Plan (through Fiscal 2016)

Tokyo International Air Terminal
Corporation

Fourth Medium-Term Management Plan (Fiscal 2017–Fiscal 2019)https://www.dbj.jp/case/list/?field=transport

To see examples and case studies (Japanese only) in the urban development
sector, please go to DBJ’s website.

Fukuoka International Airport Co., Ltd.

25

The DBJ Group’s vision is to grow alongside cities
by helping with the maintenance, renewal, andexpansion of urban functions. The DBJ Group also
aims to grow with the real estate financing market
as a market-stabilizing mechanism.
Main Business Fields• Urban development
business• Real estate
financing• DBJ Green Building
Certification

Balance of Loans in the Real Estate Sector
As of March 31, 2020¥

Accomplishments and Initiatives to Date
TOKYO SKYTREE®

Shin-Daibiru Building

Akasaka Intercity AIR

Hareza Ikebukuro©TOKYO-SKYTREE

Third Medium-Term Management Plan (through Fiscal 2016)

https://www.dbj.jp/case/list/?field=development

To see examples and case studies (Japanese only) in the urban development sector, please go to DBJ’s website.

Fourth Medium-Term Management Plan (Fiscal 2017–Fiscal 2019)https://www.dbj.jp/en/service/program/g_building/To see more information about DBJ Green Building Certification, please
go to DBJ’s website.

Corporate Data

Strategy
DBJ will facilitate urban development through the supply of risk
capital, including financing for developers and individual development projects. We also support the growth of REITs, whichhave become increasingly important entities for the stable
management of properties.
DBJ will provide opportunities to invest in quality assets for
institutional investors around the world as well as for regional
financial institutions. By engaging in collaborative financing
through proper risk-sharing agreements, we will create stable
cash flows in the real estate financing market.
DBJ Green Building Certification was created in fiscal 2011as a system for evaluating and certifying real estate from anenvironmental and social perspective. DBJ continues to operate
this system along with the Japan
Real Estate Institute, while endeavoring to improve the evaluation ofenvironmental and social aspectsof real estate.

The DBJ Group’s Corporate GovernanceLonger-Term External Environment and Social Issues
Increasing the international competitiveness of cities in Japan is
key to enhancing the country’s overall competitiveness. Urban
infrastructure, built up since 1945, is coming due for an upgrade.
Seamlessly upgrading urban infrastructure without interruption is important from the standpoint of creating communities
that take into account the environment and society.
The real estate financing market, an essential part of creating communities, is prone to instability due to international
exposure. The securitization market in particular was greatly
affected by the global financial crisis, while the real estate
financing market was thrown into disarray. In the face of suchconditions, it is necessary to ensure a reliable supply of capital,
spur growth in the real estate financing market, and promoteurban development.
Amid the COVID-19 pandemic, it is essential that we consider new concepts for creating communities, while envisioning
changes in society and the economy due to COVID-19, andworking to stabilize the real estate financing market.

1.8 trillion

The DBJ Group’s Strategy

Loans and investments in urban
development projects undertaken by
developers; special-purpose companies
for owning real estate; loans andinvestments for real estate investment
trusts (REITs); and management of DBJ
Green Building Certification with theJapan Real Estate Institute

The DBJ Group’s Value Creation Story

Urban Development Sector

26

Sector Strategy
Priority Areas

Creation, Conversion, and Growth in Industry

Industrial Sectors

Commercialization of new technologies, business restructuring to
improve productivity and hone competitiveness, businessdevelopment in global markets

In industrial fields seeing changes brought about
by technological innovation, the creation of new
businesses, and restructuring, the DBJ Group willtake a direct approach to solving issues faced bycustomers and society while searching for growth
opportunities for itself. As an incubator that creates new businesses and markets, the DBJ Groupaims to play an essential role in strengthening thecompetitiveness of industries in Japan.

Main Business Fields

Provision of financing andadvisory services for companies and projects in industrial
sectors

Longer-Term External Environment and Social Issues
Amid changes in the external environment, including population
problems, globalization, and such technological innovations as
digital technologies, which are gaining momentum during the
COVID-19 pandemic, customers are dealing with a variety ofissues that include the commercialization of new technologies
and other innovations and business restructuring to enhance
productivity and competitiveness. Customers are likely to focus
on overseas business development while eyeing fresh growth
opportunities over the medium to long term.
Meanwhile, the financial environment is likely to include
diversification in capital providers, considering the ongoingsurplus capital conditions and advances in fintech and othertechnologies. As it becomes easier to access capital, providing
unique added value will become essential to helping customers
solve their problems on the financial front.

•M anufacturing•C ommunications,­broadcasting, media• Retail and foods•H ealthcare• Hotels, Japanese-style inns,
tourism, etc.

Strategy
DBJ will offer solutions to the issues faced by customers—
centered on the fields of business portfolio optimization, newbusiness creation, overseas business development, financial
strategy, and capital policy—by mobilizing its financing functions, knowledge, and unique network while leveraging its
insight and expert knowledge of each industry. DBJ has createdteams of specialists for establishing a solid business foundationin the aerospace, communications, and healthcare fields since2017, and in the logistics field since 2018. While being deeply
involved in each industry, DBJ keeps an eye on socioeconomic
megatrends and changes in the landscape to facilitate innovation on various fronts of business development across industries (such as moving toward a hydrogen-based society)without being beholden to traditional frameworks.

Accomplishments and Initiatives to Date
Dexerials Corporation

Mitsubishi Heavy Industries
Aero Engines, Ltd.

Nippon Charge Service LLC

Third Medium-Term Management Plan (through Fiscal 2016)

https://www.dbj.jp/case/list/?field=industry

Please go to DBJ’s website to see examples and case studies (Japanese only) in industrial sectors.

DMG MORI CO., LTD.

27

Logistics

Telecommunications

Healthcare

Yanmar Holdings Co., Ltd.

Cellnex Telecom, S.A.

Space One Co., Ltd.

Japan H2 Mobility, LLC

Photo provided by ENEOS Corporation

Fourth Medium-Term Management Plan (Fiscal 2017–Fiscal 2019)

Corporate Data

In the healthcare field, the DBJ Group has focused on medicine
and nursing care, launching new initiatives in the life sciences
field. DBJ has also invested in venture capital funds focusing
on early-stage pharmaceutical companies. Through investments in similar venture capital funds, DBJ provides companies
with growth opportunities by helping Japanese companies
build networks with companies in Europe and the U.S.

Response to Innovation
Over the past few years, there has been a sudden rise in technologies and innovations, such as in IT, new materials, newenergy, bioscience, and robotics, with the potential to substantially change the existing fabric of industry and society. For
these new technologies to help society and lead to the creationof new businesses, it is important to spread new value systems
and lay down rules for collaboration across industries andbetween the public and private sectors. Accordingly, the DBJ
Group created the Innovation Promotion Office under theBusiness Planning & Coordination Department in April 2017 tofacilitate collaboration among these diverse players and takethe long view for moving projects forward.
In addition, DBJ aims to create new industries with newvalue systems to solve social issues in Japan. With this in mind,
DBJ created the Society 5.0 Investment Program as a newframework for investing in activities that contribute to the creation of a sustainable society.

The DBJ Group’s Corporate GovernanceWith 5G mobile communications systems poised to take off,
communications networks are responsible for handling everincreasing volumes of data and communications traffic, andtheir importance is only growing. Along with the arrival of adigital society where everything is connected together over
networks, as key social infrastructure, communications networks will have to become more resilient and sophisticated.
DBJ has advanced financing for core communications assets,such as communications towers and data centers. Looking
ahead, DBJ will use the knowledge it has acquired via financing
activities to collaborate with Japanese firms and aggressively
advance initiatives for the benefit of Japan.

The DBJ Group’s Strategy

In May 2018, DBJ newly established the Global Logistics Officein order to sharpen its focus on the logistics field, in light ofsweeping changes in the logistics industry being ushered in bytechnological innovations including AI and the Internet ofThings (IoT). In terms of financial support, the Global Logistics
Office facilitates improvements in competitiveness and productivity in the logistics field through assistance for creating new
industries with the latest technologies, in the supply of risk
capital to companies innovating on the technological front, andin investments and loans for the latest, high-function logistics
facilities. With regard to information support, DBJ holds
Logistics Innovation Workshops. In May 2019, these workshops produced reports about measures for spurring innovation, the state of collaboration and cooperation among
companies and industries, and the roles that financial institutions should play.

The DBJ Group’s Value Creation Story

Aerospace
DBJ has been assisting the aviation field for about three
decades, ever since the era of Japan Development Bank. In
April 2017, DBJ established the Aerospace Office with the aimof developing the outer space field, which is expected to growas a new industry, in addition to the aircraft field, leveraging theabundant knowledge and networks it has accumulated.
Having signed a business cooperation agreement withJapan Aerospace Exploration Agency (JAXA) in both the aircraftand outer space fields, DBJ provides support for new technologies and ideas for the aircraft industry, and financial assistance to local companies keen to grow. In the outer space
field, DBJ offers financial advice for market expansion, in addition to investing in a number of projects, including the inauguration of Space One Co., Ltd., an operating company thatdevelops and launches small rockets.

28

Area Strategy
Priority Areas

Industrial revitalization based on regional characteristics,
overseas business development, response to inbound tourism,
business succession

Self-Reliance and Revitalization of
Local Economies

Regions

The DBJ Group provides solutions for regional
issues, connecting regions throughout Japan toTokyo, domestic regions to those overseas, andregions the world over to each other.
OutlineProvision by the DBJ Group ofservices tailored to thecharacteristics of the respective regions in Japan from 10
branches and eight representative offices across thecountry• Investments and loans•C onsulting services• P lanning and researchservices

Total Number of Business Alliances with Financial
Institutions
As of March 31, 2020

106
Longer-Term External Environment and Social Issues
The regional economic outlook is severe with declining household spending and weaker demand for loans alongside a longterm downtrend in regional populations. Industries that dependon non-resident populations, such as tourism, a key industry inoutlying regions, have been heavily impacted by restrictions on
the movement of people during the COVID-19 pandemic. On
the other hand, regional demand may increase if people remember the value of outlying areas, amid changes in workstyles,
such as working remotely, and the realignment of supply chains.
As regional economies contract in these circumstances,
regional enterprises need growth strategies that include overseas business development, measures to improve corporate
value through business restructuring and succession, andascertainment of good opportunities in asset management.
Strategy
DBJ will provide services with two objectives in mind—namely,
to create value by connecting regions throughout Japan toTokyo, domestic regions to those overseas, and regions theworld over to each other, and to solve problems through risk
capital and consulting services.
More specifically, while taking into account regional characteristics, the themes of key objectives entail improving the
productivity and growth strategies of regional companies
through business restructuring and overseas business development, respectively, and cooperating with regional financial
institutions to create opportunities in asset management. As apart of these initiatives, DBJ created the Regional Investment
Department in the Strategic Finance Department under the
Chief Investment Office in June 2020, for the purpose of facilitating the supply of risk capital in regions where DBJ collaborates with regional financial institutions.
By providing detailed solutions to regional problems, the
DBJ Group strives to increase the value of its human capital(e.g., the skills and experience of its executives and employees),and relationship capital (e.g., networks).

Accomplishments and Initiatives to Date
Fiscal 2018
• Invigorated tourism resources in the Akan region through financing for Akan Adventure
Tourism Corp. (Hokkaido)• Contributed to measures to stimulate regional industry through financing for Niigata
Aerospace Corporation (Niigata)• Invigorated agriculture and rejuvenated deserted arable land through joint investment with
Ishida Corporation (Tottori)

Fiscal 2019
• Supported upgrading of exchange centers, with a focus on sports
venues, through financing provided to XSM Flat Hachinohe Co., Ltd.
(Aomori), which owns Japan’s first multi-purpose arena• Provided project financing to PPP Shinsakura K.K. (Toyama) toadvance a public–private project to create compact communities

Supply of risk capital • Formed funds with North Pacific Bank, Ltd. and The Hokkaido Bank, Ltd. in response to
the Hokkaido Eastern Iburi Earthquake
through collaboration• Created funds with The Bank of Iwate, Ltd. and The Toho Bank, Ltd. to help with reconand cooperation withstruction in regions affected by disasters in the Tohoku region
regional financial• Arranged a syndicated loan with The Hyakujushi Bank, Ltd. and reinforced the financial
institutions
positions of local infrastructure companies through Special Investment Operations• Signed cooperative agreement for disaster response operations with
regional financial institutions in response to COVID-19• Cooperated with regional financial institutions through funds

Special Investment
Operations

Others• Issued reports about solving regional issues• Promoted PPP/PFI projects and made proposals for rebuilding public infrastructure• Offered advisory services to local public organizations related to comprehensive government policies• Provided knowledge to local governments, including assistance for managing public assets

29

Kushiro Representative Office

Hokkaido Branch

Hakodate Representative OfficeNiigata Branch

Aomori Representative OfficeToyama Representative Office
Hokuriku Branch

Tohoku Branch

Okayama Representative Office
Matsue Representative Office

Head Office

The DBJ Group’s Value Creation Story

Head office
10 branches	Eight representative offices

Chugoku Branch
Kansai Branch

Oita Representative Office

Shikoku Branch

Minami-Kyushu Branchhttps://www.dbj.jp/service/finance/area/index.html

Regional Emergency Response Program
With a string of major natural disasters, including earthquakes
and typhoons, striking regions around Japan, DBJ has createdthe Regional Emergency Response Program to provide flexible
and rapid support to meet the demand for initial-response
emergency funds by those affected by natural disasters. This
program was created alongside the Regional Reconstruction
Headquarters, which was established with the objective ofensuring an adequate first response to regions struck by disasters, through tight-knit collaboration among our branches andrepresentative offices across Japan, as well as our head office
departments. DBJ also provides assistance for the reconstruction of disaster-struck regions through the establishment offunds with regional financial institutions.
Collaboration for M&A of Local Companies andOverseas Information Dissemination
DBJ helps local companies address various management
issues, such as business restructuring and succession as well
as expansion of business domains, including overseas expansion. As part of efforts to revitalize regions through collaboration
with regional financial institutions, DBJ creates M&A opportunities for local companies through its network of regional banks(73 banks as of March 31, 2020).

Please go to DBJ’s website to see the areas supported by each branch (Japanese only).

Corporate Data

Initiatives in PPP/PFI and Public Asset Management via
Collaboration with Local Governments and Regional
Financial Institutions
Public asset management refers comprehensively to the reassessment of assets held by national and local governmentsfrom a management perspective. DBJ assists numerous local
governments in this regard, helping them create plans and draw
up individual projects with group think tanks. DBJ set up PPP/PFI Promotion Centers in June 2013. While planning and holding its PPP/PFI Academy seminars, DBJ offers regional platforms for cooperating at the national level. In these and otherways, DBJ has made a concerted effort to expand the use of
PPP/PFI, putting into place a structure for promoting their use,

including broad scientific research commemorating the 20th
anniversary since the enactment of the PFI Act. In particular,
the PPP/PFI Academy encourages roundtable discussions andthe sharing of advanced case studies through a teleconference
system that connects all of DBJ’s bases. Now in its 11th year,
the PPP/PFI Academy has welcomed a cumulative total of
about 8,000 people as participants.

The DBJ Group’s Corporate GovernanceCollaboration and Cooperation with Regional
Financial Institutions
Support for Regional Financial Institutions with BusinessFeasibility Studies
Working with regional financial institutions, DBJ provides to theclients of regional financial institutions support for assessing thefeasibility of businesses that propose solutions to management
issues. Based on an analysis of macroeconomic conditions andindividual companies, DBJ engages in fact-finding to identify
management issues at clients, and then presents its findings inan easy-to-understand format.
DBJ subsequently comes up with various financial solutions
to the identified issues to help its clients formulate their own
growth strategies and drum up business. Employees dispatched
to DBJ from regional financial institutions are given opportunities
to gain knowledge through on-the-job training while performing
business feasibility studies of the clients of their own bank. DBJ
holds study groups to help regional financial institutions gain abetter understanding of business feasibility assessments.

Matsuyama Representative Office

The DBJ Group’s Strategy

Tokai Branch

Kyushu Branch

30

Area Strategy

Self-Reliance and Revitalization of
Local Economies

Provision of Knowledge about Local Issues
Survey of Labor Shortage Problems in Regions
In March 2020, DBJ published a research report about
addressing labor shortages in outlying regions.
Over the past few years, labor shortages have become
severe problems across all regions and industries in Japan.
This research report presented an analysis of labor shortages
in regions, and then explained initiatives to encourage womenand senior citizens to reenter the workforce, as well as employment conditions for non-Japanese laborers. The second half ofthe report introduces case studies of actual labor shortages
based on interviews with about 40 companies and discusses
the direction of measures to solve labor shortages in specificsituations.

Smart Venues and Estimations of Economic Scale ofSports Industry
DBJ welcomes consultation requests from local governments
and business owners considering upgrades to stadiums andarenas around the nation. In May 2020, DBJ published the
Smart Venue Handbook describing in detail main points andprocesses for making concepts for stadiums and arenas areality.
In the joint research paper “Estimations of Economic Scaleof Japan’s Sports Industry: Japan’s Version of Sport Satellite
Accounts 2018” published by Japan Economic ResearchInstitute Inc. and Doshisha University in March 2019, it is estimated that the economic scale of the sports industry in Japanwas ¥7.6 trillion in 2016.

Green Infrastructure
DBJ published a report about realizing a sustainable society
with impact financing, starting with green infrastructure. This
report reviews research into case studies about Environmental
Impact Bonds in the U.S. These bonds are a type of impact
investment that focuses on the impact of “green infrastructure,”
an approach to maintaining social capital that utilizes thediverse functions of nature. Environmental Impact Bonds area way of raising capital with pay-for-success (PFS) contracts,
which translates into the promotion of ESG investment withpublic–private collaboration. This research report analyzes thecase studies and dives into the possibility of using these bonds
in Japan.
DBJ promotes green infrastructure as a member of the steering committee for the Green Infrastructure Public–Private
Collaboration Platform established by the Ministry of Land,
Infrastructure, Transport and Tourism in March 2020.

Regional Revitalization with Traditional Japanese-StyleHomes
DBJ provides information and advice about creating economic
value with traditional Japanese-style homes with the aim ofusing such homes to stimulate regions. In recent years, DBJ
has published research reports, including one titled “Regional
Revitalization Using Traditional Japanese-Style Homes toCreate Economic Value,” which discusses the potential market
for repairing and remodeling traditional Japanese-style homes
and the economic boost from overseas tourists staying atthese homes, as well as “Key Points for Businesses Using
Traditional Japanese-Style Homes,” which introduces example
business models for using such homes and reference benchmarks for business revenue.

NIPPONIA Mino merchant family town

https://www.dbj.jp/investigate/etc/index.html

Please click on the link above to see the Regional, Industry and Economic
Report on DBJ’s website (Japanese only).

31

Positioning overseas operations within its sector
strategy and function strategy, the DBJ Group
engages in global operations in sectors providing
high added value.

Subsidiaries in London, Singapore, Beijing (including a branch
office in Shanghai), and New York to coordinate operations
overseas

Strategy
While monitoring the impact from COVID-19, DBJ will continue
to engage in overseas operations in line with its sector strategy
and function strategy.
1)	In infrastructure fields such as energy and transportation,
DBJ will provide investments and loans for the overseas
development of Japanese industry and for projects thatbring overseas knowledge to domestic markets.
2)	DBJ will provide investment and advisory services to support the overseas industrial expansion needs of its customers, including customers headquartered regionally in Japan.
3)	Group companies will manage investments in infrastructure
assets and corporate assets for the purpose of providing
Japanese investors with investment opportunities overseas.

Fiscal 2018

Collaboration withother financial
institutions

Fiscal 2019

• Launched a joint investment program with The Bank of Kyoto, Ltd. foroverseas private equity funds• Entered into a business partnership with Business Finland Oy for the purpose ofsoliciting innovation funds in Finland that advance the formation of an innovation
ecosystem through industry–academia–government collaboration

Investment
operations• Made a preferred equity investment related to J-POWER’s participation in
the Triton Knoll offshore wind power project in the U.K.
• Signed a financing contract for a venture capital fund that invests inearly-stage pharmaceutical companies in Japan and Europe• Established a fund with Sumitomo Corporation that invests in overseas
offshore wind power projects• Preferred equity financing for developing renewable energy projects overseas(offshore wind power plants in Taiwan) with JERA Co., Inc.
• Joint investment with Aica Kogyo Co., Ltd. (Aichi) to aggressively invest in Asia
• Signed financing agreement for a fund to invest in medical equipment venture firms
in Japan and the U.S.

Others• Addressed M&A needs of customers in Asia

Corporate Data

Accomplishments and Initiatives to Date

The DBJ Group’s Corporate GovernanceLonger-Term External Environment and Social Issues
Although the global economy has stalled as a result of the
COVID-19 pandemic, based on projections for continued
growth over the longer run, the DBJ Group is likely to see
robust demand for global business development from its corecustomers in domestic industries. At the same time, over the
medium to long term, demand for capital should increasestrongly from the infrastructure and transportation sectors
against a backdrop of population growth and the increasing
movement of people and physical goods. It is imperative thatJapan’s economy and industry sustain growth by effectively
tapping into these overseas growth opportunities.

The DBJ Group’s Strategy

OutlineThe DBJ Group’s Value Creation Story

Overseas

32

Function Strategy

Special Investment
Operations andCrisis Response Operations

The DBJ Group will provide optimal financing
solutions tailored to customer needs, from loans
to mezzanine financing and investments, while
reinforcing its ability to adequately evaluate various risks.

OutlineProvision of loans and investments after analyzing businessprospects, evaluating risks, and creating financing schemes.
Taking into consideration the traits of each project and theintentions of participants, utilization of DBJ’s expertise inintegrated investment and loan services that flexibly deploy
loans, mezzanine financing, and investments

DBJ’s Initiatives to Supply Risk CapitalSpecial Investment Operations
Special Investment Operations, established as an intensive but
temporary scheme to supply growth capital* from the perspective of promoting the competitiveness of Japanese enterprises
along with regional revitalization, draw only a portion of theinvestment (industrial investment) from the Japanese government, enough to encourage the private sector to supply growth
capital. Since launching the aforementioned operations in June
2015, DBJ has (as of March 31, 2020) made ¥717.1 billion in
investments and loans (100 projects in total), the first ¥590.2
billion of which has spurred ¥4,042 billion in private-sector
investments and loans.
Special Investment Operations follow policy objectives, inaccordance with the law, complementing and encouraging
private-sector enterprises and ensuring appropriate competitive
relationships. To improve the structure of Special Investment
Operations and thereby maintain objective evaluation andJapanesegovernment(industrial
investment)

Addition(Budget for fiscal 2020:¥300 billion)

Special Investment
Operations(Managing investments andloans in special account)
Fiscal 2020: ¥600 billion
Evaluation /verification

Special Investment
Operations
Monitoring Board(megabanks, regionalbanks, private funds, etc.)

Complement andencourage
private-sector
enterprises(including pump-priming)
Capital funds(including preferred sharesand subordinated loans)

Target company initiatives
Loans,
etc.

• Initiatives for effective use ofmanagement resources• Initiatives to promotemanagement innovation– Cultivate new business– Form alliances among various
sectors and groups
etc.

Political targets• Encouragement of self-reliant
development of regional
economies• Increase in competitiveness ofJapan and domestic enterprises• Development of markets for
growth capital

Enhance risk capital supporting growth

Capital account
Capital increase* According to the Japanese government’s Study Panel Concerning the Promotion of
Expanding Growth Funding, certain financial institutions, including DBJ, areexpected to serve in a pump-priming capacity for the foreseeable future to attract
private-sector investment by cultivating new capital providers, markets, andinvestors, thereby fostering the development of an investment cycle led by theprivate sector.

Other financial
institutions

DBJ(Budget for fiscal 2020:¥300 billion)

supervision of activities, an advisory body to the Board of
Directors was established—the Special Investment Operations
Monitoring Board—with participation from outside experts infinancial and capital markets, industry, and other professionalgroups (see page 49).
Based on the Act for the Partial Amendment of theDevelopment Bank of Japan Inc. Act (Act No. 29 of 2020),
which was enacted on May 22, 2020, Special Investment
Operations were extended—the investment decision term andgovernment financing term from March 31, 2021 until March
31, 2026 and the deadline for ending operations from March
31, 2026 until March 31, 2031.

33

Establishment of Joint Fund with Nihon M&A Center Inc. to Create Star Companies LocallySince the investment in FUJIBAMBI by the Fund and theappointment of a new president, DBJ, the Fund, and
FUJIBAMBI’s main bank have worked together to develop
new sales channels, create new products, and strengthen
the management structure.
DBJ, leveraging its extensive experience in fund operations and regional revitalization, as well as its influence inregional networks, is cooperating with experts from Nihon
M&A Center to help Japanese mid-tier firms and SMEs
expand their business.

Setting-Up of Overseas Renewable Energy Fund with Sumitomo Corporation and
Sumitomo Mitsui Banking Corporation

Sumitomo
Corporation

SMBC

24.5%

Fund managementcompany
(GP)

24.5%

Limitedpartners (LPs)Three companies(Sumitomo Corporation,
SMBC, DBJ)

Other domestic
investors
Overview of the Fund

https://www.dbj.jp/service/invest/special/index.html

To learn more about Special Investment Operations, please go to DBJ’s website (Japanese only).

Offshore wind power
generation assets

DBJ

51%

Corporate Data

DBJ is using the knowledge it has gained from investing
extensively in renewable energy to provide the fund management company with know-how and personnel, thereby
facilitating smooth fund operations. DBJ contributes to theglobal low-carbon movement by financially encouraging the
spread of renewable energy across the world.

The Fund (first fund)

DBJ, Sumitomo Corporation, and Sumitomo Mitsui Banking
Corporation (SMBC) jointly established fund managementcompany Spring Infrastructure Capital Co., Ltd., in order toadminister the Spring Infrastructure I Investment Limited
Partnership (hereinafter, “the Fund”).
The Fund raises money from Japanese investors andfinances and invests in offshore wind power projects overseas. The Fund has already acquired and begun managing
wind power facilities in the U.K. as seed assets from
Sumitomo Corporation. In Europe, offshore wind power
has rapidly proliferated, helping with the move toward a
low-carbon society, while also providing excellent investment opportunities to investors. In Japan, a number of new
offshore wind power projects are in the planning stages,
underscoring the potential for growth in this market. Against
this backdrop, DBJ provided financing through Special
Investment Operations for the Fund, in recognition of its
highly significant role in providing opportunities for domestic
investors to invest in the renewable energy field, and helping
accelerate business development therein at Sumitomo
Corporation.

The DBJ Group’s Corporate Governance“Raw Cane Sugar Donut Sticks,” the main product made by
FUJIBAMBI Co., Ltd.

The DBJ Group’s Strategy

Japan Investment Fund Inc. (J-FUN), which was jointly
established by DBJ and Nihon M&A Center Inc., created its
first Japan investment fund, a limited partnership for investment (hereinafter, the “Fund”), in February 2018. The Fund
will play a role in social infrastructure that builds a foundation
fostering mid-tier firms and small- to medium-sized enterprises (SMEs) across the nation. The Fund will also support
the growth of companies in which it has invested so they
can become star performers in their respective regions. In
this way, Special Investment Operations are being utilized
to invigorate regional economies and strengthen the competitiveness of local companies.
The Fund has invested in FUJIBAMBI Co., Ltd., a confectionery maker founded over 70 years ago in Kumamoto
Prefecture. FUJIBAMBI is a venerable company cherishedby local residents, and its main product, “Raw Cane Sugar
Donut Sticks,” is famous within Kumamoto Prefecture.
However, the management team has reached an advanced
age while facing the challenge of expanding sales nationwide. Starting with an introduction to FUJIBAMBI by its
main bank, the Fund advised the company about businesssuccession and a future growth strategy, which led to thesigning of a capital as well as a business arrangement.

The DBJ Group’s Value Creation Story

PROJECT SPOTLIGHT

34

Function Strategy

damage, Japan Finance Corporation provides two-step loans
as a complementary risk measure, among other measures, togovernment-designated financial institutions that supply necessary funds to address crisis-related damage.
In March 2020, the COVID-19 pandemic was designated acrisis (see “Our Response to COVID-19” on page 19). As adesignated financial institution, DBJ collaborated and coordinated with private-sector financial institutions to rapidly andeffectively implement Crisis Response Operations.

Crisis Response Operations
DBJ’s Crisis Response Operations function as a stabilizing
force during periods of instability in the economy, society, andmarkets.
Crisis Response Operations, on the basis of the Japan
Finance Corporation Act (Act No. 57 of 2007, including later
revisions), consist of the provision of necessary funds during
such crises as disruptions in domestic or overseas financial
markets or large-scale disasters. In response to crisis-related

Crisis Response Operations Scheme
Japanese Government• Capital contribution• Lending of funds• Interest subsidies

DesignatedJapan Finance Corporation(Crisis Response Facilitation Account)Two-step loans,etc.

Designated financial
institutions•	Prepares and announces “crisis response facilitation guidelines” (approved by
the competent minister)•	Implements complementary risk and other measures on the basis of agreements (approved by the competent minister) with designated financial
institutions

Private financial institution

Defines a new scope for DBJ’s responsibilities,
making Crisis Response Operations obligatory for
an indefinite period

DBJ• Extends the scope of Japanese government recapitalization securing DBJ’s
financial structure, etc.
• Establishes a new crisis response reserve account, reflecting this obligation in
the Articles of Incorporation, and indicates mandatory Japanese government
ownership of more than one-third of shares and other measures

Private financial institution
Private financial institution• Designated financial institutions conductbusiness in accordance with the Crisis
Response Operations Rules (based on
approval of the competent minister).
• Designated financial institutions conductbusiness with complete double checks ofrequired compliance at their financing
departments and their departments responsible for crisis response operations.

Note: Capital increases related to Crisis Response Operations before the 2015
revisions to the DBJ Act were transferred from capital to a crisis response reserve(¥206.5 billion). Capital increases for Crisis Response Operations after therevisions are to be added directly to the crisis response reserve.

Provision offunds, etc.

Clients

35

2008/10

2008/12

Commenced Crisis
Response Operations
as a designatedfinancial institution

2011/32020/3Financial Crisis Response
Operations and Earthquake Disaster
Crisis Response Operations

Earthquake Disaster Crisis Response Operations(through March 31, 2011)

Main events that were designated a crisis:

Total funds raised by the government in Crisis Response Operations¥206,529 million

•	Turmoil in international financial markets(Global financial crisis)• Great East Japan Earthquake• Kumamoto earthquakes in 2016
• COVID-19 pandemic(As of June 30, 2020)

Total loans for Crisis Response Operations, loans with loss
guarantee agreements, and commercial paper purchases• Loans: ¥7,837.3 billion (1,279 projects)• Commercial paper acquisitions: ¥361.0 billion (68 projects)

Total Crisis Response Operations related to COVID-19
		¥1,621.2 billion (130 projects)(As of June 30, 2020)

The DBJ Group’s Strategy•	Damage from heavy rainfall during Typhoon #18
in 2015

COVID-19
pandemic

The DBJ Group’s Value Creation Story

Accomplishments and Initiatives to Date

PROJECT SPOTLIGHT

industry competitiveness, builds infrastructure, and reinforces functions (the “reconstruction and growth stage”),
we established a reconstruction and growth support fundin collaboration with the Regional Economy Vitalization
Corporation of Japan.
In fiscal 2018, with demand for reconstruction seeming
to settle, we established a new fund for medium- to longterm capital funds and other forms of money with sharedrisk, aimed at supporting the economic development of theaffected areas.
Going forward, we will continue to work with local financial institutions while promoting efforts to help stricken
areas according to their particular stage of recovery.

Kumamoto Earthquakes in 2016
In 2016, DBJ established the Kumamoto Recovery Officewithin its Kyushu Branch to better provide useful knowledge and financial expertise for the restoration and reconstruction of regions affected by the Kumamoto
earthquakes.
In July 2016, DBJ formed the Kumamoto Reconstruction
Support Fund jointly with The Higo Bank, Ltd. and The
Kagoshima Bank, Ltd., financial institutions in the disasterstricken area. The fund supplies risk capital, through such
schemes as senior loans (repayment in full on maturity,
uncollateralized, non-guaranteed loans) and subordinatedloans, to businesses affected by the disaster.
Additionally, DBJ has provided beneficial information
about restoration and reconstruction through a crossdepartmental system, and has offered survey and planning

services in conjunction with related local governments,
national institutions, and economic groups, as well as local
financial institutions.

Kumamoto Castle, damaged by the earthquakes(photo from the Ninomaru Parking Lot)

Corporate Data

In the fiscal 2011 supplementary budget passed in thewake of the Great East Japan Earthquake, ¥2.5 trillion
was earmarked for Japan Finance Corporation for Crisis
Response Operations targeting medium- and large-sizedenterprises. DBJ proactively provided assistance for clientsaffected both directly and indirectly by the disaster.
Along with designated financial institutions in the disaster area, DBJ arranged the Great East Japan Earthquake
Reconstruction Fund.
In December 2014, in response to the shift of the stageof earthquake reconstruction from the restoration of production facilities (the “restoration stage”) to efforts to open
up a new enterprise-based market that resumes production, collaborates among multiple enterprises to boost

The DBJ Group’s Corporate GovernanceGreat East Japan Earthquake of 2011

36

Function Strategy

Syndication, Advisory, andConsulting Services

OutlineSyndication
DBJ utilizes its impartial standpoint to call on a wide range offinancial institutions in providing high-value-added syndicatedloans that draw on such original DBJ financing products as
DBJ certification programs.
Advisory Services
DBJ offers expert advice related to corporate M&A—ranging
from the formulation of strategies, screening of acquisition
candidates, and assessment of corporate value to negotiations,structure policy, and post-merger integration assistance—for avariety of situations, including industry restructuring, overseas
business development, business domain expansion, businesssuccession, and fund investments and exits.
Research and Consulting
Utilizing its extensive network of connections to universities,
research institutions, experts, national governments, and local
governments, DBJ provides support through surveys andproblem-solving ideas related to business strategies and policy
formation for urban development, regional development, social
capital maintenance, energy, the economy, and industry.
Strategy and Initiatives to Date
Syndication
Activities have included leveraging DBJ’s strengths in syndicatedloans in the energy sector and reinforcing ties and partnerships
with regional financial institutions through such means as business cooperation agreements for syndicated loans. In this way,
DBJ is contributing to corporate fund-raising while also providing financing opportunities for financial institutions.
DBJ has provided information to other regional financial
institutions about a measure it jointly developed with The
Hiroshima Bank, Ltd. in fiscal 2017 to provide loans withThe DBJ Group mobilizes tie-ups and collaboration to provide syndicated loans and support for
M&A designed to promote Japanese companies’
growth strategies and strengthen their international competitiveness, while offering impartial
consulting services with a long-term perspective.
Along with related services, this helps clients solve
the problems they face and stimulates activity infinancial markets.

special provisions that waive the original principal in the eventof an earthquake. Moreover, DBJ put together special deals,
including a large syndicated loan, for the Fukuoka Airport concession project.
Advisory Services
As a result of its impartiality, DBJ has a wide network it canmobilize in providing its advisory services, including not only
Japanese firms but also overseas companies and private
equity funds.
In fiscal 2017, DBJ entered into an overseas M&A advisorybusiness cooperation agreement with BDA Partners (headquartered in New York), which needed to develop business in
Asia and other parts of the world. The synergies generated
between BDA’s overseas network and the DBJ Group’s M&A
advisory organization and domestic and overseas networks
produced a more effective and efficient overseas M&A advisory
service for the client.
Research and Consulting
Japan Economic Research Institute Inc. is a comprehensive
think tank that conducts research in the public, solutions, andinternational fields. In the public–private partnership and project
financing initiative fields, it has a top-class track record in Japanbacked by unparalleled experience and know-how.
Value Management Institute Inc. is also a comprehensive
think tank that excels in analysis using proprietary economic
models and insight into cutting-edge technologies. Its highly
specialized knowledge encompasses a broad range of policy
fields, including the formulation of integrated strategies for local
governments across Japan.

37

An investment management company
that primarily handles investments(alternative investments) in the fieldsof real estate, private equity, andinfrastructure

Corporate Data

Strategy
DBJAM, as a fiduciary investment manager, works in the bestinterests of its institutional investor clients with the aim ofachieving longer-term growth in returns on each investment,
being aware of the profits flowing to the ultimate beneficiaries.
DBJAM also works to help its clients increase their asset management capabilities.
To achieve these aims, DBJAM develops a deep understanding of the financial condition, investment policies, andrisk-and-return preferences of its clients through active, thorough, and faithful engagement.
DBJAM believes that such an attitude allows it to provide
investment and asset management services that are truly optimized for the client. Through these services and operations,
DBJAM contributes to the development of financial markets inJapan by energizing new money flows, as well as the conversion of fund flows into the reliable formation of assets for thenation’s citizens.

Accomplishments and Initiatives to Date
DBJAM was established in November 2006 for the purpose ofenergizing the real estate financing market in Japan. Since then,
DBJAM has provided domestic real estate fund management
and asset management services. In 2016, it formed and beganasset management in DBJ Private REIT Inc., an unlisted private
real estate investment trust. In addition, since 2013, DBJAM
has been providing discretionary investment services andinvestment advisory services related to alternative investmentsin overseas and domestic private equity and infrastructure andoverseas real estate.
In its efforts to seek out and provide investment opportunities, DBJAM has set up seven co-investment programs targeted at regional financial institutions and foreign private equity
funds as of July 2020. In 2018, Japan’s Government Pension
Investment Fund appointed DBJAM as an investment manager
focusing mainly on Japanese infrastructure.
As a result of these activities, DBJAM had ¥1,760 billion in
assets under management as of March 31, 2020.

The DBJ Group’s Corporate GovernanceLonger-Term External Environment and Social Issues
Japan is a nation with considerable assets, including over
¥1,800 trillion in household financial assets and ¥400 trillion in
pension assets. With the Japanese economy confronted by adeclining population and an aging society, it is imperative that
this wealth (financial assets) is steadily expanded.
In realizing sustainable asset formation for the nation, it is anextremely important policy issue for Japan to have a healthy andefficient capital market. Financial institutions, pension funds, andother institutional investors must also advance their investment
capabilities in order to maintain a vibrant capital market.
DBJAM acknowledges the importance of such policy objectives and believes that its services are well aligned with the
public interest.

• Real estate• Private equity• Infrastructure

The DBJ Group’s Strategy

OutlineThe DBJ Group’s Value Creation Story

Asset Management

Backed by the DBJ Group philosophy and comprehensive financial expertise, DBJ AssetManagement Co., Ltd. (DBJAM) provides investment and asset management services that meetclients’ best interests.
By stimulating the flow of funds and appropriately addressing diverse investment needs,
DBJAM aims to spur the development of capital
markets in Japan.

38Management Foundation Strategy

We target sustainable growth by constructing an
optimal risk–return portfolio while maintaining andstrengthening a robust financial base that supports our unique business activities, including
integrated investment and loan services.

Financial Strategy

Basic Policy
Financial capital is a vital element of our business foundation
implementing advanced business strategies centered on our
sector strategy (see page 22) and function strategy (see page32). A robust financial foundation of funds and capital is necessary for the DBJ Group to execute its sector strategy, supply
risk capital, and engage in Crisis Response Operations.

Businessstrategy

External
environment
Scenarioplanning

We aim to maintain and strengthen our financial capital bymanaging it within the context of a risk appetite framework
based on sophisticated analysis of risks and returns, with due
consideration paid to regulatory capital (management focusedon shareholders’ equity ratios) and economic capital (management of capital using stress tests).

Stress test

Business plan

Execution

Monitoring

Strategy for
financial capital

Financial Soundness Indicators
Issuer ratings

A1 (Moody’s), A (S&P), AA+ (R&I), AAA (JCR)

(As of June 30, 2020)

Common equity Tier 1 risk-weighted capital ratio

17.26%

(As of March 31, 2020)

Specific Initiatives to Improve the Value of Financial Capital
A pillar of the DBJ Group’s business strategy is to provide
long-term financing for infrastructure projects. To do so, the
DBJ Group procures long-term funds through corporate bonds
and the Fiscal Investment and Loan Program (FILP). In recent
years, DBJ has stably procured funds through FILP as well as
by issuing corporate bonds, thereby augmenting its fund procurement activities with diversified maturities and methods.
DBJ has been issuing green bonds and sustainability bonds

since fiscal 2014. The issuance of these bonds has not only
diversified our fund procurement base but also invigorated thesocially responsible investment (SRI) bond market.
DBJ Socially Responsible Investment Bonds
In 2014, DBJ became the first bond issuer in Japan to issue agreen bond. Furthermore, DBJ has issued a DBJ Sustainability
Bond each year since 2015. DBJ’s $1 billion issuance in fiscal
2019 was one of the largest-ever sustainability bonds

39* The Green Bond Principles are compiledby the International Capital Market
Association (ICMA), investors, issuers,
and securities companies. These partiesare responsible for updating annually theGreen Bond Principles, which arevoluntary process guidelines thatrecommend transparency and disclosure and promote integrity in the development of the green bond market byclarifying the approach for issuance of agreen bond. These parties also constitute a platform to share the latest
information about green bonds anddisclose relevant information to society.

Issuance of SRI bonds(As of March 31, 2020)$1 billion in 2019
€700 million in 2018
$1 billion in 2017$500 million in 2016€300 million in 2015€250 million in 2014

Fiscal 2017

Fiscal 2018

Fiscal 2019

4,012.6
1,127.7
800.0

3,153.4
922.7
580.0

3,790.8
643.3
300.0

3,951.8
1,142.9
800.0

150.4

150.2

150.2

150.2

177.3

192.5

193.0

192.7

—

100.2

100.3

100.2

497.1
861.5
1,526.1

535.8
589.5
1,005.0

549.4
446.3
2,051.4

579.3
583.1
1,546.1* Borrowings from FILP in fiscal 2016 included ¥500.0 billion in the supplementary budget for “economic stimulus measures for investments in the future.”

MESSAGE FROM EMPLOYEESIR Activities to Spread Understanding of
DBJ’s Principles and Workhttps://www.dbj.jp/en/ir/

For more information related to investor relations, please go to DBJ’s website.

Corporate Data

In addition to procuring government credit through the Fiscal Investment and Loan Program (FILP) and the issuance ofgovernment-guaranteed bonds, DBJ conducts its own fund-raising activities, such as issuing corporate bonds (FILP
bonds) to domestic and overseas investors and borrowing money from insurance companies and financial institutions,primarily regional banks. When conducting its own fund-raising activities, DBJ places emphasis on having investors
understand and support its principles and work and, to that end, dispatches representatives to conduct proactive investor relations throughface-to-face meetings in all regions of Japan and overseas.
Particularly when raising funds through loans, DBJ takes care tofurther a deeper understanding of its work by giving examples of investments and loans it has extended inside and outside Japan as well as
within domestic regions. DBJ also takes care to gain a deeper appreciation of the issues faced by the borrowing customer, viewing the interaction as an opportunity for further collaboration on investments andloans, in addition to borrowings.

The DBJ Group’s Corporate GovernanceFunds raised (flow)
Fiscal Investment and Loan Program   Of which, borrowings from FILP*  Of which, government-guaranteed bonds(domestic)  Of which, government-guaranteed bonds(overseas) Government-guaranteed bonds with maturity of lessthan five years (domestic)
Corporate bonds (FILP bonds)
Long-term debt
Of which, recovered, etc.

(¥ billion)

Fiscal 2016

The DBJ Group’s Strategy

Capital Procurement (Non-Consolidated)

The DBJ Group’s Value Creation Story

denominated in the U.S. dollar issued by DBJ. The raised
funds are allocated toward the creation of a sustainable society
through DBJ Green Building Certification and theEnvironmentally Rated Loan Program. Information on the management and allocation of funds is evaluated by third parties toincrease transparency.
DBJ, in January 2017, became an issuer member of theGreen Bond Principles,* the first Japanese firm to attain such a
status, and in March 2020 participated on a committee createdby the Ministry of the Environment to revise the Green Bond
Guidelines, 2020. DBJ will continue to support the sustainablegrowth of this market by continuing to issue SRI bonds andproactively engaging in international and domestic initiatives.

40Management Foundation Strategy

Human Resource Development

We aim to be an organization with diverse humanresources that helps employees develop skills
while raising their motivation.

Number of Employees (Consolidated)
As of March 31, 2020


1,703
1,195
13.4 years

Number of Employees (Non-Consolidated)
As of March 31, 2020
Average Length of Service (Non-Consolidated)
As of March 31, 2020
Basic Policy
To steadily implement the DBJ Group’s value creation process,which aims to create both economic and social value, and torealize Vision 2030, our long-term vision for our future, it isimperative for us to nurture excellent employees who can
implement the distinctive business models of the DBJ Group,
including its integrated investment and loan services.
To this end, we think it is important to create structures inwhich employees will be highly motivated. Improving the valueof human capital is one of our most important priorities, and
DBJ is taking concrete steps to achieve this goal.

Human Resource Development Vision
DBJ’s role has evolved and developed substantially to meet theneeds of the times. DBJ considers such innovation crucial tomaintaining its leadership position in the constantly advancing
field of finance.
To develop its all-important human resource assets, DBJ
encourages autonomous and pioneering behavior in its
employees as financial professionals in keeping with the visionof “generalists who can be specialists in many fields.” While it isimportant to acquire specialist knowledge, responding to society’s constantly changing needs also requires broad experience, deep knowledge, and the ability to see the big picture.
We continue to build a wide variety of systems based on thisphilosophy.

Career Development
Training for new employees
Rank-based

Career development / management /leadershipManagement / leadership
Career development program

Strategic human resource development through job rotationand on-the-job training

Proposal ability

Front officeFinance

In-house
training

Work skills

Screening ability

Functional department
Management department

Financialaccounting

Legal

Corporate finance, etc.

Middle / Back office
Shared skills

Domestic
Dispatchoutside DBJ

Strategic global human resource development
Overseas

Self-study

Knowledge
and skills

Logical thinking / facilitation / presentation, etc.

Seconding to Group companies and outside institutions
Overseas university strategic partnership programs /Short-term study in top business schools / Overseas study /Trainee programs / Seconding to overseas institutions, etc.
Language study / Finance / Law / Accounting

41* DBJ dispatches employees to national government agencies, Group companies
around the world, and companies that have received investments.

Employees’ Use of Childbirth and Child-Rearing Support
Systems, Number of Employees in Training Courses(non-consolidated)

New-employee training program (online)

Ratio of employees returning to work after taking
childcare leave (number of employees having
completed childcare leave in fiscal 2019)32/34 (94%)

Ratio of male employees taking childcare leave(employees who had a newborn child in fiscal 2018)

71.8%

Rehiring system(number of registrants as of March 31, 2020)

33

Reduced work hours and flex time for employees
raising children and caring for elderly relatives

131“Iku-boss” training participants(cumulative total)

About 200

Seminars for finding childcare facilities(cumulative total)

About 180

Corporate Data

Motivation and Engagement
We constantly ask ourselves if we have laid the proper foundation
for genuinely motivating officers and employees to take the initiative in accordance with the DBJ Group’s corporate philosophy.
•	DBJ conducts engagement surveys for employees, evaluates the results of these surveys, and creates action plansthat enable each department to increase motivation throughimprovement activities.
•	In training about career formation, DBJ creates opportunities for furthering understanding of its corporate philosophy
and constructive dialogue about improvements and practical approaches.

The DBJ Group’s Corporate Governance•	New employees receive thorough growth assistance withapproximately three months of DBJ’s own accounting andfinancial analysis courses and a full year of new-employee
training programs.
•	In addition to work-related training, DBJ provides not only
supplementary programs for self-improvement but also askills development program, extensive in terms of both
quality and quantity, that provides rank-based training forrequired subjects whenever necessary.
•	Opportunities to study abroad at overseas universities andtraining systems are made available for developing global
human resources. DBJ also operates its own leadershiptraining program (entirely in English) in collaboration with top
overseas universities for young employees and managementlevel employees.
•	Almost all training has been moved online due to the COVID19 pandemic, and DBJ plans to continue to proactively
enhance the flexibility and sophistication of classroom training environments.

The DBJ Group’s Strategy

Skills Development
The DBJ Group develops human resources through practicalon-the-job training and extensive training opportunities.
•	Employees are strategically rotated so that they steadily
develop highly specialized skills by gaining practical anddiverse experience and broad perspectives in multiple
departments and outside institutions.*

Diversity Management and Productivity Improvements
To promote workplaces where diverse human resources canwork together, DBJ encourages mutual understanding andtakes steps to improve the productivity of each employee.
•	DBJ aims to enhance its work and leave systems for childrearing and elderly care, such as telecommuting, reduced
work hours, and flex time, in addition to holding seminars
guided by experts for finding and enrolling in facilities forchildcare and elderly care.
•	DBJ creates and distributes a guide to balancing work withchild-rearing and elderly care, and holds so-called “iku-boss”
seminars for members of management to enable them tosupport employees using these systems while improving
team productivity. DBJ also holds seminars for furthering
understanding of people with disabilities and promotes thebuilding of cooperative relationships among staff, including
employees who use these systems.
•	DBJ set up the Work Shift Promotion Headquarters with theintention of increasing work efficiency from a work shift
standpoint and promoted awareness reforms and related
initiatives across the Group.
•	DBJ supports the physical and mental well-being of its officers and employees with courses about coping with stressand managing sleep, as well as by offering a counselingsystem staffed by outside professionals, in addition to periodic health checkups. DBJ greatly relaxed rules about
working from home and staggered working hours to mitigate the spread of COVID-19 and continues to place thehighest priority on the health and safety of its executives
and employees while upgrading work environments.

The DBJ Group’s Value Creation Story

Specific Initiatives to Increase the Value of Human Capital
Intensification of the Hiring and Exchange of Human
Resources across the DBJ Group
DBJ will strengthen its hiring processes and practices and secure
the personnel necessary across the entire Group to implement its
sector strategy, function strategy, and area strategy.
The DBJ Group will also work to further disseminate its
long-term vision, Vision 2030, and its value creation process bystrengthening the exchange of human resources across the
DBJ Group.

42

Management Foundation Strategy

Knowledge and Collaboration

Basic Policy
Intellectual Capital
Knowledge 
We strive to improve skills as a core element of operations
necessary to differentiate our business model through surveys,
research, analyses, and risk management centered on industry.
Processes 
We will improve operations, including via investments in information and communication technology (ICT), by clarifying andsimplifying business processes from the customer’s standpoint
in order to rapidly and properly address customer needs.
Relationship Capital
Collaboration 
The DBJ Group has built diverse networks with customers,
financial institutions, investors, and national and local government agencies for the purpose of exchanging information andavoiding conflicts of interest. The DBJ Group utilizes its unique
networks to identify issues affecting the economy and society
and to conduct investment and loan operations. We aim to
maintain our reputation and improve our brand value throughthe services we provide to customers.
Social Capital
The DBJ Group defines social capital as a resource sharedacross society that underpins the foundations of market economics. Increasing the value of social capital is a basic tenet
for realizing a sustainable society. DBJ specifically engages inunique initiatives within the context of (1) the natural environment, (2) social infrastructure, and (3) system capital.

To improve intellectual capital and relationship andsocial capital, the management resources of the
DBJ Group, we are accumulating knowledge whileadvancing collaboration with various stakeholders.

Social capital

Details(1) Naturalenvironment

Forests, mountains,rivers, lakes, soil, air(2) Social
infrastructure

Energy, transportation,
urban infrastructure,industrial value chains

Stabilization and stimulation of the financial(3) System capital system, development
and invigoration offinancial markets

Example of initiatives

Environmentally Rated
Loan Program
DBJ Green Building
Certification
Loans and investments
for infrastructure andindustrial projects
BCM Rated Loan
Program
Crisis Response
Operations
Supply of risk capitalSocially responsible
investing bondissuance

Specific Initiatives to Improve the Value of Intellectual Capital
Knowledge
Industry Analysis 
The role of the Economic & Industrial Research Department is
to analyze and disseminate information on economic andindustrial trends in Japan and overseas, including macroeconomic trends and trends in key industries, and to support
investment activity. DBJ proactively works to accumulate anduse intellectual capital, including information on recent trends insuch areas as big data, AI, computer-assisted software engineering (CASE), virtual and augmented reality, and fintech.
In April 2017, DBJ established the post of chief research
officer and placed under it the Economic & Industrial Research
Department and the Sustainability Planning & Intellectual
Capital Support Department. Furthermore, we provide

43

https://www.dbj.jp/en/investigate/

For details, please follow the link above to the DBJ website.

• Provided certification programs• Held a business plan competition for women• Provided platforms via DBJ Connect• Supported innovation with iHub

Financial
institutions• Collaborated with LTIC• Coordinated operations with Bridges FundManagement Ltd. in the United Kingdom

Government• Participated in high-level panel about ESG finance• Participated in TCFD scenario analysis support
project

Research
institutions• Held DBJ Academy at RICF

Participation
and assessmentof outside initiatives

DISCLOSURE INSIGHT ACTIONADFIAPfinancing sustainable development

Corporate Data

Research Institute of Capital Formation 
The Research Institute of Capital Formation (RICF) was established in 1964 with Dr. Osamu Shimomura, who advocated forthe principles behind Japan’s post-1940s, high economic
growth, as its first executive officer. The institute serves as avenue for creating intellectual capital through cooperation andcollaboration between DBJ and external experts at universities
and other organizations. Its research includes a focus on
the formation of a sustainable economy and society from anacademic and liberal standpoint. In recent years, the institutehas expanded the means for creating intellectual capital byestablishing new committees for researching sustainability,
publishing research papers through Springer, an international
academic publishing company, and holding international
academic conferences in conjunction with overseas academic
journals and think tanks.

Customers

The DBJ Group’s Corporate Governance

Cross-sector Conference 
Cross-sector innovation is accelerating and the number ofthemes that must be analyzed by industrial surveys is increasing.
Against this background, to pursue deep industry knowledge
while maintaining a cross-sector perspective, the DBJ Group set
up the Cross-sector Conference in fiscal 2017 as a platform forsharing information among the Economic & Industrial Research
Department, business offices, and Group companies. To discover and share cross-sector knowledge through lectures andworkshop formats, as well as via other means, we convened the
Cross-sector Conference in fiscal 2019 with such themes asmobility as a service (MaaS) and logistics in China.

Concrete Measures to Increase the Value ofRelationship and Social Capital
Collaboration and Dialogue with Stakeholders 

The DBJ Group’s Strategy

Capital Investment Planning Survey With a history of more than 60 years (since 1956), DBJ’s
Capital Investment Planning Survey looks at trends in corporate capital investment in Japan as well as corporate activities
based on the “broad definition of investment,” including capital
investment overseas, and spending on R&D, M&A, and humanresources. The results of the survey are used for many purposes, such as furthering education at universities andresearch at R&D organizations, in addition to serving as areference for national economic policy and corporate planning.

Processes
Work Shift Promotion Headquarters 
The Work Shift Promotion Headquarters was created in fiscal
2018 with the deputy president as its chair and members
representing other departments. From the standpoint of
increasing the value added it provides to customers, the DBJ
Group is keen to make bold workstyle reforms, streamline work
processes, and improve productivity. Our initiatives haveincluded rationalizing investment management processes,
increasing back-office work efficiency with robotic process
automation (RPA), upgrading remote access environments,and moving away from paper.

The DBJ Group’s Value Creation Story

knowledge-based solutions to customers in various industries,
including solutions from the perspectives of environmental,social, and governance (ESG) issues and the Sustainable
Development Goals (SDGs), based on our wide-ranging knowledge of industry.

44

Management Foundation Strategy

DBJ Women Entrepreneurs Center (DBJ-WEC)
In 2011, the DBJ Women Entrepreneurs Center was launchedto provide comprehensive support, including entrepreneurial
know-how and networking opportunities, to nurture growthbusinesses led by women from new vantage points that couldchange society and the economy for the better. As a part ofthese efforts, DBJ has held a business plan competition eighttimes since 2012 for women entrepreneurs.
Since eighth competition, first-place awards have beencreated in three fields: Excellent Social Design Award, Excellent
Growth Potential Award, and Excellent Regional Impact Award.
From among these categories, the DBJ Women Entrepreneurs
Prize recipient is chosen.
Excellent new business ideas are awarded business grants
of up to ¥10 million. After the competition finishes, the winners
are connected with outside experts and experienced entrepreneurs who help them turn their business plans into reality bysupporting the growth and development of their business ideas.
More than 2,500 business plans have been submitted overthe past eight competitions. Some of the winners’ and finalists’competition plans have gone on to play a role in expanding
their operations. Furthermore,
DBJ assists initiatives to support women entrepreneurs inregional locations, helping
expand the breadth of women
entrepreneurs.

https://www.jeri.or.jp/wec/

For more details about the DBJ Women Entrepreneurs Center,please go to DBJ’s website (Japanese only).

DBJ iHub (DBJ innovation Hub)Along with The Japan Economic Research Institute, DBJ seeks
to spur innovation through iHub and “value training” activities.
By using its impartial position andbroad network, DBJ aims to resolve
social issues through logical andinnovative business solutions.

https://www.jeri.or.jp/sctm/about/ihub.php

For more information, please go to DBJ’s website (Japanese only).

DBJ Connect
Beginning in June 2017, at the suggestion of our young
employees, we launched DBJ Connect in collaboration with
Creww, a company that operates the largest start-up community in Japan.
DBJ Connect is a program whereby DBJ facilitates all of thenecessary processes for collaboration between start-ups andmajor and mid-tier corporate customers. When major andmid-tier corporate customers launch a new initiative, start-ups
are solicited to provide ideas for business collaboration overthe internet to solve issues related to processes, know-how,ideas and human resource shortages, for example.
DBJ Connect aims to maximize potential outcomes in shortperiods of time and human resources as all parties aim to startexperimental projects.
In fiscal 2019, the CHUDEN CTI & STARTUP PROGRAM
attracted approximately 40 proposals for start-up firms, andtwo of these proposals turned into collaborations between
start-ups and Chuden CTI Co., Ltd.

https://dbj-i.net/ja

For more information, please go to DBJ’s website (Japanese only).

Participation in and Evaluation of Outside Initiatives
DBJ and DBJ Asset Management Co., Ltd. in December 2016
became signatories of the United Nations–supported Principles
for Responsible Investment (PRI) and since February 2018
have served as members of the PRI Infrastructure Advisory
Committee. DBJ is also a member of the Long-Term Investors
Club (LTIC), an international group of investors that emphasizes
investment activities with long-term time horizons. In May 2019,with Japan Bank for International Co-operation, DBJ held anannual meeting and sponsored events to exchange opinionswith financial institutions from G20 countries. Furthermore, DBJ
proactively participates in and contributes to outside initiatives
that promote sustainability management, as an investor memberof the Global Real Estate Sustainability Benchmark, a participant in high-level panels on ESG finance at the Ministry of theEnvironment, as well as a signatory to the Principles for
Financial Action for the 21st Century and chair of its Working
Group on Savings, Lending, and Leasing Operations.
In February 2019, DBJ received an award from the
Association of Development Financing Institutions in Asia andthe Pacific recognizing its participation in outside initiatives,
specifically its efforts in health management in February 2018
and its initiatives to address natural disasters and climatechange.

45

For customers using the BCM Rated Loan Program, wehold an annual event called the BCM Rated Loan Club as avenue for crisis managers to exchange opinions and information. Through its certification programs, DBJ broadly supports
the initiatives of its customers while
contributing to the formation of asustainable society.
In recognition of these initiatives,
DBJ took the Silver Award in the
Ministry of the Environment’s inaugural ESG Finance Awards in 2019.
Environmental
RatingHealth Management
Rating(Environmental risk)(Human productivity risk)

https://www.dbj-sustainability-rating.jp/

For details on DBJ certification programs, please see the DBJ
website (Japanese only).

1

2

3

4

5

6

Preliminary
screening

Interviews

Judgment
meeting

Evaluation
decision

Financing
implementation

Feedback

Total number of rated loans:

1,275(Number)
1,500

1,250

(Right axis)

Environmental rating
BCM rating
Health management rating
Cumulative amount¥2,257.5 billion(¥ billion)
3,000(As of March 31, 2020)
210

2,500

378

2,000

183
137

1,000
107
750

45
17
4

500

250
33
0

2004

67

2005

11

13

100

126

2006

2007

19
162

2008

23
198

2009

28

1
55

234

470

523

315

278

190

145

103

75

346

574

1,500
655

621

687
1,000

415
369
500

308
244

2010

2011

2012

2013

2014

2015

2016

2017

2018


2019
(Fiscal year)

0

Corporate Data

DBJ Rated Loans

The DBJ Group’s Corporate Governance

Assessment Flow of DBJ Certification Programs(Left axis)	The DBJ Group’s Strategy

BCM Rating(Business continuation risk)

The DBJ Group’s Value Creation Story

DBJ Certification Programs
Using its independently developed screening system, DBJ
certification programs set the terms and conditions of loans
based on corporations’ non-financial information.
DBJ launched the Environmentally Rated Loan Program in
2004, the first such program in the world. In 2006, DBJ
launched the BCM Rated Loan Program to evaluate disaster
preparedness and measures to ensure business continuation.
Furthermore, in 2012, DBJ began to offer the Employees’
Health Management Rated Loan Program, which evaluates
measures in health management. A major defining characteristicof DBJ certification programs is the assessment process thatemphasizes face-to-face discussions, during which we directly
inquire about clients’ initiatives that are not evident in their
publicly disclosed information. Our screening sheet is reviewed
every year in deliberations by the Advisory Committee, composed of outside experts, who also take into consideration thelatest issues and trends around the world.
As follow-up services, we create venues in the form of postassessment award ceremonies at which companies’ top management can exchange their opinions with each other. We also
provide feedback and details about the assessment results anddirectly convey information about anticipated matters andexamples of outstanding efforts at other companies, with theview of supporting more sophisticated initiatives in the future.

46

Corporate Governance

Message from the Chairman

With ongoing efforts to strengthen
governance, DBJ contributes tosustainable growth through an innovative
process of value creation.

Creation of a Unique Business Model 
The DBJ Group practices sustainability management in accordance with the Development Bank of Japan Inc. Act, balancing
economic and social value with the aim of building a sustainable society. We supply risk capital to forward-looking initiatives
through our Special Investment Operations program and collaborate and cooperate with private financial institutions tostimulate new flows of risk capital in Japan. DBJ’s investments
and loans in new fields help strengthen Japan’s economic
competitiveness. We also address local issues through risk
capital supplied through joint funds created with regional financial institutions.
Furthermore, DBJ functions as an emergency supplier ofcapital for responses to natural disasters and other crises. In

times of international financial turmoil, and following the Great
East Japan Earthquake, the Kumamoto earthquakes, andother events calling for rapid influxes of capital, DBJ has been
there to provide relief.
In response to the damage caused by the COVID-19 outbreak, the DBJ Group opened consulting service counters inJanuary 2020 and moved forward with its unique Regional
Emergency Response Program in February. Then, in March,when the Japanese government designated the COVID-19
pandemic a crisis, we concentrated on Crisis Response
Operations as a designated financial institution.

47

and Dialogue with Stakeholders 

A Value Creation Process That Balances Economic and Social Value management and maintain a balanced value creation process.
As the social significance of balancing these two types of value
increases, we will continue making every effort to engage indialogue with our diverse stakeholders and ensure robust andeffective corporate governance, based on the notion that nothing is more important than embodying best practices that willcontinue to earn us the trust of our customers and society.

ChairmanAugust 2020

Corporate Data

Given the adoption of the Sustainable Development Goals(SDGs), the Paris Agreement, and other recent developments,
the DBJ Group established the Sustainability Committee todeal with the growing need to review corporate managementfrom a sustainability standpoint. The Sustainability Committee
discusses changes in social issues and other matters important for management. In fiscal 2019, directors engaged in lively
debate on the Group’s initiatives related to energy, climatechange, and the SDGs. In fiscal 2020, deliberations havefocused on medium- to long-term issues on the global agenda,
such as ESG matters and building of a sustainable society,while monitoring the impact from COVID-19.
To realize a sustainable society while balancing economic
and social value, the DBJ Group offers solutions to issues
faced by society and the our customers. The Group has continued to create innovative business models, centered on the
supply of risk capital, in an effort to advance sustainability

The DBJ Group’s Corporate GovernanceSpecial Investment Operations Monitoring Board are debatedby the Advisory Board, an advisory body to the Board of
Directors comprising outside experts and directors in fields
including manufacturing, infrastructure, regional communities,
and finance (see page 49). The Advisory Board provides valuable ideas on matters concerning the safeguarding of propercompetition with private financial institutions and the DBJ
Group’s management plans. In my view, a distinct aspect ofcorporate governance at the DBJ Group is its continuous
reassessment of its unique value creation process while engaging in dialogue with diverse stakeholders.
Living up to the trust placed in us by society, we want tokeep our initiatives one step ahead of the times, especially inregard to the supply of risk capital, and this means ensuringthat we operate in conformity with the Companies Act. For thispurpose, the Board of Directors formulated the Basic Policy forInternal Control, which positions legal compliance, risk management, and internal audits as important issues for
management.

The DBJ Group’s Strategy

In order to continue playing this unique role, DBJ must haverobust corporate governance, ensure transparency in management, and consider the opinions of outside experts. To promote this aim, we have created the Operations Audit
Committee, the Compensation Committee, and the Personnel
Evaluation Committee as advisory bodies to the Board of
Directors. Listening to the views of our stakeholders is imperative to strengthening this framework.
It is essential that DBJ collaborate and cooperate with private financial institutions in an environment of fair competition.
We hold regular events for this purpose, usually twice a year,
involving discussions with representatives of such institutions.
We have also created the Special Investment Operations
Monitoring Board (see page 49) as an advisory body to theBoard of Directors. The board meets twice a year to discussand evaluate the status of the bank’s business performance, as
well as its complementing and encouraging of private businessand maintenance of proper competitive relationships.
The opinions we obtain through social events with private
financial institutions and the outcomes of deliberations by the

The DBJ Group’s Value Creation Story

Governance Suited to Our Unique Business Model

48

Corporate Governance

Basic Position on Corporate Governance
DBJ is governed by the Development Bank of Japan Inc. Act (the DBJ Act) in accordance with the following objective.

Article 1
Development Bank of Japan Inc. (hereinafter referred to as the “Corporation”) shall be a joint-stock company (kabushiki-kaisha)
whose objective is to contribute to the smooth supply of funds to those needing long-term business funds, as well as to thesophistication of financial functions.

DBJ is working to enhance its unique governance system in
addition to usual management supervision as a company
with a board of directors and company auditors (Audit &Supervisory Board), through a business model built upon features such as integrated investments and loans and proper
execution of the preceding objective, in order to raise the valueof tangible and intangible management resources to beinvested and to realize sustainable management that aims forboth economic and social value.
Specifically, the 2015 revisions to the DBJ Act establishedSpecial Investment Operations and obligatory measures to beconsidered, requiring that DBJ conduct its operations in amanner that does not obstruct appropriate competitive relations with other entities, in particular, applying these requirements to the Advisory Board, made up of outside experts andoutside members of the Board of Directors, and the Special
Investment Operations Monitoring Board, composed of outside
experts, which function as advisory bodies to the Board of
Directors. These bodies provide advice on DBJ’s overallmanagement and deliberate and evaluate business results,
including consistency with the policy objectives of Special
Investment Operations, ensuring that appropriate competitive
relations are maintained with private financial institutions.
DBJ’s Corporate Governance System
A company with a board of
directors and company auditors(Audit & Supervisory Board)

Institutional design configuration
Number of members of the Board of
Directors Of whom are outside members of theBoard of Directors
Number of Board of Directors’ meetingsin fiscal 2019
Number of Audit & Supervisory Board
members Of whom are outside Audit &Supervisory Board members
Number of Audit & Supervisory Board
meetings in fiscal 2019

10
2
13
5
3
14

Adoption of executive officer system
Accounting auditor

Yes
Deloitte Touche Tohmatsu LLC

Overview of DBJ’s Corporate Governance System
General Meeting of
Shareholders

Matters requiring authorization ofcompetent minister• Appointment and dismissal of representative members of the Board of Directors andAudit & Supervisory Board members• Concurrent positions as members of theBoard of Directors

Board of Directors• Amendments to Articles of Incorporation

Audit & Supervisory
Board members,
Audit & Supervisory Board

Accounting auditor

Compensation
Committee

Cooperation

Personnel Evaluation
Committee• Disposition of surplus funds• Mergers, corporate splits, and dissolutions

ReportingOperations Audit
Committee

ReportingInternal
Audit Department

Advisory Board• Basic policy on business plans, redemption
plans, and fund procurement
Executive Committee

AuditsSpecial Investment Operations
Monitoring Board

Decision-making
bodiesDeliberative bodies

ALM & Risk
Management
Committee

Departments
Subsidiaries

General Risk
Management
Committee

Committee on
Investment and
Loan Decisions

New Operation
Screening
Committee

Advisory Panelon Investments
and Loans

Sustainability
Committee

Investment
Management
Committee

Audits49

positioned anew as an advisory body to the Board of Directors.
As one of its roles, even more than before, the Advisory Board
is tasked with deliberating and evaluating important affairs
related to ensuring that appropriate competitive relations aremaintained with private financial institutions.
This board convened twice during the fiscal year ended
March 31, 2020. It is composed of the following outside members of the Board of Directors and outside experts in fields
including manufacturing, infrastructure, regional communities,
and finance.

Advisory Bodies to the Board of Directors In pursuit of sustainability management and DBJ’s corporate
objectives, the following committees have been established asadvisory bodies to the Board of Directors for the purpose ofmaintaining transparency in management and to reflect theknowledge of outside experts.

Outside Members of the Board of Directors

Advisory Board
Since DBJ’s establishment as a joint-stock company in
October 2008, the Advisory Board has been in place as anadvisory body to the Executive Committee, providing advice
on overall management. Revisions in 2015 to the DBJ Act
stipulate for an indefinite period obligatory measures to beconsidered—in particular, requiring that DBJ conduct its operations in a manner that would not obstruct appropriate competitive relations with other entities. Accordingly, this board is

The Boston Consulting Group K.K.
Managing Director & Senior Partner

Masayuki Oku

Honorary Advisor of Sumitomo Mitsui Financial Group, Inc.

Kazuaki Kama

Senior Advisor, IHI Corporation

Katsunori Nakanishi Chairman and CEO, The Shizuoka Bank, Ltd.
Yoshizumi Nezu

President, Tobu Railway Co., Ltd.

Akio Mimura

Honorary Chairman of Nippon Steel Corporation

Kazuo Ueda

Professor, Dean of Faculty of Business Studies at
Kyoritsu Women’s University

Special Investment Operations Monitoring Board
One of the measures of the 2015 revisions to the DBJ Act wasin regard to Special Investment Operations. The act stipulates
the establishment of a Special Investment Operations Monitoring
Board as an advisory body to the Board of Directors. This monitoring board is tasked with deliberating projects and evaluating
their performance in terms of appropriateness against policy
objectives and with emboldening private-sector enterprises andcomplementing their operations while maintaining appropriatecompetitive relations. This board, whose members include outside
experts in fields such as manufacturing, infrastructure, regional
communities, and finance, convened twice during the fiscal year
ended March 31, 2020.
Moreover, in order to examine whether appropriate competitive relations with other entities are being maintained, roundtable discussions are held regularly with the Japanese Bankers
Association, the Regional Banks Association of Japan, and theSecond Association of Regional Banks, including these entities’private financial institution members. Each group met twice infiscal 2019, for a total of six meetings. Disputes and opinions
raised in these meetings are reported to and deliberated by theAdvisory Board and the Special Investment Operations
Monitoring Board.
Outside Experts
Hideharu Iwamoto

Vice Chairman & Senior Executive Director ofJapanese Bankers Association

Masayuki Oku

Honorary Advisor of Sumitomo Mitsui Financial Group, Inc.

Katsunori Nakanishi Chairman and CEO, The Shizuoka Bank, Ltd.
Takashi Yamanouchi Advisor, Mazda Motor Corporation
Keisuke Yokoo

President, Member of the Board
Chief Executive Officer, Japan Investment Corporation

Fumiaki Watari

Honorary Executive Consultant of ENEOS Holdings, Inc.

Corporate Data

Personnel Evaluation Committee
The Personnel Evaluation Committee, composed of outside
members of the Board of Directors and other outside experts,
evaluates personnel proposals on the selection of members of
the Board of Directors and Audit & Supervisory Board
members.

Reiko Akiike

The DBJ Group’s Corporate GovernanceCompensation Committee
The Compensation Committee, the majority of which consistsof outside executives, considers the type of executive compensation structure that befits DBJ from the standpoint of ensuringtransparency and objectivity regarding compensation.

Outside Experts
The DBJ Group’s Strategy

Operations Audit Committee
The Board of Directors has established the Operations Audit
Committee, delegating to this body the authority to deliberate
important matters related to internal audits. This committee
met two times during the fiscal year ended March 31, 2020.

The DBJ Group’s Value Creation Story

Audit & Supervisory Board Members,
Audit & Supervisory Board 
The Audit & Supervisory Board comprises five members.
The Companies Act prescribes that a majority of Audit &Supervisory Board members be outside members (in DBJ’scase, three of the five). DBJ offices contribute three members(two members proper to DBJ and one an outside member).
Also, DBJ has created the Audit & Supervisory Board Office,which, under the board’s direction, assists board members,
including outside members, in performing their duties. The
Audit & Supervisory Board and Audit & Supervisory Board
members audit the execution of duties by members of theBoard of Directors, based on their audit policy and audit plans.
Audit & Supervisory Board members attend Board of
Directors’ and other important meetings and may query the
execution of business by members of the Board of Directors,
peruse documents, and conduct branch audits.

50

Executive Committee
The Board of Directors has vested in the Executive Committee decision-making authority regarding the execution of business.
Accordingly, the Executive Committee makes important management decisions. The committee met 29 times during the fiscal year
ended March 31, 2020.
Committees under the Executive Committee
Name

Role

ALM & Risk Management Committee

This committee deliberates and makes decisions pertaining to portfolio risk management and asset–liability management.

General Risk Management
Committee

This committee deliberates and makes decisions on important items related to operational risk management, system risk management, legal compliance, responses to antisocial forces, client protection management, and other important items.

Committee on Investment and Loan
DecisionsThis committee handles, deliberates, and makes decisions related to investments and loans, overseas business strategy, andoperations and management conditions.

New Operation Screening Committee

This committee deliberates and makes decisions on the commencement of initiatives involving new businesses.

Advisory Panel on Investments and
LoansThis panel handles the advance deliberation on and monitoring of investments and loans as well as deliberations on overseas
business strategy and operations and management conditions.

Sustainability Committee

This committee deliberates on items related to both economic and social value as well as dialogue with stakeholders.

Investment Management Committee

This committee monitors investment projects and enhances the monitoring system, and discusses planned proposals forinvestment policies.

Internal Audits 
DBJ has established the Internal Audit Department under the
direct supervision of the president and CEO President andCEO of DBJ and independent of other operating departments.
The department conducts inspections to ensure the appropriateness and effectiveness of internal controls, including overall
operational compliance and risk management, and performs
evaluations and recommends improvements. The Operations
Audit Committee deliberates and decides audit plans, audit
reports, and other important matters related to internal audits,and this information is reported to the Board of Directors. As ofJune 26, 2020, 21 people belonged to the Internal Audit
Department.

Accounting Audits 
DBJ has in place an agreement whereby Deloitte Touche
Tohmatsu LLC conducts accounting audits as its accounting
auditor.
Three-Pronged Auditing Approach 
DBJ’s Audit & Supervisory Board members, the Internal Audit
Department, and the accounting auditor periodically and asnecessary exchange opinions and information, and communicate in an effort to ensure effective and appropriate audits.

Detailed information about DBJ’s corporate governance is presented below for reference.
Securities filings (state of corporate governance,etc.) (Japanese only)
https://www.dbj.jp/ir/financial/report.html

Policy on Sustainability
https://www.dbj.jp/en/sustainability/management/
regular.html

Internal Control System Basic Policy(Japanese only)

Compliance with Japan’s version of the
Stewardship Code (Japanese only)

https://www.dbj.jp/co/info/governance_policy.html

https://www.dbj.jp/co/info/stewardship.html

51

Meetings of the Compensation Committee in fiscal 2019
Number of meetings held in
fiscal 20192

Members of the Compensation Committee
Chairman

Yasushi Kinoshita(head of the committee)

President

Hajime Watanabe

Outside member of the Board of Directors

Akio Mimura

Outside member of the Board of Directors

Kazuo Ueda

Outside Audit & Supervisory Board member Toshio Yamasaki(¥ million)

Category

Number of Compensation,
peopleetc.

Members of the Board of Directors(Excluding Outside Members of theBoard of Directors)

9

204

Audit & Supervisory Board members(Excluding Outside Audit & Supervisory
Board Members)

2

39

Outside Executives

5

63

Total

16

307

Notes: 1. C ompensation amounts include provisions to reserves for executive
retirement benefits (¥17 million for members of the Board of Directors,and ¥4 million for Audit & Supervisory Board members).
2. N umbers of persons to be paid and compensation amounts include one
member of the Board of Directors who retired during fiscal 2019.

Corporate Data

Compensation paid to DBJ’s members of the Board of Directors
and Audit & Supervisory Board members in fiscal 2019

The DBJ Group’s Corporate GovernanceCompensation Committee

Below is a description of the compensation structure for members of the Board of Directors.
Compensation for full-time members of the Board of
Directors consists of fixed compensation, executive bonuses,and executive retirement benefits. To maintain their independence, part-time members of the Board of Directors receive
fixed compensation alone.
Compensation for full-time Audit & Supervisory Board members comprises fixed compensation, and executive retirement
benefits. Compensation for part-time Audit & Supervisory
Board members consists solely of fixed compensation.
The amount of compensation paid to members of theBoard of Directors is determined after deliberation by the Boardof Directors, within the maximum amount approved at theGeneral Meeting of Shareholders following discussions by the

The DBJ Group’s Strategy

In accordance with this approach, DBJ provides compensation to its executives in three forms: fixed compensation,­executive bonuses, and executive retirement benefits.
(1) Fixed compensation is paid monthly in an amount basedon the executive’s position.
(2) Executive bonuses are distributed after taking into consideration the performance of each member of the Boardof Directors in carrying out their duties during the fiscal
year. Bonuses start with a standard amount based on
the position of the member of the Board of Directors.
Bonuses also include a quantitative assessment portion
determined based on a preset distribution percentagethat reflects the achievement of the consolidated net
income target, as well as a qualitative assessment portion determined based on a preset distribution percentage that comprehensively considers each executive’sachievement of performance targets in their businessdivision.
(3) Executive retirement benefits are paid out upon retirement in an amount reflecting successful service over the
longer term.

Compensation Committee. Compensation amounts are basedon the position and responsibilities of each member of theBoard of Directors, with due consideration given to social
trends, DBJ’s financial performance, and other standards balanced against employee salaries.
The General Meeting of Shareholders held on June 29,
2017, passed a resolution that sets ¥270 million as the maximum annual amount for total compensation paid to membersof the Board of Directors. The Company’s first General Meetingof Shareholders held on September 22, 2008, passed a resolution that sets ¥80 million as the maximum annual amount for
total compensation paid to Audit & Supervisory Board
members.
The Compensation Committee was established in 2008 toensure transparency and objectivity in the process for determining compensation, and a majority of members of theCompensation Committee comprises outside executives. This
composition allows independent outside executives to be
involved and give relevant advice.

The DBJ Group’s Value Creation Story

Executive Compensation 
DBJ’s Compensation Committee is an advisory body to theBoard of Directors. It deliberates on the compensation structure for members of the Board of Directors and evaluates the
propriety of the compensation structure for the Company. The
majority of its members are outside executives.
DBJ takes the following basic approach to executive
compensation.
• Compensation should reflect social trends in regard to executive pay.
• Compensation should provide motivation for initiatives aimed
at realizing economic and social value during each fiscal year
and in the medium to long term.

52

Members of the Board of Directors, Audit & Supervisory Board Members,
and Executive Officers(as of the end of July 2020)

Members of the Board of Directors

ChairmanPresident and CEO

Member of the Board of Directors,
Deputy President

Yasushi Kinoshita

Hajime Watanabe

Seiji Jige

1979: Joined the Ministry of Finance2013: Vice-Minister of Finance2015: Deputy President of DBJ
2018: Chairman of DBJ

1981: Joined Japan Development Bank
2008:	General Manager,
Head of Urban Development Department
2009:	Executive Officer, Head of Corporate Planning &Coordination Department
2011:	Director and Managing Executive Officer of DBJ
2015: Deputy President of DBJ
2018: President and CEO of DBJ

1986: Joined Japan Development Bank
2011:	Executive Officer in Charge of Special Missions
2013:	Executive Officer, Head of Corporate Planning &Coordination Department
2015: Managing Executive Officer of DBJ
2018:	Member of the Board of Directors,
Managing Executive Officer of DBJ
2020:	Deputy President of DBJ

Member of the Board of Directors,
Managing Executive Officer

Member of the Board of Directors,
Managing Executive Officer

Member of the Board of Directors,
Managing Executive Officer

Eiichiro Yamane

Norifumi Sugimoto

Shoichiro Kubota

In charge of Treasury Department,
Syndication & Credit Trading Department,
Sustainability Planning & Support Department

In charge of Business Planning & Coordination
Department

In charge of Strategic Finance Department,
Growth & Cross Border Investment Department,
Regional Investment Department,
Business Development Department

1988: Joined the Ministry of Finance2017:	Councillor, Secretariat of the Headquarters for
Administrative Reform, Cabinet Secretariat
2019:	Member of the Board of Directors,
Managing Executive Officer of DBJ

1988: Joined Japan Development Bank
2013: General Manager, Secretariat Office
2015:	Executive Officer, Head of Corporate Planning &Coordination Department
2018: Managing Executive Officer of DBJ
2020:	Member of the Board of Directors,
Managing Executive Officer of DBJ

1990: Joined Japan Development Bank
2014:	Head of Real Estate Finance Department
2018:	Executive Officer, Head of Growth & Cross
Border Investment Department
2020:	Member of the Board of Directors,
Managing Executive Officer of DBJ

53

The DBJ Group’s Value Creation Story
The DBJ Group’s Strategy

Member of the Board of Directors,
Managing Executive Officer

Kenkichi Fukuda

Makoto Anayama

In charge of Corporate Planning & Coordination
Department, Information Resources Department,
General Affairs Department

In charge of Risk Management Department,
Accounting Department, Credit Analysis Department,
Legal Affairs & Compliance Department,
Research Institute of Capital Formation

1983: Joined Japan Development Bank
2009: General Manager, Head of Chugoku Branch
2012:	Executive Officer, Head of Human Resources
Management Department
2014:	Managing Executive Officer,
Head of Kansai Branch
2016:	Member of the Board of Directors,
Managing Executive Officer of DBJ

The DBJ Group’s Corporate GovernanceMember of the Board of Directors,
Managing Executive Officer

1986: Joined Japan Development Bank
2011:	Head of Economic & Industrial Research
Department
2013:	Executive Officer, Head of Business Planning &Coordination Department
2015: Managing Executive Officer of DBJ
2018:	Member of the Board of Directors,
Managing Executive Officer of DBJ* Of the 15 members of the Board of Directors andAudit & Supervisory Board members, 14 are maleand one is female, leaving the female to male ratio
at 6.7%.
* Standards and policies related to independence inthe selection of outside members of the Board of
Directors and outside Audit & Supervisory Board
members are not applicable.

Outside Member of the Board of Directors

Outside Member of the Board of Directors

Akio Mimura

Kazuo Ueda

Honorary Chairman of Nippon Steel & Sumitomo
Metal Corporation;
Chairman of Tokyo Chamber ofCommerce and Industry;
Chairman of Japan Chamber ofCommerce and Industry

Professor and Dean of Faculty of Business Studies;
Director of Tokyo University’s Center for
Advanced Research in Finance2008:	Outside Member of the Board of Directors
at DBJ

2008:	Outside Member of the Board of Directors
at DBJ* Akio Mimura, Honorary Chairman of Nippon SteelCorporation, is an outside member of the Board of
Directors of DBJ. DBJ has no special relationshipwith Mr. Mimura, and its business with Nippon SteelCorporation is conducted normally. Outside Audit &Supervisory Board member Naoko Saiki is also an
outside director of Sojitz Corporation. DBJ has noconflicts of interest with Sojitz Corporation, and its
business is conducted normally with the Company.
DBJ has no special-interest relationship with anyother of its outside members of the Board of
Directors or outside Audit & Supervisory Board
members.
* DBJ has signed liability limitation agreements with
its outside members of the Board of Directors andAudit & Supervisory Board, based on Paragraph 1,
Article 427, of the Companies Act.

Corporate Data

Notes:

54

Audit & Supervisory Board Members

Audit & Supervisory Board Member

Audit & Supervisory Board Member

Outside Audit & Supervisory Board Member

Atsushi Kurashige

Shigeru Tamagoshi

Toshio Yamasaki

1986: Joined Japan Development Bank
2010: General Manager, Credit Analysis Department
2011: General Manager, Secretariat Office
2013:	General Manager,
Head of Urban Development Department
2017: Audit & Supervisory Board Member of DBJ

1989: Joined Japan Development Bank
2014:	Head of Corporate Finance Department,
Division 2
2016:	Head of Corporate Finance Department,
Division 5
2018:	Executive Officer, Head of Business Planning &Coordination Department
2020: Audit & Supervisory Board Member of DBJ

1982:	Joined The Sumitomo Trust and Banking
Co., Ltd.
2017:	President of Sumitomo Mitsui Trust General
Service Co., Ltd.
2018:	Advisor of Sumitomo Mitsui Trust General
Service Co., Ltd.
2018: Audit & Supervisory Board Member of DBJ

Outside Audit & Supervisory Board Member

Outside Audit & Supervisory Board Member

Masato Dogauchi

Naoko Saiki

Professor, Waseda University,
Law School Senior Counsel,
Nagashima Ohno & Tsunematsu Law Office

Visiting Professor, Graduate School of Public Policy,
The University of Tokyo
Outside Director, Sojitz Corporation

2020: Audit & Supervisory Board Member of DBJ

2020: Audit & Supervisory Board Member of DBJ

Executive Officers (excluding those who are concurrently members of the Board of Directors)
Managing Executive Officer

Managing Executive Officer

Managing Executive Officer

Executive Officer

Yoshinao Ikeda

Ryusei Segawa

Masashi Kumagae

Toshiyasu Takazawa

In charge of Corporate Finance
Department, Divisions 1 and 2

In charge of Economic & Industrial
Research Department, Hokkaido
Branch, Niigata Branch, Tokai Branch

Head of Corporate Planning &Coordination Department

Head of Human Resources
Management Department

Managing Executive Officer(Head of Kansai Branch)

Managing Executive Officer

In charge of Financial Institutions
Department, Regional Planning
Department, Hokuriku Branch,
Kyushu Branch, Minami-Kyushu
BranchHiroshi Shimizu

Tsutomu Murakami

Managing Executive Officer

In charge of Kansai Branch,
Chugoku Branch, Shikoku Branch

In charge of Urban Development
Department; Real Estate Finance
Department; Corporate Finance
Department, Division 3; Structured
Finance Department

Managing Executive Officer

Michihiro Kishimoto
In charge of Corporate Finance
Department, Division 5

Managing Executive Officer

Kazufusa Matsushima
In charge of Corporate Finance
Department, Division 6,
Tohoku Branch

Keita Arakaki

Executive Officer

Katsushi Kitajo

In charge of Corporate Finance
Department, Division 4

Executive Officer

Executive Officer

In charge of Internal Audit

Keisuke Takegahara

Executive Officer

Deputy Chief Research Officer,
Chief Manager of Sustainability
Management Office, Corporate
Planning & Coordination Department

Kazushige Ikeda

Masao Masuda
Head of Business Planning &Coordination Department

55

Messages from Outside Members of the Board of Directors

Outside Member of the Board of Directors

I have served as an outside member of the Board of
Directors since DBJ became a joint stock company in 2008.
I am currently a member of the Advisory Board, an independent body that facilitates corporate governance byincorporating the opinions of outside experts into the management of DBJ. In accordance with the amendment of the
DBJ Act in 2015, the Advisory Board is positioned as anadvisory body to the Board of Directors. The role of theAdvisory Board is not only to advise DBJ’s management onbalancing economic and social value but also to deliberateon the matter of ensuring suitable competitive relations withprivate financial institutions. I believe that the Advisory
Board has fulfilled the responsibility of performing checks,
from a third-party perspective, on the proper execution oflegally mandated Special Investment Operations, Crisis
Response Operations, collaboration with private financial
institutions, and sustainability management by DBJ.
With no end in sight to the COVID-19 pandemic, theoutlook is still uncertain. However, Japan’s strengths andproblems have become more apparent due to the COVID-19
crisis. As a nation, Japan needs to address its slow adoptionof digital technologies, the risk of over-concentration in theTokyo metropolitan area, and the need to increase theresilience of supply chains at companies.
Dialogue and cooperation with stakeholders is essential
for DBJ to be able to help solve the many issues that arise
in our rapidly changing society. I will continue to carry out
my corporate governance responsibilities by advising andfacilitating such dialogue.

International interest in sustainability, as seen in measures
such as ESG initiatives and the Sustainable Development
Goals, has grown rapidly since the adoption of the Paris
Agreement. The COVID-19 pandemic is likely to refocus
attention on the social aspect of ESG from an employee
health standpoint, in addition to the environmental aspect.
In step with the times and changing social issues, DBJ’s
solutions have included developing evaluation-based lending programs and providing risk capital through collaboration with private companies and financial institutions. I want
to see DBJ expand yet further its initiatives to balance
economic and social value while keeping aware of theinternational mood, especially during the COVID-19 crisis.
DBJ’s medium- to long-term goals for facilitating socialand economic development and achieving a sustainable
society require that it continue to implement these initiatives. Proper governance is therefore essential. The DBJ
Group’s Advisory and Special Investment Operations
Monitoring Boards support the attainment of these goals
and underpin DBJ’s unique business model. As a memberof the Advisory Board—in addition to my duties as an
outside member of the Board of Directors—I work closelywith outside experts to advise on overall management. I
will do my part in pursuing the sustainable social development and sustainability management goals sharedthroughout DBJ.

Career

CareerApril 1963:	Joined Fuji Iron & Steel Co., Ltd.
April 2000:	Representative Director and Executive Vice President of
Nippon Steel Corporation
April 2003:	Representative Director and President of
Nippon Steel Corporation
April 2008:	Representative Director and Chairman of
Nippon Steel Corporation
October 2008:	Outside Member of the Board of Directors at DBJ(current position)
October 2012:	Director, Member of the Board, and Senior Advisor of
Nippon Steel & Sumitomo Metal Corporation
June 2013:	Senior Advisor of Nippon Steel & Sumitomo Metal Corporation
November 2013:	Senior Advisor, Honorary Chairman of Nippon Steel &Sumitomo Metal Corporation
Chairman of the Tokyo Chamber of Commerce andIndustry (current position)
Chairman of the Japan Chamber of Commerce andIndustry (current position)
June 2018:	Honorary Chairman of Nippon Steel & Sumitomo Metal
Corporation (now Nippon Steel Corporation) (current position)

July 1980:	Assistant professor at the University of British Columbia,
School of Economics
April 1982:	Assistant professor at Osaka University,
School of Economics
April 1989:	Assistant professor at Tokyo University,
School of Economics
March 1993:	Professor at Tokyo University, School of Economics
April 1998:	Member of the Bank of Japan’s Policy Board
April 2005:	Professor at Tokyo University, School of Economics
October 2008:	Outside Member of the Board of Directors at DBJ(current position)
April 2017:	Professor, Faculty of International Studies, Head of Officefor New Department Planning, Kyoritsu Women’s University
Director of Tokyo University’s Center for Advanced
Research in Finance (current position)
April 2020:	Professor, Faculty of Business Studies at
Kyoritsu Women’s University (current position)
Dean of Faculty of Business Studies at
Kyoritsu Women’s University (current position)

Corporate Data

Kazuo Ueda

Outside Member of the Board of Directors

The DBJ Group’s Corporate Governance

Akio Mimura

The DBJ Group’s Strategy

Strengthening Corporate Governance for the
Advancement of Sustainability Management

The DBJ Group’s Value Creation Story

Leveraging Corporate Governance to Help
Solve Social Issues

56Compliance

Basic Stance
DBJ believes compliance is at the heart of our corporate management and also, together with our business model and strategy, form
two sides of the same coin. In addition, compliance risk must be properly managed in our organization’s overall governance and control
structure in implementing our corporate philosophy based upon societal demand and expectation. We feel that compliance is achieved
when each and every employee and executive actively engages in their work with compliance foremost on their minds.

Business Conduct and Compliance
The DBJ Group is a unique financial group which provides
various financial services such as financing, investment, consulting and advisory services, and asset management, among
others. While reinforcing collaboration within the Group, DBJ
creates proactive and advanced business and core strategies.
As a financial institution, DBJ’s first duty is to address the legitimate and logical expectations of its customers. Even in its
initiatives in Crisis Response Operations and Special
Investment Operations, DBJ carries out Customer-Oriented
Business Conduct, and these initiatives are executed while
work is performed in compliance with all laws and regulations.
To achieve our corporate philosophy, all employees and executives engage in work while pursuing both economic and social
value in accordance with our Action Guidelines, the basis for
decisions and behavior by Group employees and executives.

Compliance Framework
The DBJ Group has determined basic policies and rules forcompliance, creates and distributes compliance manuals for
employees and executives to follow, and conducts training andexplanatory sessions to spread awareness of compliance. Eachfiscal year, all DBJ Group companies design compliance programs and evaluate and implement concrete compliance actionplans tailored to their particular business characteristics.
DBJ has established relevant departments that report on
the status of compliance with laws and regulations to the
Executive Committee and Board of Directors. Complianceofficers have been assigned to each department to ensurecompliance by employees and executives at each department.

Compliance officers are in charge of internal management asinternal managers and function as contact points for reporting
compliance matters while centralizing such matters within theirdepartments. Through compliance officers, relevant departments in charge of compliance provide advice and guidance toeach department when necessary with the aim of ensuring
compliance. In order to quickly discover and resolve any compliance matters, DBJ has set up an internal reporting channel
to relevant departments and Audit & Supervisory Board members, which circumvents the normal reporting channels in organizational structures. DBJ has also created an externalreporting channel through a law office.
Internal Reporting System

Board of Directors

General Risk
Management
Committee

Executive Committee

Relevant departmentsin charge of compliance

Compliance officers at all departments
and Group subsidiaries
Staff
Regular reporting channel
Internal reporting (Compliance hotline)

Audit &
Supervisory
Board Member

57

The DBJ Group believes compliance with laws and regulations
is essential for maintaining the customer's trust and ensuring
the soundness and fitness of its business operations. We recognize compliance as one of our most important management
priorities. Employees and executives are keenly aware of DBJ’s
public mission and social responsibilities. We fairly engage inour business in good faith and in compliance with not only all
laws, regulations and rules but also social norms, for supplying
risk capital or pioneering initiatives.

Management of Customer Information
In addition to following legal requirements and rules aboutsharing customer information among Group companies, preventing insider trading, and managing conflicts of interest, the
DBJ Group has created management structures and systems
for handling customer information, with particular attention paid
to minutiae in order to maintain the customer’s trust.

https://www.dbj.jp/en/privacy.html

DBJ has created and disclosed the Declaration on Personal
Information Protection for protecting personal information. Please
access DBJ’s website for more details about this declaration.

Corporate Data

Anti-Money Laundering (AML) and Combating the Financingof Terrorism (CFT) Measures
As it develops business worldwide, the DBJ Group understands
the importance of taking measures to prevent international
money laundering and the financing of terrorism. In addition toadhering to laws and regulations, DBJ takes extra measures
to prevent global financial crimes based on the risks involved.
DBJ has systems in place to ensure that proper procedures aretaken, periodically conducts risk management operations, andthoroughly trains its employees and executives. We also strive
to continuously improve this structure by evaluating a variety
of measures.

Management of Conflicts of Interest
When DBJ and its Group companies provide customers withsuch financial services as financing, investment, consulting andadvisory, and asset management, the DBJ Group has systems
for identifying and managing transactions in order to prevent
conflicts of interest and act fully in the interests of customers,
based on the transaction type and degree of risk. Whenobtaining consent from customers for a transaction, we provide accurate and appropriate information to our customers.

The DBJ Group’s Corporate Governance

Elimination of Anti-Social Forces
The DBJ Group has a basic policy of not having any relationships with anti-social forces, and resolutely coping with them incooperation with the police and other external institutions. Ourrules and training programs have thus been carefully crafted toprevent relationships with anti-social forces. DBJ thoroughly
assesses and manages this risk for each project and takes
appropriate measures when necessary while communicatingwith special external institutions.

The DBJ Group has identified “the customer's perspective” as a
key element of its Action Guidelines. By taking “the customer’s
perspective,” we endeavor to improve customer protections
and convenience. Furthermore, we have created basic policies
for customer protections from the standpoint of ensuring thesoundness and fitness of our operations. Accordingly, we havetaken a management posture for ensuring customer protections. Employees and executives provide support to customers
by explaining and providing appropriate and adequate information to them.

The DBJ Group’s Strategy

Measures to Prevent Insider Trading
For providing various financial services including investments
and loans, the DBJ Group believes that complying with insider
trading regulations is essential to maintaining trust. For example,
we have created rules for employees and executives to follow
when trading in securities. Moreover, DBJ has establishedsystems for preventing insider trading, as demonstrated by ourformulation of strict procedures for confirming and executing
transactions in our investment operations. In research operations, we manage and handle corporate information carefully.

Customer Protection Management

The DBJ Group’s Value Creation Story

Compliance Practices

58

Risk Management

Risk Management System
DBJ has a risk management system in place designed tohandle a variety of specific risks, with the aim of maintaining
the soundness and creditability of management as it pursues
business based on management plans. Specifically, risks are
identified, evaluated, monitored, and controlled in each risk
category and in comprehensive risk areas, and are managed
within the scope of our management capabilities from a comprehensive understanding of each risk.
The Board of Directors sets out basic policies for comprehensive risk management, receives reports about risk management conditions, and ensures the effectiveness of risk
management functions. The Executive Committee creates
related rules based on these basic policies and deliberates onmatters of importance that directly relate to management policies. In line with these basic policies and rules, the ALM & Risk
Management Committee discusses and makes decisions on
matters essential to the risk management system for financial
risk, such as credit risk, while the General Risk Management
Committee deliberates on non-financial risk, such as administrative risk. Both committees regularly, and whenever necessary, conduct risk monitoring.

Overview of Risk Management System
Board of Directors

Committee on Investment and Loan Decisions
New Operation Screening Committee

Executive Committee

Advisory Panel on Investments and Loans
Sustainability Committee
Investment Management Committee

ALM & Risk Management Committee

General Risk Management Committee

Credit risk

Operational risk

Investment risk

System risk

Country risk

Compliance and legal risk

Market risk

Countermeasures for anti-social forces

Liquidity risk

Countermeasures for laundering money andfunding terrorist organizations

Settlement risk

Customer protection management

Comprehensive Risk Management
At DBJ, we measure the amount of each type of risk using uniform and logical methodologies to the greatest extent possible, whileconsidering the uniqueness of each risk category. As the sum total of this risk, comprehensive risk is managed within the context ofour risk guidelines. These risk guidelines are determined by the Executive Committee and reflect risk conditions in the existing portfolio and near-term business plans, within the framework for capital allocation based on the amount of our own capital.

Credit Risk
Credit risk refers to the risk of sustaining losses resulting from adecline in or loss of the value of assets due to deterioration in
the financial condition of the borrower. DBJ provides corporateloans and non-recourse loans, making credit risk acquisition asource of profits. As such, it represents a significant risk category, and DBJ conducts credit management of individual
projects as well as bank-wide portfolio management,
accordingly.
Credit Administration of Individual Loans 
When making an investment or loan, DBJ examines the entity’s
project viability and the project’s profitability from a fair andimpartial standpoint. Based on the Banking Act and the Act on
Emergency Measures for the Revitalization of the Financial
Functions (Act No. 132 of 1998), DBJ carries out independent
asset assessments in an effort to properly grasp credit risk ina timely fashion. The results of self-assessments are subject
to an audit by an auditing corporation and are reported to
management.
Credit risk and amounts are monitored to confirm that they
are within the limits established for individual borrowers.

The sales and credit analysis departments hold separate
roles in the screening and administering of credit for individual
projects, and each department keeps the operations of theother in check.
The Committee on Investment and Loan Decisions meetsas needed to deliberate important issues concerning the management and operation of individual projects.
These mutual checking functions serve to ensure the appropriateness of the finance operation and management system.
Borrower Rating System 
DBJ’s borrower rating system measures creditworthiness by
combining an evaluation point rating and a borrower category
rating, with the results quantifying a potential client’s credit
circumstances.
The evaluation point rating selects indicator and evaluation
categories that are common across all industries, scoring thecreditworthiness of the potential borrower quantitatively andqualitatively. On the other hand, the borrower category rating
measures specific items related to the borrower, looking at theborrower’s realistic financial condition, cash flows, and debt
repayment history, generating a comprehensive assessment ofa borrower’s repayment capacity.

59

category, and the collateral or guarantee status. Such assessments help DBJ establish timely and appropriate amortization
schedules and reserve levels.

Borrower Rating Classifications
Borrower
ratingBorrower category

Claims classified under the
Financial Revitalization Act

Definition

1–8

Borrowers with favorable business conditions who have been confirmed to have no particular
problematic financial circumstances.

Borrowers requiringcaution

9–11

Borrowers in this category are experiencing week or unstable business conditions, or are having
issues with their finances. These borrowers need to be managed with caution.

Substandard
borrowers

12

Normal claims

Either some or all of the debt of these borrowers requiring caution is under management.

Substandard claims

Borrowers in danger
13of bankruptcy

Borrowers in this category are having financial difficulties but are not bankrupt.
Management improvement plans and the like are progressing poorly, and these borrowers arehighly likely to fall into bankruptcy.

Doubtful claims

Effectively bankrupt
borrowers

14

Although not legally or formally in bankruptcy, these borrowers are experiencing severe financial
difficulties and are realistically falling into bankruptcy as their lack of potential for restructuring
has been confirmed.

Bankrupt borrowers

15

These borrowers are in bankruptcy, legally and formally. Specifically, these borrowers are inbankruptcy or liquidation, under corporate reorganization, bankruptcy proceedings or civil
rehabilitation, or have had transactions suspended by a bill clearinghouse.

Investment Risk

Credit Management of Individual Projects Investment decisions for individual projects are made after exit
strategies are determined in case a downside scenario materializes, and targets are set for returns based on the type ofinvestment, which is also examined for managing credit risk.
In project management, DBJ periodically monitors every
project and has established the Chief Investment Management
Office to enhance monitoring of key projects and improve themanagement of investment risks in the overall portfolio.

Overview of Investment Management System
Executive Committee
Decision on
investment policy

Type

Major risks

Returns

Corporate mezzanine
financing

Credit risk, etc.

Dividends, etc.

Corporate investment(including listed shares)

Business risk
Market risk

Capital gains

Real estate andinfrastructure, etc.

Risk of change
in asset value
Operating risk at
operating entities

Investment Management Committee

Project information

Income gains

Monitoring
Key projects
Debate overdirection

Deliberation on
investment policy

Monitoring data,
etc.

Chief Investment Office

Loan and Investment
Management Division

Chief Investment
Management Office

Investment
recommendation

Information gathering andhub function

Portfolio management andindividual project monitoring

Corporate Data

Investment risk refers to the risk of sustaining losses resulting
from a decline in or loss of the economic value of assets due toworsening financial conditions for entities receiving funds andto changing market environments. DBJ’s investments include
the provision of mezzanine and equity financing, particularly tounlisted entities, such as corporations, funds, infrastructure,and real estate. As a source of profits, investments represent
one of DBJ’s most significant risk categories. DBJ makes
investment decisions and manages individual investments aswell as its bank-wide portfolio accordingly.

Investment Policy 
The Executive Committee determines our investment policy
following deliberations each fiscal year by the Investment
Management Committee, based on our corporate philosophyof striking a balance between social value and economic value.
This policy takes into consideration the balance in risks andreturns in the overall portfolio, while also reflecting the externalbusiness environment, including changes in market conditions
and industrial structure, and a performance analysis of theexisting portfolio.

The DBJ Group’s Corporate Governance

Portfolio Management 
DBJ performs a statistical analysis of data based on borrower
ratings and calculates the loan portfolio’s overall exposure tocredit risk. Credit risk exposure is classified as unexpected loss
(UL), the maximum loss that could be incurred at a certain rateof probability minus the expected loss (EL), the average loss
expected during a specific loan period.
Large borrowers are identified based on standardized loanbalances defined by the borrower’s rating and monitored as
required in accordance with management policies.

Claims in bankruptcy,
reorganization claims,
and similar claims

The DBJ Group’s Strategy

Normal borrowers

The DBJ Group’s Value Creation Story

Asset Self-Assessment System 
Asset self-assessments are used to define asset classifications
that will offset recoverability risk or the degree of risk of value
loss based on the borrower rating, the corresponding borrower

60

Portfolio Management 
The main assets in DBJ’s investment portfolio are unlisted
stock and mezzanine financing, and risk exposure is calculated
focusing on risk characteristics in each category of investment
and on differences in recovery methods.
More specifically, assets we aim to earn returns on fromprimarily business cash flows are evaluated with a focus on
credit risk. On the other hand, assets on which we expect tosee returns by selling to a third party or the market are evaluated in the context of market risk. In this way, risk exposure is
calculated by applying evaluations of credit risk and market risk.

Market Risk
The primary focuses in terms of market risk are interest raterisk and exchange risk. DBJ classifies market risk as passive
risk pertaining to investment and loan activities. DBJ does nothave any trading-related risk because it does not engage in
trading (specified transactions).
Interest Rate Risk Interest rate fluctuations can create mismatches on rates ofinterest on assets and liabilities or on interest periods, creating
the risk of reduced profits or the risk of losses. Interest rate risk
can reduce the economic value of DBJ’s assets or interest
income.
Based on monitoring through multifaceted indices, such as
value at risk (VaR) and interest rate sensitivity analyses (duration
and basis point value), as well as ALM policies established by
the ALM & Risk Management Committee, DBJ conducts comprehensive management of current assets and liabilities tooptimize net interest expenses and economic value by adequately controlling interest rate risk and financial liquidity risk.
DBJ engages in interest rate swaps to control interest raterisk. Counterparty risk in these swap transactions is managed
within the limits of the creditworthiness of the counterparty. DBJ
also seeks to reduce risk through margin transfers by means ofa centralized exchange and mutual credit support annex.
Exchange Risk 
Exchange risk is the risk of loss due to volatility in exchange
rates, and this risk affects entities holding a net excess of assets
or liabilities denominated in foreign currencies. Exchange risk
derives from financing in foreign currencies and issuing foreign
currency bonds. However, DBJ uses exchange swaps andother instruments to limit this risk in terms of assets and liabilities denominated in foreign currencies at a net-base position.

Liquidity Risk
Liquidity risk is the risk of a mismatch occurring in the periods
when funds are used and raised or of an unexpected outflow
of funds, causing differences in the flow of funds (cash liquidityrisk). Such situations make securing funds difficult and create
situations in which interest rates on borrowed funds are substantially higher than usual rates. At other times, because of
market complexities, entities in these circumstances may
become unable to participate in market transactions, compellingthem to conduct transactions under substantially less favorable
terms than otherwise would be the case. The risk of losses forthese reasons is known as market liquidity risk.
As its main methods of acquiring funds, rather than carryingout short-term funding by issuing commercial paper, DBJ relieson the stable procurement of long-term funds from theJapanese government’s Fiscal Investment and Loan Programand government-guaranteed bonds while issuing bonds andtaking out long-term loans. To prepare for unforeseen cash flow
crunches caused by shocks to financial markets, DBJ manages funds to ensure sufficient cash on hand to cover planned
capital outflows under envisioned stress conditions. DBJ has
formulated countermeasures based on contingency plans andhas created different categories for fund operation modes
based on the degree of constriction in cash flows.

Operational Risk
DBJ defines operational risk as the risk of loss arising frominternal processes, people or systems that are inappropriate or
nonfunctioning, or from external events. DBJ works to establish a risk management system to minimize risk and prevent
potential risk from materializing. The General Risk Management
Committee has been established to deliberate topics concerning operational risk management.
Within operational risk management, DBJ conducts administrative risk management and system risk management as
described below.
Administrative Risk Management 
Administrative risk refers to the risk of sustaining losses resulting from employees neglecting to perform their duties correctlyor from accidents, fraud, and the like. To reduce or prevent
administrative risk, DBJ prepares manuals, performs checks on
administrative procedures, provides education and training, anduses systems to reduce the burden of administrative duties.

61

system risk centrally, based on its system risk management
regulations. By determining security standards from a variety ofviewpoints—from information system planning and development to operation and use—the department extends the risk
management system bank-wide and addresses appropriate
system risk management operations.

Stress Tests
Based on the latest forecasts for economic conditions,these stress tests involve scenarios that also take into account
DBJ’s financial position. We also verify the adequacy of our
cash liquidity risk management, through reevaluations of ourcapital adequacy by factoring in various scenarios for how risk
exposure increases as a result of erosion in our own capitaland of changes in our portfolio of loans and investments.

The DBJ Group’s Strategy

In addition to managing comprehensive risks based on risk exposure, DBJ performs stress tests on its own capital adequacy inorder to ensure uninterrupted financial functions, including Crisis
Response Operations, while maintaining the soundness of management under stressful conditions. These stress tests are also
used to evaluate the degree of impact on our own capital fromthe creation of and changes to medium-term management plans
and business plans, as well as in the examination of possible
responses to various management issues.

The DBJ Group’s Value Creation Story

System Risk Management 
System risk refers to the risk of loss due to a computer system
breakdown or malfunction, system defects, or improper computer use. DBJ has implemented the following internal processes to optimize system risk management and properly
manage risk with regard to system risk. The System Risk
Management Division is responsible for managing DBJ’s

Business Continuity Initiatives

We have prepared a variety of measures to ensure business
continuity.
Enhanced System Robustness 
We have ensured advanced security levels at the main centerand created a backup center to operate in the event that themain center ceases to operate.
Multilayered Communication Procedures 
We have introduced a safety confirmation system to quickly
determine the whereabouts and status of executives andemployees even at night and on holidays. In addition, we have
distributed satellite telephones to key locations and personnel
to ensure multilayered communication procedures.
Chain of Command and Delegation of Authority 
To assure that decision-making concerning the continuity ofcore operations is prompt and certain in the event it becomes

necessary to execute the plans of the Disaster Response
Committee, we have put in place a chain of command and analternative hierarchy by which authority can be delegated.
Clarification of Initial Response and Procedures forContinuing or Recovering Core Operations
For individual business units, we have established in advancethe procedures for the initial response and the continuation or
recovery of core operations so that relevant divisions can
respond quickly and with certainty on core operations evenwhen in a state of confusion.

Initiatives to Maintain or Improve BCP Viability
DBJ conducts various types of instruction and training of executives and regular employees to maintain or improve the viability of its BCP. Furthermore, employing a plan-do-check-act
cycle, we revise the BCP to reflect training results and recent
information, and the Executive Committee reviews it regularly
and amends it as necessary.

Corporate Data

Measures to Ensure Business Continuity

The BCP describes in an easy-to-understand format therole of the Disaster Response Committee, work priorities, andspecific actions and procedures to be taken in the event of adisaster. When drawing up policies for business continuity andrestoration, the Company envisions specific incidents, such as
an earthquake underneath the Tokyo metropolis or a novel
virus outbreak, and methodically decides how to respond to
anticipated damage in each disaster scenario.

The DBJ Group’s Corporate Governance

DBJ has prepared a business continuity plan (BCP) to protect
the interests of its stakeholders, including its clients, its shareholder, and its executives and employees, as well as to fulfill its
social mission. The BCP aims to ensure the continuity andrapid recovery of core operations in the event of emergencies,
such as natural disasters (in particular, large-scale earthquakes),
influenza and other pandemics, system failures, and power
outages.

62

Response to the TCFD Recommendations

Since the adoption of the Paris Agreement in 2015, addressing
climate change has become a major issue for Japan and therest of the world. Climate change is one of the management
issues that takes priority at DBJ as part of its sustainability
management efforts. While engaging in dialogue with its customers and other stakeholders, DBJ has endeavored to reducegreenhouse gas emissions in its business activities through its

Environmentally Rated Loan Program (page 45) and DBJ
Green Building Certification (page 25).
DBJ will continue to enact climate change countermeasuresand, as a financial institution, we will support our customers’
efforts focusing on the transition to a low-carbon or decarbonized society.

Promotion of Climate-Related Information Disclosure Based on the TCFD’s Recommendations
In June 2018, stemming from an awareness of the importanceof disclosing financial information related to climate change,
DBJ declared its agreement with the recommendations of the
Task Force on Climate-related Financial Disclosures (TCFD),
established by the Financial Stability Board (FSB). In May 2019,
DBJ became a member of the TCFD Consortium of Japan, a
new platform for financial institutions and business corporations to discuss and promote the TCFD’s recommendations.
DBJ played a leading role in discussions about creating
Guidance for Utilizing Climate-related Information to Promote
Green Investment (Green Investment Guidance).* While receiving support from the Ministry of the Environment’s program foranalyzing climate risks and opportunities
in line with the TCFD’s recommendations,
DBJ continuously strives to identify its
own risks and opportunities associatedwith climate change and examine ways
to augment the disclosure of information
based on the TCFD’s framework.

Guidance for Utilizing
Climate-related Information to
Promote Green Investment(Green Investment Guidance)

October 8, 2019

TCFD Consortium* Announced at the TCFD Summit held on October 8,
2019, as a guide on the perspectives needed byinvestors and other stakeholders for understanding
the information disclosed based on the recommendations of the TCFD

Green Investment
Guidance

Governance

The DBJ Group engages in business activities while considering its impact on the environment and society.
In this light, DBJ created its Policy on Sustainability in May 2017 with the objective of contributing to therealization of a sustainable society while balancing economic value and social value. On the Sustainability
Committee (see page 50), directors and executives discuss and monitor the risks, opportunities, and actions
related to climate change. The findings of the Sustainability Committee are reflected in the Group’s businessstrategies, risk management, and decision-making process for investments and loans.

Strategy

When crafting its long-term vision, Vision 2030 (see page 9), DBJ identified climate change and natural
resources and energy as externalities that could have a major impact on the stakeholders of the DBJ Group.
DBJ has realized that responding to the various climate-related risks and growth opportunities is a key
aspect of its business strategies.
In fiscal 2019, with assistance from the support programs of the Ministry of the Environment, DBJ begana scenario analysis to evaluate new business opportunities and business resilience to uncertainties related toclimate change. A particular focus was placed on evaluating the transitional opportunities (Please refer to thenext page for details.). DBJ will continue to refine and upgrade its analysis and expand information disclosure
within a comprehensive framework that includes consideration of physical risks and other factors.

Risk Management

DBJ identifies, evaluates, monitors, and controls various risks associated with climate change. In April 2019,
in recognition of the need to consciously evaluate and monitor environmental and social risks related tolarge-scale projects, DBJ created the Environmental & Social Assessment Office within the Structured
Finance Department. Based on the Equator Principles, DBJ identifies, evaluates, and manages environmental and social risks.

Metrics and Targets

DBJ gauges the progress of its environmental initiatives in terms of the Greenhouse Gas Protocol’s Scope 1(direct) and Scope 2 (indirect) categories, which are concerned with the amount of greenhouse gas (GHG)
emissions associated with corporate activities. Specific targets are set for DBJ and for each department inregard to the environmental aspects of investment and loan operations and environmental protection initiatives such as educational programs that encourage dialogue on relevant issues. In these ways, DBJ works
systematically and consistently to help preserve the environment.

63

among other factors. In light of these uncertainties aboutsocioeconomic trends around the world, DBJ has adopted theShared Socioeconomic Pathway (SSP)* approach to devise its
scenarios to use as future assumptions and conduct an analysis based on projected socioeconomic trends in scenarios
where global temperatures rise 1.5°C, 2.0°C, and 4.0°C.

Analysis Conducted with Focus on Transitional
Opportunities from Development and Proliferationof Climate Change-Mitigation Technologies* Shared Socioeconomic Pathways (SSPs): SSPs are socioeconomic scenarios
for climate change that factor in changes in the external environment, such as
population demographics and GDP, created by a consortium of five international
research institutions, including the National Institute for Environmental Studies(based in Japan). The diverse avenues for possible development in society andthe economy are put into five categories that reflect the level of difficulty in
mitigating and adapting to climate change.

Analysis and Evaluation of Growth Opportunities
by Scenario in Each Sector

Use of Shared Socioeconomic Pathways in
Scenarios
Even assuming a uniform rise in temperatures occurs as a resultof global warming, we believe there will be varied degrees of
expectations for technological progress and social acceptanceof solutions for the issue of climate change, depending on
population and economic growth forecasts in each country,

Summary of Scenario Analysis

Transitional risks• Policy and Legal• Market

Climate-related risks• Technology• Reputation• Resource Efficiency• Energy Source• Products / Services• Markets• Resilience

Reflection in strategic planning and risk management
Financial impact

Physical risks• AcuteOpportunities

Climate-related opportunities

Disclosure in financial reports, etc.

• Chronic

With a focus on transitional opportunities, analyze and evaluate growth opportunities in each scenario for covered sectors
Covered Sectors

SSP Scenarios

Relevant Technologies

Identify factors related to climatechange in covered sectors andevaluate their level of importance

Deploy SSPs in the scenarios with consideration paid to recent
government policy and the socioeconomic environment

Based on an evaluation of relevant technologies, qualitatively
and quantitatively analyze growth opportunities in each sector

Selection of Four Scenarios

Five experimental types of technologies in focus• SSP1 Global decarbonized society (1.5°C increase)• SSP3 Regionally segmented society with economic disparities (4.0°C increase)• SSP5-1 Low-carbon society with fossil fuels (2.0°C increase)• SSP5-2 Traditional, developed society based on fossil fuels (4.0°C increase)
Strong
Socio-economic
challenges for mitigation
Weak

SSP5
Fossil-fueled Development

Carbon capture and storage
Electric vehicles

Renewable energy

Biomass

Hydrogen

SSP3
Regional Rivalry

SSP2
Middle of the Road
SSP1
Sustainability
Socio-economic challenges for adaptation

SSP4
Inequality
StrongSource: O’Neill et al. (2014)

Corporate Data

TCFD examples of climate-related risks and opportunities

The DBJ Group’s Corporate GovernanceFor each envisioned scenario, DBJ analyzes the degree of
impact from the five aforementioned types of technologies inboth qualitative and quantitative terms, and conducts a comprehensive evaluation of growth opportunities and businessresilience in each analyzed sector, with consideration madefor Japan’s strengths.
Starting with this analysis, DBJ will continue to refine andadvance analytical methods in an attempt to better its understanding of climate change and related risks in the external
environment. While engaging in deeper conversations with­customers and other stakeholders, DBJ will provide financial
assistance with the aim of moving closer to a low-carbon or
decarbonized society, in addition to taking appropriate actions toaddress climate change in terms of opportunities that may arise.

The DBJ Group’s Strategy

Financial institutions must draw up various socioeconomic forecasts while taking into account future uncertainties associatedwith climate change, and then consider changes to their portfolios and other actions accordingly. As an initial approach toscenario analysis, DBJ analyzed and evaluated the possible
impact on its operations through 2050 with a focus on transitional opportunities brought about by government policies andregulations, as well as technological innovations toward a lowcarbon or decarbonized society. More specifically, DBJ isemphasizing five types of technologies (carbon capture andstorage, electric vehicles, biomass, hydrogen, and renewableenergy) on an experimental basis from among the technologies
strongly related to climate change. For each scenario, DBJ
analyzes and evaluates growth opportunities and businessresilience in sectors covered by the analysis, with due consideration paid to technological development and proliferation.

The DBJ Group’s Value Creation Story

Initiatives in Fiscal 2019: Start of Scenario Analysis

64

Financial and Non-Financial Highlights

Financial Highlights
Balance of Investments and Loans(Non-Consolidated)

Capital Adequacy Ratio* (Consolidated)(¥ billion)

(%)
20

1,800

17.54

1,200

809.0

854.6

952.1

1,129.3

13,724.3

13,772.3

13,467.7

13,584.6

17.22

16.81

17.26

16.65

1,454.4
15

12,981.6

Target of Fourth Medium-Term Management Plan: about 14%

10

600
5

0

2015

2016

Loan balance

2017

2018

2019 (Fiscal year)

0

2015

2016

2017

2018

2019 (Fiscal year)* Common equity Tier 1 risk-weighted capital ratio

Investment balance

The balance of investments and loans (non-consolidated) was approxi-

The capital adequacy ratio (consolidated) was 17.26% as of the end ofmately ¥14.4 trillion as of the end of fiscal 2019. The loan balancefiscal 2019. This ratio may decrease as we supply risk capital for pur-

totaled or around Totaled or around ¥13.0 trillion as of the end of fiscal

poses including strengthening our investment operations, but we will

2019, reflecting an increase in the balance of mezzanine financing andnonetheless do our best to maintain a sound capital adequacy ratio.

certification program loans, and a decrease in general loans outstanding, including Crisis Response Operations, as of March 31, 2020.
As a result of focusing on investment operations, the investment
balance has increased about ¥650.0 billion over the past five fiscal
years, reaching roughly ¥1.5 trillion as of the end of fiscal 2019.

Gross Ordinary Income (Consolidated)(¥ billion)
250

20.3
86.6

200

28.3

150

57.3
100

101.2

23.6
65.8

25.2
81.5

23.6
74.1

85.4

84.8

80.9

76.6

2016

2017

2018

2019

50

0

–50

Loans

2010
Investment

2011

2012

2013

2014

2015

(Fiscal year)

Fee and commission income

In fiscal 2019, DBJ focused on high-value-added loans in loan operations, but lending yields declined owing to the low interest rate environment, and theaverage loan balance contracted, leading to a decrease in loan profits. In investment operations, profits declined, but DBJ worked to build a portfolio thatgenerates stable earnings on investments in infrastructure and other areas, and recorded capital gains of ¥74.1 billion upon exiting a number of investments. Accordingly, gross ordinary income was ¥174.4 billion.

65

Balance of Investments and Loans
in Renewable Energy

Collaboration and Cooperation with Regional Financial
Institutions (No. of Collaborative Funds with Regional
Financial Institutions)(¥ billion)(No. of funds)
50

250

241.9
40

200

42

186.9

36

150

30

110.2

20

50

0

30
25

124.2

10

2016

2017

2018

2019

(Fiscal year)

0

2016

2017

2018

2019

(Fiscal year)

As of the end of fiscal 2019, the DBJ Group had created 42 collabora-¥241.9 billion as of the end of fiscal 2019. With renewable energy

tive funds with regional financial institutions. The DBJ Group anddrawing more attention as the world moves away from carbon-based

regional financial institutions, each with its local customer base, supply

energy sources, the DBJ Group will provide financial support to ven-risk capital to local companies. We draw on the respective strengths oftures in solar power, onshore and offshore wind power, biomass, andeach financial institution with the aim of spurring initiatives to addresshydropower based on the advantages of each type of energy source,

regional issues.

with a view toward achieving the Japanese government’s goal of a
22%–24% ratio of renewable energy by 2030.

Human Resource Development(No. of In-House Training Sessions)No. of Engagements with Customers for
DBJ Certification Programs(No. of sessions)(No. of engagements)
Corporate Data

60

150

54
48
43

40

100

113

116

2016

2017

121

119

2018

2019

39

20

0

50

2016

2017

2018

2019

(Fiscal year)

0

The DBJ Group’s Corporate GovernanceThe balance of investments and loans in renewable energy stood at

The DBJ Group’s Strategy

100

The DBJ Group’s Value Creation Story

Non-Financial Highlights(Fiscal year)

The DBJ Group provides abundant opportunities for training throughAt the request of our customers, the DBJ Group helps customers

combinations of rank-based and business-related training programs. In

participating in DBJ certification programs (see page 45) identify thefiscal 2019, DBJ updated its training programs to foster globally mindedissues they need to address and develop more sophisticated manage-

personnel, and held seminars about balancing work with child-rearing

ment by providing objective, face-to-face feedback regarding theirand elderly care, while also offering training in support of the diverse

assessment results. Through dialogue on more than 100 occasions in aworkstyle of its employees. We will continue to train our humantypical year, we help these customers make further strides in the prac-

resources while utilizing online courses and other resources.

tice of sustainability management.

66

Consolidated Financial Summary

Reference (Long-Term Profits / Losses, Financial Condition)
2008–20102011–2013

First Medium-Term Management Plan:
CHALLENGE 2010

Second Medium-Term Management Plan:
Endeavor 2013

Fiscal 2009

Fiscal 2010

Fiscal 2011

Fiscal 2012

(April 1, 2009 to
March 31, 2010)(April 1, 2010 toMarch 31, 2011)(April 1, 2011 toMarch 31, 2012)(April 1, 2012 toMarch 31, 2013)

Total income

347.9

345.1

318.7

340.0

Income before income taxes

51.9

95.0

99.2

115.6

(26.7)

(2.9)

(1.3)

30.0

Extraordinary profit / loss

(0.8)

9.3

10.9

0.6

Income before income taxes and minority interests

51.1

104.3

110.2

116.2

Total income taxes(10.8)(1.3)(31.9)(44.5)Net income attributable to owners of the parent

39.8

101.5

77.3

71.3

Total dividend amount

10.0

50.0

37.3

35.2

Total assets

15,595.7

14,845.2

15,579.8

16,248.7

Loans

13,514.6

13,031.4

13,645.4

13,918.2

Securities

1,289.4

1,165.5

1,176.6

1,357.0

Total liabilities

13,268.2

12,435.2

13,118.8

13,710.1

Borrowed money

9,082.4

8,576.4

9,170.5

9,448.3

Debentures and corporate bonds

3,746.3

3,629.3

3,671.8

3,924.5

Total equity

2,327.5

2,409.9

2,461.0

2,538.5

Common stock

1,181.1

1,181.1

1,187.7

1,206.9

Total capital ratio (Basel II, BIS standard)

19.13%

20.50%

18.56%—

Total capital ratio (Basel III, BIS standard)

—

—

—

15.52%

Ratio of risk–monitored loans (Banking Act basis)

5.07%

1.28%

1.47%

1.23%

Return on assets (ROA)

0.27%

0.67%

0.51%

0.45%

Return on equity (ROE)

1.82%

4.31%

3.18%

2.86%

Number of employees

1,181

1,203

1,270

1,315

3,793.1

2,116.6

2,927.0

2,652.4

3,682.0

2,034.4

2,849.0

2,524.5

Investments

111.1

82.2

78.0

127.8

Funds raised (flow)

3,793.1

2,116.6

2,927.0

2,652.4

840.9

1,212.8

691.7

502.2

Consolidated

Of which, equity and fund–related gains / losses

Investment and fund–raising flow (non–consolidated)
Loans and investments (flow)
Loans

Of which, recovered, etc.

67

2017–2019

Third Medium-Term Management Plan:
Supporting Japan’s Sustained Growth as a Global Innovator

Fourth Medium-Term Management Plan:
Initiate Change, Create the Future

Fiscal 2016

Fiscal 2017

Fiscal 2018

Fiscal 2019

(April 1, 2016 to
March 31, 2017)(April 1, 2017 toMarch 31, 2018)(April 1, 2018 toMarch 31, 2019)(April 1, 2019 toMarch 31, 2020)

361.6

339.0

358.6

285.4

291.7

301.2

289.1

165.7

153.0

185.1

122.5

127.1

128.1

78.9

30.3

32.1

70.8

41.1

39.7

40.5

7.2

0.2

0.6

1.5

(0.0)

2.2

(1.3)

4.0

166.0

153.6

186.7

122.4

129.4

126.7

83.0

(40.8)(58.9)(57.6)(34.6)(35.0)(33.5)(31.5)

124.3

92.7

128.9

87.6

91.9

91.9

50.4

30.8

22.5

29.2

19.7

22.1

21.0

9.9

16,310.7

16,360.6

15,907.1

16,570.4

16,952.2

17,079.5

17,693.6

13,838.4

13,261.3

12,952.5

13,039.5

12,725.2

12,923.9

12,415.9

1,637.5

1,887.9

1,803.0

1,750.3

1,866.4

1,961.0

2,374.2

13,682.9

13,613.3

13,022.9

13,584.2

13,842.1

13,783.2

14,259.6

9,182.6

8,598.2

7,892.1

8,472.3

8,574.1

7,987.8

8,070.9

4,237.4

4,569.3

4,727.9

4,711.8

4,932.9

5,296.9

5,696.8

2,627.7

2,747.2

2,884.2

2,986.2

3,110.1

3,296.3

3,434.0

1,206.9

1,206.9

1,000.4

1,000.4

1,000.4

1,000.4

1,000.4

—

—

—

—

—

—

—

15.83%

16.80%

17.87%

17.47%

16.94%

16.74%

17.37%

0.99%

0.77%

0.64%

0.54%

0.47%

0.40%

0.46%

0.76%

0.57%

0.80%

0.54%

0.55%

0.54%

0.29%

4.83%

3.47%

4.60%

2.99%

3.03%

2.88%

1.51%

1,391

1,407

1,435

1,546

1,631

1,650

1,703

2,943.3

2,544.2

3,027.7

4,012.6

3,153.4

3,790.8

3,951.8

2,805.1

2,262.7

2,861.3

3,805.8

2,973.6

3,490.4

3,401.5

138.2

281.4

166.3

206.7

179.7

300.4

550.3

2,943.3

2,544.2

3,027.7

4,012.6

3,153.4

3,790.8

3,951.8

1,307.5

1,129.9

1,639.7

1,526.1

1,005.0

2,051.4

1,546.1

Corporate Data

Fiscal 2015
(April 1, 2015 toMarch 31, 2016)

The DBJ Group’s Corporate GovernanceFiscal 2014
(April 1, 2014 toMarch 31, 2015)

The DBJ Group’s Strategy

Fiscal 2013
(April 1, 2013 toMarch 31, 2014)

The DBJ Group’s Value Creation Story(¥ billion)

2014–2016

68

Timeline

Japan Development Bank, the Hokkaido-Tohoku Development Finance Public Corporation,and the Development Bank of Japan
Year

Month

Event

1951

April

Japan Development Bank (JDB) establishedJDB branches opened in Osaka (now the Kansai Branch), Sapporo (now the Hokkaido Branch),
Nagoya (now the Tokai Branch), and Fukuoka (now the Kyushu Branch)

1952
1956

June

Hokkaido Development Finance Public Corporation established

1957

April

Hokkaido Development Finance Public Corporation, reorganized as the Hokkaido-Tohoku Development
Finance Public Corporation (HTDFP) branches, opened in Sapporo (now the Hokkaido Branch) andSendai (now the Tohoku Branch)
JDB branch opened in Takamatsu (now the Shikoku Branch)

1960

JDB branches opened in Hiroshima (now the Chugoku Branch) and Kanazawa (now the Hokuriku Branch)

1961
1962

April

JDB representative office opened in New YorkJDB representative offices opened in Kagoshima (renamed Minami-Kyushu Branch in October 1999) and Matsue

1963
1964

July

1972

January

1985

June

1987

September

JDB representative office opened in London
HTDFP representative office opened in Niigata (renamed Niigata Branch in July 1989)
The Japan Development Bank Law revised1)	Investment function (pertaining to business in such areas as research and development,
urban development, and energy use stipulated by government ordinance) added
2) R&D fund investment function added
Low interest rate loan system funded partially by sale of NTT shares created by JDB and HTDFP
JDB representative offices opened in Oita, Matsuyama, Okayama, and Toyama
HTDFP representative offices opened in Hakodate and Aomori

1989

JDB loans to assist disaster recovery commenced

1995

February

1997

SeptemberBill entitled “Pertaining to Consolidation and Rationalization of Special-Purpose Companies, etc.,” approvedby the Cabinet (decision dissolving JDB and HTDFP and consolidating them as a new bank approved)

1998

December

JDB and HTDFP loans in response to changes in the financial environment commenced(March 31, 2001, sunset clause introduced)

1999

June
October

The Development Bank of Japan Law (Law No. 73 of 1999) approved
All rights and responsibilities of JDB and HTDFP and all financing operations of Japan Regional Development Corporation andJapan Environment Corporation transferred to the Development Bank of Japan
DBJ representative offices opened in Kushiro and Singapore
The Development Bank of Japan Law revised (additional spot inspections by the Financial Services Agency introduced)

2002

May

2005

December

2006

May

The Act on Promotion of Administrative Reform for Realization of Small and Efficient Government(Act No. 47 of 2006) approved

June

Policy-Based Financing Reform Plan decided upon by DBJ head office for the Implementation of Policy Finance Reform

2007

June

The Development Bank of Japan Inc. Act (Act No. 85 of 2007) approved

Important Policy of Administrative Reform approved by the Cabinet

Development Bank of Japan Inc.
Year

Month

2008

October

Event

Development Bank of Japan Inc. (DBJ) established (Capital: ¥1 trillion)
Crisis Response Operations begun by DBJ as a designated financial institution

December
2009

June

Act for Partial Amendment of the Development Bank of Japan Inc. Act (Act No. 67 of 2009) approved

September

Capital increased to ¥1,103,232 million

November

DBJ Europe Limited launched

2010

March

2011

May

2012

DBJ Singapore Limited launched

Capital increased to ¥1,181,194 million
The Development Bank of Japan Inc. Act partially amended based on establishment of the Act for Extraordinary Expenditure andAssistance to Cope with the Great East Japan Earthquake (Act No. 40 of 2011)

December

Capital increased to ¥1,187,364 million

March

Capital increased to ¥1,187,788 million

June

Capital increased to ¥1,198,316 million

December

Capital increased to ¥1,206,953 million

2014

June

DBJ Investment Consulting (Beijing) Co., Ltd. (formerly Japan Asia Investment Consulting (Beijing) Co., Ltd.) converted to wholly
owned subsidiary

2015

May

Act for Partial Amendment of the Development Bank of Japan Inc. Act (Act No. 23 of 2015) approved
Special Investment Operations started
Advisory Board positioned as an advisory body to the Board of Directors
Special Investment Operations Monitoring Board established

AugustCapital reduced by ¥206,529 million, and crisis response reserve increased by the same amount2018

October

DBJ Americas Inc. launched

2020

May

Act for Partial Amendment of the Development Bank of Japan Inc. Act (Act No. 29 of 2020) approved

69

Shareholder Information

As of March 31, 2020
Address

Number of shares held (thousands of shares)

Percentage of total equity (%)

Finance Minister

1-1, Kasumigaseki 3-chome, Chiyoda-ku, Tokyo

43,632100.00Total—

43,632100.00

Summary of Changes to the DBJ Act after Conversion toa Joint-Stock Company

Highlights of 2015 Revisions to the DBJ Act
1. Measures maintaining direction toward full-scale privatization
BeforerevisionFull-scale privatization and disposal of all Japanese
government-held shares, targeting around five toseven years from April 1, 2015•	No changes in the main provisions, including Article 1, which stipulates DBJ’s objectives

After•	Disposal of shares as soon as practicable (considering its effect on achieving DBJ’s objecrevision
tives as well as on the market situation)

2. Measures ensuring appropriate implementation of Crisis Response Operations

Beforerevision•	Conducting Crisis Response Operations as adesignated financial institution•	Enabling Japanese government recapitalization incrisis response by March 31, 2015

•	Assuming responsibility for Crisis Response Operations for an indefinite period (at the sametime reflecting this obligation in the Articles of Incorporation)

After•	Extending for an indefinite period the scope of the Japanese government’s recapitalization
revisionsecuring DBJ’s financial structure, with the Japanese government having such obligations
as holding more than one-third of DBJ’s shares

3. Measures establishing new Special Investment Operations scheme to temporarily provide growth capital in a concentrated manner

Beforerevision

Provision of risk capital through the Fund for JapaneseIndustrial Competitiveness•	Reinforcement of the Fund for Japanese Industrial Competitiveness (a portion of the financial
resources for which are provided through measures for industrial investment); implementationof Special Investment Operations as a measure for a limited period of time, through fiscal
After2025 (at the same time reflecting this obligation in the Articles of Incorporation, complementrevision
ing and encouraging private-sector enterprises, etc.)•	Obligation that the Japanese government shall hold one-half or more of shares until theconclusion of Special Investment Operations

4. Provisions referencing consideration for private financial institutions through ongoing Japanese government involvement
As per the Third Medium-Term Management Plan,

Before sustainment of close communications, maintaining arevision focus on operations in collaboration with otherfinancial institutions•	The Corporation shall, for an indefinite period, pay special attention in conducting its
business so that it will not affect its appropriate competitive relationships with other busi-

ness entities
After
revision •	The Japanese government shall hear the opinions of representatives of ordinary financial

institutions and other relevant persons concerning Japanese government revisions on an
as-needed basis regarding Crisis Response Operations and Special Investment Operations

Corporate Data

Note: For the full text of the DBJ Act, please refer to the Data section.

The DBJ Group’s Corporate Governancefor DBJ to accept a certain amount of capital from the Japanese
government (industrial investment). This investment is to be used
for a new scheme, Special Investment Operations, to strengthen
and develop the Fund for Japanese Industrial Competitiveness. In
addition, with regard to the application of DBJ’s investment andloan functions toward crisis response and the provision of growth
capital, measures were introduced obliging the Japanese government to hold at least a certain percentage of DBJ’s shares.
As part of this structural revision, deliberations by theJapanese government’s Study Panel Concerning the Promotionof Expanding Growth Funding covered such topics as DBJ’s
proper implementation of Crisis Response Operations, theimportance of initiatives for providing growth capital (equity andmezzanine financing) to address shortages in Japanese financial
and capital markets, and an evaluation of DBJ’s initiatives following its conversion to a joint-stock company.
In light of discussions in 2019 by the Japanese government’s
Study Panel Concerning the Future Vision of Special Investment
Operations at Development Bank of Japan Inc. under the Act for
Partial Amendment of the Development Bank of Japan Inc. Act(Act No. 29 of 2020), which was enacted on May 22, 2020,
Special Investment Operations shall take the following required
measures:(1) extend the investment decision term and government financing term from March 31, 2021, until March 31, 2026 and(2) extend the deadline for ending operations from March 31,
2026, until March 31, 2031.

The DBJ Group’s Strategy

On October 1, 2008, DBJ transitioned from a special public corporation to a joint-stock company. In preparation for full-scale privatization following the disposal of all Japanese government-owned
shares, DBJ has continued working to enhance its corporate value
through integrated investment and loan services. These activities
include providing long-term loans; equity, mezzanine financing,and other types of risk capital; and M&A advisory services.
On the other hand, shortly after DBJ’s conversion to a jointstock company, the global financial crisis and the Great East Japan
Earthquake occurred. The Japanese government called on DBJ tosteadily mount large-scale Crisis Response Operations. Due tothese crises, the Development Bank of Japan Inc. Act (Act No. 85
of 2007) was amended twice, with DBJ accepting an additional
increase in Japanese government capital. Also, by the end of fiscal
2014, the Japanese government was to review DBJ’s organization, including its shareholdings, as stipulated by the revision.
Based on the deliberations by the Japanese government’s
Study Panel Concerning the Promotion of Expanding GrowthFunding, the Act for Partial Amendment of the Development Bankof Japan Inc. Act (Act No. 23 of 2015), which was enacted on
May 20, 2015, maintains the direction toward full-scale privatization. At the same time, in order to fully ensure the provision offunding in response to large-scale disasters and economic crises,
the amended act makes DBJ’s Crisis Response Operations obligatory for an indefinite period. From the perspective of promoting
the provision of growth capital to revitalize regional economies andincrease the competitiveness of enterprises, the amended act calls

The DBJ Group’s Value Creation Story

Name

70

Organizational Structure (as of August 1, 2020)

General Meeting of
Shareholders

Business Planning & Coordination Department

Innovation Promotion OfficeFinancial Institutions Department

International Strategy & Coordination
Department

Urban Development Department
Audit & Supervisory
Board Members /Audit & Supervisory
Board

Chief
Industry
Strategy
OfficeAudit & Supervisory
Board Office

Corporate Finance Department, Division 1
Corporate Finance Department, Division 2

Aerospace Office

Corporate Finance Department, Division 3

Global Logistics Office

Corporate Finance Department, Division 4
Corporate Finance Department, Division 5
Corporate Finance Department, Division 6

Healthcare Industry Office

Hokkaido Branch
Tohoku Branch
Board of Directors

Tohoku Recovery & Growth Support OfficeNiigata Branch

Executive Committee

Hokuriku Branch
Tokai Branch
Kansai Branch

Advisory Board

Chugoku Branch
Shikoku BranchSpecial Investment
Operations
Monitoring Board

Kyushu Branch

Kumamoto Recovery Office

Minami-Kyushu Branch

Real Estate Finance Department
Strategic Finance Department
Chief
Investment
OfficeGrowth & Cross Border Investment Department

Regional Investment Department
Structured Finance Department

Environmental & Social Assessment OfficeSyndication & Credit Trading Department

Business Development Department
Chief
Research
OfficeSustainability Planning & Support Department
Economic & Industrial Research Department
Regional Planning Department
Research Institute of Capital Formation

Representative Offices:
Hakodate, Kushiro, Aomori,Toyama, Matsue, Okayama,
Matsuyama, Oita

Chief
Investment
Management
OfficeEconomic Research Office
Industrial Research & Customer Solutions
Planning Office
Corporate Management & Accounting
Research OfficeSecretariat Office
Human Resources Management Department

Public Relations Office

Overseas Subsidiaries:
DBJ Singapore Limited
DBJ Europe Limited
DBJ Investment Consulting (Beijing) Co., Ltd.
DBJ Americas Inc.

Corporate Planning & Coordination Department

Sustainability Management Office

Risk Management Department

Digital Strategy Office

The Chief Investment Management Officeconsists of the Corporate Planning &Coordination Department, Business Planning& Coordination Department, Credit Analysis
Department, Risk Management Department
and Accounting Department.

Accounting Department

Operations Audit
Committee

Internal Audit Department

Information Resources Department
General Affairs Department

Credit Analysis Department
Legal Affairs & Compliance Department
Treasury Department

Settlement & Accounting Operations Office

71

Corporate Information

Development Bank of Japan Inc.

Established

October 1, 2008

Head office

Otemachi Financial City South Tower, 9-6, Otemachi 1-chome, Chiyoda-ku, Tokyo 100-8178, Japan
Tel: +81-3-3270-3211

Capital¥1,000,424 million (All capital is funded by the government of Japan.)Number of employees

1,703 (non-consolidated 1,195)(As of March 31, 2020)

Group Companies
The DBJ Group provides diverse services that satisfy the needs of its customers.

The DBJ Group’s Strategy



The DBJ Group’s Value Creation Story

Name

Overseas locations

DBJ Europe Limited

DBJ Investment Consulting (Beijing) Co., Ltd.

DBJ Americas Inc.

DBJ Europe Limited is a Londonbased subsidiary established in
November 2009. It mainly provides
support for investment and loan
services in Europe, and also collects
and disseminates information locally.

DBJ Investment Consulting (Beijing)Co., Ltd. became a wholly owned
subsidiary in June 2014 and is basedin Beijing and Shanghai. It mainlyoffers support for investment andloan services in China, and alsocollects and disseminates information
locally.

Launched in October 2018, DBJ
Americas Inc. is a local subsidiary
based in New York, U.S.A. It mainly
provides support for investment andloan services in the Americas, andalso collects and disseminates
information locally.

Investments / Securities / Asset Management

DBJ Investment Advisory Co., Ltd.

DBJ Securities Co., Ltd.

DBJ Asset Management Co., Ltd.

DBJ Investment Advisory Co., Ltd.
provides advice related to DBJ’s VG(Value for Growth) Investment
Program.*

DBJ Securities Co., Ltd. is a securities subsidiary that assists the DBJ
Group with investment and loan
services. It supports optimal capitalprocurement, centered on alternative
product fields, provides asset management opportunities, and flexibly
fulfills diverse needs.

DBJ Asset Management Co., Ltd. is
an asset management company
focused on real estate, private equity,and infrastructure investments. It
provides quality investment opportunities to investors with the comprehensive financial backing of the DBJ
Group.

* Value-added equity investment that
supports growth strategies

Research / Consulting

Real estate management / IT services

Japan Economic Research Institute Inc.

Value Management Institute, Inc.

DBJ Real Estate Co., Ltd.

Consist, Inc.

Japan Economic Research InstituteInc. is a comprehensive think tankthat primarily conducts surveys andconsulting. It meets customer needsfrom a comprehensive viewpoint,
leveraging synergies in its threesurvey fields: public, solutions, andinternational.

Value Management Institute, Inc. is acomprehensive think tank withstrengths derived from its insight into
advanced technologies and analysis
using proprietary economic models.
It provides tailor-made solutions to abroad range of government policy
issues.

DBJ Real Estate Co., Ltd. handles
administrative functions for the DBJ
Group for office building leasing,rental conference rooms, and business libraries.

Consist, Inc. provides one-stop
consulting services for developing,
maintaining, and operating IT, using
technology to help solve social
issues.

Corporate Data

DBJ Capital Co., Ltd.
DBJ Capital Co., Ltd. is the venture
capital arm of the DBJ Group. It
mainly makes early-stage equity
investments in venture firms, andsupports their growth through handson management.

The DBJ Group’s Corporate Governance

DBJ Singapore Limited
DBJ Singapore Limited is a
Singapore-based subsidiary established in December 2008. It mainly
provides support for investments andloans as well as advisory services in
the Asia-Pacific region, and alsocollects and disseminates information
locally.

https://www.dbj.jp/en

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