Daiwa Securities Group Sustainability Report 2007

Daiwa Securities Group

Sustainability Report 2007

B u i l d i ng
S u s t a ina bl e
S o c i e ty

w w w. d a i w a - g r p . j p

This report uses paper made from responsibly thinned timber.

What we can do
At the Daiwa Securities Group, we are engaged in the business of finance. As such, weare not immediately confronted with environmental problems as those in some otherindustries are. Nevertheless, we use huge amounts of paper in various reports—including

What kind of society awaits these 51 babies when they become adults 20 years from now?

this one—as well as in prospectuses, sheets and forms. Paper wastage is therefore an

The precious faces of these infants—all children of Daiwa Securities Group employees—

environmental issue that the Daiwa Securities Group must address and is addressing.

are an expression of our hopes for the future. At the Daiwa Securities Group,With the intention of protecting forests both in Japan and in developing countries, we

we are determined to take responsibility as individuals and to play our role as a company

have printed this report on paper made from responsibly thinned timber. We arecommitted to encouraging the healthy growth of forests everywhere.

to create a sustainable society—a contented people living in harmony with an unspoiled Earth.

Message from the President

Bui ld in g a co m p a ny wo r t h wo r k i ng for

employees is transmitted naturally to its customers andshareholders.
My goal for our company is to gain a large number of highly
loyal employees. In order to accomplish this, it must motivate its
employees. For this reason, there are three key points about ouremployees that I always stress. We must enable our employees■ Society supports companies whoseto: (1) have confidence in the company and their superiors; (2)employees work scrupulously.

have confidence and pride that their work is benefiting society;and (3) feel solidarity with their colleagues at work. The

I believe that the times have come to demand a great change incompany that accomplishes all three of these is a truly great

the relationship between company and employee. For example,

company.

corporate profits are higher than they have ever been—even
higher than during Japan’s economic bubble—yet employee
income is not. I cannot help thinking that there is something wrong■ Daiwa Securities Group is committed toretaining female employees.
to the employee who sold them the securities. But ourwith this situation. Returning profits to its shareholders is thefoundation of the corporation, but I believe that the corporation

The women in our group have made fantastic accomplishments.

employees’ confidence will be unshakable regardless of themust also ensure that a portion of its profits are returned to its

When a woman quits from our company, the first thing I do iscircumstances, as long as they perform their work scrupulously,

employees.

always to find out why she is quitting. As is common in Japan, themaintaining pride in the fact that their jobs in the securities

reason is often marriage or childbirth, and it saddens me eachindustry contribute greatly to the public good. We ensure thattime I hear that a woman is quitting for one of these reasons.

every employee is aware of our policy against racking up fees by

I believe that the corporation has two main types of value tosociety. The first is its contribution to society by paying taxes forprofit created through its businesses. The other is creating jobs.

I want our female employees to lead fulfilling lives, making fullrecommending

Corporations have a great responsibility: the responsibility to build

use of the expertise they have accumulated in their work. We do

consideration.

social infrastructure through the creation of jobs. As aeverything possible to enable women to continue working after

The most effective way for a company to stay in business is toconsequence, I am strongly opposed to the idea of improving

marriage, childbirth, and other life events, including creating aserve society. Because if this, it is not enough for a company toperformance through personnel and wage cutbacks in the namewide range of programs. Employee feedback, however, has shown

simply comply with laws and regulations; it must also obey theof “restructuring.”me that our programs are still not fully utilized, due to worry about

mores of society. This is what is demanded today of corporations

the opinions of coworkers and the like.

and their employees.

CSR is a measure of society’s confidence in the company.

tradestoourcustomers

withoutduework

I tell the executives on a daily basis that no matter how great a

It is vital to create a company where highly loyal employees

scrupulously, the support and confidence of society follow as

system is, if it is not functioning, then it might as well not exist;

work with confidence; where there is no gap between what people

surely as day follows night. I manage Daiwa Securities Groupand this is true not only of human resources, but any system.

say and what they feel, between appearance and reality. I believe

confident in this belief.

Simply creating a program is not enough; in order to convince thethat it is exactly CSR that can accomplish this.

When

a

company’s

management

and

employees

greatest number of employees to take advantage of it, I instruct■ Employees who are treated well also serve

the company to follow up thoroughly, in order to change thetheir customers and shareholders well.

awareness of bosses, coworkers, and others, and make it a

■ We contribute to economic growth and theglobal environment.

functioning program. I am committed to building a company thatA

corporation’s

customers

andshareholders

are

vital

stakeholders, but I focus particular attention on our employees asretains its female employees, and an environment that motivates

I believe that companies must make a serious commitment toall our employees.

tackling global environmental issues. I watched Al Gore’s movie“An Inconvenient Truth” warning of the global environmental crisis,

stakeholders. Our employees are the ones who actually add
value to our products and services. They are the source of thehard work that provides a return on our shareholders’ investment.

Shigeharu Suzuki
President and CEO
Daiwa Securities Group Inc.

1

DAIWA SUSTAINAB ILITY REPO RT 2007

■ The job of CSR is to eliminate the gap between

what people say and what they feel.

and read the book as well. These made me realize anew theurgency and importance of this task. In July 2007, the entire
Group fully adopted the “cool biz” dress code. Our main businessOne often hears the phrase “customer first,” but can employees
who are not treated well by their company truly serve their

The value of the securities we handle fluctuates. As ais securities, and in this business as well, we are actively

customers well? Conversely, employees who feel valued by theirconsequence, the customers who purchase them may reap

committed to the environment, including managing and selling ourcompany will always serve their customers to the best of theirgreat profits, but they may lose money as well. No customer is

Eco Fund, and strive to contribute to economic growth and theability. In other words, the value that a company places in its

happy to lose money, and it is human nature to want to complain

global environment.

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

2

Message from the President

Bui ld in g a co m p a ny wo r t h wo r k i ng for

employees is transmitted naturally to its customers andshareholders.
My goal for our company is to gain a large number of highly
loyal employees. In order to accomplish this, it must motivate its
employees. For this reason, there are three key points about ouremployees that I always stress. We must enable our employees■ Society supports companies whoseto: (1) have confidence in the company and their superiors; (2)employees work scrupulously.

have confidence and pride that their work is benefiting society;and (3) feel solidarity with their colleagues at work. The

I believe that the times have come to demand a great change incompany that accomplishes all three of these is a truly great

the relationship between company and employee. For example,

company.

corporate profits are higher than they have ever been—even
higher than during Japan’s economic bubble—yet employee
income is not. I cannot help thinking that there is something wrong■ Daiwa Securities Group is committed toretaining female employees.
to the employee who sold them the securities. But ourwith this situation. Returning profits to its shareholders is thefoundation of the corporation, but I believe that the corporation

The women in our group have made fantastic accomplishments.

employees’ confidence will be unshakable regardless of themust also ensure that a portion of its profits are returned to its

When a woman quits from our company, the first thing I do iscircumstances, as long as they perform their work scrupulously,

employees.

always to find out why she is quitting. As is common in Japan, themaintaining pride in the fact that their jobs in the securities

reason is often marriage or childbirth, and it saddens me eachindustry contribute greatly to the public good. We ensure thattime I hear that a woman is quitting for one of these reasons.

every employee is aware of our policy against racking up fees by

I believe that the corporation has two main types of value tosociety. The first is its contribution to society by paying taxes forprofit created through its businesses. The other is creating jobs.

I want our female employees to lead fulfilling lives, making fullrecommending

Corporations have a great responsibility: the responsibility to build

use of the expertise they have accumulated in their work. We do

consideration.

social infrastructure through the creation of jobs. As aeverything possible to enable women to continue working after

The most effective way for a company to stay in business is toconsequence, I am strongly opposed to the idea of improving

marriage, childbirth, and other life events, including creating aserve society. Because if this, it is not enough for a company toperformance through personnel and wage cutbacks in the namewide range of programs. Employee feedback, however, has shown

simply comply with laws and regulations; it must also obey theof “restructuring.”me that our programs are still not fully utilized, due to worry about

mores of society. This is what is demanded today of corporations

the opinions of coworkers and the like.

and their employees.

CSR is a measure of society’s confidence in the company.

tradestoourcustomers

withoutduework

I tell the executives on a daily basis that no matter how great a

It is vital to create a company where highly loyal employees

scrupulously, the support and confidence of society follow as

system is, if it is not functioning, then it might as well not exist;

work with confidence; where there is no gap between what people

surely as day follows night. I manage Daiwa Securities Groupand this is true not only of human resources, but any system.

say and what they feel, between appearance and reality. I believe

confident in this belief.

Simply creating a program is not enough; in order to convince thethat it is exactly CSR that can accomplish this.

When

a

company’s

management

and

employees

greatest number of employees to take advantage of it, I instruct■ Employees who are treated well also serve

the company to follow up thoroughly, in order to change thetheir customers and shareholders well.

awareness of bosses, coworkers, and others, and make it a

■ We contribute to economic growth and theglobal environment.

functioning program. I am committed to building a company thatA

corporation’s

customers

andshareholders

are

vital

stakeholders, but I focus particular attention on our employees asretains its female employees, and an environment that motivates

I believe that companies must make a serious commitment toall our employees.

tackling global environmental issues. I watched Al Gore’s movie“An Inconvenient Truth” warning of the global environmental crisis,

stakeholders. Our employees are the ones who actually add
value to our products and services. They are the source of thehard work that provides a return on our shareholders’ investment.

Shigeharu Suzuki
President and CEO
Daiwa Securities Group Inc.

1

DAIWA SUSTAINAB ILITY REPO RT 2007

■ The job of CSR is to eliminate the gap between

what people say and what they feel.

and read the book as well. These made me realize anew theurgency and importance of this task. In July 2007, the entire
Group fully adopted the “cool biz” dress code. Our main businessOne often hears the phrase “customer first,” but can employees
who are not treated well by their company truly serve their

The value of the securities we handle fluctuates. As ais securities, and in this business as well, we are actively

customers well? Conversely, employees who feel valued by theirconsequence, the customers who purchase them may reap

committed to the environment, including managing and selling ourcompany will always serve their customers to the best of theirgreat profits, but they may lose money as well. No customer is

Eco Fund, and strive to contribute to economic growth and theability. In other words, the value that a company places in its

happy to lose money, and it is human nature to want to complain

global environment.

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

2

Overview of the Sustainability Report 2007

(established March 1998)

Message from the President
Overview of the Sustainability Report 2007
Overview of the Daiwa Securities Group
Material Issues
Material Issues of the Daiwa Securities Group
Material Issue 1: Adding a Social Perspective to
Investment
Material Issue 2: Commitment to the Development of
a Sound Securities Market
Material Issue 3: Contribution to Global Environment
Material Issue 4: Publishing Information fora Sustainable Society

Customer trust
We stand on the trust of our customers. Prudently putting
customer interests first and achieving a high standard ofprofessional competence, we intend to become Japan’s
most appealing securities group at home and abroad.
Human values
People are the source of our competence. We highly value
creative initiative by the individual, we cherish thechallenging spirit, and appreciate the capability andcontributions of the individual.
Total compliance
We can be proud and prosper only when we achieve total
compliance and gain the trust of our customers, our market
and of our world society. We will maintain high standards ofprofessional ethics and a fair code of conduct, thereby
contributing to the development of our society.
Sound profit
Our fundamental objective is to enhance shareholder value
through sound business operations. We will offer valuable
services to our customers and earn adequate rewards for
distribution to our shareholders.

Management
Performance, Issues, and Targets
Corporate Governance
CSR Management
Compliance
Information Disclosure
Social Report
Customer Satisfaction
Human Values and Human Resource Utilization
Corporate Citizenship
Environmental Report
The Environmental Impact of the Daiwa Securities Group
Economic Report
Distribution of Economic Value to Stakeholders

Editorial Policy
We have published this report every year since 2002 withthe aim of disclosing, clearly and in good faith, information
relating to the Daiwa Securities Group’s activities towards
social sustainability and corporate social responsibility(CSR) initiatives. We also see the process of preparing thisreport as an important opportunity for us to affirm theoutcome of our efforts and identify issues for further
attention.
The 2006 Sustainability Reporting Guidelines, aninternational set of requirements for sustainability reporting
published by the Global Reporting Initiative (GRI)*, wasused as reference when putting this report together.
Raising CSR-awareness among employees and promoting
dialogue with various stakeholders were two particular
objectives in the preparation of this publication.
Material Issues of Daiwa Securities Group (pages 7–8)
identifies the material CSR issues of Daiwa Securities
Group, explains why they are important, and describes theimpact of each of these issues on society.
This report also emphasizes the management policy of
Daiwa Securities Group of building a company worth
working for, and our initiatives for putting this policy into
practice.
* Global Reporting Initiative (GRI): An organization founded in 1997 to draw up anddisseminate international guidelines for sustainability reporting. Participants include
a variety of stakeholders, such as businesses, nongovernmental organizations(NGOs), consultants, accounting groups, and trade associations from different partsof the world.

■ The Web edition of Sustainability Report 2007
Sustainability Report 2007 is available in booklet and Web

The URL of the Web edition of
Sustainability Report 2007 is shown below.

editions. The Web edition contains information about a wider

http://www.daiwa-grp.jp/ir/english/corporate/report/

range of initiatives than the booklet edition, as well as
supplementary information not contained here.

W E B This symbol indicates that related information can be found in the Web edition.

■ Five approaches to realize a sustainable society(1) Serving society in our daily operations
The work carried out by securities companies provides a very
public benefit. This industry is key in supporting Japan’stransition from a savings economy to that of an investing one. It
acts as an intermediary, bringing together entities in need offinancing and investors looking to invest.
The Daiwa Securities Group must execute its operations, notonly in accordance with the local laws and regulations, but also tomeet the expectations of society in its day-to-day conduct, andstrive to promote the sound functioning of the securities markets.
(2) A business strategy that takes society andthe environment into account
The Group is striving to incorporate a social perspective into theway it conducts its core financial business, practicing the kind of
CSR that should be expected from a financial institution.
Specifically, the Group is providing investment opportunities forgeneral investors to participate in tackling environmental and social
issues, in the form of SRI funds and CO2L Bonds (Cool Bonds)*1.
(3) Promoting CSR outside the company
Through the UNEP FI*2, PRI*3 and CDP*4, the Daiwa Securities
Group is lending support to various stakeholders, including thefinancial industry, to encourage CSR activities.

(4) Corporate citizenship activities
In order to develop the next generation of economics and financial
professionals, the Daiwa Securities Group aims to encourage
education in these fields as part of its Medium-term Management
Plan. The Group will continue to provide long-term support
through financial mechanisms relating to its core business, byoffering assistance to the local and international communities via
foundations and NPOs/NGOs.
(5) CSR management
The Daiwa Securities Group is aware of the social andenvironmental impact of its own business operations. Along withstrengthening corporate governance, achieving full compliance,
attaining customer satisfaction, and improving the workplaceenvironment, the Group is striving to raise environmental
awareness among its employees and build an environmental
management system. As a result, the Group is reducing its use of
paper, the part of its daily operations which has the biggest direct
impact on the environment.
*1 CO2L Bonds (Cool Bonds): See page 17 for more details.
*2, *3, *4 UNEP FI, PRI and CDP: See page 7 for more details.

Daiwa Securities Group: Five approaches to realize a sustainable society

CSR activities (measures)(1) Serving society in our daily operations(2) A business strategy that takes society and the environment into account(3) Promoting CSR outside the company

Sustainable
company

Sustainable
society(objective)(objective)

Changing the awarenessand behavior of stakeholders

Daiwa Securities Group Corporate Principles(5) CSR management

Table of Contents(4) Corporate citizenship activities

Third-party Opinions
Third-party Evaluation / Scope of Report /The Road to Sustainability

3

DAIWA SUSTAINAB ILITY REPO RT 2007

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

4

Overview of the Sustainability Report 2007

(established March 1998)

Message from the President
Overview of the Sustainability Report 2007
Overview of the Daiwa Securities Group
Material Issues
Material Issues of the Daiwa Securities Group
Material Issue 1: Adding a Social Perspective to
Investment
Material Issue 2: Commitment to the Development of
a Sound Securities Market
Material Issue 3: Contribution to Global Environment
Material Issue 4: Publishing Information fora Sustainable Society

Customer trust
We stand on the trust of our customers. Prudently putting
customer interests first and achieving a high standard ofprofessional competence, we intend to become Japan’s
most appealing securities group at home and abroad.
Human values
People are the source of our competence. We highly value
creative initiative by the individual, we cherish thechallenging spirit, and appreciate the capability andcontributions of the individual.
Total compliance
We can be proud and prosper only when we achieve total
compliance and gain the trust of our customers, our market
and of our world society. We will maintain high standards ofprofessional ethics and a fair code of conduct, thereby
contributing to the development of our society.
Sound profit
Our fundamental objective is to enhance shareholder value
through sound business operations. We will offer valuable
services to our customers and earn adequate rewards for
distribution to our shareholders.

Management
Performance, Issues, and Targets
Corporate Governance
CSR Management
Compliance
Information Disclosure
Social Report
Customer Satisfaction
Human Values and Human Resource Utilization
Corporate Citizenship
Environmental Report
The Environmental Impact of the Daiwa Securities Group
Economic Report
Distribution of Economic Value to Stakeholders

Editorial Policy
We have published this report every year since 2002 withthe aim of disclosing, clearly and in good faith, information
relating to the Daiwa Securities Group’s activities towards
social sustainability and corporate social responsibility(CSR) initiatives. We also see the process of preparing thisreport as an important opportunity for us to affirm theoutcome of our efforts and identify issues for further
attention.
The 2006 Sustainability Reporting Guidelines, aninternational set of requirements for sustainability reporting
published by the Global Reporting Initiative (GRI)*, wasused as reference when putting this report together.
Raising CSR-awareness among employees and promoting
dialogue with various stakeholders were two particular
objectives in the preparation of this publication.
Material Issues of Daiwa Securities Group (pages 7–8)
identifies the material CSR issues of Daiwa Securities
Group, explains why they are important, and describes theimpact of each of these issues on society.
This report also emphasizes the management policy of
Daiwa Securities Group of building a company worth
working for, and our initiatives for putting this policy into
practice.
* Global Reporting Initiative (GRI): An organization founded in 1997 to draw up anddisseminate international guidelines for sustainability reporting. Participants include
a variety of stakeholders, such as businesses, nongovernmental organizations(NGOs), consultants, accounting groups, and trade associations from different partsof the world.

■ The Web edition of Sustainability Report 2007
Sustainability Report 2007 is available in booklet and Web

The URL of the Web edition of
Sustainability Report 2007 is shown below.

editions. The Web edition contains information about a wider

http://www.daiwa-grp.jp/ir/english/corporate/report/

range of initiatives than the booklet edition, as well as
supplementary information not contained here.

W E B This symbol indicates that related information can be found in the Web edition.

■ Five approaches to realize a sustainable society(1) Serving society in our daily operations
The work carried out by securities companies provides a very
public benefit. This industry is key in supporting Japan’stransition from a savings economy to that of an investing one. It
acts as an intermediary, bringing together entities in need offinancing and investors looking to invest.
The Daiwa Securities Group must execute its operations, notonly in accordance with the local laws and regulations, but also tomeet the expectations of society in its day-to-day conduct, andstrive to promote the sound functioning of the securities markets.
(2) A business strategy that takes society andthe environment into account
The Group is striving to incorporate a social perspective into theway it conducts its core financial business, practicing the kind of
CSR that should be expected from a financial institution.
Specifically, the Group is providing investment opportunities forgeneral investors to participate in tackling environmental and social
issues, in the form of SRI funds and CO2L Bonds (Cool Bonds)*1.
(3) Promoting CSR outside the company
Through the UNEP FI*2, PRI*3 and CDP*4, the Daiwa Securities
Group is lending support to various stakeholders, including thefinancial industry, to encourage CSR activities.

(4) Corporate citizenship activities
In order to develop the next generation of economics and financial
professionals, the Daiwa Securities Group aims to encourage
education in these fields as part of its Medium-term Management
Plan. The Group will continue to provide long-term support
through financial mechanisms relating to its core business, byoffering assistance to the local and international communities via
foundations and NPOs/NGOs.
(5) CSR management
The Daiwa Securities Group is aware of the social andenvironmental impact of its own business operations. Along withstrengthening corporate governance, achieving full compliance,
attaining customer satisfaction, and improving the workplaceenvironment, the Group is striving to raise environmental
awareness among its employees and build an environmental
management system. As a result, the Group is reducing its use of
paper, the part of its daily operations which has the biggest direct
impact on the environment.
*1 CO2L Bonds (Cool Bonds): See page 17 for more details.
*2, *3, *4 UNEP FI, PRI and CDP: See page 7 for more details.

Daiwa Securities Group: Five approaches to realize a sustainable society

CSR activities (measures)(1) Serving society in our daily operations(2) A business strategy that takes society and the environment into account(3) Promoting CSR outside the company

Sustainable
company

Sustainable
society(objective)(objective)

Changing the awarenessand behavior of stakeholders

Daiwa Securities Group Corporate Principles(5) CSR management

Table of Contents(4) Corporate citizenship activities

Third-party Opinions
Third-party Evaluation / Scope of Report /The Road to Sustainability

3

DAIWA SUSTAINAB ILITY REPO RT 2007

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

4

Overview of the Daiwa Securities Group
Principle management indicators (consolidated)

Corporate profile (As of March 31, 2007)
Company name

FY2003453,813352,434
96,13042,637604,170
10,765,665
7.4
31.66
453.6010.00

FY2002
387,658
270,809
29,200Operating revenues (¥ million)
Net operating revenues (¥ million)
Ordinary income (¥ million)
Net income (loss) (¥ million)
Net assets (¥ million)
Total assets (¥ million)
Return on equity (ROE) (%)
Net income (loss) per share (¥)
Net assets per share (¥)
Annual dividends per share (¥)(6,322)541,718
9,502,825—(4.75)
407.84
6.00

Employee composition(persons)
15,000

By company

12,483 12,459 12,243 12,561

13,264

Headquarters
9,000

Other
group
companies
in Japan26%

6-4, Otemachi 2-chome, Chiyoda-ku,
6,000

3,000

+81-3-3243-2100

Established
December 27, 1943 (Founded 1902)

0Asia/Oceania
3%

Americas2%

Daiwa
Securities
Co. Ltd.
46%

Daiwa
Securities
SMBC Co. Ltd.
16%

FY2002 FY2003 FY2004 FY2005 FY2006
Fiscal year end

Number of employees 13,264

Europe 5%

Japan
90%

As of March 31, 2007

* The number of employees includes the number ofOperating revenues and net operating revenues

Breakdown of operating revenues

Consolidated operating revenues
Consolidated net operating revenues(¥ billion)

1,000
800

The Group provides development and management of stock,companies, the two main securities companies, Daiwa Securities

bond, and private investment trusts, as well as other investment

Co. Ltd. and Daiwa Securities SMBC Co. Ltd.

management services.

1. Retail securities business

Using its own funds, the Daiwa Securities Group invests in private

Through its national network of 117 branches, the Call Center,

equity, monetary receivables, real estate, venture capitaland the Internet, Daiwa Securities Co., Ltd. offers two retailopportunities, and business regeneration. It also forms andservices: Daiwa Consulting and Daiwa Direct. These services

manages investment funds.

offer a wide range of financial products and services, and support

5. Research, systems, and consulting businesscustomer asset management, mainly targeting individual

The Group is engaged in various forms of consulting andcustomers.

research reporting in fields such as management, finance, and

2. Wholesale securities businessinformation technology. This information is provided to institutional

The Daiwa Securities SMBC’s business line consists broadly ofinvestors, corporate clients, financial institutions, and public(1) brokerage and trading of equities, bonds, and derivatives andinstitutions in and outside Japan.

(2) investment banking services to institutional investors,

6. Group support

corporate clients and financial institutions, in and outside Japan.

Services are supplied to member companies within the Daiwa

Our investment banking services support a wide range of

Securities Group in areas such as administrative outsourcing

businesses, from business expansion to finance and capital

relating to securities, as well as consulting for real estate andstrategies, through services relating to financing for corporatebuilding management.

clients and financial institutions.

845
600
400
200
0

579

519

453
387

Number of employees (consolidated)

Service feesand other sales
46,967(¥ million)

Europe19,869Americas
9,587

Asia/Oceania
13,431

Daiwa Securities Group Inc.
Holdingcompany

917

Capital13,264

Group Inc., the holding company which controls the group

Breakdown of net operating revenues by region(¥ million)¥178.3 billion

3. Asset management business

Financial Advisors (FA).

President and CEO
Shigeharu Suzuki

The Daiwa Securities Group is comprised of Daiwa Securities

4. Investment business

By region

Daiwa Securities
Group Inc.
2%

Group companies
outside Japan11%

12,000

Telephone

FY2006917,307526,764
195,415
92,724
1,223,225
14,411,265
10.8
67.90
665.9828.00

FY2005
845,659
579,358
260,651
139,948792,281
14,898,890
19.4
103.90598.2734.00

FY2004519,337
390,432
120,433
52,665648,332
12,378,961
8.4
39.03
486.70
13.00

Number of employees (consolidated basis)*

Daiwa Securities Group Inc.

Tokyo 100-8101, Japan■ Daiwa Securities Group’s Business Description

526

390

352

270

FY2002 FY2003 FY2004 FY2005 FY2006

Number of consolidated subsidiaries

Interest anddividend income
373,452

Commissions
306,736

Total

526,762

Individual
investors

Japan
483,875

Net gain on trading
157,332
Net gain on private equity
and other securities
FY200632,818Daiwa Securities
Co. Ltd.

Trading

FY2006Mainly retailsecurities
business

46
Ordinary income, net income, and ROE

Trading

Total assets and net assets

Annual dividends per share

Daiwa Securities
SMBC Co. Ltd.

Number of equity-method affiliates
Consolidated ordinary income
Consolidated net income

4

Consolidated total assets (left-hand side)
Consolidated net assets (right-hand side)

Return on equity (ROE) (right-hand side)

Shares issued and outstanding
1,404,664,000(¥ billion)
300

%
60

250

50

200

40

150

120
96

100
50
0

29

7.4

8.4

42

52

139

30

19.4

92 20
10.8

14,898-6(¥)

Brokerage and trading

40

30

900

10,765
9,502

792

6,000

600

Asset
managers

20
15

13

648
541

604

3,000

10

10
6

300

0
FY2002 FY2003 FY2004 FY2005 FY2006

0
FY2002

Insurancecompanies
Trust banks

50

Securities issuance and underwriting

28

25

12,3789,000

Wholesalesecurities
business

Institutional
investors

34

35

1,200

1,223

0
-10

FY2002 FY2003 FY2004 FY2005 FY2006

14,411

12,00010-50DAIWA SUSTAINAB ILITY REPO RT 2007(¥ billion)
1,500

260
195

5

(¥ billion)
15,000

Corporations/Issuers

FY2003 FY2004 FY2005 FY2006

OthersDaiwa AssetManagement
Co. Ltd.

Daiwa SB
Investments
Ltd.

Asset
management

NIF SMBC
VenturesCo., Ltd.

Daiwa
Institute of
Research Ltd.

Investment

Researchand system
consulting

Daiwa
Securities
Business
CenterCo., Ltd.

Daiwa
PropertyCo., Ltd.

Group support

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

6

Overview of the Daiwa Securities Group
Principle management indicators (consolidated)

Corporate profile (As of March 31, 2007)
Company name

FY2003453,813352,434
96,13042,637604,170
10,765,665
7.4
31.66
453.6010.00

FY2002
387,658
270,809
29,200Operating revenues (¥ million)
Net operating revenues (¥ million)
Ordinary income (¥ million)
Net income (loss) (¥ million)
Net assets (¥ million)
Total assets (¥ million)
Return on equity (ROE) (%)
Net income (loss) per share (¥)
Net assets per share (¥)
Annual dividends per share (¥)(6,322)541,718
9,502,825—(4.75)
407.84
6.00

Employee composition(persons)
15,000

By company

12,483 12,459 12,243 12,561

13,264

Headquarters
9,000

Other
group
companies
in Japan26%

6-4, Otemachi 2-chome, Chiyoda-ku,
6,000

3,000

+81-3-3243-2100

Established
December 27, 1943 (Founded 1902)

0Asia/Oceania
3%

Americas2%

Daiwa
Securities
Co. Ltd.
46%

Daiwa
Securities
SMBC Co. Ltd.
16%

FY2002 FY2003 FY2004 FY2005 FY2006
Fiscal year end

Number of employees 13,264

Europe 5%

Japan
90%

As of March 31, 2007

* The number of employees includes the number ofOperating revenues and net operating revenues

Breakdown of operating revenues

Consolidated operating revenues
Consolidated net operating revenues(¥ billion)

1,000
800

The Group provides development and management of stock,companies, the two main securities companies, Daiwa Securities

bond, and private investment trusts, as well as other investment

Co. Ltd. and Daiwa Securities SMBC Co. Ltd.

management services.

1. Retail securities business

Using its own funds, the Daiwa Securities Group invests in private

Through its national network of 117 branches, the Call Center,

equity, monetary receivables, real estate, venture capitaland the Internet, Daiwa Securities Co., Ltd. offers two retailopportunities, and business regeneration. It also forms andservices: Daiwa Consulting and Daiwa Direct. These services

manages investment funds.

offer a wide range of financial products and services, and support

5. Research, systems, and consulting businesscustomer asset management, mainly targeting individual

The Group is engaged in various forms of consulting andcustomers.

research reporting in fields such as management, finance, and

2. Wholesale securities businessinformation technology. This information is provided to institutional

The Daiwa Securities SMBC’s business line consists broadly ofinvestors, corporate clients, financial institutions, and public(1) brokerage and trading of equities, bonds, and derivatives andinstitutions in and outside Japan.

(2) investment banking services to institutional investors,

6. Group support

corporate clients and financial institutions, in and outside Japan.

Services are supplied to member companies within the Daiwa

Our investment banking services support a wide range of

Securities Group in areas such as administrative outsourcing

businesses, from business expansion to finance and capital

relating to securities, as well as consulting for real estate andstrategies, through services relating to financing for corporatebuilding management.

clients and financial institutions.

845
600
400
200
0

579

519

453
387

Number of employees (consolidated)

Service feesand other sales
46,967(¥ million)

Europe19,869Americas
9,587

Asia/Oceania
13,431

Daiwa Securities Group Inc.
Holdingcompany

917

Capital13,264

Group Inc., the holding company which controls the group

Breakdown of net operating revenues by region(¥ million)¥178.3 billion

3. Asset management business

Financial Advisors (FA).

President and CEO
Shigeharu Suzuki

The Daiwa Securities Group is comprised of Daiwa Securities

4. Investment business

By region

Daiwa Securities
Group Inc.
2%

Group companies
outside Japan11%

12,000

Telephone

FY2006917,307526,764
195,415
92,724
1,223,225
14,411,265
10.8
67.90
665.9828.00

FY2005
845,659
579,358
260,651
139,948792,281
14,898,890
19.4
103.90598.2734.00

FY2004519,337
390,432
120,433
52,665648,332
12,378,961
8.4
39.03
486.70
13.00

Number of employees (consolidated basis)*

Daiwa Securities Group Inc.

Tokyo 100-8101, Japan■ Daiwa Securities Group’s Business Description

526

390

352

270

FY2002 FY2003 FY2004 FY2005 FY2006

Number of consolidated subsidiaries

Interest anddividend income
373,452

Commissions
306,736

Total

526,762

Individual
investors

Japan
483,875

Net gain on trading
157,332
Net gain on private equity
and other securities
FY200632,818Daiwa Securities
Co. Ltd.

Trading

FY2006Mainly retailsecurities
business

46
Ordinary income, net income, and ROE

Trading

Total assets and net assets

Annual dividends per share

Daiwa Securities
SMBC Co. Ltd.

Number of equity-method affiliates
Consolidated ordinary income
Consolidated net income

4

Consolidated total assets (left-hand side)
Consolidated net assets (right-hand side)

Return on equity (ROE) (right-hand side)

Shares issued and outstanding
1,404,664,000(¥ billion)
300

%
60

250

50

200

40

150

120
96

100
50
0

29

7.4

8.4

42

52

139

30

19.4

92 20
10.8

14,898-6(¥)

Brokerage and trading

40

30

900

10,765
9,502

792

6,000

600

Asset
managers

20
15

13

648
541

604

3,000

10

10
6

300

0
FY2002 FY2003 FY2004 FY2005 FY2006

0
FY2002

Insurancecompanies
Trust banks

50

Securities issuance and underwriting

28

25

12,3789,000

Wholesalesecurities
business

Institutional
investors

34

35

1,200

1,223

0
-10

FY2002 FY2003 FY2004 FY2005 FY2006

14,411

12,00010-50DAIWA SUSTAINAB ILITY REPO RT 2007(¥ billion)
1,500

260
195

5

(¥ billion)
15,000

Corporations/Issuers

FY2003 FY2004 FY2005 FY2006

OthersDaiwa AssetManagement
Co. Ltd.

Daiwa SB
Investments
Ltd.

Asset
management

NIF SMBC
VenturesCo., Ltd.

Daiwa
Institute of
Research Ltd.

Investment

Researchand system
consulting

Daiwa
Securities
Business
CenterCo., Ltd.

Daiwa
PropertyCo., Ltd.

Group support

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

6

Material

IssuesMaterial Issues of the Daiwa Securities GroupIn the goal of achieving a sustainable society

The material issue identification process
In order to identify key issues, we first analyzed the feedback wedemands, and identified issues that the Daiwa Securities Group

have received from our stakeholders in the form of employee

should consider in its CSR activities. At the same time, we verified

surveys, customer satisfaction surveys, our Sustainability Report

the importance of issues recognized within the Group andquestionnaires, shareholder surveys, stakeholder comments andexternally, giving consideration to such factors as the frequency of

dialogs, and the views of opinion leaders from outside the Daiwa

occurrence and the impact on society. Through this process, four

Securities Group. To this feedback we added considerations formaterial issues were recognized as highly important to the Daiwa

international trends in CSR, the GRI Guideline, and other societal

Securities Group.

Modern society faces a wide range of issues that threaten its

Companies with the power to influence society as a whole aresustainability. These include global-scale environmental issues

key players, greatly affecting whether it will be possible to achievethat threaten the survival of the human species, most well known

a sustainable society. The financial institutions that handle society’s

among them being global warming; the increasing disparity ofmoney have a particularly important duty to society through theirprosperity between the northern and southern hemispheres; andmain business: finance. This duty includes maintaining andin Japan, the aging society and low childbirth. It will not be

developing fair, active financial markets, as well as a commitment

possible to overcome these issues without the responsible action

to finance from a social perspective, and the creation of monetary

Securities marketof every sector of society, including the public sector, the private

flows that will help achieve a sustainable society. We believe that

sector, and communities.

our Group has a large role to play in this effort.

We will collaborate with everyone involved in the
securities market, and aim for the developmentof a sound and reliable securities market.

Stakeholders in the Daiwa Securities Group

Investors

Material issues of the Daiwa Securities GroupThe purpose of this report is to focus on topics, indicators andstudied the economic, environmental and social impact of theissues that we believe will greatly influence the decisions of thevarious activities of the Daiwa Securities Group, and identified

stakeholders of the Daiwa Securities Group. For this reason, wematerial issues that should be reported.

We are committed to offering
products and services that meetthe needs of individual investors,
institutional investors, andpotential investors who are
considering investing in the
future, and to improve customer
satisfaction.

Issuers
Private-sector enterprises,
public-service organizations,and other entities that needfund-raising by issuing stocks
and bonds are valuable
customers of the Daiwa
Securities Group.

Securities
MarketInvestors

Issuers

Shareholders

Signing to the United Nations Environment Programme FinanceInitiative (UNEP FI)*1, Principles of Responsible Investment(PRI)*2, and the Carbon Disclosure Project (CDP)*3, the Daiwa
Securities Group will fulfill our social roles as a financial institution.
In our efforts to achieve a sustainable society, it is vital that weincorporate initiatives to invest from a social perspective into our
securities business.
2. Commitment to the Development of a Sound Securities
Market (pages 13–16)

4. Publishing Information for a Sustainable Society(pages 20–24)
We continue to take advantage of our characteristics as acompany that handles information, including giving back theknowledge and expertise we have cultivated in the securities
industry through financial and economic education, collaboration
with academia, and providing the latest information on

We also focus on initiatives to build a company worth working for,from the President (pages 1–2) and Human Values and Humanmarket, we recognize that we must have thorough compliance that

Resource Utilization (pages 37–40).

lives up to the confidence of society and does not stop at mere
statutory compliance.

*1 UNEP FI: A partnership between the United Nations Environment Programme

3. Contribution to Global Environment (pages 17–19)*2 PRI: A guideline indicating environmental, social, and governance (ESG)

Recognizing global environmental issues as challenges that must

*3 CDP: With the support of institutional investors concerned about climate change,

and financial institutions from around the world.

environmental issues.

7

DAIWA SUSTAINAB ILITY REPO RT 2007

Government

Employees

considerations for investment to institutional investors.
the Carbon Disclosure Project asks investors and corporate executives todisclose information relating to their initiatives and approaches to environmental
problems.

WEB

UNEP FI, PRI and CDP

Employees

Em

Group. More information on this topic can be found in the Message

committed to collaborating in and promoting efforts to resolve

Daiwa
Securities
Group

as one of the key management policies of the Daiwa Securities

industry to maintain and develop a sound and reliable securities

the environmental impact of our businesses, while remaining fully

Shareholders

We maintain fairrelationships withall our business
partners, and work
together for therealization of asustainable society.

Business
Partnerssustainability.

In order to fulfill our responsibility as a company in the securities

be met by all companies and individuals, we thus strive to reduce

Business
Partners

Our employees are the creatorsof all added value received byour stakeholders. We arebuilding an environment that
increases the job satisfaction of
our employees, and empowers
them to fully harness theirabilities and ambitions. Our
employees’ families are also
important stakeholders.

plo

es

1. Adding a Social Perspective to Investment (pages 9–12)

In order to earn theconfidence of ourshareholders, we aim
to provide highly
transparent information disclosure, andmeet their expectations
by continually creating
value.

y e e s ’ Fa mili

Government

Local
Communities

NPOs/NGOs

We fulfill our tax
obligations, and offer
policy suggestions forthe realization of abetter society.

Local Communities

NPOs/NGOs

Our branches and overseas offices are
members of their local communities,
and promote community-rooted
efforts.

We will collaborate with NPOs and NGOs in suchfields as financial and economic education anddisaster relief, while reflecting the values of society
in our management through an active dialog.

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

8

Material

IssuesMaterial Issues of the Daiwa Securities GroupIn the goal of achieving a sustainable society

The material issue identification process
In order to identify key issues, we first analyzed the feedback wedemands, and identified issues that the Daiwa Securities Group

have received from our stakeholders in the form of employee

should consider in its CSR activities. At the same time, we verified

surveys, customer satisfaction surveys, our Sustainability Report

the importance of issues recognized within the Group andquestionnaires, shareholder surveys, stakeholder comments andexternally, giving consideration to such factors as the frequency of

dialogs, and the views of opinion leaders from outside the Daiwa

occurrence and the impact on society. Through this process, four

Securities Group. To this feedback we added considerations formaterial issues were recognized as highly important to the Daiwa

international trends in CSR, the GRI Guideline, and other societal

Securities Group.

Modern society faces a wide range of issues that threaten its

Companies with the power to influence society as a whole aresustainability. These include global-scale environmental issues

key players, greatly affecting whether it will be possible to achievethat threaten the survival of the human species, most well known

a sustainable society. The financial institutions that handle society’s

among them being global warming; the increasing disparity ofmoney have a particularly important duty to society through theirprosperity between the northern and southern hemispheres; andmain business: finance. This duty includes maintaining andin Japan, the aging society and low childbirth. It will not be

developing fair, active financial markets, as well as a commitment

possible to overcome these issues without the responsible action

to finance from a social perspective, and the creation of monetary

Securities marketof every sector of society, including the public sector, the private

flows that will help achieve a sustainable society. We believe that

sector, and communities.

our Group has a large role to play in this effort.

We will collaborate with everyone involved in the
securities market, and aim for the developmentof a sound and reliable securities market.

Stakeholders in the Daiwa Securities Group

Investors

Material issues of the Daiwa Securities GroupThe purpose of this report is to focus on topics, indicators andstudied the economic, environmental and social impact of theissues that we believe will greatly influence the decisions of thevarious activities of the Daiwa Securities Group, and identified

stakeholders of the Daiwa Securities Group. For this reason, wematerial issues that should be reported.

We are committed to offering
products and services that meetthe needs of individual investors,
institutional investors, andpotential investors who are
considering investing in the
future, and to improve customer
satisfaction.

Issuers
Private-sector enterprises,
public-service organizations,and other entities that needfund-raising by issuing stocks
and bonds are valuable
customers of the Daiwa
Securities Group.

Securities
MarketInvestors

Issuers

Shareholders

Signing to the United Nations Environment Programme FinanceInitiative (UNEP FI)*1, Principles of Responsible Investment(PRI)*2, and the Carbon Disclosure Project (CDP)*3, the Daiwa
Securities Group will fulfill our social roles as a financial institution.
In our efforts to achieve a sustainable society, it is vital that weincorporate initiatives to invest from a social perspective into our
securities business.
2. Commitment to the Development of a Sound Securities
Market (pages 13–16)

4. Publishing Information for a Sustainable Society(pages 20–24)
We continue to take advantage of our characteristics as acompany that handles information, including giving back theknowledge and expertise we have cultivated in the securities
industry through financial and economic education, collaboration
with academia, and providing the latest information on

We also focus on initiatives to build a company worth working for,from the President (pages 1–2) and Human Values and Humanmarket, we recognize that we must have thorough compliance that

Resource Utilization (pages 37–40).

lives up to the confidence of society and does not stop at mere
statutory compliance.

*1 UNEP FI: A partnership between the United Nations Environment Programme

3. Contribution to Global Environment (pages 17–19)*2 PRI: A guideline indicating environmental, social, and governance (ESG)

Recognizing global environmental issues as challenges that must

*3 CDP: With the support of institutional investors concerned about climate change,

and financial institutions from around the world.

environmental issues.

7

DAIWA SUSTAINAB ILITY REPO RT 2007

Government

Employees

considerations for investment to institutional investors.
the Carbon Disclosure Project asks investors and corporate executives todisclose information relating to their initiatives and approaches to environmental
problems.

WEB

UNEP FI, PRI and CDP

Employees

Em

Group. More information on this topic can be found in the Message

committed to collaborating in and promoting efforts to resolve

Daiwa
Securities
Group

as one of the key management policies of the Daiwa Securities

industry to maintain and develop a sound and reliable securities

the environmental impact of our businesses, while remaining fully

Shareholders

We maintain fairrelationships withall our business
partners, and work
together for therealization of asustainable society.

Business
Partnerssustainability.

In order to fulfill our responsibility as a company in the securities

be met by all companies and individuals, we thus strive to reduce

Business
Partners

Our employees are the creatorsof all added value received byour stakeholders. We arebuilding an environment that
increases the job satisfaction of
our employees, and empowers
them to fully harness theirabilities and ambitions. Our
employees’ families are also
important stakeholders.

plo

es

1. Adding a Social Perspective to Investment (pages 9–12)

In order to earn theconfidence of ourshareholders, we aim
to provide highly
transparent information disclosure, andmeet their expectations
by continually creating
value.

y e e s ’ Fa mili

Government

Local
Communities

NPOs/NGOs

We fulfill our tax
obligations, and offer
policy suggestions forthe realization of abetter society.

Local Communities

NPOs/NGOs

Our branches and overseas offices are
members of their local communities,
and promote community-rooted
efforts.

We will collaborate with NPOs and NGOs in suchfields as financial and economic education anddisaster relief, while reflecting the values of society
in our management through an active dialog.

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

8

Material

Issue

1

Adding a Social Perspective to Investment
Our goal is to incorporate the perspectives of the environment and society into investment decisions, but what is theawareness of investors and our sales force? What can the employees of the Daiwa Securities Group do? Employees
directly involved in these matters discuss the situation. (Discussion held May 31, 2007)

O n e of th e e mp loye e ’s mat erial roles is t o communicat e t he im p o r t an ceo f a so c ia l p ers p ec tive in invest ment .

Society in general still has a low awareness ofenvironmental and social aspects.

Shinji Kawakami

Sachiko Hanaoka

Shiko Yanagisawa

Katsumi Aoi

General Manager
Equity Department
Daiwa Securities Co. Ltd.

General Manager
Investment Strategy & Research Department
Daiwa Securities Co. Ltd.

General Manager
Global Head of Equity Sales
Institutional Sales Department (I)Daiwa Securities SMBC Co. Ltd.

Branch Manager
Area Manager of Shinjuku
Shinjuku Branch
Daiwa Securities Co. Ltd.

Yanagisawa: I think this is also the same overall situation withinstitutional investors in Japan. The typical reaction is, “Weunderstand the importance of SRI*, but we don’t know what to

Aoi: The Daiwa Securities Group’s Daiwa Eco Fund investment

do.” Although some people manage SRI funds, they are a very

Yanagisawa: Although I can’t say this applies to all institutional

to get institutional investors’ interest when we talk about SRI. Ourtrust is the largest in Japan. Although more and more of oursmall minority. The average fund manager might realize theinvestors, because each one, both inside and outside Japan, hasjunior sales staff are planning and holding seminars forcustomers are becoming interested in these types of products,

importance, but doesn’t know how to translate this into action by

its own ideas, but institutional investors also show a lot of interest

institutional investors on environmental issues on their own

most have no interest whatsoever. I feel that people generally

investors.

when I explain to them that Japan has many companies withinitiative, and they provide information on such topics ashave a low awareness of environmental and social issues when

Hanaoka: I sometimes have opportunities to speak withsome of the world’s top environmental technologies. They invest

emissionschoosing investments.

customers, and just about the only thing they are interested in isbecause they judge that they can profit from it.

government.

Kawakami: We have more opportunities to talk with customers

whether share prices will rise or fall. If you don’t tie in the

Hanaoka: Companies that are environmentally friendly also often

Hanaoka: We will actively publish investment information relating

about companies that have improved performance through anenvironment to share prices, it’s almost impossible to get them tohave scrupulous systems for internal management in addition toto environmental technologies and initiatives. I think that ouractive commitment to the environment, than opportunities to use

listen.

the environment, so I think that it is well worth investing in them.

Group’s focus on the CSR of our companies is also important for

The company’s scrupulous response to CSR earns it trust. I thinkgetting people to understand us. I believe that if people

one criterion for choosing stocks is the company’s attitude.

understand us, then when it comes time to chose a securities

the environment as an entry point for discussion. For example, if
an auto maker launches a new hybrid car, I think that investors* Socially responsible investment (SRI) is an approach to investing in companies,
considering not only the company’s financial performance, but also evaluating its
efforts to deal with environmental issues, social programs, and ethical practices.

will only pay attention to the auto maker, and decide to invest in it,

Convince investors that environmental and social
responsiveness improves a company’s
performance.

extremely receptive to themes. Our customers consist mainly ofpeople investing for the long term, and people investing for the
short term. I feel that people looking at a company’s growthpotential over the long and medium term are very receptive tothemes like the environment and society.
Hanaoka:

We are currently focusing on getting people torediscover the attraction of Japanese stocks, but the key to thisrediscovery is the environment. Growth in China and otheremergent economies harms the environment and creates energy
problems. Customers are very receptive when I explain that theability to be environmentally friendly is a big business opportunity
for a company. This is because Japan has the world’s highest
level of environmental technology.

DAIWA SUSTAINAB ILITY REPO RT 2007

environmental

measuresby

the

Aoi: I believe that the branches are the ones who put the CSR of

Kawakami: When customers are choosing a stock, they are9andcompany, they will choose us.

after they have some concrete evidence, such as improved
performance or fund value.

trading

Spreading the concept of incorporating a social
perspective into investment is a business
opportunity for a securities company.

Daiwa Securities into practice. Each of the 117 branches of Daiwa
Securities Co. Ltd. nationwide collaborates with local public
institutions, municipalities, local elementary and junior highAoi: Given the fact that financial education in Japan still doesn’t

schools, and others to promote CSR, including creating

have enough penetration, I think that communicating theopportunities to think about environmental issues and CSR. I

importance of investment from a social perspective is anbelieve that this raises the awareness of each employee, andimportant job for us. I think that improving financial education forleads to concrete action.

young people and explaining the concept of SRI is one of the

Kawakami: Daiwa Securities Co. Ltd. has a President’s Awards

ways that we can contribute to society.

program, which recognizes employees. Starting this fiscal year,

Kawakami: I feel that the philosophy of our company’s top

we created a Volunteer Award as part of this program. The

management has reached the employees. I believe that there is a

Volunteer Award is given as a special prize recognizing people

heightened awareness among employees that what they can do

who have made significant achievements through volunteer

individually is increase the recognition of SRI funds, eco funds,

activities. I think that this is one answer to employees’ question ofand the like, or get investors to turn their attention to companies

what they can do for society to help fulfill the corporate social

promoting the environment and CSR, and I believe that this is our

responsibility of Daiwa Securities Co. Ltd. I think another of our

responsibility to society.

biggest missions is to raise the awareness of as many investors

Yanagisawa: The environment has changed; today, we are able

as possible.

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

10

Material

Issue

1

Adding a Social Perspective to Investment
Our goal is to incorporate the perspectives of the environment and society into investment decisions, but what is theawareness of investors and our sales force? What can the employees of the Daiwa Securities Group do? Employees
directly involved in these matters discuss the situation. (Discussion held May 31, 2007)

O n e of th e e mp loye e ’s mat erial roles is t o communicat e t he im p o r t an ceo f a so c ia l p ers p ec tive in invest ment .

Society in general still has a low awareness ofenvironmental and social aspects.

Shinji Kawakami

Sachiko Hanaoka

Shiko Yanagisawa

Katsumi Aoi

General Manager
Equity Department
Daiwa Securities Co. Ltd.

General Manager
Investment Strategy & Research Department
Daiwa Securities Co. Ltd.

General Manager
Global Head of Equity Sales
Institutional Sales Department (I)Daiwa Securities SMBC Co. Ltd.

Branch Manager
Area Manager of Shinjuku
Shinjuku Branch
Daiwa Securities Co. Ltd.

Yanagisawa: I think this is also the same overall situation withinstitutional investors in Japan. The typical reaction is, “Weunderstand the importance of SRI*, but we don’t know what to

Aoi: The Daiwa Securities Group’s Daiwa Eco Fund investment

do.” Although some people manage SRI funds, they are a very

Yanagisawa: Although I can’t say this applies to all institutional

to get institutional investors’ interest when we talk about SRI. Ourtrust is the largest in Japan. Although more and more of oursmall minority. The average fund manager might realize theinvestors, because each one, both inside and outside Japan, hasjunior sales staff are planning and holding seminars forcustomers are becoming interested in these types of products,

importance, but doesn’t know how to translate this into action by

its own ideas, but institutional investors also show a lot of interest

institutional investors on environmental issues on their own

most have no interest whatsoever. I feel that people generally

investors.

when I explain to them that Japan has many companies withinitiative, and they provide information on such topics ashave a low awareness of environmental and social issues when

Hanaoka: I sometimes have opportunities to speak withsome of the world’s top environmental technologies. They invest

emissionschoosing investments.

customers, and just about the only thing they are interested in isbecause they judge that they can profit from it.

government.

Kawakami: We have more opportunities to talk with customers

whether share prices will rise or fall. If you don’t tie in the

Hanaoka: Companies that are environmentally friendly also often

Hanaoka: We will actively publish investment information relating

about companies that have improved performance through anenvironment to share prices, it’s almost impossible to get them tohave scrupulous systems for internal management in addition toto environmental technologies and initiatives. I think that ouractive commitment to the environment, than opportunities to use

listen.

the environment, so I think that it is well worth investing in them.

Group’s focus on the CSR of our companies is also important for

The company’s scrupulous response to CSR earns it trust. I thinkgetting people to understand us. I believe that if people

one criterion for choosing stocks is the company’s attitude.

understand us, then when it comes time to chose a securities

the environment as an entry point for discussion. For example, if
an auto maker launches a new hybrid car, I think that investors* Socially responsible investment (SRI) is an approach to investing in companies,
considering not only the company’s financial performance, but also evaluating its
efforts to deal with environmental issues, social programs, and ethical practices.

will only pay attention to the auto maker, and decide to invest in it,

Convince investors that environmental and social
responsiveness improves a company’s
performance.

extremely receptive to themes. Our customers consist mainly ofpeople investing for the long term, and people investing for the
short term. I feel that people looking at a company’s growthpotential over the long and medium term are very receptive tothemes like the environment and society.
Hanaoka:

We are currently focusing on getting people torediscover the attraction of Japanese stocks, but the key to thisrediscovery is the environment. Growth in China and otheremergent economies harms the environment and creates energy
problems. Customers are very receptive when I explain that theability to be environmentally friendly is a big business opportunity
for a company. This is because Japan has the world’s highest
level of environmental technology.

DAIWA SUSTAINAB ILITY REPO RT 2007

environmental

measuresby

the

Aoi: I believe that the branches are the ones who put the CSR of

Kawakami: When customers are choosing a stock, they are9andcompany, they will choose us.

after they have some concrete evidence, such as improved
performance or fund value.

trading

Spreading the concept of incorporating a social
perspective into investment is a business
opportunity for a securities company.

Daiwa Securities into practice. Each of the 117 branches of Daiwa
Securities Co. Ltd. nationwide collaborates with local public
institutions, municipalities, local elementary and junior highAoi: Given the fact that financial education in Japan still doesn’t

schools, and others to promote CSR, including creating

have enough penetration, I think that communicating theopportunities to think about environmental issues and CSR. I

importance of investment from a social perspective is anbelieve that this raises the awareness of each employee, andimportant job for us. I think that improving financial education forleads to concrete action.

young people and explaining the concept of SRI is one of the

Kawakami: Daiwa Securities Co. Ltd. has a President’s Awards

ways that we can contribute to society.

program, which recognizes employees. Starting this fiscal year,

Kawakami: I feel that the philosophy of our company’s top

we created a Volunteer Award as part of this program. The

management has reached the employees. I believe that there is a

Volunteer Award is given as a special prize recognizing people

heightened awareness among employees that what they can do

who have made significant achievements through volunteer

individually is increase the recognition of SRI funds, eco funds,

activities. I think that this is one answer to employees’ question ofand the like, or get investors to turn their attention to companies

what they can do for society to help fulfill the corporate social

promoting the environment and CSR, and I believe that this is our

responsibility of Daiwa Securities Co. Ltd. I think another of our

responsibility to society.

biggest missions is to raise the awareness of as many investors

Yanagisawa: The environment has changed; today, we are able

as possible.

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

10

Material

Issue

1

Adding a Social Perspective to Investment
Daiwa Securities Group’s SRI funds

reducing their environmental impact. Quite a few companies also

also

include environmental information in their annual reports.

sometimes

companies

visit
with

Suzuki: So on the question of how companies’ attitudes haveanalysts. There, I interview

changed, would you say that the perspective of responsiveness toenvironmental issues has come to be incorporated into

An SRI fund* is a financial product for investment with a social

Daiwa Securities Group are the Daiwa SRI Fund, which focuses

peopleon a commitment to CSR, and the Daiwa Eco Fund, which

environmental technologies

funds sold by the Daiwa Securities Group was approximately 75.3

focuses on a commitment to the environment and return on

and CSR directly. This gives

Kitahara: Out of the three factors of environment, society, andbillion yen, accounting for more than about 20% of all SRI funds

equity.

me access to information thatgovernance, the need to include governance as a factor in the

The approach of the Daiwa Eco Fundchargeisshare of the SRI fund market in Japan. Two key SRI funds of thequestionnaires or corporate

investment (SRI).

Economic value(Ecological perspective)(Economic perspective)

Developing environmentallyfriendly technologies

Investment performance by period (end-June 2007)

Supplying environmentallyfriendly products

PeriodDaiwa SRI Fund

Daiwa Eco FundTOPIX

3 months+5.07 %

+5.14 %

+3.58 %

1 year

+11.38 %+11.65 %+11.84 %Since fundestablishment*+63.32 %–+60.45 %–+7.54 %

+10.54 %¥ Increasing sales¥ Improving profitability¥ Strong potential

Improving energy efficiency

availableofin Japan (total value of about 370 billion yen). This is the largest
Social value

not

in

togetherperspective. As of end-March 2007, the balance of assets of SRI* SRI fund: An investment trust managed based on the concept of socially responsible

publications

investment in general, rather than just eco funds?

through

and

press

measurement of corporate value is fully recognized. In the same

Tadashi Kitahara
General Manager
Equity Research Department
Daiwa Asset Management Co. Ltd.

be an essential element. But it’s difficult to evaluate commitments
to the environment and social issues quantitatively. I think weSuzuki: What points to you pay particular attention to on yourneed a way to view companies from a different angle thanvisits?

conventional company analysis.
I would say it’s whether an awareness of CSR hasreached all employees. In companies where this awareness has
The Daiwa Securities Group invests in companies that it
anticipates will improve their corporate value from both“Eco” perspectives: ecology and economy.

way, the ability to respond to environmental issues is coming toreleases.

Kikuchi:penetration, employees work actively, and on their own initiative,

Funds that support companies committed to theenvironment

to develop and sell environmentally friendly products, and reduce

Suzuki:Companies with aenvironmental impact at the factory. Specifically, I ask about suchlarge

impactthings as the R&D process for environmentally friendly products,

environment are striving to

the environmental education curriculum, and the mechanism forminimize this impact, in orderproviding feedback on the results of environmental efforts.

to achieve a sustainable

Yuka Suzuki, who is in charge of communication with investors and sales representatives, interviewed

Suzuki:society. According to the

Katsuya Kikuchi, a fund manager for the Daiwa Eco Fund, and Tadashi Kitahara, an analyst who performs

perspective to make investment decisions?

results of a survey*3, nearly

corporate analysis and surveys industry trends, about how the Daiwa Eco Fund—currently a focus of the

Kikuchi: While such factors as environmental education and a

90% of investors in Japan

Daiwa Securities Group—helps to achieve a sustainable society. (Interview held May 28, 2007)

commitment to environmental activities may be difficult to tie into

support the idea that they

short-term sales or profits, I believe that they can reduce the risk

should consider a company’s

Kikuchi: One example is a manufacturer of gauges that measureof investment. When companies have practical environmentalsocial* Daiwa SRI Fund was established in May 2004, and Daiwa Eco Fund wasestablished in March 2006.

Achieving a sustainable society with the Daiwa Eco Fund

Evaluating how environmental technologies
tie into performance

How do you use the information gained through thisonresponsibilitytheKatsuya Kikuchi
Senior Fund Manager
Japanese Equity Management Department
Daiwa Asset Management Co. Ltd.

whenmaterials that impact the environment. The EU has recently

initiatives, it shows that they have excellent crisis-management

deciding where to invest their

The Daiwa Eco Fund invests in companies whose

enacted a series of regulations on chemicals, including RoHS*1

capabilities

hard-earned money. I believecommitment to the environment will be reflected in futureand REACH*2. Companies that manufacture or import products inpenetration. When I visit a company, I want to get a sense ofthat it is an important duty of Daiwa Asset Management Co. Ltd.

performance. What points do you focus on in particular when

the EU must investigate whether those products contain harmful

whether its initiatives are effective, and whether the organization

to publish information that moves the hearts of as many investors

choosing stocks to include in the fund?

substances, and for this reason, companies that produce

has a commitment to environmental and social issues in its DNA.

and fund salespersons as possible.

Kikuchi:

The first thing is sales of environmentally friendly

fluorescence X-ray systems are seeing real increases in sales.

Such a company is “sustainable,” and in particular, I can deem

Kikuchi:products.

a

Recycling of precious metals from mobile handsets and otherthat it is an appropriate medium to long-term investment.

Fund, we have expanded the group supporting companies thatcompany reduces its usage ofelectronic devices, and sales of energy-efficient office equipment

Suzuki:

Also,

when

energy and raw materials in its

are also increasing.

corporate activities, it leads to
lower

costs

or

greaterFund managers go out to collect information themselves

DAIWA SUSTAINAB ILITY REPO RT 2007

management

policyhas

thorough

Suzuki:

Viewing the actions of companies from an analyst’s

companies’ environmental initiatives?

Kitahara: I think they have changed a great deal. A significant

commitment to the environment

Kikuchi:

I choose stocks to include in the fund based on

number of companies have already incorporated a commitment tohas

corporate assessment data from specialized institutions, and also

the environment into the management strategies, and over 80%

use information from other analysts in the company, and theof corporations have created specific targets or action plans forresulted

performance?

in

improved

I believe that through investment in the Daiwa Eco

are strongly committed to the environment to include individual
Friendliness to the environment is a necessary factor
for measuring corporate value

environment have changed?

Can you give an

example of a company whose

Social Responsibility Investment Coordinator
Investment Planning Department
Daiwa Asset Management Co. Ltd.

that

Suzuki: What kind of information do you use to actually evaluate

Suzuki:

Yuka Suzuki

andperspective, do you feel that companies’ commitments to the

profitability.

11

results of my own studies. I

investors as well. I will also continue to stress that a commitment
to the environment increases a company’s value.
*1 The RoHS Directive stands for the Directive on the restriction of the use ofcertain hazardous substances in electrical and electronic equipment. It wasenacted by the EU in July 2006.

*2 REACH stands for Registration, Evaluation, Authorization and Restriction ofChemicals. It was enacted by the EU in June 2007. The program centralizes
the registration, evaluation, and authorization of chemicals, and requires
entities handling chemicals to perform safety assessments and othermeasures.

*3 Japanese

Ministry of Environment, “Socially responsible investmentcomparison report among Japan, the United States and United Kingdom.”
http://www.env.go.jp/policy/kinyu/rep_h1506/index.html (In Japanese only)

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

12

Material

Issue

1

Adding a Social Perspective to Investment
Daiwa Securities Group’s SRI funds

reducing their environmental impact. Quite a few companies also

also

include environmental information in their annual reports.

sometimes

companies

visit
with

Suzuki: So on the question of how companies’ attitudes haveanalysts. There, I interview

changed, would you say that the perspective of responsiveness toenvironmental issues has come to be incorporated into

An SRI fund* is a financial product for investment with a social

Daiwa Securities Group are the Daiwa SRI Fund, which focuses

peopleon a commitment to CSR, and the Daiwa Eco Fund, which

environmental technologies

funds sold by the Daiwa Securities Group was approximately 75.3

focuses on a commitment to the environment and return on

and CSR directly. This gives

Kitahara: Out of the three factors of environment, society, andbillion yen, accounting for more than about 20% of all SRI funds

equity.

me access to information thatgovernance, the need to include governance as a factor in the

The approach of the Daiwa Eco Fundchargeisshare of the SRI fund market in Japan. Two key SRI funds of thequestionnaires or corporate

investment (SRI).

Economic value(Ecological perspective)(Economic perspective)

Developing environmentallyfriendly technologies

Investment performance by period (end-June 2007)

Supplying environmentallyfriendly products

PeriodDaiwa SRI Fund

Daiwa Eco FundTOPIX

3 months+5.07 %

+5.14 %

+3.58 %

1 year

+11.38 %+11.65 %+11.84 %Since fundestablishment*+63.32 %–+60.45 %–+7.54 %

+10.54 %¥ Increasing sales¥ Improving profitability¥ Strong potential

Improving energy efficiency

availableofin Japan (total value of about 370 billion yen). This is the largest
Social value

not

in

togetherperspective. As of end-March 2007, the balance of assets of SRI* SRI fund: An investment trust managed based on the concept of socially responsible

publications

investment in general, rather than just eco funds?

through

and

press

measurement of corporate value is fully recognized. In the same

Tadashi Kitahara
General Manager
Equity Research Department
Daiwa Asset Management Co. Ltd.

be an essential element. But it’s difficult to evaluate commitments
to the environment and social issues quantitatively. I think weSuzuki: What points to you pay particular attention to on yourneed a way to view companies from a different angle thanvisits?

conventional company analysis.
I would say it’s whether an awareness of CSR hasreached all employees. In companies where this awareness has
The Daiwa Securities Group invests in companies that it
anticipates will improve their corporate value from both“Eco” perspectives: ecology and economy.

way, the ability to respond to environmental issues is coming toreleases.

Kikuchi:penetration, employees work actively, and on their own initiative,

Funds that support companies committed to theenvironment

to develop and sell environmentally friendly products, and reduce

Suzuki:Companies with aenvironmental impact at the factory. Specifically, I ask about suchlarge

impactthings as the R&D process for environmentally friendly products,

environment are striving to

the environmental education curriculum, and the mechanism forminimize this impact, in orderproviding feedback on the results of environmental efforts.

to achieve a sustainable

Yuka Suzuki, who is in charge of communication with investors and sales representatives, interviewed

Suzuki:society. According to the

Katsuya Kikuchi, a fund manager for the Daiwa Eco Fund, and Tadashi Kitahara, an analyst who performs

perspective to make investment decisions?

results of a survey*3, nearly

corporate analysis and surveys industry trends, about how the Daiwa Eco Fund—currently a focus of the

Kikuchi: While such factors as environmental education and a

90% of investors in Japan

Daiwa Securities Group—helps to achieve a sustainable society. (Interview held May 28, 2007)

commitment to environmental activities may be difficult to tie into

support the idea that they

short-term sales or profits, I believe that they can reduce the risk

should consider a company’s

Kikuchi: One example is a manufacturer of gauges that measureof investment. When companies have practical environmentalsocial* Daiwa SRI Fund was established in May 2004, and Daiwa Eco Fund wasestablished in March 2006.

Achieving a sustainable society with the Daiwa Eco Fund

Evaluating how environmental technologies
tie into performance

How do you use the information gained through thisonresponsibilitytheKatsuya Kikuchi
Senior Fund Manager
Japanese Equity Management Department
Daiwa Asset Management Co. Ltd.

whenmaterials that impact the environment. The EU has recently

initiatives, it shows that they have excellent crisis-management

deciding where to invest their

The Daiwa Eco Fund invests in companies whose

enacted a series of regulations on chemicals, including RoHS*1

capabilities

hard-earned money. I believecommitment to the environment will be reflected in futureand REACH*2. Companies that manufacture or import products inpenetration. When I visit a company, I want to get a sense ofthat it is an important duty of Daiwa Asset Management Co. Ltd.

performance. What points do you focus on in particular when

the EU must investigate whether those products contain harmful

whether its initiatives are effective, and whether the organization

to publish information that moves the hearts of as many investors

choosing stocks to include in the fund?

substances, and for this reason, companies that produce

has a commitment to environmental and social issues in its DNA.

and fund salespersons as possible.

Kikuchi:

The first thing is sales of environmentally friendly

fluorescence X-ray systems are seeing real increases in sales.

Such a company is “sustainable,” and in particular, I can deem

Kikuchi:products.

a

Recycling of precious metals from mobile handsets and otherthat it is an appropriate medium to long-term investment.

Fund, we have expanded the group supporting companies thatcompany reduces its usage ofelectronic devices, and sales of energy-efficient office equipment

Suzuki:

Also,

when

energy and raw materials in its

are also increasing.

corporate activities, it leads to
lower

costs

or

greaterFund managers go out to collect information themselves

DAIWA SUSTAINAB ILITY REPO RT 2007

management

policyhas

thorough

Suzuki:

Viewing the actions of companies from an analyst’s

companies’ environmental initiatives?

Kitahara: I think they have changed a great deal. A significant

commitment to the environment

Kikuchi:

I choose stocks to include in the fund based on

number of companies have already incorporated a commitment tohas

corporate assessment data from specialized institutions, and also

the environment into the management strategies, and over 80%

use information from other analysts in the company, and theof corporations have created specific targets or action plans forresulted

performance?

in

improved

I believe that through investment in the Daiwa Eco

are strongly committed to the environment to include individual
Friendliness to the environment is a necessary factor
for measuring corporate value

environment have changed?

Can you give an

example of a company whose

Social Responsibility Investment Coordinator
Investment Planning Department
Daiwa Asset Management Co. Ltd.

that

Suzuki: What kind of information do you use to actually evaluate

Suzuki:

Yuka Suzuki

andperspective, do you feel that companies’ commitments to the

profitability.

11

results of my own studies. I

investors as well. I will also continue to stress that a commitment
to the environment increases a company’s value.
*1 The RoHS Directive stands for the Directive on the restriction of the use ofcertain hazardous substances in electrical and electronic equipment. It wasenacted by the EU in July 2006.

*2 REACH stands for Registration, Evaluation, Authorization and Restriction ofChemicals. It was enacted by the EU in June 2007. The program centralizes
the registration, evaluation, and authorization of chemicals, and requires
entities handling chemicals to perform safety assessments and othermeasures.

*3 Japanese

Ministry of Environment, “Socially responsible investmentcomparison report among Japan, the United States and United Kingdom.”
http://www.env.go.jp/policy/kinyu/rep_h1506/index.html (In Japanese only)

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

12

Iss
Materialue

2changed when new products are created, and when the market

theCommitment to the Development of a Sound
Securities Market

environment changes. We also focus on making our rules asbranchsimple and easy to understand as possible, because that makes

recommending

them more effective.

customer to sell a holding— What kind of compliance system have you built at theinvestment

Maintaining and developing a sound securities market is a key responsibility of the Daiwa Securities Group. In order toorganizational level?

purchase a new one. This

accomplish this, we must live up to the confidence placed in us by our customers and society by practicing

Kagawa: We need a system to continually check whether our

prevents recommendations

compliance at a higher level than just complying with the laws and regulations.

operations are being carried out appropriately. The Complianceto

Department in our headquarters has compliance officers who are

products, and also helps

responsible for the sales branches in each area and group. Eachgrowsales branch also has an internal administration supervisor. This

increasingrole is separate from the branch manager, who is responsible for

period of our investment

sales. The internal administration supervisors report to ourtrusts.

A c t i o n with a wa re n es s of compliance by each of our employees
w i l l ea rn th e c o n fid e n ce of our cust omers and societ y.
Because the industry is growing, creating a fairmarket is an especially important duty.

unnecessary trades, would cause our customers to lose faith inbefore
to

such

the

as

trust,

inappropriately

our

an
and

switchassetsthethebyAtsushi Maeda

retention

General Manager
Compliance Department
Daiwa Securities Co. Ltd

We also perform sampling to check whether our trades match

Additionally, the Legal and Planning Section in the

don’t give high ratings to employees who only create transient

Compliance Department accepts consultations on laws andprofits. We promote a system that rates employees on how well

regulations from our sales branches, and the Examination Section

Shimazu: Compliancethey propose investments that are suited to their customers, andaccepts consultations on compliance operations. The Trade— How do you judge the results of your initiatives?

doesn’t

how well they build a true relationship of trust, and this system isSurveillance

Department

Kagawa: One of the indicators we focus on is the number of

becoming universal throughout our organization.

responds

inquiries

telephone calls that our Customer Support Center receives fromregarding share and othercustomers, and the details of the calls—inquiries, complaints, andso on (see page 15). Over 70% of all calls are inquiries, and the

just

mean

complying with the letterof

Senior Managing Director
Chief Compliance Officer
Member of the Board
Daiwa Securities Co. Ltd.

manager

product,

Compliance Division each month.

of

the act of investing itself, as well as their confidence in us. We— What do you think of compliance at Daiwa Securities?

Masaki Shimazu

authorization

the

law.

Daiwa

to

our customers’ needs, and implement a system for consultations
between superiors and customers.

Securities Group’s sense— What do you think the relationship is between the Daiwa

trades.

of compliance means all

Securities

Maeda: In order to practiceremaining slightly less than 30% are complaints. The proportionof complaints is declining, and I believe that this indicates that ourGroup’ssenseofcompliance,

and

legal

the actions to build a truecompliance?

a customer-oriented sales

relationship of trust with

Shimazu: Compliance fundamentally means living up to the trust

approach, we have a system

initiatives are showing results. We also analyze the complaints,

customers and society. Itof society. It does not simply mean “not breaking the law.” Itthat requires sales staff toand this helps us find areas in need of improvement.

includes all the actions tomeans every employee doing their jobs with the reasons why

apply

be taken in order tolaws and rules were created firmly in mind. I believe that this will

before switching products.

establish a sound andbuild a relationship of trust with our customers, and improve ourUndersales capabilities.

salesperson must obtainreliable securities market,

forauthorization

thissystem,a

Takanobu Kagawa
General Manager
Compliance Department
Daiwa Securities Co. Ltd.

including an appropriate
sales attitude that takes
customer

needs

into

Continually revising systems will achieve
universal compliance.

Compliance structure

account, a check system to eliminate securities incidents and thelike, and the elimination of antisocial forces.
As a company that deals with financial products, we must

— What are you doing to firmly establish the concept ofcompliance among our front-line staff?

have a strong sense of ethics. After a long period of low interest

Shimazu: We continually provide compliance training torates, the flow from savings into investment is accelerating, andeveryone from junior employees up to management. We

the ratio of direct financing is increasing. Precisely because this isparticularly emphasize to superiors that educating, checking, anda huge business opportunity, we also have a huge responsibility.

protecting subordinates is a key attitude that enables our internalcontrol system to function. Our personnel evaluations also

13

— But don’t salespeople tend to focus on profits?

emphasize sales approach that is suited to their customers andShimazu: What would happen if our salespeople acted like thecompliance. We will also centralize the chain of command for our

only thing that mattered was selling financial products? While

Sales Division and Compliance Division, and show a clear course

performance might increase over the short term, selling productsof action.

to customers who do not have a good sense of risk and return

Kagawa: Creating, managing, and continually revising internal

without informing them of the risks, and repeatedly performing

rules is also part of compliance practices. Rules need to be

DAIWA SUSTAINAB ILITY REPO RT 2007

Customers

Head Office Compliance Division
Head of Internal Administration Supervisors
Head of Compliance Division

Education and support

Compliance Department (Compliance Officers)
Information Security Department

Reports

Trade Surveillance Department

Internal Audit Department

Sales branches
Sales
supervisor

Internal
administration
supervisors
Check

Audit

Employees at sales branches

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

14

Iss
Materialue

2changed when new products are created, and when the market

theCommitment to the Development of a Sound
Securities Market

environment changes. We also focus on making our rules asbranchsimple and easy to understand as possible, because that makes

recommending

them more effective.

customer to sell a holding— What kind of compliance system have you built at theinvestment

Maintaining and developing a sound securities market is a key responsibility of the Daiwa Securities Group. In order toorganizational level?

purchase a new one. This

accomplish this, we must live up to the confidence placed in us by our customers and society by practicing

Kagawa: We need a system to continually check whether our

prevents recommendations

compliance at a higher level than just complying with the laws and regulations.

operations are being carried out appropriately. The Complianceto

Department in our headquarters has compliance officers who are

products, and also helps

responsible for the sales branches in each area and group. Eachgrowsales branch also has an internal administration supervisor. This

increasingrole is separate from the branch manager, who is responsible for

period of our investment

sales. The internal administration supervisors report to ourtrusts.

A c t i o n with a wa re n es s of compliance by each of our employees
w i l l ea rn th e c o n fid e n ce of our cust omers and societ y.
Because the industry is growing, creating a fairmarket is an especially important duty.

unnecessary trades, would cause our customers to lose faith inbefore
to

such

the

as

trust,

inappropriately

our

an
and

switchassetsthethebyAtsushi Maeda

retention

General Manager
Compliance Department
Daiwa Securities Co. Ltd

We also perform sampling to check whether our trades match

Additionally, the Legal and Planning Section in the

don’t give high ratings to employees who only create transient

Compliance Department accepts consultations on laws andprofits. We promote a system that rates employees on how well

regulations from our sales branches, and the Examination Section

Shimazu: Compliancethey propose investments that are suited to their customers, andaccepts consultations on compliance operations. The Trade— How do you judge the results of your initiatives?

doesn’t

how well they build a true relationship of trust, and this system isSurveillance

Department

Kagawa: One of the indicators we focus on is the number of

becoming universal throughout our organization.

responds

inquiries

telephone calls that our Customer Support Center receives fromregarding share and othercustomers, and the details of the calls—inquiries, complaints, andso on (see page 15). Over 70% of all calls are inquiries, and the

just

mean

complying with the letterof

Senior Managing Director
Chief Compliance Officer
Member of the Board
Daiwa Securities Co. Ltd.

manager

product,

Compliance Division each month.

of

the act of investing itself, as well as their confidence in us. We— What do you think of compliance at Daiwa Securities?

Masaki Shimazu

authorization

the

law.

Daiwa

to

our customers’ needs, and implement a system for consultations
between superiors and customers.

Securities Group’s sense— What do you think the relationship is between the Daiwa

trades.

of compliance means all

Securities

Maeda: In order to practiceremaining slightly less than 30% are complaints. The proportionof complaints is declining, and I believe that this indicates that ourGroup’ssenseofcompliance,

and

legal

the actions to build a truecompliance?

a customer-oriented sales

relationship of trust with

Shimazu: Compliance fundamentally means living up to the trust

approach, we have a system

initiatives are showing results. We also analyze the complaints,

customers and society. Itof society. It does not simply mean “not breaking the law.” Itthat requires sales staff toand this helps us find areas in need of improvement.

includes all the actions tomeans every employee doing their jobs with the reasons why

apply

be taken in order tolaws and rules were created firmly in mind. I believe that this will

before switching products.

establish a sound andbuild a relationship of trust with our customers, and improve ourUndersales capabilities.

salesperson must obtainreliable securities market,

forauthorization

thissystem,a

Takanobu Kagawa
General Manager
Compliance Department
Daiwa Securities Co. Ltd.

including an appropriate
sales attitude that takes
customer

needs

into

Continually revising systems will achieve
universal compliance.

Compliance structure

account, a check system to eliminate securities incidents and thelike, and the elimination of antisocial forces.
As a company that deals with financial products, we must

— What are you doing to firmly establish the concept ofcompliance among our front-line staff?

have a strong sense of ethics. After a long period of low interest

Shimazu: We continually provide compliance training torates, the flow from savings into investment is accelerating, andeveryone from junior employees up to management. We

the ratio of direct financing is increasing. Precisely because this isparticularly emphasize to superiors that educating, checking, anda huge business opportunity, we also have a huge responsibility.

protecting subordinates is a key attitude that enables our internalcontrol system to function. Our personnel evaluations also

13

— But don’t salespeople tend to focus on profits?

emphasize sales approach that is suited to their customers andShimazu: What would happen if our salespeople acted like thecompliance. We will also centralize the chain of command for our

only thing that mattered was selling financial products? While

Sales Division and Compliance Division, and show a clear course

performance might increase over the short term, selling productsof action.

to customers who do not have a good sense of risk and return

Kagawa: Creating, managing, and continually revising internal

without informing them of the risks, and repeatedly performing

rules is also part of compliance practices. Rules need to be

DAIWA SUSTAINAB ILITY REPO RT 2007

Customers

Head Office Compliance Division
Head of Internal Administration Supervisors
Head of Compliance Division

Education and support

Compliance Department (Compliance Officers)
Information Security Department

Reports

Trade Surveillance Department

Internal Audit Department

Sales branches
Sales
supervisor

Internal
administration
supervisors
Check

Audit

Employees at sales branches

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

14IssueMaterial

2

Commitment to the Development of a Sound Securities Market

Administrative sanction, subsequent improvement measures, and the status of their implementation

Administrative sanction on Daiwa Securities Co. Ltd. by Financial Services Agency
In October 2005, an executive of a chemical manufacturer asked the“…recognizes that not enough was done to prevent unfair trading

After the training, the employees were given questionnaires.

assistant manager of the Himeji branch to open an account in the namerelating to corporate information,” and further that the assistant

The responses in the questionnaires showed us that the trainingof one of the manufacturer’s business partners, and placed amanager “…accepted the customer’s security-trade order without

gave many employees a renewed awareness of the need topurchasing order for 1,500 shares of the manufacturer’s stock. Basedconfirming customer identity in accordance with the Customer

administrative sanction (see page 16) in fiscal 2006?

remain conscious of compliance in all actions.

on the way in which the account was opened and other factors, theIdentification Law,” and that these actions were subject to sanction.

Shimazu:

Shimazu: Based on this incident, we studied ways to enhancebranch assistant manager was suspicious that the executive of the

Daiwa Securities Co. Ltd. takes this administrative sanction very

branch of one of the most important duties of a securities

our internal control system, including personal identification andchemical manufacturer was using this account under the businessseriously, and we deeply regret the inconvenience we have caused ourcompany: to maintain the reliability of the securities market. The

preventing illicit trading, from the perspective of the duties ofpartner’s name. These actions were subject to sanction because

shareholders and everyone involved. In accordance with an order byadministrative sanction was for insider trading by a customer thatbranch managers and ensuring that our salespeople execute their“…accepted the customer’s security-trade order despite knowing thethe FSA to halt operations, we halted operations by our Himeji branch

we should have been able to prevent, but didn’t. In subsequent

duties appropriately, and we formulated measures to improverisk of insider trading.”

for two days: December 19 and 20, 2006.

We take our administrative sanction very seriously.
We will use it to create better mechanisms.
—

Whatcausedour

Himejibranchtoundergo

It was caused by insufficient awareness within the

training, we are emphasizing the importance of recognizing thisduty we have to society.

sent from nearby branches to staff the phones during training.

The FSA also determined that the Himeji branch manager

operations.
We take this incident very seriously, and we are committed toregaining trust by enhancing our structural regime in order to

Our response to business improvement order and correction order— What was the reaction by employees like?

prevent illegal activities, and ensuring thorough knowledge andWe created a business improvement plan designed to prevent such

We are committed to improving our internal management and

Maeda: Within two months of the incident, our directors visitedunderstanding of compliance and internal controls.

violations from occurring again, and submitted a Businesschecking system, and enhancing our regime to prevent violations from

Improvement Report to the FSA on January 4, 2007. Below are

occurring, as well as ensuring thorough awareness of compliance indescribed the business improvement order and correction order

order for each employee to think carefully about the reasons behindconsequent to the administrative sanction, and our main responses tolaws and rules, act in accordance with commonly accepted norms, andthese orders.

build a relationship of trust with our customers and society.

Business improvement orderand correction order

Main responses to the orders

every sales branch and personally conducted training, in order tothoroughly communicate the background of the incident, and that
employees must exercise caution. This training was given to

Outstanding compliance is a major businessadvantage.

everyone, from managers, to salespeople, to drivers. People were
— What are your future goals?
Shimazu: Outstanding compliance is a major businessadvantage. It makes us more valuable as consultants.
By having each individual understand his or her mission, and● Created an Internal Control Improvement Committee at the Himeji branch

recognize and execute his or her duties based on thisunderstanding, I believe that it is possible to differentiate theDaiwa Securities Group from our competitors on the strength ofDrastically revise the internal-control
systems at the Himeji branch.

● Conducted training at Himeji branch
During the halt of operations at the Himeji branch, all branch employees underwent compliance training.

our compliance. Our goal is to make Daiwa Securities Co. Ltd. thefinance industry’s compliance leader.
Clearly identify the accountability forthe facts causing the administrative
sanction

Calls received by our Customer Support Center
that the decreasing trend in the ratio of complaints to total calls

Support Center as an indicator of the results of our compliancereflects successful results of our customer support initiatives.

initiatives.
Number of calls received by our Customer Support Center

calls. Of these, 3,818 were inquiries, and 1,313 were complaints.

0

We believe that the reduction in the number of inquiries is a

FY2004reflection of the decrease in trading due to the sluggish securities

FY2005market.

FY2006

2,000

4,000

4,068

1,716

4,944
1,284

● Compartmentalization of information
Validate the internal control systemsof our branches, and formulate andimplement measures to prevent reoccurrence.

7
1,778

3,818

8,000 (calls)

6,000

297

Fiscal year

Ratio of complaints and feedback to total calls*

2004

29.6%

and the like. For this reason, it is inappropriate to base evaluations

2005

25.3%

2006

25.0%

15

DAIWA SUSTAINAB ILITY REPO RT 2007

● Independence of Trade Auditing Department
We made the Trade Auditing Department, which was part of the Compliance Department, independent, giving it
a key role in checks against insider trading, and enhancing its trading control operations by increasing thedepartment’s personnel from 8 to 14 people.
We will introduce a system capable of recording all telephone conversations with customers at all branches bySeptember 2007. This will enable concrete recording-based monitoring.

■ Inquiries ■ Complaints/feedback (excluding system faults) ■ Complaints about system faults

and investment performance of financial products, system faults,

We compartmentalized information by physically separating the working environment of the Investment
Banking personnel from that of the Brokerage personnel.

● Introduction of call recording system

29

increases or decreases in the numbers of trades, market trends

on a simple comparison of numbers alone. However, we believe

In order to clearly assign accountability to officers and employees, the compensation of seven directors was
reduced from 5 to 10% for three months, and five employees involved in the incident received official
reprimands or warnings.

We forbid employees in the Investment Banking Department involved with insider information from taking tradeorders under any circumstances.

The numbers of calls and complaints received by the Customer
Support Center fluctuates due to variable factors, including● Clearly identified accountability● Revisions to internal regulations and systems

We focus on the analysis of calls received by our Customer

In fiscal 2006, our Customer Support Center received 5,131

We have created an Internal Control Improvement Committee at the Himeji branch. Every Monday, the branchmanager and other persons in positions of responsibility meet, identifying issues for that week, and confirming
the implementation status of issues from the previous week.

Ensure through awareness of legal
compliance by all officers andemployees by means of training andother programs.

● Conducted compliance training at all sales branches
In order to learn well from this incident and ensure thorough knowledge and understanding of compliance, ourdirectors visited all 117 branches nationwide within two months of the incident, providing compliance training to
all employees.

* Excluding complaints about system faults

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

16

IssueMaterial

2

Commitment to the Development of a Sound Securities Market

Administrative sanction, subsequent improvement measures, and the status of their implementation

Administrative sanction on Daiwa Securities Co. Ltd. by Financial Services Agency
In October 2005, an executive of a chemical manufacturer asked the“…recognizes that not enough was done to prevent unfair trading

After the training, the employees were given questionnaires.

assistant manager of the Himeji branch to open an account in the namerelating to corporate information,” and further that the assistant

The responses in the questionnaires showed us that the trainingof one of the manufacturer’s business partners, and placed amanager “…accepted the customer’s security-trade order without

gave many employees a renewed awareness of the need topurchasing order for 1,500 shares of the manufacturer’s stock. Basedconfirming customer identity in accordance with the Customer

administrative sanction (see page 16) in fiscal 2006?

remain conscious of compliance in all actions.

on the way in which the account was opened and other factors, theIdentification Law,” and that these actions were subject to sanction.

Shimazu:

Shimazu: Based on this incident, we studied ways to enhancebranch assistant manager was suspicious that the executive of the

Daiwa Securities Co. Ltd. takes this administrative sanction very

branch of one of the most important duties of a securities

our internal control system, including personal identification andchemical manufacturer was using this account under the businessseriously, and we deeply regret the inconvenience we have caused ourcompany: to maintain the reliability of the securities market. The

preventing illicit trading, from the perspective of the duties ofpartner’s name. These actions were subject to sanction because

shareholders and everyone involved. In accordance with an order byadministrative sanction was for insider trading by a customer thatbranch managers and ensuring that our salespeople execute their“…accepted the customer’s security-trade order despite knowing thethe FSA to halt operations, we halted operations by our Himeji branch

we should have been able to prevent, but didn’t. In subsequent

duties appropriately, and we formulated measures to improverisk of insider trading.”

for two days: December 19 and 20, 2006.

We take our administrative sanction very seriously.
We will use it to create better mechanisms.
—

Whatcausedour

Himejibranchtoundergo

It was caused by insufficient awareness within the

training, we are emphasizing the importance of recognizing thisduty we have to society.

sent from nearby branches to staff the phones during training.

The FSA also determined that the Himeji branch manager

operations.
We take this incident very seriously, and we are committed toregaining trust by enhancing our structural regime in order to

Our response to business improvement order and correction order— What was the reaction by employees like?

prevent illegal activities, and ensuring thorough knowledge andWe created a business improvement plan designed to prevent such

We are committed to improving our internal management and

Maeda: Within two months of the incident, our directors visitedunderstanding of compliance and internal controls.

violations from occurring again, and submitted a Businesschecking system, and enhancing our regime to prevent violations from

Improvement Report to the FSA on January 4, 2007. Below are

occurring, as well as ensuring thorough awareness of compliance indescribed the business improvement order and correction order

order for each employee to think carefully about the reasons behindconsequent to the administrative sanction, and our main responses tolaws and rules, act in accordance with commonly accepted norms, andthese orders.

build a relationship of trust with our customers and society.

Business improvement orderand correction order

Main responses to the orders

every sales branch and personally conducted training, in order tothoroughly communicate the background of the incident, and that
employees must exercise caution. This training was given to

Outstanding compliance is a major businessadvantage.

everyone, from managers, to salespeople, to drivers. People were
— What are your future goals?
Shimazu: Outstanding compliance is a major businessadvantage. It makes us more valuable as consultants.
By having each individual understand his or her mission, and● Created an Internal Control Improvement Committee at the Himeji branch

recognize and execute his or her duties based on thisunderstanding, I believe that it is possible to differentiate theDaiwa Securities Group from our competitors on the strength ofDrastically revise the internal-control
systems at the Himeji branch.

● Conducted training at Himeji branch
During the halt of operations at the Himeji branch, all branch employees underwent compliance training.

our compliance. Our goal is to make Daiwa Securities Co. Ltd. thefinance industry’s compliance leader.
Clearly identify the accountability forthe facts causing the administrative
sanction

Calls received by our Customer Support Center
that the decreasing trend in the ratio of complaints to total calls

Support Center as an indicator of the results of our compliancereflects successful results of our customer support initiatives.

initiatives.
Number of calls received by our Customer Support Center

calls. Of these, 3,818 were inquiries, and 1,313 were complaints.

0

We believe that the reduction in the number of inquiries is a

FY2004reflection of the decrease in trading due to the sluggish securities

FY2005market.

FY2006

2,000

4,000

4,068

1,716

4,944
1,284

● Compartmentalization of information
Validate the internal control systemsof our branches, and formulate andimplement measures to prevent reoccurrence.

7
1,778

3,818

8,000 (calls)

6,000

297

Fiscal year

Ratio of complaints and feedback to total calls*

2004

29.6%

and the like. For this reason, it is inappropriate to base evaluations

2005

25.3%

2006

25.0%

15

DAIWA SUSTAINAB ILITY REPO RT 2007

● Independence of Trade Auditing Department
We made the Trade Auditing Department, which was part of the Compliance Department, independent, giving it
a key role in checks against insider trading, and enhancing its trading control operations by increasing thedepartment’s personnel from 8 to 14 people.
We will introduce a system capable of recording all telephone conversations with customers at all branches bySeptember 2007. This will enable concrete recording-based monitoring.

■ Inquiries ■ Complaints/feedback (excluding system faults) ■ Complaints about system faults

and investment performance of financial products, system faults,

We compartmentalized information by physically separating the working environment of the Investment
Banking personnel from that of the Brokerage personnel.

● Introduction of call recording system

29

increases or decreases in the numbers of trades, market trends

on a simple comparison of numbers alone. However, we believe

In order to clearly assign accountability to officers and employees, the compensation of seven directors was
reduced from 5 to 10% for three months, and five employees involved in the incident received official
reprimands or warnings.

We forbid employees in the Investment Banking Department involved with insider information from taking tradeorders under any circumstances.

The numbers of calls and complaints received by the Customer
Support Center fluctuates due to variable factors, including● Clearly identified accountability● Revisions to internal regulations and systems

We focus on the analysis of calls received by our Customer

In fiscal 2006, our Customer Support Center received 5,131

We have created an Internal Control Improvement Committee at the Himeji branch. Every Monday, the branchmanager and other persons in positions of responsibility meet, identifying issues for that week, and confirming
the implementation status of issues from the previous week.

Ensure through awareness of legal
compliance by all officers andemployees by means of training andother programs.

● Conducted compliance training at all sales branches
In order to learn well from this incident and ensure thorough knowledge and understanding of compliance, ourdirectors visited all 117 branches nationwide within two months of the incident, providing compliance training to
all employees.

* Excluding complaints about system faults

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

16

Material

Issue

3

Contribution to Global Environment
The Daiwa Securities Group continues to implement a wide range of initiatives aimed at helping to resolve global
warming and other environmental issues.

Daiwa Eco Fund
The Daiwa Eco Fund is a stock investment trust that selects

Net Balance of the Daiwa Eco Fund (¥ billion)

investment

corporations’(¥billion)

environmental technologies and commitment to the environment, and60

stocksbasedonevaluations

of

65.46
53.31

56.47

57.29

57.58

58.33

Number of internal statement
pages printed at Daiwa
Securities Co. Ltd.

the volume of hard copies made by switching over to electronic

streamlined administrative processes

statements at all sales branches. In fiscal 2005, Daiwa Securities Co.

via electronic statements, as well asLtd. printed out approximately 40.8 million pages of internal

sharing the awareness of the need tostatements; in fiscal 2006, it printed out 11.17 million pages—a huge

reduce paper hardcopies through73% year-on-year decrease. In fiscal 2006, we ordered 245 tons of

dialogs between people involved in

paper for statements, a 48% year-on-year decrease. This works out tothis process on the operations level.

4,000

a reduction from 68.1 kg of paper per Daiwa Securities employee to

We will continue in our efforts to

3,000

35.4 kg. In order to achieve this massive reduction in hard copies, it

reduce our environmental impact,

was necessary to reform the operational flow used by thelooking into ways to move theadministrative departments of our sales branches, which until now had

documents we distribute to affiliates

used paper slips. The key to achieving this was creating tools thatand others to electronic form.

(10,000
pages )
5,000

4,080

2,000

1,117
1,000
0

FY2005 FY2006

Environmental seminar for customersof the economic value of their stock. The Daiwa Eco Fund is one of
the key products managed and sold by the Daiwa Securities Group.

30

Our goal in promoting the Daiwa Eco Fund is to support companies
that are committed to the environment, and raise individual investors’
awareness of environmental issues.

In May 2007, we held “Daiwa Environmental Forum 2007: What Is

vital to have a vision of the kind of Japan and Planet Earth you want,

Happening to the Earth Now?”—an environmental seminar aimed atand act to achieve it.

raising the awareness of environmental issues by Daiwa Securities

0Mar. 06

Jun.

Sep.

Dec.

Mar. 07Jun.

customers in Tokyo Metropolitan area. The first part of the seminar
was a lecture by Junko Edahiro, Chief Executive of Japan for
Sustainability, titled “Making the Earth Healthy and Us Happy.” The

Initiatives in the emissions trading business
Nine greenhouse-gas reduction projects financed by Daiwa Securities

second was a lecture by Mariko Kawaguchi, Senior CSR Analyst at
Daiwa Institute of Research Ltd., titled “Preventing Global Warming:

Cool Bond mechanis

What Your Money Can Do.” The seminar was broadcast via satellite

SMBC Principal Investments Co. Ltd. under the World Bank’s
Community Development Carbon Fund have been approved by theJapanese government and the UN. In February 2006, the company
developed and began sales of a euro-dollar bond named CO2L Bond

* CER: Certificated Emissions Reduction
Purchasing CER* at a fixed price,
Companies
based on interest payout funds
reducing
greenhouse gas
CO2L Bondemissions(“Cool Bonds”)*, the world’s first bond in which coupons are linked tothe prices of Certified Emission Reductions (CERs). The company willcontinuously contribute to expanding the emissions-trading market,
and consider the development of financial products and other meansthat enable investors with an awareness of the global-warming issue

CER

Interest

304 people attended the forum. The audience listened intently to

Value of CER
sold prior tointerest payout(AAA ratingplanned)Edahiro’s message that global warming is a chance for reform; it isInterest(CER sales
value)

Emissionstrading market

Principal

Investors

finance.
http://www.daiwasmbcpi.co.jp/news/060216/060216.html

Environmental seminar for customers

In-house screening of “An Inconvenient Truth”

Redemption

to join efforts to promote the reduction of CO2 emissions through* See the following URL for details about CO2L Bonds. (In Japanese only)

for the general public.

A bond that incorporates a mechanism for paying the prices set by the
Kyoto Protocol for selling CERs to investors as coupon payments.

In December 2006, we held an in-house screening of “An

including that the numbers and video made it easy to understand that

Inconvenient Truth,” a movie about the issue of global warming by

we are in a dangerous situation, and that the video was well worth

former US vice president Al Gore, in order to raise the awareness ofviewing; and that we should make a commitment to environmentalgroup employees about issues of climate change. Many officers andbusinesses leveraging our special characteristics as a securities

employees of the Daiwa Securities Group attended the screening. We

company, including emissions trading.

received a large number of comments by those who saw the movie,

Initiatives for electronic statement promotion
Presentation at Global Business Summit for the Environment (B4E)
In February 2005, we began the Electronic Statement Promotion

2006. The types of documents that can be sent in electronic form

Project. This project has succeeded in greatly reducing the volume ofhave also increased. In fiscal 2006, we reduced the volume of

In April 2007, Global Business Summit for the Environment (B4E) was

paper we use.

customer statements by 15.42 million pages. This is equivalent toheld in Singapore. The summit, hosted jointly by the United Nations

about 15% of all forms used by Daiwa Securities Co. Ltd. We are

Environment Programme and UN Global Compact, invited the Daiwa

aiming to further reduce our paper output in fiscal 2007, by increasing

Securities Group as a panelist. As a representative of the Group,

Daiwa Securities Co. Ltd. is moving toward sending its customers

the number of e-members and moving to electronic statements for our

Masaru Arai, Principal Executive Officer at Daiwa Asset Management

electronic versions of a number of statements and reports it has

investment trusts.

Co. Ltd., attended the panel discussion to discuss trends in SRI,Electronic statements for customers

mailed until now, including account statements, transaction reports,
and other notices. The number of e-members—customers who have17

environmental-business initiatives, and other topics. B4E brought
Electronic statements for internal use

together people from a wide range of industries around the world tosigned up to receive electronic reports and statements and to utilize

The internal forms used by Daiwa Securities Co. Ltd. have increased

discuss environmentally friendly businesses. We were the only

online trading—has grown from 270,000 to 430,000 during fiscal

due to the diversification of our products, but we have greatly reduced

Japanese company to attend the summit.

DAIWA SU STAINABILITY R EPO RT 2007

Masaru Arai, Director and Principal Executive Officer
at Daiwa Asset Management Co. Ltd. (second from left)

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

18

Material

Issue

3

Contribution to Global Environment
The Daiwa Securities Group continues to implement a wide range of initiatives aimed at helping to resolve global
warming and other environmental issues.

Daiwa Eco Fund
The Daiwa Eco Fund is a stock investment trust that selects

Net Balance of the Daiwa Eco Fund (¥ billion)

investment

corporations’(¥billion)

environmental technologies and commitment to the environment, and60

stocksbasedonevaluations

of

65.46
53.31

56.47

57.29

57.58

58.33

Number of internal statement
pages printed at Daiwa
Securities Co. Ltd.

the volume of hard copies made by switching over to electronic

streamlined administrative processes

statements at all sales branches. In fiscal 2005, Daiwa Securities Co.

via electronic statements, as well asLtd. printed out approximately 40.8 million pages of internal

sharing the awareness of the need tostatements; in fiscal 2006, it printed out 11.17 million pages—a huge

reduce paper hardcopies through73% year-on-year decrease. In fiscal 2006, we ordered 245 tons of

dialogs between people involved in

paper for statements, a 48% year-on-year decrease. This works out tothis process on the operations level.

4,000

a reduction from 68.1 kg of paper per Daiwa Securities employee to

We will continue in our efforts to

3,000

35.4 kg. In order to achieve this massive reduction in hard copies, it

reduce our environmental impact,

was necessary to reform the operational flow used by thelooking into ways to move theadministrative departments of our sales branches, which until now had

documents we distribute to affiliates

used paper slips. The key to achieving this was creating tools thatand others to electronic form.

(10,000
pages )
5,000

4,080

2,000

1,117
1,000
0

FY2005 FY2006

Environmental seminar for customersof the economic value of their stock. The Daiwa Eco Fund is one of
the key products managed and sold by the Daiwa Securities Group.

30

Our goal in promoting the Daiwa Eco Fund is to support companies
that are committed to the environment, and raise individual investors’
awareness of environmental issues.

In May 2007, we held “Daiwa Environmental Forum 2007: What Is

vital to have a vision of the kind of Japan and Planet Earth you want,

Happening to the Earth Now?”—an environmental seminar aimed atand act to achieve it.

raising the awareness of environmental issues by Daiwa Securities

0Mar. 06

Jun.

Sep.

Dec.

Mar. 07Jun.

customers in Tokyo Metropolitan area. The first part of the seminar
was a lecture by Junko Edahiro, Chief Executive of Japan for
Sustainability, titled “Making the Earth Healthy and Us Happy.” The

Initiatives in the emissions trading business
Nine greenhouse-gas reduction projects financed by Daiwa Securities

second was a lecture by Mariko Kawaguchi, Senior CSR Analyst at
Daiwa Institute of Research Ltd., titled “Preventing Global Warming:

Cool Bond mechanis

What Your Money Can Do.” The seminar was broadcast via satellite

SMBC Principal Investments Co. Ltd. under the World Bank’s
Community Development Carbon Fund have been approved by theJapanese government and the UN. In February 2006, the company
developed and began sales of a euro-dollar bond named CO2L Bond

* CER: Certificated Emissions Reduction
Purchasing CER* at a fixed price,
Companies
based on interest payout funds
reducing
greenhouse gas
CO2L Bondemissions(“Cool Bonds”)*, the world’s first bond in which coupons are linked tothe prices of Certified Emission Reductions (CERs). The company willcontinuously contribute to expanding the emissions-trading market,
and consider the development of financial products and other meansthat enable investors with an awareness of the global-warming issue

CER

Interest

304 people attended the forum. The audience listened intently to

Value of CER
sold prior tointerest payout(AAA ratingplanned)Edahiro’s message that global warming is a chance for reform; it isInterest(CER sales
value)

Emissionstrading market

Principal

Investors

finance.
http://www.daiwasmbcpi.co.jp/news/060216/060216.html

Environmental seminar for customers

In-house screening of “An Inconvenient Truth”

Redemption

to join efforts to promote the reduction of CO2 emissions through* See the following URL for details about CO2L Bonds. (In Japanese only)

for the general public.

A bond that incorporates a mechanism for paying the prices set by the
Kyoto Protocol for selling CERs to investors as coupon payments.

In December 2006, we held an in-house screening of “An

including that the numbers and video made it easy to understand that

Inconvenient Truth,” a movie about the issue of global warming by

we are in a dangerous situation, and that the video was well worth

former US vice president Al Gore, in order to raise the awareness ofviewing; and that we should make a commitment to environmentalgroup employees about issues of climate change. Many officers andbusinesses leveraging our special characteristics as a securities

employees of the Daiwa Securities Group attended the screening. We

company, including emissions trading.

received a large number of comments by those who saw the movie,

Initiatives for electronic statement promotion
Presentation at Global Business Summit for the Environment (B4E)
In February 2005, we began the Electronic Statement Promotion

2006. The types of documents that can be sent in electronic form

Project. This project has succeeded in greatly reducing the volume ofhave also increased. In fiscal 2006, we reduced the volume of

In April 2007, Global Business Summit for the Environment (B4E) was

paper we use.

customer statements by 15.42 million pages. This is equivalent toheld in Singapore. The summit, hosted jointly by the United Nations

about 15% of all forms used by Daiwa Securities Co. Ltd. We are

Environment Programme and UN Global Compact, invited the Daiwa

aiming to further reduce our paper output in fiscal 2007, by increasing

Securities Group as a panelist. As a representative of the Group,

Daiwa Securities Co. Ltd. is moving toward sending its customers

the number of e-members and moving to electronic statements for our

Masaru Arai, Principal Executive Officer at Daiwa Asset Management

electronic versions of a number of statements and reports it has

investment trusts.

Co. Ltd., attended the panel discussion to discuss trends in SRI,Electronic statements for customers

mailed until now, including account statements, transaction reports,
and other notices. The number of e-members—customers who have17

environmental-business initiatives, and other topics. B4E brought
Electronic statements for internal use

together people from a wide range of industries around the world tosigned up to receive electronic reports and statements and to utilize

The internal forms used by Daiwa Securities Co. Ltd. have increased

discuss environmentally friendly businesses. We were the only

online trading—has grown from 270,000 to 430,000 during fiscal

due to the diversification of our products, but we have greatly reduced

Japanese company to attend the summit.

DAIWA SU STAINABILITY R EPO RT 2007

Masaru Arai, Director and Principal Executive Officer
at Daiwa Asset Management Co. Ltd. (second from left)

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

18

Material

Issue

3

Material

Issue

4

Contribution to Global Environment
Dialog with Stakeholder: CSR and the Environment

Publishing Information for a Sustainable Society

What should people involved with finance know about the environment? Mariko Kawaguchi, senior CSR

Daiwa Securities Group publishes information with the goal of achieving a sustainable society. We believe thatanalyst of Daiwa Institute of Research asked this question of Junko Edahiro, chief executive of environmental

expanding our collaboration with society and supporting reform, including sustainability education, economic andcommunication NPO Japan for Sustainability and Japanese translator of “An Inconvenient Truth.”financial literacy, support for international initiatives, and policy suggestions, are one of our most important missions.

If the earth were a single market, there is no doubt that it
would collapse.

Junko Edahiro, chief executive, Japan for Sustainability (right) and Mariko
Kawaguchi, senior CSR analyst of Daiwa Institute of Research (left)

Edahiro: Global warming is the result of the dynamics of a

Daiwa Securities Group actively supports international activities

Sector*3. Daiwa Securities Group Inc. also became a signatory tosystem in which a wide variety of factors are interacting. One ofwith the goal of achieving a sustainable society. In May 2006,

the Carbon Disclosure Project (CDP)*4 in March 2004, and joined

the features of this system is the interaction of stock and flow. With

Daiwa Asset Management Co. Ltd. became a signatory to thethe United Nations Environment Programme Finance Initiative

a bank account, the deposits and withdrawals are the flow, while

Principles for Responsible Investment (PRI)*1, and announced a(UNEP FI) in November 2004.

the balance is the stock, right? If we say that the concentration ofpolicy for putting these principles into practice. Additionally, in May

carbon dioxide in the atmosphere is the stock, then our annual

2007, Daiwa Securities Group Inc. became a signatory to UNEP

emissions are the inflow, and the carbon dioxide absorbed by

FI*2’s Declaration on Climate Change by the Financial Services

forests and other sinks is the outflow. Currently, the inflow is twiceas large as the outflow, and more than half is accumulated as
stock. This is what is causing global warming.

People in the finance industry without an interest inenvironmental issues should gain a perception of theissues through first-hand experience.

WEB

Principles for Responsible Investment (PRI)*1, United Nations Environment Programme Finance Initiative (UNEP FI)*2, Declaration on
Climate Change by the Financial Services Sector*3, and Carbon Disclosure Project (CDP)*4.

Kawaguchi: People in the finance industry would probably
understand this better if you called them the profit and loss
statement and the balance sheet. Almost all the good stock, like

Kawaguchi: Many people working at financial institutions think

Support for international initiatives

Sustainability education

forests, marine resources, and mining resources are declining,that environmental issues have nothing to do with them. They tend

while bad stock—CO2—keeps on increasing. This means that if

to look at the world solely in monetary terms. Although thethe entire earth were a single market, there is no doubt that we

principle of responsible investment has begun to gain traction ofwould be facing economic collapse, right?

The Daiwa Securities Group reports its CSR activities andlate, I believe that there is a strong tendency in this field for people

Edahiro: Yes, that’s right.

publishes information for the achievement of a sustainable societyon the Daiwa Securities Group Inc. website. The website contains

to think that the environment is a problem for the manufacturing,mining, and transport industries, and that it has nothing to do with

CSR website / Sustainability and asset management

Money grabs our attention because we can see it. I havehigh expectations for the power of the finance industry.

them.

a wide range of general CSR/SRI information from primers to the
Daiwa Asset Management Co. Ltd.
Sustainability website(In Japanese only)

latest reports by expert researchers at Daiwa Institute of

Edahiro: A financial conference was held in Switzerland, where

Edahiro: People in the finance industry handle money. Money

Research, which is useful for persons with an interest inthey discussed quite seriously the need to influence companies

grabs our attention because we can see it. Thinking thatsustainability. Daiwa Asset Management Co. Ltd. also has awith more measures of sustainability. Although the people

something doesn’t exist because you can’t see it is just like a

dedicated site for sustainability and asset management,

attending the conference were very passionate about this topic,

child. Although we can see share prices as numbers, there is no

however, it doesn’t mean that this is the fundamental approach offramework to tell us what happens each time resources, forests,

their companies as a whole. I think that all we can conclude is thator carbon dioxide go up by a given amount. That make it likepeople with your way of thinking are gradually starting to appear.

money without substance; you get the feeling that you are justKawaguchi: I actually got together employees of Daiwa

playing with numbers.

Daiwa Securities Group teaches courses in CSR and SRI at the(1)

Securities Group to see a screening of “An Inconvenient Truth.”Kawaguchi: That’s because it’s hard to see environmental stock

request of universities. Since April 2007, the staff of the Daiwa(2)

That movie was pretty shocking, and convincing as well. Seeing

and flow with numbers, right?

Securities Group CSR Promotion Department has been teachingthat movie convinced them that just because they’re at a financial

Edahiro: If we could find a numerical representation that showeda new Social Finance course at the Keio University Graduate

institution, they can’t say that it’s not their problem—that they

the minute-by-minute changes in the environment, like with share

School of Media and Governance. The half-year course iscouldn’t hide from the problem.

prices, it would be easy to understand, because I think that people

designed as an initiative to develop the abilities of young people

Edahiro: It sounds like that was a good opportunity. The mostin the finance industry really react to numbers. In any case,

who will be responsible for sustainability in the future. The course

important thing is to perceive it as your own problem through first-

finance has a great deal of power to change the world, so I have

hand experience. I think that expanding these opportunities sohigh hopes for it.

publishing a wide range of information for investors.

http://www.daiwa-am.co.jp/sustainability/
index.html

Daiwa Securities Group Inc.
CSR website (In Japanese only)
http://www.daiwa-grp.jp/branding/Social Finance Course at Keio University

Social Finance course syllabus(3)

that they can be seen by employees as well as institutional
investors and other clients would be a wonderful CSR activity.

(4)

(5)

covers the workings of finance considering society andenvironment, including trends in UNEP FI, SRI funds, micro-(6)

finance, and support for social entrepreneurs, combined with realworld information.

(7)

Guidance• Overview of social finance
The enterprise and social finance• CSR theory• Financial institutions and non-finance industries
The social finance framework (1)• Initiatives and players(UNEP FI, CDP, etc.)
The social finance framework (2)• Social finance conventions and principles(Equator Principles, PRI, etc.)• SRI indices (DJSI, FTSE, etc.)
The social finance framework (3)• Social finance and human security/humandevelopment• Bottom of the pyramid (BOP) business
NPOs and social finance• NPO banks• Local financial institutions
Governmental/international institutions andsocial finance• ODA• IMF/World bank(8)

Social finance as investment• SRI investment trusts/bonds• Local support/recovery funds(9) Social finance as finance business• Finance considering society andenvironment• Micro-financing(10) Social finance as donation• Partnership with NPOs
• Support for social entrepreneurs(11) Alternative currencies and social
finance• Local currencies (eco money)• Corporate currencies (points/mileage)(12) Procurement (purchase of products
and services) and social finance• Green procurement/CSR procurement• Fair trade(13) Wrap-up• The future of social financeSee pages 45 and 46 for details about initiatives to reduce environmental impact within the Daiwa Securities Group.

19

DAIWA SU STAINABILITY R EPO RT 2007

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

20

Material

Issue

3

Material

Issue

4

Contribution to Global Environment
Dialog with Stakeholder: CSR and the Environment

Publishing Information for a Sustainable Society

What should people involved with finance know about the environment? Mariko Kawaguchi, senior CSR

Daiwa Securities Group publishes information with the goal of achieving a sustainable society. We believe thatanalyst of Daiwa Institute of Research asked this question of Junko Edahiro, chief executive of environmental

expanding our collaboration with society and supporting reform, including sustainability education, economic andcommunication NPO Japan for Sustainability and Japanese translator of “An Inconvenient Truth.”financial literacy, support for international initiatives, and policy suggestions, are one of our most important missions.

If the earth were a single market, there is no doubt that it
would collapse.

Junko Edahiro, chief executive, Japan for Sustainability (right) and Mariko
Kawaguchi, senior CSR analyst of Daiwa Institute of Research (left)

Edahiro: Global warming is the result of the dynamics of a

Daiwa Securities Group actively supports international activities

Sector*3. Daiwa Securities Group Inc. also became a signatory tosystem in which a wide variety of factors are interacting. One ofwith the goal of achieving a sustainable society. In May 2006,

the Carbon Disclosure Project (CDP)*4 in March 2004, and joined

the features of this system is the interaction of stock and flow. With

Daiwa Asset Management Co. Ltd. became a signatory to thethe United Nations Environment Programme Finance Initiative

a bank account, the deposits and withdrawals are the flow, while

Principles for Responsible Investment (PRI)*1, and announced a(UNEP FI) in November 2004.

the balance is the stock, right? If we say that the concentration ofpolicy for putting these principles into practice. Additionally, in May

carbon dioxide in the atmosphere is the stock, then our annual

2007, Daiwa Securities Group Inc. became a signatory to UNEP

emissions are the inflow, and the carbon dioxide absorbed by

FI*2’s Declaration on Climate Change by the Financial Services

forests and other sinks is the outflow. Currently, the inflow is twiceas large as the outflow, and more than half is accumulated as
stock. This is what is causing global warming.

People in the finance industry without an interest inenvironmental issues should gain a perception of theissues through first-hand experience.

WEB

Principles for Responsible Investment (PRI)*1, United Nations Environment Programme Finance Initiative (UNEP FI)*2, Declaration on
Climate Change by the Financial Services Sector*3, and Carbon Disclosure Project (CDP)*4.

Kawaguchi: People in the finance industry would probably
understand this better if you called them the profit and loss
statement and the balance sheet. Almost all the good stock, like

Kawaguchi: Many people working at financial institutions think

Support for international initiatives

Sustainability education

forests, marine resources, and mining resources are declining,that environmental issues have nothing to do with them. They tend

while bad stock—CO2—keeps on increasing. This means that if

to look at the world solely in monetary terms. Although thethe entire earth were a single market, there is no doubt that we

principle of responsible investment has begun to gain traction ofwould be facing economic collapse, right?

The Daiwa Securities Group reports its CSR activities andlate, I believe that there is a strong tendency in this field for people

Edahiro: Yes, that’s right.

publishes information for the achievement of a sustainable societyon the Daiwa Securities Group Inc. website. The website contains

to think that the environment is a problem for the manufacturing,mining, and transport industries, and that it has nothing to do with

CSR website / Sustainability and asset management

Money grabs our attention because we can see it. I havehigh expectations for the power of the finance industry.

them.

a wide range of general CSR/SRI information from primers to the
Daiwa Asset Management Co. Ltd.
Sustainability website(In Japanese only)

latest reports by expert researchers at Daiwa Institute of

Edahiro: A financial conference was held in Switzerland, where

Edahiro: People in the finance industry handle money. Money

Research, which is useful for persons with an interest inthey discussed quite seriously the need to influence companies

grabs our attention because we can see it. Thinking thatsustainability. Daiwa Asset Management Co. Ltd. also has awith more measures of sustainability. Although the people

something doesn’t exist because you can’t see it is just like a

dedicated site for sustainability and asset management,

attending the conference were very passionate about this topic,

child. Although we can see share prices as numbers, there is no

however, it doesn’t mean that this is the fundamental approach offramework to tell us what happens each time resources, forests,

their companies as a whole. I think that all we can conclude is thator carbon dioxide go up by a given amount. That make it likepeople with your way of thinking are gradually starting to appear.

money without substance; you get the feeling that you are justKawaguchi: I actually got together employees of Daiwa

playing with numbers.

Daiwa Securities Group teaches courses in CSR and SRI at the(1)

Securities Group to see a screening of “An Inconvenient Truth.”Kawaguchi: That’s because it’s hard to see environmental stock

request of universities. Since April 2007, the staff of the Daiwa(2)

That movie was pretty shocking, and convincing as well. Seeing

and flow with numbers, right?

Securities Group CSR Promotion Department has been teachingthat movie convinced them that just because they’re at a financial

Edahiro: If we could find a numerical representation that showeda new Social Finance course at the Keio University Graduate

institution, they can’t say that it’s not their problem—that they

the minute-by-minute changes in the environment, like with share

School of Media and Governance. The half-year course iscouldn’t hide from the problem.

prices, it would be easy to understand, because I think that people

designed as an initiative to develop the abilities of young people

Edahiro: It sounds like that was a good opportunity. The mostin the finance industry really react to numbers. In any case,

who will be responsible for sustainability in the future. The course

important thing is to perceive it as your own problem through first-

finance has a great deal of power to change the world, so I have

hand experience. I think that expanding these opportunities sohigh hopes for it.

publishing a wide range of information for investors.

http://www.daiwa-am.co.jp/sustainability/
index.html

Daiwa Securities Group Inc.
CSR website (In Japanese only)
http://www.daiwa-grp.jp/branding/Social Finance Course at Keio University

Social Finance course syllabus(3)

that they can be seen by employees as well as institutional
investors and other clients would be a wonderful CSR activity.

(4)

(5)

covers the workings of finance considering society andenvironment, including trends in UNEP FI, SRI funds, micro-(6)

finance, and support for social entrepreneurs, combined with realworld information.

(7)

Guidance• Overview of social finance
The enterprise and social finance• CSR theory• Financial institutions and non-finance industries
The social finance framework (1)• Initiatives and players(UNEP FI, CDP, etc.)
The social finance framework (2)• Social finance conventions and principles(Equator Principles, PRI, etc.)• SRI indices (DJSI, FTSE, etc.)
The social finance framework (3)• Social finance and human security/humandevelopment• Bottom of the pyramid (BOP) business
NPOs and social finance• NPO banks• Local financial institutions
Governmental/international institutions andsocial finance• ODA• IMF/World bank(8)

Social finance as investment• SRI investment trusts/bonds• Local support/recovery funds(9) Social finance as finance business• Finance considering society andenvironment• Micro-financing(10) Social finance as donation• Partnership with NPOs
• Support for social entrepreneurs(11) Alternative currencies and social
finance• Local currencies (eco money)• Corporate currencies (points/mileage)(12) Procurement (purchase of products
and services) and social finance• Green procurement/CSR procurement• Fair trade(13) Wrap-up• The future of social financeSee pages 45 and 46 for details about initiatives to reduce environmental impact within the Daiwa Securities Group.

19

DAIWA SUSTAINAB ILITY REPO RT 2007

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

20

Material

Issue

4

Publishing Information for a Sustainable Society
Presenting information at the World Economic Forum (WEF)
At the World Economic Forum (WEF) held in Switzerland in
January 2007, Akira Kiyota, Deputy Chairman of the Board of

Economic and financial literacy
Through its economic and financial literacy program, the Daiwa

economy and society, and what it means to get along with other

Securities Group aims to teach young people to make their own

people, and live and work in society. We believe that the sounddecisions and live independently. In order to achieve this goal, it

development of young people is achieved through a thoroughis important to teach young people—not just college students but

understanding of the principles and rules of living in society,junior and senior high-school students as well—about therather than mere superficial knowledge of economic issues.

Daiwa Securities Group Inc., sat on a panel discussion, where hepresented the Group’s CSR initiatives, and discussed issues witha large number of corporate leaders. The Daiwa Securities Group

Education in economics and finance

was named by the WEF as one of the world’s top 100 sustainable
companies.

Sustainable development of the Japanese economy in the 21st century

Educational institutions

Research institutions

Akira Kiyota, Deputy Chairman of the Board (right), attends the WEF

Policy recommendations
From fiscal 2004 to fiscal 2006, Yoshinari Hara, Chairman of thescandals. Rather than these elements of CSR, however, thisBoard of Daiwa Securities Group Inc., chaired the Committee forreport focused on business activities themselves. The report

the Promotion of CSR Management of the Japan Association of

focused particularly on case studies of good practices by 92

Corporate Executives (Keizai Doyukai), where he worked toJapanese companies in the areas of customers, employees, local

promote and raise awareness of CSR in business. On May 30, a

communities, and the environment, from the perspectives ofreport titled “CSR Innovation: Creating New Value through CSR inwhether the products and services offered by the company are

Business Activities ,” which could be called a roundup of Hara’ssocially and environmentally friendly, and whether they took these

efforts over these three years.

four groups and all other stakeholders sufficiently into account.

CSR includes actions as a corporate citizen, such as

The report is available at the following URL (In Japanese only):

charitable donations, as well as compliance in order to prevent

Understandingsocial andeconomic principles

Raising the levelof economic
and financial
knowledge

Development offinancial experts

Publication andutilizationof research results

Practical application
andcommercializationof research results

Elementary, juniorhigh, and seniorhigh school students

Undergraduate
students

Graduate students

ResearchersIntellectual property
and patents

Support for teachers
Participationin classes

Courses offeredor sponsored,
and lecturers
provided

Courses offeredor sponsored,
and lecturers
provided

Joint research
Research support

Assistance offered touniversity venturecompanies andintellectual property
departments

In cooperation with group employees

http://www.doyukai.or.jp/policyproposals/articles/2007/
070530a.html
W E B Main academic partnerships with universities in fiscal 2006

University endowment for Basic Course of Entrepreneurship andBusiness Planning

From the Japan Association of Corporate Executives (Keizai Doyukai) Reportcompany must constantly ask itself what

endowed by the Daiwa Securities Group. The course, which teaches basic

This embodies two ideas I gained through myare the key challenges it must tackle

knowledge about entrepreneurship and business planning, is taught by part-time

threethrough

years

chairing

thecommittee:

innovation through CSR and innovation in

Together,

CSR,
these

and

act

ideas

upon
entailthem.
that

instructors who are employees of the Daiwa Securities Group with experience

in

means

order to achieve CSR

advising IPOs and venture investment. The course is quite popular for giving

changing a company’s business activities

Innovation, a company

practical advice on the business plans created by the students from the perspective

through CSR initiatives. This makes themust change its waysof industry professionals. Until fiscal 2006, this course was taught only at Waseda

company more competitive, and contributesof thinking and strive forto the growth and development of society.

constant improvement.

CSR.

Innovation

through

CSR

Innovation in CSR means that changes inhistorical context and values in turn change
the way we think about CSR. Thus, a

21

The Basic Course of Entrepreneurship and Business Planning is one of the courses

The title of the report is “CSR Innovation.”

DAIWA SUSTAINAB ILITY REPO RT 2007

University, but starting in fiscal 2007, it will be taught at Meiji University, Chuo
University, and Nihon University as well. This unique experiment in economic
Yoshinari Hara
Chairman of the Board
Daiwa Securities Group Inc.

education by the Daiwa Securities Group to leverage its expertise has been praisedby the public and academic circles, and the program is growing rapidly.

Basic Course of Entrepreneurship and Business
Planning at Waseda University
Students present their business plans at a retreat in
Karuizawa

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

22

Material

Issue

4

Publishing Information for a Sustainable Society
Presenting information at the World Economic Forum (WEF)
At the World Economic Forum (WEF) held in Switzerland in
January 2007, Akira Kiyota, Deputy Chairman of the Board of

Economic and financial literacy
Through its economic and financial literacy program, the Daiwa

economy and society, and what it means to get along with other

Securities Group aims to teach young people to make their own

people, and live and work in society. We believe that the sounddecisions and live independently. In order to achieve this goal, it

development of young people is achieved through a thoroughis important to teach young people—not just college students but

understanding of the principles and rules of living in society,junior and senior high-school students as well—about therather than mere superficial knowledge of economic issues.

Daiwa Securities Group Inc., sat on a panel discussion, where hepresented the Group’s CSR initiatives, and discussed issues witha large number of corporate leaders. The Daiwa Securities Group

Education in economics and finance

was named by the WEF as one of the world’s top 100 sustainable
companies.

Sustainable development of the Japanese economy in the 21st century

Educational institutions

Research institutions

Akira Kiyota, Deputy Chairman of the Board (right), attends the WEF

Policy recommendations
From fiscal 2004 to fiscal 2006, Yoshinari Hara, Chairman of thescandals. Rather than these elements of CSR, however, thisBoard of Daiwa Securities Group Inc., chaired the Committee forreport focused on business activities themselves. The report

the Promotion of CSR Management of the Japan Association of

focused particularly on case studies of good practices by 92

Corporate Executives (Keizai Doyukai), where he worked toJapanese companies in the areas of customers, employees, local

promote and raise awareness of CSR in business. On May 30, a

communities, and the environment, from the perspectives ofreport titled “CSR Innovation: Creating New Value through CSR inwhether the products and services offered by the company are

Business Activities ,” which could be called a roundup of Hara’ssocially and environmentally friendly, and whether they took these

efforts over these three years.

four groups and all other stakeholders sufficiently into account.

CSR includes actions as a corporate citizen, such as

The report is available at the following URL (In Japanese only):

charitable donations, as well as compliance in order to prevent

Understandingsocial andeconomic principles

Raising the levelof economic
and financial
knowledge

Development offinancial experts

Publication andutilizationof research results

Practical application
andcommercializationof research results

Elementary, juniorhigh, and seniorhigh school students

Undergraduate
students

Graduate students

ResearchersIntellectual property
and patents

Support for teachers
Participationin classes

Courses offeredor sponsored,
and lecturers
provided

Courses offeredor sponsored,
and lecturers
provided

Joint research
Research support

Assistance offered touniversity venturecompanies andintellectual property
departments

In cooperation with group employees

http://www.doyukai.or.jp/policyproposals/articles/2007/
070530a.html
W E B Main academic partnerships with universities in fiscal 2006

University endowment for Basic Course of Entrepreneurship andBusiness Planning

From the Japan Association of Corporate Executives (Keizai Doyukai) Reportcompany must constantly ask itself what

endowed by the Daiwa Securities Group. The course, which teaches basic

This embodies two ideas I gained through myare the key challenges it must tackle

knowledge about entrepreneurship and business planning, is taught by part-time

threethrough

years

chairing

thecommittee:

innovation through CSR and innovation in

Together,

CSR,
these

and

act

ideas

upon
entailthem.
that

instructors who are employees of the Daiwa Securities Group with experience

in

means

order to achieve CSR

advising IPOs and venture investment. The course is quite popular for giving

changing a company’s business activities

Innovation, a company

practical advice on the business plans created by the students from the perspective

through CSR initiatives. This makes themust change its waysof industry professionals. Until fiscal 2006, this course was taught only at Waseda

company more competitive, and contributesof thinking and strive forto the growth and development of society.

constant improvement.

CSR.

Innovation

through

CSR

Innovation in CSR means that changes inhistorical context and values in turn change
the way we think about CSR. Thus, a

21

The Basic Course of Entrepreneurship and Business Planning is one of the courses

The title of the report is “CSR Innovation.”

DAIWA SUSTAINAB ILITY REPO RT 2007

University, but starting in fiscal 2007, it will be taught at Meiji University, Chuo
University, and Nihon University as well. This unique experiment in economic
Yoshinari Hara
Chairman of the Board
Daiwa Securities Group Inc.

education by the Daiwa Securities Group to leverage its expertise has been praisedby the public and academic circles, and the program is growing rapidly.

Basic Course of Entrepreneurship and Business
Planning at Waseda University
Students present their business plans at a retreat in
Karuizawa

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

22

Material

Issue

4

Publishing Information for a Sustainable Society

Daiwa-JFS Sustainability College
In October 2006, Daiwa Securities Group began a course called

Student Company Program (SCP)—Economic and financial
literacy for high school students“Daiwa-JFS Sustainability College”—a course endowed through apartnership with Japan for Sustainability (JFS), and funded by

The Student Company Program (SCP) is a hands-on economic literacy offered by Juniorproceeds from the sale and management of the Daiwa Eco

Achievement Japan, an NPO dedicated to economic and financial literacy for young people.

Fund—in the group headquarters’ auditorium. The goal of theThrough the program, high-school students learn about the economy and how corporations

course is to improve the sustainability of society as a whole, bywork by actually managing a company. The Daiwa Securities Group began collaborating inraising the awareness of Japan’s leaders of tomorrow and

the SCP at Ritsumeikan High School in Kyoto in fiscal 2003. Two group employees

encouraging them to take concrete actions through an easy-to-

participate in the program each week, advising the students as “external directors.”
Students participating in the SCP learn first-hand about the difficulties of managing anorganization in the real world, sharing their knowledge and striving to overcome issues.
The huge growth achieved by the students as people has also been covered by the
media. More and more schools are introducing the SCP, providing a fresh stimulus tounderstand description of the concept of sustainability. The

Selling products

course, which meets once a month 12 times each year, will beThis knit basket is a productof Runners Co., Ltd.,a student-run joint-stockcompany

held for four years, with a different topic for each year. As of endJune 2007, the course has had about 140 student entries from 48
different high schools and universities, with about 30 to 80

high-school education.
WE B

Daiwa-JFS Sustainability College

learning passionately at each class.

Junior Achievement Japan

Yearly topic scheduleFinance Park—Economic and financial literacy for junior high school
students• 2006: Capacity/resources andsustainability

The Finance Park program offered by Junior Achievement Japan gives students first-handexperience in life design, teaching them how much living expenses cost, and how society
and the economy work. Students are given certain parameters, such as yearly income andfamily makeup, and experience a simulation of real life in a “town” set up with company
booths at the venue, and purchasing such items as cars and daily necessities.

1. Various views on sustainability• 2007: Fairness (generational andregional) and sustainability

2. Living with limited capacity and resources—considering the future of the earth from the• 2008: Diversity and sustainability

3. Movement toward sustainable energy—world update and Japan’s potential• 2009: Human will, networking, andsustainability

4. Tokyo’s pioneering attempt—toward dramatic increase in the use of renewable energy

The Daiwa Securities Group is a special sponsor of the Finance Park in Shinagawa,viewpoints of food, agriculture and the environment

5. The resource loop and sustainable production & consumption
6. On the front lines of waste—from illegal dumping to exporting garbage as resourcesTokyo, which in June 2005 became the first Finance Park to be introduced in Japan.
Another Finance Park was launched in Kyoto in January 2007, and the program isClasses to date (October 2006 to June 2007)

7. Water as a global resource issue

Daiwa Securities booth at Finance Park

8. The concentration of population in cities and urban issues

currently being offered to all junior high schools in the city of Kyoto.

9. What is the most important environment?—learning from Edo lifestyles

General economic and financial literacy
Comment fromstakeholder‘Financial Information TV by Daiwa’ is the only television channel in Japan that isdedicated to information about securities. It is available via Sky PerfecTV! and other

Attending Daiwa-JFS Sustainability College

carriers. In March 2007, the channel began a basic course on securities called “Fun with
Securities @ Daiwa TV,” whose concept is making securities easy for both junior and highschool students and their parents to understand.
Daiwa Internet TV (http://www.daiwatv.jp/) (In Japanese only), the largest video
website in the finance and securities fields, offers five-minute lessons on basic topics suchas types of financial products and fundamental investment concepts.
‘Financial Information TV by Daiwa’

For me, the greatest attraction of thisThrough this experience, this course has

course was the ability to meet othergiven me the invaluable opportunity topeople who are passionate about thishave a glimpse of my present and future

topic. When I first started the course, I had

selves. Lately, I have begun to holda vague notion that I wanted to change

voluntary study sessions, where mysociety, but I had no idea where to getfriends and I debate various topics, thenstarted. But by meeting action-oriented

attend lectures after deepening ourpeople through this course, I have been

understanding.

http://daiwa766.jp (In Japanese only)

Revised Japanese-language edition “Financial Fitness for Life” textbook
for elementary and junior-high students
Since fiscal 2005, we have collaborated in the Japanese-language production of “Financial

Fitness for Life ,” an economic and financial literacy textbook for junior high-school
students used widely in American classrooms. Daiwa Securities Group employees

able to take the first step toward changing

Although this course is centered on asociety. Specifically, I planned a youth

lecture format, I hope to make use of whatsummit with the topic of sustainability.

I have learned here in my future activities.

Risa Hatabu
The 3rd grade of Law School
Department of Law
Meiji University

volunteered in the translation of the textbook. In fiscal 2006, the content of the textbook
was revised using feedback from working teachers, in order to make the text more
effective in Japanese classrooms.

23

DAIWA SU STAINAB ILITY REPO RT 2007

The Japanese-language edition“Financial Fitness for Life ”

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

24

Material

Issue

4

Publishing Information for a Sustainable Society

Daiwa-JFS Sustainability College
In October 2006, Daiwa Securities Group began a course called

Student Company Program (SCP)—Economic and financial
literacy for high school students“Daiwa-JFS Sustainability College”—a course endowed through apartnership with Japan for Sustainability (JFS), and funded by

The Student Company Program (SCP) is a hands-on economic literacy offered by Juniorproceeds from the sale and management of the Daiwa Eco

Achievement Japan, an NPO dedicated to economic and financial literacy for young people.

Fund—in the group headquarters’ auditorium. The goal of theThrough the program, high-school students learn about the economy and how corporations

course is to improve the sustainability of society as a whole, bywork by actually managing a company. The Daiwa Securities Group began collaborating inraising the awareness of Japan’s leaders of tomorrow and

the SCP at Ritsumeikan High School in Kyoto in fiscal 2003. Two group employees

encouraging them to take concrete actions through an easy-to-

participate in the program each week, advising the students as “external directors.”
Students participating in the SCP learn first-hand about the difficulties of managing anorganization in the real world, sharing their knowledge and striving to overcome issues.
The huge growth achieved by the students as people has also been covered by the
media. More and more schools are introducing the SCP, providing a fresh stimulus tounderstand description of the concept of sustainability. The

Selling products

course, which meets once a month 12 times each year, will beThis knit basket is a productof Runners Co., Ltd.,a student-run joint-stockcompany

held for four years, with a different topic for each year. As of endJune 2007, the course has had about 140 student entries from 48
different high schools and universities, with about 30 to 80

high-school education.
WE B

Daiwa-JFS Sustainability College

learning passionately at each class.

Junior Achievement Japan

Yearly topic scheduleFinance Park—Economic and financial literacy for junior high school
students• 2006: Capacity/resources andsustainability

The Finance Park program offered by Junior Achievement Japan gives students first-handexperience in life design, teaching them how much living expenses cost, and how society
and the economy work. Students are given certain parameters, such as yearly income andfamily makeup, and experience a simulation of real life in a “town” set up with company
booths at the venue, and purchasing such items as cars and daily necessities.

1. Various views on sustainability• 2007: Fairness (generational andregional) and sustainability

2. Living with limited capacity and resources—considering the future of the earth from the• 2008: Diversity and sustainability

3. Movement toward sustainable energy—world update and Japan’s potential• 2009: Human will, networking, andsustainability

4. Tokyo’s pioneering attempt—toward dramatic increase in the use of renewable energy

The Daiwa Securities Group is a special sponsor of the Finance Park in Shinagawa,viewpoints of food, agriculture and the environment

5. The resource loop and sustainable production & consumption
6. On the front lines of waste—from illegal dumping to exporting garbage as resourcesTokyo, which in June 2005 became the first Finance Park to be introduced in Japan.
Another Finance Park was launched in Kyoto in January 2007, and the program isClasses to date (October 2006 to June 2007)

7. Water as a global resource issue

Daiwa Securities booth at Finance Park

8. The concentration of population in cities and urban issues

currently being offered to all junior high schools in the city of Kyoto.

9. What is the most important environment?—learning from Edo lifestyles

General economic and financial literacy
Comment fromstakeholder‘Financial Information TV by Daiwa’ is the only television channel in Japan that isdedicated to information about securities. It is available via Sky PerfecTV! and other

Attending Daiwa-JFS Sustainability College

carriers. In March 2007, the channel began a basic course on securities called “Fun with
Securities @ Daiwa TV,” whose concept is making securities easy for both junior and highschool students and their parents to understand.
Daiwa Internet TV (http://www.daiwatv.jp/) (In Japanese only), the largest video
website in the finance and securities fields, offers five-minute lessons on basic topics suchas types of financial products and fundamental investment concepts.
‘Financial Information TV by Daiwa’

For me, the greatest attraction of thisThrough this experience, this course has

course was the ability to meet othergiven me the invaluable opportunity topeople who are passionate about thishave a glimpse of my present and future

topic. When I first started the course, I had

selves. Lately, I have begun to holda vague notion that I wanted to change

voluntary study sessions, where mysociety, but I had no idea where to getfriends and I debate various topics, thenstarted. But by meeting action-oriented

attend lectures after deepening ourpeople through this course, I have been

understanding.

http://daiwa766.jp (In Japanese only)

Revised Japanese-language edition “Financial Fitness for Life” textbook
for elementary and junior-high students
Since fiscal 2005, we have collaborated in the Japanese-language production of “Financial

Fitness for Life ,” an economic and financial literacy textbook for junior high-school
students used widely in American classrooms. Daiwa Securities Group employees

able to take the first step toward changing

Although this course is centered on asociety. Specifically, I planned a youth

lecture format, I hope to make use of whatsummit with the topic of sustainability.

I have learned here in my future activities.

Risa Hatabu
The 3rd grade of Law School
Department of Law
Meiji University

volunteered in the translation of the textbook. In fiscal 2006, the content of the textbook
was revised using feedback from working teachers, in order to make the text more
effective in Japanese classrooms.

23

DAIWA SU STAINAB ILITY REPO RT 2007

The Japanese-language edition“Financial Fitness for Life ”

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

24

Managem

ent

Perfo rman ce , I ss u e s , a n d Ta rg e ts
This section reports the fiscal 2006 results, and fiscal 2007 targets, for the wide range of initiatives conducted by the
Daiwa Securities Group for the achievement of a sustainable society.

Issues and targets for fiscal 2006

Rating of initiatives

Pages in report

Issues and targets for fiscal 2007
Promote the widespread practice of SRI (continued).

Adding a Social Perspective
to Investment

9–12

Commitment to the Developmentof a Sound Securities Market

13–16

Provide more information on socially responsible investment.
See “Compliance.”

17–19

Consider the development of financial products that enable investors to help resolve
environmental issues.

are listed as the issues and targets of each division. Each

Expand environmental management systems to major overseas offices.

initiative is rated based on its results in achieving its vision andReduce environmental impact by such means as appropriate adjustment of air conditioning andusing electronic statements.

medium-term goals*1.

Achieve zero waste on move of headquarters building.
Enhance activities to raise awareness of sustainability.

Publishing Information
for a Sustainable Society

CSR Management

Entire Group

Compliance

Daiwa
Securities

Daiwa Securities
SMBC

Information Disclosure

Customer Satisfaction

Human Values andHuman Resource Utilization

Corporate Citizenship

The Environmental Impactof the Daiwa Securities Group25

Fiscal 2006 performance
The results of initiatives in fiscal 2006, and plans for fiscal 2007,

Contribution to Global
Environment

Corporate GovernanceFiscal 2006 performance and fiscal 2007
targets

20–24

Promote economic and financial literacy initiatives for junior and senior high-school students.
Perform documentation and validation in anticipation of fiscal 2008 (first year that internal
control system goes into effect).

Document internal standards relating to financial reporting and establish evaluation methods for the entire group.

G

Prepare systems for each group company in compliance with upcoming changes in Japanese commercial law.

VG

Improve group management structures by investigating performance evaluation methods and promoting business
continuity plans (BCP).

G

Focus more on economic and financial education.

G

Promote the widespread practice of SRI.

G

Arrange activities to raise awareness of the Corporate Ethics Hotline among group companies.

VG

Raise awareness of corporate ethics and compliance at group companies (continued).

Strengthen measures against anti-social influences.

G

Strengthen measures against anti-social forces (continued).

Practice proposal sales in order to support the asset formation that clients truly want.

VG

Enhance systems compliant with such revised laws as the Financial Instruments and Exchange
Law and Financial Products Sales Law.

Streamline the way consultations are conducted between customers and senior branch officers.

G

Revise internal rules, including simplification and streamlining.

Improve quality of performance in order to eliminate complaints and claims.

G

Enhance customer and sales-force management systems.

Keep rigorous guard against anti-social influences and unfair trading practices.

G

Implement training that includes current issues, and enrich e-learning content.

VG

Take steps to prevent any leakage of personal data during the implementation of measures.

VG

Manage information more strictly, and in particular establish systems to prevent the leakage of
personal information.

Build an inspection system to watch for conflicts of interest.

VG

Enhance compliance regimes relating to laws and regulations concerning foreign exchange.

Create a framework to comply with the Comprehensive Supervisory Guidelines for Securities Companies establishedby the Financial Services Agency.

VG

Support greater sophistication in risk-management systems.

Set up a trading management system according to the new rules of the Japan Securities Dealers Association.

VG

Expand IR programs to suit more types of investors.

VG

Improve investor relations activities for individual investors.

G

Encourage a better understanding of disclosure-related regulations within the Group.

G

Actively pursue post-sales follow up.

G

Create office atmospheres that are appealing to a broad clientele.

G

Implement education programs to improve manners and knowledge of younger sales staff.

G

Improve customer-interface skills of branch employees who interact with customers.

Strengthen initiatives for job creation.

VG

Further promote company-vitalization measures.

Enhance education and training programs to increase the number of qualified analysts and certified financial
planners (CFPs).

G

Continue workplace initiatives in support of female employees.
Strengthen initiatives that address social issues.
Promote volunteer programs that enable the participation of larger numbers of employees.

F

Expand the environmental management systems to consolidated subsidiaries in Japan.

F

Reduce environmental impact through the computerization of documents and the reduction of office paper usage.

VG

Establish guidelines on procurement.

NI

DAIWA SUSTAINAB ILITY REPO RT 2007

27–28

29–30

31–32

Create systems for new businesses.

Fiscal 2007 targets
Targets for fiscal 2007 relating to the material issues identified inthis report are categorized as “targets for material issues.”
Additionally, the CSR targets of each division for fiscal 2007
are in accordance with the Group’s Medium-term Management

Further promote BCP.

Plan*2, and the practice of CSR targets leads to the maximization

See “Adding a Social Perspective to Investment” and “Publishing Information for a Sustainable
Society.”of the value of each stakeholder group.
*1 In the following pages, “vision and medium-term goals” are indicated as the vision ofeach division to achieve through its initiative.

*2 The Group’s Medium-term Management Plan: A three-year plan from fiscal 2006 to
fiscal 2008. See page 14 of the Daiwa Securities Group Inc. Financial Report for theperiod ended March 2007 for details. (In Japanese only)
http://www.daiwa-grp.jp/ir/financial/report.cfm

Enhance systems compliant with such revised laws as the Financial Instruments and Exchange
Law and Financial Products Sales Law.

Enhance disclosure of non-financial information.
33–34

Further expand and enhance investor relations (IR) targeting individual investors.

Actively pursue post-sales follow up (continued).
35–36

Improve skills of junior salespeople.

Enhance education and training programs to increase number of certified
analysts and CFPs (continued).

Rating of initiatives

G

Develop workplace environments where women can fully demonstrate their abilities (continued).

G

Contribute to social welfare through the utilization of grant programs and the like.

VG : Very good results toward achieving vision andmedium-term goals
G : Good results toward achieving vision and medium-termgoals
F : Fair; further implementation and results needed
NI : Not implemented

37–40

41–44

45–46

Promote volunteer programs to enable more employees to participate (continued).

See “Contribution to Global Environment.”

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

26

Managem

ent

Perfo rman ce , I ss u e s , a n d Ta rg e ts
This section reports the fiscal 2006 results, and fiscal 2007 targets, for the wide range of initiatives conducted by the
Daiwa Securities Group for the achievement of a sustainable society.

Issues and targets for fiscal 2006

Rating of initiatives

Pages in report

Issues and targets for fiscal 2007
Promote the widespread practice of SRI (continued).

Adding a Social Perspective
to Investment

9–12

Commitment to the Developmentof a Sound Securities Market

13–16

Provide more information on socially responsible investment.
See “Compliance.”

17–19

Consider the development of financial products that enable investors to help resolve
environmental issues.

are listed as the issues and targets of each division. Each

Expand environmental management systems to major overseas offices.

initiative is rated based on its results in achieving its vision andReduce environmental impact by such means as appropriate adjustment of air conditioning andusing electronic statements.

medium-term goals*1.

Achieve zero waste on move of headquarters building.
Enhance activities to raise awareness of sustainability.

Publishing Information
for a Sustainable Society

CSR Management

Entire Group

Compliance

Daiwa
Securities

Daiwa Securities
SMBC

Information Disclosure

Customer Satisfaction

Human Values andHuman Resource Utilization

Corporate Citizenship

The Environmental Impactof the Daiwa Securities Group25

Fiscal 2006 performance
The results of initiatives in fiscal 2006, and plans for fiscal 2007,

Contribution to Global
Environment

Corporate GovernanceFiscal 2006 performance and fiscal 2007
targets

20–24

Promote economic and financial literacy initiatives for junior and senior high-school students.
Perform documentation and validation in anticipation of fiscal 2008 (first year that internal
control system goes into effect).

Document internal standards relating to financial reporting and establish evaluation methods for the entire group.

G

Prepare systems for each group company in compliance with upcoming changes in Japanese commercial law.

VG

Improve group management structures by investigating performance evaluation methods and promoting business
continuity plans (BCP).

G

Focus more on economic and financial education.

G

Promote the widespread practice of SRI.

G

Arrange activities to raise awareness of the Corporate Ethics Hotline among group companies.

VG

Raise awareness of corporate ethics and compliance at group companies (continued).

Strengthen measures against anti-social influences.

G

Strengthen measures against anti-social forces (continued).

Practice proposal sales in order to support the asset formation that clients truly want.

VG

Enhance systems compliant with such revised laws as the Financial Instruments and Exchange
Law and Financial Products Sales Law.

Streamline the way consultations are conducted between customers and senior branch officers.

G

Revise internal rules, including simplification and streamlining.

Improve quality of performance in order to eliminate complaints and claims.

G

Enhance customer and sales-force management systems.

Keep rigorous guard against anti-social influences and unfair trading practices.

G

Implement training that includes current issues, and enrich e-learning content.

VG

Take steps to prevent any leakage of personal data during the implementation of measures.

VG

Manage information more strictly, and in particular establish systems to prevent the leakage of
personal information.

Build an inspection system to watch for conflicts of interest.

VG

Enhance compliance regimes relating to laws and regulations concerning foreign exchange.

Create a framework to comply with the Comprehensive Supervisory Guidelines for Securities Companies establishedby the Financial Services Agency.

VG

Support greater sophistication in risk-management systems.

Set up a trading management system according to the new rules of the Japan Securities Dealers Association.

VG

Expand IR programs to suit more types of investors.

VG

Improve investor relations activities for individual investors.

G

Encourage a better understanding of disclosure-related regulations within the Group.

G

Actively pursue post-sales follow up.

G

Create office atmospheres that are appealing to a broad clientele.

G

Implement education programs to improve manners and knowledge of younger sales staff.

G

Improve customer-interface skills of branch employees who interact with customers.

Strengthen initiatives for job creation.

VG

Further promote company-vitalization measures.

Enhance education and training programs to increase the number of qualified analysts and certified financial
planners (CFPs).

G

Continue workplace initiatives in support of female employees.
Strengthen initiatives that address social issues.
Promote volunteer programs that enable the participation of larger numbers of employees.

F

Expand the environmental management systems to consolidated subsidiaries in Japan.

F

Reduce environmental impact through the computerization of documents and the reduction of office paper usage.

VG

Establish guidelines on procurement.

NI

DAIWA SUSTAINAB ILITY REPO RT 2007

27–28

29–30

31–32

Create systems for new businesses.

Fiscal 2007 targets
Targets for fiscal 2007 relating to the material issues identified inthis report are categorized as “targets for material issues.”
Additionally, the CSR targets of each division for fiscal 2007
are in accordance with the Group’s Medium-term Management

Further promote BCP.

Plan*2, and the practice of CSR targets leads to the maximization

See “Adding a Social Perspective to Investment” and “Publishing Information for a Sustainable
Society.”of the value of each stakeholder group.
*1 In the following pages, “vision and medium-term goals” are indicated as the vision ofeach division to achieve through its initiative.

*2 The Group’s Medium-term Management Plan: A three-year plan from fiscal 2006 to
fiscal 2008. See page 14 of the Daiwa Securities Group Inc. Financial Report for theperiod ended March 2007 for details. (In Japanese only)
http://www.daiwa-grp.jp/ir/financial/report.cfm

Enhance systems compliant with such revised laws as the Financial Instruments and Exchange
Law and Financial Products Sales Law.

Enhance disclosure of non-financial information.
33–34

Further expand and enhance investor relations (IR) targeting individual investors.

Actively pursue post-sales follow up (continued).
35–36

Improve skills of junior salespeople.

Enhance education and training programs to increase number of certified
analysts and CFPs (continued).

Rating of initiatives

G

Develop workplace environments where women can fully demonstrate their abilities (continued).

G

Contribute to social welfare through the utilization of grant programs and the like.

VG : Very good results toward achieving vision andmedium-term goals
G : Good results toward achieving vision and medium-termgoals
F : Fair; further implementation and results needed
NI : Not implemented

37–40

41–44

45–46

Promote volunteer programs to enable more employees to participate (continued).

See “Contribution to Global Environment.”

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

26

Management
discusses and makes decisions regarding key issues for executive

Corporate governance system

C orp o rat e G over n a n c emanagement, including the business strategy of the Group as awhole and group-wide management issues. In order to ensure

Daiwa Securities Group Inc. has adopted a committee system,

uniform management across the Group, some of the executive

The Group is united in its efforts to build a highly transparent and objective corporate governance system, in order towith the goals of greater agility in decision making, enhancing theofficers of Daiwa Securities Group Inc. also serve as key directors

earn the confidence of all our stakeholders and continually improve our corporate value.

supervisory functions of the Board of Directors, and making

in group companies.

management more transparent. Our corporate governancesystem consists of the Board of Directors, which serves in a

Vision and medium-term goals forcorporate governancestakeholders will enable it to continuously increase corporate
value. The company actively incorporates outside viewpoints,
building a transparent, dynamic, and efficient corporate-

Against a backdrop of recent increasing market globalization andgovernance system that meets international standards. At theinstitutionalization, corporate governance has come to besame time, we are leveraging the synergy of each group company

considered vital for making investment decisions. Daiwa

to build a unified group-management system.

Securities Group believes that earning the confidence of all

Fiscal 2006 initiatives

supervisory role; the Nominating, Audit, and Compensation
Committees; the Executive Committee, which serves as theGroup-wide rollout of internal control

executive body, and the Internal Control, Disclosure and Group IT

We are strengthening our initiatives in anticipation of the internal-

Strategy Committees, which are subcommittees of the Executive

control and reporting system under the Financial Instruments andCommittee.

Exchange Law, which will go into effect in April 2008. We have

Although our Chairman of the Board, who chairs the Board ofcreated four working groups—company-wide control, general IT

Directors, is also an executive Officer, he does not have any

control, business processes, and verification—and in fiscal 2006

specific duties as an Executive Officer.

we documented the operational flow, risks, and control of a

W E B Preventing conflicts of interest between group companies

number of business processes as a pilot project. The various
divisions of Daiwa Securities Group Inc. play a leading role inIssues and targets for fiscal 2006

Results and progress for fiscal 2006

Document internal standards relating to financial reporting andestablish evaluation methods for the entire group.

• Created project team, selected business processes for key
business sites and evaluation items, and began documentationcompany-wide.

Prepare systems for each group company in compliance withupcoming changes in Japanese commercial law.

• Revised institutional design in accordance with the businessesof each group company, and revised regulations at eachcompany in preparation for creation of internal-control system.

Supervisory function

each working group. They determine the responsible divisions and

The Board of Directors consists of 13 directors, including four

persons within each group company, coordinating a group-wide

outside directors. The Board of Directors determines key

effort. In fiscal 2007, the working groups are promoting

management policy and supervises executive duties. In order todocumentation of company-wide control, general IT control, andperform this supervisory role from multiple viewpoints inbusiness processes across the Group, and are evaluating andaccordance with the demands of society, the policy for selecting

verifying internal control.

new board members states that candidates must have a strong• Studied method of evaluating performance of group companies
that takes capital costs into account.

Study performance evaluation methods.

Improve group management structures by promoting business
continuity plans (BCP).

• Created crisis-management regulations and manuals at Daiwa
Securities Group Inc. and major subsidiaries.

sense of ethics and lead by example. Additionally, external

Revision of systems for group companies consequent todirectors are experts in such fields as law and executive

enactment of new Company Law

management.
Our supervisory function is reinforced by the Audit Committee
and the Office of the Audit Committee. The Audit Committee,

Corporate governance organization chart
General Meeting of Shareholders
Board of Directors, 13 members(including 4 outside directors*1)

Nominating Committee, 5 members*2(including 3 outside directors)

Audit Committee, 3 members*3(including 2 outside directors)

Compensation Committee, 5 members*4(including 3 outside directors)

Proposes selections anddismissals of directors

Audits execution of duties bydirectors and executive officers

Sets policies on director and executive officer
compensation, amount of individuals’ compensation

Internal Control Committee

Disclosure Committee

Group IT Strategy Committee

Performs internal control and preparesrisk control and internal audit system

Monitors key information anddetermines what to disclose

Writes original IT investment budget,
evaluates and monitors IT investments

Representative executive officerrole in the supervision of executive duties. The Audit Committee ischoices regarding the company’s institutional design. In response,

assisted by the Office of the Audit Committee, which has no

we have made several revisions, including revisions to the articles

executive duties, and has different systems for assignment andof incorporation of each group company. In addition to assigningevaluation.

appropriate directors and corporate auditors, we implemented* Outside directors as defined by Article 2-15 of the Company Law.

measures to enable general shareholders meetings to be
conducted on paper. We have created systems to promote faster

Tetsuro KawakamiCounsel, Sumitomo Electric Industries, Ltd.
Ryuji Yasuda
Professor, Hitotsubashi University
Graduate School
Keisuke Kitajima
Attorney
Koichi Uno
Certified public accountant

27

and more appropriate business operations.

The Executive Committee, consisting of 15 executive officers, is

W E B Consideration of performance-evaluation methods

located at Daiwa Securities Group Inc. The Executive Committee

W E B BCP initiatives

Targets and main action plans for fiscal 2007
We will carry out group-wide documentation and verification during*1. Outside directors

the Group.
One of the features of the new law is a much broader range of

Executive bodyGroup-wide business strategy and management
issues, important financial matters

May 2006, we have revised our management system throughout

which consists of a majority of outside directors*, plays a central

Basic management policy
Executive Committee, 15 members

In accordance with the enactment of the new Company Law in*2. Nominating Committee
internal Yoshinari Hara (Committee Chair)

Chairman of the Board of Corporate Executive Officer
Daiwa Securities Group Inc.
Shigeharu Suzuki
Director and President (CEO)Daiwa Securities Group Inc.
external Tetsuro Kawakami

DAIWA SUSTAINAB ILITY REPO RT 2007

*3. Audit Committee
internal Kenji Hayashibe (Committee Chair)Director
Daiwa Securities Group Inc.
external Keisuke Kitajima

Koichi Uno*4. Compensation Committee
internal Yoshinari Hara (Committee Chair)

Shigeharu Suzuki

As our businesses become increasingly diverse due to the rollout

internal control and reporting system relating to financial reporting,of new businesses within the Group, we will also design flexible

which will first go into effect in fiscal 2008.

institutions in accordance with the size and businesses of eachWith regard to the business continuity plan we have beenexternal Tetsuro Kawakami

Ryuji Yasuda
Koichi Uno

revisions after we move our headquarters building in December 2007.

fiscal 2007, and build a system that fully enables compliance with thecompany, ensuring a high degree of unity within the Group.

developing since fiscal 2006 as well, we will strengthen a system for

We will raise the level of information security within the Group by

contact between group companies, and complete the businessmoving forward with the operation in conformity with Information

continuity manual in July 2007. In addition, we plan to make broad

Security Management System (ISMS).

Ryuji Yasuda
Keisuke Kitajima

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

28

Management
discusses and makes decisions regarding key issues for executive

Corporate governance system

C orp o rat e G over n a n c emanagement, including the business strategy of the Group as awhole and group-wide management issues. In order to ensure

Daiwa Securities Group Inc. has adopted a committee system,

uniform management across the Group, some of the executive

The Group is united in its efforts to build a highly transparent and objective corporate governance system, in order towith the goals of greater agility in decision making, enhancing theofficers of Daiwa Securities Group Inc. also serve as key directors

earn the confidence of all our stakeholders and continually improve our corporate value.

supervisory functions of the Board of Directors, and making

in group companies.

management more transparent. Our corporate governancesystem consists of the Board of Directors, which serves in a

Vision and medium-term goals forcorporate governancestakeholders will enable it to continuously increase corporate
value. The company actively incorporates outside viewpoints,
building a transparent, dynamic, and efficient corporate-

Against a backdrop of recent increasing market globalization andgovernance system that meets international standards. At theinstitutionalization, corporate governance has come to besame time, we are leveraging the synergy of each group company

considered vital for making investment decisions. Daiwa

to build a unified group-management system.

Securities Group believes that earning the confidence of all

Fiscal 2006 initiatives

supervisory role; the Nominating, Audit, and Compensation
Committees; the Executive Committee, which serves as theGroup-wide rollout of internal control

executive body, and the Internal Control, Disclosure and Group IT

We are strengthening our initiatives in anticipation of the internal-

Strategy Committees, which are subcommittees of the Executive

control and reporting system under the Financial Instruments andCommittee.

Exchange Law, which will go into effect in April 2008. We have

Although our Chairman of the Board, who chairs the Board ofcreated four working groups—company-wide control, general IT

Directors, is also an executive Officer, he does not have any

control, business processes, and verification—and in fiscal 2006

specific duties as an Executive Officer.

we documented the operational flow, risks, and control of a

W E B Preventing conflicts of interest between group companies

number of business processes as a pilot project. The various
divisions of Daiwa Securities Group Inc. play a leading role inIssues and targets for fiscal 2006

Results and progress for fiscal 2006

Document internal standards relating to financial reporting andestablish evaluation methods for the entire group.

• Created project team, selected business processes for key
business sites and evaluation items, and began documentationcompany-wide.

Prepare systems for each group company in compliance withupcoming changes in Japanese commercial law.

• Revised institutional design in accordance with the businessesof each group company, and revised regulations at eachcompany in preparation for creation of internal-control system.

Supervisory function

each working group. They determine the responsible divisions and

The Board of Directors consists of 13 directors, including four

persons within each group company, coordinating a group-wide

outside directors. The Board of Directors determines key

effort. In fiscal 2007, the working groups are promoting

management policy and supervises executive duties. In order todocumentation of company-wide control, general IT control, andperform this supervisory role from multiple viewpoints inbusiness processes across the Group, and are evaluating andaccordance with the demands of society, the policy for selecting

verifying internal control.

new board members states that candidates must have a strong• Studied method of evaluating performance of group companies
that takes capital costs into account.

Study performance evaluation methods.

Improve group management structures by promoting business
continuity plans (BCP).

• Created crisis-management regulations and manuals at Daiwa
Securities Group Inc. and major subsidiaries.

sense of ethics and lead by example. Additionally, external

Revision of systems for group companies consequent todirectors are experts in such fields as law and executive

enactment of new Company Law

management.
Our supervisory function is reinforced by the Audit Committee
and the Office of the Audit Committee. The Audit Committee,

Corporate governance organization chart
General Meeting of Shareholders
Board of Directors, 13 members(including 4 outside directors*1)

Nominating Committee, 5 members*2(including 3 outside directors)

Audit Committee, 3 members*3(including 2 outside directors)

Compensation Committee, 5 members*4(including 3 outside directors)

Proposes selections anddismissals of directors

Audits execution of duties bydirectors and executive officers

Sets policies on director and executive officer
compensation, amount of individuals’ compensation

Internal Control Committee

Disclosure Committee

Group IT Strategy Committee

Performs internal control and preparesrisk control and internal audit system

Monitors key information anddetermines what to disclose

Writes original IT investment budget,
evaluates and monitors IT investments

Representative executive officerrole in the supervision of executive duties. The Audit Committee ischoices regarding the company’s institutional design. In response,

assisted by the Office of the Audit Committee, which has no

we have made several revisions, including revisions to the articles

executive duties, and has different systems for assignment andof incorporation of each group company. In addition to assigningevaluation.

appropriate directors and corporate auditors, we implemented* Outside directors as defined by Article 2-15 of the Company Law.

measures to enable general shareholders meetings to be
conducted on paper. We have created systems to promote faster

Tetsuro KawakamiCounsel, Sumitomo Electric Industries, Ltd.
Ryuji Yasuda
Professor, Hitotsubashi University
Graduate School
Keisuke Kitajima
Attorney
Koichi Uno
Certified public accountant

27

and more appropriate business operations.

The Executive Committee, consisting of 15 executive officers, is

W E B Consideration of performance-evaluation methods

located at Daiwa Securities Group Inc. The Executive Committee

W E B BCP initiatives

Targets and main action plans for fiscal 2007
We will carry out group-wide documentation and verification during*1. Outside directors

the Group.
One of the features of the new law is a much broader range of

Executive bodyGroup-wide business strategy and management
issues, important financial matters

May 2006, we have revised our management system throughout

which consists of a majority of outside directors*, plays a central

Basic management policy
Executive Committee, 15 members

In accordance with the enactment of the new Company Law in*2. Nominating Committee
internal Yoshinari Hara (Committee Chair)

Chairman of the Board of Corporate Executive Officer
Daiwa Securities Group Inc.
Shigeharu Suzuki
Director and President (CEO)Daiwa Securities Group Inc.
external Tetsuro Kawakami

DAIWA SUSTAINAB ILITY REPO RT 2007

*3. Audit Committee
internal Kenji Hayashibe (Committee Chair)Director
Daiwa Securities Group Inc.
external Keisuke Kitajima

Koichi Uno*4. Compensation Committee
internal Yoshinari Hara (Committee Chair)

Shigeharu Suzuki

As our businesses become increasingly diverse due to the rollout

internal control and reporting system relating to financial reporting,of new businesses within the Group, we will also design flexible

which will first go into effect in fiscal 2008.

institutions in accordance with the size and businesses of eachWith regard to the business continuity plan we have beenexternal Tetsuro Kawakami

Ryuji Yasuda
Koichi Uno

revisions after we move our headquarters building in December 2007.

fiscal 2007, and build a system that fully enables compliance with thecompany, ensuring a high degree of unity within the Group.

developing since fiscal 2006 as well, we will strengthen a system for

We will raise the level of information security within the Group by

contact between group companies, and complete the businessmoving forward with the operation in conformity with Information

continuity manual in July 2007. In addition, we plan to make broad

Security Management System (ISMS).

Ryuji Yasuda
Keisuke Kitajima

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

28

Management

Daiwa Securities Group’s basic CSR strategy

C SR M an ag emen t(Taken from “Passion for the Best 2008,” Daiwa Securities Group’s new medium-term management plan.)To

We promote CSR activities through communication with our stakeholders, actively publishing information related tooutcommunication

withstakeholders

on

a

more

sound economy and society, as well as maintains its social status.

CSR both inside and outside the company.

Vision and medium-term goals for CSR
management

carrycomprehensive scale, the Group contributes to the development of a
● Education in economics and finance

CSR activities, we also aim to meet the demands

and● Socially responsible investment (SRI)

To promote the widespread practice of SRI.
● Environmental protection

To build an environmental management system, including the

To work with educational institutions and NPOs to promoteestablishment of environmental policies, within the group companies,

economics education, as well as support education and researchstarting first with the principal group companies in Japan, then thebased on the cooperation between business and universities.

consolidated subsidiaries in Japan, and later, the overseas

expectations of all our stakeholders, and improve our employees’

subsidiaries.

confidence in the company, their pride in their work, and their
The Daiwa Securities Group has a wide range of CSR initiatives,sense of solidarity.

Targets and main action plans for fiscal 2007

aimed at sustainable growth together with society. By carrying out

Issues and targets for fiscal 2006

We will further expand and enhance our CSR information-disclosure

our SRI fund and others. We will focus our economic and financial

system, including our sustainability reports. We will coordinate our

education particularly on junior and senior high-school students,

Group SRI strategy, and support the development and promotion ofcontinuing our activities in collaboration with NPOs and others.

Results and progress for fiscal 2006

Focus more on economic and financial education.

• Continued practical activities to give youth the ability to live insociety; these efforts have grown steadily.

Promote the widespread practice of SRI.

• Promoted sales of the Daiwa Eco Fund, and carried out a wide
range of activities to promote and raise awareness aboutsocially responsible investment (SRI) by publishing information
via symposiums and other means.

Results of CSR employee survey
Daiwa Securities Group regularly conducts CSR surveys of all its employees, in order to track employee awareness of
CSR. In fiscal 2007, we conducted a survey in May targeting all 15,206 employees (including temporary employees),and received 12,277 responses (80.74%). Some of the survey results are reported below. We treat these results very
seriously, and are committed to having our employees carry out CSR activities autonomously.

reports on the Group’s CSR activities and raises CSR-related

CSR promotion system

issues.
We are also building a CSR promotion system to work toward

What aspects of CSR at Daiwa Securities Group do
you think are particularly important, apart from acommitment to your day-to-day duties?

Encouraging SRICommitment to environmental issues

The most common responses were (in order) “Compliance with laws

Economic and financial education

sustainability and share information at our 43 major overseas

and regulations” (77%), “Commitment to employees, such as company

Returning profits to shareholders

Securities Group Inc. The department participates regularly infacilities (which include foreign subsidiaries, branches, andprograms that emphasize work-life balance” (44%), and “Encouraging

Volunteer activities by employees

SRI” (35%).

overseas offices).

44%
35%
26%
22%
21%
19%

Corporate governance

We have established a CSR Promotion Department at Daiwa

department head meetings at group headquarters and in77%

Compliance with laws and regulations
Commitment to employee, such as emphasizing work-life balance

Corporate citizenship activities through donations and foundations
Others6%
6%
1%

departmental liaison meetings held through the Group, where it
Why do you think Daiwa Securities Group promotes
CSR?

CSR promotion system

Foundations

The most common response was “Because it leads to job satisfaction,

Daiwa Securities Group

pride and confidence in the company, and solidarity” (31%), showing

Local communities
NPOs and NGOs
Shareholders
Customers
Business partners
Securities market
Government

Sustainability Report
CSR website
Dialogue

General Affairs Department,
Daiwa Securities Group Inc.
Compliance Department,
Daiwa Securities Co., Ltd.

Participates in department
head meetings heldat group headquarters

CSR Promotion
Department

Dialogue
Participates in liaison
meetings across Group

Joint Compliance Training
CSR questionnaire to employees

Daiwa Securities branch offices

Employees

29

DAIWA SUSTAINAB ILITY REPO RT 2007

other common responses were “Because it is demanded by society”

Executive officers
ReportStakeholders

the level of penetration that our management policy has attained. Two

President and CEO

Dialogue

Dialogue

Daiwa Securities Health Foundation
Daiwa Securities Foundation
Daiwa Anglo-Japanese Foundation

Departments
within Daiwa
Securities
Group Inc.
Departments
withingroup
companies

and “Because it helps raise the value of our brand and improve our

Because it is a selling
point with customers
7%

Because it leads to job
satisfaction, pride and
Because it avoids a
confidence in thevariety of risks associatedcompany, and solidarity
with business activities
31%
Because it is11%demandedby society
25%
Because it helps raise the value ofour brand and improve our recognition
25%

recognition,” both at 25%.

What would be an effective way for Daiwa Securities
Group to tackle environmental issues?

statements, investing in energy efficiency, etc.” Meanwhile, efforts toappeal CSR awareness to society through our main businesses was
lower than those of lowering the environmental impact of the Group:

The responses showed that employees have a high level of

28% responded “Private Investment in environmental business”; 25%

awareness of reducing the Daiwa Securities Group’s environmental

responded “Developing and selling such financial products as

impact: 52% responded “Reducing the environmental impact of offices

environmentally aware investment trusts”; and 24% each responded

by saving paper, managing air conditioning, etc.,” and 47% responded“Expanding emissions-trading related business” and “Offering“Reducing the environmental impact of operations by using electronic

customers investment information relating to the environment.”

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 730

Management

Daiwa Securities Group’s basic CSR strategy

C SR M an ag emen t(Taken from “Passion for the Best 2008,” Daiwa Securities Group’s new medium-term management plan.)To

We promote CSR activities through communication with our stakeholders, actively publishing information related tooutcommunication

withstakeholders

on

a

more

sound economy and society, as well as maintains its social status.

CSR both inside and outside the company.

Vision and medium-term goals for CSR
management

carrycomprehensive scale, the Group contributes to the development of a
● Education in economics and finance

CSR activities, we also aim to meet the demands

and● Socially responsible investment (SRI)

To promote the widespread practice of SRI.
● Environmental protection

To build an environmental management system, including the

To work with educational institutions and NPOs to promoteestablishment of environmental policies, within the group companies,

economics education, as well as support education and researchstarting first with the principal group companies in Japan, then thebased on the cooperation between business and universities.

consolidated subsidiaries in Japan, and later, the overseas

expectations of all our stakeholders, and improve our employees’

subsidiaries.

confidence in the company, their pride in their work, and their
The Daiwa Securities Group has a wide range of CSR initiatives,sense of solidarity.

Targets and main action plans for fiscal 2007

aimed at sustainable growth together with society. By carrying out

Issues and targets for fiscal 2006

We will further expand and enhance our CSR information-disclosure

our SRI fund and others. We will focus our economic and financial

system, including our sustainability reports. We will coordinate our

education particularly on junior and senior high-school students,

Group SRI strategy, and support the development and promotion ofcontinuing our activities in collaboration with NPOs and others.

Results and progress for fiscal 2006

Focus more on economic and financial education.

• Continued practical activities to give youth the ability to live insociety; these efforts have grown steadily.

Promote the widespread practice of SRI.

• Promoted sales of the Daiwa Eco Fund, and carried out a wide
range of activities to promote and raise awareness aboutsocially responsible investment (SRI) by publishing information
via symposiums and other means.

Results of CSR employee survey
Daiwa Securities Group regularly conducts CSR surveys of all its employees, in order to track employee awareness of
CSR. In fiscal 2007, we conducted a survey in May targeting all 15,206 employees (including temporary employees),and received 12,277 responses (80.74%). Some of the survey results are reported below. We treat these results very
seriously, and are committed to having our employees carry out CSR activities autonomously.

reports on the Group’s CSR activities and raises CSR-related

CSR promotion system

issues.
We are also building a CSR promotion system to work toward

What aspects of CSR at Daiwa Securities Group do
you think are particularly important, apart from acommitment to your day-to-day duties?

Encouraging SRICommitment to environmental issues

The most common responses were (in order) “Compliance with laws

Economic and financial education

sustainability and share information at our 43 major overseas

and regulations” (77%), “Commitment to employees, such as company

Returning profits to shareholders

Securities Group Inc. The department participates regularly infacilities (which include foreign subsidiaries, branches, andprograms that emphasize work-life balance” (44%), and “Encouraging

Volunteer activities by employees

SRI” (35%).

overseas offices).

44%
35%
26%
22%
21%
19%

Corporate governance

We have established a CSR Promotion Department at Daiwa

department head meetings at group headquarters and in77%

Compliance with laws and regulations
Commitment to employee, such as emphasizing work-life balance

Corporate citizenship activities through donations and foundations
Others6%
6%
1%

departmental liaison meetings held through the Group, where it
Why do you think Daiwa Securities Group promotes
CSR?

CSR promotion system

Foundations

The most common response was “Because it leads to job satisfaction,

Daiwa Securities Group

pride and confidence in the company, and solidarity” (31%), showing

Local communities
NPOs and NGOs
Shareholders
Customers
Business partners
Securities market
Government

Sustainability Report
CSR website
Dialogue

General Affairs Department,
Daiwa Securities Group Inc.
Compliance Department,
Daiwa Securities Co., Ltd.

Participates in department
head meetings heldat group headquarters

CSR Promotion
Department

Dialogue
Participates in liaison
meetings across Group

Joint Compliance Training
CSR questionnaire to employees

Daiwa Securities branch offices

Employees

29

DAIWA SUSTAINAB ILITY REPO RT 2007

other common responses were “Because it is demanded by society”

Executive officers
ReportStakeholders

the level of penetration that our management policy has attained. Two

President and CEO

Dialogue

Dialogue

Daiwa Securities Health Foundation
Daiwa Securities Foundation
Daiwa Anglo-Japanese Foundation

Departments
within Daiwa
Securities
Group Inc.
Departments
withingroup
companies

and “Because it helps raise the value of our brand and improve our

Because it is a selling
point with customers
7%

Because it leads to job
satisfaction, pride and
Because it avoids a
confidence in thevariety of risks associatedcompany, and solidarity
with business activities
31%
Because it is11%demandedby society
25%
Because it helps raise the value ofour brand and improve our recognition
25%

recognition,” both at 25%.

What would be an effective way for Daiwa Securities
Group to tackle environmental issues?

statements, investing in energy efficiency, etc.” Meanwhile, efforts toappeal CSR awareness to society through our main businesses was
lower than those of lowering the environmental impact of the Group:

The responses showed that employees have a high level of

28% responded “Private Investment in environmental business”; 25%

awareness of reducing the Daiwa Securities Group’s environmental

responded “Developing and selling such financial products as

impact: 52% responded “Reducing the environmental impact of offices

environmentally aware investment trusts”; and 24% each responded

by saving paper, managing air conditioning, etc.,” and 47% responded“Expanding emissions-trading related business” and “Offering“Reducing the environmental impact of operations by using electronic

customers investment information relating to the environment.”

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 730

Management

Compliance regime

C omp l i an ce

respond to reports as quickly as possible, which increased
recognition of and confidence in the hotline. Most of the reports
deal with the workplace environment, and we believe that

Daiwa Securities Group Inc. plays a central role in complianceimprovements to the workplace environment have been a benefit

We do not believe that compliance stops with the letter of the law; we believe that it includes all actions for winningpolicy for the entire Group: it formulates the principles and vision forof the hotline. We remain committed to increasing confidence inthe confidence of our customers and society. We are committed to enhancing both group-wide initiatives andcompliance for the Group as a whole; it collects information about

the program and program recognition in order make the hotline

independent initiatives by our group companies.

compliance at each group company; and it creates a workplace

fully effective at preventing issues, and enhance the program toenvironment and foments ethical viewpoints to enable thoroughpromote its appropriate use.

Vision and medium-term goals forcompliancedevelopment of the securities market.

compliance. Meanwhile, each group company must comply with a

We will maintain a self-purifying system at the organizational

different set of rules and regulations, due to differences in the types

level, where we are able to independently discover and correctand details of their businesses. For this reason, the Compliance

Given the public-interest aspect of the securities industry, allrisks and problems in our duties by having each employee be

Department of each group company plays a leading role in setting

Daiwa Securities Group officers and employees must continuallyhighly conscious of compliance.

detailed compliance regulations and response.

maintain a strong sense of ethics, and contribute to the soundThe compliance regime of the Group as a whole is maintained
and promoted by having both Daiwa Securities Group Inc. andResponses to reports made through the Corporate Ethics
HotlineReportResponse

Misuse of power andposition, character
disparagement, etc.

After an investigation of the situation, awarning was issued to the superiors andguidance was provided.

Sexual harassment

After an investigation of the situation, awarning was issued to the staff and guidance
was provided.

Breaches of sales
ethics and rules

After an investigation of the situation, special
training and guidance was provided to theindividuals concerned.

ImpolitenessA warning was issued at a general meeting
concerning proper business practices andconduct.

each group company fulfill its respective role, and enhancing the

Daiwa Securities

Entire Group

Issues and targets for fiscal 2006

Arrange activities to raise awareness of the Corporate
Ethics Hotline among group companies.

• Conducted corporate ethics training at three major groupcompanies.
• Revamped the in-house website for the Corporate Ethics Hotline,
and enhanced access features from each group company.
• Shared information on trends in whistle blowing cases and the likeamong general-affairs management from each group company,
and encourage alertness to enhance self-purification functions.

Strengthen measures against anti-social influences.

• Enhanced information collection functions, accumulated data, andenhanced advise relating to new business partners andinvestments of group companies.

Daiwa Securities SMBC

collaboration between the initiatives of each.

Fiscal 2006 initiatives
Structure and performance of the Corporate Ethics Hotline

Practice proposal sales in order to support the asset
formation that clients truly want.

• Informed all officers and employees of the need to ascertain
customer attributes such as investment experience via compliancetraining and satellite broadcasts.

Streamline the way consultations are conducted between
customers and senior branch officers.

• The Compliance Department manages the status of consultations
between specific types of customers (such as elderly customers)
and superiors (branch managers and section managers) on amonthly basis.

Improve quality of performance in order to eliminate
complaints and claims.

• Continued to raise awareness of sales personnel and maintain asystem of close contact between sales branches and theCompliance Division, and reduced the number of complaints to
the Customer Support Center.

Keep rigorous guard against anti-social influences andunfair trading practices.

• Visited 73 sales offices jointly with Daiwa Securities Group Inc.,and conducted training aimed at improving corporate ethics andthe quality of operations, and thoroughly eliminate antisocial
forces. Increased our case study profile of preventing antisocial
forces from opening accounts.
• Built a system for timely incident-prevent training based on
securities incidents and actual examples from other companies,and created new e-learning content regarding the latest casestudies.
• Enhanced training curriculum for temporary employees.

We introduced a Corporate Ethics Hotline in January 2003,

Training with topical content, and enhancements tothrough which employees can report problems in the workplacee-learning content

directly to either a corporate-ethics officer from Daiwa Securities

In addition to compliance training carried out on a regular basis,

Group Inc., or an outside attorney.

whenever there is a major incident we also conduct training in

When there is a report, we investigate the situation together

departments concerned, in order to prevent the occurrence ofwith the head of internal administration supervisors and thesimilar incidents in the future. We also produce topical content forcompliance officers at group companies, while working to ensure

our e-learning program that reflects changes in rules for screeningthat the whistleblower is protected. The hotline received 74

sales promotion materials, the latest securities case studies,

reports in fiscal 2006, up 50% from the 49 reports in fiscal 2005.

administrative sanctions, and the like, and utilize this content in

We judge that this increase is due to a broader user base, thanks

our training.

to the training concerning the hotline, and our commitment to

W E B Building a system to check for conflicts of interest

Targets and main action plans for fiscal 2007
The Group is committed to creating an environment at each group

Financial Instruments and Exchange Law and the revised Law on

company where its employees understand corporate ethics andSales of Financial Products, including a customer management

compliance well, by conducting training in corporate ethics,

system and investment recommendation system. We will also

employee surveys about the Corporate Ethics Hotline, and othercontinue to check for the existence of personal information andTake steps to prevent any leakage of personal data during
the implementation of measures.

• Checked for the existence of personal data throughout thecompany. Conducted leak-prevention training in each department,
and made our system for selecting and managing outsidecontractors stricter.

measures. We also continually monitor each group company toour system for selecting and managing outside contractors, inensure they have no ties to antisocial forces, and strengthen ourorder to ensure that personal information is thoroughly managed.

Build an inspection system to watch for conflicts of interest.

• Built a system to check all transactions for conflicts of interest
across the company.

response through such measures as continual enhancements to

We will also enhance and expand our regime for compliance with

our database relating to the elimination of antisocial forces.

laws and regulations relating to foreign exchange, including

Implement training that includes current issues, and enriche-learning content.

31

Results and progress for fiscal 2006

Create a framework to comply with the Comprehensive
Supervisory Guidelines for Securities Companies
established by the Financial Services Agency.

• Identified items that do not meet the levels required by thesupervisory guideline, and devised improvement measures.

Set up a trading management system according to the newrules of the Japan Securities Dealers Association.

• Build new system with transaction screening functions incompliance with rules.

DAIWA SUSTAINAB ILITY REPO RT 2007

Another key challenge for fiscal 2007 is the creation ofsystems required to comply with such newly enacted laws as theenhancing our system for checking for accounts subject toeconomic sanctions and money laundering.

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

32

Management

Compliance regime

C omp l i an ce

respond to reports as quickly as possible, which increased
recognition of and confidence in the hotline. Most of the reports
deal with the workplace environment, and we believe that

Daiwa Securities Group Inc. plays a central role in complianceimprovements to the workplace environment have been a benefit

We do not believe that compliance stops with the letter of the law; we believe that it includes all actions for winningpolicy for the entire Group: it formulates the principles and vision forof the hotline. We remain committed to increasing confidence inthe confidence of our customers and society. We are committed to enhancing both group-wide initiatives andcompliance for the Group as a whole; it collects information about

the program and program recognition in order make the hotline

independent initiatives by our group companies.

compliance at each group company; and it creates a workplace

fully effective at preventing issues, and enhance the program toenvironment and foments ethical viewpoints to enable thoroughpromote its appropriate use.

Vision and medium-term goals forcompliancedevelopment of the securities market.

compliance. Meanwhile, each group company must comply with a

We will maintain a self-purifying system at the organizational

different set of rules and regulations, due to differences in the types

level, where we are able to independently discover and correctand details of their businesses. For this reason, the Compliance

Given the public-interest aspect of the securities industry, allrisks and problems in our duties by having each employee be

Department of each group company plays a leading role in setting

Daiwa Securities Group officers and employees must continuallyhighly conscious of compliance.

detailed compliance regulations and response.

maintain a strong sense of ethics, and contribute to the soundThe compliance regime of the Group as a whole is maintained
and promoted by having both Daiwa Securities Group Inc. andResponses to reports made through the Corporate Ethics
HotlineReportResponse

Misuse of power andposition, character
disparagement, etc.

After an investigation of the situation, awarning was issued to the superiors andguidance was provided.

Sexual harassment

After an investigation of the situation, awarning was issued to the staff and guidance
was provided.

Breaches of sales
ethics and rules

After an investigation of the situation, special
training and guidance was provided to theindividuals concerned.

ImpolitenessA warning was issued at a general meeting
concerning proper business practices andconduct.

each group company fulfill its respective role, and enhancing the

Daiwa Securities

Entire Group

Issues and targets for fiscal 2006

Arrange activities to raise awareness of the Corporate
Ethics Hotline among group companies.

• Conducted corporate ethics training at three major groupcompanies.
• Revamped the in-house website for the Corporate Ethics Hotline,
and enhanced access features from each group company.
• Shared information on trends in whistle blowing cases and the likeamong general-affairs management from each group company,
and encourage alertness to enhance self-purification functions.

Strengthen measures against anti-social influences.

• Enhanced information collection functions, accumulated data, andenhanced advise relating to new business partners andinvestments of group companies.

Daiwa Securities SMBC

collaboration between the initiatives of each.

Fiscal 2006 initiatives
Structure and performance of the Corporate Ethics Hotline

Practice proposal sales in order to support the asset
formation that clients truly want.

• Informed all officers and employees of the need to ascertain
customer attributes such as investment experience via compliancetraining and satellite broadcasts.

Streamline the way consultations are conducted between
customers and senior branch officers.

• The Compliance Department manages the status of consultations
between specific types of customers (such as elderly customers)
and superiors (branch managers and section managers) on amonthly basis.

Improve quality of performance in order to eliminate
complaints and claims.

• Continued to raise awareness of sales personnel and maintain asystem of close contact between sales branches and theCompliance Division, and reduced the number of complaints to
the Customer Support Center.

Keep rigorous guard against anti-social influences andunfair trading practices.

• Visited 73 sales offices jointly with Daiwa Securities Group Inc.,and conducted training aimed at improving corporate ethics andthe quality of operations, and thoroughly eliminate antisocial
forces. Increased our case study profile of preventing antisocial
forces from opening accounts.
• Built a system for timely incident-prevent training based on
securities incidents and actual examples from other companies,and created new e-learning content regarding the latest casestudies.
• Enhanced training curriculum for temporary employees.

We introduced a Corporate Ethics Hotline in January 2003,

Training with topical content, and enhancements tothrough which employees can report problems in the workplacee-learning content

directly to either a corporate-ethics officer from Daiwa Securities

In addition to compliance training carried out on a regular basis,

Group Inc., or an outside attorney.

whenever there is a major incident we also conduct training in

When there is a report, we investigate the situation together

departments concerned, in order to prevent the occurrence ofwith the head of internal administration supervisors and thesimilar incidents in the future. We also produce topical content forcompliance officers at group companies, while working to ensure

our e-learning program that reflects changes in rules for screeningthat the whistleblower is protected. The hotline received 74

sales promotion materials, the latest securities case studies,

reports in fiscal 2006, up 50% from the 49 reports in fiscal 2005.

administrative sanctions, and the like, and utilize this content in

We judge that this increase is due to a broader user base, thanks

our training.

to the training concerning the hotline, and our commitment to

W E B Building a system to check for conflicts of interest

Targets and main action plans for fiscal 2007
The Group is committed to creating an environment at each group

Financial Instruments and Exchange Law and the revised Law on

company where its employees understand corporate ethics andSales of Financial Products, including a customer management

compliance well, by conducting training in corporate ethics,

system and investment recommendation system. We will also

employee surveys about the Corporate Ethics Hotline, and othercontinue to check for the existence of personal information andTake steps to prevent any leakage of personal data during
the implementation of measures.

• Checked for the existence of personal data throughout thecompany. Conducted leak-prevention training in each department,
and made our system for selecting and managing outsidecontractors stricter.

measures. We also continually monitor each group company toour system for selecting and managing outside contractors, inensure they have no ties to antisocial forces, and strengthen ourorder to ensure that personal information is thoroughly managed.

Build an inspection system to watch for conflicts of interest.

• Built a system to check all transactions for conflicts of interest
across the company.

response through such measures as continual enhancements to

We will also enhance and expand our regime for compliance with

our database relating to the elimination of antisocial forces.

laws and regulations relating to foreign exchange, including

Implement training that includes current issues, and enriche-learning content.

31

Results and progress for fiscal 2006

Create a framework to comply with the Comprehensive
Supervisory Guidelines for Securities Companies
established by the Financial Services Agency.

• Identified items that do not meet the levels required by thesupervisory guideline, and devised improvement measures.

Set up a trading management system according to the newrules of the Japan Securities Dealers Association.

• Build new system with transaction screening functions incompliance with rules.

DAIWA SUSTAINAB ILITY REPO RT 2007

Another key challenge for fiscal 2007 is the creation ofsystems required to comply with such newly enacted laws as theenhancing our system for checking for accounts subject toeconomic sanctions and money laundering.

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

32

Managem

ent

Disclosure Policy

Informat i o n Di sclo s u r e
The Daiwa Securities Group actively communicates with all its stakeholders, disclosing financial, social, andenvironmental information fairly, appropriately, and in a timely manner.

Vision and medium-term goals for
information disclosure

appropriately and in a timely manner that can serve as a modelfor other listed companies, based on its Disclosure Policy.
We also strive to communicate fully with all our stakeholders,

As an enterprise engaged in the securities industry, Daiwa

including shareholders and investors, providing a wide range of

Securities Group is committed to disclosing information

information, such as financial, social, and environmental information.

Issues and targets for fiscal 2006

Expand IR programs to suit more types of investors.

Improve investor relations activities for individual investors.

Encourage a better understanding of disclosure-related
regulations within the Group.

• We will observe fair and timely disclosure of important financial, social andenvironmental information (“Management-Related Information”) regarding
the Daiwa Securities Group so that our stakeholders (including
shareholders, investors and the communities we operate in) may
understand and maintain realistic expectations of the Daiwa Securities
Group.
• We will comply with the Securities Exchange Law and other laws andordinances related to securities transactions and the various rules of thestock exchanges where on which our stock is listed.
• We will endeavor to achieve fair disclosure both in terms of content andtiming.
• We will utilize various communication channels including presentations,
telephone conferences, the Internet and printed materials to disclose
information in an easy to comprehend manner for investors.
• We will consciously act as a leader of the securities markets in terms of
disclosure and set the standards for all other listed corporations.
• We have established the Daiwa Securities Group Inc. Disclosure
Regulations, that define guidelines such as setting up a disclosurecommittee and the methods of disclosing management-related information
to fulfill the spirit of this Policy.

investors’ high interest in CSR.
The seminar began with a keynote address by Mariko
Kawaguchi, Senior CSR Analyst at Daiwa Institute of ResearchLtd., titled “The Growing Focus on Corporate Social Responsibility.”This was followed by a presentation titled “SRI Management Facts”
by a fund manager at Daiwa Asset Management, and one titled“CSR Activities of Daiwa Securities Group Inc.” by the staff of the
CSR Promotion Department of Daiwa Securities Group Inc. The
audience was quite passionate about the topic, with manyquestions during the Q&A sessions. More information about thisseminar can be found at the following URL (In Japanese only).

http://www.daiwair.co.jp/individual/csr_report/20070416/
index.html

Results and progress for fiscal 2006
• Held IR informational meetings with institutional investors inTokyo, New York, London, and Hong Kong.
• Increased number of individual meetings with institutional
investors (including outside Japan) by expanding and enhancing
our IR programs.
• Made IR visits to Australia and the Middle East.
• Held informational meetings with individual investors in Tokyo
and Osaka.
• Although the number of individual shareholders decreased, we
increased the number of people applying for rewards comparedto the previous year by expanding and enhancing ourshareholder reward program.
• We created a new IR website for individual investors, andoffered more easy-to-understand IR information.
• Placed management-related information contact table on inhouse information network.
• Started creation of system to facilitate the communication ofmanagement-related information.

Disclosing information using a wide rangeof tools
We disclose information using a wide range of tools, based on our

CSR seminar for individual
investors

policy of disclosing financial, social, and environmental
information. This commitment to information disclosure has been

W E B Communication with institutional investors

widely recognized. Daiwa Securities Group Sustainability Report
2006 won the Excellence Prize in the sustainability report

Initiatives at general meetings for shareholders

category of the 10th Environmental Communication Awards of the

The general meeting for shareholders is an opportunity for direct

Global Environmental Forum (GEF); it also won Excellence Prize

communication with our shareholders. In order to encouragein the sustainability report category of the 10th Green Reporting

higher attendance, in 2006 we began holding these meetings on

Awards of Toyo Keizai Inc.

Saturdays. A total of 1,550 shareholders attended our 70th
regular general meeting for shareholders (held on June 23, 2007).

Information disclosure flow at the Daiwa Securities Group

Information disclosure system

Flow of Management-Related Information(excluding financial information)

Information
disclosure

Daiwa Securities Group Inc.

Nagoya, Sapporo, and Fukuoka.

disclosure, in accordance with these regulations.

*1
ReportingDisclosure Committee secretariat

Executive
Committee

Disclosure Committee*1 Reports
importantdecisions

uniform information-disclosure system for the entire Group. Each
Corporate Planning Department

Finance Department

Securities Group Inc. without fail, including posting managementrelated information contact tables on our in-house network.

Subsidiaries
Departments responsible
for processing information*2(Corporate Planning Department, etc.)
Departments*2 or directors whoare sources of information*2 Including
subsidiariesof thesubsidiaryconcerned

individual investors in accordance with our policy of emphasizing
communication with individual investors. Through this site, we

Shareholder surveys

strive to publish easy-to-understand information on such topics as

We continuously carry out shareholder surveys in order to gain

the details of our businesses and our strategies.

direct feedback from our shareholders, and reference this in our

Additionally, in February 2007 we held seminars for individual

management and IR activities. In 2006, we created a new IR

investors in Tokyo and Osaka, where Daiwa Securities Group Inc.

website for individual investors and expanded our shareholder

President and CEO Shigeharu Suzuki described our management

reward program based on feedback from shareholders in thesepolicy and other matters to a total of about 1,020 individual

surveys.

investors.

CSR seminars for individual investors
In April 2007, we held a CSR seminar for individual investors titled“New Trends in Investing: The Search for Sustainable Growth
Companies.” 410 people attended the seminar, showing individual

DAIWA SUSTAINAB ILITY REPO RT 2007

followed by a lecture. The meeting was also broadcast live via
satellite, and was watched by a total of 850 people in Osaka,

Each group company also creates rules for controlling the33

The meeting was followed by light refreshments, which wasin order to expand and enhance our disclosure of information to

Determination of information
to be disclosed and methods

group company collects information and reports it to Daiwa

shareholders about employee education and risk management.

In June 2006, we launched an IR website for individual investors,

Committee is responsible for final decisions regarding information

release of Management-Related Information. We have created a

Communication with individual investors

The meeting included a lively Q&A session, with questions by

Flow of financial information

Daiwa Securities Group Inc. has created Disclosure Regulations
in order to achieve its Disclosure Policy. Our Disclosure

Communication with shareholders andinvestors

W E B Shareholder survey result (fiscal 2006)

Targets and main action plans for fiscal 2007
We will strive to expand and increase awareness of information
disclosure in the Daiwa Securities Group, and increase our corporate
value by improving our disclosure of such non-financial information as
CSR, governance, and corporate culture.

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

34

Managem

ent

Disclosure Policy

Informat i o n Di sclo s u r e
The Daiwa Securities Group actively communicates with all its stakeholders, disclosing financial, social, andenvironmental information fairly, appropriately, and in a timely manner.

Vision and medium-term goals for
information disclosure

appropriately and in a timely manner that can serve as a modelfor other listed companies, based on its Disclosure Policy.
We also strive to communicate fully with all our stakeholders,

As an enterprise engaged in the securities industry, Daiwa

including shareholders and investors, providing a wide range of

Securities Group is committed to disclosing information

information, such as financial, social, and environmental information.

Issues and targets for fiscal 2006

Expand IR programs to suit more types of investors.

Improve investor relations activities for individual investors.

Encourage a better understanding of disclosure-related
regulations within the Group.

• We will observe fair and timely disclosure of important financial, social andenvironmental information (“Management-Related Information”) regarding
the Daiwa Securities Group so that our stakeholders (including
shareholders, investors and the communities we operate in) may
understand and maintain realistic expectations of the Daiwa Securities
Group.
• We will comply with the Securities Exchange Law and other laws andordinances related to securities transactions and the various rules of thestock exchanges where on which our stock is listed.
• We will endeavor to achieve fair disclosure both in terms of content andtiming.
• We will utilize various communication channels including presentations,
telephone conferences, the Internet and printed materials to disclose
information in an easy to comprehend manner for investors.
• We will consciously act as a leader of the securities markets in terms of
disclosure and set the standards for all other listed corporations.
• We have established the Daiwa Securities Group Inc. Disclosure
Regulations, that define guidelines such as setting up a disclosurecommittee and the methods of disclosing management-related information
to fulfill the spirit of this Policy.

investors’ high interest in CSR.
The seminar began with a keynote address by Mariko
Kawaguchi, Senior CSR Analyst at Daiwa Institute of ResearchLtd., titled “The Growing Focus on Corporate Social Responsibility.”This was followed by a presentation titled “SRI Management Facts”
by a fund manager at Daiwa Asset Management, and one titled“CSR Activities of Daiwa Securities Group Inc.” by the staff of the
CSR Promotion Department of Daiwa Securities Group Inc. The
audience was quite passionate about the topic, with manyquestions during the Q&A sessions. More information about thisseminar can be found at the following URL (In Japanese only).

http://www.daiwair.co.jp/individual/csr_report/20070416/
index.html

Results and progress for fiscal 2006
• Held IR informational meetings with institutional investors inTokyo, New York, London, and Hong Kong.
• Increased number of individual meetings with institutional
investors (including outside Japan) by expanding and enhancing
our IR programs.
• Made IR visits to Australia and the Middle East.
• Held informational meetings with individual investors in Tokyo
and Osaka.
• Although the number of individual shareholders decreased, we
increased the number of people applying for rewards comparedto the previous year by expanding and enhancing ourshareholder reward program.
• We created a new IR website for individual investors, andoffered more easy-to-understand IR information.
• Placed management-related information contact table on inhouse information network.
• Started creation of system to facilitate the communication ofmanagement-related information.

Disclosing information using a wide rangeof tools
We disclose information using a wide range of tools, based on our

CSR seminar for individual
investors

policy of disclosing financial, social, and environmental
information. This commitment to information disclosure has been

W E B Communication with institutional investors

widely recognized. Daiwa Securities Group Sustainability Report
2006 won the Excellence Prize in the sustainability report

Initiatives at general meetings for shareholders

category of the 10th Environmental Communication Awards of the

The general meeting for shareholders is an opportunity for direct

Global Environmental Forum (GEF); it also won Excellence Prize

communication with our shareholders. In order to encouragein the sustainability report category of the 10th Green Reporting

higher attendance, in 2006 we began holding these meetings on

Awards of Toyo Keizai Inc.

Saturdays. A total of 1,550 shareholders attended our 70th
regular general meeting for shareholders (held on June 23, 2007).

Information disclosure flow at the Daiwa Securities Group

Information disclosure system

Flow of Management-Related Information(excluding financial information)

Information
disclosure

Daiwa Securities Group Inc.

Nagoya, Sapporo, and Fukuoka.

disclosure, in accordance with these regulations.

*1
ReportingDisclosure Committee secretariat

Executive
Committee

Disclosure Committee*1 Reports
importantdecisions

uniform information-disclosure system for the entire Group. Each
Corporate Planning Department

Finance Department

Securities Group Inc. without fail, including posting managementrelated information contact tables on our in-house network.

Subsidiaries
Departments responsible
for processing information*2(Corporate Planning Department, etc.)
Departments*2 or directors whoare sources of information*2 Including
subsidiariesof thesubsidiaryconcerned

individual investors in accordance with our policy of emphasizing
communication with individual investors. Through this site, we

Shareholder surveys

strive to publish easy-to-understand information on such topics as

We continuously carry out shareholder surveys in order to gain

the details of our businesses and our strategies.

direct feedback from our shareholders, and reference this in our

Additionally, in February 2007 we held seminars for individual

management and IR activities. In 2006, we created a new IR

investors in Tokyo and Osaka, where Daiwa Securities Group Inc.

website for individual investors and expanded our shareholder

President and CEO Shigeharu Suzuki described our management

reward program based on feedback from shareholders in thesepolicy and other matters to a total of about 1,020 individual

surveys.

investors.

CSR seminars for individual investors
In April 2007, we held a CSR seminar for individual investors titled“New Trends in Investing: The Search for Sustainable Growth
Companies.” 410 people attended the seminar, showing individual

DAIWA SUSTAINAB ILITY REPO RT 2007

followed by a lecture. The meeting was also broadcast live via
satellite, and was watched by a total of 850 people in Osaka,

Each group company also creates rules for controlling the33

The meeting was followed by light refreshments, which wasin order to expand and enhance our disclosure of information to

Determination of information
to be disclosed and methods

group company collects information and reports it to Daiwa

shareholders about employee education and risk management.

In June 2006, we launched an IR website for individual investors,

Committee is responsible for final decisions regarding information

release of Management-Related Information. We have created a

Communication with individual investors

The meeting included a lively Q&A session, with questions by

Flow of financial information

Daiwa Securities Group Inc. has created Disclosure Regulations
in order to achieve its Disclosure Policy. Our Disclosure

Communication with shareholders andinvestors

W E B Shareholder survey result (fiscal 2006)

Targets and main action plans for fiscal 2007
We will strive to expand and increase awareness of information
disclosure in the Daiwa Securities Group, and increase our corporate
value by improving our disclosure of such non-financial information as
CSR, governance, and corporate culture.

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

34

Social Re

port
Hospitality training is also provided to all employees in the

Systems and initiatives to leveragecustomer feedback

Investment Services Section who interact with customers, in order

C ust o mer S at i sf a c tio n

to improve their customer-service skills with an emphasis on
attentiveness and consideration. We value warmth and hospitality,

Our headquarters collects and summarizes feedback received

We at the Daiwa Securities Group consider improving customer satisfaction to be one of our key management

and are committed to making a visit to each branch a worry-freefrom customers by each of our branches, and provides thischallenges. Reflecting the feedback and views from customers, the Daiwa Securities Group is committed to offeringexperience for all our customers, including the elderly andfeedback throughout the company each week, teaching customer-

services that exceed their expectations, and improving the quality of service we provide.

persons with handicaps.

service skills and sharing knowledge.
Our “report on initiatives to utilize customer feedback”

Vision and medium-term goals forcustomer satisfaction

accurately reflect these customer needs.
We also create an atmosphere at our branches that makes
more customers glad that they came to Daiwa Securities. In order

As the trend from saving in investing accelerates, the services

to accomplish this, we offer warm hospitality in addition to

demanded by our customers grow more diverse and ceaselessly

creating a relaxed ambiance, and providing information in depthchanging. Our vision for the Daiwa Securities Group is to be aand in an easy-to-understand manner.

team of professionals that continues to offer new services that

Educating junior sales staff

summarizes our initiatives to make improvements reflecting

At Daiwa Securities, we focus on educating our juniorcustomer feedback.

salespeople, in order to give them correct knowledge and

The report is available from the following URL (In Japanese only).

understanding of customer satisfaction from an early stage. In

http://www.daiwa.jp/company/documents/0706.pdf

addition to group training as appropriate, a special site for juniorsales representative is established, which helps achieve this goal

How customer feedback is utilizedin conjunction with our corporate television circuit and other tools.

Customers

Issues and targets for fiscal 2006
Actively pursue post-sales follow up.

Create office atmospheres that are appealing to a broad clientele.

Implement education programs to improve manners and knowledgeof younger sales staff.

Fiscal 2006 customer satisfaction survey

Opinions, comments, and requests

Each year, a customer-satisfaction survey is carried out in order

Daiwa Securities Co. Ltd. branches

Results and progress for fiscal 2006
• Held emergency follow-up seminar to give an analysis of the current
situation and future forecasts at a time of rapid market change.
• Ensured thorough awareness and understanding of the importanceof post-sales follow-up in sales training.
• Established a branch layout and presentation flow that make iteasier for customers visiting branches to achieve the purposes of
their visits.
• Provided hospitality training to staff that interface with customers.
• Installed Executive Rooms that utilize teleconferencing to enable
expert staff at the headquarters to provide information and describe
products to customers.
• Created a site for younger sales staff, prepared training materials,
and published reference materials for trainers.

Improvement

to track how our customers rate us. In fiscal 2006, we received
Opinions, requests,
reports, and inquiries

responses from 1,897 customers. The results of the survey
showed that providing information and advice after the purchaseof a product (i.e. post-sales follow-up) continues to be an issue

Gathering feedback ateach branch to beshared by all branches(weekly)

Response proposals
and steps for
improvement

CS Promotion Section of Sales Planning Department, Daiwa Securities Co. Ltd.

that we must focus on. We will therefore hold seminars and work

Contact

Improvement

Departments responsible at headquarters

to raise employee awareness, identifying post-sales follow-up as aReportImprovement

Management

key issue.
Results from the customer satisfaction survey (fiscal 2006)
Level ofsatisfaction

Initiatives to improve customer
satisfaction
Actively following up customers after sales

Speaking style of employees
Attitude of employees

satisfaction

Name recognition

Consideration for privacy

Our branches are currently being remodeled. In this remodeling,
we are converting our counters to booths. This enables us to
consult with our customers in a more relaxed atmosphere, andemphasize the importance of post-sales follow-up to our sales

also better protects their privacy. Executive Rooms equipped withforce and branch staff that interacts with customers, and raise

teleconferencing systems are installed to enable experts at our

their awareness of this issue.

headquarters to provide information and describe products tothen March 2007 saw rapid fluctuations in the stock market. At

Greetings by
employees
Employee grooming

Post-sales follow-up is always a focus of customers. We

In June 2006, there was a rapid change in exchange rates;

4.5

Creating a branch ambiance that engenders customer

Fairlysatisfied4

Speed of service by employees
Expert knowledge of investment trusts
Convenience of branch location
Waiting time at branchSoundness of finances

Expert knowledge of stocks
Expert knowledge of foreign bonds
Variety of products

Impression from advertisements

Demonstrated customer focus

3.5

Quality of investment information
Ease of understanding of pamphlets
Usefulness of seminars

Investment performance
Quality of advice after purchasecustomers, as well as provide advice on asset management
directly.

Accuracy of service by employees

Average3

these times, we held Emergency Investment Seminars at our

Cost performance

Importance*The level of customer satisfaction for each item is the average of customer ratings (e.g. very satisfied: 5 points; fairly satisfied: 4 points; neither: 3 points; fairly dissatisfied: 2 points; very dissatisfied: 1 point).
Importance is a plot of deviation using the coefficient of correlation between each item and the overall level of satisfaction.

branches nationwide, rapidly providing a broad range of
information relating to analyses of the current situation for
products held by our customers and future forecasts. We also held

Targets and main action plans for fiscal 2007

Internet seminars in order to enable access by customers who

In fiscal 2007 and beyond, we will continue to actively follow up customers after sales. We will also improve the skills of our juniorsalespeople through various training programs including on-the-job training, and give our branches a sense of hospitality that makes ourcustomers happy that they came to Daiwa Securities for a consultation.

live a long distance from our branches, and customers who work
during the day.

Hospitality training

35

DAIWA SUSTAINAB ILITY REPO RT 2007

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

36

Social Re

port
Hospitality training is also provided to all employees in the

Systems and initiatives to leveragecustomer feedback

Investment Services Section who interact with customers, in order

C ust o mer S at i sf a c tio n

to improve their customer-service skills with an emphasis on
attentiveness and consideration. We value warmth and hospitality,

Our headquarters collects and summarizes feedback received

We at the Daiwa Securities Group consider improving customer satisfaction to be one of our key management

and are committed to making a visit to each branch a worry-freefrom customers by each of our branches, and provides thischallenges. Reflecting the feedback and views from customers, the Daiwa Securities Group is committed to offeringexperience for all our customers, including the elderly andfeedback throughout the company each week, teaching customer-

services that exceed their expectations, and improving the quality of service we provide.

persons with handicaps.

service skills and sharing knowledge.
Our “report on initiatives to utilize customer feedback”

Vision and medium-term goals forcustomer satisfaction

accurately reflect these customer needs.
We also create an atmosphere at our branches that makes
more customers glad that they came to Daiwa Securities. In order

As the trend from saving in investing accelerates, the services

to accomplish this, we offer warm hospitality in addition to

demanded by our customers grow more diverse and ceaselessly

creating a relaxed ambiance, and providing information in depthchanging. Our vision for the Daiwa Securities Group is to be aand in an easy-to-understand manner.

team of professionals that continues to offer new services that

Educating junior sales staff

summarizes our initiatives to make improvements reflecting

At Daiwa Securities, we focus on educating our juniorcustomer feedback.

salespeople, in order to give them correct knowledge and

The report is available from the following URL (In Japanese only).

understanding of customer satisfaction from an early stage. In

http://www.daiwa.jp/company/documents/0706.pdf

addition to group training as appropriate, a special site for juniorsales representative is established, which helps achieve this goal

How customer feedback is utilizedin conjunction with our corporate television circuit and other tools.

Customers

Issues and targets for fiscal 2006
Actively pursue post-sales follow up.

Create office atmospheres that are appealing to a broad clientele.

Implement education programs to improve manners and knowledgeof younger sales staff.

Fiscal 2006 customer satisfaction survey

Opinions, comments, and requests

Each year, a customer-satisfaction survey is carried out in order

Daiwa Securities Co. Ltd. branches

Results and progress for fiscal 2006
• Held emergency follow-up seminar to give an analysis of the current
situation and future forecasts at a time of rapid market change.
• Ensured thorough awareness and understanding of the importanceof post-sales follow-up in sales training.
• Established a branch layout and presentation flow that make iteasier for customers visiting branches to achieve the purposes of
their visits.
• Provided hospitality training to staff that interface with customers.
• Installed Executive Rooms that utilize teleconferencing to enable
expert staff at the headquarters to provide information and describe
products to customers.
• Created a site for younger sales staff, prepared training materials,
and published reference materials for trainers.

Improvement

to track how our customers rate us. In fiscal 2006, we received
Opinions, requests,
reports, and inquiries

responses from 1,897 customers. The results of the survey
showed that providing information and advice after the purchaseof a product (i.e. post-sales follow-up) continues to be an issue

Gathering feedback ateach branch to beshared by all branches(weekly)

Response proposals
and steps for
improvement

CS Promotion Section of Sales Planning Department, Daiwa Securities Co. Ltd.

that we must focus on. We will therefore hold seminars and work

Contact

Improvement

Departments responsible at headquarters

to raise employee awareness, identifying post-sales follow-up as aReportImprovement

Management

key issue.
Results from the customer satisfaction survey (fiscal 2006)
Level ofsatisfaction

Initiatives to improve customer
satisfaction
Actively following up customers after sales

Speaking style of employees
Attitude of employees

satisfaction

Name recognition

Consideration for privacy

Our branches are currently being remodeled. In this remodeling,
we are converting our counters to booths. This enables us to
consult with our customers in a more relaxed atmosphere, andemphasize the importance of post-sales follow-up to our sales

also better protects their privacy. Executive Rooms equipped withforce and branch staff that interacts with customers, and raise

teleconferencing systems are installed to enable experts at our

their awareness of this issue.

headquarters to provide information and describe products tothen March 2007 saw rapid fluctuations in the stock market. At

Greetings by
employees
Employee grooming

Post-sales follow-up is always a focus of customers. We

In June 2006, there was a rapid change in exchange rates;

4.5

Creating a branch ambiance that engenders customer

Fairlysatisfied4

Speed of service by employees
Expert knowledge of investment trusts
Convenience of branch location
Waiting time at branchSoundness of finances

Expert knowledge of stocks
Expert knowledge of foreign bonds
Variety of products

Impression from advertisements

Demonstrated customer focus

3.5

Quality of investment information
Ease of understanding of pamphlets
Usefulness of seminars

Investment performance
Quality of advice after purchasecustomers, as well as provide advice on asset management
directly.

Accuracy of service by employees

Average3

these times, we held Emergency Investment Seminars at our

Cost performance

Importance*The level of customer satisfaction for each item is the average of customer ratings (e.g. very satisfied: 5 points; fairly satisfied: 4 points; neither: 3 points; fairly dissatisfied: 2 points; very dissatisfied: 1 point).
Importance is a plot of deviation using the coefficient of correlation between each item and the overall level of satisfaction.

branches nationwide, rapidly providing a broad range of
information relating to analyses of the current situation for
products held by our customers and future forecasts. We also held

Targets and main action plans for fiscal 2007

Internet seminars in order to enable access by customers who

In fiscal 2007 and beyond, we will continue to actively follow up customers after sales. We will also improve the skills of our juniorsalespeople through various training programs including on-the-job training, and give our branches a sense of hospitality that makes ourcustomers happy that they came to Daiwa Securities for a consultation.

live a long distance from our branches, and customers who work
during the day.

Hospitality training

35

DAIWA SUSTAINAB ILITY REPO RT 2007

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

36

Social Re

port
2008. Partly due to the effects of this program, the number of

Human-resources development and skill
improvement

H uman Val u es an d H u m a n R e s o u rc e U tilization

employees with securities analyst, financial planner, and similar
certifications has risen, and the program has shown significant

Daiwa Securities Group has a wide range of training and othersuccess at its original goal: motivating employees to voluntarily

The Daiwa Securities Group is committed to creating a workplace that its employees strongly feel is worth working

programs aimed at improving skills, with the goal of making us theand continuously study.

for, and can take on new challenges in their work with high motivation.

number-one professional team in the industry. We have a highly
effective training program that tailors training to the audience andVision and medium-term goals for acompany worth working forincluding expansion of female employees support plan,
enhancements to mental healthcare, and a career path for
temporary employees to become permanent employees, so thatIn July 2006 and March 2007, the Daiwa Securities Group set the

everyone working in our Group will (1) feel confident in thetarget of being the top securities group in Japan, full of motivationcompany; (2) have pride in their work, with an understanding ofand passion. We have created a company vitalization program to

the role and significance of the business; and (3) share a sense of

be a company that highly motivates its employees and createssolidarity with the company and their coworkers.

greater job satisfaction. We implement a number of measures,

Issues and targets for fiscal 2006

Strengthen initiatives for job creation.

Enhance education and training programs to increase thenumber of qualified analysts and certified financial planners(CFPs).

Continue workplace initiatives in support of female employees.

Results and progress for fiscal 2006
• Hired 1,423 fiscal 2007 graduates, a huge increase overprevious years.
• Converted temporary employees to permanent employees.
• Actively hired persons with disabilities, and increased ratio of
disabled employees.
• Increased number of certified securities analysts and CFPs by
providing last-minute reports and other information, andproviding test-preparation classes.
• Received Tokyo Labor Bureau Chief Award of Excellence in the
Corporate Equal Opportunity Awards in recognition of our
support for the female employees.
• Created a working environment that is supportive of women,
including creating the Childcare Support Guidebook, andlaunching the Daiwa Family Net, which supports a goodbalance between work and family.

WEB

Internal (intra-Group) job postings and new career pathexaminations

context, including training for specific positions and career stages(such as new hires), executive and management training, andselective training. We have an especially complete program for the

Evaluation system

first three years after hiring, identifying this as the period for
acquiring a broad range of knowledge and skills.

In order to make its evaluation system fairer and more acceptable

We have also introduced set certification requirements forto employees, we implement a “two-way evaluation system” inemployee promotions and advancement. The system works bywhich superiors and subordinates evaluate each other, and agiving employees points for obtaining certifications appropriate for“multi-directional evaluation system,” evaluates are received fromsecurities business, such as securities analyst and financial

collaborating departments. These evaluation systems are usedplanner, and requiring a certain minimum number of points inwhen making personnel-transfer, promotion, and advancement.

order to be promoted to such positions as general manager. The

Evaluations are multi-faceted, also taking compliance-related

system was announced in 2005, and will go into effect in June

performance into account.

Number of new graduates hired in Daiwa Securities Group(consolidated bases)

Persons earning credentials (nine principal group companies) (persons)

Career-track employees/
Regional career-track
employees*1(persons)

April 2005

April 2006

April 2007

Male

251

401

570

Female

235

326

610

Male

0

0

0

Female

81

101

243

Male

34

33

0

Female

40

17

0

641

878

1,423

Total as ofMarch 31, 2007

Credentials

Credentialed persons

1,444

Chartered Member, Security Analyst Association of Japan

46

Chartered Financial Analyst (USA credential)

General employees

Financial Planner (AFP)

2,445

Financial Planner (CFP)

234
17

Licensed Tax Accountant
Financial advisors*2

Total

5,579

Variable insurance sales credentials
System Analyst

28

Overseas MBA program graduate, etc.

153

*1 Regional career-track employees make up a class of career-track employees who stay in one
region and are not subject to transfers that require a change of residence. Full-scale hiring of
new graduates into this class began in April 2002.

Basic employee statistics (Daiwa Securities Group Inc.)*2 Financial advisors are employees who work in sales at Daiwa Securities Co. Ltd., under one-

Employees at Daiwa Securities Group (consolidated bases)

We have also created a new program that offers a career pathemployment contracts that primarily focus on long-term
employment.
In April 2007, we hired 1,423 new graduates. This was the

Male(Careertrack*2)(Manager)

6,879

258

–

Female(Careertrack*2)(Manager)

3,220Japan total

10,099Overseas

1,196

Total

11,295We also conducted broad, nationwide efforts to hire persons
with disabilities, with a focus on the sales branches of Daiwa
Securities Co. Ltd. As of end-March 2007, persons with disabilities

largest number of new-graduate hires in the securities industry.

accounted for 1.95% of our workforce, averaged across nine

We expanded communications in our hiring process throughgroup companies. This is a 0.1% increase from fiscal 2006. In

seminars, small meetings, and the like, in order to improve thefiscal 2007, we will actively begin hiring new graduates withmutual understanding between students and our company. Thisdisabilities as well.

6,971

357

–

Temporaryemployees*1

periodically elevate temporary employees to full-time status.

Financialadvisors

employment. For this reason, we create a system of hiring and

Employees

employees through this program. We will also continue toTemporaryemployees*1

2006, more than 100 temporary employees became full-time

company and a sense of solidarity, we must offer them long-term

Financialadvisors

employees who share the feeling of confidence and pride in the

Employees

for temporary employees to become full-time employees. In fiscal

Japan

Daiwa Securities Group believes that in order to increase(persons)

As of March 31, 2005 As of March 31, 2006 As of March 31, 2007
Temporaryemployees*1

students most want to work for.

Financialadvisors

Hiring initiatives

FY2004

year contracts.

Employees

effort also improved our score in rankings of companies that

7,341

324

–

6,127

6,280

6,613

3,278

3,465

3,641

690

–

3,300

698

–

3,666

1,258

1,411

1,515

75

97

110

593

–

–

48

1,235

–

46

1,340

948 1,675 11,506 1,055 1,798 12,347

FY2006

Average annual salary*¥8.68 million¥10.22 million ¥11.87 million

Average age

37.1 years old

37.8 years old

37.9 years old

10.7 years

11.0 years

11.4 years

Average number of years of service* Average annual salary includes bonuses and other forms of additional remuneration.

Employment rate for persons with disabilities (average across the nine
principal group companies, as of the end of each fiscal year)
(%)
2.0
1.8

1.95
1.0

948 1,627 10,271 1,055 1,752 11,007

FY20051.89

1.85

FY2004

FY2005917 1,914
–

37

0.0

FY2006917 1,951*1 Temporary employees are part-time hires; the figure shown here is the average number ofsuch employees over the year. This class of employees is mostly made up of women.

*2 Includes regional career-track employees and specialist positions.

37

DAIWA SUSTAINAB ILITY REPO RT 2007

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

38Social Re

port
2008. Partly due to the effects of this program, the number of

Human-resources development and skill
improvement

H uman Val u es an d H u m a n R e s o u rc e U tilization

employees with securities analyst, financial planner, and similar
certifications has risen, and the program has shown significant

Daiwa Securities Group has a wide range of training and othersuccess at its original goal: motivating employees to voluntarily

The Daiwa Securities Group is committed to creating a workplace that its employees strongly feel is worth working

programs aimed at improving skills, with the goal of making us theand continuously study.

for, and can take on new challenges in their work with high motivation.

number-one professional team in the industry. We have a highly
effective training program that tailors training to the audience andVision and medium-term goals for acompany worth working forincluding expansion of female employees support plan,
enhancements to mental healthcare, and a career path for
temporary employees to become permanent employees, so thatIn July 2006 and March 2007, the Daiwa Securities Group set the

everyone working in our Group will (1) feel confident in thetarget of being the top securities group in Japan, full of motivationcompany; (2) have pride in their work, with an understanding ofand passion. We have created a company vitalization program to

the role and significance of the business; and (3) share a sense of

be a company that highly motivates its employees and createssolidarity with the company and their coworkers.

greater job satisfaction. We implement a number of measures,

Issues and targets for fiscal 2006

Strengthen initiatives for job creation.

Enhance education and training programs to increase thenumber of qualified analysts and certified financial planners(CFPs).

Continue workplace initiatives in support of female employees.

Results and progress for fiscal 2006
• Hired 1,423 fiscal 2007 graduates, a huge increase overprevious years.
• Converted temporary employees to permanent employees.
• Actively hired persons with disabilities, and increased ratio of
disabled employees.
• Increased number of certified securities analysts and CFPs by
providing last-minute reports and other information, andproviding test-preparation classes.
• Received Tokyo Labor Bureau Chief Award of Excellence in the
Corporate Equal Opportunity Awards in recognition of our
support for the female employees.
• Created a working environment that is supportive of women,
including creating the Childcare Support Guidebook, andlaunching the Daiwa Family Net, which supports a goodbalance between work and family.

WEB

Internal (intra-Group) job postings and new career pathexaminations

context, including training for specific positions and career stages(such as new hires), executive and management training, andselective training. We have an especially complete program for the

Evaluation system

first three years after hiring, identifying this as the period for
acquiring a broad range of knowledge and skills.

In order to make its evaluation system fairer and more acceptable

We have also introduced set certification requirements forto employees, we implement a “two-way evaluation system” inemployee promotions and advancement. The system works bywhich superiors and subordinates evaluate each other, and agiving employees points for obtaining certifications appropriate for“multi-directional evaluation system,” evaluates are received fromsecurities business, such as securities analyst and financial

collaborating departments. These evaluation systems are usedplanner, and requiring a certain minimum number of points inwhen making personnel-transfer, promotion, and advancement.

order to be promoted to such positions as general manager. The

Evaluations are multi-faceted, also taking compliance-related

system was announced in 2005, and will go into effect in June

performance into account.

Number of new graduates hired in Daiwa Securities Group(consolidated bases)

Persons earning credentials (nine principal group companies) (persons)

Career-track employees/
Regional career-track
employees*1(persons)

April 2005

April 2006

April 2007

Male

251

401

570

Female

235

326

610

Male

0

0

0

Female

81

101

243

Male

34

33

0

Female

40

17

0

641

878

1,423

Total as ofMarch 31, 2007

Credentials

Credentialed persons

1,444

Chartered Member, Security Analyst Association of Japan

46

Chartered Financial Analyst (USA credential)

General employees

Financial Planner (AFP)

2,445

Financial Planner (CFP)

234
17

Licensed Tax Accountant
Financial advisors*2

Total

5,579

Variable insurance sales credentials
System Analyst

28

Overseas MBA program graduate, etc.

153

*1 Regional career-track employees make up a class of career-track employees who stay in one
region and are not subject to transfers that require a change of residence. Full-scale hiring of
new graduates into this class began in April 2002.

Basic employee statistics (Daiwa Securities Group Inc.)*2 Financial advisors are employees who work in sales at Daiwa Securities Co. Ltd., under one-

Employees at Daiwa Securities Group (consolidated bases)

We have also created a new program that offers a career pathemployment contracts that primarily focus on long-term
employment.
In April 2007, we hired 1,423 new graduates. This was the

Male(Careertrack*2)(Manager)

6,879

258

–

Female(Careertrack*2)(Manager)

3,220Japan total

10,099Overseas

1,196

Total

11,295We also conducted broad, nationwide efforts to hire persons
with disabilities, with a focus on the sales branches of Daiwa
Securities Co. Ltd. As of end-March 2007, persons with disabilities

largest number of new-graduate hires in the securities industry.

accounted for 1.95% of our workforce, averaged across nine

We expanded communications in our hiring process throughgroup companies. This is a 0.1% increase from fiscal 2006. In

seminars, small meetings, and the like, in order to improve thefiscal 2007, we will actively begin hiring new graduates withmutual understanding between students and our company. Thisdisabilities as well.

6,971

357

–

Temporaryemployees*1

periodically elevate temporary employees to full-time status.

Financialadvisors

employment. For this reason, we create a system of hiring and

Employees

employees through this program. We will also continue toTemporaryemployees*1

2006, more than 100 temporary employees became full-time

company and a sense of solidarity, we must offer them long-term

Financialadvisors

employees who share the feeling of confidence and pride in the

Employees

for temporary employees to become full-time employees. In fiscal

Japan

Daiwa Securities Group believes that in order to increase(persons)

As of March 31, 2005 As of March 31, 2006 As of March 31, 2007
Temporaryemployees*1

students most want to work for.

Financialadvisors

Hiring initiatives

FY2004

year contracts.

Employees

effort also improved our score in rankings of companies that

7,341

324

–

6,127

6,280

6,613

3,278

3,465

3,641

690

–

3,300

698

–

3,666

1,258

1,411

1,515

75

97

110

593

–

–

48

1,235

–

46

1,340

948 1,675 11,506 1,055 1,798 12,347

FY2006

Average annual salary*¥8.68 million¥10.22 million ¥11.87 million

Average age

37.1 years old

37.8 years old

37.9 years old

10.7 years

11.0 years

11.4 years

Average number of years of service* Average annual salary includes bonuses and other forms of additional remuneration.

Employment rate for persons with disabilities (average across the nine
principal group companies, as of the end of each fiscal year)
(%)
2.0
1.8

1.95
1.0

948 1,627 10,271 1,055 1,752 11,007

FY20051.89

1.85

FY2004

FY2005917 1,914
–

37

0.0

FY2006917 1,951*1 Temporary employees are part-time hires; the figure shown here is the average number ofsuch employees over the year. This class of employees is mostly made up of women.

*2 Includes regional career-track employees and specialist positions.

37

DAIWA SUSTAINAB ILITY REPO RT 2007

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

38Social Re

port
Persons. Under this system, we continue to employ persons
reaching retirement age and who meet certain criteria until the

Human Values and Human Resource Utilization

age of 65. We will continue to actively hire experienced
employees.

Creating an environment that is
supportive of womenCommitment to a healthy working
environment

Usage of the Daiwa Elder System and the Daiwa Master System(Daiwa Securities Group Inc., Daiwa Securities Co. Ltd. andDaiwa Securities SMBC Co. Ltd.)(persons)

The Daiwa Securities Group actively supports its female

Our Human Rights Awareness Promotion Committee is chaired

Mariko Kikutake

employees. We have introduced a wide range of programsby the Daiwa Securities Group Inc. director in charge of personnel

Clinical Psychologist
Mental Health Support Promotion Department

enabling our female employees to achieve a work-life balance,

management. The committee provides training to directors andincluding the introduction of the Female Employee Support Plan,

employees. It also strengthened the measures against sexual

led by the Women’s Support Action Team, which is located in theharassment in the Group, consequent to the enactment of the

Personnel Department of Daiwa Securities Group Inc. We actively

revised Equal Employment Opportunity Law in April 2007. Daiwa

hire women, confident in the ability of female employees to shine

Group also manages employees’ working hours. Daiwa Securities

in the workplace. The number of women hired by the Group

Group Inc. and Daiwa Securities Co. Ltd. encourage employees toincreases each year, and we actively promote female employees

leave by 7 p.m. Several programs have also been put in place toto management positions. In June 2006, Daiwa Securities Groupfacilitate the taking of paid vacation, including “family days off” andInc., Daiwa Securities Co. Ltd., and Daiwa Securities SMBC Co.

“marriage preparation leave.” As a result of these programs,

Ltd. won the Tokyo Labor Bureau Chief Award of Excellence in theemployees take 35.6% of their paid vacation, which is ansomething troubling you, please don’t hesitate to use thefiscal 2006 Corporate Equal Opportunity Awards conducted by

improvement from fiscal 2005.

Mental Health Support Promotion Department.

the Ministry of Health, Labor and Welfare in recognition of thethree companies’ support for the advancement of women.

March 31, 2005 March 31, 2006 March 31, 2007

Annual regular working hours (Hours)
Average monthly overtime hours* (Hours)
Paid vacation usage rate

Ratio of female employees tototal employees

31.9%

32.1%

33.3%

Ratio of female managers tototal managers

2.2%

2.7%

2.9%

FY2004

FY2005

FY2006

1837.51845.01845.0

29.3

27.0

26.2

33.2%

34.3%

35.6%

* Figures represent the employees at the three companies who are members of the Daiwa
Securities Group Employees’ Union.

(persons)

Comment fromstakeholder

Balancing work with children

FY2004

FY2005

FY2006severe that you can’t change your mood, you feel anxiety or

Bottling up worry or stress causes a vicious cycle, making
you more susceptible to stress-related ailments. If there is

83

–

–

6

Initiatives for employee family
Recognizing that family support is essential for enabling our
employees to fully harness their capabilities at work, we are
deeply committed to communicating with our employees’ families.
We invite the families of prizewinners to the Daiwa Securities
President’s Awards ceremonies held twice each year. We conduct
a number of other initiatives aimed at making families feel close to
the company as well. As an example, the president sends flowers
to all employees each Christmas, including temporary employees.

Communication

Our mental-health support program also makes care available
to all employees and their families nationwide. We are committed

The Daiwa Securities Group believes that it is vital to get direct

to creating an environment that is friendly to family life, supportive

feedbackof our employees, and enables our employees to fully harness

fromemployees.

Our

Personnel

Department

their capabilities at work.

annual self-assessment questionnaire. We also communicate
frequently with members of the Employees’ Union, and maintain
good relations between labor and management, including utilizing

138

150

Male

0

0

2

questionnaire conducted by the union twice each year in a variety

Number of
employees taking
family-care leave

Female023of policies and initiatives.

Male

0

0

0

the

resultsofspringnegotiations

andunion-member

Number of Employees’ Union members (seven principal groupcompanies*, as of the end of each fiscal year)(persons)

Number of Employees’ Union member

Initiatives for mental health80

recommend talking to a friend or expert as soon as possible.

115

In August 2006, Daiwa Securities Group Inc. created a new84

depression, or find that you become tired easily, then we

FemaleCo. Ltd., and Daiwa Securities SMBC Co. Ltd.
*2 Employees eligible for childcare leave include non-regular employees (contract workers, parttimers, etc.).

FY2006

become skilled at changing your mood. If stress becomes so

Number of
employees taking
childcare leave*2*1 Results of FY2004 and FY2005 covered only Daiwa Securities Group Inc., Daiwa Securities

FY2005

track the stress you are feeling in your day-to-day life, andcommunicates with employees through interviews, and a semiEmployee welfare system usage (nine principal group companies*1)* Deputy general manager or higher

FY2004are vital for mental health. The best form of prevention is toWorking hours and paid vacation usage rate (Daiwa Securities Group
Inc., Daiwa Securities Co. Ltd., and Daiwa Securities SMBC Co. Ltd.)W E B Female Employee Support Plan

Daiwa Securities Group’s female employee and manager* ratios in Japan

Just as with illnesses of the body, prevention and early care

Number of employees hired throughthe Daiwa Elder System
Number of employees hired throughthe Daiwa Master System

FY2004

FY2005

FY2006

5,786

5,747

6,078

Employees’ families are invited to the President’s Awards reception* Daiwa Asset Management Co. Ltd., which has its own employees’ union, and Daiwa Property
Co. Ltd. which has no employee union, are excluded from the Group’s principal companies.

Mental Health Support Promotion Department in order to maintain
Rie Kataoka

the mental health of our employees. The office provides

Asset Consultant Section (I)Ueno Branch
Daiwa Securities Co. Ltd.

consultations via telephone, face-to-face meetings, and via its

Targets and main action plans for fiscal 2007

I balance my job in sales with caring for my two year-old son. My parents

counseling. In fiscal 2006, we focused on raising employee

don’t live close by, so when my son gets sick I have to take off work, butawareness. Because attentiveness by superiors ties into

The Daiwa Securities Group actively hires experienced

when I do, my coworkers help me to contact my customers. I also get awork environment that allows men and women to achieve a

prevention and early detection, we repeatedly provided training toemployees. In 2000, we introduced the Daiwa Elder System,

lot of cooperation from the people at work; for example, they remind me

work-life balance, from the perspectives of confidence, pride,

managers and supervisors in order to gain their understanding.

which re-hires senior employees after they have reached

to go home early. That has allowed me to balance my job with raising aand solidarity, in order to create a supportive corporate

Additionally, the body and mind are closely linked, so the Mental

mandatory retirement age. In April 2006, we introduced the Daiwa

child. Pretty soon now, I’ll be taking my second maternity leave. I have toenvironment that keeps our employees highly motivated. We will

Health Support Promotion Department collaborates with the

Master System in order to actively employ highly motivated andalso enhance our educational and training curricula in order tomedical offices and outside specialists in order to provide rapid

skilled people regardless of age, including compliance with the

improve the professionalism of our team.

support to our employees.

revised Law concerning Stabilization of Employment of Older

admit that I’m a little worried about returning to work after my maternity
leave, but I plan to continue working as long as possible.

39

website. A certified clinical psychologist is also on call to provide

Supporting the careers of senior
employees

DAIWA SUSTAINAB ILITY REPO RT 2007

We will continue to introduce a wide range of measures for a

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

40Social Re

port
Persons. Under this system, we continue to employ persons
reaching retirement age and who meet certain criteria until the

Human Values and Human Resource Utilization

age of 65. We will continue to actively hire experienced
employees.

Creating an environment that is
supportive of womenCommitment to a healthy working
environment

Usage of the Daiwa Elder System and the Daiwa Master System(Daiwa Securities Group Inc., Daiwa Securities Co. Ltd. andDaiwa Securities SMBC Co. Ltd.)(persons)

The Daiwa Securities Group actively supports its female

Our Human Rights Awareness Promotion Committee is chaired

Mariko Kikutake

employees. We have introduced a wide range of programsby the Daiwa Securities Group Inc. director in charge of personnel

Clinical Psychologist
Mental Health Support Promotion Department

enabling our female employees to achieve a work-life balance,

management. The committee provides training to directors andincluding the introduction of the Female Employee Support Plan,

employees. It also strengthened the measures against sexual

led by the Women’s Support Action Team, which is located in theharassment in the Group, consequent to the enactment of the

Personnel Department of Daiwa Securities Group Inc. We actively

revised Equal Employment Opportunity Law in April 2007. Daiwa

hire women, confident in the ability of female employees to shine

Group also manages employees’ working hours. Daiwa Securities

in the workplace. The number of women hired by the Group

Group Inc. and Daiwa Securities Co. Ltd. encourage employees toincreases each year, and we actively promote female employees

leave by 7 p.m. Several programs have also been put in place toto management positions. In June 2006, Daiwa Securities Groupfacilitate the taking of paid vacation, including “family days off” andInc., Daiwa Securities Co. Ltd., and Daiwa Securities SMBC Co.

“marriage preparation leave.” As a result of these programs,

Ltd. won the Tokyo Labor Bureau Chief Award of Excellence in theemployees take 35.6% of their paid vacation, which is ansomething troubling you, please don’t hesitate to use thefiscal 2006 Corporate Equal Opportunity Awards conducted by

improvement from fiscal 2005.

Mental Health Support Promotion Department.

the Ministry of Health, Labor and Welfare in recognition of thethree companies’ support for the advancement of women.

March 31, 2005 March 31, 2006 March 31, 2007

Annual regular working hours (Hours)
Average monthly overtime hours* (Hours)
Paid vacation usage rate

Ratio of female employees tototal employees

31.9%

32.1%

33.3%

Ratio of female managers tototal managers

2.2%

2.7%

2.9%

FY2004

FY2005

FY2006

1837.51845.01845.0

29.3

27.0

26.2

33.2%

34.3%

35.6%

* Figures represent the employees at the three companies who are members of the Daiwa
Securities Group Employees’ Union.

(persons)

Comment fromstakeholder

Balancing work with children

FY2004

FY2005

FY2006severe that you can’t change your mood, you feel anxiety or

Bottling up worry or stress causes a vicious cycle, making
you more susceptible to stress-related ailments. If there is

83

–

–

6

Initiatives for employee family
Recognizing that family support is essential for enabling our
employees to fully harness their capabilities at work, we are
deeply committed to communicating with our employees’ families.
We invite the families of prizewinners to the Daiwa Securities
President’s Awards ceremonies held twice each year. We conduct
a number of other initiatives aimed at making families feel close to
the company as well. As an example, the president sends flowers
to all employees each Christmas, including temporary employees.

Communication

Our mental-health support program also makes care available
to all employees and their families nationwide. We are committed

The Daiwa Securities Group believes that it is vital to get direct

to creating an environment that is friendly to family life, supportive

feedbackof our employees, and enables our employees to fully harness

fromemployees.

Our

Personnel

Department

their capabilities at work.

annual self-assessment questionnaire. We also communicate
frequently with members of the Employees’ Union, and maintain
good relations between labor and management, including utilizing

138

150

Male

0

0

2

questionnaire conducted by the union twice each year in a variety

Number of
employees taking
family-care leave

Female023of policies and initiatives.

Male

0

0

0

the

resultsofspringnegotiations

andunion-member

Number of Employees’ Union members (seven principal groupcompanies*, as of the end of each fiscal year)(persons)

Number of Employees’ Union member

Initiatives for mental health80

recommend talking to a friend or expert as soon as possible.

115

In August 2006, Daiwa Securities Group Inc. created a new84

depression, or find that you become tired easily, then we

FemaleCo. Ltd., and Daiwa Securities SMBC Co. Ltd.
*2 Employees eligible for childcare leave include non-regular employees (contract workers, parttimers, etc.).

FY2006

become skilled at changing your mood. If stress becomes so

Number of
employees taking
childcare leave*2*1 Results of FY2004 and FY2005 covered only Daiwa Securities Group Inc., Daiwa Securities

FY2005

track the stress you are feeling in your day-to-day life, andcommunicates with employees through interviews, and a semiEmployee welfare system usage (nine principal group companies*1)* Deputy general manager or higher

FY2004are vital for mental health. The best form of prevention is toWorking hours and paid vacation usage rate (Daiwa Securities Group
Inc., Daiwa Securities Co. Ltd., and Daiwa Securities SMBC Co. Ltd.)W E B Female Employee Support Plan

Daiwa Securities Group’s female employee and manager* ratios in Japan

Just as with illnesses of the body, prevention and early care

Number of employees hired throughthe Daiwa Elder System
Number of employees hired throughthe Daiwa Master System

FY2004

FY2005

FY2006

5,786

5,747

6,078

Employees’ families are invited to the President’s Awards reception* Daiwa Asset Management Co. Ltd., which has its own employees’ union, and Daiwa Property
Co. Ltd. which has no employee union, are excluded from the Group’s principal companies.

Mental Health Support Promotion Department in order to maintain
Rie Kataoka

the mental health of our employees. The office provides

Asset Consultant Section (I)Ueno Branch
Daiwa Securities Co. Ltd.

consultations via telephone, face-to-face meetings, and via its

Targets and main action plans for fiscal 2007

I balance my job in sales with caring for my two year-old son. My parents

counseling. In fiscal 2006, we focused on raising employee

don’t live close by, so when my son gets sick I have to take off work, butawareness. Because attentiveness by superiors ties into

The Daiwa Securities Group actively hires experienced

when I do, my coworkers help me to contact my customers. I also get awork environment that allows men and women to achieve a

prevention and early detection, we repeatedly provided training toemployees. In 2000, we introduced the Daiwa Elder System,

lot of cooperation from the people at work; for example, they remind me

work-life balance, from the perspectives of confidence, pride,

managers and supervisors in order to gain their understanding.

which re-hires senior employees after they have reached

to go home early. That has allowed me to balance my job with raising aand solidarity, in order to create a supportive corporate

Additionally, the body and mind are closely linked, so the Mental

mandatory retirement age. In April 2006, we introduced the Daiwa

child. Pretty soon now, I’ll be taking my second maternity leave. I have toenvironment that keeps our employees highly motivated. We will

Health Support Promotion Department collaborates with the

Master System in order to actively employ highly motivated andalso enhance our educational and training curricula in order tomedical offices and outside specialists in order to provide rapid

skilled people regardless of age, including compliance with the

improve the professionalism of our team.

support to our employees.

revised Law concerning Stabilization of Employment of Older

admit that I’m a little worried about returning to work after my maternity
leave, but I plan to continue working as long as possible.

39

website. A certified clinical psychologist is also on call to provide

Supporting the careers of senior
employees

DAIWA SUSTAINAB ILITY REPO RT 2007

We will continue to introduce a wide range of measures for a

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

40Social Re

port
100 employees volunteered at the Azabu-Juban Summer Festival
held each year in August 2006 again, helping to pick up trash, set

C orp o rat e Ci t i z e n s h ip

up the venue, etc.
In the charitable fundraising and recycling activities,

As a member of society, Daiwa Securities Group is actively committed to supporting volunteerism, culture and theemployees collected unused and used stamps and prepaid cards,
ruined postcards, and the like from across the company, andarts, international exchange, and social-welfare projects.

donated them to charitable organizations. In fiscal 2006, wenotified employees ahead of time what money collected throughfundraising and recycling would be used for, such as local

Vision and medium-term goals forcorporate citizenship initiatives(1) Education and research activities in the fields of economics
and financedevelopment in developing countries, and urged them to get
involved. As a result, the number of participants increased, and(2) Encouraging volunteerism among employees

we collected donations worth a total of 414,463 yen (a 3.8%

We believe that our contribution to developing a sustainable(3) Support for culture and the arts

increase against the previous year).

society and helping to resolve social issues is our mission as a(4) Assistance to communities both on the local and international

corporate citizen, as well as an investment in society. We areof Japanese opera fans, bringing together the three great tenorsof the new century. Additionally, we were the special sponsor of

W E B Results of fundraising/recycling efforts by employees(fiscal 2006)

level through foundations and NPOs

Ryuo Watanabe faces “Bonanza,” the world’s number-one
computer shogi software

the “Claude Monet: L’art de Monet et sa posterite” exhibit at theactively involved in a wide range of efforts in the following fourNational Art Center, Tokyo, from April to July 2007, in

main fields.

commemoration of the center’s opening. The exhibit was a great
success, attracting a total of 710,000 visitors.

Issues and targets for fiscal 2006
Strengthen initiatives that address social issues.

Promote volunteer programs that enable the participation oflarger numbers of employees.

Meanwhile, we also focus on supporting traditional JapaneseResults and progress for fiscal 2006

culture, such as shogi and go. We sponsor the top title matches• Enhanced our framework for collaboration with NPOs andNGOs in order to resolve social issues, including efforts tovalue ‘human life’.

in the shogi and go : the Meijin Title Match in shogi and the
Honinbo Tournament in go. We are also the special sponsor of

shogi and go formal matches via Internet. As a commemoration• Increased the numbers of programs and participants from theprevious fiscal year. A remaining issue is to expand selfplanned programs in which many employees can participate.

of the formal Internet shogi match, the Daiwa Securities Cup, wesponsored the special shogi match between Ryuo Watanabe and

Employee volunteers participating at the Azabu-Juban
Summer Festival“Bonanza,” the world’s number-one computer shogi software.

Daiwa Securities Group’s initiatives as a corporate citizen(1) Education and research activities in the fields ofExpenditure (unit: ¥1,000)
Activities

order to maintain broad perspectives and become strong assets

our main businesses—economics and finance—we actively

in a wide range of fields. In June 2007, Daiwa Securities Co. Ltd.

conduct joint research with universities, support economic

created a new Volunteer Award as part of the President’s Awards,

education in junior and senior high schools, and the like. See

which recognize company employees. The Volunteer Award

pages 23 and 24 for more details.

recognizes employee accomplishments in volunteer activities.

• Women entrepreneur support project

The Daiwa Securities Group Inc. CSR Promotion Department

We have held the Women Entrepreneur Business Plan Contest

publishes information about various volunteer activities, andjointly with the Fujisankei Group since 2005, with the goal ofurges employees to become actively involved.

supporting women entrepreneurs with a strong motivation.
In 2006, 1,161 women entrepreneurs from throughout Japan

In fiscal 2006, a cumulative total of 2,771 people participatedin 105 volunteer activities, including charitable fundraising,competed in the contest. The Grand Prize (Daiwa Securities

recycling, a sign-language class that was open to the public, andGroup Award) went to Ms. Eriko Yamaguchi for her fair-trade plana hands-on forest thinning experience. Additionally, more than

(1) Education andresearch in thefields of economics
and finance(4) Assistance tocommunities bothon the local andinternational level
through foundations,NPOs and others

Louvre Museum exhibitions, Teatro
Comunale Di Bologna Japan Concert

184,040

164,921 249,518

in developing countries.”and attracted large audiences in addition to shogi fans.

international level through foundations and NPOs
• Daiwa Anglo-Japanese Foundation

4,305

6,208

6,765

The Daiwa Anglo-Japanese Foundation was established in 1988
in commemoration of the 25th anniversary of Daiwa Securities’

360,000

358,000 517,000

establishment in London, with the goal of promoting mutual
understanding between Japan and Britain.

Daiwa Securities HealthFoundation

The

Daiwa Anglo-JapaneseFoundation
Tsunami Reconstruction FundThis special match was broadcast as a special program by NHK(4) Assistance to communities both on the local andDaiwa Securities Foundation

Daiwa

Scholarshipprogramprovides19-month

internships in Japan to British graduates, in order to develop
160,000

75,440 136,097

human resources that can serve as a bridge between Japan andDaiwa SRI Fund
Assistance Program

Britain. Daiwa Scholars learn about Japan through training in the

Daiwa Eco Fund
Assistance Program

Japanese language and their own fields of specialty, and come in

Total

Countries: Creating brands

contact with Japanese society through interpersonal interactions
708,345

604,569 909,380

W E B Main activities as a corporate citizen (fiscal 2006)

plan

in home stays. Since the program’s founding, more than 100
Daiwa Scholarships have been awarded, and graduates of the
program are active in a wide range of fields. In May 2007, areceived high ratings from

(3) Support for culture and the arts

reception was held at the British Embassy to commemorate theall of the judges. We will

Daiwa Securities Group supports a wide range of cultural and100th Daiwa Scholar.

continue to support womenartistic activities. As part of our support for the arts, we were theAdditionally, the Daiwa Anglo-Japanese Foundation supports

special sponsor of a Japan concert by the Teatro Comunale Di

the arts, culture, and science in a wide range of fields in both

Bologna of Italy in June 2006. The concert dazzled large numbers

Japan and Britain.

entrepreneurs through thisproject.

41

FY2005 FY2006

Disaster relief, membership etc.

titled “Selling Products Planned and Produced in Developing

Yamaguchi’s

Academic-industrial cooperation andinitiatives for universities, graduate
schools and the public(2) Encouraging
Self-planned programs
volunteerism among
Joint programs
employees(3) Support for culture
and the arts

FY2004

Initiatives for elementary, and juniorand senior high school students

Foundations

Leveraging the knowledge and expertise we have accumulated in

Ms.

Activity typeDaiwa Securities Group encourages its employees to volunteer inAssistanceprograms

economics and finance(2) Encouraging volunteerism among employees

Ceremony for contest winners

DAIWA SUSTAINAB ILITY REPO RT 2007

Daiwa Securities Co. Ltd.’s Volunteer AwardDAIWA SUSTAINABILIT Y REP ORT 2 0 0 742Social Re

port
100 employees volunteered at the Azabu-Juban Summer Festival
held each year in August 2006 again, helping to pick up trash, set

C orp o rat e Ci t i z e n s h ip

up the venue, etc.
In the charitable fundraising and recycling activities,

As a member of society, Daiwa Securities Group is actively committed to supporting volunteerism, culture and theemployees collected unused and used stamps and prepaid cards,
ruined postcards, and the like from across the company, andarts, international exchange, and social-welfare projects.

donated them to charitable organizations. In fiscal 2006, wenotified employees ahead of time what money collected throughfundraising and recycling would be used for, such as local

Vision and medium-term goals forcorporate citizenship initiatives(1) Education and research activities in the fields of economics
and financedevelopment in developing countries, and urged them to get
involved. As a result, the number of participants increased, and(2) Encouraging volunteerism among employees

we collected donations worth a total of 414,463 yen (a 3.8%

We believe that our contribution to developing a sustainable(3) Support for culture and the arts

increase against the previous year).

society and helping to resolve social issues is our mission as a(4) Assistance to communities both on the local and international

corporate citizen, as well as an investment in society. We areof Japanese opera fans, bringing together the three great tenorsof the new century. Additionally, we were the special sponsor of

W E B Results of fundraising/recycling efforts by employees(fiscal 2006)

level through foundations and NPOs

Ryuo Watanabe faces “Bonanza,” the world’s number-one
computer shogi software

the “Claude Monet: L’art de Monet et sa posterite” exhibit at theactively involved in a wide range of efforts in the following fourNational Art Center, Tokyo, from April to July 2007, in

main fields.

commemoration of the center’s opening. The exhibit was a great
success, attracting a total of 710,000 visitors.

Issues and targets for fiscal 2006
Strengthen initiatives that address social issues.

Promote volunteer programs that enable the participation oflarger numbers of employees.

Meanwhile, we also focus on supporting traditional JapaneseResults and progress for fiscal 2006

culture, such as shogi and go. We sponsor the top title matches• Enhanced our framework for collaboration with NPOs andNGOs in order to resolve social issues, including efforts tovalue ‘human life’.

in the shogi and go : the Meijin Title Match in shogi and the
Honinbo Tournament in go. We are also the special sponsor of

shogi and go formal matches via Internet. As a commemoration• Increased the numbers of programs and participants from theprevious fiscal year. A remaining issue is to expand selfplanned programs in which many employees can participate.

of the formal Internet shogi match, the Daiwa Securities Cup, wesponsored the special shogi match between Ryuo Watanabe and

Employee volunteers participating at the Azabu-Juban
Summer Festival“Bonanza,” the world’s number-one computer shogi software.

Daiwa Securities Group’s initiatives as a corporate citizen(1) Education and research activities in the fields ofExpenditure (unit: ¥1,000)
Activities

order to maintain broad perspectives and become strong assets

our main businesses—economics and finance—we actively

in a wide range of fields. In June 2007, Daiwa Securities Co. Ltd.

conduct joint research with universities, support economic

created a new Volunteer Award as part of the President’s Awards,

education in junior and senior high schools, and the like. See

which recognize company employees. The Volunteer Award

pages 23 and 24 for more details.

recognizes employee accomplishments in volunteer activities.

• Women entrepreneur support project

The Daiwa Securities Group Inc. CSR Promotion Department

We have held the Women Entrepreneur Business Plan Contest

publishes information about various volunteer activities, andjointly with the Fujisankei Group since 2005, with the goal ofurges employees to become actively involved.

supporting women entrepreneurs with a strong motivation.
In 2006, 1,161 women entrepreneurs from throughout Japan

In fiscal 2006, a cumulative total of 2,771 people participatedin 105 volunteer activities, including charitable fundraising,competed in the contest. The Grand Prize (Daiwa Securities

recycling, a sign-language class that was open to the public, andGroup Award) went to Ms. Eriko Yamaguchi for her fair-trade plana hands-on forest thinning experience. Additionally, more than

(1) Education andresearch in thefields of economics
and finance(4) Assistance tocommunities bothon the local andinternational level
through foundations,NPOs and others

Louvre Museum exhibitions, Teatro
Comunale Di Bologna Japan Concert

184,040

164,921 249,518

in developing countries.”and attracted large audiences in addition to shogi fans.

international level through foundations and NPOs
• Daiwa Anglo-Japanese Foundation

4,305

6,208

6,765

The Daiwa Anglo-Japanese Foundation was established in 1988
in commemoration of the 25th anniversary of Daiwa Securities’

360,000

358,000 517,000

establishment in London, with the goal of promoting mutual
understanding between Japan and Britain.

Daiwa Securities HealthFoundation

The

Daiwa Anglo-JapaneseFoundation
Tsunami Reconstruction FundThis special match was broadcast as a special program by NHK(4) Assistance to communities both on the local andDaiwa Securities Foundation

Daiwa

Scholarshipprogramprovides19-month

internships in Japan to British graduates, in order to develop
160,000

75,440 136,097

human resources that can serve as a bridge between Japan andDaiwa SRI Fund
Assistance Program

Britain. Daiwa Scholars learn about Japan through training in the

Daiwa Eco Fund
Assistance Program

Japanese language and their own fields of specialty, and come in

Total

Countries: Creating brands

contact with Japanese society through interpersonal interactions
708,345

604,569 909,380

W E B Main activities as a corporate citizen (fiscal 2006)

plan

in home stays. Since the program’s founding, more than 100
Daiwa Scholarships have been awarded, and graduates of the
program are active in a wide range of fields. In May 2007, areceived high ratings from

(3) Support for culture and the arts

reception was held at the British Embassy to commemorate theall of the judges. We will

Daiwa Securities Group supports a wide range of cultural and100th Daiwa Scholar.

continue to support womenartistic activities. As part of our support for the arts, we were theAdditionally, the Daiwa Anglo-Japanese Foundation supports

special sponsor of a Japan concert by the Teatro Comunale Di

the arts, culture, and science in a wide range of fields in both

Bologna of Italy in June 2006. The concert dazzled large numbers

Japan and Britain.

entrepreneurs through thisproject.

41

FY2005 FY2006

Disaster relief, membership etc.

titled “Selling Products Planned and Produced in Developing

Yamaguchi’s

Academic-industrial cooperation andinitiatives for universities, graduate
schools and the public(2) Encouraging
Self-planned programs
volunteerism among
Joint programs
employees(3) Support for culture
and the arts

FY2004

Initiatives for elementary, and juniorand senior high school students

Foundations

Leveraging the knowledge and expertise we have accumulated in

Ms.

Activity typeDaiwa Securities Group encourages its employees to volunteer inAssistanceprograms

economics and finance(2) Encouraging volunteerism among employees

Ceremony for contest winners

DAIWA SUSTAINAB ILITY REPO RT 2007

Daiwa Securities Co. Ltd.’s Volunteer AwardDAIWA SUSTAINABILIT Y REP ORT 2 0 0 742Social Re

port

C o rp orate C itize n sh ip

The Daiwa Securities Group
Tsunami Reconstruction Fund

• Daiwa Securities Health Foundation

The Daiwa Securities Group Tsunami Reconstruction Fund was establishedThe Daiwa Securities Health Foundation supports outstanding

to assist survivors of the major earthquake and resulting tsunami that struck

medical research activities, with a special emphasis on researchIndonesia and other countries along the Indian Ocean on December 26,

that contribute to the improved health, medical care, and welfare

2004. The fund will provide long-term support for ten years starting in fiscal
One of the groups we support is the Sri Lankan NGO Women’s Savings

provided 30 grants worth a total of 30 million yen to diverse

Effort “Wilpotha.” This NGO begins by teaching survivors the importance of

research projects ranging from basic research to clinical studies.

savings, and the concept of bookkeeping. More than a simple financial

health seminars for the public at Daiwa Securities branches,taught by researchers (892 in total) who had received the grantover the past 33 years. In fiscal 2006, the foundation held

effort, this NGO supports programs that encourage survivors’ independence
through microfinance, and the impact of this support is slowly but surely
beginning to show.
Asian Community Center 21 (ACC21) selects programs and monitors
their activities. Sumitomo Trust & Banking Co., Ltd. is in charge of fundmanagement.

seminars at 39 branches, with such topics as “prevention andcare of lifestyle diseases” and “what is metabolic syndrome?”

Receiving micro-finance support

2005, with an annual disbursement of 10 million yen, totaling 100 million yen.

of middle-aged and older people. In fiscal 2006, the foundation

Additionally, in September 2006 the foundation began offering

Comment fromstakeholder

Aid-recipient organizations
Country

Activity

Women’ Independence and
Sri Lanka Development Program

India

Local NGOs

Women’s Savings 425 women
Effort “Wilpotha” (200 new women added)

Occupational training and selfefficiency support for orphans TRUE
and persons with disabilities

Psychological care andIndonesia educational support forchildren

Number of beneficiaries

Aid*¥3.50 million

75 disabled children andteenagers who wereaffected by the disaster¥3.10 million

65 children¥3.00 million

This is the second year that the Daiwa Securities

and told the women in the second year about the

Group

has

results and experiences of the first-year women:

supported the Women’s Independence and(1) the savings system, savings passbooks, andDevelopment Program. This year, we continued

bookkeeping; (2) experiences from the savings

our program for 225 women who received

program; (3) group organization; (4) marketing;assistance in the first fiscal year (businessand (5) incorporating women’s organizations. They

improvement,

women’sused local idioms and vocabulary, and taught in anrights/gender equality, and creation of a children’s

easy-to-understand way. This increased thelibrary). In addition, we conducted savings andunderstanding of the novice women, and gave

finance activities, business development, technicalthem confidence about starting a handicraft or foodtraining, and other programs for 200 new women.

business.

TsunamiReconstructionhomegardening,

Fund

The women from the first fiscal year were actively

They are working actively to create an

involved in these programs, and contributed

operational system led by members of the

Karunawathie Menikegreatly.

incorporated women’s group, with the primary goal

Chairperson
Women’s Savings Effort “Wilpotha”(Sri Lankan NGO)

Taking advantage of their experiences fromof guiding victims toward independence.

the first year, the women leaders offered a wide
range of ideas on how to improve the program,

WALSAMA-NAD* This is the amount spent in the second year of either a two- or three-year plan.

Health seminar on topic “what is metabolic syndrome?”

Daiwa SRI Fund Assistance Program*
The Daiwa SRI Fund Assistance Program provides grants to cover the• Daiwa Securities Foundation

personnel and education costs of Japanese NGOs that help people whose

The Daiwa Securities Foundation provides research grants tolives are in danger for various reasons. This program is planned andsupport such fields as volunteering and welfare, with the goals of

operated in collaboration with the Civil Society Initiative Fund, a registered
In response to the needs of society, in fiscal 2006 the total grant moneyand enriching lives in society. In fiscal 2006, the foundation

was increased to 10 million yen, from 7 million yen in the previous year. The
scope of the program was also expanded from the greater Tokyo
metropolitan area to all eligible NGOs in Japan.

The foundation will continuously contribute to improving thewelfare of the Japanese people through ongoing grants forvolunteer activities.

* This program derives its funding from a portion of the revenues of Daiwa Securities Groupgained through the sale and management of the Daiwa SRI Fund.

Aid-recipient organizations
Plan

Targets and main action plans for fiscal 2007
In order to enable directors and employees to participate involunteer activities at any time, we will continue to reflect the
feedback of volunteers and others, develop volunteer programs
that interest people and create an environment for them. At thesame time, we actively utilize grant programs, and continue

Receiving personnel support assistancespecial non-profit organization.

encouraging, promoting, and raising awareness of volunteering,

provided 195 grants worth a total of 44.86 million yen.

Comment fromstakeholder

Organization

Creation of staffing regime for project to prevent childsuicide via “Life Classes”

VIVACE

Generalist education for planning and implementation oftraining for supporters of rape victims

Center for Education andSupport of Women Japan

Aid¥1.75 million¥1.45 million

We have a new success through the assistance foras one form of collaboration between companies

personnel expenses through the SRI Fund, which

and NPOs. Thanks to this, we have had increasing

manages socially responsible investment products.

inquiries from adults and students with an interest

The focus of the SRI Fund assistance was on ourin NPOs.

our

Refugees are among those who fall throughorganization through human-resource training.

the safety net of modern Japanese society. The

This enabled the staff receiving the personnel

SRI Fund is showing society that there is value in

expenses to improve their expertise and become

this effort, especially because there is still noactively aware of their roles in the organization,

safety net for these people. We hope for evenincreasing their sense of ownership. Additionally,

more opportunities to communicate our message

since marketing and financial staff were eligible,

to society in the future.

staff,

with

the

goal

of

strengthening

we were able to begin building an infrastructure to
Coordinator education to expand and promote medical
interpreting system

Tabunka Kyosei Center
Kyoto¥1.90 million

Staff training for training of interpreters to support foreign
women and children who are victims of violence

Clover¥1.80 million

Enhancement of organizational infrastructure for refugee
support activities (enhancement of PR and finances)

Japan Association for
Refugees¥1.70 million

Improvement of staff capabilities in the areas of caring for
prisoners and providing political advocacy on their behalf

Center for Prisoners’
Rights¥1.40 million

support our organization that is beyond the

Shiho Tsutsui

resources of most mid-sized and smaller NPOs.

Director of Secretariat
Japan Association for Refugees

Activities to support refugees were accepted
as an eligible type of project for human security(protection of people whose lives are in danger),

activities that can contribute to the welfare of society.

43

DAIWA SUSTAINAB ILITY REPO RT 2007

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

44Social Re

port

C o rp orate C itize n sh ip

The Daiwa Securities Group
Tsunami Reconstruction Fund

• Daiwa Securities Health Foundation

The Daiwa Securities Group Tsunami Reconstruction Fund was establishedThe Daiwa Securities Health Foundation supports outstanding

to assist survivors of the major earthquake and resulting tsunami that struck

medical research activities, with a special emphasis on researchIndonesia and other countries along the Indian Ocean on December 26,

that contribute to the improved health, medical care, and welfare

2004. The fund will provide long-term support for ten years starting in fiscal
One of the groups we support is the Sri Lankan NGO Women’s Savings

provided 30 grants worth a total of 30 million yen to diverse

Effort “Wilpotha.” This NGO begins by teaching survivors the importance of

research projects ranging from basic research to clinical studies.

savings, and the concept of bookkeeping. More than a simple financial

health seminars for the public at Daiwa Securities branches,taught by researchers (892 in total) who had received the grantover the past 33 years. In fiscal 2006, the foundation held

effort, this NGO supports programs that encourage survivors’ independence
through microfinance, and the impact of this support is slowly but surely
beginning to show.
Asian Community Center 21 (ACC21) selects programs and monitors
their activities. Sumitomo Trust & Banking Co., Ltd. is in charge of fundmanagement.

seminars at 39 branches, with such topics as “prevention andcare of lifestyle diseases” and “what is metabolic syndrome?”

Receiving micro-finance support

2005, with an annual disbursement of 10 million yen, totaling 100 million yen.

of middle-aged and older people. In fiscal 2006, the foundation

Additionally, in September 2006 the foundation began offering

Comment fromstakeholder

Aid-recipient organizations
Country

Activity

Women’ Independence and
Sri Lanka Development Program

India

Local NGOs

Women’s Savings 425 women
Effort “Wilpotha” (200 new women added)

Occupational training and selfefficiency support for orphans TRUE
and persons with disabilities

Psychological care andIndonesia educational support forchildren

Number of beneficiaries

Aid*¥3.50 million

75 disabled children andteenagers who wereaffected by the disaster¥3.10 million

65 children¥3.00 million

This is the second year that the Daiwa Securities

and told the women in the second year about the

Group

has

results and experiences of the first-year women:

supported the Women’s Independence and(1) the savings system, savings passbooks, andDevelopment Program. This year, we continued

bookkeeping; (2) experiences from the savings

our program for 225 women who received

program; (3) group organization; (4) marketing;assistance in the first fiscal year (businessand (5) incorporating women’s organizations. They

improvement,

women’sused local idioms and vocabulary, and taught in anrights/gender equality, and creation of a children’s

easy-to-understand way. This increased thelibrary). In addition, we conducted savings andunderstanding of the novice women, and gave

finance activities, business development, technicalthem confidence about starting a handicraft or foodtraining, and other programs for 200 new women.

business.

TsunamiReconstructionhomegardening,

Fund

The women from the first fiscal year were actively

They are working actively to create an

involved in these programs, and contributed

operational system led by members of the

Karunawathie Menikegreatly.

incorporated women’s group, with the primary goal

Chairperson
Women’s Savings Effort “Wilpotha”(Sri Lankan NGO)

Taking advantage of their experiences fromof guiding victims toward independence.

the first year, the women leaders offered a wide
range of ideas on how to improve the program,

WALSAMA-NAD* This is the amount spent in the second year of either a two- or three-year plan.

Health seminar on topic “what is metabolic syndrome?”

Daiwa SRI Fund Assistance Program*
The Daiwa SRI Fund Assistance Program provides grants to cover the• Daiwa Securities Foundation

personnel and education costs of Japanese NGOs that help people whose

The Daiwa Securities Foundation provides research grants tolives are in danger for various reasons. This program is planned andsupport such fields as volunteering and welfare, with the goals of

operated in collaboration with the Civil Society Initiative Fund, a registered
In response to the needs of society, in fiscal 2006 the total grant moneyand enriching lives in society. In fiscal 2006, the foundation

was increased to 10 million yen, from 7 million yen in the previous year. The
scope of the program was also expanded from the greater Tokyo
metropolitan area to all eligible NGOs in Japan.

The foundation will continuously contribute to improving thewelfare of the Japanese people through ongoing grants forvolunteer activities.

* This program derives its funding from a portion of the revenues of Daiwa Securities Groupgained through the sale and management of the Daiwa SRI Fund.

Aid-recipient organizations
Plan

Targets and main action plans for fiscal 2007
In order to enable directors and employees to participate involunteer activities at any time, we will continue to reflect the
feedback of volunteers and others, develop volunteer programs
that interest people and create an environment for them. At thesame time, we actively utilize grant programs, and continue

Receiving personnel support assistancespecial non-profit organization.

encouraging, promoting, and raising awareness of volunteering,

provided 195 grants worth a total of 44.86 million yen.

Comment fromstakeholder

Organization

Creation of staffing regime for project to prevent childsuicide via “Life Classes”

VIVACE

Generalist education for planning and implementation oftraining for supporters of rape victims

Center for Education andSupport of Women Japan

Aid¥1.75 million¥1.45 million

We have a new success through the assistance foras one form of collaboration between companies

personnel expenses through the SRI Fund, which

and NPOs. Thanks to this, we have had increasing

manages socially responsible investment products.

inquiries from adults and students with an interest

The focus of the SRI Fund assistance was on ourin NPOs.

our

Refugees are among those who fall throughorganization through human-resource training.

the safety net of modern Japanese society. The

This enabled the staff receiving the personnel

SRI Fund is showing society that there is value in

expenses to improve their expertise and become

this effort, especially because there is still noactively aware of their roles in the organization,

safety net for these people. We hope for evenincreasing their sense of ownership. Additionally,

more opportunities to communicate our message

since marketing and financial staff were eligible,

to society in the future.

staff,

with

the

goal

of

strengthening

we were able to begin building an infrastructure to
Coordinator education to expand and promote medical
interpreting system

Tabunka Kyosei Center
Kyoto¥1.90 million

Staff training for training of interpreters to support foreign
women and children who are victims of violence

Clover¥1.80 million

Enhancement of organizational infrastructure for refugee
support activities (enhancement of PR and finances)

Japan Association for
Refugees¥1.70 million

Improvement of staff capabilities in the areas of caring for
prisoners and providing political advocacy on their behalf

Center for Prisoners’
Rights¥1.40 million

support our organization that is beyond the

Shiho Tsutsui

resources of most mid-sized and smaller NPOs.

Director of Secretariat
Japan Association for Refugees

Activities to support refugees were accepted
as an eligible type of project for human security(protection of people whose lives are in danger),

activities that can contribute to the welfare of society.

43

DAIWA SUSTAINAB ILITY REPO RT 2007

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

44

Environm

ental Rep

ort
setting to appropriate levels. All employees wore badges

The E nvi ro n men ta l Im p a c t o f th e D a iwa
Secu ri t i es G ro u p
Recognizing that the impact of its operations of the Daiwa Securities Group on the global environment is notinconsequential, we continually strive to reduce our environmental impact, and raise employee awareness. See pages
17 through 19 for our internal and external initiatives to help resolve environmental issues.

Vision and medium-term goals for
reducing the environmental impact of the
Daiwa Securities GroupAt the Daiwa Securities Group, we believe that each employee
should think and act in the following way regarding global
environmental issues.

employee strives voluntarily and actively to conserve energy andimprove administrative flows.
• Each employee strives to promote and raise awareness ofsocially responsible investment (SRI), and supports companies

Daiwa Securities Group’s energy consumption (Table 1)
FY2003

FY2004

FY2005

FY2006

95,239,027

89,546,672

86,320,394

88,732,751

885,700

904,255

727,485

691,395

Gasoline (l)1,213,171

1,151,487

1,036,609

1,035,700

Heavy oil (l)45,17961,73930,14634,087

Light oil (l)12,732

11,048

1,267

73

promoting the “COOL BIZ” style. Additionally, we put up posters in
each

of

our

departments

Electricity (kWh)andNatural gas (cubic meters)

branches, and utilize the in-housesatellite programs to promote COOL
BIZ. Through these efforts, we haveensured that all employees group-

WE B For the scope of data, see the “scope of environmental impact data” table on thewebsite.

wide know and understand our

Daiwa Securities Group’s CO2 emissions (Table 2)commitment to contribute to global
environment.

The “COOL BIZ” badge

52,857,660

49,698,403

47,907,819

49,246,677

1,841,955

1,880,543

1,512,921

1,437,867

W E B Copy and statement paper purchase amount for Daiwa

Gasoline

2,816,571

2,673,362

2,406,654

2,404,543

Heavy oil

134,703

184,078

89,882

101,632

Light oil

33,34928,937

3,319

191

57,684,238

54,465,324

51,920,594

53,190,910

Securities Group

Reducing our environmental impact bymoving our headquarters

Expand the environmental management systems to consolidated
subsidiaries in Japan.

Reduce environmental impact through the computerization of
documents and the reduction of office paper usage.

• Greatly reduced the amount of paper documents sent to customers
and used internally (see pages 17 and 18).

Establish guidelines on procurement.

• Studied a general policy of green purchasing of stationary and otheroffice supplies consequent to our home-office move in November
2007.

* The emissions conversion factors used in the CO2 output calculations are based on theministerial ordinance related to the calculation of greenhouse gas emissions arising from thebusiness activities of specified emitters (March 2006, Ministry of Economy, Trade and Industry
and Ministry of the Environment, Ordinance No. 3), for all fiscal years.

WE B For the scope of data, see the “scope of environmental impact data” table on the

Results and progress for fiscal 2006
• Collected data on the environmental impact of our domestic
consolidated subsidiaries, confirmed their compliance withrequirements, adjusted room temperatures to appropriate levels,and implemented a “COOL BIZ” policy (open collars andshirtsleeves in the office).

FY2006Natural

Total

Issues and targets for fiscal 2006

FY2005

Electricity

that tackle environmental issues through the securities market.

economic growth and the global environment.

FY2004W E B Scope of environmental impact data

Through these efforts, we are committed to contributing to• Recognizing that environmental issues are our issues, each

(Unit: kg-CO2)

FY2003

website.

In December 2007, we will move the Daiwa Securities Group Inc.,

Daiwa Securities Group’s electricity usage (Graph 1)

the Daiwa Securities Co. Ltd. headquarters, and Daiwa Securities
SMBC to Gran Tokyo North Tower (1-9-1, Marunouchi, Chiyoda,
Tokyo). Gran Tokyo North Tower has leading-edge energyconservation technologies, including an automated sun-censoring
control system and highly insulating airflow windows*. We expect(Unit: thousand kWh)
120,000

95,239100,000

89,54686,32088,732

FY2005

FY200680,00060,00040,000these technologies to greatly reduce our environmental impact.
20,000We will also introduce several environmental measures specific0

FY2003to the Daiwa Securities Group, including utilizing recyclable floor
carpet on about 49,500 square meters spanning 14 floors, a paper

The environmental impact of the Daiwa
Securities headquarters building

The environmental impact of the Daiwa
Securities Group

recycling system capable of dissolving all waste paper, and a fireextinguishing system that does not use halon gas.

WE B For the scope of data, see the “scope of environmental impact data” table on thewebsite.

Daiwa Securities Group’s water usage (Graph 2)(Unit: kl )Our goal is to make a “zero waste” move: we will utilize

500,000

We have been able to continuously collect data on the electricity

Although the environmental impact of the Daiwa Securities Groupreusable container boxes, and strive to reuse and recycle as400,000

usage of the Daiwa Securities headquarters building since fiscal

decreased continually from fiscal 2002 to fiscal 2005, our impact

much unneeded material as possible.

300,000

1990. As of fiscal 2006, electricity usage at this building

increased in fiscal 2006 due to our increased electricity usage.

* Airflow window: The window consists of two panes of glass, between which room air is made200,000

decreased by 20.8% from fiscal 1990 levels. We believe that thisThis was caused by increased electricity usage to power

reduction has been thanks mainly to the energy efficiency gained

additional servers and control the air conditioning in the computer

by replacing air-conditioning equipment and shorter working

rooms of Daiwa Institute of Research Ltd., due to increased

hours due to improved productivity.

contracts for data processing and other business. Although theto flow, reducing the impact of outside heat from the windows.

(Unit: thousand kWh)
9,000

8,138

8,006
8,000

headquarters building and branches. We have also reduced our
7,000

7,410
6,603

6,000

gasoline consumption by switching over our fleet of sales vehicles

6,862
6,521

6,427

6,339

to light cars, but in fiscal 2006 the reduction was small.
In July 2007, the Daiwa Securities Group implemented a

5,000
FY1990 FY1992 FY1994 FY1996 FY1998 FY2000 FY2002 FY2004 FY2006

324,527
273,704

FY2003“COOL BIZ” policy group-wide, and began controlling temperature

FY2004

FY2005

FY2006WE B For the scope of data, see the “scope of environmental impact data” table on thewebsite.

Daiwa Securities Group’s waste generation andrecycling over time (Table 3)

slowed.

such actions as eliminating the employee cafeterias at our

411,100

0

Daiwa Securities Co. Ltd. decreased, the rate of reduction has

Usage of natural gas, water, and light oil decreased through

8,159

438,428

100,000

electricity usage of the headquarters building and branches ofElectricity usage of Daiwa Securities headquarters building

FY2004(Unit: tons)

FY2003

FY2004

FY2005

FY2006

Amount generated

1,495.5

1,552.8

1,470.3

1,451.6

Amount recycled

1,297.4

1,328.8

1,212.3

1,230.4

Amount discarded

198.1

224.0

258.0

221.2

our “COOL BIZ” policy and by appropriately controlling room

Recycling rate

87%

86%

82%

83%

temperatures. We will also conserve paper through such means as

Amount generated

316.5

417.5

391.8

415.8

converting more paperwork to electronic format. We will strive to

Non-paper Amount recycled
Waste
Amount discarded

79.0

112.9

104.4

88.5

237.5

304.6

287.4

327.1

25%

27%

27%

21%

Targets and main action plans for fiscal 2007
We will increase our employees’ awareness of global environmental
issues and strive to further reduce our environmental impact throughmake a “zero waste” move of the headquarters through reuse andrecycling.

Paper
Waste

Recycling rate

WE B For the scope of data, see the “scope of environmental impact data” table on thewebsite.

45

DAIWA SUSTAINAB ILITY REPO RT 2007

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

46

Environm

ental Rep

ort
setting to appropriate levels. All employees wore badges

The E nvi ro n men ta l Im p a c t o f th e D a iwa
Secu ri t i es G ro u p
Recognizing that the impact of its operations of the Daiwa Securities Group on the global environment is notinconsequential, we continually strive to reduce our environmental impact, and raise employee awareness. See pages
17 through 19 for our internal and external initiatives to help resolve environmental issues.

Vision and medium-term goals for
reducing the environmental impact of the
Daiwa Securities GroupAt the Daiwa Securities Group, we believe that each employee
should think and act in the following way regarding global
environmental issues.

employee strives voluntarily and actively to conserve energy andimprove administrative flows.
• Each employee strives to promote and raise awareness ofsocially responsible investment (SRI), and supports companies

Daiwa Securities Group’s energy consumption (Table 1)
FY2003

FY2004

FY2005

FY2006

95,239,027

89,546,672

86,320,394

88,732,751

885,700

904,255

727,485

691,395

Gasoline (l)1,213,171

1,151,487

1,036,609

1,035,700

Heavy oil (l)45,17961,73930,14634,087

Light oil (l)12,732

11,048

1,267

73

promoting the “COOL BIZ” style. Additionally, we put up posters in
each

of

our

departments

Electricity (kWh)andNatural gas (cubic meters)

branches, and utilize the in-housesatellite programs to promote COOL
BIZ. Through these efforts, we haveensured that all employees group-

WE B For the scope of data, see the “scope of environmental impact data” table on thewebsite.

wide know and understand our

Daiwa Securities Group’s CO2 emissions (Table 2)commitment to contribute to global
environment.

The “COOL BIZ” badge

52,857,660

49,698,403

47,907,819

49,246,677

1,841,955

1,880,543

1,512,921

1,437,867

W E B Copy and statement paper purchase amount for Daiwa

Gasoline

2,816,571

2,673,362

2,406,654

2,404,543

Heavy oil

134,703

184,078

89,882

101,632

Light oil

33,34928,937

3,319

191

57,684,238

54,465,324

51,920,594

53,190,910

Securities Group

Reducing our environmental impact bymoving our headquarters

Expand the environmental management systems to consolidated
subsidiaries in Japan.

Reduce environmental impact through the computerization of
documents and the reduction of office paper usage.

• Greatly reduced the amount of paper documents sent to customers
and used internally (see pages 17 and 18).

Establish guidelines on procurement.

• Studied a general policy of green purchasing of stationary and otheroffice supplies consequent to our home-office move in November
2007.

* The emissions conversion factors used in the CO2 output calculations are based on theministerial ordinance related to the calculation of greenhouse gas emissions arising from thebusiness activities of specified emitters (March 2006, Ministry of Economy, Trade and Industry
and Ministry of the Environment, Ordinance No. 3), for all fiscal years.

WE B For the scope of data, see the “scope of environmental impact data” table on the

Results and progress for fiscal 2006
• Collected data on the environmental impact of our domestic
consolidated subsidiaries, confirmed their compliance withrequirements, adjusted room temperatures to appropriate levels,and implemented a “COOL BIZ” policy (open collars andshirtsleeves in the office).

FY2006Natural

Total

Issues and targets for fiscal 2006

FY2005

Electricity

that tackle environmental issues through the securities market.

economic growth and the global environment.

FY2004W E B Scope of environmental impact data

Through these efforts, we are committed to contributing to• Recognizing that environmental issues are our issues, each

(Unit: kg-CO2)

FY2003

website.

In December 2007, we will move the Daiwa Securities Group Inc.,

Daiwa Securities Group’s electricity usage (Graph 1)

the Daiwa Securities Co. Ltd. headquarters, and Daiwa Securities
SMBC to Gran Tokyo North Tower (1-9-1, Marunouchi, Chiyoda,
Tokyo). Gran Tokyo North Tower has leading-edge energyconservation technologies, including an automated sun-censoring
control system and highly insulating airflow windows*. We expect(Unit: thousand kWh)
120,000

95,239100,000

89,54686,32088,732

FY2005

FY200680,00060,00040,000these technologies to greatly reduce our environmental impact.
20,000We will also introduce several environmental measures specific0

FY2003to the Daiwa Securities Group, including utilizing recyclable floor
carpet on about 49,500 square meters spanning 14 floors, a paper

The environmental impact of the Daiwa
Securities headquarters building

The environmental impact of the Daiwa
Securities Group

recycling system capable of dissolving all waste paper, and a fireextinguishing system that does not use halon gas.

WE B For the scope of data, see the “scope of environmental impact data” table on thewebsite.

Daiwa Securities Group’s water usage (Graph 2)(Unit: kl )Our goal is to make a “zero waste” move: we will utilize

500,000

We have been able to continuously collect data on the electricity

Although the environmental impact of the Daiwa Securities Groupreusable container boxes, and strive to reuse and recycle as400,000

usage of the Daiwa Securities headquarters building since fiscal

decreased continually from fiscal 2002 to fiscal 2005, our impact

much unneeded material as possible.

300,000

1990. As of fiscal 2006, electricity usage at this building

increased in fiscal 2006 due to our increased electricity usage.

* Airflow window: The window consists of two panes of glass, between which room air is made200,000

decreased by 20.8% from fiscal 1990 levels. We believe that thisThis was caused by increased electricity usage to power

reduction has been thanks mainly to the energy efficiency gained

additional servers and control the air conditioning in the computer

by replacing air-conditioning equipment and shorter working

rooms of Daiwa Institute of Research Ltd., due to increased

hours due to improved productivity.

contracts for data processing and other business. Although theto flow, reducing the impact of outside heat from the windows.

(Unit: thousand kWh)
9,000

8,138

8,006
8,000

headquarters building and branches. We have also reduced our
7,000

7,410
6,603

6,000

gasoline consumption by switching over our fleet of sales vehicles

6,862
6,521

6,427

6,339

to light cars, but in fiscal 2006 the reduction was small.
In July 2007, the Daiwa Securities Group implemented a

5,000
FY1990 FY1992 FY1994 FY1996 FY1998 FY2000 FY2002 FY2004 FY2006

324,527
273,704

FY2003“COOL BIZ” policy group-wide, and began controlling temperature

FY2004

FY2005

FY2006WE B For the scope of data, see the “scope of environmental impact data” table on thewebsite.

Daiwa Securities Group’s waste generation andrecycling over time (Table 3)

slowed.

such actions as eliminating the employee cafeterias at our

411,100

0

Daiwa Securities Co. Ltd. decreased, the rate of reduction has

Usage of natural gas, water, and light oil decreased through

8,159

438,428

100,000

electricity usage of the headquarters building and branches ofElectricity usage of Daiwa Securities headquarters building

FY2004(Unit: tons)

FY2003

FY2004

FY2005

FY2006

Amount generated

1,495.5

1,552.8

1,470.3

1,451.6

Amount recycled

1,297.4

1,328.8

1,212.3

1,230.4

Amount discarded

198.1

224.0

258.0

221.2

our “COOL BIZ” policy and by appropriately controlling room

Recycling rate

87%

86%

82%

83%

temperatures. We will also conserve paper through such means as

Amount generated

316.5

417.5

391.8

415.8

converting more paperwork to electronic format. We will strive to

Non-paper Amount recycled
Waste
Amount discarded

79.0

112.9

104.4

88.5

237.5

304.6

287.4

327.1

25%

27%

27%

21%

Targets and main action plans for fiscal 2007
We will increase our employees’ awareness of global environmental
issues and strive to further reduce our environmental impact throughmake a “zero waste” move of the headquarters through reuse andrecycling.

Paper
Waste

Recycling rate

WE B For the scope of data, see the “scope of environmental impact data” table on thewebsite.

45

DAIWA SUSTAINAB ILITY REPO RT 2007

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

46

Economic

ReportTrends in the distribution of economic value to stakeholders(¥ million)
Stakeholders

D ist ri bu t i o n o f E c o n o m ic Va lu e to Sta k e holders
This section describes revenue structure, the distribution of economic value to each of stakeholders, and theintangible assets of the Daiwa Securities Group.

insurance contributions). A fair compensation system has been

Revenues in the Economic Report

built that is highly acceptable to all, in order to improve employee
motivation and maximize the value provided to all stakeholders. In

For the purpose of this Economic Report, revenues are calculated

fiscal 2006, the Group distributed 163.4 billion yen to its

as the sum of operating revenues, non-operating income, andexecutives and employees; this was 40% of its economic value.

extraordinary gains. This total is taken as representative of allrevenues received by the Group in one year. In fiscal 2006, thisSociety

FY2002

FY2003

FY2004

FY2005

FY2006

123,904

137,511

143,469

172,923

163,379

320

332

708

604

909

Shareholders

7,969

13,307

17,29745,031

39,072Creditors

15,783

15,292

22,42818,47847,024Government

20,02526,42346,921

86,137

77,895

Minority shareholders

2,810

13,48019,77040,33923,746

Internal reserve(14,291)

28,782

34,65093,05553,652

Total economic value

156,520

235,127

285,243456,567

405,677

Executives and employees
SocietyW E B Calculation method of the distribution of economic value tostakeholders

and finding and training a replacement is both expensive and time
consuming. We believe that the Group’s Female Employee
Support Plan and the results of initiatives to build an environment
to facilitate the use of this plan is a major intangible asset.
Message from the President (Page 1–2) / Human Values and Human
Reference Resource Utilization (Page 37–40)(3) Thorough compliance
We treat all actions aimed at winning the confidence of ourcustomers, society, and other stakeholders as compliance. We
have identified a universal awareness of compliance as vital not
only for reducing legal and regulation risks, but also fordifferentiating ourselves from our competitors.

Intangible assets of the Daiwa Securities
Group

Reference

Message from the President (Page 1–2) / Commitment to the Development of
a Sound Securities Market (Page 13–16) / Compliance (Page 31–32)

amount was 931,845 million yen, 98.4% of which is from

Regardless of business cycle fluctuations, the Group aims tooperating revenues.

provide stable funding for its corporate citizenship activities which

This section describes the intangible assets of the Daiwa(4) Management policies focused on future revenues

represents its economic contribution to society. See page 42 for a

Securities Group that we believe have a particularly high value.

Our management strategy is focused on future revenues; it is notbreakdown of these expenditures.

Although it is very difficult to measure the value of theseconcerned solely with immediate revenues. We carry out concrete

intangible assets in monetary terms, please see the relevantmeasures based on our management policies in a wide range of

pages for management strategies and measures for increasing

fields, including our hiring policy and human-resource evaluation

their value.

system, as well as product sales strategy and customer-

Revenue structure in the Economic Report (fiscal 2006)
Service fees andother sales 6.6%

Equity 10.6%
Fixed income 0.3%
Investment banking
8.0%

Commissions
32.9%

Interest anddivided income
40.1%
Net gain on
trading
16.9%

Asset management
11.5%
Other
2.5%

Net gain on private equity and other securities 3.5%

Shareholders
The Group decides its dividend policy with an eye to maintaining
a stable dividend amount, and with a goal of providing a dividend
payout ratio of 30%.

satisfaction initiatives.
(1) Employee vitality, job satisfaction, and loyalty
The key management policy of the Daiwa Securities Group is toper share, and a year-end dividend of 16 yen per share, for a total

make this a group worth working for and enable our employees toannual dividend of 28 yen per share. This amounted to a total offeel loyalty for the Group. We believe that a company whose

39 billion yen in dividend payouts.

employees can thrive and take on new challenges at work will(5) Responsiveness to social issues

have high productivity, and a company with many highly loyal

We believe that marrying our management strategy to actions that

employees will be highly competitive.

make society more sustainable will be a great advantage for our

Creditors
The Group paid 47.0 billion yen in interest to creditors.

WE B Overview of revenue in the Economic Report

Economic value for the purpose of this Economic Report is(Page 37–40)

future corporate management. Additionally, the ability to swiftly

Message from the President (Page 1–2) / Human Values and Human
Reference Resource Utilization (Page 37–40)

respond to the needs of society, and the ability to ensure that all

Government

Distribution of economic value tostakeholders

Message from the President (Page 1–2) / Commitment to the Development of
a Sound Securities Market (Page 13–16) / Initiatives to Achieve Customer
Reference Satisfaction (Page 35–36) / Human Values and Human Resource Utilization

In fiscal 2006, the Group paid an interim dividend of 12 yen

employees are aware of and understand our management policy,

According to the Daiwa Securities Group’s financial accounting,(2) Vitality of female employees

the tax amount paid is the sum of current income taxes, deferred

We are committed to creating a workplace environment whereare major assets of the Daiwa Securities Group.

income taxes, and other taxes and duties including consumption

women can fully demonstrate their abilities. It is a loss to thetax. In fiscal 2006, the total tax amount paid was 77.9 billion yen.

company when talented women quit due to marriage or childbirth,

Message from the President (Page 1–2) / Adding a Social Perspective to
Investment (Page 9–12) / Commitment to the Development of a Sound
Reference Securities Market (Page 13–16) / Contribution to Global Environment(Page 17–19) / Human Values and Human Resource Utilization (Page 37–40)

calculated as revenues as previously defined, minus interest
expense (less interest paid), the cost of sales, selling, general andMinority shareholders

administrative expenses (less personnel costs, taxes, andProfit is returned to the minority shareholders of the Daiwa

expenditure for corporate citizenship activities), non-operating

Securities Group companies. The principal minority shareholders

expenses (less interest paid), and extraordinary losses. In fiscal

are Sumitomo Mitsui Financial Group with a 40% share in Daiwa

2006, this amount was 405,677 million yen.

Securities SMBC Co. Ltd., and the shareholders of NIF SMBC
Ventures, a JASDAQ-listed company in which Daiwa Securities

Executives and employees
The distribution of economic value to executives and employees isDistribution of economic value to stakeholders (fiscal 2006)

Economic
value
405,677
Economic
Report revenues
931,845

Group Inc. holds a majority stake (46.2%). The minority interest

Costs related
to S&GA
expenses
167,820for fiscal 2006 was 23.7 billion yen.

calculated as personnel expenses (including reserves for salaries
and bonuses, as well as welfare program costs and social

47

DAIWA SUSTAINAB ILITY REPO RT 2007

Cost of sales
36,298

Revenues

Minorityshareholders
5.9%

Costs related
to interest
expenses
307,614

Internal
reserves
13.2%

Government
19.2%

Other expenses
14,613
Expenditures(¥ million)

Creditors
11.6%

Executives
and employees
40.3%

Society 0.2%
Shareholder dividends 9.6%

* The totals may not always equal sums of the amounts given, due to rounding.

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

48

Economic

ReportTrends in the distribution of economic value to stakeholders(¥ million)
Stakeholders

D ist ri bu t i o n o f E c o n o m ic Va lu e to Sta k e holders
This section describes revenue structure, the distribution of economic value to each of stakeholders, and theintangible assets of the Daiwa Securities Group.

insurance contributions). A fair compensation system has been

Revenues in the Economic Report

built that is highly acceptable to all, in order to improve employee
motivation and maximize the value provided to all stakeholders. In

For the purpose of this Economic Report, revenues are calculated

fiscal 2006, the Group distributed 163.4 billion yen to its

as the sum of operating revenues, non-operating income, andexecutives and employees; this was 40% of its economic value.

extraordinary gains. This total is taken as representative of allrevenues received by the Group in one year. In fiscal 2006, thisSociety

FY2002

FY2003

FY2004

FY2005

FY2006

123,904

137,511

143,469

172,923

163,379

320

332

708

604

909

Shareholders

7,969

13,307

17,29745,031

39,072Creditors

15,783

15,292

22,42818,47847,024Government

20,02526,42346,921

86,137

77,895

Minority shareholders

2,810

13,48019,77040,33923,746

Internal reserve(14,291)

28,782

34,65093,05553,652

Total economic value

156,520

235,127

285,243456,567

405,677

Executives and employees
SocietyW E B Calculation method of the distribution of economic value tostakeholders

and finding and training a replacement is both expensive and time
consuming. We believe that the Group’s Female Employee
Support Plan and the results of initiatives to build an environment
to facilitate the use of this plan is a major intangible asset.
Message from the President (Page 1–2) / Human Values and Human
Reference Resource Utilization (Page 37–40)(3) Thorough compliance
We treat all actions aimed at winning the confidence of ourcustomers, society, and other stakeholders as compliance. We
have identified a universal awareness of compliance as vital not
only for reducing legal and regulation risks, but also fordifferentiating ourselves from our competitors.

Intangible assets of the Daiwa Securities
Group

Reference

Message from the President (Page 1–2) / Commitment to the Development of
a Sound Securities Market (Page 13–16) / Compliance (Page 31–32)

amount was 931,845 million yen, 98.4% of which is from

Regardless of business cycle fluctuations, the Group aims tooperating revenues.

provide stable funding for its corporate citizenship activities which

This section describes the intangible assets of the Daiwa(4) Management policies focused on future revenues

represents its economic contribution to society. See page 42 for a

Securities Group that we believe have a particularly high value.

Our management strategy is focused on future revenues; it is notbreakdown of these expenditures.

Although it is very difficult to measure the value of theseconcerned solely with immediate revenues. We carry out concrete

intangible assets in monetary terms, please see the relevantmeasures based on our management policies in a wide range of

pages for management strategies and measures for increasing

fields, including our hiring policy and human-resource evaluation

their value.

system, as well as product sales strategy and customer-

Revenue structure in the Economic Report (fiscal 2006)
Service fees andother sales 6.6%

Equity 10.6%
Fixed income 0.3%
Investment banking
8.0%

Commissions
32.9%

Interest anddivided income
40.1%
Net gain on
trading
16.9%

Asset management
11.5%
Other
2.5%

Net gain on private equity and other securities 3.5%

Shareholders
The Group decides its dividend policy with an eye to maintaining
a stable dividend amount, and with a goal of providing a dividend
payout ratio of 30%.

satisfaction initiatives.
(1) Employee vitality, job satisfaction, and loyalty
The key management policy of the Daiwa Securities Group is toper share, and a year-end dividend of 16 yen per share, for a total

make this a group worth working for and enable our employees toannual dividend of 28 yen per share. This amounted to a total offeel loyalty for the Group. We believe that a company whose

39 billion yen in dividend payouts.

employees can thrive and take on new challenges at work will(5) Responsiveness to social issues

have high productivity, and a company with many highly loyal

We believe that marrying our management strategy to actions that

employees will be highly competitive.

make society more sustainable will be a great advantage for our

Creditors
The Group paid 47.0 billion yen in interest to creditors.

WE B Overview of revenue in the Economic Report

Economic value for the purpose of this Economic Report is(Page 37–40)

future corporate management. Additionally, the ability to swiftly

Message from the President (Page 1–2) / Human Values and Human
Reference Resource Utilization (Page 37–40)

respond to the needs of society, and the ability to ensure that all

Government

Distribution of economic value tostakeholders

Message from the President (Page 1–2) / Commitment to the Development of
a Sound Securities Market (Page 13–16) / Initiatives to Achieve Customer
Reference Satisfaction (Page 35–36) / Human Values and Human Resource Utilization

In fiscal 2006, the Group paid an interim dividend of 12 yen

employees are aware of and understand our management policy,

According to the Daiwa Securities Group’s financial accounting,(2) Vitality of female employees

the tax amount paid is the sum of current income taxes, deferred

We are committed to creating a workplace environment whereare major assets of the Daiwa Securities Group.

income taxes, and other taxes and duties including consumption

women can fully demonstrate their abilities. It is a loss to thetax. In fiscal 2006, the total tax amount paid was 77.9 billion yen.

company when talented women quit due to marriage or childbirth,

Message from the President (Page 1–2) / Adding a Social Perspective to
Investment (Page 9–12) / Commitment to the Development of a Sound
Reference Securities Market (Page 13–16) / Contribution to Global Environment(Page 17–19) / Human Values and Human Resource Utilization (Page 37–40)

calculated as revenues as previously defined, minus interest
expense (less interest paid), the cost of sales, selling, general andMinority shareholders

administrative expenses (less personnel costs, taxes, andProfit is returned to the minority shareholders of the Daiwa

expenditure for corporate citizenship activities), non-operating

Securities Group companies. The principal minority shareholders

expenses (less interest paid), and extraordinary losses. In fiscal

are Sumitomo Mitsui Financial Group with a 40% share in Daiwa

2006, this amount was 405,677 million yen.

Securities SMBC Co. Ltd., and the shareholders of NIF SMBC
Ventures, a JASDAQ-listed company in which Daiwa Securities

Executives and employees
The distribution of economic value to executives and employees isDistribution of economic value to stakeholders (fiscal 2006)

Economic
value
405,677
Economic
Report revenues
931,845

Group Inc. holds a majority stake (46.2%). The minority interest

Costs related
to S&GA
expenses
167,820for fiscal 2006 was 23.7 billion yen.

calculated as personnel expenses (including reserves for salaries
and bonuses, as well as welfare program costs and social

47

DAIWA SUSTAINAB ILITY REPO RT 2007

Cost of sales
36,298

Revenues

Minorityshareholders
5.9%

Costs related
to interest
expenses
307,614

Internal
reserves
13.2%

Government
19.2%

Other expenses
14,613
Expenditures(¥ million)

Creditors
11.6%

Executives
and employees
40.3%

Society 0.2%
Shareholder dividends 9.6%

* The totals may not always equal sums of the amounts given, due to rounding.

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

48

Third-party Opinions
establish a system for advancing initiatives relating to key issues at theorganizational level, beyond the bounds of individual departments anddivisions.

(2) Attitude toward employees
As clearly expressed in the message from the president, the attitude ofTakeshi Mizuguchi
Associate Professor
Takasaki City University of Economics
Chair, Environmental Accounting Technical Committee,
the Japanese Institute of Certified Public Accountants

valuing employees is strong. This attitude is commendable, because thecompany’s attitude is not just as a title, but is realized through a number ofToshihiko Goto

specific programs, including the program for converting temporary employees

Chair, Environment Auditing Research Group (EARG)
Chief Executive, Social Investment Forum Japanto full-time employees, programs to encourage and support women, and the
1. Introduction

creation of a Mental Health Support Promotion Department. Employee

A survey of report readers by the NTT-group portal site KANKYO goo

environmental efforts are becoming more effective, and that it has gained aThis third-party opinion was created at the request of the Daiwa

relations is not only a CSR item itself, but also the foundation of all CSR. This

showed that for many years, work-life balance has been the topic ofstrong awareness of the need to reduce its environmental impacts. The Group

Securities Group, after witnessing the report-production process. The

is because nearly all CSR items, be it compliance or customer satisfaction,

greatest interest. Most of companies, however, do not have a high level ofis creating its own environmental management systems, rather than utilizing

purpose of this third-party opinion is to, by witnessing the production

depend on the awareness and actions of each employee. In this sense asrecognition of the necessity to disclose information in this area. Given thisexisting environmental management systems, such as ISO 14001 or Eco

process, (1) express my opinion on the credibility of the information in thewell, this attitude of emphasizing employees is on the mark.

general state of affairs, I thus felt it wonderful that the president spoke at

Action 21. However, we, people outside of the company, can not see well thisreport, and (2) express my opinion on the CSR activities of the Daiwa

As someone from outside the industry, I was somewhat uncomfortable atsuch length about the employees, and women in particular, continuingmechanism. I think the Group should make its environmental management

Securities Group. For this purpose I attended a total of 44 hours of

the company’s remuneration system, where there is a significant disparity inthe trend set last year. I interpreted the facts that utilization of each of thesystems more transparent, clearly disclosing its environmental policies, goals,

interviews, discussions, and the like concerning this report over 11 days

remuneration depending on performance expressed by numbers, but perhaps

Group’s programs has increased, and the utilization of paid vacation has

targets, action plans, and the like. When the Group does this, I recommend

during the period from April 10, 2007 to August 3, 2007, asking additional

this falls within accepted norms in the industry. I believe that this system mustalso steadily increased, as demonstrations that the Group’s policies andthat it also mentions biodiversity, as I also advised last year. Speaking

questions and receiving briefings as needed.

be operated with balance, because if it is taken too far, it could harm the threesystems have become firmly established.

globally, one major American NGO has identified 34 hot spots for biodiversity
around the world, and the Japanese archipelago as a whole has beenvalues that the company prizes: confidence, pride, and solidarity.
2. Opinion concerning the credibility of the information

identified as one of these hot spots. There is a high probability that the

Although the third-party opinion on the credibility of information by(3) Adding a social perspective to investment

explained is pioneering, it would be even better if it was a little more

Conference of the Convention on Biological Diversity (COP10) will be held incertified public accountants usually means an assurance mainly focusing

Defining four key issues represents a major step forward in Daiwa Securities

detailed. In Material Issue 1, under “adding a social perspective to

Nagoya, Japan in 2010, and this will be a conference that focuses a greaton accuracy of data, this statement does not provide an assurance in thisGroup’s reporting. Although each of these issues is highly important, theinvestment,” the perception is expressed that “…Japan has the world’s

deal about the private sector’s initiatives. We are currently living in what has

sense. In fact, in cases like Daiwa Securities Group, where many of its

statement that commitments to “adding a social perspective to investment”

highest level of environmental technology.” Although this is inevitable,

been called the Sixth major Mass Extinction, and I believe that providing

CSR activities are difficult to quantify, I believe it is more important toand “the creation of monetary flows that will help achieve a sustainable

since Japanese politicians, government officials, and even industry haveinformation on biodiversity in the Japanese archipelago, which is the focus of

focus on whether the textual content reflects the actual situation. The

society” are “an important duty to society through [financial institutions’] main

expressed this perception, this does not necessarily make it true.

intense attention by the rest of the world, as well providing information

textual portions that are not under the direct control of the CSR

business: finance” is of great significance. The fact that lots of positive

The significance of the certain level of agreement reached at the G8

Promotion Department (which produces the report) are created mainly

opinions were expressed in unscripted discussions and interviews issummit in Heiligendamm to reduce greenhouse gasses by 50% worldwide

based on interviews and discussions with relevant departments. On thisextremely impressive. A future challenge may be to increase collaboration

by 2050 is great in this sense. This shows that world leading politicians

point, it is my belief that in cases where I was present, the content of

between departments, and incorporate this into the organizational strategy,

have settled the scientific debate over the theory that global warming is

I think it is excellent that the Group has continued to improve its report.

interviews or discussions is accurately reflected in the report, and in thisrather than stopping at the individual level. Naturally, the Daiwa Securities

caused by humans, and that those politicians have been forced to

The Group has made progress in its report in including negative information,

sense, the content of the report is credible*.

Group deals with individual and institutional investors, and these are issues

recognize that business as usual could threaten the extinction of theand utilizing the website as I suggested, and it also included more information*that society as a whole must grapple with, but I hope to see even morehuman race. It is claimed that efforts to avoid global warming over the next

about the “check” and “act” phases of the P-D-C-A cycle, which I remarked onleadership from the Daiwa Securities Group. To use cars as an example, both

10 to 15 years will be key. I believe that if a worldwide reduction of 50% islast year.

3. Opinion concerning CSR activities

developing fuel-cell and electric cars on the one hand, and improving the fuelneeded, a reduction of less than 80 to 90% by Japan would be

However, there is still room for improvement, in that there is still a large(1) CSR promotion systemefficiency of ordinary cars on the other are important for environmental

unacceptable to the rest of the world. The “Sustainability Revolution”

amount of qualitative content. Efforts to quantify key issues are also

I felt that the production process of this report, which is based onconservation. In the same way, SRI funds and incorporating as much of aentails a major upheaval in our civilization, surpassed only by thenecessary for improving reliability. If including more detailed numerical datainterviews with relevant departments, symbolically expresses thesocial perspective as possible in all investment are both important for

upheavals of the agricultural and industrial revolutions. I believe that it iswould hinder readability, then the Group could utilize the website.

distinctive properties of the CSR promotion system of the Daiwa

investment. What will make this possible? I believe that the true battle is yet tovital to study and obtain accurate information about each company

Incidentally, how is the Group’s progress on drawing up its corporate

Securities Group. Rather than having a specific department centrallycome.

individually, to determine whether it is boldly pursuing radical innovation

governance charter and voluntary code of conducts? I believe that an

W E B Contents relating to discussions/interviews which Mr. Mizuguchi attended.

throughout the world, will be a good opportunity for companies to enhancetheir reputations.

and a new business model, and determine whether it is truly operating at a

explanation of the situation is required, since the Group has alreadygovernance, and the rest of a wide range of CSR activities, each relevant

4. Conclusions

high level, and to then utilize this information. I believe that companies thatannounced that it would create them.

department is responsible for its own initiatives, and the sum of these

Incorporating outsiders into the report-production process for the purpose of

are not committed to this issue will not be in existence 10 years from now.

Although I conjecture that its many financial literacy efforts or the fact that

initiatives makes up Daiwa Securities Group’s CSR. Given thea third-party opinion is an attempt to increase transparency. It also has great

Although I am pleased at Daiwa Securities Group’s honesty in writing that

the Group placed photos of the babies of its employees on the front and backmultifaceted nature of CSR, this approach is a natural one. The annual

significance when considering the desiderata for third-party opinions. Adding

its work to promote these efforts in its main business is still lacking, I wantcovers are to express its passionate commitment to the coming generations, I

interviews for the creation of this report are an opportunity to track

to this the idea that the report-production process doubles as a CSR-activity

to make it clear to all that this is the true key to CSR in the finance industry.

think the Group should emphasize the next generation a bit more in words as

progress on CSR in each department. In this instance, however, I believe

review process, I believe that this method has the potential for even greaterthat there were some items listed as key issues which require cross-development.

control environmental issues, employees, compliance, corporate

departmental cooperation. I believe that a future challenge will be to49

Although the fact that the process for identifying material issues is

DAIWA SUSTAINAB ILITY REPO RT 2007

well. That is what a true “Sustainability Report” is all about.
The fact that Daiwa Securities Group has greatly reduced its paper
usage by changing to electronic statements and other facts show that its

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

50Third-party Opinions
establish a system for advancing initiatives relating to key issues at theorganizational level, beyond the bounds of individual departments anddivisions.

(2) Attitude toward employees
As clearly expressed in the message from the president, the attitude ofTakeshi Mizuguchi
Associate Professor
Takasaki City University of Economics
Chair, Environmental Accounting Technical Committee,
the Japanese Institute of Certified Public Accountants

valuing employees is strong. This attitude is commendable, because thecompany’s attitude is not just as a title, but is realized through a number ofToshihiko Goto

specific programs, including the program for converting temporary employees

Chair, Environment Auditing Research Group (EARG)
Chief Executive, Social Investment Forum Japanto full-time employees, programs to encourage and support women, and the
1. Introduction

creation of a Mental Health Support Promotion Department. Employee

A survey of report readers by the NTT-group portal site KANKYO goo

environmental efforts are becoming more effective, and that it has gained aThis third-party opinion was created at the request of the Daiwa

relations is not only a CSR item itself, but also the foundation of all CSR. This

showed that for many years, work-life balance has been the topic ofstrong awareness of the need to reduce its environmental impacts. The Group

Securities Group, after witnessing the report-production process. The

is because nearly all CSR items, be it compliance or customer satisfaction,

greatest interest. Most of companies, however, do not have a high level ofis creating its own environmental management systems, rather than utilizing

purpose of this third-party opinion is to, by witnessing the production

depend on the awareness and actions of each employee. In this sense asrecognition of the necessity to disclose information in this area. Given thisexisting environmental management systems, such as ISO 14001 or Eco

process, (1) express my opinion on the credibility of the information in thewell, this attitude of emphasizing employees is on the mark.

general state of affairs, I thus felt it wonderful that the president spoke at

Action 21. However, we, people outside of the company, can not see well thisreport, and (2) express my opinion on the CSR activities of the Daiwa

As someone from outside the industry, I was somewhat uncomfortable atsuch length about the employees, and women in particular, continuingmechanism. I think the Group should make its environmental management

Securities Group. For this purpose I attended a total of 44 hours of

the company’s remuneration system, where there is a significant disparity inthe trend set last year. I interpreted the facts that utilization of each of thesystems more transparent, clearly disclosing its environmental policies, goals,

interviews, discussions, and the like concerning this report over 11 days

remuneration depending on performance expressed by numbers, but perhaps

Group’s programs has increased, and the utilization of paid vacation has

targets, action plans, and the like. When the Group does this, I recommend

during the period from April 10, 2007 to August 3, 2007, asking additional

this falls within accepted norms in the industry. I believe that this system mustalso steadily increased, as demonstrations that the Group’s policies andthat it also mentions biodiversity, as I also advised last year. Speaking

questions and receiving briefings as needed.

be operated with balance, because if it is taken too far, it could harm the threesystems have become firmly established.

globally, one major American NGO has identified 34 hot spots for biodiversity
around the world, and the Japanese archipelago as a whole has beenvalues that the company prizes: confidence, pride, and solidarity.
2. Opinion concerning the credibility of the information

identified as one of these hot spots. There is a high probability that the

Although the third-party opinion on the credibility of information by(3) Adding a social perspective to investment

explained is pioneering, it would be even better if it was a little more

Conference of the Convention on Biological Diversity (COP10) will be held incertified public accountants usually means an assurance mainly focusing

Defining four key issues represents a major step forward in Daiwa Securities

detailed. In Material Issue 1, under “adding a social perspective to

Nagoya, Japan in 2010, and this will be a conference that focuses a greaton accuracy of data, this statement does not provide an assurance in thisGroup’s reporting. Although each of these issues is highly important, theinvestment,” the perception is expressed that “…Japan has the world’s

deal about the private sector’s initiatives. We are currently living in what has

sense. In fact, in cases like Daiwa Securities Group, where many of its

statement that commitments to “adding a social perspective to investment”

highest level of environmental technology.” Although this is inevitable,

been called the Sixth major Mass Extinction, and I believe that providing

CSR activities are difficult to quantify, I believe it is more important toand “the creation of monetary flows that will help achieve a sustainable

since Japanese politicians, government officials, and even industry haveinformation on biodiversity in the Japanese archipelago, which is the focus of

focus on whether the textual content reflects the actual situation. The

society” are “an important duty to society through [financial institutions’] main

expressed this perception, this does not necessarily make it true.

intense attention by the rest of the world, as well providing information

textual portions that are not under the direct control of the CSR

business: finance” is of great significance. The fact that lots of positive

The significance of the certain level of agreement reached at the G8

Promotion Department (which produces the report) are created mainly

opinions were expressed in unscripted discussions and interviews issummit in Heiligendamm to reduce greenhouse gasses by 50% worldwide

based on interviews and discussions with relevant departments. On thisextremely impressive. A future challenge may be to increase collaboration

by 2050 is great in this sense. This shows that world leading politicians

point, it is my belief that in cases where I was present, the content of

between departments, and incorporate this into the organizational strategy,

have settled the scientific debate over the theory that global warming is

I think it is excellent that the Group has continued to improve its report.

interviews or discussions is accurately reflected in the report, and in thisrather than stopping at the individual level. Naturally, the Daiwa Securities

caused by humans, and that those politicians have been forced to

The Group has made progress in its report in including negative information,

sense, the content of the report is credible*.

Group deals with individual and institutional investors, and these are issues

recognize that business as usual could threaten the extinction of theand utilizing the website as I suggested, and it also included more information*that society as a whole must grapple with, but I hope to see even morehuman race. It is claimed that efforts to avoid global warming over the next

about the “check” and “act” phases of the P-D-C-A cycle, which I remarked onleadership from the Daiwa Securities Group. To use cars as an example, both

10 to 15 years will be key. I believe that if a worldwide reduction of 50% islast year.

3. Opinion concerning CSR activities

developing fuel-cell and electric cars on the one hand, and improving the fuelneeded, a reduction of less than 80 to 90% by Japan would be

However, there is still room for improvement, in that there is still a large(1) CSR promotion systemefficiency of ordinary cars on the other are important for environmental

unacceptable to the rest of the world. The “Sustainability Revolution”

amount of qualitative content. Efforts to quantify key issues are also

I felt that the production process of this report, which is based onconservation. In the same way, SRI funds and incorporating as much of aentails a major upheaval in our civilization, surpassed only by thenecessary for improving reliability. If including more detailed numerical datainterviews with relevant departments, symbolically expresses thesocial perspective as possible in all investment are both important for

upheavals of the agricultural and industrial revolutions. I believe that it iswould hinder readability, then the Group could utilize the website.

distinctive properties of the CSR promotion system of the Daiwa

investment. What will make this possible? I believe that the true battle is yet tovital to study and obtain accurate information about each company

Incidentally, how is the Group’s progress on drawing up its corporate

Securities Group. Rather than having a specific department centrallycome.

individually, to determine whether it is boldly pursuing radical innovation

governance charter and voluntary code of conducts? I believe that an

W E B Contents relating to discussions/interviews which Mr. Mizuguchi attended.

throughout the world, will be a good opportunity for companies to enhancetheir reputations.

and a new business model, and determine whether it is truly operating at a

explanation of the situation is required, since the Group has alreadygovernance, and the rest of a wide range of CSR activities, each relevant

4. Conclusions

high level, and to then utilize this information. I believe that companies thatannounced that it would create them.

department is responsible for its own initiatives, and the sum of these

Incorporating outsiders into the report-production process for the purpose of

are not committed to this issue will not be in existence 10 years from now.

Although I conjecture that its many financial literacy efforts or the fact that

initiatives makes up Daiwa Securities Group’s CSR. Given thea third-party opinion is an attempt to increase transparency. It also has great

Although I am pleased at Daiwa Securities Group’s honesty in writing that

the Group placed photos of the babies of its employees on the front and backmultifaceted nature of CSR, this approach is a natural one. The annual

significance when considering the desiderata for third-party opinions. Adding

its work to promote these efforts in its main business is still lacking, I wantcovers are to express its passionate commitment to the coming generations, I

interviews for the creation of this report are an opportunity to track

to this the idea that the report-production process doubles as a CSR-activity

to make it clear to all that this is the true key to CSR in the finance industry.

think the Group should emphasize the next generation a bit more in words as

progress on CSR in each department. In this instance, however, I believe

review process, I believe that this method has the potential for even greaterthat there were some items listed as key issues which require cross-development.

control environmental issues, employees, compliance, corporate

departmental cooperation. I believe that a future challenge will be to49

Although the fact that the process for identifying material issues is

DAIWA SUSTAINAB ILITY REPO RT 2007

well. That is what a true “Sustainability Report” is all about.
The fact that Daiwa Securities Group has greatly reduced its paper
usage by changing to electronic statements and other facts show that its

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

50Third-party Evaluation

The Road to Sustainability

Daiwa Securities Group Sustainability Report 2007
Reader Questionnaire
Thank you for taking the time to read Daiwa Securities Group

2003

FTSEGood Index

FTSE is a subsidiary of the UK’s Financial Times and the London

Corporate Ethics Hotline, a group-wide internal reporting system, introduced.

February

Internal Audit Department established at Daiwa Securities Group Inc.

March

New medium-term management plan (FY2003–FY2005) drawn up.

April

New shareholder benefit plan introduced.

June

Total value of compensation paid to directors and corporate auditors of Daiwa Securities Group
Inc. disclosed.

July

Daiwa Securities SMBC Principal Investments Co. Ltd., invests in the World Bank’s Community
Development Carbon Fund.

Stock Exchange. It provides data and constructs global indices forinvestment.
Starting in September 2006, Daiwa Securities Group Inc. has
Octoberbeen included in the FTSE4Good, an index of socially responsible

Sustainability Report 2007.

January

Support begins for Student Company Program, a hands-on economics education programprovided by Junior Achievement.
Begins sales of UBS Global Equity 40 SRI+, an SRI investment trust that invests in global
corporations.

companies compiled by FTSE.

November Membership in SIF-Japan, a socially responsible investment forum.

2004

Dow Jones Sustainability World IndicesWe are conducting a survey about this report on the website
below. Please let us know your thoughts on this report.
http://www.daiwa-grp.jp/ir/english/corporate/report/

GRI Application Level
This report was created with reference to Sustainability Reporting Guideline
2006 by the GRI*. This guideline recommends that reports declare their GRI
Application Level**, which is an indicator of the level of compliance with theJanuary

CSR/brand management website goes online.

GRI defined by the guideline.

March

Disclosure Policy established.

The Daiwa Securities Group believes that Daiwa Securities Group

April

Cooperation with Waseda University’s Graduate School of Finance, Accounting and Law begins.

Sustainability Report 2007 meets the criteria of GRI Application Level B.

May

Begins sales of the Daiwa SRI Fund, an SRI investment trust that invests in Japanese corporations.

June

New management introduced under the leadership of Shigeharu Suzuki. Change to committee
system.

July

CSR Promotion Department established at Daiwa Securities Group Inc.

October

SRI fund included in defined-contribution pension fund for Daiwa Securities Group employees.

November Membership in the United Nations Environmental Programme Finance Initiative (UNEP FI).

* Global Reporting Initiative (GRI): An organization founded in 1997 to draw up anddisseminate international guidelines for sustainability reporting. Participants include avariety of stakeholders, such as businesses, non-governmental organizations (NGOs),consultants, accounting groups, and trade associations from different parts of the world.
http://www.globalreporting.org/Home** See the following URL for details about GRI Application Levels.
http://www.globalreporting.org/GRIReports/ApplicationLevels/

2005

The Dow Jones Sustainability World Index (DJSI World) is a stockFebruaryindex of companies with sustainable practices as selected by Dow

Long-term support determined for areas devastated by the Sumatra earthquake and South Asiantsunami. (Daiwa Securities Group Tsunami Reconstruction Fund)W E B GRI Content Index

Daiwa Securities Co. Ltd. begins Electronic Statement Promotion Project

Jones & Company, Inc. of the US, and Sustainable Asset

April

Management (SAM) of Switzerland.

With the Incubation Projects of Waseda University Intellectual Property Center, set up a basic
venture capitalist course for students.
Employee CSR questionnaire survey.

May

Daiwa Securities Group Inc. has been in the DJSI World for nine
years running now.

June

Environmental Management Committee introduced at Daiwa Securities Group Inc.

Please send inquiries to:

Support provided to Finance Park, a hands-on economics educational program offered by Junior
Achievement.
Women entrepreneur support project begins.

July

Daiwa Asset Management Co. Ltd. participates in the GRI G3 project working group to consider theusefulness of sustainability reporting from the perspective of finance and investors.

October

Daiwa Securities Co. Ltd. begins the Daiwa e-members service, which makes it possible to be sent
electronic transaction reports.

November A support program begins for NPO staff, funded by donations based on Daiwa SRI Fund sales.

February

Scope of Report

Address

6-4, Otemachi 2-chome, Chiyoda-ku, Tokyo 100-8101, JapanTEL+81-3-3243-5992

Development of Euro-dollar Bonds with Emissions Credit Value Referenced Coupons (Cool Bonds).

E-mailbrand@dsgi.daiwa.co.jp

Begins sales of Daiwa Eco Fund.

URL

http://www.daiwa-grp.jp/index.cfm

New medium-term management plan “Passion for the Best 2008,” which includes the Group’s
basic CSR strategy.
AprilIntended readership:

Period covered by report:

The Daiwa Securities Group’s diverse stakeholders, which primarily

Fiscal 2006 (April 2006–March 2007). The report also includes someinclude customers, shareholders, investors, and employees, as well as

information on activities carried out in fiscal 2007 which became

businessavailable close to the publication date, as well as some information on

partners,

NPOs/NGOs(non-profit

organizations),

educational institutions, and the local communities in which ouractivities that occurred prior to fiscal 2005.

branches and overseas offices are located.

May

September 2007 (Previous report was published in September 2006,

This report basically covers our nine main group companies*, which

and the next report is planned for September 2008).

OctoberJanuary

Daiwa Securities Group Inc. is scheduled to move on December 3, 2007.
Our contact information after the move is as follows.
As of Dec. 3, 2007:
Address

9-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-8101, JapanTEL+81-3-5555-1111

E-mailbrand@dsgi.daiwa.co.jp

URL

http://www.daiwa-grp.jp/index.cfm

The Daiwa Securities Group makes it into the Global 100 (world’s 100 most sustainable
companies).
Attends World Economic Forum (WEF) in Davos, Switzerland.

February

principal companies.

The Daiwa Securities Group Sustainability Report 2005 wins the Sustainability Report ExcellencePrize (the President Award), awarded by the Global Environmental Forum.

Design and production assistanceCre-en Inc.

Daiwa Securities Group Sustainability Report 2006 wins the Excellence Prize in the sustainability
report category awarded by Toyo Keizai Inc.

* See “Daiwa Securities Group’s Business Description” on page 6 for the Group’s nine
April

all items reported. Rather, information is provided in proportion to the

CSR seminar held for individual investors titled “New Trends in Investing: The Search for
Sustainable Growth Companies.”May

Customer environmental seminar held titled “Daiwa Environmental Forum 2007: What Is
Happening to the Earth Now?”

July“COOL BIZ” policy (open collars and shirtsleeves in the office) implemented group-wide as an
initiative to combat global warming.

is noted along with the data.

DAIWA SU STAINABILITY R EPO RT 2007

Daiwa-JFS Youth Sustainability College opened with environmental NPO Japan for Sustainability(JFS) as a grant program of the Daiwa Eco Fund.

Daiwa Securities Group Sustainability Report 2005 ranked 34th (top ranking of any JapaneseNovember company) in the Global Reporters 2006, an international comparative survey.

account for about 90% of the Group’s total number of employees. The

size and business area of each company. The scope of numerical data

Daiwa Asset Management Co. Ltd. signs the Principles for Responsible Investment (PRI), jointly
created by the United Nations Environment Programme Finance Initiative (UNEP FI) and the UN
Global Compact.

2007

Scope of reporting:report does not, however, encompass data from all nine companies on

Daiwa Securities Group Sustainability Report 2005 wins the Excellence Prize in the sustainability
report category awarded by Toyo Keizai Inc.

Business School Pavilion opened as a special sponsor of Kidzania Tokyo.

Publication date:

51

Until Dec. 2, 2007:

The Daiwa Securities Group Sustainability Report 2005 wins the Sustainability Report First Prize(Minister of the Environment Award), awarded by the Global Environmental Forum.

2006
January

CSR Promotion Department, Daiwa Securities Group Inc.

This report has been produced using a waterless printing process that does not employ any organic solvents.
The printing ink is made from soybean oil, which has a volatile organic compound (VOC) level of less than 1%.

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

52Third-party Evaluation

The Road to Sustainability

Daiwa Securities Group Sustainability Report 2007
Reader Questionnaire
Thank you for taking the time to read Daiwa Securities Group

2003

FTSEGood Index

FTSE is a subsidiary of the UK’s Financial Times and the London

Corporate Ethics Hotline, a group-wide internal reporting system, introduced.

February

Internal Audit Department established at Daiwa Securities Group Inc.

March

New medium-term management plan (FY2003–FY2005) drawn up.

April

New shareholder benefit plan introduced.

June

Total value of compensation paid to directors and corporate auditors of Daiwa Securities Group
Inc. disclosed.

July

Daiwa Securities SMBC Principal Investments Co. Ltd., invests in the World Bank’s Community
Development Carbon Fund.

Stock Exchange. It provides data and constructs global indices forinvestment.
Starting in September 2006, Daiwa Securities Group Inc. has
Octoberbeen included in the FTSE4Good, an index of socially responsible

Sustainability Report 2007.

January

Support begins for Student Company Program, a hands-on economics education programprovided by Junior Achievement.
Begins sales of UBS Global Equity 40 SRI+, an SRI investment trust that invests in global
corporations.

companies compiled by FTSE.

November Membership in SIF-Japan, a socially responsible investment forum.

2004

Dow Jones Sustainability World IndicesWe are conducting a survey about this report on the website
below. Please let us know your thoughts on this report.
http://www.daiwa-grp.jp/ir/english/corporate/report/

GRI Application Level
This report was created with reference to Sustainability Reporting Guideline
2006 by the GRI*. This guideline recommends that reports declare their GRI
Application Level**, which is an indicator of the level of compliance with theJanuary

CSR/brand management website goes online.

GRI defined by the guideline.

March

Disclosure Policy established.

The Daiwa Securities Group believes that Daiwa Securities Group

April

Cooperation with Waseda University’s Graduate School of Finance, Accounting and Law begins.

Sustainability Report 2007 meets the criteria of GRI Application Level B.

May

Begins sales of the Daiwa SRI Fund, an SRI investment trust that invests in Japanese corporations.

June

New management introduced under the leadership of Shigeharu Suzuki. Change to committee
system.

July

CSR Promotion Department established at Daiwa Securities Group Inc.

October

SRI fund included in defined-contribution pension fund for Daiwa Securities Group employees.

November Membership in the United Nations Environmental Programme Finance Initiative (UNEP FI).

* Global Reporting Initiative (GRI): An organization founded in 1997 to draw up anddisseminate international guidelines for sustainability reporting. Participants include avariety of stakeholders, such as businesses, non-governmental organizations (NGOs),consultants, accounting groups, and trade associations from different parts of the world.
http://www.globalreporting.org/Home** See the following URL for details about GRI Application Levels.
http://www.globalreporting.org/GRIReports/ApplicationLevels/

2005

The Dow Jones Sustainability World Index (DJSI World) is a stockFebruaryindex of companies with sustainable practices as selected by Dow

Long-term support determined for areas devastated by the Sumatra earthquake and South Asiantsunami. (Daiwa Securities Group Tsunami Reconstruction Fund)W E B GRI Content Index

Daiwa Securities Co. Ltd. begins Electronic Statement Promotion Project

Jones & Company, Inc. of the US, and Sustainable Asset

April

Management (SAM) of Switzerland.

With the Incubation Projects of Waseda University Intellectual Property Center, set up a basic
venture capitalist course for students.
Employee CSR questionnaire survey.

May

Daiwa Securities Group Inc. has been in the DJSI World for nine
years running now.

June

Environmental Management Committee introduced at Daiwa Securities Group Inc.

Please send inquiries to:

Support provided to Finance Park, a hands-on economics educational program offered by Junior
Achievement.
Women entrepreneur support project begins.

July

Daiwa Asset Management Co. Ltd. participates in the GRI G3 project working group to consider theusefulness of sustainability reporting from the perspective of finance and investors.

October

Daiwa Securities Co. Ltd. begins the Daiwa e-members service, which makes it possible to be sent
electronic transaction reports.

November A support program begins for NPO staff, funded by donations based on Daiwa SRI Fund sales.

February

Scope of Report

Address

6-4, Otemachi 2-chome, Chiyoda-ku, Tokyo 100-8101, JapanTEL+81-3-3243-5992

Development of Euro-dollar Bonds with Emissions Credit Value Referenced Coupons (Cool Bonds).

E-mailbrand@dsgi.daiwa.co.jp

Begins sales of Daiwa Eco Fund.

URL

http://www.daiwa-grp.jp/index.cfm

New medium-term management plan “Passion for the Best 2008,” which includes the Group’s
basic CSR strategy.
AprilIntended readership:

Period covered by report:

The Daiwa Securities Group’s diverse stakeholders, which primarily

Fiscal 2006 (April 2006–March 2007). The report also includes someinclude customers, shareholders, investors, and employees, as well as

information on activities carried out in fiscal 2007 which became

businessavailable close to the publication date, as well as some information on

partners,

NPOs/NGOs(non-profit

organizations),

educational institutions, and the local communities in which ouractivities that occurred prior to fiscal 2005.

branches and overseas offices are located.

May

September 2007 (Previous report was published in September 2006,

This report basically covers our nine main group companies*, which

and the next report is planned for September 2008).

OctoberJanuary

Daiwa Securities Group Inc. is scheduled to move on December 3, 2007.
Our contact information after the move is as follows.
As of Dec. 3, 2007:
Address

9-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-8101, JapanTEL+81-3-5555-1111

E-mailbrand@dsgi.daiwa.co.jp

URL

http://www.daiwa-grp.jp/index.cfm

The Daiwa Securities Group makes it into the Global 100 (world’s 100 most sustainable
companies).
Attends World Economic Forum (WEF) in Davos, Switzerland.

February

principal companies.

The Daiwa Securities Group Sustainability Report 2005 wins the Sustainability Report ExcellencePrize (the President Award), awarded by the Global Environmental Forum.

Design and production assistanceCre-en Inc.

Daiwa Securities Group Sustainability Report 2006 wins the Excellence Prize in the sustainability
report category awarded by Toyo Keizai Inc.

* See “Daiwa Securities Group’s Business Description” on page 6 for the Group’s nine
April

all items reported. Rather, information is provided in proportion to the

CSR seminar held for individual investors titled “New Trends in Investing: The Search for
Sustainable Growth Companies.”May

Customer environmental seminar held titled “Daiwa Environmental Forum 2007: What Is
Happening to the Earth Now?”

July“COOL BIZ” policy (open collars and shirtsleeves in the office) implemented group-wide as an
initiative to combat global warming.

is noted along with the data.

DAIWA SU STAINABILITY R EPO RT 2007

Daiwa-JFS Youth Sustainability College opened with environmental NPO Japan for Sustainability(JFS) as a grant program of the Daiwa Eco Fund.

Daiwa Securities Group Sustainability Report 2005 ranked 34th (top ranking of any JapaneseNovember company) in the Global Reporters 2006, an international comparative survey.

account for about 90% of the Group’s total number of employees. The

size and business area of each company. The scope of numerical data

Daiwa Asset Management Co. Ltd. signs the Principles for Responsible Investment (PRI), jointly
created by the United Nations Environment Programme Finance Initiative (UNEP FI) and the UN
Global Compact.

2007

Scope of reporting:report does not, however, encompass data from all nine companies on

Daiwa Securities Group Sustainability Report 2005 wins the Excellence Prize in the sustainability
report category awarded by Toyo Keizai Inc.

Business School Pavilion opened as a special sponsor of Kidzania Tokyo.

Publication date:

51

Until Dec. 2, 2007:

The Daiwa Securities Group Sustainability Report 2005 wins the Sustainability Report First Prize(Minister of the Environment Award), awarded by the Global Environmental Forum.

2006
January

CSR Promotion Department, Daiwa Securities Group Inc.

This report has been produced using a waterless printing process that does not employ any organic solvents.
The printing ink is made from soybean oil, which has a volatile organic compound (VOC) level of less than 1%.

DAIWA SUSTAINABILIT Y REP ORT 2 0 0 7

52

Daiwa Securities Group Sustainability Report 2007

Daiwa Securities Group

Sustainability Report 2007

B u i l d i ng
S u s t a ina bl e
S o c i e ty

w w w. d a i w a - g r p . j p

This report uses paper made from responsibly thinned timber.

What we can do
At the Daiwa Securities Group, we are engaged in the business of finance. As such, weare not immediately confronted with environmental problems as those in some otherindustries are. Nevertheless, we use huge amounts of paper in various reports—including

What kind of society awaits these 51 babies when they become adults 20 years from now?

this one—as well as in prospectuses, sheets and forms. Paper wastage is therefore an

The precious faces of these infants—all children of Daiwa Securities Group employees—

environmental issue that the Daiwa Securities Group must address and is addressing.

are an expression of our hopes for the future. At the Daiwa Securities Group,With the intention of protecting forests both in Japan and in developing countries, we

we are determined to take responsibility as individuals and to play our role as a company

have printed this report on paper made from responsibly thinned timber. We arecommitted to encouraging the healthy growth of forests everywhere.

to create a sustainable society—a contented people living in harmony with an unspoiled Earth.