Daiwa Securities Group
What we can do
What will the world be like in 20 years from now,
when these babies are adults?
Imagine a society where people live happily inharmony with our Earth’s abundant nature.
At the Daiwa Securities Group, we are determined to fulfill
our responsibilities as individuals and as a company to createa sustainable society.
The smiles of these infants—all children of Daiwa Securities Group
employees—express our hopes for a bright future.

CSR Report
2014
Contributing to Sustainable Development

Shigeharu Suzuki
Chairman of the Board
Daiwa Securities Group Inc.

Takashi Hibino
President and CEO
Daiwa Securities Group Inc.

To Our Stakeholders
The Daiwa Securities Group recognizes its responsibility, as acorporate member of society, to contribute to the sustainable
development of society as well as the economy through its
activities in financial and capital markets. Under our current
Medium-Term Management Plan, “Passion for the Best” 2014,
our transitional process from “Growth” phase in FY2013 to“Expansion” phase in FY2014 is positioned as a milestone for
us to fulfill this responsibility.
The balance of household financial assets in Japan iscurrently estimated at some ¥1,600 trillion, and these assets
are gradually being shifted “from savings to investment.” The
Daiwa Securities Group aims to facilitate this shift by cultivatingand expanding its client base. By helping growth-oriented
companies and public-sector organizations to tap into thevast supply of capital formerly tied up in savings deposits, theGroup hopes to invigorate the Japanese economy while alsoestablishing a customer base that can support the Group’s own
long-term growth.
The Group is also developing and marketing new financial
products, such as “impact investment bonds,” which can

Daiwa Securities Groupgenerate attractive returns while also making a positive social
or societal contribution, such as alleviating poverty or elevating
the status of women in developing countries. In this way,
Japanese investors can make a meaningful contribution to theresolution of global issues. The Daiwa Securities Group willcontinue its efforts to develop innovative financial products
and services that seek to use investment activity as a means toaddress social concerns.
In FY2014 – the final year of our current Medium-Term
Management Plan – the Daiwa Securities Group will continue
its efforts to expand client-based high-quality earnings in order
not only to secure sustainable growth, but also to contribute tovibrant sustainable economic and social conditions. We believethat the Group can enhance its corporate value by promoting
a society of sustainable growth. All executives and employeesof the Group are united in their passion to realize a future inwhich everyone can take pride.
As we work toward achieving this goal, we kindly request
the continued support and understanding of all stakeholders.

1

CSR REPORT 2014

Message from the CEO

Earnings at the Daiwa Securities Group rose sharply in
FY2013, and while the Group received benefits fromfavorable market conditions during the period, thestrong performance was also a testament to the steadyprogress that the Group has made in implementing thecurrent Medium-Term Management Plan. The statedgoal of our strategy is “to establish a robust businessstructure capable of securing profit even under stressful
economic conditions.” FY2014 is the final year of thecurrent Medium-Term Management Plan. By taking thelead in the dynamic shift of Japanese household assets“from savings to investment,” which is set as a coremanagement strategy, the Group will move into a newphase of the Medium-Term Management Plan: “Expansion
for Sustainable Growth.”

equity markets on the back of expectations for ending thedeflationary cycle by the government’s economic policies (often
referred to as “Abenomics”) and the strong US economy.
Against this backdrop, net operating revenues at the Daiwa
Securities Group rose 29.9% year on year, to ¥541.9 billion,
ordinary income more than doubled, to ¥197.0 billion, andnet income grew 132.4%, to ¥169.4 billion. Net income thus
reached its highest level in 24 years, and ordinary income
far surpassed the ¥120 billion target set for FY2014, thefinal year of the current Medium-Term Management Plan.
While favorable market conditions contributed to earnings
growth, much of the improvement was a result of factors
specific to the Daiwa Securities Group. Changes made to
the Group’s organizational structure and business strategy
with the launch of the “new Daiwa Securities” began to takeeffect even before the positive boost provided by Abenomics.
These measures reduced expenses and placed priority on thedevelopment of client-based high-quality earnings. Earnings
results for FY2013 clearly illustrate the success of Groupefforts to “establish a robust business structure.” Indeed, theGroup’s fixed cost coverage ratio reached 52%, surpassing the
50% target level, a year ahead of schedule. This ratio is themost important key performance indicator set in the current
Management Plan.
In FY2014, the Group has moved into the “Expansion”
phase of its current Medium-Term Management Plan. The newtax exemption scheme for investments by individuals, NISA (theNippon Individual Savings Account) launched in January 2014,is expected to have a positive impact on the shift “from savings
to investment.” The Daiwa Securities Group as a whole will
step forward to accomplish sustainable growth with its primary
focus on both expanding its client base and increasing clientbased high-quality earnings

In April 2012, the Daiwa Securities Group merged its two main
subsidiaries, which formerly exercised separate control over theGroup’s Retail securities business and its Wholesale securities
business, to establish a unified “new Daiwa Securities.” The
Group also launched its Medium-Term Management Plancovering the period from FY2012 to FY2014 at the same time.
Based on the outline of the Medium-Term Management Plan,
we have been making efforts to “establish a robust businessstructure capable of securing profit even under stressful
economic conditions.” In FY2012, the Group returned to
profitability in line with the “Turnaround” phase of the plan. In
FY2013, we took the next step by introducing strategies aimed
at “Growth.”
Business conditions in FY2013 got off to a positive start, as
the Bank of Japan introduced both quantitative and qualitative
monetary easing policies from April 2013 which led to a
weak yen and higher stock prices. Although there have beenoccasional periods of instability in the Japanese equity market,
there was a sharp increase in trading activity in JapaneseDaiwa Securities Group

Takashi Hibino

President and CEO
Daiwa Securities Group Inc.

2

CSR REPORT 2014

Message from the Chairman

The Daiwa Securities Group is rooted in the four corporate
principles of “building trust,” “placing importance on
personnel,” “contributing to society,” and “securing soundprofits.” As the foundation from which we conduct business,these corporate principles express our deeply engraved spirit
and core business values that allow us to participate in financial
and capital markets with pride and integrity.
Under these principles, we have spared no effort to create
an organization where each member of the Group can feel asense of high job satisfaction, by promoting a higher dimensionof work-life balance and thorough compliance education, in
our aim of being a highly sustainable company that does not
succumb to chasing near-term profits. The greatest competitive
advantages we have are the sense of unity and trust acrossthe entire Daiwa Securities Group, as well as the high levelof loyalty and professionalism among management andemployees regardless of gender.

Daiwa Securities Group

After a prolonged slump, the Japanese stock market
finally started to undergo a massive transformation when the
Abe administration came to power in December 2012. Thistransformation brings not only business opportunities for the
Daiwa Securities Group to achieve sustainable growth, but also
opportunities to contribute to the realization of a sustainable
society through our core business activities. To lead thetransition “from savings to investment,” the Daiwa Securities
Group has set a goal for all of its managers and employees
to be the most reliable partner in the formation of assets forcustomers, as it accelerates management initiatives centeredon its corporate principles.

Shigeharu Suzuki
Chairman of the Board
Daiwa Securities Group Inc.

3

CSR REPORT 2014

Editorial Policy

Intended ReadershipThis report is intended for the broad range of the Daiwa Securities
Group’s stakeholders defined by ISO 26000, including customers,
shareholders and investors, employees, business partners and local
communities.

We at the Daiwa Securities Group have commenced
publishing CSR report annually since 2002 for the following
two objectives: to disclose our CSR activities supporting theReporting Boundary

creation of a sustainable society and to evaluate current state

stakeholders proactively together with our Annual Report, withThis report generally discusses the principal companies of the Daiwa
Securities Group. It does not, however, include all data from theGroup’s principal companies on items reported. The information is
selected based on the respective companies’ size and type of business.
Each set of the data specifies the scope of coverage.

which we envisage our CSR report evolves to be integrated in

Period Covered by Report

the future.

Fiscal 2013 (April 1, 2013 to March 31, 2014)
The report, however, also includes some information on events andactivities carried out prior to the beginning of or after the end of fiscal
2013, or scheduled to take place during fiscal 2014.

of affairs and the challenges we face.
In CSR Report 2014, we intend to disclose information for our

Our CSR Report 2014 is only released on our website, as we
believe our Annual Report 2014 contains the essential parts

Date of Publicationof our ESG activities. It is produced referring the guidelines

October 2014
(The previous report was published in October 2013; the next report isplanned for October 2015.)of the global reporting initiative (GRI) and ISO 26000. As for
GRI Guidelines, we refer to its version 3.1, while taking into

Inquiries

consideration of adopting version 4 of the guidelines. We aim

Daiwa Securities Group Inc.
Corporate Communication Department, CSR Group
Tel: +81-3-5555-1111 (main)
E-mail: daiwacsr@daiwa.co.jp
Website: http://www.daiwa-grp.jp/english/csr/

to the report more accessible utilizing the concept of Color
Universal Design in selecting the colors of the document.

C o n t e n t s
To Our Stakeholders

1

Message from the CEO

2

Relationship with Customers

25

Message from the Chairman

3

Relationship with Shareholders and Other Investors

27

Editorial Policy

4

Relationship with Employees

28

Daiwa Securities Group Profile

5

Human Rights Initiative

31

Daiwa Securities Group Corporate Principles
and Key Issues

6

Relationship with Society

32

Verification of CSR Key Issues and Responses
to Changing Social Requirements

7

Social Report

Environmental ReportManagement Report

Environmental Initiatives

38

Third-party Opinion / Response to Third-party Opinion

40

Third-party Evaluations

41

Initiatives through Business Activities

8

CSR Management

13

Corporate Governance18

GRI/ISO 26000 Content Index

42

Compliance20

CSR Related Data

50

Risk Management

22

Glossary54

IT Strategy, Information Security, and Disclosure

24

Independent Assurance Report

55

Daiwa Securities Group4CSR REPORT 2014

Daiwa Securities Group Profile
Corporate Data

Description of the Daiwa Securities Group’s Businesses●Name

The Daiwa Securities Group is a financial services group and operates in suchfields as Retail, Global Markets, Global Investment Banking, Asset Management
and Proprietary Investment as its core businesses. Underpinned by the strong
unity of the group, we provide a broad range of services.

Daiwa Securities Group Inc.
●Head Office
GranTokyo North Tower
9-1, Marunouchi 1-chome, Chiyoda-ku,

1. Retail DivisionTokyo 100-6751, Japan

Through its domestic network of 135 branches,* contact centers and the Internet,
Daiwa Securities offers two retail services, Daiwa Consulting and Daiwa Direct,
which provide a wide range of financial products and services as well as support forcustomer asset management, mainly for individuals and unlisted companies.

●Tel+81-3-5555-1111 (main)●Established

2. Global Markets DivisionDecember 27, 1943 (Founded 1902)

It provides brokerage and trading services of securities and other financial products
mainly to institutional investors.

●President and CEO
Takashi Hibino

3. Global Investment Banking Division●CapitalThrough capital raising, it supports industrial corporations, financial institutions andothers in their business expansion and making and carrying out their financial andcapital strategies.

¥247.3 billion●Number of employees (consolidated)

4. Asset Management Division

13,317It creates and manages stock, bond, and private investment trusts, and provides
other investment management services for real estate investment trusts, pensions,and other funds.

●Number of consolidated subsidiaries
49●Number of equity-method affiliates

5. Investment Division
It invests in areas such as private equity, venture capital opportunities, business
regeneration, monetary receivables, and real estate using its own funds or throughthe formation of investment funds.

8●Shares issued and outstanding
1,749,378,772

6. Other(As of March 31, 2014)

The Group provides information via research reports, consulting, IT services, andother services to institutional investors, industrial corporations, financial institutions,and public organizations in Japan and overseas.
* As of June 30, 2014

Daiwa Securities Group Inc.
RetailWholesale
Global Markets

Global IB

Daiwa Securities Co. Ltd.

Daiwa Capital Markets Europe Limited

Asset Management

Investment

Daiwa AssetManagement Co.
Ltd.

Daiwa Corporate
Investment Co., Ltd.

Daiwa SB
Investments Ltd.

Daiwa Securities
SMBC Principal
Investments Co. Ltd.

Daiwa Real Estate
Asset Management
Co. Ltd.

Daiwa PI Partners
Co. Ltd.

Daiwa Capital Markets Asia Holding B.V.

Daiwa Capital Markets America Holdings Inc.

Daiwa Securities Group5CSR REPORT 2014

Other
Daiwa Next Bank,Ltd.
Daiwa Institute of Research
Holdings Ltd.
Daiwa Instituteof Research Ltd.
Daiwa Institute of ResearchBusiness Innovation Ltd.
Daiwa Securities BusinessCenter Co. Ltd.
Daiwa Property Co.,Ltd.

Daiwa Securities Group Corporate Principles and Key Issues
We at the Daiwa Securities Group believe that our business activities like providing financial advices and investmentbanking play important functions in development of society and economy, and regard them as our mission.
To continue to fulfill them whilst expanding our business, we trust that it is essential maintaining close ties with our
stakeholders.

Corporate Principles of the Daiwa Securities GroupKey Issues for the Daiwa Securities GroupTo achieve its corporate principles and realize a sustainable society,
the Group has addressed the following two key issues based on the
inputs we have received from our stakeholders.

Building trust
The trust and approval of customers form the very foundationof the Daiwa Securities Group. The Group will always place theneeds of customers first, and strive to develop the advanced,
specialized skills to offer them the most attractive products
and services of any securities group.

1. Leveraging financial capabilities tocontribute to a sustainable society

Placing importance on personnel
The source of the Group’s competitiveness lies in thecapabilities of its employees. The Group will promote thecreativity of employees by offering them a challenging andself-directed working environment that encourages theirabilities and appropriately rewards their contributions.

2. Developing sound financial and capital
markets for the next generation

Contributing to society
The Daiwa Securities Group will seek to benefit theeconomy and society through the development of soundfinancial markets. In addition to scrupulously observing
both regulations and internal policies, the Group will strive
to maintain a high sense of morality and duty, endeavoring
to continue contributing to the sustainable growth of thesocieties in which we operate.

We believe keeping each of our employees motivated and proud of
his/her work is essential for tackling these key issues.

Thus in addition to these two key issues, theGroup strives to create a rewarding workplacein which our employees can take pride.

Maintaining robust earnings results
The Group will always seek to develop sound business
operations and to increase corporate value for the benefit ofshareholders. By providing customers with attractive products
and services, the Daiwa Securities Group will seek to generatestrong profits and robust returns for shareholders.

To achieve its corporate principles, the Daiwa Securities
Group anchors its CSR activities in these goals.

Daiwa Securities Group Stakeholders

Customers●Investors
We are committed to improving customer
satisfaction by offering products andservices that meet the needs of retailinvestors, institutional investors, andpotential investors who are considering
investing in the future.

Shareholders
and others●Shareholders and Others*
To earn the confidence of ourshareholders, we aim to provide fullytransparent information disclosure,and meet their expectations bycontinually creating value.

Shareholders
andOthersye e s’ F a m

Business
Partners

Governmentis●Employees
We are endeavoring to create aworkplace where our employees,
who create added value for allother stakeholders, are fully
motivated and can find satisfactionin their work and lives. Our
employees’ families are also
important stakeholders.

p lo

Daiwa
Securities
Group
li e

Em

* Including investors holding bonds issued by
the Daiwa Securities Group

Issuers

Investors●Issuers
For private corporations, public institutions and otherentities seeking to raise funds through equity, debt, orother sources, we propose optimal solutions from awide range of financing options and provide full-scale
support, from planning to execution.

Employees
Local
Communities

Employees

Daiwa Securities Group

NPOs/
NGOs

●Business Partners
We maintain fair relationships withall our business partners and work
together to create a sustainable society.
●Government
We fulfill our tax obligations and offer
policy suggestions to create a better
society.

Society●NPO/NGO
We collaborate with NPOs and NGOs in suchfields as financial and economic education anddisaster relief. We reflect social values in ourmanagement through active dialogue.

●Local Communities
As a member of their local communities, our branches
and overseas offices support community-based initiatives.

6

CSR REPORT 2014

Verification of CSR Key Issues and Responses toChanging Social Requirements
The Daiwa Securities Group recognizes that we are responsible, as a member of society, to various
stakeholders when selecting CSR key issues. Meanwhile, social requirements for companies may changeover time, and we need to constantly verify whether significant changes are occurring and whether our
key issues accommodate these changes.
We believe social requirements for corporations from a wide range of stakeholders have become
increasingly diversified and thus more complex to reconcile and that it has become more important thanever to take a balanced approach considering these diverse demands.
In light of these circumstances, the Daiwa Securities Group has actively participated in external CSR
initiatives in Japan and overseas and promoted activities that use various codes in order to identify
properly and respond to corporate CSR trends. The following are the ones that we place a special
emphasis on among such codes:

Important external initiatives for the Daiwa Securities Group●The United Nations Global Compact (the Daiwa Securities Group signed the Compact in 2010)

Human
RightsPrinciple 1: Businesses should support and respect the protection ofinternationally proclaimed human rights; andPrinciple 2: make sure that they are not complicit in human rights abuses.

LabourPrinciple 3: Businesses should uphold the freedom of association and theeffective recognition of the right to collective bargaining;
Principle 4: the elimination of all forms of forced and compulsory labour;
Principle 5: the effective abolition of child labour; andPrinciple 6: the elimination of discrimination in respect of employment
and occupation.

Environment

Principle 7: Businesses should support a precautionary approach toenvironmental challenges;
Principle 8: undertake initiatives to promote greater environmental
responsibility; andPrinciple 9: encourage the development and diffusion of environmentallyfriendly technologies.

Anti-Corruption

Principle 10: Businesses should work against corruption in all its forms,
including extortion and bribery.

● ISO 26000● The Charter of Corporate Behavior of the Nippon Keidanren (Japan Business Federation)
Given their global importance, we also plan to implement the following principles and guidelines, giving
consideration to their relationship to the business activities of our Group.

● The United Nations Guiding Principles on Business and Human Rights● The OECD Guidelines for Multinational Enterprises

Communication with Daiwa Securities Group stakeholders
Moreover, we have adopted the following basic policy, considering that communication with stakeholders
plays an important role in identifying social demands, which change over time.

● The Daiwa Securities Group will strive to maintain two-way communication witha broad range of stakeholders based on ISO 26000 and the Charter of Corporate
Behavior of the Nippon Keidanren.
● The Group will strive to deepen communication with stakeholders already known
to us, including customers, shareholders and other investors, business partners,
employees and local communities.
● The Group will strive to communicate actively with third-parties in order to identify
other stakeholders.

Daiwa Securities Group7

CSR REPORT 2014

Management
ReportInitiatives through Business Activities
Approach and Basic Stance
The Daiwa Securities Group’s mission is to contribute to the development of society and the economy through business operations, including
wealth management for investors and support for the financial strategies and other aspects of corporations and public institutions.
Deepening the bond of trust we share with our stakeholders is essential to the perpetual accomplishment of our mission andachievement of growth.

and Social Responsibilities of● Rolethe Financial Services

On the basis of this belief, the Daiwa Securities Group has joined
the Principles for Responsible Investment (PRI) and the Carbon
Disclosure Project (CDP) to fulfill our role as a member of theinternational community.
In January 2010, the Daiwa Securities Group became the firstJapanese financial services group whose staple is securities businessto be a signatory of the United Nations Global Compact (GC), a
platform to help companies that have committed to sustainable andresponsible business practices shape their policies. Further, in linewith the United Nations Millennium Development Goals (MDGs),
the Group is endeavoring to formulate and market products andservices that help resolve social issues.

The securities business, the core business of the Daiwa Securities
Group, plays a key role in society, by building a bridge between theneeds of investors to manage assets and those of private and public
sectors to raise funds.
On the fund-raising side through issuing equities, bonds, andother securities products, the Group provides advice and assistanceto companies in their efforts to raise money for equipment
investment or R&D, as well as for national governments, local
governments, international institutions, and public corporations
seeking to raise funds for public works projects.
On the asset management side, the Group provides appropriate
investment information and advice, as well as a comprehensive anddiverse lineup of financial products and services to meet the various
needs of individuals, companies, institutional investors, and pension
funds. In these ways, the securities business facilitates the smooth
flow of money by matching demand and supply through financial
and capital markets. The Group fulfills an important role andresponsibility in society by contributing to sustainable development
through the channeling of funds into businesses that solve social
issues and create new technologies, for example.
On investing in corporate shares, the Daiwa Securities Group
promotes methods of investing that take into account a company’ssocial responsibility (CSR), such as its environmental and social
initiatives, in addition to financial information. In recent years,
the Group has concentrated on the composition and sale offinancial products based on an investment strategy called “Impact
Investment,” where investments are directly made in organizations
that use the funds to solve social problems.
From its position as a financial institution, the Daiwa Securities
Group is endeavoring to contribute to society by developing andmarketing these products. In addition to pursuing economic gain,
the Group is dedicated to resolving a host of social issues.

Principles for Financial Action toward a Sustainable
Society (Principles for Financial Action for the
21st Century)
The Principles for Financial Action for the 21st Century were drawn
up by a committee comprising representatives from a range ofJapanese financial institutions. They were tasked with drafting a
Japanese version of Principles for Environmental Financial Action.
This was based on a recommendation issued by Japanese Ministryof Environment’s Central Environment Council with the objectiveof promoting environmental finance. Each signatory institution is
expected to endeavor reflecting ESG (environment, society andgovernance) issues and concerns to its own business practices. The
Group was instrumental in the establishment of the principles fromthe drafting stage to the final framework. Both Daiwa Securities
Group Inc. and Daiwa Asset Management became signatories in
November 2011.

● Promotion of Impact Investment
Impact Investment bonds
Compared to typical forms of SRI, Impact Investment focuses moreon investments that have direct impacts on society, addressing
environmental destruction on a global scale, poverty in developing
countries, and other issues. It is a method that not only pursues
economic benefits, but is also a way to allocate assets solely toactivities targeted at resolving social issues, such as poverty andclimate change.
As a financial institution, we have supported the alleviationof problems in society by underwriting various types of Impact
Investment bonds.
In FY2013, Daiwa Securities sold Impact Investment bonds worth¥115.2 billion in issues for nine transactions. Cumulative offerings infor Financial Institutions toward● Mission
Solving the Global Social Issues
The business sector’s role in endeavoring to create a sustainable
society has become more important than ever. For financial
institutions, materialization of such a society through finance, theircore capability, is a social mission. At the Daiwa Securities Group,
we believe that our role is not only to maintain and develop anfair and dynamic financial market, but also to incorporate a social
perspective in finance and to facilitate the flow of money to build
sustainable society.

Daiwa Securities Group8CSR REPORT 2014

Japan totaled ¥957.8 billion as of March 31, 2014, of which Daiwa
Securities has placed ¥565.4 billion in Impact Investment bonds, fora share of 59% (Source: Daiwa Securities).

In FY2013, we held seminars jointly with JICA at multiple branch
offices coinciding with the issuance of new JICA Bonds, giving
presentations about the current status of Impact Investment bonds
and JICA’s activities.

Lead manager for JICA Bonds sold to individual
investors for three consecutive years / Joint
seminarsFirst-ever sale of IFC Banking on Women Bonds
In November 2013, we underwrote and placed to retail investors
the Banking on Women Bonds, issued by the International FinanceCorporation (IFC). Proceeds of the bonds are used by the IFC to provide
financing for female entrepreneurs in emerging countries. These bonds
were the first of their kind in Japan.
In June 2013, before the Banking on Women Bonds were issued,
the IFC, Daiwa Securities Co. Ltd. and Japan Sustainable Investment
Forum (JSIF) jointly sponsored a seminar about supporting theempowerment of women in Africa and impact investment. At theseminar, panel discussions and lectures introduced examples of BOP
businesses in Africa and businesses managed by women, both ofwhich are relatively unknown in Japan.

Japan International Cooperation Agency (JICA) Bonds for individual
investors are Impact Investment bonds available from only a
few issuers in Japan. They mainly provide retail investors with
an opportunity to invest in international cooperative activities
undertaken by JICA.
Since December 2011, JICA has issued bonds for individual
investors every year, and did so again in December 2013. Daiwa
Securities has been one of the lead managers for JICA Bonds forthree years straight, ever since the initial issuance, helping promoteawareness of and the sale of the bonds.

Daiwa Securities Group’s History of SRI Funds and Impact Investment Bonds
Market share of SRI funds
Daiwa Securities
cumulative sales¥55.4 billion*1

Independent
Assurance●Daiwa New SmartGrid Fund
●Daiwa Nippon Support Fund Vol. 3●Daiwa Microfinance Fund

18%
●Daiwa Energy Technology Fund(limited open-type fund)●Russell Global Environment
Technology Fund

Total ¥301.7 billion*2●Daiwa SRI
Fund●DC Daiwa SRI
Fund● 2012● 2009●JICA Bonds●Ecology Bonds●Banking on Women Bonds●Agri Bonds (2 times)●Water Bond (KEXIM)●Microfinance Bonds●Vaccine Bonds●JICA Bonds●Microfinance Bonds●Green Bonds●Agri Bonds●Water Bonds● 2008●JICA Bonds●Ecology Bonds●Vaccine Bonds●Poverty Reduction Bonds for
Latin America and the Caribbean● 2007● 2004●World CO2L Bonds●Vaccine Bonds●CO2L Bonds*1 Source: Daiwa Securities*2 Source: Daiwa Fund Consulting Co. Ltd.
(As of the end of March 2014)●Green Bonds●Water Bonds (2 times)● 2013● 2010● 2006● 2001● 2014● 2011●GlobalEnvironment
Equity Fund
●GlobalEnvironment
Foreign Bond
Balance Fund●Six Asset Balance Fund
(distribution type)●Six Asset Balance Fund(growth type)●Daiwa Eco Fund●Global Eco GrowthFund Course A●Global Eco GrowthFund Course B●Daiwa/Blackrock Green New
Energy Fund
●Next-Generation Environmental
Business Fund●“Eco Business Japan Stocks Open”●Ecology Bonds (2 times)●Microfinance Bonds (IFC)●Education Bonds for Africa●Poverty Reduction Bonds for Latin
America and the Caribbean●Microfinance Bonds (EBRD)●Water Bonds●Vaccine Bonds●Green World Bank Bonds

Market share of Impact
Investment bonds
Daiwa Securities
cumulative sale¥565.4 billion*1

Independent
Assurance

59%●Microfinance Bonds (IFC)●Vaccine Bonds

Total ¥957.8 billion*1

Daiwa Securities Group9CSR REPORT 2014

Socially Responsible Investment (SRI) Funds

Independent
Assurance

Initiatives for ESG investment

SRI funds are managed by evaluating and selecting stocks andbonds for their issuers’ social and environmental efforts, businessethics, and other nonfinancial performance aspects, as well as
their level of sales and profit. These include eco-funds, for which
nonfinancial criteria used in evaluation are limited to environmental
performance or which invest exclusively in companies operating
environment-related businesses. Investing in such funds enables
investors to indirectly support countries and firms actively engaged
in environmental conservation efforts and CSR activities via thefinancial market.
Total net assets held in the Daiwa Securities Group’s SRI funds
stood at ¥55.4 billion at the end of March 2014 (Source: Daiwa
Securities).

■Daiwa Asset Management and ESG investment

Daiwa Asset Management has placed personnel in charge of ESG
within the Fund Management Division to promote ESG investment
in an organized manner as a signatory member of both PRI and thePrinciples for Financial Action for the 21st Century. In addition, in
engagement with investees through, inter alia, meetings with their
management and voting at their AGMs, we encourage them to beaware more of ESG issues and concerns and to adapt themselves
appropriately. Meanwhile, we have been providing training andseminars within the company in order to raise understanding andawareness of ESG investment among executives and employees.
Moreover, we have introduced appropriate topics regarding ESG
investment at the training sessions for companies marketing ourinvestment trusts.
As recent initiatives, coinciding with the introduction of JPXNikkei Index 400, a new stock index on January 6, 2014, Daiwa
Asset Management set up Daiwa JPX-Nikkei 400 Fund on January
6, Daiwa Index Select JPX-Nikkei 400 on January 31 and Daiwa ETF
JPX-Nikkei 400 on March 26. These new funds were launched to
track the new index. The selection criteria of the index constituents
include ROE levels, corporate governance and information
disclosure. Thus, through management of these new investment
trusts, we expect to be able to help improve the capital efficiencyof Japanese companies and the level of their corporate governancecumulating into sustainable improvement of corporate value andbolstering the stock market.

Daiwa Microfinance Fund:
Lending to microfinance institutions (MFIs)
The Daiwa Microfinance Fund was launched on March 1, 2011 inorder to support MFIs in developing countries financially by direct
lending and other measures. DWM Asset Management Inc., which
specializes in the microfinancing, provides portfolio managementadvisory services to the Fund. The Fund is lending to six MFIs as ofMarch 2014.

● As a Responsible Institutional Investor
Adoption of “Japan’s Stewardship Code”■Daiwa SB Investments and ESG
Daiwa SB Investments signed PRI in 2012. Whilst we have been
keen to ensure that we fulfill our “duty to maximize profit witha long-term perspective for the beneficiaries,” meaning that
we endeavor to improve our investment performance, we haveconcluded that utilizing the framework of PRI would contribute toour efforts to ameliorate our investment decisions. We set up the
ESG committee and rules to enhance our capacity to evaluate andanalyze ESG issues of companies.

In February 2014, Japan’s Financial Services Agency (FSA)
announced the “Principles for Responsible Institutional Investors,
also known as “Japan’s Stewardship Code.” The code was drawn
up to promote sustainable growth of businesses, in response
to “The Japan Revitalization Strategy,” which was approved by
Cabinet on June 14, 2013, through constructive dialogue between
businesses and various types of institutional investors whilst thelatters dully fulfilling their fiduciary duties. The stewardship for
institutional investors signifies careful management of assets
for the maximum benefit of clients and beneficiaries and taking
action to promote sustainable growth of companies invested in.
The Chief Investment Officer (CIO) of Daiwa Asset Management
participated in the process of drawing up the Code as a memberof the “Council of Experts Concerning the Japanese Version of
the Stewardship Code” established by the FSA, and the company
announced its adoption of the Code in May 2014.
Daiwa Securities and Daiwa SB Investments also declaredcompliance with the Code, striving to take initiatives to fulfill
their stewardship responsibilities, such as further engagement in
dialogue with investees.

Daiwa Asset Management and Cluster Munitions
Keeping up with the implementation of the Oslo Convention on
Cluster Munitions in August 2010, Daiwa Asset Management, as
an asset management company operating in a signatory country,
has introduced the principles outlined below when investing in orotherwise dealing with cluster munitions producers.
1. Do not include the securities of cluster munitions producers inactively managed funds. Promptly sell those already included.
2. In exercising voting rights associated with shares issued bycluster munitions producers, vote in favor of any shareholder
proposals to withdraw from, or scale down, cluster munitions
production.

Daiwa Securities Group10CSR REPORT 2014

investment fund manager with experience in real estate investment
in healthcare and nursing care facilities. The REIT’s initial size of
assets under management was approximately ¥9 billion, including
paid retirement housing, serviced residential facilities for the elderly,
hospitals and comprehensive outpatient facilities. The REIT launched
operations in March 2014 and is looking to be listed on the Tokyo
Stock Exchange.

for the creation● Supportof our future society
Support for Cultivating a Capital Market in
MyanmarDaiwa Institute of Research Ltd. (DIR), Tokyo Stock ExchangeGroup, Inc. (currently, the Japan Exchange Group), and the Central
Bank of Myanmar signed a memorandum of understanding
pertaining to cooperation toward establishing a securities exchange
and supporting the development of a capital market in Myanmar
in May 2012. A major component of the memorandum is theestablishment of a securities exchange in 2015. The bourse
is expected to provide companies in Myanmar fund-raising
opportunities while facilitating investors’ wealth creation. In theensuing period, DIR has put in place a variety of measures, suchas providing recommendations to government officials, holding
seminars in Myanmar, and accepting trainees.
On April 8, 2013, DIR and ACE Data Systems Ltd. (ACE), oneof a small number of leading IT companies in Myanmar, jointly
established DIR-ACE Technology Ltd. to provide IT services in
Myanmar. ACE offers services related to banking systems in
Myanmar. DIR has been building a cooperative relationship with
ACE since December 2010, primarily through the outsourcing ofsystems development in securities operations.
On May 31, 2013, DIR signed a Memorandum of Understanding(MOU) with the Central Bank of Myanmar regarding IT support,
and DIR has provided PCs and a cloud computing environment
to the central bank. DIR plans to provide an additional 1,000 PCs
or more, enough for almost every employee at the central bank.
Moreover, an agreement has been reached for deploying a stateof-the-art modular data center in Yangon City, Myanmar.
The Daiwa Securities Group will continue to harness its collective
strengths to help cultivate a capital market in Myanmar going
forward.

Initiatives for the “Data Health Plan”
Due to a rapidly aging population combined with a fallingbirthrate, Japan’s medical costs have been surging and insurance
premium revenues have been falling in recent years, leading toa serious deterioration in the finances of the country’s healthinsurance programs. Under such circumstances,“The Japan
Revitalization Strategy,” which was approved by Cabinet in June
2013, incorporated the goal of “extending the nation’s healthy
life expectancy.” The government states that “it will require all thehealth insurance associations followings: to analyze data such as
medical information on health insurance claims and medical checkups of their members, and, utilizing such analysis, to develop,
announce, implement and evaluate a project program called “DataHealth Plan” to maintain and improve their members’ welfare.
Meanwhile, Daiwa Institute of Research Business Innovation
provides data processing systems to more than 400 of Japan’sroughly 1,400 health insurance associations. It has built and started
offering information analyzing systems based on a databaseof medical information on approximately 7.5 million people
accumulated from the business.
Daiwa Institute of Research Business Innovation’s medical
information database plays a crucial role for the promotion of thisData Health Plan because data analysis is essential for the plan. We
will utilize the business base and medical information database it
has built by providing data processing systems to these associations,
thereby helping facilitate their making of Data Health Plans. We
will continue to carry out initiatives of social significance, such aspresenting the government with measures to improve welfare andto reduce medical expenses.

Fund Established to Support Unlisted Companies
in Disaster-Stricken Areas
Daiwa Corporate Investment Co., Ltd., along with the Organizationfor Small & Medium Enterprises and Regional Innovation, JAPAN,
The 77 Bank, Ltd., Bank of Iwate, Ltd., Toho Bank, Ltd., Aomori
Bank, Ltd., and other institutions financed the creation of the East
Japan Earthquake SME Reconstruction Support Fund. Targeting
unlisted private companies, the fund aims to expeditiously provide
risk finance mainly in the form of equity. By supplying finance fora variety of purposes, including restoration and reconstruction
following the earthquake disaster, new business development, theshift to a new industry or line of business, business reorganizationand succession, and business incubation, the goal is to actively
support companies in their efforts to secure renewed growth anddevelopment. Daiwa Corporate Investment established a new
branch office in Tohoku to administer the Fund, and supports

Signing ceremony held on May 31, 2013

Establishment of Nippon Healthcare Investment
Corporation, Japan’s First Investment Corporation(REIT) Specializing in Healthcare Facilities
In January 2014, in response to the progressive aging of society,Daiwa Real Estate Asset Management Co. Ltd. established Nippon
Healthcare Investment Corporation as the first REIT in Japan
specializing in healthcare facilities. The advisor is AIP-Japan GK, an

Daiwa Securities Group11

CSR REPORT 2014

ESG IR events and ESG seminars

growth in the companies targeted by the Fund by leveraging the
Daiwa Securities Group’s far-reaching network and by working
closely with the Organization for Small & Medium Enterprises andRegional Innovation and regional financial institutions.
Investments have already been made for rebuilding companies
affected by the natural disaster in the seafood processing andshipbuilding industries, as well as for venture companies spun off
from universities in the fields of completely artificial lighting plant
nurseries and the development of new next-generation materials
for hard wiring. We convey to local governments and the Tohoku
branches of central government agencies the opinions and requests
of companies invested in by the Fund as well as investment
candidate companies. We focus on accelerating growth at venturecompanies and the rebuilding of companies affected by the natural
disaster by explaining to investees ways to utilize business matching
schemes and expert assistance systems provided by the national
government, as well as the policies of public institutions and theirvarious forms of assistance.

In response to growing awareness of ESG among issuers andinvestors, Daiwa Securities continued to present IR events focusing
the issues and have started to arrange ESG seminars in FY2013. We
arranged and sponsored three seminars during the year, targeting
both issuers and investors commencing with “Transformation of
Corporate Governance in Japan” in September.

Photovoltaic power generation projects
participation in Saitama Eco-Town project
Refer to “Environmental Initiatives” on page 39

Shipbuilding plant under repair work

Dock reopened after repair work

Daiwa Securities Group12CSR REPORT 2014

Management
Report

CSR Management
Approach and Basic Stance
The Daiwa Securities Group Management Vision is to become one of Asia’s leading financial services firms leveraging oursolid business platform in Japan. In order to achieve this vision, we will continue to strengthen our ability to respond to
our CSR key issues by maintaining a high level of employee awareness concerning ESG issues and striving for vigorous
dialogue with stakeholders.

issues. For example, information on CSR is taught to Group’s newly
hired employees. The CSR group promotes and raises awarenessof CSR issues throughout branches and departments across Japanand major overseas sites and builds a network of cooperation. The
CSR group has also organized dialogues on various CSR issues withexperts of various fields and posted them on our CSR website as“CSR Dialogue”● CSR Promotion System
For materialization of a sustainable society and our vision, ourofficers and employees endeavor to implement our corporate
principles through their business operations.
We are promoting the PDCA (Plan, Do, Check and Act) cycle
where each department reviews its challenges and achievements
every year, recognizes issues of its own and then set targets for thefollowing year.
Specifically the CSR Group of the Corporate Communication
Department at Daiwa Securities Group Inc. under the Corporate
Communication Officer, an executive officer,* actively seeks
information and holds dialogues at external and internal meetings.
CSR issues and our progress are shared regularly with the
Executive officer at numerous meetings and are disseminated tothe members of the Group depending on the importance of the* Starting in April

CSR Dialogue
Since 2004, the Daiwa Securities Group has held dialogues
with experts in relevant fields on CSR issues associated withthe economy and finance as well as environment, society andgovernance (ESG) information. We have had 49 dialogues thus far
with four conducted in fiscal 2013 on current issues.
Web

CSR Dialogue

CSR Promotion System

Daiwa Securities Group Inc.
Foundations
Daiwa Securities HealthFoundation

DialoguePresident and CEO

Stakeholders

Executive officers

Customers
Shareholders

Daiwa Securities Foundation
Daiwa Anglo-JapaneseFoundation (UK)

Direction and order

Daiwa Myanmar-JapanFoundation (Myanmar)

Group companies

Reporting

CSR Group, Corporate
Communication Department

Dialogue

Communication of
information anddevelopment ofawareness

Consulting andreporting

Departments within
Daiwa Securities Group Inc.

Daiwa Securities Group13

CSR REPORT 2014

Dialogue

Business partners
Government
NPOs / NGOs
Local communities
Employees

For example, as a member of the responsible institutional investor
community, the Group actively participated in various initiatives
like the discussions upon introducing Japan's version of the UK
Stewardship Code, the Principles for Financial Action for the 21stCentury in Japan and Principles for Responsible Investment (PRI).
Thus, we have established an appropriate promotion systemthat enables us to provide investors with better quality financial
products and services with consideration to environment, society
and governance.
Meanwhile, in order to ensure that we do not have any
relationships with anti-social forces, we have established a set ofrules and a database among Group companies and eradicated antisocial forces from our supply chain.

● Value Chain Management
Approach, basic stance and promotion system
For the Daiwa Securities Group, securities such as stocks and bonds
are core financial products, thus companies and organizations
issuing these securities as well as investors investing in them are
our important customers. We believe that we are responsible forbuilding and maintaining a transparent and fair value chain which
also contributes to the development of a sustainable society; andthus have established the necessary systems. Asset management
and sales of investment products are also part of the Group’s core
operations. We have established a system that gives consideration
to environment, society and governance when making investments.

Value Chain Management
Dialogue under “Japan‘s Stewardship Code”*

Issuers

Public works,
etc.

Business firms

National/local
governments
Internationalorganizations
Public corporations

Issuance

Investors

Financial
Capital Markets

Equities
bonds

Investment
Equities
bonds

Institutional
investors

ReturnInvestment
trust
Proceeds

Securitized
assetsFunding needs

Securities company

Capitalexpenditure
Research anddevelopment
M&As, etc.

Corporate
Finance

Derivatives
securitized
products

14

Individual retailinvestors

Asset management needs* Refer to “As a responsible institutional investor“ on page 10

Daiwa Securities Group

Investment

CSR REPORT 2014

CSR Issues: Performance and Targets
Self-evaluation of fiscal 2013 results:◎ : success (significant)○ : success (moderate)

Degree of achievement of the mid-term goal and realization of the ideal:△ : little success × : not attempted or failed

Key Issue 1 Leveraging Financial Capabilities to Contribute to a Sustainable Society
Targets for fiscal 2013

Results for Fiscal 2013

Selfevaluation

Targets for Fiscal 2014

Promote of SRI and Impact
Investments= Sold ¥115.2 billion of Impact Investment bonds (nine transactions)◎

Promote of SRI and Impact Investments

Provide of expanded CSR and SRI
information= Hosted a seminar on the Banking on Woman bonds issued by the International
Finance Corporation (IFC)= Disseminated ESG reports (Daiwa Institute of Research)= Held ESG IR meetings○

Implement of CSR initiatives throughbusiness across the Group

Provide assistance forreconstruction from the Great East
Japan Earthquake= Continued offering grants through the Daiwa Securities Phoenix Japan program= Continued providing funds through Great East Japan Earthquake Small and Mid-Sized
Enterprise Reconstruction Support Fund
= Hosted a seminar reporting on reconstruction support for areas devastated by the2004 Indian Ocean Earthquake and Tsunami and 2011 Great East Japan Earthquake.

◎Continue of reconstruction support for
the Great East Japan Earthquake

Key Issue 2 Developing Sound Financial and Capital Markets for the Next Generation
Targets for fiscal 2013

Results for Fiscal 2013

Selfevaluation

Contribute to support improving
economic and financial education= University lectures (including at Keio Business School)= Welcomed students and teachers from junior and senior high schools for corporate
study (eleven groups)= Decided to set up a booth at Finance Park in Iwaki City and Sendai City○

Contribute to support improving
economic and financial education

Hold seminars and forums (at least
three) for customers and generalpublic= Offered Finance Classroom for Beginners (with sign language and closed captioning)◎

Host forums and seminars on moredefined subjects

Results for Fiscal 2013

Selfevaluation

Targets for Fiscal 2014

= Presented four “Understanding CSR through Dialogues” discussions○

Seek to review the boundaries of
stakeholders by grasping wide range ofsocial issues through dialogues= Group companies cooperated in CSR initiatives through business○

Build stronger internal bonds between
the Group's related departments

Selfevaluation

Targets for Fiscal 2014○

Strengthen crisis management systemfor disasters

Targets for Fiscal 2014

CSR Management
Targets for fiscal 2013
Hold dialogues with specialists ofvarious fields

Strengthen coordination between
related departments and sections
within the Group

Risk Management
Targets for fiscal 2013
Strengthen crisis management indisasters

Results for Fiscal 2013
= Conducted business continuity exercise in cooperation with Group companies= Continued to conduct post-disaster safety confirmation exercises and reinforced
Group awareness of crisis management and readiness

Daiwa Securities Group15CSR REPORT 2014

ComplianceTargets for fiscal 2013

Provide and reinforce ofcorporation-wide internal controls;
building awareness of highstandards of professional ethics andcomplianceFurther increase in sales service
quality; continuing implementationof "business from the customer's
perspective"

Establish of robust information
security policy and systems to
exclude anti-social forces

Selfevaluation

Results for Fiscal 2013
= Implemented internal control systems in step with expansion of the business= Strengthened self-monitoring of ethics at headquarter departments and sections= Strengthened internal controls by improving cooperation with Daiwa Next Bank andthe relevant departments in light of expanded bank agency operations= Substantially increased the frequency of on-site visits by compliance officers andstrengthened cooperation with line managers and internal control officers. Heldmonthly compliance meetings at several departments and sections, thereby providing
support to strengthen their self-monitoring and improving capabilities= Conducted appropriate marketing and provided adequate explanations according tocustomer characteristics= Strengthened the customer management system at the corporate sales division= Tightened policy for sales of private bonds and took initiatives toward eliminating
unnecessary product switching; as a result, the number of problematic transactions
fell and sales service quality improved. Moreover, reduced clerical work to be
performed by sales staff and thereby achieved an improvement in sales efficiency= Revised rules for older customers based on guidelines set by the Japan Securities
Dealers Association and reinforced awareness by conducting training for line groupheads at all sales branches= Strengthened the customer management system at the corporate sales division by
ensuring, especially for corporate clients classified as non-institutional investors,
that rules for selecting their representatives with power were followed and that
discussions were arranged with customers investing in high-risk products= Introduced and implemented policy for management of confidential corporate
information- Management of confidential corporate information: Continued to require approval
by superiors at relevant departments and sections and conducted the verificationof registration of confidential corporate information by compliance officers. No
problems have been found occurred thus far.
= Raised awareness of information security- Information security: Focused on ensuring that employees do not use theirpersonal cellphones for business purposes. We will continue our efforts todecrease such use.
= Strengthened the screening system by expanding a database of criminal syndicates- Measures against anti-social forces: Strengthened systems to exclude anti-social
forces by organizing a database and implementing a change in rules for checks athead office—Targets for Fiscal 2014◎

Reinforce corporation-wide internal
controls◎

Thoroughly emphasize on adoption ofsales from the customer’s perspective◎

Establish of sound information security
policy and systems to exclude antisocial forces——

Reinforce group companies efforts
against anti-social forces

Results for Fiscal 2013

Selfevaluation

Information Disclosure
Targets for fiscal 2013
Increase the provision of
information in the “Growth” phase

Improve website functionality

Implement effective IR activities
that suit each investor base

= Provided information on steady progress of the Group Medium-Term Management
Plan at earnings announcements and management strategy briefing sessions as wellas in annual reports and business reports. Explained our growth strategy to takethe lead in the flow of money from savings to investments whilst expanding ourcustomer base
= Continued to design annual reports in a way suitable for web browsing. As a result,the number of copies of annual reports sent to overseas investors fell 30% year-onyear.
= Increased opportunities to meet with investors, especially those who had never had
meetings with us before. The number of meetings with investors for fiscal 2013 rose
to approximately 300 from about 250 for fiscal 2012.
= Held two IR events and 32 meetings in North America, two IR events and 25
meetings in Europe and two IR events and 26 meetings in Asia. IR events in Asia
included our first visits to investors in South Korea and Malaysia as our efforts totarget sovereign wealth funds in the region.
= Started distributing audio files of presentations simultaneously interpreted in English
on Daiwa Securities Group Inc.’s website from the telephone conference held after
the first quarter earnings announcement in order to make our communications evenmore accessible for overseas investors= Held briefings for individual investors for the first time in five years at 10 sites.
Attracted a total of roughly 1,000 participants by tying up with investment seminars
and investor meetings of other companies in cooperation with our Sales Offices andthe Retail Marketing Strategy Dept.

Daiwa Securities Group16

CSR REPORT 2014◎

Targets for Fiscal 2014
Implement of strict information
management

◎

—

◎

Expand of briefings about the group for
individual investors
Examine new formats of IR events

Relationship with Customers
Results for Fiscal 2013

Selfevaluation= Continually organized seminars on national and international market conditions
at each sales branch on the fifth day of every month; in addition, held inheritancerelated seminars to meet growing demand seen in recent years, seminars on NISA,
which was introduced in January 2014, and a variety of other information seminars= Organized large-scale seminars to provide information, including “Daiwa New Year’s Lectures for2014” held at eight sites—Tokyo, Osaka, Nagoya, Kyoto, Kobe, Sapporo, Fukuoka and Yokohama= Continued to present day-to-day market reports, fund reports, and other informationon our websites in a timely manner◎

Targets for fiscal 2013

Strengthen post-sales service

Targets for Fiscal 2014

Active post-sale follow up

Relationship with Employees
Targets for fiscal 2013

Develop human resource
through strategic promotion andappointments

Pursue of a high standard ofprofessional competence to meet thetrust of our customers

Establish environment where all
employees can continue to work withhigh motivation

Results for Fiscal 2013
= Continued to improve internal training systems for younger employees- Introduced an Annex Learning system: expanded the tutoring system; expanded
training for managerial skills further= Expantion of training for managerial skills= Increased number of female employees at management levels (221 as of the end of
March 2014)= Increased the number of female employees seeking improved career paths (850 employeestransferred to career-track positions in the five years from fiscal 2009 to fiscal 2013)= Professional global talent training- 555 employees hold CFP (Certified Financial Planner)- 1,461 employees hold the CMA® (Chartered Member of the Securities Analysts
Association of Japan)- 929 employees sat for the TOEIC (Test of English for International Communication) heldinternally; 1,470 of our employees hold TOEIC scores of 730 or higher- Introduced a global trainee course and an expert course- Introduced five practical training courses that are designed to improve
employees’ expertise (including courses on inheritance and business succession,
securities analysis, and investment banking advisory)= Worked to change employee awareness through promotion of family-friendly
measures, including family visits to the workplace (4,476 families visited) andencouragement to leave the office before 7 p.m.
= Achieved a high standard of work-life balance- Distributed a questionnaire on support for balancing work and child care to all employees
Implemented measures to encourage employees to use our programs and takeannual leave in light of the results of the questionnaire- Set up a WLB (Work-Life Balance) advisory committee= Increased the number of employees who took advantage of our workplace
relocation program (136 people as of the end of March 2014)= Expanded our Senior Advisors program to encourage senior employees
Offered re-employment of Senior Advisors up to the age of 70

Selfevaluation

Targets for Fiscal 2014◎

Develop human resource throughstrategic promotion and appointments◎

Pursue of a high standard ofprofessional competence to meet thetrust of our customers◎

Establish environment where all
employees can continue to work withhigh motivation

Relationship with Society
Targets for fiscal 2013

Results for Fiscal 2013

Selfevaluation

Targets for Fiscal 2014

Build consciousness for volunteering
among employees and improved
communication of volunteering
opportunities= Posted opportunities for volunteering and other events on our internal website (56in total)○

Build consciousness for volunteering among
employees and improving communicationof volunteering information

Promote group-wide action programs= Introduced the “Table for Two Program” subsidizing school meals in developing
countries and won a “Gold Supporter” award from the organizer◎

Promote of cross-Group programs——

Bolster an environment that helps
employees take advantage ofopportunities for volunteering.

Results for Fiscal 2013

Selfevaluation—

Environmental Initiatives
Targets for fiscal 2013
CO2 emissions reduction by 1%
compared with the previous year
(domestic consolidated basis) as a partof the Group’s ongoing compliancewith the Law Concerning the
Rational Use of Energy, and Tokyo’s
environmental protection ordinances
Continuation of the "Cool Biz" programas part of energy saving initiatives

Targets for Fiscal 2014
Expand of the introduction of eco-cars= Achieved the goal of reducing CO2 emissions by 1% from the previous year
Continued to take energy saving initiatives including the implementation of the“Cool Biz” program= Carried out energy savings measures through on and off-peak periods

◎

—

—

—

—

—

—

Daiwa Securities Group17

CSR REPORT 2014

Initiatives for the reduction of electricity
consumption (reducing consumption
per unit area in fiscal 2020 by at least
10% from the level of fiscal 2009)
Improve the accumulation ofenvironment-related data and honing
skills to analyze those data
Purchase products certified under the
Top Runner standards

Management Report
Corporate GovernanceCorporate GovernanceApproach and Basic Stance
The Daiwa Securities Group clearly separates the oversight and executive functions of management to create a highly
transparent and objective corporate governance system.
The Group is pursuing a management structure that improves the efficiency of head office operations at the Daiwa
Securities Group, our holding company, and maximizes synergies between Group companies. For this end, the holding
company‘s employees responsible for head office functions also perform roles for securities subsidiaries.

of the Corporate Governance● Features
SystemThe Nomination Committee met three times in FY2013 todiscuss the composition of the Board of Directors and its effect on
corporate governance, the basic policy for nominating candidates
for directorships, and the selection of these candidates. The
Nomination Committee selects candidates for directorships in lightof the Group’s selection standards for the appointment of directors.
These standards include criteria that ensure the independence ofoutside directors.
The Audit Committee met 12 times in FY2013. The committee
evaluated the activities of directors and corporate executive officers,
audited documentation including financial statements and business
reports, and prepared an audit report for the period under review.
The Compensation Committee met five times in FY2013 todiscuss the compensation policy and determine the compensationof each director, and also studied a Group-wide incentive plan
aimed at improving consolidated earnings results.
The Board of Directors met 10 times in FY2013, and outside
directors had a 100% record of attendance.

In 1999, the Daiwa Securities Group became the first listed
Japanese company to adopt a holding company structure. Since
then, we have been pursuing a highly transparent and objective
corporate governance system that maximizes synergies between
Group companies while valuing the independence and uniqueexpertise of each Group member.
In June 2004, Daiwa Securities Group Inc. made the transition toa “Committee System” of corporate governance and accelerated
the decision-making process by transferring a substantial portionof authority from the Board of Directors to corporate executive
officers. In addition, we strengthened the management oversightby increasing the number of outside directors and establishing theNominating Committee, Audit Committee, and Compensation
Committee.
The representative directors of major Group companies also serveas corporate executive officers of the holding company, thereby
allowing them to efficiently implement individual business strategies
based on Group strategies.
Corporate Governance System at Daiwa Securities Group
Shareholders’ Meeting

Nomination Committee,
6 members(including 4 outside directors)

Audit Committee, 4 members(including 3 outside directors)

Compensation Committee,
5 members(including 3 outside directors)

Basic management policy

Nominates directors forselection, or recommends
dismissal

Audits the activities of directors
and corporate executive
officers, audits business reports
and financial statements, andprepares audit reports

Sets policy for compensationof directors and corporate
executive officers, anddetermines compensation
amount for each

Executive Management
Committee, 13 members

Group Risk Management
Committee

Disclosure Committee

Group IT Strategy Committee

Overseas Management
Committee

Group-wide business strategy
and management issues,
important financial matters

Gathers information on thesystem and current situationof risk management, and sets
policy and strategy regarding
risk management

Determines scope of
consolidated financial reports,
scope of evaluation of internal
control reports and disclosure ofimportant information

Prepares original IT investment
budget, evaluates and monitors
IT investments

Makes decisions on issues
related to the managementof overseas offices and otheroperations abroad

Board of Directors,
13 members (including
5 outside directors)

Group Internal Audit
Committee

Representative Executive
OfficerMakes decisions on issues
relating to the internal audit
system and the verification ofinternal control activities

Daiwa Securities Group(As of June 30, 2014)18

CSR REPORT 2014

Compensation More
● Executive
Closely Linked to PerformanceControl System and● InternalInternal Audit

Compensation for directors and corporate executive officers isdetermined by the Compensation Committee. It generally has
three components: basic compensation, performance-based
compensation, and stock-price-linked compensation.
Comprehensive criteria used in calculating performance-based
compensation include consolidated ordinary income and ROE, as
well as other factors including which of the management goals
outlined in the Medium-Term Management Plan have been met.

In recognition that management is responsible for maintaining aneffective internal control system to ensure the sound and proper
execution of business, the Group, under the main initiative of Daiwa
Securities Group Inc., has established a system for managing theGroup’s major business risks. The Group also maintains this internal
control system for ensuring “business effectiveness and efficiency,”“reliable financial reporting,” “compliance with laws related tobusiness activities,” and “asset preservation.”
The Internal Audit Department verifies the internal control
system. The department, established independently from all otherdepartments and reporting to a dedicated corporate executive
officer, ensures internal audits to act as an important function ofraising Group value through the creation of sound and efficientinternal controls. The department’s internal auditing plans andthe results of internal audits are reported to and approved by theGroup Internal Audit Committee, which is directly under the controlof the CEO of Daiwa Securities Group Inc. Plans and results are also
reported to the Audit Committee.
Daiwa Securities Group Inc. seeks to raise corporate value byeffectively conducting internal audits, and implements risk-based
internal audits primarily through its Internal Audit Department.
The Internal Audit Department pays special attention to certain
aspects of Group internal auditing activities, including the internal
control systems at Daiwa Securities Co. Ltd. and the Group’s
overseas business offices as a global financial services group, theinternal control systems at Daiwa Next Bank, Ltd. as a bank, thestatus of Group-related businesses, and the status of controls overGroup companies at the parent company.
The Internal Audit Department collaborates with the internal
auditing section of each Group company within the context ofholding periodic meetings, monitoring activities, and performing
audits. It also formulates policies that apply to all Group internal
audits, plans risk-based audits, and monitors these activities.
The Internal Audit Department maintains communications with
the Audit Committee and External Auditor, making any necessary
adjustments to ensure that audits are performed efficiently.
The Audit Committee on occasionally asks the Internal Audit
Department to conduct an audit.

● Supervisory Function
The Board of Directors consists of 13*1 directors, including fiveoutside directors*2 and two female directors. The Board of Directors
determines key management policy and oversees executive
duties. In order to perform this supervisory role from multiple
viewpoints in accordance with the demands of society, the policy
for selecting new board members states that candidates musthave a strong sense of ethics and demonstrate initiative andleadership. Additionally, outside directors are experts in such fields
as management and accounting. In addition, the supervisory
function of Daiwa Securities Group Inc. is reinforced by the Audit
Committee and the Office of the Audit Committee. The Audit
Committee, which consists of a majority of outside directors,*2
plays a pivotal role in the supervision of executive duties. The Audit
Committee is assisted by the Office of the Audit Committee, which
is a department independent of execution of business.
*1 As of June 30, 2014
*2 Outside directors as defined by Article 2-15 of Japan’s Companies Act

Conflict-of-Interest● Preventing
Transactions between Group Companies
Conflict-of-interest transactions between Group companies canoccur in situations such as intra-Group trading. The Daiwa Securities
Group applies rules regarding conflicts of interest stipulated by
Japan’s Companies Act to Executive Committees as well as Board
meetings. Conflicts of interest within the Group are prevented
through a rule prohibiting an executive officer from voting when heor she is also the director of an interested Group company.
Internal Audit System of the Daiwa Securities Group
Daiwa Securities Group Inc.

CEOGroup Internal Audit Committee(chaired by the CEO)

Executive officer in charge of internal audit(Global Internal Audit Line Head)

Deliberation, decision making and reporting

Board of Directors
Group Internal
Audit Committee

Daiwa Securities Internal Audit Department

Accounting
auditor

Delegation of audit
work and reporting

Overseeing and reporting

Internal Audit Department
Internal audit staff member
works at the Internal
Audit Department of bothcompanies

Exchange of opinions

Communication andadjustment
Monitoring/collaboration/direct auditing

Direct auditing

Domestic Group companies without
an internal auditing section

Domestic Group companies withan internal auditing section

Monitoring/collaboration/direct auditing

Global Internal Audit Line Regional Heads(Asia and Oceania region, Europe and Middle East region, and Americas region)

Daiwa Securities Group19

Overseas Group companies

CSR REPORT 2014

Management Report
Corporate GovernanceComplianceApproach and Basic Stance
The Daiwa Securities Group’s corporate principles identify “building trust,” “placing importance on personnel,”“contributing to society,” and “maintaining robust earnings results” as among the most important goals of our business
operations. We believe that compliance is essential to realize these corporate principles. The goal of the Group’s
compliance activities is not merely to “comply with laws and regulations,” but to earn the trust of customers, the market,
society, and shareholders.

Daiwa Securities Group’s● The
Approach to Compliance

Compliance Training

Improving compliance awareness

Daiwa Securities Group companies provide regular training andtesting to improve compliance awareness and ensure that all
employees embrace Daiwa’s Corporate Principles and that selfdiscipline is exercised under any circumstance.
Daiwa Securities holds numerous compliance training sessions,making full use of e-learning technologies.
Every year, we provide compliance training for all employees. We
also have a wide range of training emphasizing practical aspects,
including compliance education and awareness activities for newhires and newly appointed managers, group training programs, andtraining on the firewall regulation.

In order to make our executives and employees contribute tosustainable growth of the society with elevated ethical mindset,
we always take steps to educate and train them to uphold external
regulations, exercise self-discipline and appropriate conducts. These
compliance training programs commence as soon as employees join
the Group and continue through regularly scheduled training sessions
encompassing their careers, thus ensuring that every employee is awareof, and thoroughly understands, compliance related issues. As theGroup pursues new business ventures in areas where the regulatory
structure is still incomplete, employees are trained to approach allmatters with strong self-discipline and legal awareness, refer to existing
legal precedents whenever possible, and always adhere to acceptedsocial norms of proper behavior.

Countermeasures to Anti-social Forces
Initiatives the Group has taken to eliminate any and all relations
with corporate racketeers and other anti-social forces involve
collecting information on their increasingly sophisticated methods
by working closely with the police and other relevant organization,and legal experts, and by enhancing the Group’s various outward
procedures for scrupulously severing contact with such groups.
In addition, Group companies share relevant information andtake other unified steps to eliminate any and all relations with antisocial forces.

Measures for Maintaining Information Security
In FY2013, Group companies continued to implement training
and spread knowledge about insider trading as a part of efforts
to prevent insider trading. In order to fulfill its social responsibility
as an active participant in the financial and capital markets, aswell as gain the trust of customers, the Group has adopted a full
spectrum of information security policies at companies throughout
the Group to ensure that important personal information received
from customers and all other information resources are managed ina secure and appropriate manner.
The Security Group Minimum Standard is a basic policy for
information security Group-wide. Following this basic policy, Group
companies maintain related rules for information security. These
rules about information security are made available on the corporate
intranet to ensure all employees and executives adhere to the rules.
Using e-learning and other resources, training, education and an
aptitude test about information security are implemented on a periodic
basis.

● Basic Policy on Avoiding Any Involvement with Anti-social Forces
To ensure fairness and the sound development of the securities market andprotect our customers and employees, the Daiwa Securities Group has createda framework to eliminate the influence of organized anti-social forces, gangmembers, corporate extortionists, and other criminal elements and takes
systematic measures to avoid all ties with such elements.
1. The Daiwa Securities Group will not carry out any transactions whatsoever
with anti-social forces.
2. If it is determined that parties already having transactions with the Daiwa
Securities Group are anti-social forces, we will swiftly take appropriate
measures to terminate dealings with them.
3. The Daiwa Securities Group will provide no funds to anti-social forces.
4. The Daiwa Securities Group will accept no unfair demands from anti-social
forces. If it is determined that an unfair demand has been made by anti-social
forces, we will take legal action in the civil or criminal court against the party
making the demand.
5. The Daiwa Securities Group establishes close cooperative relationships withoutside parties such as the police force, the National Center for the Eliminationof Boryokudan (anti-social forces), legal experts, and others.

Refer to “IT Governance, Disclosure, and Information Security” on page 24

Anti-Corruption Initiatives
In line with the principles of the United Nations Global Compact,
the Daiwa Securities Group has established an anti-corruption
system that requires each of our Group companies in and outsideof Japan to implement rules appropriate for its operations andapplicable laws and regulations, while reinforcing awarenessthrough measures like e-learning. We will take initiatives to further
improve our anti-corruption system.

Daiwa Securities Group2020

CSR REPORT 2014

Structure and Achievement of Whistle-Blowing
System (Corporate Ethics Hotline)

Compliance Initiatives at Daiwa Securities Co. Ltd.
Daiwa Securities Co. Ltd. is taking measures in line with thecompliance program to ensure the effective operation of ourinternal control system and strict compliance of our sales activities
with laws and regulations.
In FY2013, Daiwa Securities Co. Ltd. upgraded and reinforced
company-wide internal management systems and foster betterawareness of professional ethics and compliance issues; to further
improve quality of its marketing and firmly establish customeroriented sales; and to build robust information management
systems and system for eradicating anti-social forces.
For FY2014, the Company decided to create the following
three compliance programs to reinforce the initiatives taken in
the previous year. It will strive to bolster its internal management
systems further.
1. Greater emphasis on sales from the customer’s perspective
2. Reinforcement of company-wide internal controls
3. Establishment of sound information security policy andsystems to exclude anti-social forces

Since January 2003, the Daiwa Securities Group has been operating
a Corporate Ethics Hotline, through which employees can reportproblems in the workplace directly to a corporate ethics officer of
Daiwa Securities Group Inc. or an outside lawyer. When the Hotline
is contacted, the corporate ethics officer, in cooperation with theinternal control officers at each Group company, carries out a factfinding investigation, while taking steps to protect the caller. The
Corporate Ethics Hotline was contacted 29 times in fiscal 2013, up
12 from the previous fiscal year.
The Group is working to make the Corporate Ethics Hotline wellknown to all employees, including staff at affiliated companies
and temporary workers, in order to ensure that anyone can use
it without hesitation. We are also making efforts to respond as
quickly as possible when calls are received. The Group is taking
steps to improve the Hotline so that it can work effectively as adeterrent to prevent problems before they occur, not just as ameasure to solve problems.

Daiwa Securities’ Compliance Framework

Customers

Person in charge of compliance(Head of Internal Administration Supervisors)
Sales branches

Compliance Section
Education and support

Compliance Control Department
Consultations and reports

Sales supervisor

Internal administration
supervisor

Verification, guidance and oversightCompliance Department
Sales branch employees

Inspection

Headquarters● Calling alert to prevent fraudulent sale of unlisted stocks

Daiwa Securities Co. Ltd. has been warning its customers of fraudulent solicitations by showing a reminder message “Watch out for solicitation of
investment in unlisted stocks or bonds by swindlers who call themselves Daiwa Securities” on a prominent part of the top page of its website andimproving the website’s contents. Similar measures have been implemented by Daiwa Securities Group Inc., Daiwa Asset Management, and Daiwa SB
Investments Ltd.

Daiwa Securities Group21

CSR REPORT 2014

Management Report
Corporate GovernanceRisk Management
Approach and Basic Stance
While the Daiwa Securities Group pursues profitability and growth, we also recognize the importance of identifying
and evaluating the various risks associated with our business operations accurately, and controlling them effectively. Our
objective is to improve corporate value steadily by maintaining a sound financial base and profit structure by properly
balancing risks and returns and by implementing effective risk control and management.

● Risk Management Policy● Type of Risks

Daiwa Securities Group Inc. has established “The Rules of Risk
Management” governing all activities by Group companies tomanage risk in order to ensure that they conform to the following
basic policies:
1. Management’s proactive involvement in risk management.
2. Implementing a risk management system commensurate with
the nature of such risks in the Group’s management.
3. Understanding comprehensive risk based on integrated risk
management and strengthening capital.
4. Clarifying the risk management process.
Limits are set for each type of risk so as to control risk within an
amount suitable for the management strength of the Group.

We face various risks in the course of our business activities andthus believe it is important to properly identify, evaluate, andmanage these risks in order to maintain robust financial andearnings structures. Daiwa Securities Group Inc. engages in risk
management to clearly identify risks based on the respective Group
company’s business characteristics and risk profile. The types ofrisks that have been deemed important to manage include market
risk, credit risk, liquidity risk, operational risk, and reputational risk.

Risk Management System

Daiwa Securities Group Inc.

Group companies
Daiwa Securities

Nomination Committee
Board of Directors

Audit Committee

Executive Management
Committee

Compensation Committee

Representative
Executive Officer

Group Internal Audit Committee

Policyformulation
andinstruction

Daiwa Asset Management

ReportingDaiwa Office Investment
Corporation

CRO *Discussion
andreportingComprehensive risk management structure
Risk Management Department
Liquidity
Information
riskCompliance
Operations Systems
security
risk
risk
risk
risk

Daiwa Corporate Investment
Daiwa PI Partners
Daiwa Securities SMBC
Principal Investments

Operational risk
Creditrisk

Daiwa Capital Markets
Hong Kong
Daiwa Capital Markets America

Group Risk Management Committee

Marketrisk

Daiwa Capital Markets Europe

Legal
risk

Human
resources
risk

Physicalassetsrisk

Daiwa Next Bank
Other Group companies* Chief Risk Officer

Daiwa Securities Group22

CSR REPORT 2014

● Risk Management System● Business Continuity Plan

The Board of Directors of Daiwa Securities Group Inc. has approved“The Rules of Risk Management.” This rule defines basic policies
related to risk management, the types of risks that are necessary
to be managed, and the executive and department for each majorrisk. Each subsidiary conducts risk management suitable for the risk
profile and size of each business in accordance with these basic
policies related to risk management.
Daiwa Securities Group Inc. monitors the system and situation of its
subsidiaries’ risk management. Also, the Group Risk Management
Committee, as a sub-committee of the Executive Management
Committee of Daiwa Securities Group Inc., receives reports aboutrisk exposures obtained via the aforementioned monitoring ofsubsidiaries and themes concerning their risk management systemand discusses and resolves hose issues. In addition, major Group
companies regularly hold risk management committee meetings inorder to strengthen their risk management.

To be prepared for emergencies, we have drawn up a business
continuity plan (BCP) prioritizing important operations* to berestored and continued in order to keep the financial markets
open and to protect customers’ economic activities. Envisioned
emergencies which might make our head office functions, branches
and data centers or other important facilities inoperative include:
earthquakes, fires, storms, floods, other extraordinary weather
conditions, terrorism, serious outbreaks of infectious diseases,
such as new strains of influenza, and serious disruptions of social
infrastructures and services due to such events.
In accordance with this plan, we will not only ensure the safetyof customers, our employees, and protection of our assets but will
strive to continue our vital operations in the financial markets where
our business serves public interests.
For example, we have begun operating Japan’s highest-levelbackup center, which enables us to easily switch to the alternate
system in case of an emergency at headquarters. We can thereby
continue vital operations through a substitute office location.
* Prioritized operations to be restored or continued:
1. Carrying out securities transactions traded in the markets andyet to be settled
2. Payment to our customers
3. New orders from customers to sell, cancel or withdraw for the
products below:○ Domestic listed shares, including closing long positions on
margin transactions○ MRF (money reserve funds), MMF (money market funds),
		 medium-term government bond funds○ Japanese government bonds for individual investors○ Cash deposits

Initiatives on impact of climate change
A significant rise in sea levels and the occurrence of extremely
large typhoons due to global warming have raised concerns overpotential large-scale flood damage. Some of the Daiwa Securities
Group’s important business bases are located in places not very
far from the seashore or rivers and may be affected should
floods occur. We are not just taking general precautions against
flood damage, but promoting such measures as setting up key
equipment and facilities at different sites and moving machineryto the upper stories of our office buildings, in order to mitigate theimpact of disasters on our business operations as much as possible.

Daiwa Securities Group23

CSR REPORT 2014

Management Report
Corporate Governance

IT Strategy, Information Security and Disclosure
Approach and Basic Stance
The Daiwa Securities Group aims to provide customers with high-value-added products and services quickly, precisely, andat a reasonable price. To this end, it uses IT strategically. As an active participant in the financial and capital markets, theGroup possesses information resources, including personal information. In order to protect these information resourcesfrom outside threats, the Group is working to maintain and improve the level of its information security.

● IT Strategy● Information Security

IT Governance System

Information Security

The Group has established the Group IT Strategy Committee as a
subcommittee of the Executive Management Committee. This
committee deliberates and makes decisions on such issues asbudgets for IT investment and the allocation of IT functions. IT
investment budgets are drawn up in accordance with management
strategies while weighing the importance of unifying IT strategies,
and funds are prioritized for investment budgets that contributeto the achievement of Group management targets and businessstrategies.
The Group IT Management Committee, which serves as a priorconsultation mechanism for the Group IT Strategy Committee, wasestablished as a venue for executive officers to discuss investment
themes common to all Group companies.

The Daiwa Securities Group is proactively strengthening
information security measures and pursuing measures to protect
information assets, including personal customer information, froma variety of threats while keeping pace with the latest technologicaltrends. Cyber-attacks and other external threats have become
more serious over the past few years, making it more important
than ever to detect and defend against these attacks. The Groupmakes every effort to ensure security and data accuracy by rapidly
deploying appropriate information security measures from botha technological and physical perspective. The Group aims to
improve the sophistication of its information asset management
by preventing problematic behavior before it occurs and quickly
detecting it when it does occur, through systematic monitoring andmanagement of information system user IDs and access privileges.

IT Strategy

Malfunction Countermeasures

With the aim of achieving sustainable growth, the Daiwa Securities
Group has been promoting the two IT strategies (basic IT policies)of “rebuilding business infrastructure” and “strengthening IT
governance” under its Medium-Term Management Plan, “Passion
for the Best” 2014, which commenced in FY2012.
The Group plans and implements medium- and long-term IT
strategies on a global basis based on its business strategy. The
Group provides its customers with reliable services by developingrock-solid systems in a timely manner in order to support
marketing staff on all fronts, from both quantitative and qualitative
standpoints.
In FY2013, the Group has started offering services for the Nippon
Individual Savings Accounts (NISA) with a broad lineup of products
launched at the same time NISA started. Daiwa Securities focusedon improving customer service and increasing the efficiency ofmarketing activities by reinforcing associated functions at marketingbranches and contact centers.
In FY2014, while responding to the global trend towardtighter financial regulations, the Group is working to improve
efficiency and quality in NISA offerings and overall marketing,and concentrating resources in fields that enhance customer
convenience. In this way, the Group is creating a platform fromwhich the Group can play a leadership role in the shift “fromsavings to investment” in Japan.

Daiwa Securities GroupThe Daiwa Securities Group appropriately monitors information
systems in terms of their operational status, capacity, andmalfunctions. Data about malfunctions is shared among Group
companies to be used as references in the creation of measures toprevent reccurrences and to prevent new problems from arising.
In order to shorten recovery times, the Group creates procedures
and automate processes for recovering from system malfunctions,by analyzing patterns in previous malfunctions.

● Disclosure System
The Daiwa Securities Group has formulated the Disclosure
Policy, which outlines the Group’s basic approach to information
disclosure and strives to provide information that is fair, prompt,
and appropriate.
Web

24

Daiwa Securities Group Disclosure Policy

CSR REPORT 2014

Social Report

Relationship with Customers
Approach and Basic Stance
The Daiwa Securities Group understands that customer trust is the foundation of our business, and our focus is always on
finding ways to deliver genuine customer satisfaction. We have adopted the idea of “hospitality” to enhance ourexisting concept of customer service. We aim to have the most satisfied customers in the financial services industry.

Deeper, Stronger Trust with
● Building
Customers● Follow Up Services for Impact Investment Products
Daiwa Securities provides customers who purchase Vaccine Bonds
with activity reports released by the issuer, IFFIm. We believe that it isimportant to provide information on how customers are contributing
to society by providing information on how the money invested in
Impact Investment products is used to tackle social issues.

Appropriate Explanations for Customers
We aim to build customer satisfaction through quality services,
built on understanding customer needs quickly and proposing thebest solutions for each customer. Providing faithful and appropriate
explanations is paramount for us.
Japan’s Financial Instruments and Exchange Law prohibits“solicitation that is improper in light of a customer’s knowledge,
experience, financial situation and objectives.” Daiwa Securities’
approach is rooted in this law, but as a part of our hospitalitybased service, we work to deliver explanations that go beyond legal
requirements when explaining the financial products we offer.
When selling Impact Investment products aimed at addressing
social issues, including Vaccine Bonds and Water Bonds, Daiwa
Securities explains to our customers how their investments
contribute to society, deepening their understanding of these
Impact Investments.

● Daiwa’s Point Program
Daiwa’s Point Program awards customers with points based on theirtransactions. These points can be exchanged for products or used
to make a variety of charitable donations using a conversion rate ofone point for 1 yen. As of April 2014, customers were offered an
opportunity to make donations to UNICEF, Medecins Sans Frontieres
Japan Association, WWF Japan, World Food Programme (WFP), Japan
Platform and New Japan Philharmonic under the program, wherecontributions are used to support the activities of these organizations.

Improving In-Branch Customer Service Quality
Our employees interacting with a great variety of customers need
not only specialized knowledge of the markets and financial
products, but polished service skills with an emphasis on customer
attentiveness as well.
At Daiwa Securities, our goal is to provide quality customer
services with a spirit of hospitality. In addition to group training,
we require regular check-up tests on an ongoing basis using its
internal e-learning system. Staff from our head office perform onsite checks to provide guidance to drive greater improvements inquality.
Daiwa Securities has conducted customer satisfaction surveys via
mail on an ad hoc basis. In addition, we continue to ask customers
visiting sales branches to answer surveys to further improve ourservice quality, solve the issues raised by customers and enhancecustomer convenience and comfort. In June 2014, we alsoannounced our commitment to provide enhanced services andexplanations to customers and since then, have stepped up ourefforts to improve hospitality.

Active Post-Sale Follow Up
Completing the sale of a product is only the beginning of asecurities company’s relationship with the customer. Follow up is a
key element in building the relationship of trust with the customer.
This is especially true when the value of a product declines after
purchase and customers feel dissatisfied and apprehensive. Daiwa
Securities works to reinforce trust in its customer relations and to
alleviate customer apprehension through appropriate explanations
and proposals.
● Informing Customers through Seminars and through Our Website
Daiwa Securities holds investor seminars on the 5th of every month at each sales
branch and continues providing information on Japanese and overseas markets. We
also hold a variety of seminars to offer information, including inheritance-related
seminars to meet the growing demand seen in recent years and seminars on NISA,
which was introduced in January 2014. Across all branches, over 97,000 people
attended more than 7,700 seminars held in 2013.
We also arrange large-scale seminar events, in addition to those held at each sales
branch. In August 2013, We held seminars entitled “The Current State and Outlookof the U.S. Economy” in Tokyo, Yokohama, Osaka, Nagoya and Kobe, attracting
over 1,300 people. We also held “Daiwa New Year’s Lectures for 2014” in January
and February 2014 in Tokyo, Osaka, Nagoya, Kyoto, Kobe, Sapporo, Fukuoka andYokohama, attracting over 4,500 people and receiving positive responses from thoseparticipants.

Accessible Services for Diverse Customers
When Daiwa Securities renovates existing sales branches or plans
new branches, we work to ensure that our branches are accessible
to a wide range of customers, including measures such as reducing
steps of the floor and installing bigger counters.
The company also provides necessary explanations throughwritten communication and introduces its Internet banking services
to customers with hearing difficulties.

The Information Box for users of the online
trading section of Daiwa‘s website presents
videos on portfolio management as wellas trends and forecasts for trust funds andexchange rates.

Daiwa Securities Group25

CSR REPORT 2014

Strengthening Contact Center Functions

center operations to meet the demand for high-quality service, we
provide training and regular level checks for all Telephone Service
Representatives (TSR).
The Contact Center uses questions and other input from
customers to analyze data and identify the causes of any issues
raised. The Contact Center provides feedback and information
to our head office and sales branches as part of our work on
improved services and customer interaction and increased customer
satisfaction.

On April 1, 2014, Daiwa Securities’ Call Center was renamed theContact Center. The new Contact Center has taken on morefunctions, taking all calls made to sales branches. In July, we also
expanded the scale of the two sites where contact center functions
are located. Of our 620 service points, 500 are now located inTokyo and 120 are located in Osaka. The expansion of the service
points enables us to further improve our ability to accept orders in
the event of an emergency and decentralize operational risks bysplitting our contact center functions between two sites. The centerhas been one of the main channels of transactions, sustaining
the company’s business model whose cornerstones are Daiwa
Consulting and Daiwa Direct transaction courses. The center now
handles calls coming in to sales
branches and executes some of
the transactions. Thus it plays
a role as our comprehensive
remote contact center forcustomers.

Daiwa Securities’ Systems for Utilizing Customer Feedback

Customers
Telephone
E-mailCustomer Support
Contact Center

Efforts to Improve Telephone Customer Service
Quality
Daiwa Securities’ Contact Center participates in a telephonecustomer service competition* organized by the Japan Telecom
Users Association, a Public Interest Incorporated Foundation.
The purpose of the participation is to improve Contact Center
service quality significantly by receiving quality evaluations froma third-party. In pursuit of high marks in the competition, we
encourage our staff at the Contact Center to work constantly to
improve customer service and verbal skills; we believe this will help
strengthen the capabilities and motivation of our telephone service
representatives. Improving the level of remote service provided byservice representatives also helps bring about increased customer
satisfaction.
* Japan Telecom Users Association Telephone Customer
Service Competition:
This competition is a forum for companies to compare theirtelephone customer service with others and to increase customer
satisfaction by improving the verbal quality of their customer
handling. At the yearly competition, participating companies
test the results of their many hours of accumulated telephonecustomer-service training and preparation as a part of efforts
to improve customer service and verbal skills. Nationwide, over
10,000 people compete in this well-recognized event.

Sales branches

Management

Departmentsin charge

Improvement

Improvement

Improvement

Calls Received at the Customer Support Center
Daiwa Securities’ Customer Support Center also handles customer
feedback directly. The Center works to respond promptly andappropriately to customer complaints and shares this input with
Daiwa Securities’ sales branches and head office to avoid repeat
problems.
In FY2013, the Center received 6,289 calls—roughly 850 morethan the preceding fiscal year. This rise was due to an increase incalls to confirm the status of accounts, inquiries associated with
the introduction of the NISA system and tax revisions, as well ascomplaints about customer services such as inadequate post-salefollow-up and lack of communication.
The Center employees appreciate the value of customer feedback
and will continue to work on improving customer service.
Calls Received at
the Customer Support Center■ Inquiries■ Complaints

FY

to Incorporate● WorkingCustomer Voices
Contact Center Initiatives
Employees at the Contact Center, which serves as ourcomprehensive remote contact point, has direct contact withcustomers and will play an increasingly crucial role not only as atransaction channel but also in customer support and marketing.
Its role gives it access to direct customer feedback that can leadto improved operations. In order to maintain and improve contact

Daiwa Securities Group

Questionnaire
postcards
available atbranches

Opinions, comments and requests

2009

77%

23%

2010

80%

20% 4,224

2011

82%

18% 5,119

2012

83%

17%

2013

82%
0

1,000

2,000

4,144

5,436

18%
3,000

4,000

5,000

6,000

6,289
7,000

calls

26

CSR REPORT 2014

Social Report

Relationship with Shareholders and Other Investors
Approach and Basic Stance
The Daiwa Securities Group works hard to advance communication with shareholders and other investors.
Amid a major shift from savings to investments in Japan, we believe that increasing the number of individual investors
is a part of our social responsibility as a company engaged in the securities business, and we will work hard to provide
stockholders and investors with improved communications and information that are easy to understand.
opportunities, including telephone conferences on the daysof earnings announcements, briefings about the company for
individual investors, management strategy briefing sessions,
one-on-one meetings with analysts and investors, and by
participation in Daiwa Investment Conferences (in Tokyo, Hong
Kong and New York).
In addition, we are further developing information disclosure
on our IR websites and publishing annual reports and business
reports for shareholders. We will continue to strive to makeour communications even more accessible and precise forshareholders.

● Breakdown of Shareholders
As of March 31, 2014, 46.2% of the Daiwa Securities Group’s
shareholders were foreign investors, up 5.1 points from theend of the previous fiscal year. The percentage of individual
investors decreased 3.5 points over the same period to 18.9%.

Breakdown by Investor Type (as of March 31, 2014)
Total number of shares outstanding: 1,749,378,772
Other(4.5%)

Foreigninvestors(46.2%)Web

Individuals inJapan(18.9%)

Questionnaire for Shareholders
We distribute a questionnaire to shareholders coinciding withthe distribution of rewards under our Shareholder Rewards
Program at the half-year end, to gather and incorporate theirviews into management and IR activities. The findings ofthese questionnaires are utilized for improving our business
operations while leading to improvements such as higher
satisfaction with the shareholder reward program.

Financial
institutions inJapan(26.5%)● September 2013 Shareholder Rewards Questionnaire Contents
Q. When did you first purchase our shares?
Q. Why did you choose to buy the stock of Daiwa
Securities? (multiple answers allowed)
Q. What types of disclosure and corporate communication
would you like to see enhanced in the future? (multiple
answers allowed)
Q. Are there any products you would like for theshareholder reward program? (multiple answers allowed)

Other corporationsin Japan(3.9%)Web Stock Information● Dividend Policy
Daiwa Securities Group Inc. aims to continuously provide
improved value for shareholders, including distribution of
profits. In principle, dividends are paid semiannually (interim
and year-end dividends) at a payout ratio of approximately
30% based on consolidated financial performance. We also
actively seek ways to increase returns to our shareholders,
including share buybacks when we have sufficient accumulated
capital to pursue further growth.

● Shareholder Reward Program
In September 2010, we improved our shareholder reward
program while retaining the catalog format. Shareholders who
qualify for rewards at the end of March and September havemultiple reward options to choose from such as charitable
donations, quarterly journals on investment and Daiwa’s Point
Program, in addition to regional specialties already available
through our shareholder reward program. For those qualified
at the end of each March, they are also offered an opportunity
to choose a calendar.

● Communication with Shareholders and Investors
The general meeting of shareholders is an opportunity fordirect interaction with shareholders, and we have many
shareholders attend it. 2,113 shareholders attended the 77th
regular general meeting of shareholders, held on June 26,
2014. We are also working to create new communication

Daiwa Securities Group

Web

27

Web Investor Relations Information

CSR REPORT 2014

Social Report

Relationship with Employees
Approach and Basic Stance
The Daiwa Securities Group believes that maximizing the motivation of our employees will lead to improved customer
satisfaction and consequently enhance shareholder value. We take a range of measures to ensure that all of ouremployees feel a sense of job satisfaction and that their families and partners share their pride to be part of the Group.
We have our corporate culture nurtured since foundation of our business, and we regard it as the core of Daiwa’s
identity. We have taken steps to crystallize the basic philosophy and mindset of the Group inherent of our culture to
be manifested as the “Daiwa Spirit.” We hope that the “Daiwa Spirit” will enhance employees’ sense of unity andtogetherness and thus the Group’s overall strength.

● Hiring Initiatives

with the local communities.
We have Daiwa Master Program which supports the successof highly motivated and skilled employees after their statedretirement age. Under the program our senior advisors canwork up to the age of 70. Leading the initiatives expected to
be introduced in Japan due to its aging society, our schemewith extended retirement age lets our experienced personnel
continue to make contributions at their work place throughbetter customer services with their attention to details andhelping younger colleagues by letting emulate them.

Hiring Approaches and Trends
The Daiwa Securities Group would like all of its employees tobe highly motivated and to stay with the Group from hiring toretirement. All new college graduates recruited by the Group,
including those with disabilities, are brought on as full andregular employees aiming to encourage newly hired to have asense of trust and pride in the Group, and a sense of solidarity
with their colleagues. On April 1, 2014, 610 new employees
joined the Group.
By providing an environment where diverse people canperform to their full potential, we hope to be able to retain
highly skilled people. Endeavoring to be one of Asia’s leading
financial services firms, we also focus on attracting people
capable of excelling globally.

Employment of People with Disabilities
The Daiwa Securities Group has around 170 employees withdisabilities working for a wide range of responsibilities in ourhead office, sales branches and contact centers.
We had started recruiting new graduates with disabilities
as regular employees (general office staff) in FY2008, and in
FY2011 broadened the scheme to the career-track employee,regional career-track employee, and employee for customer
services. We have also vigorously increased recruitment
opportunities by holding briefings about the company for new
graduates, participating in career expos, and implementing
job placement support programs for university students withdisabilities.
Once people with disabilities are hired, we provide
support for their career advancement, for example, creating
opportunities for them to enter the career-track and regional
career-track employment opportunities.

Fairness in Hiring
The Daiwa Securities Group has published its Guidelines for Fair
Hiring, composed of three fundamental principles for ensuring
fair hiring practices.
● Guidelines for Fair Hiring

1. Utmost respect for the rights of the applicants.
2. Eligibility for all individuals who meet the hiring criteria.
3. Making all hiring decisions based on a fair andobjective evaluation of the applicants’ ability, aptitude
and motivation.

● Human Resource Development and Skill Enhancement

Recruitment of University Graduates

Employee Training Approaches and Trends

In FY2011, we began hiring recent university graduates who
had obtained their diploma within the preceding three years
with or without any work experience during the period as partof our efforts to build a diverse workforce. These recruits
receive the same training as new graduates.

The Daiwa Securities Group’s competitiveness derives fromour employees. We have a management vision to become
one of Asia’s leading financial services groups possessing andleveraging a solid business platform in Japan. To materialize
this vision, we focus on human resource development with theaim of creating clusters of professionals. We offer extensive
training programs to newly hired employees as we believethat the moment their joining us is a critical period for theirtraining. The program ensures that they acquire not only thebasic knowledge and skills, but understanding of our corporate
philosophy and commitment to CSR.
We also believe that our employees must have a firm

Support for the Success of Veteran Employees
The Daiwa Securities Group has introduced Senior Advisors
Scheme in which senior employees with a wealth of experience
work actively in the workplace alongside with their younger
colleagues. Our senior advisors work in region of their choiceand engage in consultation-oriented sales activities with along-term investment perspective while keeping their close ties

Daiwa Securities Group28

CSR REPORT 2014

understanding of corporate ethics and compliance in orderto ensure the development of sound financial and capital
markets—a key issue for the Daiwa Securities Group.
Accordingly, we offer regular training on information security
and compliance.

performances into account.
In addition, we endeavor to create a personnel evaluation
system that motivates all employees, regardless of years they
are with us, whether they are young, middle of their careers,
or experienced veterans, to challenge the next stage of theircareers and to work in positions with bigger responsibilities.

Education and Training System● Striving to Create a Pleasant Working Environment

The Daiwa Securities Group trains employees based on ourGroup-wide policy using programs tailored to their skill levels.
We would like to foster a sense of solidarity and networking
among employees of Group companies thus offer joint training
opportunities.
We help employees raise their skills to higher levels, and have
set up new programs that aim to improve their capabilities
in specialized fields starting second half of FY2013. We havealso expanded training programs for those with managerial
responsibilities to improve our productivity further.
From FY2013, the Annex Education Program, a program for
newly hired and carried out by dedicated instructors, has been
expanded to our regional career-track employees, while our
Mentor System now covers employees entering their second
year of employment. These are examples of our initiatives toimprove and expand our educational and training systems foryounger staff, and to maintain environment that is conducive
to learning.

Encouraging Work-Life Balance
One of the Daiwa Securities Group’s targets is to achieve an
advanced level of work-life balance. We are committed topursuing working styles that enable employees to achievea balance between their private and professional lives, andmake efforts to create an environment in which both men andwomen can work in various ways.
Not only do we seek to establish systems that enable diverse
work styles, but we also work to change employees’ mindset
by ensuring employees to leave their offices by 7 p.m., byencouraging them to take all their paid holidays, and by setting
a day of welcoming their family members to our offices.
We have adopted systems aimed at supporting our
employees raising their children or caring other family
members that exceed legal requirements. Since FY2012, a
survey concerning the Group’s efforts to support both careerand child-raising needs of our employees has been conductedannually to solicit inputs from all Group employees. The survey
is designed to grasp how they are using the Group’s systems
and to collect feedbacks particularly on their needs. Based on
the results of the survey, we are contemplating on making
further improvements in working conditions and environment
for all employees. Prior to an employee returning to work after
taking childcare leave, interviews are conducted with the headof relevant department or branch to facilitate his/her return towork. Even during childcare leave, employees are still eligible
for promotions and raises based on their contributions prior totheir leaves.
We will continue to introduce initiatives designed to attract
superior and diversified employees for our better performances.

Supporting Employees Trying to Earn Credentials
The Daiwa Securities Group encourages employees to improvetheir English skills in light of globalization and our corporate
strategies of focusing on Asia.
We consider Financial Planner (AFP and CFP) and Securities
Analyst qualifications as core requirements for our securities
business. In particular we aim to have the highest numberof employees in the industry accredited as Certified Financial
Planners (CFPs). In addition, the company provides supports
like subsidizing certification costs to facilitate our employees toenhance their professional skills of their fields of specialty.

Intra-Group Job Postings and the Career Path Change System
Daiwa Securities has instituted a Career Path Change Systemthat enables non-career-track employees to transfer to careertrack and regional career-track positions. In the five years from
FY2009 to FY2013, 850 people moved to other positions
through the system.
We have also instituted a system of intra-Group job postingsfor employees with skills and the desire to realize their potential
to open new career paths. Since the year 2000, 904 employees
have applied and 146 have succeeded.

Encouraging Women to Succeed
The Daiwa Securities Group promotes talented employees
regardless of their gender. Promotions are based on fairevaluations, and we believe creating a work environment
where people from diverse backgrounds can exercise theirabilities fully will lead to improved corporate value.
In order to promote more female employees to managerial
positions, we introduce noteworthy female employees in
our internal publication to be role models and also provide
opportunities for cross-company networking.
A career consultation service has been set up in our intranet’s
Initiatives for Work-Life Balance site. Female executives aswell as heads of our departments and branches give advice
regarding the concerns and inquiries of female employees.
There are a total of six women in top management positions
across the Daiwa Securities Group, including two female
directors at Daiwa Securities Group Inc. The number of womenin management positions has increased every year, totaling
221 women at Group companies as of March 31, 2014. The

Evaluation System
At the Daiwa Securities Group, we believe that a fair and wellaccepted evaluation system is crucial to keep all employees
highly motivated. For this purpose, we have implemented amultifaceted evaluation system for managers. This involves
subordinates and related departments assessing eachmanager’s job performances in carrying our duties and theresults being fed back to the manager. With the scheme we
intend to improve assessees’ managerial skills and improve
our overall productivity. We also take their compliance-related

Daiwa Securities Group29

CSR REPORT 2014

Mental Healthratio of women in management positions has risen from 2.2%
(at the end of FY2004) to 5.4% over the past ten years at theGroup, and from 2.3% to 6.3% at Daiwa Securities Co. Ltd.
By increasing the number of role models, we make it easierfor our female staff to envision their career paths with positive
results. For example, there has been a sharp increase of female
employees aspiring to advance their careers by switching tocareer-track and regional career-track positions in recent years.
From FY2009 to FY2013, about 850 female employees havechosen to convert to career-track positions. Over the past
few years, an increasing number of employees have taken
advantage of our Professional Return Plan, a plan for exemployees, who have left us to raise their children or to caretheir family members. It allows them to restart their careerswith the same level of compensation when they left. The
scheme helps us attract talented personnel who underpin ourbusiness.
We will continue to increase the number of female
managers, hoping to bear female leaders who would lead thefuture of Japan’s financial industry.

The Daiwa Securities Group’s Health Support Promotion
Department was established in August 2006 to help employees
maintain and manage their mental and physical health. The
Health Support Promotion Department has two certified clinicalpsychologists on its staff to provide consultations to support
Group employees, as well as to their families. We have alsoestablished arrangements with outside specialists so that they
can receive prompt attention.
We also arrange for occasional talks in all branches anddepartments to broaden awareness of mental health issues asa part of our strong support for employees’ mental health.

● Communication
Communication with Employees
We believe that good communication with employees isvital for better workplace environment. Our communications
programs include regular interviews by the Personnel
Department and semi-annual self-assessment questionnaires.
We also regularly conduct a questionnaire on work-life balance.
This unfiltered input from our employees helps us re-examine
our programs and enhance ongoing improvement efforts.

Initiatives to Improve Employee Health
The Daiwa Securities Group considers employee health an
indispensable capital for both the company and society. Our
Personnel Departments, Health Insurance Association, andoccupational health staff work closely to improve employees’
health.
Specifically, the Group has set up a website whichenables employees to track the past results of regular healthcheckups whenever they want to. The Group also uses
internal communications to raise employees’ awareness ofhealth issues. Company wellness programs include a walking
program, action to promote countermeasures against cancer,a quit-smoking campaign, a program to promote moderatemeal portions, a health campaign for female employees, breast
cancer and cervical cancer exams, and measures for those withsevere diseases. The Group has introduced a system that uses
a follow-up confirmation form (known as a “yellow paper”)
to urge employees with problematic data to see doctors after
their regular health checkups. Employees receiving this form
are required to obtain a doctor’s comment within two weeks,
and submit it to us. As a result, the majority of employees
receiving the notice now visit medical institutions.
Occupational health staff work at General Health
Development Centers. The Daiwa Securities Group has
established the Centers at the main Group offices. Doctors
at the in-house Centers provide medical services, while staff
industrial physicians and health nurses provide general healthconsultation services. There are also psychiatrists and clinicalpsychotherapists available to offer mental health consultations.
These efforts to promote employees’ health havesubstantially raised their health awareness and favorably
affected the test results of regular health checkups. Thanks tothese successes, in November 2013, we received an excellence
award from the Minister of Health, Labour and Welfare in theministry sponsored “2nd Smart Life Project Award (Let’s extend
healthy life expectancy!),” the highest award in the corporate
division. Our initiatives have attracted much attention fromother companies and local governments.

Daiwa Securities Group

Communication among Employees
In October 2007, Daiwa Securities introduced a program forsupporting club activities. This program was created to help
employees enjoy their time off and to deepen their friendships
with colleagues, building more opportunities to share a senseof camaraderie and solidarity. It is also intended to support
work-life balance and facilitate a fuller social life for employees.
The program was expanded and enhanced in FY2009. Under
this program, employee groups that meet certain conditions
are recognized as Daiwa Clubs or Daiwa Circles, which receive
subsidies to cover some of their activity costs. As of March
2014, 18 clubs and 4 circles are active in the Group.

Relationship with Employee Unions
The questionnaires conducted by the employee’s union amongits members have been an important opportunity for the Group
as a whole to learn the opinions of its employees and a tool for
better mutual understanding. Employee union membership asof the end of March 2014 was 6,406.

Initiatives for Families
We work to ensure that members of employees’ families share
their pride to be part of the Group.
Since FY2008, we welcome employees’ families to theworkplace on Family Visit Day to give family members a better
understanding of our company and the employee’s jobs. In
FY2013, 4,476 family members participated in this program.
Other initiatives for supporting our employees’ families
include family day leave and the extension of mental healthsupport to employee’s families.

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CSR REPORT 2014

Social Report

Human Rights Initiative
Approach and Basic Stance
The Daiwa Securities Group is strengthening efforts based on its corporate principles, the Act on Promotion of Educationand Enlightenment of Human Rights, the United Nations Global Compact and ISO 26000, to educate its employees
about human rights with the aim of improving a corporate culture rooted in the basic principles of human rights.
1998. The Federation is composed of 126 companies(mostly headquartered in Tokyo) with a combined total of
approximately one million employees (as of April 2014).
Federation members work together to improve their humanrights and awareness through research and communication.

● Basic Policy for Initiatives Addressing Human Rights
and Social Integration Issues(1) Daiwa Securities Group Inc. supports and complies with theprotection of human rights as advocated internationally and does
not infringe on human rights within the limits of its influence.
(2) The Daiwa Securities Group educates and instructs Group
employees with accurate information on human rights and social
integration issues.
(3) At the same time, the Group views human rights and social
integration issues as our own problem, not somebody else’s
problem, and fosters a sensitivity that enables empathy with thesuffering of others.
(4) We provide an equitable working environment that values
people and is free of discrimination.
(5) Each employee is a member of society unburdened by prejudice.

● Initiatives in FY2013
Immediately after the company induction ceremony on April
1, the 523 new Group employees underwent group trainingthat included human rights training intended to provide
basic knowledge concerning human rights and to raise
understanding and awareness of the Group’s fundamental
principles concerning respect for human rights. In addition,
46 general managers, 186 managers, and 323 associatemanagers underwent training in July to provide the knowledge
and awareness concerning human rights required for theirrespective positions. In November, as part of a new initiative,
Group managers and higher-level personnel watched an
educational video regarding power harassment.
An annual contest for executives and employees heldfrom October to December was extended to include family
members this year—participants created and submitted
Human Rights Awareness Slogans to promote broader anddeeper understanding of human rights issues, and the winning
entries were presented in an internal newsletter. Human
Rights Awareness Workshops are conducted each year toaddress various issues, and in February 2014, the video Honto
no Sora (The True Sky) was used as an educational resource
and a discussion was held regarding awareness of prejudicescommon to issues such as exclusion and detrimental treatment
of seniors and foreign nationals, assimilation, and harm caused
by rumors regarding recent nuclear accidents.

● Specific Efforts(1) We highly value the human rights of every stakeholder and ourstaff will always address clients, local communities and theirmembers with great awareness of human rights.
(2) We work to ensure that our hiring and recruiting, personnel
evaluations and labor management practices are always fair.
(3) The Group is continually improving internal human rights
education and awareness programs, including regular training
and feedback and response loops.
May 18, 2011: Human Rights Awareness Promotion Committee● Human Rights Education and AwarenessIn 1984, the Daiwa Securities Group set up a Human Rights
Awareness Promotion Committee with the objective ofpromoting activities and training for raising human rights
awareness to encourage better understanding and appreciationof social integration and other human rights issues including
but not limited to so called Dowa–mondai in Japan, which
generally refers to centuries-old discrimination and ostracism
against a specific group in Japanese society. The committee
is currently chaired by our director in charge of HR, with the
deputy human resources officer and the head of HR as deputy
chairs, along with five division leaders including the heads of
the Compliance Control Division, the Communications Divisionand the General Affairs Department—all active in pursing thecommittee’s goals. Besides the committee, all Group managers(at the office, division or branch level) act in a promotionalrole, using education and awareness activities to ensure that
employees correctly understand and acknowledge humanrights and social integration issues. The committee revised
and released the Group’s Basic Policy for Initiatives Addressing
Human Rights and Social Integration Issues in May 2011.
The Daiwa Securities Group has been a member of
the Industrial Federation for Human Rights, Tokyo, since

Daiwa Securities GroupNew Employee Training

31

CSR REPORT 2014

Social Report

Relationship with Society
Approach and Basic Stance
The Daiwa Securities Group considers it important to work together with NPOs and NGOs as a good corporate citizen and to engage in consistentcollaboration with the local community to foster sustainable development.
To this end, we group our diverse corporate citizenship initiatives into the following four key categories:
1. Education and research activities in economics and finance 2. Assistance to communities inside and outside of Japan through foundations and NPOs
3. Support for culture and the arts
4. Encouraging volunteerism among employees⇒Refer to “CSR Related Data” on page 52 for “Corporate Citizenship
Initiatives and Expenditures”

the workings of a company, the importance of finance, and thefunctions that a financial services company fulfills, thus improving
their financial literacy.

and Research Activities● 1. Educationin Economics and Finance

Finance Park

Capitalizing on accumulated financial and economic expertise to
make public contributions, the Daiwa Securities Group engages inbusiness-academia collaborations and supports programs for juniorand senior high school students as well as teachers. We believe that
economic and financial education is important in helping young
people develop the capacity to build their own lives and shape thefuture world.

Junior Achievement Japan has established Finance Parks in
Shinagawa, Tokyo and another in Kyoto with the goal of providing
a space where junior high school students can learn to develop andpractice life-planning skills where we have set up pseudo-branches.
We have decided to participate in their new project to open facilities
in Iwaki, Fukushima in May 2014 and in Sendai, Miyagi in August
2014. As a special sponsor, we support operation of our branchlets
there. To date, a total of 47,323 students have participated.
Figures for FY2013:
8,138 participants (2,742 in Shinagawa; 5,396 in Kyoto)(Figures provided by JA Japan)⇒Refer to “CSR Related Data” on page 52 for “Results in Economic andFinancial Education”

Economic and Financial Education
Sustainable Development of the Japanese Economy in the 21st Century
Research
institutions

Educational
institutions
Understandingof social andeconomicprinciples

Improveeconomic
and financial
knowledge

Developfinancial
specialists

Discloseresearch results
Create practicalapplications

Commercial
and businessapplication ofresearch results

Elementary/junior/high school
students

Undergraduate
students

Graduatestudents

ResearchersIntellectual
property (IP)/patents

Supportteachers
Participate inclasses

Provide or
endow classes
Dispatch
instructors

Provide or
endow classes
Dispatch
instructors

Joint research
Researchsupport

Universitylaunched
ventures and IP
headquarters

Finance Park, Shinagawa

Student Company Program(Hands-on Company Management Program)Group Employee Cooperation

We cooperate with the Student Company Program operated
by Junior Achievement Japan. The program teaches high school
students about corporate management and organization by
allowing them to run a real company.
In FY2013, students from a Tokyo metropolitan high school
incorporated a company as part of their extracurricular activities.
Initially, the students showed some confusion about corporate
management and business operations, but they got on track
through self-management. Ultimately, they were able to generatea profit by selling smart phone covers and paid dividends toshareholders within their school. Group employees served as
outside directors for six months and provided advice concerningcompany management.

KidZania
The Daiwa Securities Group is a supporter of KidZania, a theme
park designed to provide children from the age of three throughto junior high school
students with work
experiences and has
established securities
consulting pavilions
at their facilities inTokyo and Koshien(near Osaka). Children
gain an insight into
KidZania

Daiwa Securities Group32

CSR REPORT 2014

Council for Economic Education Japan (CEE-Japan)

Assistance to Communities Inside● 2. and Outside of Japan throughFoundations and NPOs

CEE-Japan was established in January 2009 to provide economic
education training for school teachers. The Daiwa Securities Groupis CEE-Japan’s main sponsor, providing both the inaugural funding
and ongoing support.
Under a partnership with the Council for Economic Education(CEE) of the US, CEE-Japan seeks to implement programs tailoredfor Japanese schools.
As of the end of March 2014, a total of 3,090 teachers had
participated in training and workshops using materials provided by
CEE, including the trial run in 2009, according to JA Japan.

Daiwa Securities Health Foundation(Public Interest Incorporated Foundation)
The Daiwa Securities Health Foundation was established in1972, in commemoration of the Group’s 30th anniversary, tosupport medical research. Since 1973, the Daiwa Securities HealthFoundation has supported outstanding research projects focusing
on improving health, medical care and welfare for middle-aged andelderly people. Since being founded, Daiwa Securities has disbursed
a total of ¥30 million every year, composed of 30 separate grants of¥1 million each. FY2013 marked the 40th year of this program.
Cumulative contributions through FY2013:
A cumulative total of ¥1,087 million to 1,102 recipients
Independent

Financial Planning Classroom for Beginners
We have held financial lectures for those with limited knowledge infinance that cover a wide range finance related topics at our head
office and on our website. These encompass financial planning,
basic knowledge in finance and economy. To cater to the needs ofa broad audience, these lectures are presented with sign language
and simultaneous captioning. Intended as part of our engagement
for a sustainable society, the program was scheduled to take place
on a quarterly basis between 2013 and 2014 with different themes
each time.

AssuranceWeb

Daiwa Securities Health Foundation (available only in Japanese)

Daiwa Securities Foundation(Public Interest Incorporated Foundation)
The Daiwa Securities Foundation was established in 1994 tocommemorate the 50th anniversary of the Group’s foundation to
make contributions to society out of our profits. The Foundation
provides grants to organizations and groups doing volunteer workin welfare and medicine.
Since FY2011, the Foundation has focused primarily onorganizations and groups involved in volunteer work responding to
the Great East Japan Earthquake.
Cumulative contributions through FY2013:
Volunteer Activities Grants
A cumulative total of ¥620 million to 2,699 organizations Independent
Assurance
Disaster Volunteer Activities Grants
A cumulative total of ¥72.28 million to 162 organizations Independent
Assurance

Seminar Themes● 1st seminar (March 18, 2013)“Japanese and money—from savings to investments:
discover the reality through Japanese history”●	2nd seminar (June 7, 2013)“Simple ideas and tips for family budget management andlife planning”● 3rd seminar (September 18, 2013)“Changing ideas of home buying and financial planning”● 4th seminar (December 17, 2013)“Asset management to prepare for tax hikes and inflation—interest rates, currency exchange, and investment”● 5th seminar (March 5, 2014)“Outlook for reform of the social security system—public
pension and nursing care insurance”

Presentation ceremony
Web

Financial PlanningClassroom for
Beginners
Web

Daiwa Anglo-Japanese Foundation(Chartered in the UK)
The Daiwa Anglo-Japanese Foundation is a UK charity establishedin 1988 in part with contributions from Daiwa Securities, forfostering closer ties between UK and Japan.

Financial Planning Classroom for Beginners (available only in Japanese)

Daiwa Securities Group

Daiwa Securities Foundation (available only in Japanese)33

CSR REPORT 2014

Principal activities include:(1) Awarding grants to individuals, institutions, and organizations
working to promote ties between the UK and Japan(2) Enabling British and Japanese students and academics tofurther their education by providing opportunities for joint
research and supporting exchanges and other bilateral initiatives(3) Awarding Daiwa Scholarships for British graduates to study
Japanese and undertake work assignments in Japan(4) Organizing a year-round calendar of events to improveunderstanding of Japan in the UK.
The Foundation’s Tokyo office provides local assistance to Daiwa
Scholars (students from the UK), administers grant applications fromJapan and collaborates with other institutions promoting AngloJapanese relations.
Cumulative contributions through FY2013:
A total of 152 accepted under the Daiwa Scholars program and2,623 projects receiving grants
Independent
Overall funding equivalent to around ¥2,215 million
Assurance(at the exchange rate at the end of each fiscal year)

opportunities for children, sharing and disseminating tsunami
disaster prevention knowledge, and exchange and cooperation
activities among those who suffered. The Fund’s attributes include
provision of long-term recovery inducing measures rather than
temporary assistance, utilization of financial mechanisms likecharitable trusts and microfinance, and scrupulous monitoring by
ACC 21.
Designated areas: Indonesia, India, and Sri Lanka
Designated fields: mental health care and education forchildren and people with disabilities, microfinancing, interaction
through disaster prevention education, and promotion of
information sharing
Web

Daiwa Securities Group Tsunami Reconstruction Fund (available only in Japanese)

Flow of funds
Flow of reports

ACT
Custody of funds
Trust bank

Donations
Daiwa Securities
Group

Advice and approval
ACT
Steering committee

Self-reliance ofdisaster victims
Local NPOs

Discovery of deals and monitoring
ACC21(Executive office for ACT)

Activities of Daiwa
ScholarsWeb

Daiwa Securities Phoenix Japan Program

The Daiwa Anglo-Japanese Foundation

In May 2012, the Daiwa Securities Group established the Great East
Japan Earthquake Relief Assistance program. The program donates
a portion of management fees from the Daiwa Nippon Support
Fund Vol. 3—Phoenix Japan and continues providing assistanceto local NPOs through the Japan Earthquake Local NPO Support
Fund (specified aid), which was set up by Japan NPO Center, acertified NPO. The program supports local NPOs’ human resources
development. Their activities include educational assistance andreconstructing communities in the disaster-affected areas.
FY2013 second-term results:
Assistance totaling ¥35.03 million provided for nine projects Independent
Assurance(including ¥1.5 million for joint research assistance).

Daiwa Myanmar-Japan Foundation
On April 1, 2013, the Daiwa Securities Group established the Daiwa
Myanmar-Japan Foundation to improve lives of the citizens ofMyanmar and to develop human capital necessary for its sustainableeconomic growth. The foundation has been focusing on providing
opportunities to train people who would carry key responsibilities in
its future capital markets. Examples include scholarships for juniorstaff of the central government to study in Japan. On December 2,
2013, we signed a memorandum of understanding with Myanmar
Institute of Certified Public Accountants concerning cooperation inhuman resources development.

Daiwa Securities Group
Tsunami Reconstruction FundWeb
Independent
Assurance

Flow of funds
Flow of reports

The Daiwa Securities Group established the Daiwa Securities Group
Tsunami Reconstruction Fund to provide recovery assistance toregions affected by the December 2004 Indian Ocean earthquake
and tsunami. Beginning in FY2005, this fund has provided longterm support for recovery, disbursing ¥10 million annually for a tenyear period for a total of ¥100 million. The Daiwa Securities Group
Tsunami Reconstruction Fund provides grants to local NPOs in thethree hardest hit countries: Indonesia, Sri Lanka and India. The
program offers assistance across four fields: mental health care forchildren, utilization of microfinancing, provision of educational

Daiwa Securities Group

Daiwa Securities Phoenix Japan Program (available only in Japanese)
Japan NPO Center
Japan Earthquake Local NPO
Support Fund
(special aid)
Selection and advice

Donations“Special aid”
Selection committee

Daiwa
Securities

NPO

Operation and grant
Civil Society Initiative FundJapan NPO Center

34

CSR REPORT 2014

Developmentof human
resources

3keys Program● Events held to report on earthquake reconstruction
activities

In 2012, the Daiwa Securities Group began offering support to the
3keys Program, a designated NPO working to improve learning
opportunities in group homes. The program, which also receives
funding relating to the Daiwa SRI Fund, helps to foster greater
confidence and ambition in children.
Donations made during FY2013:
Independent
A total of ¥1.09 million
Assurance

In August 2013, the Daiwa Securities Group sponsored a forum
to bring together people helping two regions struck by natural
disasters—2004 Indian Ocean earthquake and tsunami and the2011 Great East Japan Earthquake for both of which we have been
supporting reconstruction activities. Panel discussions were held withleaders from reconstruction agencies and support groups, and action
reports were presented by program managers of Daiwa Securities
Group Tsunami Reconstruction Fund and Daiwa Securities Phoenix
Japan Program.
The forum was attended
by 104 people interested
in disaster assistancefrom businesses andinternational cooperation,
who shared ideas anddiscussed future support
plans.

“Daiwa SRI Fund” Grant Program
The Daiwa SRI Fund Grant Program had provided grants toJapanese NPOs working in fields involving human security since2006. The program supports human resources development at
NPOs by subsidizing personnel and training program costs. The
program is operated in collaboration with designated NPO, Civil
Society Initiative Fund, and sponsored by donations from the
management fees of the Daiwa SRI Fund. From FY2012 throughthe end of July 2013, the fund continued its support for the Big
Issue Foundation, a designated NPO, but has now ended its
donations.
Grants Awarded:
26 projects (new grants for 16 projects and continued grants for
10 projects)
A total of 35 staff across 16 groups, totaling ¥45.8 million Independent
Assurance(grants were completed at the end of July 2013)

Disaster reconstruction
eventsKopernik Program
Kopernik is a US-based NPO established in 2009 with the goalof improving quality of life and reducing poverty in developing
countries; it began operations in Japan in 2010. Kopernik hasdeveloped a program to enable contributors in developed countries
to go online and donate to NPOs/NGOs in developing countries
or areas of their own choosing by selecting needed products suchas simple water purifiers and solar lamps. Kopernik shares detailsof recipient NPO/NGO activities supported by donations on its
website to ensure transparency. Donations originated from ourrevenue from the Daiwa Eco Fund and Russell Global Environmental
Technology Fund are granted to products and recipients selected inlight of their consistency with the principles of these funds.
Donations made during FY2013:
A total of ¥4.54 million
IndependentWeb

Daiwa SRI Fund Grant Program (available only in Japanese)

Disaster AssistanceIndependent
Assurance

The Daiwa Securities Group contributed ¥10 million to Japan
Platform, a certified NPO, as donations for typhoon victims in thePhilippines in November 2013.

Assurance

Solar Light Project● 3. Support for Culture and the ArtsThe Daiwa Securities Group provides ongoing support for a wide
range of cultural and artistic activities. For example we have been
the special sponsor of the Mainichi Shimbun Central Contest forBook Review Painting for 20 years, a tradition that began with thesixth year of the event. The contest aims to encourage reading and

Cooking Stove Project
Web

Kopernik Program (available only in Japanese)Awardedpaintings
exhibited at oneof our branches

Daiwa Securities Group35

CSR REPORT 2014

improve children’s reading skills by awarding prizes for paintings
based on their impression and images from books they have read.
Prizes are awarded to elementary pupils, junior and senior highschool students. The winning paintings for FY2013 were exhibitedat 10 Daiwa Securities branches.
Since 2005, the Group has also been supporting traditional
Japanese activities, including sponsorship of title matches of both
Shogi and Go (Japanese board games): Meijin Title Match (Shogi)
and the Honinbo Tournament (Go).

as an initiative that can be easily participated in by employees.
Books already read and unusable postcards are donated to threegroups—JEN BOOK MAGIC, Japan Committee “Vaccines for
the World’s Children,” and Live with Friends on the Earth. Items
collected are sold by them to fund their activities, including support
for education, medical services and assistance to the disabled indeveloping countries.
We will continue the activity as it is quite popular among our
employees for its accessibility.
Contributions made in fiscal 2013:
Independent
Worth ¥36,426 to JEN BOOK MAGIC
Assurance
Independent
Worth ¥67,273 to Japan Committee “Vaccines for the
Assurance
World’s Children”
Worth ¥54,232 to Live with Friends on the Earth Independent
Assurance

Volunteerism among● 4. Encouraging
Employees
The Daiwa Securities Group believes that participation in volunteer
programs and other community actions by employees helps
broaden their perspectives and familiarize them with different
values. We consider that this, in turn, has a good influence on
both their work and their lives. Through our intranet, we provide
information on volunteer opportunities for projects planned byourselves, other businesses and NPOs/NGOs as well as events
that help educate employees and raise their awareness. We also
strive to create an environment that makes it easy for employees
to volunteer by setting up a recognition program, the Volunteer
Award, among other incentives. In our work to encourage as
many of our people as possible to participate in volunteer activities,
we will seek ongoing collaborations with external organizations,strengthen internal communications on volunteering and volunteer
opportunities and continue to pursue increased opportunities for
employees to engage.

■ TABLE FOR TWO (TFT) Program
The Daiwa Securities Group contributes to the TFT Program, which
is organized by TABLE FOR TWO, an internationally designated NPO.
The program aims at eradicating starvation in developing countries
and reducing the occurrence of lifestyle diseases in developed
countries. We have set up 23 vending machines in our Tokyo Head
Office since the spring of 2013, making an automatic donationof ¥10 to the charity from each purchase of healthy drinks. Our
Toyocho Center Building’s employee cafeteria also participated in
the program, making a ¥20 donation each time a healthy menu
item is chosen. The donations are used to pay for school lunches indeveloping countries. In March 2014, we won a “Gold Supporter”
award for our contributions. We aim to encourage participation andfurther expand our activities in the future.
Contributions made February–December, 2013:
Independent
Worth around 38,000 school lunches in developing
Assurance
countries (calculated on the assumption that one meal costs ¥20)

Volunteer Activities by Employees■ Tree-thinning activity on Mount Takao
On April 13, 2013, 34 employees and their families joined theHands-on Forest Experience in Odaira National Forest (Tokyo's
Mount Takao). The participants learned about Japan’s naturalforests and nurturing plantation forests, under the guidance of
Takao Forest Center, a department of the Kanto Regional Forest
Office. They later thinned out trees to experience the importanceof forest preservation and maintenance, and made stakes to create
pathways, using lumber of their earlier works. In FY2014, we will
use these stakes to carry out maintenance work for pathways forelementary school children coming to Mount Takao for natureobservation.

Won a Gold Supporter
award

Initiatives Taken by the Group’s Hong Kong
Operational Base
Daiwa Securities Capital Markets Hong Kong opperates “FirstClass,” a CSR program that was established in FY2012 by voluntary
members.
The panel running the program has been engaged in CSR
activities with its focus on “Children and Education,” as themembers want to contribute toward addressing educational issues
faced by many Asian countries, such as poor access to formal
education and a lack of teachers and school facilities.
In FY2013, we decided to provide support to two schools in

Tree-thining experience■ International cooperation through a collection drive
The Daiwa Securities Group has been running a collection drive

Daiwa Securities Group36

CSR REPORT 2014

Hong Kong in collaboration with an intermediary support group.
Volunteers from Daiwa Securities Capital Markets Hong Kong
have been giving a wide range of advice to upper-grade students
at South Island School since September 2013. In December 2013,
we invited many students from TKL School to our workplace
visit program for families, giving an office tour and offering an
opportunity to interact with employees and their families. We
have also supported the construction of a new library for TKL
School and provided desks, PCs, and other supplies for the library.
Representatives from the company attended the opening ceremonyof the library in March 2014. Daiwa Securities Capital Markets Hong
Kong will continue planning a variety of CSR activities involving theparticipation of employees.

Workplace visit programfor families in Hong Kong

Initiatives to Promote Volunteer Activities■ Volunteer Award
Daiwa Securities has the President’s Awards program to recognize
outstanding achievements by employees. As part of the program
we introduced the Volunteer Award in FY2007, which is given twicea year to employees and groups involved in volunteer initiatives andactivities that provide ongoing support to communities.

Volunteer Award■ Dissemination of Information through the Internal Network
The Daiwa Securities Group provides a wide range of information
on volunteer programs within the Group through our intranet,
believing that volunteer activities help broaden the perspectives of
employees and provide benefits by making them aware of various
social issues. We introduce the best practice among such volunteer
work, through our in-house magazine and internal TV broadcasts.

Daiwa Securities Group37

CSR REPORT 2014

Environmental
ReportEnvironmental Initiatives
Approach and Basic StanceProtecting the global environment, the basis of our livelihoods, is essential for a sustainable society.
Through our business activities, the Daiwa Securities Group strives to help resolve environmental issues by promoting
products that can help reduce the environmental burden, and also by introducing investments that help to makeenvironmental technologies and infrastructure more widely available. At the same time, we are working to establish
a system that efficiently collects data on Daiwa’s environmental load. We are also focusing on raising employees’
environmental awareness to empower them to reduce the environmental burden in daily business operations.

Environmental Management● Environmental Vision / Environmental Principles /Basic Environmental Policies

The Daiwa Securities Group holds a meeting of its
Environmental Management Council every half year. A
representative from each Group company attends the meeting
to share data and exchange information. In addition, 10Group companies based at the Headquarters building attend
a meeting of the CO2 Reduction Promotion Committee hosted
by the management company of the building every half year,
working together to reduce the overall CO2 emissions of thebuilding.
The Group compiles and reports quantitative data on its
environmental impact each year, including details such asenergy and water consumption, CO2 emissions, paper usage,
waste disposal and recycling volume. We also consider how tobuild a sustainable environment management system.

Environmental Vision
The Group is dedicated to protecting the precious global
environment and preserving it for future generations by leveraging
financial capabilities.
Environmental Principles
The Group recognizes the importance of environmental principles
such as the effort to combat global warming, recycling and reuseof raw materials, and preserving biodiversity, in order to createa sustainable society for the 21st century. The Group pledges tocontribute to solving environmental issues through its business asa financial service company and to constantly seek new ways toreduce its environmental impact as a responsible corporate citizen.
Basic Environmental Policies
1. Make positive environmental contributions through ourcore business activities

Initiatives to Reduce Environmental● Impactof Business Activities

We shall seek to develop and provide financial products andservices that promote a low-carbon, recycling-oriented andsymbiotic society.

Initiatives at Branch Offices

2. Implement an environmental management system

When installing new equipment at branch offices, Daiwa
Securities Co. Ltd. has a requirement that the equipment mustbe certified under Top Runner standards. We have also decided
to replace the approximately 900 passenger vehicles at branch
offices with eco-cars and hybrid vehicles over the next few
years.

We shall implement an environmental management system andconstantly seek new ways to improve environmental activities. In
addition, we shall support environmental education and publicity
efforts, while promoting environmental protection efforts byemployees.
3. Take steps to save natural resources, reduce energy
consumption, and promote biodiversity
We shall continue to progress in our efforts to reduce the use ofnatural resources and energy, and seek ways to improve materials
and energy efficiency (including efforts to improve businessefficiency). We shall also take steps to reduce water use andreduce, reuse and recycle other materials to contribute to a moreenvironmentally friendly society. Furthermore, considering theimportance of biodiversity, we shall seek a symbiotic relationshipwith the environment and use safe, clean methods of materials
procurement.

Offering Environmentally Friendly Services
Daiwa Securities Co. Ltd. provides an online service that allows
customers to request a wide range of electronic reports.
Reports cover such areas as each transaction or balance andother pertinent details as a substitute for written notifications(hardcopy reports). Reports received in an electronic format
can, in principle, be accessed and confirmed as and whenrequired, saved to personal computers, and printed for five
years after initial receipt.

4. Promote environmental communication
Working in concert with business partners, the local community,
NGOs and NPOs, we shall actively disseminate information about
environmental issues, and communicate our concern for theenvironment to customers and society at large.

Launch of the Sustainability Committee

5. Strictly observe environmental regulations

Daiwa Real Estate Asset Management launched a Sustainability
Committee in FY2013 as part of its efforts to address a varietyof CSR-related challenges systematically. The Committee,
comprising the president and full-time executives, draw up
policy on sustainability and discuss challenges and activities ona monthly basis.

We shall always endeavor in environmental assurance, observing
environmental laws and regulations in addition to the Group’s
environment policies.
(May 22, 2012)
Takashi Hibino
Daiwa Securities Group Inc.
President and CEO

Daiwa Securities Group38

CSR REPORT 2014

Environmental Initiatives at Shinjuku Maynds Tower

Financing for Projects to Combat Climate Change
in Developing Countries

The following environmental initiatives have been implemented
since 2012 at the Shinjuku Maynds Tower building, which isowned by Daiwa Office Investment Corporation and operated
by Daiwa Real Estate Asset Management:■ Installation of Building Specific Heat Sources (in 2012)
The building started to produce a portion of its air-conditioning
cooling water, which is otherwise provided by the district
heating and cooling company. It has thereby reduced annual
CO2 emissions by around 833 tons (equivalent to emissions
from a single tower with over 7,000 m2 of floor area).
■ Adoption of LED Lighting (2012–present)
Since 2012, the building has continued to introduce LED
lighting systems for its common-use space. By adopting LED
lighting for its underground parking lot, first basement level,
and entrance on the first floor, it has reduced annual CO2
emissions by about 147.2 tons.
■ Adoption of BEMS for the Central Control System(to be completed in 2015)
Building energy management system (BEMS) functions will
be added to the new central control system, allowing forelaborate energy monitoring and control of the entire building.
■ Introduction of Automated Electronic Air Conditioning
Control System (to be completed in 2015)
The replacement of the current self-contained control systemwith an electronic system is expected to help optimize
the efficiency of air conditioning systems and curb energy
consumption.

The Daiwa Securities Group provides financing for projects
to counter climate change in developing countries. Throughunderwriting and sale of Green Bonds and other financial
products, we supply risk money of Japanese investors to
renewable energy and other projects in developing countries.

Investment in Companies Providing Environmental
Technologies and Services
The Daiwa Securities Group markets environmental productsthat invest in stocks of Japanese and foreign companies
focusing on improvement of the global environment as theirmain business. Such products include the Daiwa Eco Fund andthe Russell Global Environmental Technology Fund.

Participation in Saitama Eco-Town Project
Daiwa Institute of Research Business Innovation Ltd. wasinvolved in an “Eco-town” project in Saitama Prefecture,providing the systems support to operate the “Home Energy
Management System” (HEMS) installed in residences. WithHEMS installed in each home, the company provides energy
management and efficient administrative services while
analyzing energy usage by each family. The use of HEMS
allows urban planning projects to reduce their environmental
impact.

Photovoltaic Power Generation Projects
Since the launch of the renewable energy feed-in tariff (FIT)
system in July 2012, Daiwa PI Partners Co., Ltd. has leveraged
the Group’s network to identify investment projects in theenergy investment business, and is currently involved in
multiple photovoltaic power generation projects. In April 2014,a photovoltaic power generation facility that the company
funded in Kan-onji City, Kagawa Prefecture, began generating
and supplying electric power to the local power utility.
Construction work for two additional photovoltaic power
generation projects in Kushiro City, Hokkaido is in progress.

Carbon Dioxide Emissions
Energy consumption at the Daiwa Securities Group’s domestic
offices (on a carbon dioxide emissions basis) fell by 5.3%
in FY2013 compared with the previous year as a result of
initiatives to conserve energy. Electricity consumption atoverseas offices fell by 7.2% from the previous fiscal year.
⇒ Refer to “CSR Related Data” on page 53 for details

Volume of Copy Paper / Forms Used
We facilitated the transition to a paperless office by promoting
paperless meetings. In spite of these endeavors at Group
companies, the volume of copy paper increased by 12.8%
from the previous fiscal year due to the reasons such as theincrease of business. Overall, 10.2% (based on monetary
value) of the copy paper used consisted of Green Procurement
Network (GPN) compatible products.

● Information Dissemination
Dissemination of ESG Reports
The Daiwa Institute of Research carries out research in areas
such as local revitalization efforts, SRI, corporate governance,
renewable energy and other environmental issues. It publishes
the findings on its website or in its quarterly research review. In
FY2013, the Daiwa Institute of Research published 113 reports
and commentary articles on keywords concerning ESG.

⇒ Refer to “CSR Related Data” on page 53 for details● Climate Change Initiatives

Web

In every facet of its business activities, the Daiwa Securities
Group is promoting collaboration between the public andprivate sectors in an effort to mitigate the effects attributable
to climate change, while implementing various initiatives anddeveloping services.

DIR>Research>ESG (available only in Japanese)⇒ Refer to “Initiatives on Impact of Climate Change” on page 23 for details

Daiwa Securities Group39

CSR REPORT 2014

Sachiko Kishimoto
Executive Director
Public Resources Foundation(Public Interest Incorporated
Foundation)

Third-Party Opinion
The Daiwa Securities Group discloses information
comprehensively and faithfully in a PDF version of its CSR
report in accordance with the GRI’s Sustainability Reporting
Guidelines and ISO 26000. The Group also states in messages
from top executives that it aims to take the lead in the shift“from savings to investments,” with the aim of being a highlysustainable company that does not succumb to chasing nearterm profit and using investment activity as a means to addresssocial concerns. I consider the statement to be a clear andstrong commitment concerning what the Group should be.
Through its business activities, the Group has taken an
active lead in increasing impact investment in Japan. Morespecifically, the Group has arranged 59% of cumulative
offerings of impact investment bonds in Japan and marketed
IFC’s “Banking on Woman Bonds” for the first time in the
country. I find these efforts highly commendable and would
like to see the Group continue and expand initiatives to direct
its financial capacities into contributions toward a sustainable
society.
In the CSR management, the Group sorts and lists theinitiatives that it especially focuses on in order to properly
identify and respond to the trends of corporate social
responsibility. The Group also participated in the process ofdrawing up the Japanese version of the Stewardship Codeand became one of the first institutional investors announcing
the adoption of the Code. I find these efforts worthy ofpraise, while empathizing with its statement that the buildingof a transparent and fair value chain which extends fromcompanies and organizations issuing securities to investors is an
important CSR issue to be addressed by securities companies.
With these efforts in mind, I would like to respectfully
propose that the Group improve the following points. The
Group has thus far signed PRI and actively adopted Japan’s
version of the Stewardship Code. These efforts are part ofthe social responsibility of institutional investors. Meanwhile,
the Group has not fully incorporated its view on ESG. In thechart illustrating value chain management included in thisCSR report, the Group features dialogues under the Japaneseversion of the Stewardship Code. However, it is unclear fromthe chart whether the Group places at the core of its activities

the recognition that ESG factors
significantly affect the long-term
growth and investment performanceof a business. Moreover, it is
impossible for a third party to know
how far and to what extent theGroup will apply its view on ESG in specific business activities
such as conducting due diligence as a security company andmaking investment choices. I agree with the Group’s efforts
to deepen dialogues under the Stewardship Code and hopethat the Group will clearly present specific policies, including its
opinion on ESG factors, and show a roadmap to apply the view.
In the “Relationship with Customers” section of the report,
the Group states that its conventional “Call Center” wasrenamed “Contact Center” and has started receiving calls
coming in to sales branches as the company’s representative. I
am happy to know that the Group has expanded its customer
service amid the shift from savings to investments, hopingthat it will continue to sincerely respond to the needs of retailinvestors. I also consider it necessary to have a third party
evaluate social achievements gained from investment in impact
investment products, which are quintessential to the Group,and communicate the results of such evaluation to investors.
In the “Relationship with Employees” section, the Groupdescribed how it has been proactive in the promotion of
women to management levels. Daiwa Securities Group Inc.,for example, has recently appointed a “female” executive witha long career at Daiwa to be a board member for the firsttime ever. I would like to praise the Group for making steadyprogress and hope that it will continue such efforts and createa cycle where a diverse range of human resources boost theGroup’s competitiveness.
It is worthy of praise that the Group signed the Global
Compact as described in Human Rights Initiatives, but its
specific activities seem limited to social integration issues
in Japan and problems that could arise in the Group’s own
working environment. I believe that the Group should review
human rights issues again in today’s context or in the Group’s
broader business activities.

Response toThird-Party Opinion

our products and services to help solve social challenges without
being satisfied with the status quo. We will also strengthen
our initiatives under the Japanese version of the Stewardship
Code as a major institutional investor, and continue to enhancecustomer services and actively promote female employees tomanagement positions.
Concerning your suggestion on our ESG investment, we
will consider measures to live up to the expectations of a wide
range of stakeholders, while taking into account materiality
and our business characteristics as a financial group. Since
our establishment over 110 years ago, the Group hasconstantly adapted to changes that have occurred with thedevelopment of the global financial and capital markets. We
will continue to identify changing social requirements withsincerity and provide our services accordingly.

Yoshihisa Kaneko

Executive Officer

We are grateful to receive your valuable
opinion for this fiscal year again.
We believe it is becoming increasingly important forcompanies to respond to requests from a variety of
stakeholders in a balanced manner.
From this viewpoint, we will incorporate your opinion toachieve a better balanced approach.
Our impact investment initiative and other business activities
have received high praise, but we will further strive to improve

Daiwa Securities Group40

CSR REPORT 2014

Third-Party Evaluations
Name
Dow Jones Sustainability Asia Indexes
In Collaboration with RobecoSAM

Evaluation
The Dow Jones Sustainability Asia Pacific Index (DJSI Asia Pacific) is a stock index of companies
with sustainable practices selected by Dow Jones & Company, Inc. of the United States andRobecoSAM AG of Switzerland. Daiwa Securities Group Inc. has been included in DJSI Asia
Pacific for five consecutive years. Since DJSI World was launched in 1999, it has continually
been included in both DJSI World and DJSI Asia Pacific.

FTSE4Good Index
FTSE4Good Index FTSE is a subsidiary of the UK’s Financial Times and the London Stock
Exchange. It develops global indexes and provides data for investment. Daiwa Securities Group
Inc. has been included in the FTSE4Good, an index of socially responsible companies
compiled by FTSE, for eight consecutive periods since September 2006.

Certified Family-friendly Employer

Certified Family-friendly Employer shown left is the certification symbol for family-friendly
employers provided by Japan’s Ministry of Health, Labour and Welfare based on the Act on
Advancement of Measures to Support Raising the Next Generation of Children. In addition
to Daiwa Securities Group Inc. obtaining certification as a family-friendly employer on June 9,
2008. Daiwa Securities, Daiwa Securities Capital Markets, Daiwa Institute of Research Holdings,
Daiwa Institute of Research, Daiwa Institute of Research Business Innovation and Daiwa
Securities Business Center also received this certification.

Work-Life Balance

The Daiwa Securities Group has earned high praise from a range of external organizations for
its initiatives to provide employees with a more supportive work environment that is conducive
to work-life balance.
・Ranked 7th in the “Best 100 Companies for Women to Play an Active Role” and 1st in the“Utilization of Women” division according to Nikkei WOMAN (May 2013 issue)
・Recipient of the Ministry of Health, Labour and Welfare sponsored “Award for Companies
Providing Career Support in 2013—for companies committed to human resources
development” (October 2013)
・Recognized in the Ministry of Economy, Trade and Industry sponsored “Diversity Management
Selection 100” (March 2014)
Daiwa Securities Group Inc. received an excellence award from the Minister of Health, Labour

Healthy Management

and Welfare in the ministry sponsored “2nd Smart Life Project Award (Let’s extend healthy life
expectancy!).” (November 2013)GRESB 2013“Green Star”
The Global Real Estate Sustainability Benchmark (GRESB) awarded its highest recognition,a Green Star, to Daiwa Real Estate Asset Management Co. Ltd. subsidiary Daiwa Office
Investment Corporation for two consecutive years.

Daiwa Securities Group41

CSR REPORT 2014

GRI/ISO 26000 Content Index
GRI Application Levels
In compiling the Daiwa Securities Group Sustainability Report 2014, reference was made to Global Reporting Initiative (GRI) Guidelines (3.1 Edition)and the Financial Services Sector Supplement (2008).
The guidelines set out a series of standard levels (GRI application levels) based on regulations outlined therein that companies compiling reports
may apply to ensure that their reports are compliant with GRI guidelines. We believe that the Daiwa Securities Group Sustainability Report 2014
meets the reporting standards for GRI Report Application Level B+.

GRI/ISO 26000 Content Index
Indicator

Link

ISO 26000
Core Social Responsibility Subjects & Themes Clauses

1. Strategy and Analysis

1.1Statement from the most senior decision-maker of the organization (e.g., CEO, chair, or
equivalent senior position) about the relevance of sustainability to the organization and its
strategy.

Message from the CEO/Message from the
Chairman

1.2

Description of key impacts, risks, and opportunities.

Message from the CEO/Message from the Chairman
Initiatives through Business Activities
CSR Management: Performance and Targets

Organizational governance

6.2

Organizational governance

6.2

2. Organizational Profile
2.1

Name of the organization.

Daiwa Securities Group Profile

2.2

Primary brands, products, and/or services.

Daiwa Securities Group Profile
Initiatives through Business Activities

2.3

Operational structure of the organization, including main divisions, operating companies,
subsidiaries, and joint ventures.

Daiwa Securities Group Profile

2.4

Location of organization’s headquarters.

Daiwa Securities Group Profile

2.5

Number of countries where the organization operates, and names of countries with either major
Daiwa Securities Group Profile
operations or that are specifically relevant to the sustainability issues covered in the report.

2.6

Nature of ownership and legal form.

Daiwa Securities Group Profile

2.7

Markets served (including geographic breakdown, sectors served, and types of customers/beneficiaries).

Daiwa Securities Group Profile

2.8

Scale of the reporting organization, including:· Number of employees;· Number of operations;· Net sales (for private sector organizations) or net revenues (for public sector organizations); Daiwa Securities Group Profile· Total capitalization broken down in terms of debt and equity (for private sector organizations);and· Quantity of products or services provided.

2.9

Significant changes during the reporting period regarding size, structure, or ownership including:· The location of, or changes in operations, including facility openings, closings, andexpansions; andDaiwa Securities Group Profile· Changes in the share capital structure and other capital formation, maintenance, andalteration operations (for private sector organizations).

2.10

Awards received in the reporting period.

Third-Party Evaluations

3. Report Parameters
Report Profile
3.1

Reporting period (e.g., fiscal/calendar year) for information provided.

Contents/Editorial Policy

3.2

Date of most recent previous report (if any).

Contents/Editorial Policy

3.3

Reporting cycle (annual, biennial, etc.).

Contents/Editorial Policy

3.4

Contact point for questions regarding the report or its contents.

Contents/Editorial Policy

Report Scope and Boundary
3.5

Process for defining report content, including:· Determining materiality;· Prioritizing topics within the report; and· Identifying stakeholders the organization expects to use the report.

Daiwa Securities Group Corporate Principles
and Key Issues

3.6

Boundary of the report (e.g., countries, divisions, subsidiaries, leased facilities, joint ventures, suppliers). Contents/Editorial Policy

3.7

State any specific limitations on the scope or boundary of the report.

Contents/Editorial Policy

3.8

Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, andother entities that can significantly affect comparability from period to period and/or between
organizations.

CSR Related Data

3.9

Data measurement techniques and the bases of calculations, including assumptions andtechniques underlying estimations applied to the compilation of the Indicators and otherinformation in the report.

CSR Related Data

3.10

Explanation of the effect of any restatements of information provided in earlier reports, and thereasons for such restatement (e.g., mergers/ acquisitions, change of base years/periods, natureof business, measurement methods).

Not applicable

3.11

Significant changes from previous reporting periods in the scope, boundary, or measurement
methods applied in the report.

Not applicable, because there have been no
significant changes since the previous report

Daiwa Securities Group42

CSR REPORT 2014

GRI Content Index
3.12

Table identifying the location of the Standard Disclosures in the report.

This table references GRI content

Policy and current practice with regard to seeking external assurance for the report.
If not included in the assurance report accompanying the sustainability report, explain thescope and basis of any external assurance provided. Also explain the relationship between thereporting organization and the assurance provider(s).

Third-Party Opinion
Independent Assurance Report

Assurance
3.13

Verification

7.5.3

Organizational governance

6.2

4. Governance, Commitments, and Engagement
Governance
4.1

Governance structure of the organization, including committees under the highest governancebody responsible for specific tasks, such as setting strategy or organizational oversight.

Corporate Governance

4.2

Indicate whether the Chair of the highest governance body is also an executive officer (and, if
so, their function within the organization’s management and the reasons for this arrangement).

Corporate Governance

4.3

For organizations that have a unitary board structure, state the number and gender of members
Corporate Governanceof the highest governance body that are independent and/or non-executive members.

4.4

Mechanisms for shareholders and employees to provide recommendations or direction to thehighest governance body.

4.5

Linkage between compensation for members of the highest governance body, senior managers,
and executives (including departure arrangements), and the organization’s performance
Corporate Governance(including social and environmental performance).

4.6

Processes in place for the highest governance body to ensure conflicts of interest are avoided.

Corporate Governance

4.7

Process for determining the composition, qualifications, and expertise of the members of thehighest governance body and its committees, including any consideration of gender and otherindicators of diversity.

Corporate Governance

4.8

Internally developed statements of mission or values, codes of conduct, and principles relevant
to economic, environmental, and social performance and the status of their implementation.

Daiwa Securities Group Corporate Principles
and Key Issues

4.9

Procedures of the highest governance body for overseeing the organization’s identification andmanagement of economic, environmental, and social performance, including relevant risks andopportunities, and adherence or compliance with internationally agreed standards, codes ofconduct, and principles.

CSR Management (CSR Promotion System)

4.10

Processes for evaluating the highest governance body’s own performance, particularly withrespect to economic, environmental, and social performance.

Corporate GovernanceCorporate Governance
Relationship with Employees (Communication)

Commitments to External Initiatives
Compliance
Risk Management
IT Strategy, Information Security, and Disclosure

4.11

Explanation of whether and how the precautionary approach or principle is addressed by theorganization.

4.12

Externally developed economic, environmental, and social charters, principles, or other initiatives
Initiatives through Business Activities
to which the organization subscribes or endorses.

4.13

Principal Member Qualifications· Nippon Keidanren· Japan Securities Dealers Association· Work-Life Balance Promotion Model
Project by the Ministry of Health, Labourand Welfare· The Multi-Stakeholder Forum on Social
Responsibility for a Sustainable Future
· PRI
· CDP
· Global Compact Japan Network
Etc.

Memberships in associations (such as industry associations) and/or national/international
advocacy organizations in which the organization:· Has positions in governance bodies;· Participates in projects or committees;· Provides substantive funding beyond routine membership dues; or· Views membership as strategic.

Stakeholder Engagement

4.14

List of stakeholder groups engaged by the organization.
· Civil society;· Customers;· Employees, other workers, and their trade unions;· Local communities;· Shareholders and providers of capital; and· Suppliers.

Daiwa Securities Group Corporate Principles
and Key Issues

4.15

Basis for identification and selection of stakeholders with whom to engage.

Daiwa Securities Group Corporate Principles
and Key Issues

4.16

Approaches to stakeholder engagement, including frequency of engagement by type and by
stakeholder group.

Daiwa Securities Group Corporate Principles
and Key Issues
Relationship with Customers
Relationship with Shareholders and Other
Investors
Relationship with Employees
Relationship with Society

4.17

Key topics and concerns that have been raised through stakeholder engagement, and how theorganization has responded to those key topics and concerns, including through its reporting.

Relationship with Customers
Relationship with Shareholders and Other
Investors
Relationship with Employees
Relationship with Society

Daiwa Securities Group43

CSR REPORT 2014

5. Management Approach and Performance Indicators
Economic
Message from the CEO/
Message from the Chairman

Disclosure on Management Approach

Organizational governanceCommunity involvement and development

6.2
6.8

Community involvement and development
Community involvement
Wealth and income creation
Social investment

6.8
6.8.3
6.8.7
6.8.9

Climate change mitigation and action

6.5.5

Economic Performance
Economic Performance
EC1.

Direct economic value generated and distributed, including revenues, operating costs, employee
CSR Related Data
CORE compensation, donations and other community investments, retained earnings, and payments
Annual Report 2014
to capital providers and governments.

EC2.

CORE

EC3.

CORE Coverage of the organization’s defined benefit plan obligations.

Annual Report 2014

EC4.

CORE Significant financial assistance received from government.

Impact is insignificant

Financial implications and other risks and opportunities for the organization’s activities due toclimate change.

Initiatives through Business Activities

Market Presence
EC5.

ADD

Range of ratios of standard entry level wage by gender compared to local minimum wage atsignificant locations of operation.

Impact is insignificant, due to the nature ofour business

Discrimination and vulnerable groups
Conditions of work and social protection
Community involvement and development

6.3.7
6.4.4
6.8

EC6.

CORE

Policy, practices, and proportion of spending on locally-based suppliers at significant locationsof operation.

Impact is insignificant, due to the nature ofour business

Promoting social responsibility in the value
chain
Community involvement and development
Employment creation and skills development
Wealth and income creation

6.6.6
6.8
6.8.5
6.8.7

EC7.

CORE

Procedures for local hiring and proportion of senior management hired from the local
community at locations of significant operation.

Not reported

Community involvement and development
Employment creation and skills development
Wealth and income creation

6.8
6.8.5
6.8.7

Development and impact of infrastructure investments and services provided primarily for public Initiatives through Business Activities
benefit through commercial, in-kind, or pro bono engagement.
Relationship with Society

Economic, social and cultural rights
Community involvement and development
Community involvement
Education and culture
Employment creation and skills development
Technology development and access
Wealth and income creation
Social investment

6.3.9
6.8
6.8.3
6.8.4
6.8.5
6.8.6
6.8.7
6.8.9

Understanding and describing significant indirect economic impacts, including the extent of
impacts.

Not applicable

Economic, social and cultural rights
Promoting social responsibility in the value
chain
Respect for property rights
Access to essential services
Community involvement and development
Employment creation and skills development
Technology development and access
Wealth and income creation
Social investment

6.3.9
6.6.6
6.6.7
6.7.8
6.8
6.8.5
6.8.6
6.8.7
6.8.9

Environmental Initiatives(Approach and Basic Stance)
Environmental Initiatives(Environmental Management)

Organizational governance
The environment

6.2
6.5

The environment
Sustainable resource use

6.5
6.5.4

Indirect Economic Impacts

EC8.

EC9.

CORE

ADD

Environmental
Disclosure on Management Approach

Performance Indicators
Materials
EN1.

CORE Materials used by weight or volume.

Not applicable

EN2.

CORE Percentage of materials used that are recycled input materials.

Not applicable

EN3.

CORE Direct energy consumption by primary energy source.

CSR Related Data

EN4.

CORE Indirect energy consumption by primary source.

CSR Related Data

EN5.

ADD Energy saved due to conservation and efficiency improvements.

CSR Related Data

EN6.

Initiatives to provide energy-efficient or renewable energy based products and services, andADD
reductions in energy requirements as a result of these initiatives.

CSR Related DataEN7.

ADD Initiatives to reduce indirect energy consumption and reductions achieved.

CSR Related Data

EN8.

CORE Total water withdrawal by source.

CSR Related Data

EN9.

ADD Water sources significantly affected by withdrawal of water.

Impact is insignificant

EN10.

ADD Percentage and total volume of water recycled and reused.

Not reported

EnergyWater

Daiwa Securities Group44

CSR REPORT 2014

Biodiversity
EN11.

CORE

Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas
Not applicableof high biodiversity value outside protected areas.

EN12.

CORE

Description of significant impacts of activities, products, and services on biodiversity in protected
Not applicableareas and areas of high biodiversity value outside protected areas.

EN13.

ADD Habitats protected or restored.

The environment
The environment protection of theenvironment & biodiversity, and restoration ofnatural habitats

6.5
6.5.6

Not applicable

The environment
The environment protection of theenvironment & biodiversity, and restoration ofnatural habitats
Community involvement

6.5
6.5.6
6.8.3

Not applicable

The environment
The environment protection of theenvironment & biodiversity, and restoration ofnatural habitats

6.5
6.5.6

The environment
Climate change mitigation and action

6.5
6.5.5

The environment
Prevention of pollution

6.5
6.5.3

Not applicable

The environment
Prevention of pollution
Sustainable resource use
The environment protection of theenvironment & biodiversity, and restoration ofnatural habitats

6.5
6.5.3
6.5.4
6.5.6

Environmental Initiatives (Initiatives to Reduce)

The Environment
Sustainable resource use
Promoting social responsibility in the value chain
Sustainable consumption

6.5
6.5.4
6.6.6
6.7.5

Not applicable

The Environment
Prevention of pollution
Sustainable resource use
Sustainable consumption

6.5
6.5.3
6.5.4
6.7.5

Not applicable

EN14.

ADD Strategies, current actions, and future plans for managing impacts on biodiversity.

EN15.

ADD

Number of IUCN Red List species and national conservation list species with habitats in areas
affected by operations, by level of extinction risk.

Emissions, Effluents, and Waste
EN16.

CORE Total direct and indirect greenhouse gas emissions by weight.

CSR Related Data

EN17.

CORE Other relevant indirect greenhouse gas emissions by weight.

CSR Related DataEN18.

ADD Initiatives to reduce greenhouse gas emissions and reductions achieved.

CSR Related Data

EN19.

CORE Emissions of ozone-depleting substances by weight.

Impact is insignificant

EN20.

CORE NO, SO, and other significant air emissions by type and weight.

Impact is insignificant

EN21.

CORE Total water discharge by quality and destination.

Impact is insignificant

EN22.

CORE Total weight of waste by type and disposal method.

CSR Related Data

EN23.

CORE Total number and volume of significant spills.

Not applicable

EN24.

Weight of transported, imported, exported, or treated waste deemed hazardous under the terms
ADD of the Basel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped
Not applicableinternationally.

EN25.

Identity, size, protected status, and biodiversity value of water bodies and related habitats
ADD
significantly affected by the reporting organization’s discharges of water and runoff.

Products and Services
Initiatives to mitigate environmental impacts of products and services, and extent of impact
mitigation.

EN26.

CORE

EN27.

CORE Percentage of products sold and their packaging materials that are reclaimed by category.

Compliance
EN28.

CORE

Monetary value of significant fines and total number of non-monetary sanctions fornoncompliance with environmental laws and regulations.

Not applicable

The environment

6.5

ADD

Significant environmental impacts of transporting products and other goods and materials used
for the organization’s operations, and transporting members of the workforce.

Not reported

The environment
Sustainable resource use
Promoting social responsibility in the value chain

6.5
6.5.4
6.6.6

Not reported

The environment

6.5

Relationship with Employees

Organizational governanceLabour practices
Fundamental principles and rights at work

6.2
6.4
6.3.10Labour practices
Employment and employment relationships

6.4
6.4.3

Relationship with Employees(Stiving to Create a Pleasant Working
Environment)

Labour practices
Employment and employment relationships
Conditions of work and social protection

6.4
6.4.3
6.4.4

Relationship with Employees(Stiving to Create a Pleasant Working
Environment

Labour practices
Conditions of work and social protection

6.4
6.4.4

Transport
EN29.
Overall
EN30.

ADD Total environmental protection expenditures and investments by type.

Society
Labor Practices and Decent Work
Disclosure on Management Approach

Performance Indicators
Employment
Daiwa Securities Group Profile
CSR Related Data

LA1.

CORE Total workforce by employment type, employment contract, and region, broken down by gender.

LA2.

CORE

Total number and rate of new employee hires and employee turnover by age group, gender, andCSR Related Data
region.

LA3.

ADD

Benefits provided to full-time employees that are not provided to temporary or part-time
employees, by significant locations of operation.

LA15.

CORE Return to work and retention rates after parental leave, by gender.

Daiwa Securities Group45

CSR REPORT 2014

Labor/Management Relations

LA4.

CORE Percentage of employees covered by collective bargaining agreements.

LA5.

CORE

Minimum notice period(s) regarding operational changes, including whether it is specified incollective agreements.

Relationship with Employees(Relationship with Employee Unions)

Labour practices
Employment and employment relationships
Conditions of work and social protection
Social dialogue
Fundamental principles and rights at work

6.4
6.4.3
6.4.4
6.4.5
6.3.10

Not reported

Labour practices
Employment and employment relationships
Conditions of work and social protection
Social dialogue

6.4
6.4.3
6.4.4
6.4.5

Labour practices
Health and safety at work

6.4
6.4.6

Relationship with Employees(Stiving to Create a Pleasant Working
Environment)

Labour practices
Health and safety at work
Community involvement and development
Community involvement
Education and culture
Health

6.4
6.4.6
6.8
6.8.3
6.8.4
6.8.8

Not reported

Labour practices
Health and safety at work

6.4
6.4.6

Not reported

Labour practices
Human development and training in theworkplace

6.4
6.4.7

Occupational Health and Safety
LA6.

ADD

Percentage of total workforce represented in formal joint management-worker health and safetycommittees that help monitor and advise on occupational health and safety programs.

Not reported

LA7.

Rates of injury, occupational diseases, lost days, and absenteeism, and total number of workCORE
related fatalities, by region and by gender.

Not reported

Education, training, counseling, prevention, and risk-control programs in place to assist
workforce members, their families, or community members regarding serious diseases.

LA8.

CORE

LA9.

ADD Health and safety topics covered in formal agreements with trade unions.

Training and Education
LA10.

CORE Average hours of training per year per employee by gender, and by employee category.

LA11.

ADD

Programs for skills management and lifelong learning that support the continued employabilityof employees and assist them in managing career endings.

Relationship with Employees(Human Resource Development and Skill
Enhancement)

Labour practices
Human development and training in theworkplace
Employment creation and skills development

6.4
6.4.7
6.8.5

LA12.

ADD

Percentage of employees receiving regular performance and career development reviews, bygender.

Relationship with Employees(Human Resource Development and Skill
Enhancement)

Labour practices
Human development and training in theworkplace

6.4
6.4.7

CSR Related Data

Discrimination and vulnerable groups
Fundamental principles and rights at work
Labour practices
Employment and employment relationships
Conditions of work and social protection

6.3.7
6.3.10
6.4
6.4.3

Not reported

Discrimination and vulnerable groups
Fundamental principles and rights at work
Labour practices
Employment and employment relationships
Conditions of work and social protection

6.3.7
6.3.10
6.4
6.4.3
6.4.4

Human Rights Initiative (Approach and Basic
Stance)Organizational governance
Human rights
Due diligence
Human rights risk situations
Resolving grievances
Promoting social responsibility in the value
chain

6.2
6.3
6.3.3
6.3.4
6.3.6
6.6.6

HR1.

Percentage and total number of significant investment agreements and contracts that include
CORE
clauses incorporating human rights concerns, or that have undergone human rights screening.

We have no operations in areas where there
are special concerns about protection ofhuman rights

Human rights
Due diligence
Avoidance of complicity
Promoting social responsibility in the value
chain

6.3
6.3.3
6.3.5
6.6.6

HR2.

Percentage of significant suppliers, contractors, and other business partners that have
CORE
undergone human rights screening, and actions taken.

We have no operations in areas where there
are special concerns about protection ofhuman rights

Human rights
Due diligence
Avoidance of complicity
Employment and employment relationships
Promoting social responsibility in the value
chain

6.3
6.3.3
6.3.5
6.4.3
6.6.6

HR3.

CORE

Human Rights Initiative

Human rights
Avoidance of complicity

6.3
6.3.5

Not applicable

Human rights
Resolving grievances
Discrimination and vulnerable groups
Fundamental principles and rights at work
Employment and employment relationships

6.3
6.3.6
6.3.7
6.3.10
6.4.3

Diversity and Equal Opportunity

LA13.

Composition of governance bodies and breakdown of employees per employee category
CORE
according to gender, age group, minority group membership, and other indicators of diversity.

Equal Remuneration for Women and Men

LA14.

CORE

Ratio of basic salary and remuneration of women to men by employee category, by significant
locations of operation.

Human Rights

Disclosure on Management Approach

Performance Indicators
Investment and Procurement Practices

Total hours of employee training on policies and procedures concerning aspects of humanrights that are relevant to operations, including the percentage of employees trained.

Non-Discrimination

HR4.

CORE Total number of incidents of discrimination and corrective actions taken.

Daiwa Securities Group46

CSR REPORT 2014

Freedom of Association and Collective Bargaining

HR5.

CORE

Operations and significant suppliers identified in which the right to exercise freedom of
association and collective bargaining may be violated or at significant risk, and actions taken to Not applicable, due to the nature of our
support these rights.
business

Human rights
Due diligence
Human rights risk situations
Avoidance of complicity
Civil and political rights
Fundamental principles and rights at work
Employment and employment relationships
Social dialogue

6.3
6.3.3
6.3.4
6.3.5
6.3.8
6.3.10
6.4.3
6.4.5

Child Labor
HR6.

CORE

Operations and significant suppliers identified as having significant risk for incidents of childlabor, and measures taken to contribute to the effective abolition of child labor.

Our business entails no risk of using child labor Human rights
Due diligence
Human rights risk situations
Avoidance of complicity
Discrimination and vulnerable groups
Our business entails no risk of using forced labor Fundamental principles and rights at work
Promoting social responsibility in the value chain

6.3
6.3.3
6.3.4
6.3.5
6.3.7
6.3.106.6.6

Impact is insignificant, due to the nature ofour business

Human rights
Avoidance of complicity
Employment and employment relationships
Promoting social responsibility in the value chain

6.3
6.3.5
6.4.3
6.6.6

Not applicable

Human rights
Resolving grievances
Discrimination and vulnerable groups
Civil and political rights
Respect for property rights

6.3
6.3.6
6.3.7
6.3.8
6.6.7

Percentage and total number of operations that have been subject to human rights reviews
and/ or impact assessments.

Not reported

Human rights
Due diligence
Human rights risk situations
Avoidance of complicity

6.3
6.3.3
6.3.4
6.3.5

Number of grievances related to human rights filed, addressed and resolved through formal
grievance mechanisms.

Not reported

Human Rights
Resolving grievances

6.3
6.3.6

Forced and Compulsory Labor
HR7.

Operations and significant suppliers identified as having significant risk for incidents of forced
CORE or compulsory labor, and measures to contribute to the elimination of all forms of forced orcompulsory labor.

Security Practices
HR8.

ADD

Percentage of security personnel trained in the organization’s policies or procedures concerning
aspects of human rights that are relevant to operations.

Indigenous Rights

HR9.

ADD Total number of incidents of violations involving rights of indigenous people and actions taken.

Assessment
HR10.

CORE

Remediation
HR11.

CORE

Society
Relationship with Society (Approach and Basic Organizational governance
Stance)Fair operating practices
Compliance
Community involvement and development

Disclosure on Management Approach

6.2
6.6
6.8

Performance Indicators
Local Communities
Percentage of operations with implemented local community engagement, impact assessments, Impact is insignificant, due to the nature ofand development programs.
our business

SO1.

CORE

SO9.

CORE Operations with significant potential or actual negative impacts on local communities.

Not applicable

SO10.

Prevention and mitigation measures implemented in operations with significant potential or
CORE
actual negative impacts on local communities.

Not applicable

Economic, social and cultural rights
Community involvement and development
Community involvement
Social Investment

6.3.9
6.8
6.8.3
6.8.9

Economic, social and cultural rights
Prevention of pollution
Protection of the environment & biodiversity,and restoration of natural habitats
Community Involvement and development

6.3.9
6.5.3
6.5.6
6.8

Fair operating practices
Anti-corruption

6.6
6.6.3

Fair operating practices
Responsible political involvement
Community involvement

6.6
6.6.4
6.8.3

Corruption
SO2.

CORE Percentage and total number of business units analyzed for risks related to corruption.

Risk Management
IT Strategy, Information Security, andDisclosure

SO3.

CORE Percentage of employees trained in organization’s anti-corruption policies and procedures.

Compliance

SO4.

CORE Actions taken in response to incidents of corruption.

Not applicablePublic Policy
SO5.

CORE Public policy positions and participation in public policy development and lobbying.

Not reported

SO6.

Total value of financial and in-kind contributions to political parties, politicians, and related
ADD
institutions by country.

Not reported

Anti-Competitive Behavior
SO7.

ADD

Total number of legal actions for anticompetitive behavior, anti-trust, and monopoly practices
and their outcomes.

Not applicable

Fair operating practices
Fair competition
Respect for property rights

6.6
6.6.5
6.6.7

Monetary value of significant fines and total number of non-monetary sanctions fornoncompliance with laws and regulations.

Not applicable

Fair operating practices
Anti-corruption
Respect for property rights
Wealth and income creation

6.6
6.6.3
6.6.7
6.8.7

Compliance
SO8.

CORE

Daiwa Securities Group47

CSR REPORT 2014

Product Responsibility
IT Strategy, Information Security and Disclosure Organizational governance
Relationship with Customers (Approach andFair operating practices
Basic Stance)
Consumer Issues

Disclosure on Management Approach

6.2
6.6
6.7

Performance Indicators
Customer Health and Safety
PR1.

Life cycle stages in which health and safety impacts of products and services are assessed for
CORE improvement, and percentage of significant products and services categories subject to suchprocedures.

Not applicable, due to the nature of ourbusiness

PR2.

ADD

Total number of incidents of noncompliance with regulations and voluntary codes concerning
health and safety impacts of products and services during their life cycle, by type of outcomes.

Not applicable, due to the nature of ourbusiness

Economic, social and cultural rights
Promoting social responsibility in the value
chain
Consumer issues
Protecting consumers’ health & safety
Sustainable consumption

6.3.9
6.6.6
6.7
6.7.4
6.7.5

Product and Service Labeling
PR3.

CORE

Type of product and service information required by procedures, and percentage of significant
products and services subject to such information requirements.

PR4.

ADD

Total number of incidents of non-compliance with regulations and voluntary codes concerning
product and service information and labeling, by type of outcomes.

PR5.

ADD

Practices related to customer satisfaction, including results of surveys measuring customer
satisfaction.

Relationship with Customers (Building Deeper, Consumer issues
Stronger Trust with Customers)
Fair marketing, factual and unbiased
information and fair contractual practices
Protecting consumers’ health & safety
Sustainable consumption
Not applicable
Consumer service, support and complaint anddispute resolution
Education and awareness

6.7
6.7.3
6.7.4
6.7.5
6.7.6
6.7.9

Consumer issues
Protecting consumers’ health & safety
Sustainable consumption
Consumer service, support and complaint anddispute resolution
Access to essential services
Education and awareness

6.7
6.7.4
6.7.5
6.7.6
6.7.8
6.7.9

Relationship with Customers (Building Deeper, Consumer issues
Stronger Trust with Customers)
Fair marketing, factual and unbiased
information and fair contractual practices
Consumer service, support and complaint and
Not applicabledispute resolution
Education and awareness

6.7
6.7.3
6.7.6
6.7.9

Relationship with Customers (Working toIncorporate Customer Voices)

Marketing Communications
Programs for adherence to laws, standards, and voluntary codes related to marketing
communications, including advertising, promotion, and sponsorship.

PR6.

CORE

PR7.

Total number of incidents of non-compliance with regulations and voluntary codes concerning
ADD marketing communications, including advertising, promotion, and sponsorship by type ofoutcomes.

Customer Privacy
PR8.

ADD

Total number of substantiated complaints regarding breaches of customer privacy and losses ofcustomer data.

Not applicable

Consumer issues
Consumer data protection and privacy

6.7
6.7.7

Consumer Issues
Consumer service, support and complaint anddispute resolution

6.7
6.7.6

Compliance
PR9.

CORE

Monetary value of significant fines for noncompliance with laws and regulations concerning the
Not applicableprovision and use of products and services.

Daiwa Securities Group48

CSR REPORT 2014

Sustainability Reporting Guidelines & Financial Services Sector Supplement(2008)
Indicator

Link

Product and Service Impact (Financial Services Sector Specific Disclosure on Management Approach)
FS1.

CORE Policies with specific environmental and social components applied to business lines.

CSR Management (CSR Promotion System)

FS2.

CORE Procedures for assessing and screening environmental and social risks in business lines.

Not reported

FS3.

CORE

Processes for monitoring clients’ implementation of and compliance with environmental andsocial requirements included in agreements or transactions.

Compliance

FS4.

CORE

Process(es) for improving staff competency to implement the environmental and social policies
and procedures as applied to business lines.

CSR Management (CSR Promotion System)
Relationship with Employees(Human Resource Development and Skill
Enhancement)

FS5.

CORE

Interactions with clients/investees/business partners regarding environmental and social risks
and opportunities.

Relationship with Customers (Building Deeper,
Stronger Trust with Customers)
Relationship with Shareholders and Other
Investors

Product and Service Impact (Performance Indicators)
Product Portfolio
FS6.

CORE

Percentage of the portfolio for business lines by specific region, size (e.g. micro/SME/large) andby sector.

Daiwa Securities Group Profile
Initiatives through Business Activities

FS7.

CORE

Monetary value of products and services designed to deliver a specific social benefit for eachbusiness line broken down by purpose.

Initiatives through Business Activities

FS8.

CORE

Monetary value of products and services designed to deliver a specific environmental benefit for
Initiatives through Business Activities
each business line broken down by purpose.

CORE

Coverage and frequency of audits to assess implementation of environmental and social
policies and risk assessment procedures.

Audit
FS9.

Corporate Governance

Active Ownership
Percentage and number of companies held in the institution’s portfolio with which the reporting
Not reported
organization has interacted on environmental or social issues.

FS10.

CORE

FS11.

CORE Percentage of assets subject to positive and negative environmental or social screening.

Initiatives through Business Activities

FS12.

Voting policy(ies) applied to environmental or social issues for shares over which the reporting
CORE
organization holds the right to vote shares or advises on voting.

Initiatives through Business Activities

Society (Performance Indicators)
Community
FS13.

CORE Access points in low-populated or economically disadvantaged areas by type.

Not applicable

FS14.

CORE Initiatives to improve access to financial services for disadvantaged people.

Relationship with Customers (Building Deeper,
Stronger Trust with Customers)
Relationship with Society (2. Assistanceto Inside and Outside of Japan throughFoundations and NPOs)

Product Responsibility (Performance Indicators)
FS15.

Relationship with Customers (Building Deeper,
Stronger Trust with Customers)

CORE Policies for the fair design and sale of financial products and services.

Product Responsibility (Performance Indicators)
Product and Service Labeling
FS16.

CSR Management (CSR Issues: Performanceand Targets)
Relationship with Society (1. Education andResearch Activities in Economics and Finance)

CORE Initiatives to enhance financial literacy by type of beneficiary.

Daiwa Securities Group49

CSR REPORT 2014

=CSR Related Data=Management Report
Compensation Paid to Directors and Corporate Executive Officers of Daiwa Securities Group Inc. in FY2013
Directors

Corporate Executive Officers

Total

Recipients

AmountRecipients

AmountRecipients

Amount8 persons¥113 million

14 persons¥1,159 million

22 persons¥1,273 million

Amounts based on resolution of the Compensation Committee
Notes:
1. The above amounts include performance-based compensation paid in this fiscal year
2. The above compensation amounts include a total of ¥95 million in stock acquisition rights granted as stock options to directors and corporate executive officers
3. Compensation paid to the six outside directors totaled ¥85 million
4. Seven directors also served as corporate executive officers; their total compensation is included in the “Corporate Executive Officers” category

Social ReportCompanies covered by data
Consolidated: Entire Group (except for equity-method affiliates)
10 Group companies:
Daiwa Securities Group Inc., Daiwa Securities Co. Ltd., Daiwa Asset Management Co. Ltd., Daiwa Institute of Research Holdings Ltd., Daiwa Institute of Research Ltd., Daiwa Institute of ResearchBusiness Innovation Ltd., Daiwa SB Investments Ltd., Daiwa Securities Business Center Co. Ltd., Daiwa Property Co., Ltd., and Daiwa Corporate Investment Co., Ltd.
Eight Group companies:
Daiwa Securities Group Inc., Daiwa Securities Co. Ltd., Daiwa Asset Management Co. Ltd., Daiwa Institute of Research Ltd., Daiwa Institute of Research Business Innovation Ltd., Daiwa SB
Investments Ltd., Daiwa Securities Business Center Co. Ltd., and Daiwa Corporate Investment Co., Ltd.
Two Group companies:
Daiwa Securities Group Inc., Daiwa Securities Co. Ltd.,

Employees at the Daiwa Securities Group (Consolidated)(Unit: persons)

As of March 31, 2013
Male

Temporaryemployees

FA*1

Employees

As of March 31, 2014
Employees

Temporaryemployees

FA*1

7,452

71

—

7,478

65

—

(Career track )

7,011

—

—

7,029

—

—

(Managers)

3,773

—

—

3,835

—

—

4,117

122

—

4,125

102

—

(Career track )

2,360

—

—

2,486

—

—

(Managers)

190

—

—

221

—

—

Japan total

11,569193

391

11,603

167

563

*2

Japan Female*2

Overseas

1,664

—

88

1,547

−

103

Total

13,233193

479

13,150167

666*1 Financial advisors*2 Includes regional career-track employees and specialist positions

Number of New Graduates Recruited by the Daiwa Securities Group
Career-track employees/regional career-track
employees(Unit: persons)April 2012

April 2013

Male

186

296

345

Female

168

227

265

354

523

610

Total

April 2014

This data pertains to eight Group companies

Workforce Statistics
FY2011FY2012FY2013

Average annual salary*1 (in ten thousand yen)

811

888

1,153

Average age (years old)

39.9

40.5

41.2

Average number of years of service (years)

13.7

14.3

14.8

FY2011FY2012FY201363

61

59This data pertains to Daiwa Securities Group Inc. only (numbers include those who simultaneously work for Daiwa Securities)*1 Average annual salary includes bonuses and other remuneration

Re-Employment under the Daiwa Master System
No. of employees hired under the Daiwa Master System(Unit: persons)This data pertains to two Group companies

Daiwa Securities Group50CSR REPORT 2014

Employment Rate for Persons with Disabilities(Unit: %)As of March 31, 2012

As of March 31, 2013

As of March 31, 2014

2.09

2.08

2.04

Daiwa Management Academy: Targeting department managers

FY2011FY2012FY2013

Number finishing program (cumulative)

269

291

314

Daiwa Leadership Program: Targeting deputy general managers

FY2011FY2012FY2013

Number finishing program (cumulative)

599

631

671

Employment rate for persons with disabilities
This data pertains to 10 Group companies

Achievements of Selected Participants in Management Training(Unit: persons)This data pertains to 10 Group companies

Participants in Business Skill Training(Unit: persons)

Number finishing program (cumulative)*1

FY2011FY2012FY2013

2,469

2,862

3,468

This data pertains to eight Group companies*1 The number of people completing training courses in presentation, coaching, negotiation skills, communication, logical thinking and facilitation

Persons Earning Credentials
Credentials(Unit: persons)

As of March 31, 2012

As of March 31, 2013

As of March 31, 2014

Affiliated Financial Planner (AFP)

5,255

5,183

5,191

Certified Financial Planner (CFP)*1

439

497

555

1,440

1,446

1,461

Chartered Member of the Securities Analysts Association of Japan(CMA)
Chartered Financial Analyst (USA credential)
TOEIC (730–990)*2
Overseas MBA program graduate, etc.

41

42

44

1,249

1,383

1,470

158

154

164

This data pertains to 10 Group companies*1 This data represents numbers at Daiwa Securities*2 Data as of March 31, 2012 includes some group companies that did not conduct summary countSuccessful Applicants in Internal Recruiting System(Unit: persons)

Held

Cumulative from FY2000

No. ofNo. ofsuccessful
applicants
applicants

Positions offered
M&A, SMA consultants, analysts, internal wholesalers, compliance, dealers, derivatives, traders, fundmanagers, principal finance specialists, venture capitalists, money managers, research, underwriting,sale, overseas, management consultant, individual and corporate sales, product development,
proposals and planning, investment advisors, investment information, pension consultants, etc.

904

146

This data pertains to 10 Group companies

Working Hours and Paid Vacation Usage Rate
Annual regular working hours (hours)
Average monthly overtime hours (hours) *1
Paid vacation usage rate (%) *2

FY2011FY2012FY20131822.51837.51837.5

25.1

25.7

27.2

54

52

50

This data pertains to two Group companies*1 Figures indicate employees at the two companies who are members of the Daiwa Securities Group Employees’ Union*2 In addition to annual paid vacation, the Daiwa Securities Group offers three days of special summer vacation. These figures show usage rates for annual paid vacation when the special summer vacation is included

Daiwa Securities Group51

CSR REPORT 2014

Employee Welfare System Usage(Unit: persons)*1

Number of employees taking childcare leave

Number of employees taking nursing care leave

FY2011FY2012FY2013

Female

396

436

486

Male

12

17

19

Female

8

8

10

Male

0

0

0

This data pertains to all consolidated Group companies**1 Employees eligible for childcare leave include non-regular employees (contract workers, part-timers, etc.)

Main Initiatives for Work-Life Balance and Female Employee Support Plan
Program name

Program description

Professional return plan (rehiring of sales staff)

Offers opportunities for re-employment to former full-time employees who left their jobs after marriage or childbirth.

Job location change system*1

Offers a position in a new location when an employee must relocate after marriage or spouse’s job transfer.

Childcare leave

Employees can take childcare leave until their child’s third birthday.

Exemption from or restricted overtime work

Employees can apply for an exemption from overtime work until their child completes the third grade of elementary school.
Employees can also apply for restricted overtime work until their child completes elementary school.

Daycare subsidy

The company offers subsidies for daycare expenses until the employee’s child begins elementary school.
The company encourages employees to take paid vacation and has introduced leave for marriage preparations or "family day"leave to give employees a chance to spend quality time with their families.
The Personnel Department keeps track of individual employees’ childcare-related schedules and notifies them of programs
available at the appropriate time.

Expanded leave system
Follow-up on program use

Enables employees to return to work after a period of childcare leave. The return to work guidelines were revised in FY2011.
Daiwa WLB Station, a work-life balance promotion website that focuses on various support systems related to childrearing andnursing care, provides information for employees on childcare leave and helps facilitate their smooth return to the workplace.

Support after returning to work

*1 Number of employees using the program at Daiwa Securities as of the end of March 2014, 136 (cumulative)

Female Employees and Managers at the Daiwa Securities Group(Unit: %)As of March 31, 2012

As of March 31, 2013

As of March 31, 2014

Percent of employees who are female

36.2

35.6

35.6

Percent of managers who are female

4.3

4.8

5.4

This data pertains to all consolidated Group companies

Number of Employees’ Union Members(Unit: persons)

As of March 31, 2012

As of March 31, 2013

As of March 31, 2014

6,907

6,490

6,406

Employees’ union membership

Of the eight Group companies (nine companies until end of March 2012) this does not include Daiwa Asset Management Co., Ltd., which has its own employees’ union, and Daiwa Property Co., Ltd., which has no employee union

Corporate Citizenship Initiatives and Expenditures

Independent
Assurance(Unit: ¥ million)

Type of Activity

FY2011FY2012FY2013

1. Education and research activities in economics and finance
2. Assistance to communities inside and outside of Japan through foundations andNPOs

65.43563.52549.694133.457

165.851179.937231.900

3. Support for culture and the arts

269.869272.500

4. Encouraging volunteerism among employees

31.053

2.328

1.790

Total

499.814504.204

463.321

Results in Economic and Financial Education
Duration

Participants

Support for Finance Park

ProgramJune 2005–March 2014

47,323 persons

Support for Japan Council for Economic Education (CEE-Japan)

January 2009–March 2014

3,090 persons

July 2001–March 2014

3,182 persons

September 2003–March 2014

204 persons

Sponsorship of JA’s mainstay Global Leadership Forum for elementary and junior andsenior high school teachers
Support for thee Student Company Program

Daiwa Securities Group52

CSR REPORT 2014

Environmental Report
Energy Consumption
Electricity (thousand kWh)Natural gas (thousand m3)
Gasoline (kl)*1
Heavy oil (kl)Diesel fuel (kl)Electricity (thousand kWh)

Domestic offices

Overseas offices

FY2011FY2012FY201393,402
582
1,117
7.9
0.1
15,991*2

76,247
503
1,111
10.8
0.1
13,716 *2

72,813
456
1,088
2.0
0.1
12,586FY2011FY2012FY2013

51,8381,327*1
2,593
23.7
0.2
55,782*1
8,792

42,317
1,147
2,579
32.2
0.2
46,075
7,529

40,047
1,040
2,525
5.9
0.2
43,6196,985

64,574*1

53,60450,604This data pertains to all consolidated Group companies (including equity-method affiliates) At overseas offices, only electricity consumption was calculated*1 Leased vehicles are used as company cars *2 Data has been restated

CO2 Emissions(Unit: t-CO2)

Domestic offices

Overseas offices*3
Total for domestic and overseas

Electricity
Natural gas
Gasoline*2
Heavy oil
Diesel fuelTotal for domestic offices
Electricity

offices*1 Data has been restated *2 Leased vehicles are used as company cars *3 Figures for overseas offices are calculated as references using the emission factor for Japanese offices

CO2 Emissions per Employee (Domestic)
FY2011
Number of employees in Japan (persons)

FY2012FY2013

4.6*1

3.9

3.7

12,257

11,762

11,770FY2011FY2012FY2013

129.6

119.5

FY2011FY2012FY2013

24
303
95
84
35
31
28
3
3
6
16
629

28
374
−
59
23
36
28
3
1
7
20
578

32
417
—
62
34
40
30
4
3
6
24
652

FY2011FY2012FY2013

601.0
88
390.4
37

361.9
88
276.0
43

377.8
89
214.3
82

Per employee (t-CO2)*1 Data has been restatedClean Water Consumption(Unit: thousand kl)

Consumption volume162.0

This data pertains to all consolidated Group companies (including equity-method affiliates; domestic offices only)

Volume of Copy Paper/Forms Used

(Unit: t)Company nameDaiwa Securities Group Inc.
Daiwa Securities*1
Daiwa Securities Capital Markets*1
Daiwa Institute of Research Group
Daiwa Asset Management
Daiwa Securities Business Center
Daiwa SB Investments
Daiwa Property
Daiwa Office Management*2
Daiwa Corporate Investment
Others total
Total for domestic offices

This data pertains to all consolidated Group companies (including equity-method affiliates; domestic offices only)*1 Daiwa Securities Capital Markets is integrated in Daiwa Securities in April 2012
*2 Daiwa Sanko was renamed Daiwa Office Management Co., Ltd. in January 2014

Waste Generated and Recycling Volume
Paper waste
Non-paper waste

Amount generated (t)Recycling rate (%)
Amount generated (t)Recycling rate (%)

This data pertains to all consolidated Group companies (including equity-method affiliates; domestic offices only)
Calculated based on the Reuse Plan for Large-Scale Buildings used for business, as specified by each local government

Daiwa Securities Group53

CSR REPORT 2014

Glossaryn Active fund/Actively managed funds

n Low carbon society

In contrast to passive funds, which are managed to mirror certain indexes, active funds are investment

A society where carbon dioxide emissions is lesstrusts and other funds managed by a fund manager who makes decisions concerning the stocks,
bonds, and other assets to invest in and the investment ratios based on investment policies

n Microfinance

A form of financial services for the poor entrepreneurs and small businessesn Base of the pyramid (BOP) businessIn many countries, the poorest of the poor make up a large portion of the lower segment of then Nippon Individual Savings Account (NISA)

population pyramid distributed by wealth, but these are undeveloped markets, and this business

Dividends and capital gains from stocks, investment trusts, and other investments are subject tofocuses on the potential of such markets to become major markets and seeks to solve social issues andordinary income tax and local taxes, but this program exempts dividends and capital gains from newraise the quality of life by providing sustainable products and services.

purchases up to 1 million yen for a maximum of five years

n Carbon Disclosure Projectn NPO/NGO

This project is an affiliation of institutional investors concerned about climate change who demand

Non profit organization/non governmental organizationthat companies disclose information about their stance on environmental problems and initiatives
addressing such problemsn Principles for Financial Action toward a Sustainable Society(Principles for Financial Action for the 21st Century)n Cluster bomb/Cluster munitions

Aims to expand investment and financing with the environment in mind, formulated as voluntary

A bomb that contains multiple bomblets within a large shell that serves as a container. Explosions

efforts of financial institutions in Japanoccur over a wide area from a single attack, expanding the scope of damage. It has also been pointed
out that cluster bombs pose the difficult problem of dealing with multiple unexploded bomblets.

n Principles for Responsible Investment (PRI)

PRI is a set of six principles launched by the UNEP Finance Initiative and the UN Global Compact inn Color universal design

April 2006. This initiative asks corporate investors to incorporate ESG into their investment decision-

A method of design that takes into consideration the use of color so that information can be conveyedmaking practices.

to more people, keeping in mind people with varied color perceptionn Recycle
n Compliance

To process waste for reuse afterwards as a new productConfirming to standards, regulations and other requirements
n SRI
n Corporate governance

Investment strategy where both financial return and social good are sought

The mechanism that allows for sound and efficient corporate managementn Stakeholdersn CSR

A person, group or organization that has interest or concern in an organization

Corporate social responsibility
n TSR
n ESG

Telephone service representative—Telephone Operator with the expertise

Environment/social/governancen UN Global Compact
n Green procurement/Clean methods of materials procurement

The UN Global Compact was established in 2000 under the UN secretariat after an initiative launched

To buy environmentally-friendly products for reducing environment load of producers

in 1999 by then-Secretary General Kofi Annan. The membership consists of global corporate leaders
who are expected to align their business practices with ten principles in the fields of human rights,

n GRI

labor, environment, and anti-corruption in their business activities, in partnership with UN agencies,

Global Reporting Initiative—An organization dedicated to proposing and promoting common

labor, and civil society. Signatory members are required to implement these principles with a top

international guidelines for sustainability reports

management commitment.

n HEMS/BEMS

n United Nations Millennium Development Goals (MDGs)

Energy management systems (EMS) for electricity, gas, and so on that use information technology.

The MDGs consist of eight goals that 189 representatives from UN Member States, including 147

BEMS (Building EMS) are for commercial buildings, and HEMS (Home EMS) are for homes

heads of state, participating in the UN Millennium Summit held in New York in September 2000,
designated as 21st century goals for the international community. It aims to achieve numerical goals ineight fields such as poverty alleviation, education and public healthcare and so on by 2015.

n IFFImInternational Finance Facility for Immunisationn Value chain

Interlinked value-adding activities that convert inputs into outputs which, in turn, add to the bottom

n Impact investmentline and help create competitive advantage

A method of investment that in addition to producing economic benefit, invests in assets with theintention of addressing social issues such as poverty and environmental problems

n Work-Life balance

Balance between an individual's work and personal lifen IR

Investor relationsn ISO 26000

A worldwide standard that provides guidance for social responsibility of organizations

Daiwa Securities Group54

CSR REPORT 2014

Independent Assurance Report

Daiwa Securities Group55

CSR REPORT 2014

Daiwa Securities Group
What we can do
What will the world be like in 20 years from now,
when these babies are adults?
Imagine a society where people live happily inharmony with our Earth’s abundant nature.
At the Daiwa Securities Group, we are determined to fulfill
our responsibilities as individuals and as a company to createa sustainable society.
The smiles of these infants—all children of Daiwa Securities Group
employees—express our hopes for a bright future.

CSR Report
2014
Contributing to Sustainable Development