Daiwa Securities GroupCSR Report
Integrated Report Supplement

2016Daiwa Securities Group CSR REPORT 2016

Contents

Editorial Policy
Daiwa Securities Group Profile

2

Corporate Principles and Management Vision

4

CSR of the Daiwa Securities Group5

3

CSR Key Issues for the Daiwa Securities Group

5

Verification of CSR Key Issues and Responses to Changing Social Requirements

5

Daiwa Securities Group Stakeholders

6

Communication with Stakeholders

6

CSR Promotion System

7

Building and Maintaining a Transparent and Fair Value Chain

7

CSR Materiality of the Daiwa Securities Group8

Message from Management

9

Initiatives through Business Activities

10

Role and Social Responsibilities of the Financial Services

11

Provision of Quality Service to Customers

13

Initiatives through Product Development and Provision

17

To Maintain and Develop Financial and Capital Market Functions

21

Communication of Information of Analysis and Proposals about Economy, Society and Investment

22

Support for the Creation of Our Future Society

24

Initiatives for Supporting Business Activities

25

Corporate Governance

26

Compliance29

Human Rights Initiative

32

Risk Management

33

IT Strategy and the Management of Systemic Risk

37

Environmental Initiatives

38

Relationship with Shareholders and Other Investors

41

Relationship with Employees

43

Engagement with Society

48

Third-Party Evaluations

55

GRI Index/ISO 26000 Index

56

CSR Related Data

64

Glossary72

Independent Assurance Report731Editorial Policy

Daiwa Securities Group CSR REPORT 2016

Editorial Policy

We at the Daiwa Securities Group have been reporting our CSR activities annually since FY2002 for the following two objectives: todisclose our CSR activities in an easy-to-understand way and to evaluate the current state of affairs and the challenges we face.
Since FY2015, we have evolved our Annual Report (disclosure report) as an integrated report containing the Group’s financial
and non-financial information. This CSR Report is designed to disclose non-financial information in a more detailed manner as asupplement to the Integrated Report.
The CSR Report, which is only released on our website, is produced referring the guidelines of the Global Reporting Initiative (GRI)and ISO 26000. Regarding GRI Guidelines, we have referred to the G4 Sustainability Reporting Guidelines since FY2014 and identified
our materiality for disclosure. (In FY2015, we also started to take account of the provisional sustainability accounting for the financial
sector issued by the Sustainability Accounting Standards Board.) Moreover, we aim to make the report more accessible by utilizing theconcept of Color Universal Design in selecting the colors of the document.
The meanings of underlined words are provided in the glossary (p. 72).

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

Reporting Boundary
This report generally discusses the principal companies of the Daiwa Securities Group. It does not, however, include all data fromthe Group’s principal companies on items reported. The information is selected based on the respective companies’ size and type ofbusiness. Each set of data specifies the scope of coverage. The term “Daiwa Securities Group” refers to our entire group, while theterm “Daiwa Securities Group Inc.” and the term “Daiwa Securities” refer to Daiwa Securities Group Inc. and Daiwa Securities Co.
Ltd., respectively.

Period Covered by Report
FY2015 (April 1, 2015, to March 31, 2016)
The report, however, also includes some information on events and activities carried out prior to the beginning of or after the end of
fiscal 2015, or scheduled to take place during FY2016.

Date of Publication
October 2016
(The previous report was published in October 2015; Publication of the English edition of the next report is planned for October 2017.)

Inquiries
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/

Reference Guidelines
The GRI Sustainability Reporting Guidelines (G4)Core subjects of ISO 26000
Sustainability Accounting Standards Board (SASB), sustainability accounting standards for the Financials sector
Ministry of the Environment JAPAN, Environmental Accounting Guidelines 2005

Photos on the cover
The smiles of these children of Daiwa Securities Group employees symbolize our hopes for the creation of a sustainable society.
At the Daiwa Securities Group, we are determined to fulfill our role as a company and our responsibilities as adults to enable these children to live in a happy society
when they grow up.

2

Daiwa Securities Group Profile

Daiwa Securities Group CSR REPORT 2016

Daiwa Securities Group Profile
Corporate Data

Description of the Daiwa Securities Group’s Businesses● NameThe 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 OfficeGran Tokyo North Tower
9-1, Marunouchi 1-chome, Chiyoda-ku,

1. Retail Division
Daiwa Securities offers two retail services, Daiwa Consulting and Daiwa Direct,
through its domestic network of 144 branches, contact centers and the Internet,
which provide a wide range of financial products and services as well as support
for customer asset management, mainly for individuals and unlisted companies.

Tokyo 100-6751, Japan● Tel+81-3-5555-1111 (Main)

2. Global Markets Division● Established
December 27, 1943 (Founded 1902)● President and CEO

This division provides brokerage and trading services of securities and otherfinancial products mainly to institutional investors.
3. Global Investment Banking (Global IB) Division

Takashi Hibino

Through raising capital, this division supports industrial corporations, financial
institutions and others in their business expansion and making and carrying out
their financial and capital strategies.

● Capital¥247.3 billion● Number of employees (consolidated)
13,701● Number of consolidated subsidiaries
50● Number of equity-method affiliates
10

4. Asset Management DivisionThis division sets up and manages investment trusts focusing on a variety ofassets, while providing investment advice on pension assets and management
services to institutional investors in and outside Japan.
5. Investment Division
The Investment Division invests in areas such as private equity, venture capital
opportunities, business regeneration, monetary receivables, and real estateusing its own funds and through the formation of investment funds.

● Shares of Common Stock(issued and outstanding)

6. Other

1,749,378 thousand shares

The Group provides information via research reports, consulting, IT services,and other services to institutional investors, industrial corporations, financial
institutions, and public organizations in Japan and overseas.

(As of March 31, 2016)

Daiwa Securities Group Inc.

Retail Division

Wholesale Division
Global Markets

Global IB

Daiwa Securities Co. Ltd.

Hinode Securities
Co. Ltd.

Daiwa Capital Markets Europe Limited

Retela Crea
Securities Co.,Ltd.

Daiwa Capital Markets Hong Kong
LimitedDaiwa Capital Markets Singapore
LimitedDaiwa Capital Markets America Inc.

Asset Management
Division
Daiwa AssetManagement
Co.Ltd.

Investment Division

Daiwa Corporate
Investment Co.,Ltd.

Daiwa SB
Investments Ltd.

Daiwa Real Estate
Asset Management
Co. Ltd.
Daiwa Office
Investment
Corporation

Daiwa PI Partners
Co. Ltd.

Daiwa Securities
SMBC Principal
Investments Co.
Ltd.

Other

Daiwa Institute of
Research Ltd.
Daiwa Institute of ResearchBusiness Innovation Ltd.
Daiwa Next Bank,Ltd.
Daiwa Securities BusinessCenter Co. Ltd.
Daiwa Property Co.,Ltd.
*As of June 30, 20163

Corporate Principles and Management Vision

Daiwa Securities Group CSR REPORT 2016

Corporate Principles of the Daiwa Securities Group
Building trust

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

Placing importanceon personal

The source of the Group’s competitiveness lies in the capabilities of its employees. The Group will
promote the creativity of employees by offering them a challenging and self-directed working
environment that encourages their abilities and appropriately rewards their contributions.

Contributing tosociety

The Daiwa Securities Group will seek to benefit the economy and society through the developmentof healthy financial 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 the societies in which we operate.
The Group will always seek to develop healthy business operations and to increase corporate value

Maintaining healthy for the benefit of shareholders. By providing customers with attractive products and services, theearnings results
Daiwa Securities Group will seek to generate strong profits and healthy returns for shareholders.

Management Vision and Strategies
The Daiwa Securities Group has formulated“Passion for the Best” 2017, a new Medium-Term
Management Plan covering the period throughFY2017. The Daiwa Securities Group will pursue
growth strategies under the basic policies of
attracting customers with the industry’s top quality
and becoming their best partner, as the “era oftransition from savings to investment” gains fullmomentum.
We believe our social mission is contributing to
the development of a sustainable society. This canbe achieved by continuously raising corporate value
through these growth strategies and other measures
as well as supporting sound and stable developmentof global financial and capital markets.

Management Vision“Be the First Choice”
Lead the development of capital markets in Japan and Asia,and be the customer’s first choice securities group

Basic Management Policy
Leverage the industry's
top quality anddramatically expand ourcustomer baseAchieve sustainablegrowth by linking Japanto the growth of Asia

Contribute to the development of society andeconomy through financial and capital markets

In response to the full-fledged start of an era of transition from savings
to investment, attract customers with the industry’s highest quality, andbecome their best partner
FY2015FY2016FY2017

Provide investment services to lead the era of transition “from savings to investment”
Basic Policy ➊ Pursue best quality
Basic Policy ➋ D ramatically expand ourcustomer base and revenue

Provide solutions that contribute to improvement in corporate value
Basic Policy ➌ Support the sustainable growth of companies and thedevelopment of new industries

Numerical
targets❶ROE: 10% or more❷ Fixed cost coverage ratio: 75% ormore in the final fiscal year

Positive cycleof “transition
from savings toinvestment” and“improvement ofcorporate value”

4CSR of the Daiwa Securities Group

Daiwa Securities Group CSR REPORT 2016

CSR Key Issues for the Daiwa Securities GroupAt the Daiwa Securities Group, we regard “building trust” as one of our corporate principles. We believe that contributing to thedevelopment of society and the economy through financial and capital markets is our social mission and that trust from customers
and society supports the Group’s sustained growth.
We are promoting the Group’s CSR activities under three pillars. They comprise the following two CSR key issues and thedevelopment of a work environment which serves as a base for promoting these issues:

Corporate
Principles

1

Leveraging financial capabilities to contribute toa sustainable society

2

Developing sound financial and capital markets
for the next generation

Striving to Create a
Pleasant Working
Environment

Realizationof asustainable
society

Maintaining a Balance with Creation of Shareholder Value
In promoting CSR activities, we place a great emphasis on
initiatives through business activities. Such initiatives help
solve social issues and at the same time, generate commission
and fee revenue—tangible value for shareholders. Moreover,a cut in energy costs achieved as a result of initiatives toreduce the environmental footprint of our business activities isalso an example of such value.
Value for shareholders is not limited to matters that areeasy to gauge. Such intangible value for our shareholders
includes trust given to us by customers, a rise in morale ofemployees and improvement in corporate governance andcompliance systems.

While CSR activities generate tangible and intangible value
for stakeholders and shareholders, they also incur costs.
As with other business activities, due to the limitations ofhuman and other resources, CSR activity costs may growrapidly when the volume of activities increases. We consider
it important to analyze the cost-effectiveness of our CSR
activities whilst working on reducing their costs, in assessing
value for shareholders.
The Daiwa Securities Group will continue practicing CSR
activities with the aim of living up to stakeholders’ various
expectations and generating value for shareholders throughthose activities.

Verification of CSR Key Issues and Responses to Changing
Social Requirements
The Daiwa Securities Group recognizes that we are responsible, as a corporate citizen, to various stakeholders when selecting
key CSR issues. Meanwhile, social requirements for companies may change over 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 andthus more complex to reconcile and that it has become more important than ever to take a balanced approach in considering thesediverse demands.
In light of these circumstances, the Daiwa Securities Group has actively participated in external CSR initiatives in Japan andoverseas and promoted activities that use various codes in order to identify properly and respond to corporate CSR trends. The
following are codes that we place a special emphasis on:

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 of internationallyproclaimed human rights; andPrinciple 2: make sure that they are not complicit in Environment
human rights abuses.

LabourPrinciple 3: Businesses should uphold the freedomof association and the effective
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.

Anticorruption

Principle 7: Businesses should support aprecautionary approach toenvironmental challenges;
Principle 8: undertake initiatives to promote greater
environmental responsibility; andPrinciple 9: encourage the development anddiffusion of environmentally friendly
technologies.
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)● The United Nations Guiding Principles on Business and Human Rights ● The OECD Guidelines for Multinational Enterprises● The UN Sustainable Development Goals (SDGs)

5

CSR of the Daiwa Securities Group

Daiwa Securities Group CSR REPORT 2016

Daiwa Securities Group Stakeholders
To continue fulfilling our social mission whilst expanding our business, we trust that it is essential to maintain close ties with our
stakeholders.

● Issuers● Investors
We are committed to
improving customer
satisfaction by offering
products and services thatmeet the needs of retailinvestors, institutional
investors, and potential
investors who are
considering investing in the
future.

Shareholders
and Others

Customers
Issuers
Investors

Shareholders
and Others● S hareholders
and Others*pEmloyees’ Fami

Investees

As an institutional investor,
we actively communicate
with investee companies.

Business
Partners

Daiwa
SecuritiesGroup● Business partners
Governmentlie

Employees

Employees● Investees

Societys

To earn the confidence of
our shareholders, we aim
to provide fully transparent
information disclosure, andmeet their expectations bycontinually creating value.
*Including investors
holding bonds
issued by the Daiwa
Securities GroupFor private corporations,public institutions and otherentities seeking to raise funds
through equity, debt, or othersources, we propose optimal
solutions from a wide rangeof financing options andprovide full-scale support,
from planning to execution.

Local
Communities

NPO
NGO

We maintain fair relationships
with all our business partners
and work together to createa sustainable society.

● Government
We fulfill our tax obligations
and offer policy suggestions
to create a better society.

● Employees● Local communities● NPO/NGOWe are endeavoring to create a workplace
where our employees, who create added
value for all our stakeholders, are fully
motivated and can find satisfaction in theirwork and lives.

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

We collaborate with NPOs
and NGOs in such fields
as financial and economic
education and disaster relief.
We reflect social values in ourmanagement through active
dialogue.

Communication with Stakeholders
We have adopted the following basic policy, considering that communication with stakeholders plays an important role inidentifying social demands, which change over time.

Basic Policy (1)Basic Policy (2)Basic Policy (3)The Daiwa Securities Group will strive tomaintain 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 alreadyknown 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.

6CSR of the Daiwa Securities Group

Daiwa Securities Group CSR REPORT 2016

CSR Promotion System
Our officers and employees endeavor to implement our corporate principles through their business operations for thematerialization of a sustainable society and our vision.
Specifically, the CSR Group of the Corporate Communication Department at Daiwa Securities Group Inc. actively seeks
information and holds dialogues at external and internal meetings. These activities are conducted under the direction and orderof the Corporate Communication Officer, an executive managing director under the supervision of the CEO. CSR issues and ourprogress are shared regularly with the executive managing director at meetings and other occasions.
Furthermore, information on CSR is taught to the Group’s newly hired employees. The CSR group promotes and raises awarenessof CSR issues throughout branches and departments across Japan and major overseas sites and builds a network of cooperation.

CSR Promotion System
Daiwa Securities Group Inc.

Foundations

Stakeholders

CEO
Daiwa Securities Health Foundation
Daiwa Securities Foundation

ReportingDirection and order

Dialogue

Daiwa Anglo-Japanese Foundation (UK)Daiwa Myanmar-Japan Foundation (Myanmar)

Customers
Shareholders & Investors

Executive Managing Director
Direction and order

Investees

ReportingBusiness partners

Group companies

Dialogue

Communication of
information anddevelopment of awarenessGovernment

Dialogue

CSR Group, Corporate
Communication Department

NPOs/NGOs
Local communities

Consulting andreporting

Employees

Departments within
Daiwa Securities Group Inc.

(As of April 1, 2016)

Building and Maintaining a Transparent and Fair Value Chain
For the Daiwa Securities Group, securities such as stocks and bonds are core financial products. Companies and organizations
issuing these securities as well as investors in them are therefore our important customers. We believe that endeavoring to build
and maintain a transparent and fair value chain is our important responsibility to develop financial and capital markets in a viableway, whilst bearing in mind the construction of a sustainable society. Asset management and sales of investment products arealso part of the Group’s core operations. As a responsible institutional investor, our Asset Management Division aims to achieve
excellent performance by encouraging investees to seek sustainable growth over the medium to long term while appropriately
taking ESG factors into consideration.
Meanwhile, in order to ensure that we do not have any relationships with anti-social forces, we have established a set of rules
and a database among Group companies and eradicated antisocial forces from our value chain.

Value Chain Management
Dialogue under Japan’s Stewardship Code*Issuers

Public works, etc.

Business firms

National/local
governments
Internationalorganizations
Public corporations

Issuance

Financial
CapitalMarkets

Proceeds
Securitized assets

Funding needs*Refer to “Role and Social Responsibilities of the Financial Services” on page 11

Investors

Investment
Equities
Bonds

Equities
Bonds

Securities company

Capital expenditure
Research anddevelopment
M&As, etc.

Corporate
Finance

Investment trust

Derivatives
securitized products

ReturnInvestment

Institutional investors

Individual retail investors

Asset management
needs

7

CSR of the Daiwa Securities Group

Daiwa Securities Group CSR REPORT 2016

CSR Materiality of the Daiwa Securities GroupWe identified materiality for CSR in FY2014 and have stepped up our CSR activities by focusing on the important aspects
identified. We referred to the disclosure requirements shown in the G4 Sustainability Reporting Guidelines, in addition to otherguidelines, in an effort to identify important aspects that suit our business model as a financial services group. To identify
materiality, we first reviewed the Group’s activities from three perspectives: “the provision of good-quality services to customers,”“being a supporter for the financial and capital markets, which are part of our social and economic infrastructure” and “beinga member of society.” We held discussions within the Group, obtaining opinions from third-party experts. We then determinedmateriality after conducting a questionnaire to relevant departments within the Group to ask about the adaptability and validity of
the aspects identified with their operations.
We have disclosed information on the Group’s initiatives for materiality. We have also strived to grasp the expectations of our
stakeholders and changes in social trends through engagement and will review our initiatives if necessary. Moreover, we will verify“CSR Key Issues” in accordance with changes in materiality.

The Daiwa Securities Group’s Materiality

Relevant Items for CSR Report 2016

I.

Appropriate proposals and after-sales service in accordancewith the characteristics and needs of customers

Provision of Quality
Service to Customers

II.

Customer service with a wealth of hospitality

Provision of Quality
Service to Customers

III.

Development and provision of superior financial andinvestment products

Initiatives throughProduct Development
and ProvisionIV.

Communication of information of analysis and proposals
about economy, society and investment

Communication of Informationof Analysis and Proposals about
Economy, Society and Investment

V.

Maintenance and development of financial and capital
market functions

To Maintain and Develop
Financial and CapitalMarket Functions

VI. Appropriate risk controls

RiskManagement

VII. Appropriate management of customer information

Compliance

VIII. Construction and maintenance of a strong IT system

IT Strategy and theManagement of
Systemic Risk

IX. Responsible action as an institutional investor

Role and Social
Responsibilities of the
Financial Services

X.

Creation of a workplace that values human resource
development and diversity of employees

XI. Creation of a corporate culture to comply with laws,
regulations and codes in Japan and overseas, based on
self-discipline (including adequate anti-corruption andhuman rights measures)

Compliance

Support for theCreation of Our
Future Society

Risk
Management

IT Strategy and theManagement of
Systemic Risk

IT Strategy and theManagement of
Systemic Risk

Initiatives throughProduct Development
and Provision

Relationship with
Employees

Compliance

Risk
Management

XII. Reduction of environmental load and responses toenvironmental changes

Environmental
Initiatives

Risk
Management

XIII. Initiatives to address social concerns and contribute to future
development of society, and financial and capital markets

Role and Social
Responsibilities of the
Financial Services

Initiatives throughProduct Development
and Provision

XIV. Contribution to local communities

Engagementwith Society

XV. Construction and maintenance of an appropriate corporate
governance system

Corporate
GovernanceBlue

Initiatives throughBusiness Activities

Red

Human Rights
Initiative

Support for theCreation of Our
Future Society

Initiatives for Supporting
Business Activities

8

CSR of the Daiwa Securities Group

Daiwa Securities Group CSR REPORT 2016

Message from Management

Yoshihisa Kaneko
Executive Managing Director
Daiwa Securities Group Inc.

Adapt to Changes through Continuous
Verification to Remain as a Company
Contributing to Society
A book which argued that major financial institutions have not contributed tosociety at all was published overseas in 2015, drawing much attention.
This has helped us reaffirm that we should continuously verify what to do in order
to live up to the expectations of a wide range of stakeholders.
In FY2014, we identified 15 items as materiality for our social responsibility. We
believe all of these items are important to convince various stakeholders that the
Daiwa Securities Group plays a useful role in to society. We will continue actively
working on them.
Meanwhile, recent advances in artificial intelligence (AI) and other technologies,
along with changes in social trends, have demanded that we financial institutions
revolutionize our business models. Reponses to this major shift will be a significant
business chance for the Daiwa Securities Group. In the meantime, these changes
could also generate new challenges of how to secure appropriate profits for ourshareholders and meet the expectations of other stakeholders at the same time. We
may need to significantly amend our materiality.
The Daiwa Securities Group has a business history of more than 110 years. We
are proud this history is one of creating our own evolution while being aware of oursocial role. Along with our stakeholders, we would like to continuously verify whatrole we should play and whether we live up to this role, thereby adapting to this ageof significant changes.

9Initiatives through Business Activities

Daiwa Securities Group CSR REPORT 2016

10

Initiatives throughBusiness Activities
Approach and Basic Stance
The Daiwa Securities Group’s mission is to contribute to the development of society and theeconomy through business operations, including wealth management for investors and support forthe development of financial strategies and other aspects of corporations and public institutions.
Deepening the bond of trust we share with our stakeholders is essential to the sustainableaccomplishment of our mission and achievement of growth.

Role and Social Responsibilities of the Financial Services

Daiwa Securities Group CSR REPORT 2016

Role and Social Responsibilities of the Financial Services
The securities business, the core business of the
Daiwa Securities Group, plays a key role in society, bybuilding a bridge between the needs of investors tomanage assets and those of private and public sectors
to raise funds.
On the fund-raising side through underwriting
equities and bonds, and arranging other securities
products, the Group provides advice and assistanceto companies in their efforts to raise money forequipment investment or R&D, as well as to 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 and diverse lineup of financial
products and services to meet the various needs ofindividuals, companies, institutional investors, andpension funds.
In these ways, the securities business facilitates
the smooth flow of money by matching demand andsupply through financial and capital markets. The
Group fulfills an important role and responsibility insociety by contributing to sustainable development
through the channeling of funds into businesses thatsolve social issues and create new technologies, forexample.
On investing in corporate shares, the Daiwa
Securities Group promotes methods of investing thattake into account a company’s social responsibility(CSR), such as its environmental and social initiatives,in addition to financial information. In recent years,
the Group has put its emphasis on the promotion offinancial products based on the concept of Impact
Investment, a type of Socially Responsible Investment(SRI), which refers to making more direct, quick-acting
investments to resolve social issues. From its position
as a financial institution, the Daiwa Securities Groupis endeavoring to contribute to society by developing
and marketing these products. In addition to pursuingeconomic gain, the Group is dedicated to resolving ahost of social issues.

Mission for Financial Institutions
toward Solving Social Issues
The business sector’s role in endeavoring to createa sustainable society has become more important
than ever. For financial institutions, materialization ofsuch a society through finance, their core capability,
is a social mission. At the Daiwa Securities Group,
we believe that our role is not only to maintain anddevelop a fair and dynamic financial market, but also
to incorporate a social perspective in finance and to
facilitate the flow of money to build a sustainable
society.
In January 2010, the Daiwa Securities Groupsigned the United Nations Global Compact (UNGC), a
platform to help companies that have committed tosustainable and responsible business practices shape
their policies, and have proceeded with businessactivities in compliance with the principles. We will
also incorporate into our activities the Sustainable
Development Goals (SDGs) adopted in September
2015 at the United Nations Sustainable Development
Summit.

●Principles for Financial Action towarda Sustainable Society (Principles for
Financial Action for the 21st Century)
The Principles for Financial Action for the 21stCentury were drawn up by a committee comprising
representatives from a range of Japanesefinancial institutions. They were tasked withdrafting a Japanese version of the Principles forEnvironmental Financial Action. This was based on arecommendation issued by Japanese Ministry of theEnvironment’s Central Environment Council with theobjective of promoting environmental finance. Eachsignatory institution is expected to endeavor reflecting
ESG (environment, society and governance) issues andconcerns to its own business practices. The Group wasinstrumental in the establishment of the principles
from the drafting stage to the final framework.
Both Daiwa Securities Group Inc. and Daiwa AssetManagement Co. Ltd. became signatories in
November 2011.

Responsible Action as an
Institutional Investor●Initiatives by Daiwa AssetManagement
Daiwa Asset Management announced its adoptionof the Japanese version of the Stewardship Code in
May 2014 and has been actively working to fulfill its
stewardship responsibility.
It has deepened dialogue with investee companies
based on the Policy to Hold Constructive Dialogue
with Investee Companies announced in June 2014,
with the aim of properly understanding the conditionsof investees, sharing such assessments, and creating
mid- to long-term corporate value. The dialogue held
under the policy can be classified into three types.
The first type is dialogue on Corporate Governanceheld by the company’s staff responsible for exercising
voting rights. Such dialogue was held about 140 times
in FY2015, significantly increasing from the about 100
times it was held in FY2014. The company also revised
its policy and standards for exercising voting rights
several times, thereby reflecting knowledge obtained
from dialogue and the circumstances surrounding

11

Signed Global
Initiatives• United Nations-

supported Principles for
Responsible Investment
(PRI)
• CDP
• United Nations Global

Compact (UNGC)• Principles for Financial

Action for the 21stCentury

Number of Corporate
Governance related
dialogues held

100 times (FY2014)
About 140 times (FY2015)
About

â

* Results from Daiwa AssetManagement

Role and Social Responsibilities of the Financial Services

the investee companies. The revisions represent thecompany’s efforts to help the investee companies toimprove their corporate value and achieve sustainablegrowth.
The second type is engagement of analysts andfund managers through research activities. Daiwa
Asset Management held such engagement about
1,100 times in FY2015. The Research Department of
the company has drawn up an Analyst Handbook(Guide to Analyst Activities Related to the StewardshipCode), which includes important points to be notedwhen analysts assess companies as well as issues to beconsidered when they hold dialogue with companies
from a mid- to long-term perspective. Engagement
has been conducted following the handbook. The
company intends to continue focusing on dialogue
based on the handbook in order to further enhance
its engagement.
The third type is dialogue by an engagement teamlaunched jointly by the Research Department andthe Equity Management Department in June 2015.
The team selects companies considered to havelarge scope to increase corporate value among thebusinesses the company especially focuses on in its
active investment, and holds deeper engagementwith the selected companies. Such engagement washeld 15 times in FY2015. Daiwa Asset Management
intends to further reinforce its activities, aiming tocreate a tripartite win-win situation between thecompanies’ customers, workers and employees, andshareholders.
Daiwa Asset Management has released a Reporton the Status of Stewardship Activities on its website(only available in Japanese). The report includes thestatus of engagement, such as policy, structure, andthe number of engagement times by theme, as well as
the status of exercising of voting rights and measures
to improve stewardship activities.

Daiwa Securities Group CSR REPORT 201612

● Initiatives by Daiwa SB Investments
At Daiwa SB Investments, we are also stepping up
dialogue with investees, steadily promoting initiatives
to fulfill our stewardship responsibility, and further
strengthening such initiatives.
We have increased the number of meetings
with the management of companies, such as
representative directors and CFOs. We have long
focused on engagement with companies antecedently
and by actively holding dialogue, urged investee
companies to turn their potential into actual businessresults.
We believe that, as an institutional investor,
Daiwa SB Investments has responsibilities to provide
investees with advice on how to exercise theirpotential and how to respond and prevent recurrence
when there is a problem. We consider that taking
various opportunities to raise issues and urge
improvement is our responsibility as an institutional
investor and also our mission for the customers
entrusting their assets.
From these perspectives, the company has decided
to invite highly independent outside directors andestablish the Responsible Investment Committee
in FY2016 as part of its initiatives to strengthen
structure.

Investment Policy against
Cluster Munitions Producers
The Convention on Cluster Munitions (Oslo
Declaration) came into effect in August
2010. As an asset management company inJapan, a country ratifying the convention,
Daiwa Asset Management applies basic
principles for investments in, and other actions
against, cluster munitions producers. Visit thecompany’s website for details of the principles.

Daiwa Asset Management Co. Ltd.
Daiwa Asset Management >Japan's Stewardship Code
Daiwa Asset Management >Investment Principle against
Cluster Munitions Producers

Daiwa SB Investments Ltd.
Daiwa SB Investments >Company Information>
Responsible Action as an
Investor > Our Stewardship
Activities > Our initiatives on
the Japanese Version of the
Stewardship Code (Japanese)Provision of Quality Service to Customers

Daiwa Securities Group CSR REPORT 2016

Provision of Quality Service to Customers
Approach and Basic Stance
The Daiwa Securities Group understands that customer trust is the foundation of ourbusiness. Based on the idea of the Customer First Principle, our focus is always on finding
ways to deliver genuine customer satisfaction.
We have also adopted the idea of hospitality to enhance our existing concept of customer
service. We aim to have the most satisfied customers in the financial services industry.

Building Deeper, Stronger Trustwith Customers●Appropriate Explanations for
Customers
We aim to build customer satisfaction throughquality services, built on understanding customer
needs quickly and proposing the best solutions foreach 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 acustomer’s knowledge, experience, financial situationand objectives.” Daiwa Securities’ approach is rooted
in this law, but as a part of our hospitality-based
service, we strive to deliver explanations that exceed
the legal requirements when promoting our financial
products.
For example, Daiwa Securities explains to ourcustomers how their investments contribute to society
when promoting Impact Investment products aimed
at addressing social issues, including Green Notes
and Water Bonds, or Daiwa Social Contribution
Wrap—Daiwa Fund Wrap with a donation service.
We thereby deepen their understanding of theseproducts.

skills that focus on giving consideration to customers.
At Daiwa Securities, we have also announced
our commitment to provide enhanced services andexplanations to customers and stepped up our efforts
to improve hospitality. To maintain sophisticatedcustomer service skills and further enhance them,
we hold training that uses online videos or internal
TV broadcasts on an as-needed basis, in addition toregular group training. Headquarters staff also checkin-branch and telephone customer services whenevernecessary.
Moreover, we conduct a customer service survey
once every half year at all the branches of Daiwa
Securities and reflect the survey results in theevaluation of the branches to further enhance service
quality.
In FY2015, we implemented a dementia supporter*
training program from August at all the branches of
Daiwa Securities as part of our efforts to build anenvironment enabling senior customers and theirfamilies to trade without worries. We have now about
2,400 dementia supporters (as of the end of March
2016), mainly comprised of employees engaged inin-branch customer services.
*Dementia supporter
A dementia supporter is a person who has an accurate knowledgeof dementia and pays warm attention to people with dementia●Active Post-Sale Follow Up
Completing the sale of a product is only the beginningof a securities company’s relationship with thecustomer. Follow up is a key element in building therelationship of trust with the customer. To alleviate
customer dissatisfaction or concerns arising after
trading, we offer thorough explanations, appropriate
proposals, and information as well as promote
initiatives to reinforce our relationship of trust withcustomers.

●Improving In-Branch Customer Service
Quality
Our employees engaged in in-branch customer
services need not only specialized knowledge of themarkets and financial products, but polished service

and their families. The Ministry of Health, Labour and Welfare has
been stepping up the training of supporters across the country as
part of its “Dementia Supporter Caravan” project.

Lecture for the dementia supporter training program

Number of Daiwa
Securities employees
who have become
dementia supporters
About

2,400 people(As of March 31, 2016)13

Provision of Quality Service to Customers●Accessible Services for Diverse
Customers
When Daiwa Securities renovates existing sales
branches or plans new branches, we work to ensurethat they are accessible to more customers, throughbarrier-free measures such as reduced variations infloor level and installation of bigger counters.
In accordance with requests from customers, thecompany also reads documents on behalf of themor provides necessary explanations through written
communication, and introduces its Internet banking
services. These initiatives are based on the Act on the
Elimination of Discrimination against Persons with
Disabilities, which took effect in April 2016.

●Further Improvement of Consulting
Services on Inheritance and BusinessSuccession
To meet the inheritance and business successionrelated needs of customers, some branches of Daiwa
Securities have inheritance consultants. We havealso introduced an Inheritance Planner Certification
program and started offering better quality service tocustomers.
Inheritance consultants are staff members who
not only handle procedures within Daiwa Securities
but also comprehensively support any procedure
for customers at the time of inheritance. They also
arrange tax accountants, judicial scriveners andagents for inheritance procedures in accordance withrequests from customers. Inheritance consultants
undergo lectures, training programs and OJT for the
first three months and also receive training regularly
thereafter.
The Inheritance Planner Certification® programis an in-house qualification system for employeeswith advanced expertise accumulated through thecertification for financial planners (CFP®) qualifications
and completion of in-house training. It helps us toenhance our inheritance and business successionrelated consulting services to customers.

Daiwa Securities Group CSR REPORT 2016

Daiwa’s Point Program
Daiwa’s Point Program rewards customers
based on their transactions. Points earned
can be exchanged for goods or used tomake a variety of charitable donations using
a conversion rate of one point for one yen.
Organizations to which donations
can be made• Japan Committee for UNICEF• Médecins Sans Frontières Japan
Association• WWF Japan• Unites Nations World Food Programme• Japan Platform• New Japan Philharmonic• Arts Support Kansai• The Kidney Foundation, Japan(As of April 2016)

14

Number of sales
branches with Daiwa
Securities inheritanceconsultants

46 branches(As of April 2016)

Number of accredited
inheritance planners

262 people(As of March 2016)

Number of CFP®
accredited staff

616 people
Highest number among
financial institutions(As of March 2016)●Continuing to Hold a Wide Variety of
Seminars
Each sales branch of Daiwa Securities holds a variety
of seminars, covering topics including Japanese andoverseas markets, Nippon (Japan) Individual Savings
Account (NISA) and inheritance, in an effort to provide
information. In particular, we have been expanding
the scale of seminars for Fund Wrap, as well as
seminars for investment beginners.
In FY2015, we had about 26,000 seminars intotal as we actively held small-scale seminars at sales
branch counters, as well as ones held at branch halls.
There are also large-scale seminar events, in addition
to those held at sales branches. We held seminars
entitled “Top Strategist Seminar” at five venues
across Japan, attracting about 1,800 people. About
5,900 people also participated in “Daiwa New Year’s
Lectures for 2016,” which was held at 14 venues
nationwide.

Daiwa’s Point
Program• Donations madethrough Japan
Platform to workthat assists victims of
the Great East Japan
Earthquake

32.80 million¥(Cumulative amount from May 2011
to April 2016)

Number of seminars
held at Daiwa
Securities•About26,000 times(Seminars held at sales branches
during FY2015)•About1,800 people

Number of participantsin Top Strategist
Seminar (nationwide)
Letter of thanks from Japan Platform

Large-scale seminar•About5,900

peopleNumber of participantsin Daiwa New Year’s
Lectures for 2016
(nationwide)Provision of Quality Service to Customers●Open Website to Learn Finance andEconomy for Junior and Senior HighSchool Students
Daiwa Securities opened okane-no-mikata, a website
for learning about finance and economy, in March
2016 ahead of the start of a Junior Nippon Individual
Savings Account program. The website is designed
to help junior and senior high school students toacquire a basic and broad knowledge of finance,
economy, and investment so as to assist them in life
planning and money management. It uses words andillustrations that are easy to understand and enjoyable
even for teenagers.

Daiwa Securities Group CSR REPORT 2016

*Japan Telecom Users Association Telephone
Customer Service Competition
telephone customer services with others and to increase customer
satisfaction by improving the verbal quality of their customer
handling. At the annual competition, participating companies
test the results of their many hours of accumulated telephone(500 in Tokyo, 120 in
Osaka)

to improve customer service and verbal skills. Nationwide, over
10,000 people compete in this widely recognized event.

Working to Incorporate Customer
Voices●Contact Center Initiatives
Employees at the Contact Center, which serves as
our comprehensive remote contact point, have directcontact with customers and play an increasingly
crucial role not only as a transaction channel but
also in customer support and marketing. In order tomaintain and improve contact center operations tomeet the demand for high-quality service, we provide
training and regular level checks for all Telephone
Service Representatives (TSR).

Okane-no-mikata, a website to learn how money works

620 service points

customer-service training and preparation as a part of efforts

The Contact Center has been a key channel fortransactions, sustaining the company’s businessmodel whose cornerstones are Daiwa Consulting andDaiwa Direct transaction courses. The center now
handles calls coming in to sales branches, thereby
acting as our comprehensive remote contact centerfor customers. To strengthen the functions of thecenter, we expanded the scale of service points inTokyo and Osaka in FY2014, and also plan to havea contact center function in Fukuoka in FY2016. By
further expanding the ability to take calls, we aim
to enhance our support functions for sales branches
going forward.

Daiwa Securities’ Contact Center participates in a
telephone customer service competition* organizedby the Japan Telecom Users Association, a public
interest incorporated foundation. The purpose of ourparticipation is to improve Contact Center service
quality significantly by receiving quality evaluations
from a third-party. We attained good results andqualified to participate in the national meet in
FY2015. Moreover, in the Customer Support Rating
hosted by HDI-Japan, we earned 3 Star—the highest
possible rating—in the FY2015 Customer Support
category of the securities industry. We will seek tofurther improve our overall services through training,
aiming to achieve 3 Star again for two consecutive
years.

Scale of Contact
CenterThis competition is a forum for companies to compare their●Contact Center Functions●Efforts to Improve Telephone
Customer Service Quality

15

Daiwa Securities’ Systems for Utilizing
Customer Feedback
Customers

Opinions, comments,
and requests
Consumer feedback
postcards available
at branches

Telephone E-mailCustomer Support Center
Contact Center

Sales
branches

Management

Departmentsin charge

Improvement

Improvement

Improvement

Earned 3 Star in HDI’s Customer Service Rating

Okane-no-mikata,a website to learn how money
works (Japanese)Provision of Quality Service to Customers

The Contact Center analyzes inquiries, other
input from customers and related data to identify
the causes of any issues raised. The Contact Center
provides feedback and information to our head officeand sales branches as part of our efforts to improve
services and customer interaction and to increasecustomer satisfaction.
In response to a number of requests for increased
trading services for smartphone users, we revamped
our online brokerage service Daiwa Online Trade to
make the service easier to use for smartphone andtablet users. For example, we have expanded thefunctions of the service by setting up a smartphone
and tablet site for traders taking advantage of the
Nippon Individual Savings Account (NISA) program.

Daiwa Online Trade website for smartphone and tablet users

Daiwa Securities Group CSR REPORT 201616

●Customer Support Center Initiatives
Daiwa Securities’ Customer Support Center is a
department within the head office that handles
customer feedback and complaints directly byphone. The center, which is part of the ComplianceDepartment of Daiwa Securities, strives to enhancecustomer satisfaction and prevent the recurrence ofcomplaints while closely working with sales branches
and other departments within the head office.
In FY2015, the Center received 5,958 calls, about
560 more than FY2014, due mainly to tax systemrevisions and the start of the Japanese government's
Individual Number identification system. To respondto customer feedback and complaints thoroughly andaccurately, Customer Support Center members study
tax and other systems and Daiwa Securities’ services
together on a daily basis, and work to improve
the quality of customer services. The Center gives
feedback from customers to relevant departments
and sales branches to capitalize on such feedbackfor identifying problems and improving customer
services. We also sort and analyze customer input by
issue and share the points that Daiwa Securities needs
to improve as a company with management andrelated departments within the head office. Customer
feedback is thus used as valuable information toenhance services and customer satisfaction.

Calls Received at the Customer
Support Center
(FY)

2011

82％

18％

2012

83％

17％

2013

82％

2014

83％

17％ 5,393

2015

82％

18％

0

1,000

2,000

5,119
5,436
18％

3,000

4,000

5,000

6,289

5,958

6,000

7,000
(Calls)Inquiries

Complaints

Calls received at theCustomer Support
Center in FY2015
No reports indicating
violation of humanrights, environmental
pollution by Daiwa
Securities, or othermatters raising extremely
serious concern ingeneral social terms

Initiatives through Product Development and Provision

Daiwa Securities Group CSR REPORT 2016

Initiatives through Product Development and Provision

17

Results of Impact
Investment bonds• Daiwa Securities

For Addressing Social Issues
and Contributing to Future
Development of Society and
Financial and Capital Markets●Impact Investment Bonds
Compared with typical forms of Socially Responsible
Investment (SRI), Impact Investment focuses moreon the direct impact of investment on society. It isa method that not only pursues economic benefits,
but is also a way to allocate assets solely to activities
targeted at resolving social issues, such as poverty andclimate change.
As a financial institution, we have supported thealleviation of problems in society by underwriting
various types of Impact Investment bonds.
• Initiatives in FY2015
Among a variety of global issues, potentially lifethreatening water problems are particularly serious.
Diverse events associated with water and sanitaryfacilities, sewage treatment, and environmental
issues have become major factors impairing humanhealth and economic growth. In August 2015, Daiwa
Securities sold Water Bonds issued by the AsianDevelopment Bank to assist water-related projects in

the Asia-Pacific region. In January 2016, the company
also sold Water Bonds issued by Corporación Andina
de Fomento (CAF), a development bank in Latin
America, to investors worldwide for the first time everto provide sufficient drinking water and sanitation
services in Latin America and the Caribbean region.
In October 2015, we sold Green Notes issued by
Crédit Agricole Corporate and Investment Bank tosupport companies promoting renewable energy or
implementing other environmentally friendly practices.
In March 2016, we also sold Inclusive Business
Bonds issued by the International Finance Corporation(IFC) to assist businesses working to improve thelivelihood of people at the base of the economic
pyramid (BOP).
The funds collected by the Daiwa Securities Groupthrough the sale of these bonds have been invested inprojects which solve a variety of issues across the globe.

Daiwa Securities Group’s History of SRI Funds andImpact Investment Bonds● Water Bonds● Inclusive Business Bonds

SRI funds●2016

Impact Investment bonds● 2015● Daiwa Woman Supporter Fund

● 2014● 2013● 2012● JICA Bonds● Microfinance Bonds● Green Notes● Agri Bonds● Water Bonds● Green Notes（2 times）● Water Bonds（2 times）● Agri Bonds● Banking on Woman Bonds● Inclusive Business Bonds● JICA Bonds● JICA Bonds● Ecology Bonds● Banking on Woman Bonds● Agri Bonds（2 times）● Water Bonds（KEXIM）● Microfinance Bonds● Vaccine Bonds● Water Bonds● Green Notes

cumulative sales

653.9 billion*

Independent
Assurance¥• Daiwa Securities’ sharein the Japanese market

56%
Total ¥1,161.2 billion** Figures have been rounded* Source: Daiwa Securities Co. Ltd.
(From March 2008 to March 2016)• Daiwa Securities

cumulative sales for
FY2015

4 issues¥37.2 billion in total* Figures have been rounded

Independent
Assurance

Initiatives through Product Development and Provision●SRI Investment Trusts
SRI investment trusts are a mixture of stocks andbonds that take into account factors other thanfinancial performance, such as ethics and social andenvironmental objectives, in addition to assessmentsof the sales and profits of the investment candidates.
We offer eco funds that limit non-financial assessments
to environmental performance, and investment trusts
that limit their stock portfolios to environmentalrelated businesses. By investing in these trusts, throughfinancial markets, investors can indirectly support
countries and corporations that are proactively involvedin CSR and environmental programs.

Development and Provision ofSuperior Financial and Investment
Products
Amid an accelerating shift from savings to investment,
Daiwa Securities considers the development andprovision of superior products as one of our major
missions in society, and strives to develop new
products and improve their quality.

●Initiatives of Fund Wrap Services
Daiwa Fund Wrap is a service enabling even busy
customers or those with no investment experience tostart mid- to long-term diversified investment easily.
Under a discretionary investment contract, Daiwa
Securities invests and manages assets on behalf of ourcustomers. We offer plans that enable each customer
to make diversified investments according to theirinvestment policy, as do professional institutional
investors such as those managing public pension
assets. It has become more important than ever for alarge number of investors to manage their assets in an
efficient and stable manner through diversified global
investment, in particular as a measure to address thenegative interest rate policy introduced in Japan in
January 2016.
Daiwa Fund Wrap is a service offered to customers
over the mid- to long-term. We provide thoroughexplanations, conduct a questionnaire survey after
the conclusion of a contract, report investment
performance regularly every three months and holdfollow-up seminars whenever necessary. We thus
ensure close communication with customers andseek to build a relationship of trust with them. We
strive to listen to customers, while introducing newservices and improving existing services, in an effort
to enhance customer satisfaction.
Assets entrusted through Fund Wrap are managed
in collaboration with Daiwa Asset Management andDaiwa Fund Consulting. By harnessing the Daiwa
Securities Group’s specialty, experience, and knowhow, we are making collective efforts to improve
investment performance.
To keep attracting customers over the longterm, we will continue our initiatives to implement
a better structure and system so as to improve
our performance and quality of services, including
expanded Internet services.

18

Daiwa Securities Group CSR REPORT 2016

●Initiatives by the Asset Management
Division
The asset management division of Daiwa Securities
Group strives to reinforce the asset management
system and continues working on a variety of
initiatives to offer better returns to beneficiaries overthe medium to long term.
• Initiatives by Daiwa Asset Management
For Daiwa Asset Management, one of the pillars tobuilding a stable, distinguished asset management
capability is to take appropriate risks in managing
active funds. We have therefore built a support system
by collecting information from the research divisionand other relevant specialist teams. This is a systemenabling fund managers to take risks without undue
concern. In particular, we are striving to improve ourability to select companies with good prospects,
hoping that this will become a major source for strong
investment performance.
Amid such efforts, we focus on environmental,social and governance (ESG) issues, as they may help
boost our long-term investment performance. Daiwa
Asset Management has placed personnel in chargeof ESG within the Fund Management Division topromote ESG investment in an organized manneras a signatory member of both the United Nations’Principles for Responsible Investment (PRI) and thePrinciples for Financial Action for the 21st Century.
In particular, since announcing the adoption of theJapanese version of the Stewardship Code, we havebeen actively engaged in dialogue with investee
companies—urging them to improve their ESG
initiatives. Moreover, we have introduced topics
regarding ESG investment at in-house seminars
and training sessions for companies marketing ourinvestment trusts.
It is especially important to always grasp current
trends and customer needs in this way for thedevelopment of products. We are therefore striving
to maintain close communication by holding seminars
for customers and through operation of our uniquecall center. We are also building a structure that assists
companies marketing our products to support a shift
from savings to investment.

Results of SRI
investment trusts• Daiwa Securities

Group net assets

Independent
Assurance

42.0 billion*1¥• Daiwa Securities’

share in the Japanesemarket16%
Total ¥257.6 billion*2*1 Source: D aiwa Securities Co. Ltd.
*2 Source: Daiwa Fund Consulting Co. Ltd.
(As of March 31, 2016)

Results of Fund Wrap
• Balance of domestic

Wrap accounts¥

5,777.6 billion• Balance of Wrapaccounts at Daiwa
Securities¥

1,540.3 billion* From data released by the Japan
Investment Advisers Association(As of March 31, 2016)

Major services
newly introduced or
improved in FY2015•June 2015

Introduction of
new service
Daiwa Social
Contribution
Wrap—Daiwa
Fund Wrap with adonation service•October 2015

Daiwa Social Contribution Wrap
—Daiwa Fund Wrap with a donation service

Introduction of
new styles
Japanese Bond Zero
Style and Domestic
and Foreign Asset
Half Style•February 2016

Renewal of
Daiwa Fund Wrap
Performance Report

顧問が作成したものであり、金融商品取引法に基づく
客さま等、貴行・貴社外へ当資料を配布・提示すること
頼できると考えられる情報から作成しておりますが、料の中で記載されている内容、数値、図表、意見等はがあります。■当資料の中で使用されているデータ・
他へ無断転用した場合の責任は当方にございません。

Initiatives through Product Development and Provision

Development of ESG-Oriented
Exchange-Traded Funds (ETFs)
On December 18, 2015, the Bank of Japan(BOJ) announced supplementary measures forquantitative and qualitative monetary easing.
The measures include purchase of exchangetraded funds (ETFs) composed of stocks issued
by firms that are proactively making investmentin physical and human capital at an annual paceof about ¥300 billion. BOJ stated that the newprogram would start with purchases of ETFs
which track the JPX-Nikkei Index 400, urging
asset management companies to launch new
types of ETFs focusing on human and physicalinvestment, among others.
In response to this, Daiwa Asset Management
has worked with MSCI Inc., which has gained
significant recognition as a pioneer in the fieldsof stock indexes and risk management, anddecided to develop an ETF linked to the MSCIJapan Human and Physical Investment Index,
which leverages know-how on ESG held by
MSCI ESG Research, a research arm of MSCI.
The largest characteristic of the index is thatit incorporates an original ESG perspective anda governance score, along with the factor ofwhether companies are actively making humanand physical investment, into its assessment ofcompanies and weighting of their shares. Thisis based on the idea that companies with anexcellent governance capability are likely to makecapital and human investment efficiently andsucceed in expanding their profit in the future byleveraging such investment.
We endeavor to boost performance byproactively incorporating viewpoints absent fromexisting investment products including giving
negative scores to companies not encouraging
women to play an active role or failing toproperly manage human resources.
The ETF developed has already beenrecognized as an ETF eligible for purchase by the
BOJ. It was listed on the Tokyo Stock Exchange
on May 19, 2016.

• Initiatives by Daiwa SB Investments
The need for multifaceted corporate analysis is
growing, while a variety of mid- to long-term
management factors are expected to affect companies’
share prices. Since corporate analysis and researchrequire human resources, Daiwa SB Investments places

Daiwa Securities Group CSR REPORT 2016

importance on nurturing and promoting professionals
who have acquired the ability to think on their own
through training and other means. We have also
overhauled our organizational systems as a company,
including the adoption of a performance-linked
evaluation system. Moreover, we strive to elevatea corporate culture as a professional managementcompany and to diversify our workforce by hiring ofoverseas and female staff, with the aim of respond todiversifying needs and providing quality services.
We have also focused on the education of sales
staff at companies handling our products, who
directly communicate with customers. We conduct
workshops for those sales staff to enhance theirmarketing skills and knowledge on investment trusts
while creating booklets containing informationnecessary for them to explain to customers. We arethus working to help those staff to improve theircommunication abilities.
Following the signing of the PRI in 2012, weestablished the ESG committee and rules to enhance
our capacity to evaluate and analyze ESG issues ofcompanies. These initiatives reflect our efforts to fulfill
our responsibility to pursue maximum profits with ourutmost efforts from a long-term standpoint on behalfof beneficiaries. We will continue with our initiatives
to provide good returns over the medium to longterm in our multifaceted corporate analysis, including
analysis focusing on ESG.

●Investment Companies and Other
Initiatives to Resolve Social Problems
Daiwa Real Estate Asset Management Co. Ltd.
manages investments and infrastructure assets forsolving social issues through investment companies
and fund structures. Nippon Healthcare Investment
Corporation, which listed on the Tokyo Stock
Exchange in November 2014, invests in healthcare
facilities that are likely to see stronger demand fromsociety over the longer term as the number of seniorcitizens increases. In FY2014, Daiwa Real Estate
Asset Management began managing a new fundwith assets focused on photovoltaic power stations
and logistics facilities respectively. These investment
funds mainly acquire assets held by private-sector
companies for now. In the future, they aim to be
receptacles for assets to be sold by lossmaking publicprivate partnership entities. Daiwa Securities Groupwill continue to fulfill its role by supplying private
sector funds for maintaining social infrastructure.
Facilities in which Nippon Healthcare Investment Corporation invests

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作成日：2012年9月28日

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19

Nippon Healthcare
Investment
Corporation
Total amount ofassets acquired

18.6 billion

About ¥(As of March 31, 2016)

Management results
at photovoltaic
power stations anddistribution facilities

Photovoltaic power
stations•Number of deals:

7(Hokkaido, Tohoku, Hokuriku,
Kanto, and Chugoku regions)•Output:

34 MW•Balance of assets undermanagement:¥

8.3 billion

Distribution facilities•Balance of assets undermanagement:¥

11 billion(As of March 31, 2016)

Initiatives through Product Development and Provision●Initiative for Daiwa Online Trade
Daiwa Securities launched Daiwa Online Trade in
1996, becoming Japan’s first company to start an
Internet-based securities brokerage service. Since
then, we have led the industry with a variety ofadvanced, innovative initiatives. Online services thatare common now, such as stock trading and shareprice information service, were introduced in themarket by Daiwa Securities ahead of industry peers.
With the spread of mobile devices anddevelopment of information and telecommunications
technology, the importance of internet channels hasgrown significantly in recent years. Daiwa Securities
has strived to expand the services offered through"Kabu walk," an application exclusively for domestic
stock trading, and a website for smartphone andtablet users. Thanks to these efforts, the number ofaccounts held under contacts for Daiwa Online Trade
topped 3 million as of March 31, 2016. Of Daiwa
Securities’ total stock transactions, about 80% arecarried out via the online trading service, underscoring
the fact that Daiwa Online Trade has become an
indispensable channel for Daiwa Securities.
In FY2015, we substantially revised the home
page design of Daiwa Securities to make the website
easy to view and use for anyone. We also set up
a Daiwa FX website exclusively for smartphoneusers, while adding a page for investment trusts tothe smartphone website. We have thus made newservices available to customers.
We celebrated the 20th anniversary of Daiwa
Online Trade on April 1, 2016. To mark theanniversary, we will step up promotion activities for
Daiwa Online Trade, including the preparation of acommunication logo and the implementation of a
campaign. We have also introduced a state-of-theart security system to enable customers to use our
website with ease.
With an eye toward a new era, we will continue
our efforts to make Daiwa Online Trade a service thatis more convenient and easier to use as a channel
chosen by the youth and wealthy individuals of thenext generation, who comprise the majority of new
investors that approach us.

Daiwa Online Trade

Daiwa Securities Group CSR REPORT 2016

History of Daiwa Online Trade
Date

Initiative

April

Industry first
Began offering of mini stock trading andshare price information service

June

Industry first
Began offering unit stocks and current
share price information service

January

Industry first
Began handling trading of over-thecounter stocks, including Daiwa MMF
and Medium-Term Government Securities
Funds

1998

April

Industry first
Began handling Daiwa foreign currency
MMF (US$) and taking pre-orders on
holidays

1999

February

Industry first
Began providing share price and market
information and handling stock trading,through NTT DoCoMo’s i-mode service

2002

January

Began providing margin trading service

2003

May

Introduced two transaction courses

2005

May

Introduced daily flat-fee system withreward points

1996

1997

February

Began handling Daiwa FX, an over-thecounter FX

2006
April

2008

2009

July/

Began Daiwa Trading Board information
serviceAugustBegan handling newly-issued and existing
bonds denominated in foreign currencies

NovemberBegan handling Daiwa 365 FX, becoming
Japan’s first major general securities
company to offer exchange FX

Launched “Kabu walk” application forAndroid
2012

August2015

January

Renewed the site for smartphone andtablet users

Daiwa Online Trade•Number of contract

accounts

3 million accounts(As of March 31, 2016)20

To Maintain and Develop Financial and Capital Market Functions

Daiwa Securities Group CSR REPORT 2016

To Maintain and Develop Financial and CapitalMarket Functions

Settlement Functions

Suppliers offunds

Investment

Retail investor

Institutional
investor

Purchase of securities

Securities company

Securities settlement—a mainstay of the Group’s
overall operations—is the delivery of stocks or bonds
and transaction payment to/from the buyer andseller of a securities transaction respectively. We
consider it vital to perform this settlement function
accurately and promptly as required in order toensure the function of the financial market as asocial infrastructure as well as for the maintenanceand development of the economy. We are therefore
striving to build a structure enabling the smooth
execution of settlement operations. Daiwa securities
has implemented an IT system that is reliable andhas a high processing capability to appropriately
respond to a massive number of settlement deals
as a wide range of investors are now actively using
trading methods leveraging computers for frequent
trading. We believe, however, that even if operations
are systematized, the most important thing for the
securities settlement operation is human resources.
Staff members are required to have not justknowledge of the operations they are responsible
for, but a wide range of knowledge, such as theunderstanding of related businesses and transactions,in order to grasp the situation quickly when an
irregular event occurs, and respond to it appropriately.

For that reason, we are making efforts to visualize andaccumulate the experience and know-how acquired
through daily settlement operations and expand thescope of operations each staff member can cover byrequiring them to rotate their tasks regularly.
Meanwhile, the securities industry recognizes that
it is necessary to further increase the convenience of
securities systems and strengthen risk management
to boost the competitiveness of Japan’s financial
and capital markets. With this awareness, discussion
on the reduction of settlement time is currently
underway in the entire industry. Daiwa Securities
plays a central role in a working group launchedby the Japan Securities Dealers Association, a selfregulatory organization of the industry, identifying
and examining a variety of issues.
Moreover, cross-border foreign exchangetransactions entail settlement risk (risk of lossof principal) associated with time differences insettlement for the currencies involved. Daiwa
Securities is set to participate in CLS* as a settlement
member in the summer of 2016, becoming thefirst Japanese securities companies to do so. This is
expected to substantially reduce the settlement risk offoreign exchange transactions.
We are determined to continue the settlement
operations no matter what happens. Under suchdetermination, we have drawn up a business
continuity plan (BCP) and regularly conduct training
in preparation for unforeseen circumstances, such as
natural disasters and terrorism.
Amid the accelerating shift from savings toinvestment, the reliability of settlement is extremely
important to maintain customer trust. We will quickly
provide solutions that meet increasingly sophisticatedcustomer needs by taking advantage of a reliable
settlement infrastructure and human resources.
* Continuous Linked Settlement

Financial & capital
markets(stock, bond)

Securities company

At Daiwa Securities, we recognize that our major
mission is to develop sound financial and capital
markets for the next generation, which is also oneof our key CSR issues. In particular, the securities
business, the core business of Daiwa Securities,functions as an important social and economic
infrastructure. It facilitates the smooth flow of moneyby matching fundraising needs through issuanceof securities and investment needs of investors via
financial and capital markets.

Users of funds
Fundraising
Company

Issue of stocks or bonds

Government &municipality

21

Number of settlementtransactions handled•DailyOver
10,000 transactions•Annually

Approximately

3 million transactions(transactions mainly by institutional
investors in and outside Japan)

Communication of Information of Analysis and Proposals about Economy, Society and Investment

Daiwa Securities Group CSR REPORT 2016

Communication of Information of Analysis
and Proposals about Economy, Society andInvestment
The Daiwa Securities Group provides, in addition toinvestment information, a wide range of information
on economy and society as a financial services group.
We hope that the measures we propose from along-term perspective will be helpful to a variety of
stakeholders.

form of published reports. We are also stepping up
transmission of ESG information, communicatingwide-ranging information via our website andquarterly journals regarding local revitalization, SRI,
environmental problems, corporate governance andother issues.

Easy-to-UnderstandCommunication of Information

Further Strengthening the Provisionof Information

Daiwa Securities publishes information to a wide
range of people from institutional and retail investors
to those who are about to start investment. The
central role in provision of information is played byhighly specialized analysts and strategists at theInvestment Strategy, Equity Research, and Fixed
Income, Currency and Commodities Research
departments. They provide information mainly
through analyst reports based on their uniqueanalysis. Our information is based on close analysis
and collection of data, and we tailor our presentation
for retail investors and institutional investors, who areinvestment professionals, even if the same person isproviding that information. For retail investors, weincorporate more visualized reporting.
To remove the general perception that securities
investment or securities companies are complicated,
we believe it is one of our missions to work toward
communicating our analysis in an easy-to-understandway.

In 2015, DIR’s Research Division added theenvironment to its pillars of information provision,
which until then had consisted of the macro economy
and the financial and capital markets. The division
established the Economic Environment Research
Department in April 2015, with an eye to providing
analysis on both the economy and the environment.
The new department’s focus covers six fields: (1)medical and nursing care; (2) regional economies;(3) women’s empowerment (in employment andwork); (4) global warming; (5) energy; and (6) ESG.
The department contributes to society by providing
information and holding seminars related to these
themes. We have strengthened our activities as athink-tank since 2015 to fulfill the role of a reliable
compass in providing useful research that satisfies
growing needs for information, while at the sametime grasping changes in economic and social trends.

Comprehensive Provision ofInformation and Policy Proposal
Activities
Daiwa Institute of Research (DIR), which assumes
the think-tank role of the Daiwa Securities Group,
provides wide-ranging economic and financial analysis
and information to the public.
At DIR, we consider it our mission to engage incomprehensive provision of information and policy
proposal activities concerning the financial andcapital markets and the real economy. We havealways sought to provide up-to-date and in-depth
information and a unique viewpoint that has neverbeen presented by others. In order to provide
information that satisfies the needs of public, we
also exchange information and hold discussions
with businesses, investors, governments and otherpublic institutions as well as overseas think-tanks andmedia. In this way, we are able to grasp the currents
and trends of society and share information in the22

Third-party
evaluation of analyst
performance• Ranked No.

1

in theMost Award-Winning
Brokers category of
the 2014 StarMine
Analyst Awards for
Japan

Reports and seminars
on ESGDIR• ESG reports andcommentary articles on
ESG keywords
Release of

57 reports and articles(Results for FY2015)• Number of ESG

seminars held

15 seminars(Results for FY2015)

Provision of
information throughdiverse media
DIR•Number of reports

posted on thewebsiteApproximately

600 reports(Results for 2015)

Provision of Information throughDiverse Media●Lectures and Media Appearances
The Research Division of DIR adopts a variety ofmethods for providing information, including reports,
quarterly journals, contribution to newspapers
and economic magazines, media interviews, TV
appearances, lectures, seminars, presentations at

Mitsumaru Kumagai
Senior Managing Director, Deputy
Head of Research Division, Chief
Economist, DIR
Source: Live Internet coverageof deliberations of the House ofRepresentatives

Hitoshi Suzuki
Chief Researcher at DIR
Head of Public Policy Team
Source: The Specialist
Committee on the Basic Planfor Gender Equality of theCouncil for Gender Equality•The full texts of thereports are available
on the website•Number of recent

hits on the researchdivision’s page

3.8 million hits
(Results for 2015)

Seminars held by
Daiwa Securities
Refer to “Provision ofGood Quality Services to
Customers” on page 13

Communication of Information of Analysis and Proposals about Economy, Society and Investment

workshops and publication of books. We strive
to explain complex issues plainly, while placing
importance on the quality of reports. We ensure
the reliability of our reports by requiring them toundergo reviews by a specialized section as well as
the departments issuing those reports. We are also
expressing our opinions on an increasing numberof occasions. This includes speaking at a varietyof lectures and seminars, contributing articles tothird-party economic magazines, appearing on TV
programs, posting comments through interviews
with newspapers and other media, holding meetings
or workshops with customers concerning research
information, and participating in government councils.

●Issuance of Books and Booklets
The Investment Strategy Department of Daiwa
Securities issues “Daiwa Investment Weekly”
and “Daiwa Investment Monthly” as tools forcommunicating information to general customers.
They are both distributed to sales branches of Daiwa
Securities and are also available on the Internet. We
also transmit information in various ways to generalcustomers, including selling books through publishers
and producing desk calendars with information on
financial events and wall-hanging market charts.

Internet-Based Initiatives●Internet Live Seminar
Live seminars presented on the Internet now play acentral role in the Daiwa Securities Group, in addition
to ones held at each sales branch of Daiwa Securities.
They can be viewed over the Internet in real time andare also available on-demand.
These live seminars are designed to communicate
the significance of investment to potential customers
by using the Internet, which is an easy way toparticipate. Meanwhile, we also hope that they
will serve as an opportunity for investors to start
supporting the Japanese economy in the long run.

Daiwa Securities Group CSR REPORT 2016broadcast service “SKY Perfect TV!” Since April 2011,
we have been producing “Daiwa Internet TV” at ourown studio and distributing it online in an effort totarget a wider range of viewers. We distribute timely
market information three times a day, before andafter trading, while offering information from Hong
Kong and New York each business day. Analysts at
Daiwa Securities and Daiwa Institute of Research (DIR)
appear as “Specialist Report” in programs which
provide comments on current issues or offer corporate
and other information.
Because the service allows anyone to view theirrequired content at their preferred time of day andis also available through smartphones and tablets, itis well-received by retail investors. We also provide
contents explaining products marketed by Daiwa
Securities. However, we consider that our biggest
mission is to raise awareness of finance, rather
than advertising ourselves, and thus communicate
information from a neutral and objective stance.
Our Daiwa Internet TV initiative was introduced by
the SDG Industry Matrix for Financial Services (issued
jointly by the United Nations Global Compact and
KMPG International in 2015) as a case for Goal 4“Quality Education.” The report highlighted Daiwa’stimely and free of charge provision of a variety offinancial and investment information.
The programs for Daiwa Internet TV are
produced in collaboration with Daiwa Securities
Group companies, such as the Investment Strategy
Department of Daiwa Securities and DIR. We willdevelop new content and expand market informationin response to viewers’ requests.
Daiwa Internet TV website●Daiwa Internet TV
In 2000, Daiwa Securities began “Daiwa Securities
Information TV,” Japan’s only channel dedicatedto securities information, on multichannel pay TV

Daiwa Investment Monthly

Desk calendar with a market scheduleDaiwa’s own studio for Daiwa Internet TV

Internet live seminar
Seminars held in
FY2015
A total of 14
seminars
Annual number ofparticipants

31,561 participants
PV number for Daiwa
Internet TV (monthly
average)639,107 PV(FY2014) â

698,343 PV(FY2015)

23

Support for the Creation of Our Future Society

Daiwa Securities Group CSR REPORT 2016

Support for the Creation of Our Future Society
Developmental Support for CapitalMarkets in Myanmar
The Yangon Stock Exchange (YSX), which wasestablished by Daiwa Institute of Research (DIR), Japan
Exchange Group and the Myanmar Economic Bank,
commenced trading operations on March 25, 2016, withthe listing of First Myanmar Investment Co., Ltd. (FMI),a real estate company in Myanmar, as its first stock. The
Yangon Stock Exchange was established with broad
support from the public and private sector in Japan.
In December 2014, the Myanmar Economic
Bank, Japan Exchange Group and Daiwa Institute of
Research signed an agreement on the Yangon Stock
Exchange, and then worked together to put in place
the groundwork for operations. Daiwa Securities
Group has provided support to Myanmar since 1996,
when it established the Myanmar Securities Exchange
Centre as a joint venture between DIR and the
Myanmar Economic Bank.
The Yangon Stock Exchange plans to steadily increase
the number of listed companies. Daiwa Securities
Group will continue to support the development of acapital market in Myanmar using our capabilities whilst
maintaining transparency of the market.

East Japan Earthquake SME
Reconstruction Support Fund
Daiwa Corporate Investment Co., Ltd. operates theEast Japan Earthquake SME Reconstruction Support
Fund, receiving investment from the Organization for
Small & Medium Enterprises and Regional Innovation,
JAPAN (SME Support Japan), The Aomori Bank, Ltd.,Bank of Iwate, Ltd., The 77 Bank, Ltd., The Toho Bank,
Ltd., and other institutions. Targeting unlisted privatecompanies, the fund aims to expeditiously provide risk
finance mainly in the form of equity. The goal is toactively support companies in their efforts to secure
renewed growth and development by supplying financefor a variety of purposes, including restoration andreconstruction following the 2011 earthquake disaster,
including new business development, the shift to a new
industry or line of business, business reorganization andsuccession, and business incubation.
On November 5, 2015, the fund participated in“Business Match Tohoku 2015,” an event aimed atmatching businesses in the Tohoku region, presenting
fundraising methods and management support andholding business meetings.

Finding Ways to Save Energy in
Smart Community Experiments
Daiwa Institute of Research Business Innovation Ltd.
participated in two separate experimental smart

community projects promoted by the Ministry of
Economy, Trade and Industry, and Kawasaki City from
FY2014 to FY2015. The experimental projects entail
the use of HEMS installed in homes to manage energy
usage in the home and the community, as well as theprovision of government, community and lifestyle
related services to invigorate the local community.
Through the use of IT, electricity usage has been cut
by roughly 12% by encouraging residents to step out
during times of high energy usage and giving advice
on how to cut back on energy use based on individual
usage patterns. Taking advantage of the knowledge
gained from these experiments, we will continue
to help improve convenience in daily lives, revitalize
regional economies and create environmentally
sustainable communities.

East Japan
Earthquake SME
Reconstruction
Support Fund
•Cumulative amount ofinvestment
Approximately

4.8 billion¥(As of March 31, 2016)

Iwamizawa
Photovoltaic Power
Staiton•Output:

Daiwa PI Partners Co. Ltd. (PIP) has aggressively
invested in the development and operation ofrenewable energy power generation projects,
leveraging the network of the Daiwa Securities Group,
since the renewable energy feed-in tariff system wasintroduced in July 2012.
In November 19, 2015, construction was completed
on the Iwamizawa Photovoltaic Power Station that PIP
developed on its own in Iwamizawa, Hokkaido. This
photovoltaic power station is one of the largest of its
kind in the Sorachi area of Hokkaido. All five of thephotovoltaic power stations that PIP has developedand invested in are operating stably.
In December 18, 2015, PIP announced plans toconstruct a wood pulp biomass power generation
plant that uses tree trimmings as its primary source offuel in the city of Yonezawa in Yamagata Prefecture.
Wood-based biomass power generation is a formof renewable power generation that contributes
to the revitalization of regional economies throughthe creation of new industries and employment in
the forestry business. The Group will continue toaggressively invest in the development and operationof energy infrastructure assets.
Opening ceremony of the Yangon Stock Exchange

9 MW•Amount of electricity

generated:
Equivalent to the amountfor

Renewable Energy Power
Generation Projects

242,800 households*Measured in terms ofelectricity consumption
per household

Photovoltaic power
stations developed/
invested in by PIP (5deals in total)
Output:34 MW in total•Amount of electricity

generated:
Equivalent to theamount for about

10,400 households*Measured in terms ofelectricity consumption
per household﻿
Initiatives
for Supporting Business Activities

Daiwa Securities Group CSR REPORT 201625

Initiatives for Supporting
Business Activities
Approach and Basic Stance
The financial and capital markets are based on the confidence and trust of participants.
We consider that sustaining confidence and trust in us is essential for us to
not only continue our business activities
but also live up to the expectations of our stakeholders.

Corporate Governance

Daiwa Securities Group CSR REPORT 2016

26

Corporate GovernanceApproach and Basic Stance
The Daiwa Securities Group clearly separates the oversight and executive functions ofmanagement to create a highly transparent and objective corporate governance system.

Features of the Corporate
Governance System
Daiwa Securities Group clearly separates thesupervisory and executive functions of its
management to create a highly transparent andobjective corporate governance system. As with
Corporate Executive Officers of Daiwa Securities
Group Inc., employees responsible for head office
functions also hold similar roles for the securities
subsidiary. Under this structure, the Group is pursuinga management structure that improves the efficiencyof head office operations and that maximizes
synergies between Group companies.
The Group has adopted a company with Three
Committees System with the objective of supervising
management through:(a) Better decision-making agility by having the Boardof Directors assign significant authority to corporate
executive officers while clarifying the division ofduties among corporate executive officers;(b) More effective supervisory functions at theBoard of Directors from the appointment ofoutside directors with highly specialized skills,
and better transparency in management from theestablishment of the Nominating Committee, Audit
Committee and Compensation Committee withoutside directors a majority of their members; and(c) H ighly independent and ethical outside directors
providing advice from an outside perspective to theBoard of Directors and the three committees basedon their knowledge and experiences.
The Group also proactively engages in CSR activities
to gain the trust of stakeholders. CSR encompasses
providing excellent products and services to customers
with integrity, appropriately returning profits anddisclosing information to shareholders, creating
pleasant work environments and fair personnel
evaluation systems for employees, strictly observing
regulations and following corporate ethics, managing
the environment, and contributing to society.
Through these initiatives, the Group aims to further
enhance its corporate governance structure in termsof transparency, agility and efficiency, in order tocontinuously improve corporate value.
The corporate governance structure consists of

Number of times
each committee met(FY2015)•Nominating Committee:

5•Audit Committee:

12•Compensation Committee:

5•Board of Directors:

10
Rate of attendanceat Board of Directors
meetings by outside
directors

100%

Corporate Governance System at Daiwa Securities Group
Shareholders’ Meeting

Board of Directors,
14 members(including 6 outside directors)

Nominating Committee,
7 members(including 5 outside directors)

Audit Committee, 5 members(including 4 outside directors)

Compensation Committee,
5 members(including 3 outside directors)

Nominates directors for selection,or recommends dismissal

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

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

Basic management policy
Outside Directors Council, 6 members(6 outside directors)
Increases communication amongst outside directors

Executive Management
Committee, 14 members
Group-wide businessstrategy andmanagement issues,
important financial
matters

Representative
Executive Officer

Group Risk Management
Committee

Disclosure Committee

Group IT Strategy Committee

Overseas
Management
Committee

Gathers information on the systemand current situation of risk
management, and sets policy andstrategy regarding risk management

Determines scope of consolidated
financial reports, scope of evaluationof internal control reports anddisclosure of important information

Deliberates and decides on the integrationof management strategy and IT strategy, theacceleration of IT investment decision-making,and the improvement of IT investment efficiency

Makes decisions on issues
related to the managementof overseas offices andother operations abroad

Group Internal Audit Committee
Makes decisions on issues relating to the internal audit system and theverification of internal control activities

Corporate Governance

Daiwa Securities Group CSR REPORT 2016

the Board of Directors and the three aforementioned
committees (Nominating Committee, Audit
Committee and Compensation Committee) as
supervisory functions. Business execution functions
are embodied in the Executive Management
Committee and its sub-committees comprising theGroup Risk Management Committee, the Disclosure
Committee, the Group IT Strategy Committee, andthe Overseas Management Committee, as well as
the Group Internal Audit Committee, the internal
audit organization that reports directly to the Chief
Executive Officer (CEO).

ethics and demonstrate initiative and leadership.
Additionally, outside directors are experts in suchfields as management and accounting. In addition, thesupervisory function of Daiwa Securities Group Inc. isreinforced by the Audit Committee and the Office of
the Audit Committee. The Audit Committee, which
consists of a majority of outside directors, plays apivotal role in the supervision of executive duties. The
Audit Committee is assisted by the Office of the Audit
Committee, which is a department independent ofexecution of business.
*1 A
 s of June 30, 2016
*2 Outside directors as defined by Article 2-15 of Japan’sCompanies Act

Executive Compensation That Is
Closely Linked to Performance
Compensation for directors and corporate executive
officers is determined by the Compensation
Committee. Executive compensation has threecomponents: basic compensation; performance-based
compensation; and share price-linked compensation.
Comprehensive criteria used in calculating
performance-based compensation include ROE andconsolidated ordinary income, as well as other factors
such as results of management targets as outlined in
the Medium-Term Management Plan.

Supervisory Function
The Board of Directors consists of 14*1 directors,
including six outside 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 ofsociety, the policy for selecting new board members
states that candidates must have a strong sense ofPreventing Conflict-of-Interest
Transactions between Group
Companies
Conflict-of-interest transactions between Group
companies can occur in situations such as intra-Group
trading. The Daiwa Securities Group applies rules
regarding conflicts of interest stipulated by Japan’sCompanies Act to Executive Committees as well as
Board meetings. Conflicts of interest within the Groupare prevented through a rule prohibiting an executive
officer from voting when he or she is also the directorof an interested Group company.

Internal Control System andInternal Audit
In recognition that management is responsible formaintaining an internal control system to ensure thesound and appropriate execution of business, theGroup, under the main initiative of Daiwa Securities

Internal Auditing System Diagram of Daiwa Securities Group
Daiwa Securities
Group Inc.

CEOGroup Internal
Audit Committee(Chairman: CEO)Internal Audit
Department

Corporate Executive Officer in charge ofinternal audits (Head of Global Internal Audit)

Deliberation decision/Reporting

Internal Audit
Department staff holdconcurrent positions at
both companies’ internal
audit departments

Daiwa Securities
Internal Audit Department
Co. Ltd.

Control/Reporting

Board of Directors
Audit Committee

Collaboration

Accounting
auditors

Audit
delegation/
ReportingCommunication/
Adjustments

Monitoring/Collaboration/
Direct audit

Direct audit

Domestic Group companies without anInternal Audit Department

Domestic Group companies with an
Internal Audit Department

Monitoring/Collaboration/Direct audit

Head of Global/Regional Internal Audit(Europe/Middle East region, Asia/Oceania region,
Americas region)

Overseas securities subsidiaries

27

Corporate Governance

Daiwa Securities Group CSR REPORT 2016

Group Inc., has established a system for managing theGroup’s major business risks. Through this system theGroup endeavors to ensure “business effectivenessand efficiency,” “reliable financial reporting,”“compliance with laws related to business activities,”and “asset preservation.”
The Internal Audit Department verifies the internal
control system. This department sits independently
from all other departments, reports to a dedicatedcorporate executive officer, and ensures internal audits
to act as an important function of raising Groupvalue through the creation of a sound and efficientinternal control system. The department’s internal
auditing plans and the results of internal audits areapproved by and reported to the Group Internal Audit
Committee, which sits directly under the control of
the CEO of Daiwa Securities Group Inc. Plans andresults are also reported to the Audit Committee.
Daiwa Securities Group seeks to raise its corporate
value by effectively conducting internal audits, andimplements risk-based internal audits primarily
through its Internal Audit Department.
The Internal Audit Department pays special
attention to certain aspects of the Group’s businessactivities. They include the internal control systems
at Daiwa Securities Co. Ltd. and overseas offices as a
global financial instruments firm, the internal control
systems at Daiwa Next Bank, Ltd. as a bank, the statusof businesses that involve the collaboration between
Group companies, and the status of control overGroup companies by the holding company.
Reports to the Group Internal Audit Committee are
not limited to the audit results conducted at Daiwa
Securities Group Inc. and Daiwa Securities Co. Ltd.,but also include highly important findings madeduring audits conducted on companies in Japan andoverseas.
The Internal Audit Department collaborates with
the internal auditing divisions of Group companies
through periodic meetings, monitoring, and audits.
The Internal Audit Department maintains
communications with the Audit Committee
and accounting auditor, making any necessary
adjustments to ensure that audits are performed
efficiently and, receives audit requests from the
Audit Committee.

The degree to which these internal auditing
activities satisfy The Institute of Internal Auditors’“International Standards for the Professional Practiceof Internal Auditing,” the global standard for internal
auditing, is routinely evaluated by independent
outside third parties, which helps to constantly
improve the system.

28

Number of reports
received throughwhistle-blowing
system for FY2015

42(up 1 from FY2014)*N o reports indicating violation

Structure and Achievements ofWhistle-Blowing System(Corporate Ethics Hotline)
Since January 2003, the Daiwa Securities Grouphas been operating a Corporate Ethics Hotline,
through which employees can report problems in
the workplace directly to a corporate ethics officer of
Daiwa Securities Group Inc. or outside lawyers.
When the Hotline is contacted, the corporate
ethics officer, in cooperation with the internal control
officers at each Group company, carries out a factfinding investigation, while taking steps to protect
the caller.
In 2015, 42 reports were received through thewhistle-blowing system.
The Group is working to ensure that all employees
are familiar with the Corporate Ethics Hotline,
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 quickly when calls are received. The Group is
taking steps to improve the Hotline so that it can work
effectively as a deterrent to prevent problems before
they occur, not just as a measure to solve problems.

Intranet and poster to increase employee's awarenessof human rights, environmental
pollution by Daiwa Securities,
or other matters raising
extremely serious concerns ingeneral social terms

Compliance

Daiwa Securities Group CSR REPORT 2016

ComplianceApproach 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 thatcompliance 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 trustof customers, the market, society, and shareholders.

Compliance System

on-site inspections. Moreover, it visits the work sitesof headquarters departments and sections directly,
identifying issues and providing training support. The
Customer Support Center, established within the
Compliance Department, comprehensively handles
customer feedback and complaints and reflects themin the business to improve customer satisfaction.
One of Daiwa Securities’ strengths is that a full-time
internal administrator belonging to the ComplianceDepartment is stationed at all of the sales branches.
The internal administrator works on improving theeffectiveness of the PDCA cycle (plan–do–check–act)
at each sales branch, while closely cooperating with
the Compliance Department, thereby building a solid
compliance system.
The compliance section consists of roughly 250
staff, composed of 41 staff at the Compliance Control
Department, 77 at the Compliance Department,
and about 130 working as internal administrators
at sales branches. The staff members are striving tostrengthen the Group’s compliance system.

The compliance section of the Daiwa Securities Groupconsists of the Compliance Control Department,
which is mainly responsible for establishing overallrules, and the Compliance Department, which istasked with providing support to sales branches andheadquarters departments and sections. The twocollaborate to build a compliance system, working
concurrently for Daiwa Securities Group Inc. and its
subsidiary Daiwa Securities.
At the Daiwa Securities Group, the compliancesection focuses on three key issues: securing thefairness and transparency of the market, eliminating
any relations with anti-social forces, and maintaining
information security, and supports Daiwa Securities
and other Group companies.
At Daiwa Securities, the Compliance Department
monitors transactions and solicitation by sales
branches, identifies challenges and issues, and visitssales branches to check their business and provide
instructions. The department also regularly conducts

The Daiwa Securities Group’s Compliance Framework
Daiwa Securities Group Inc.
Group Internal Audit Committee

Group Risk Management Committee

Reporting
Reporting and consultations

Instructions andmonitoring

Reporting ofcompliancerelated meetings

ReportingCompliance Control Department and Compliance Department
Keeping track of the compliance program
Conflict-of-interest management
Trading rules for executives and employees
Transaction screening
Measures for eradicating anti-social forces
Information security management
Keeping track of progress of lawsuits
etc.

Reporting and consultations

SupportReporting ofcompliancerelated meetings

Overseas subsidiaries

Daiwa Securities

Other Group
companies

Compliance Section

Compliance Control Department
Compliance Department

Compliance Section

Reports andconsultations
Instructions andmonitoring

Addressing complaints
and disputes
Checking anti-social forces

Sales branches and headquarters
departments and offices

Customers

29Compliance

Daiwa Securities Group CSR REPORT 2016

Full Implementation of the
Customer First Principle

Eliminating Any Relations with
Anti-social Forces

Daiwa Securities Co. Ltd. is taking measures inline with the compliance program to ensure theeffective operation of our internal control systemand strict compliance of our sales activities with laws
and regulations. For FY2016, we set up the pillars
outlined below, while maintaining the “Customer First
Principle” as the keyword as in the previous fiscal year:
1. Greater emphasis on sales activities from thecustomer’s perspective
2. Reinforcement of internal control systems at
headquarters departments and sections
3. Exercise of proper functions as a gatekeeper to themarketDaiwa Securities markets a wide range of financial
products including investment trusts. When soliciting
investment from customers, we ensure compliancewith the principles of integrity and fairness, theobligation to explain, and the principle of suitability
from the perspective of investor protection. We haveadopted the practice of systematically providing
continuous and thorough after-sale follow-ups, rather
than leaving it to individual sales agents, especiallywhen the market is on a downward trend. We consider
providing thorough, face-to-face explanation tocustomers and maintaining customer trust and a senseof security at the time of market fluctuations to be partof the practice of Customer First Principle for Daiwa
Securities as a marketer of financial products. We willcontinue stepping up such initiatives going forward.

We recognize that financial institutions play a largerole in eradicating so-called “anti-social” forces, andcontinue engaging in persistently. We also collaborate
with the police and lawyers to eliminate any relations
with such forces.
We have implemented a structure that prevents any
relationship with anti-social forces from commencing
by collecting a variety of information and closely
checking them when accounts are to be opened.
We also constantly accumulate new information
and regularly check existing accounts in an effort
to tighten management of ongoing transactions.
Personnel serving customers at sales branches
undergo training to hone their skills to identify antisocial forces and always stay alert.

Securing the Fairness andTransparency of the Market
The Daiwa Securities Group is working to secure thefairness and transparency of the market from twostandpoints. These points are how to check andprevent illicit transactions by investors and by Daiwa
Securities itself.
To prevent illegal transactions by the investors, wecheck daily transactions by extracting deals that go
beyond certain criteria, such as whether they havean excessive impact on the market. As an effort toaddress insider trading, we ask customers’ place of
employment and positions within their companies
before registering their information. This practiceallows us to check transactions as soon as trading
orders are placed by customers who are in a position
to acquire internal information. We also check the pasttransactions conducted with us retroactively whentimely disclosure is made for important information.
To prevent illegal transactions within the Daiwa
Securities Group, we strictly manage not just material
facts of listed companies but broader information
related to them in a similar way. We have also
introduced a system managing their information,
keeping track of people obtaining information andwhere information has been sent. We have thereby
constructed a structure to prevent illegal transactions.

Basic Policy on Avoiding Involvementwith Anti-social Forces
To ensure fairness and the sound development of
the securities market and protect our customers
and employees, the Daiwa Securities Group has
created a framework to eliminate the influenceof organized anti-social forces, their associates,
corporate extortionists, and other criminal
elements and takes systematic measures to avoid
all ties with such elements.
1. The Daiwa Securities Group will not carryout any transactions whatsoever with
antisocial forces.
2. If it is determined that parties alreadyhaving transactions with the Daiwa
Securities Group are anti-social forces, wewill swiftly take appropriate measures toterminate dealings with them.
3. T he Daiwa Securities Group will provide nofunds to anti-social forces.
4. T he 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 willtake legal action in the civil or criminal court
against the party making the demand.
5. T he Daiwa Securities Group establishes
close cooperative relationships with outside
parties such as the police force, the National
Center for the Elimination of Boryokudan(anti-social forces), legal experts, and others.

Initiatives against Bribery andCorruption
In line with the principles of the United Nations
Global Compact, the Daiwa Securities Group works
to prevent corruption. Daiwa Securities’ code of
ethics and conduct prohibits employees from making
reward or entertainment. We have also incorporated
management rules on entertainment into selfinspection items since FY2015, and each department,
office, and sales branch therefore inspects theirpractice voluntarily. We have especially tightened
our oversight on the corporate business section by

30

Compliancerequiring the section to make reports in accordancewith the management rules on entertainment. We
also strictly manage dealings with government
officials to ensure that we are not involved in bribery
and corruption as entertainment of government
officials is prohibited by law. Similar instructions arebeing given to overseas operational bases.

Information Security
We at Daiwa Securities Group have implemented
numerous information security measures to protect
personal information entrusted to us by customers ina safe and precise manner.
In many personal information leakage incidents
arising in recent years, leakage has occurred at third
parties to which operations have been entrusted.
Accordingly, when signing an outsourcing contract
with a third party, we thoroughly check theinformation management structure of the party. We
have also started conducting on-site visits before
outsourcing to examine the practice of the party.
In October 2015, the Individual Number Act (theAct on the Use of Numbers to Identify a Specific
Individual in the Administrative Procedure) took effect.
We have not only complied with the law, but also
applied stricter standards to manage information.
We have controlled access to Individual Number andother data entrusted to us by customers by isolatingsuch data physically and managing them with extra
care. No matter how much data is systematized, there
always remains a human element. To ensure thata mistake does not occur, we focus on training forsales personnel to recognize the importance of data,
while keeping the number of employees authorized
to get access to personal information at a minimum
level necessary. Daiwa Securities also bans employees
from taking personal information out of the company
in principle. When it is absolutely necessary to takeinformation out for business purposes, we require
employees to obtain prior approval from an internal
administrator or other superiors and to keep records,
thereby strictly managing such information.
We also strictly manage the printing of personal
information and output to external recording media,
while monitoring whether there is any unauthorizeduse. Since some of the documents received from
customers are paper-based, we have implemented an
initiative to prepare specialized portfolios to avoid therisk of losing documents within the company.

Fostering Compliance AwarenessWe consider it extremely important for each employee
to always maintain compliance awareness. We havetherefore adopted a compliance-related program
in training for new employees and other internal
training. We also give tests on compliance regularly
through e-learning, while posting “Information
Security Check Test” and “Compliance Digest” every
Monday on our intranet. Compliance-related contents
are also broadcast twice a month in our internal TV
program aired every morning. Moreover, at Daiwa
Securities’ sales branches, the internal administrator
leads an initiative to provide training and instructions
that suit each workplace on a daily basis. The branch

Daiwa Securities Group CSR REPORT 2016

chief, meanwhile, chairs a compliance meeting inwhich all branch members participate. We have thus
implemented various systems to keep the complianceawareness of all employees at a high level, andcontinue to foster awareness among employees.

Important Issues for FY2016 andBeyondWe will continue to focus on Customer First Principle
and especially work on strengthening the checking
function, including the internal control system of theheadquarters. It is imperative that we comply with set
rules, and we consider that the goal of our initiatives
should not be just such adherence. Compliance is acommon theme that must be addressed by the entire
industry and also a matter of trust in the securities
industry as a whole. We will therefore exchange
information with industry peers and proceed withmeasures while sharing good practices with one
another. The Daiwa Securities Group will strive tostrengthen compliance as a leading company of theindustry going forward and make efforts to contributeto enhancing trust in the entire securities industry.

31

Human Rights Initiative

Daiwa Securities Group CSR REPORT 201632

Human Rights Initiative
Approach and Basic Stance
The Daiwa Securities Group is strengthening efforts based on its corporate principles, theAct on Promotion of Education and Enlightenment of Human Rights, the United Nations
Global Compact and ISO 26000, to educate its employees about human rights with the aimof improving a corporate culture rooted in the basic principles of human rights.

Basic Policy for Initiatives Addressing Human
Rights and Social Integration Issues
1. Daiwa Securities Group Inc. supports and complies
with the protection of human rights as advocatedinternationally and does not infringe on human rights
within the boundaries of its influence.
2. T he 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 andsocial integration issues as our own problem, notsomebody else’s problem, and fosters a sensitivity thatenables empathy with the suffering of others.
4. We provide an equitable working environment thatvalues people and is free of discrimination or humanrights violations based on race, nationality, biologicalsex, sexual orientation, or gender identity.
5. Each employee is a member of society unburdened by
prejudice.

Specific Efforts
1. We highly value the human rights of every stakeholder
and our staff will always address clients, local
communities and their members with great awarenessof 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 humanrights education and awareness programs, including
regular training and feedback and response loops.
Human Rights Awareness Promotion Committee
Revised on August 12, 2016

Human Rights Education andAwareness
In 1984, the Daiwa Securities Group set up the
Human Rights Awareness Promotion Committee. Itsestablishment is aimed to promote activities and training
for raising human rights awareness, thereby encouraging
better understanding and appreciation of social
integration and other human rights issues including so
called Dowa-mondai in Japan, which refers to centuriesold discrimination and ostracism against a specific groupin Japanese society. Since the committee’s establishment,
we have been working to achieve its objective. Besides
the committee, all Group managers at the head office orbranch level act in a promotional role, using education
and awareness activities to ensure that employees
correctly understand and acknowledge human rights
and social integration issues. The committee revised
and released the Group’s Basic Policy for Initiatives
Addressing Human Rights and Social Integration Issues inAugust 2016.
The Daiwa Securities Group has been a member of
the Industrial Federation for Human Rights, Tokyo, since1998. The Federation is composed of 125 companies
mostly headquartered in Tokyo with a combined totalof one million employees (as of May 2016). Federation
members work together to improve their employees’
awareness of human rights issues through research andcommunication.
Composition of Human Rights Awareness Promotion Committee
Chair: the director as Human Resources Officer at Daiwa Securities
Group Inc.
Vice Chair: the director as deputy Human Resources Officer andhead of the Human Resources Department
Committee Members: five department heads including Executive
Officer and General Manager of the
Corporate Communications

Initiatives in FY2015
In FY2015, we provided human rights education intraining for the Group’s new employees conducted
immediately after their induction ceremony as well as intraining for young employees (annex education) and for
those newly becoming general managers, managers,
and associate managers. The chief of the Human Rights
Awareness Promotion Committee Secretariat took chargeof the training, taking up basic knowledge of humanrights and the recent social environment. LGBT issues
were also newly added to the training for FY2015 todeepen understanding in this area.
In November, the Group also held a Human Rights
Awareness Workshop, an event to consider humanrights from multiple viewpoints, for all executives andemployees. The participants held discussions after
watching an educational video entitled “Why dobusinesses need to promote human rights awareness?”
Moreover, we disseminate information on humanrights regularly through our in-house magazine, issued
every other month. We also solicited human rights
awareness slogans between October and December
in a contest designed to promote a broader anddeeper understanding of human rights issues. Contest
participation was open not just to employees but also totheir families. The winning entries were presented in our
in-house magazine.

The in-house magazine is used topromote human rights awareness

Human rights education for
employees

Human rights
education for
employees for FY2015•Training participants

670 new employees•Objective

To acquire basic
knowledge concerning
human rights
To understand andraise awareness of theGroup’s fundamental
principles concerning
respect for humanrights•Training participants

442 promoted employees•Objective

To acquire knowledge
and raise awarenessconcerning humanrights required for theirrespective positions

Risk Management

Daiwa Securities Group CSR REPORT 2016

33

Risk Management
Approach and Basic Stance
While the Daiwa Securities Group pursues profitability and growth, we also recognize theimportance 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 and Risk
Appetite Framework*

Committee. The Risk Management Department playsa central role in these risk controls.

Daiwa Securities Group Inc. has drawn up the “Risk
Appetite Statement” to clarify its risk-taking policy
and risk management system consistent with its
group's business strategy. The statement has been
approved by the Board of Directors. In line with thegroup’s business profiles, it defines risk categories,
quantitative indicators to be managed, risk culture
based on the corporate principles, and the governancestructure supporting these matters. Based on thisrisk appetite framework, we at Daiwa Securities
Group Inc. control risk according to the profile andthe size of risk at each business, and monitor therisk management systems and risk exposures of our
subsidiaries. Risk exposures and issues are discussed
at the Group Risk Management Committee, which
is a sub-committee of the Executive Management

Appropriate Risk Controls

should be assumed in order to●System Adequate to Prevent Risk at
Worksites (Three Lines of Defense)

a common phrase used internally

The Risk Management Department has set up groups
according to risk fields—the market risk management,
credit risk management, liquidity risk management,
and planning groups. Each group is responsible forcontrolling risk in their fields. The department also
has an IT & Administration group that provides IT
support due to the elaborate calculations required inrisk measurement. Moreover, overseas business bases
and major group companies also have risk control
divisions. We thus manage risk at home and abroad
through group-wide collaboration.

management.

*Risk Appetite Framework
This risk appetite framework
defines risk appetite as the type
and total amount of risk thatto discuss risk-taking policies
within the context of businessSocial Role Required

Corporate Principles

The Daiwa Securities
Group’s Risk Appetite
Framework

achieve business strategies. It is

Building trust, placing importance on personnel, contributing to society,maintaining healthy earnings results

Realization of a fair and transparent
marketRisk Culture

Business Strategy
Direction andideal to be
pursued■M edium-Term
Management Plan

Specific
guideline andstrategy

Action Plan
Financial Strategy

Capital Buffer
Risk Appetite■ E stablishment of risk appetite in terms of profitability and quantitativeand qualitative elements to achieve business strategy■ P rofitability indexes■Q uantitative indicators: liquidity, capital, concentration risk, andoperational risk indicators■Q ualitative elements: Implementation of system to manage Statement,risk culture, operational and other risks as well as articulation ofmanagement policy■ Fundraising Plan

Risk Limits
Governance System/Management Information System

Internal Audit■ Management Vision■ Basic Management Policy

Risk Capacity■M aximum allowable risk in light of liquidity and capital requirements

Risk Management

Daiwa Securities Group CSR REPORT 2016

It is a fact that risk materializes where businessis executed. The Risk Management Department
monitors risk based on measurement of indicators,
but always communicates with business units
because numerical data is sometimes not enough todetermine business conditions. The department has
also employed Risk Control Self-Assessment (RCSA),
identifying risks at each business unit along withpeople working there and implementing measures toavoid risk. We thus help them, where risk arises, tocontrol risk on their own.
The first line of defense to prevent risk fromemerging is each business unit, which controls
risk based on self-discipline. The second is the
Risk Management Department, which is tasked
with controlling risk in a cross-organizational andcomprehensive manner. The third is the Internal Audit
Department. We endeavor to control risk by utilizingthese three defense lines.

Sophisticated Risk Management●Drastic Changes in Risk Controls after
the Lehman Brothers Bankruptcy andthe Financial Crisis
It goes without saying that the importance of risk
management at financial institutions became amatter of public awareness following the financial
crisis triggered by Lehman Brothers Holdings Inc.’sbankruptcy. Discussions were held among people
in different perspective across the globe under therecognition that, although financial institutions had
engaged in risk management, their risk controls were
inadequate, resulting in the financial crisis.
Immediately after the financial crisis, many majorinternational financial institutions were bailed out by
injecting public funds—taxpayers’ money. In financial
markets, where global and complicated transactions
are conducted, assets and liabilities of financial
institutions are intertwined with one another in acomplex way. Therefore, if one of the institutions
collapses, a chain of crises occurs instantly acrossborders, possibly throwing the financial market intochaos. It can be said that, during the crisis, to avoid
such an eventuality, governments had no choice but
to inject public funds for bailouts.

Risks for the Daiwa Securities GroupThe risks which are particularly important for the Daiwa Securities Group as a
general securities group are those related to our key securities business, securities
transactions, and market making, which is associated with such trading. Managing
risk for liquidity of funds is extremely important as transaction amounts are large.
We especially focus on the management of foreign currency liquidity risk arisingwith an increase in handling of global financial products. At the same time, weneed to control the market risk resulting from fluctuations of securities prices, credit
risk for business partners and issuers, and the integration risk measured from an
overall management perspective and a medium- and long-term viewpoint. The Risk
Tsutomu Kobayashi Management Department’s role is to quantify and monitor these risks.
Managing Director of the Risk

In addition to these risks, we have operational risk, which is difficult to quantify.

Management Department of

Operational risk is further classified into seven risks, including compliance,

Daiwa Securities Group Inc.

information security, and operations risks. They are each managed by different

Managing Director of the Risk
Management Department of
Daiwa Securities

departments and sections, but the Risk Management Department is responsible for
their overall management.

34

Risk Management

Daiwa Securities Group CSR REPORT 2016

Reflecting on the crisis, the financial authorities
have started requiring financial institutions to grasp
the scale of loss that could be incurred at the time ofmanifestation of risk, no matter how small the chanceof such loss may be foreseen. Financial institutions arealso required to prepare a structure allowing themto collect accurate data on risk arising from dailytransactions with customers and counter parties andreport such data promptly if necessary. The collapseof a major financial institution would leave not only
the shareholders and employees of the institution,
but also society in chaos. To stem the risk that may
spread globally, it is necessary to establish universal
standards. This has prompted G20 countries andothers to introduce globally standardized regulations.

35

management system encompassing various initiatives
closely related to business strategy.
Moreover, the financial institutions designated as
D-SIBs need to comply with “Principles for effective
risk data aggregation and risk reporting” within three
years from the designation. This requirement has
been implemented in light of the financial crisis, toenable financial institutions to aggregate and assess
data on various risk events and impact arising at each
institution and to report it in a timely and accurate
manner. These initiatives are expected to lead to moreelaborate risk management methods through thedevelopment of infrastructure and construction of agovernance system, while enhancing and advancing
management efficiency. We consider the flow fromsavings to investment to be a business opportunityand strive to help further development of capital
markets. Further sophistication of our risk controls willcontribute to the realization of this business strategy.
Risk management holds a large key to the Daiwa
Securities Group fulfilling an intermediary function in
finance—an important infrastructure of society—and
helping to develop sound financial and capital markets.
We will continue working on risk management,
considering that it is a responsibility toward society weneed to fulfill as a financial service group.

●Designation of Domestic Systemically
Important Banks (D-SIBs)In December 2015, Daiwa Securities Group Inc. wasdesignated as one of Japan’s Domestic Systemically
Important Banks (D-SIBs). Following the designation,
we have introduced the aforementioned risk appetite
framework in FY2016. The framework has been
established not merely for risk management, but for a

Risk Management System
Daiwa Securities Group Inc.

Group companies• Daiwa Securities

Nominating Committee
Board of Directors

Audit Committee
Compensation Committee

Executive Management Committee
Reporting

ReportingOutside Directors Council

Representative Executive Officer

Discussion
andreporting

Reporting

Risk Management Department• Daiwa Next Bank
• Other Group companies

Operational risk
risk

risk

• Daiwa Corporate Investment• Daiwa Securities SMBC Principal
Investments

Comprehensive Risk Management Structurerisk• Daiwa Office Investment
Corporation• Daiwa PI Partners*Chief Risk Officer

Liquidity• Daiwa Capital Markets Hong
Kong

• Daiwa Asset Management

CRO*

Credit• Daiwa Capital Markets Europe• Daiwa Capital Markets America

Group Internal Audit Committee

Group Risk Management Committee

MarketPolicyformulation
andinstruction

Operations

SystemInformation

Compliance

Legal

risk

risk

Security risk

risk

risk

Human
resource
risk

Physicalassets risk

As of June 30, 2016

Risk Management

Supply Chain Management andHuman Rights Due Diligence
The Daiwa Securities Group regularly checks the
documents disclosed by major business partners,
including providers of IT equipment and services,
as well as news reports about these companies andtheir reputation on the Internet in order to address
issues in the Group’s supply chain, including ones
related to the environment, society, human rights,
information and cyber security. If any issues are found,
we take steps, such as urging the business partners
to make improvements. We also collect information
provided by public institutions in and outside ofJapan and exchange information with external
parties to be aware of human rights issues that exist
in the countries where the Group conducts business
operations. We then consider taking appropriate
measures for issues of importance.
We carry out due diligence in deals underwritten
and in self-investment deals, considering not only
business history and financial aspects but also
environmental and social issues.

Daiwa Securities Group CSR REPORT 2016serves public interests. For example, we have begun
operating Japan’s highest-level backup center, whichenables us to easily switch to the alternate system
in case of an emergency at headquarters. We canthereby continue vital operations through a substituteoffice location.

●Initiatives on Impact of Climate
ChangeA significant rise in sea levels and the occurrence of
extremely large typhoons due to global warming
have recently raised concerns over potential largescale flood damage. Some of the Daiwa Securities
Group’s important business bases are located inplaces not very far from the seashore or rivers andmay be affected should floods occur. We are not justtaking general precautions against flood damage,but promoting such measures as setting up key
equipment and facilities at different sites and moving
machinery to the upper stories of our office buildings,
in order to mitigate the impact of disasters on ourbusiness operations as much as possible.

Business Continuity Plan
To be prepared for emergencies, we have drawn up abusiness continuity plan (BCP) prioritizing important
operations* to be restored and continued in orderto keep the financial markets open and to protect
customers’ economic activities. Emergencies whichmight make our head office functions, branches anddata centers or other important facilities inoperative
include: earthquakes, fires, storms, floods, otherextraordinary 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 thesafety of customers, our employees, and protectionof our assets but will strive to continue our vital
operations in the financial markets where our business*Prioritized operations to be restored
or continued
1. Carrying out securities transactions tradedin the markets and yet 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)
・Japanese government bonds forindividual investors
・Ordinary deposit

Power receiving and transforming facilities relocated to
the rooftop of the Osaka branch building36

IT Strategy and the Management of Systemic Risk

Daiwa Securities Group CSR REPORT 2016

IT Strategy and the Management of Systemic Risk
Approach and Basic Stance
Under its Medium-Term Management Plan, “Passion for the Best” 2017, Daiwa Securities
Group will promote two IT strategies (basic IT policies), namely, “strategic IT investment” and“strengthening IT governance” in order to achieve the management vision of “leading thecapital markets in Japan and Asia, and becoming the customer’s first choice securities group.”

IT Governance Structure
To achieve the management vision of “leading thecapital markets in Japan and Asia and becoming
the customer’s first choice securities group,” theDaiwa Securities Group is pursuing two IT strategies(Basic IT Policies): “Strategic IT Investment” and“Strengthening IT Governance.” These are includedin the Group’s Medium-Term Management Plan,“Passion for the Best” 2017, which commenced in
FY2015.
Against a backdrop of globally tightening financial
regulations, increasingly serious and sophisticatedcyberattacks, and the spread of advanced services
combining finance and IT (FinTech), the CIO* has beenplaced in charge of overseeing all IT-related operations
across the Group, including overseas offices, throughthe aforementioned committees, and is tasked withstrengthening collaboration within the Group andmanaging risk on a global basis.
*CIO: Chief Information Officer

Strategic IT Investment
Aware of the importance of synchronizing
management and IT strategies, Daiwa Securities
Group prioritizes the allocation of resources in IT
investments that contribute to the achievement ofGroup performance targets and business strategies.
By aiming to coordinate strategic IT investments withchanges in tax systems and infrastructure platforms
that are essential for business continuity, the Group
strives to enhance the value added of its businesses.
More specifically, to provide investment services thatlead the transition “from savings to investment,”
the Group is working to improve its approach toa new customer base (i.e., the next generation ofhigh-net-worth individuals and young people) andenhance marketing efficiency and quality in order toaddress the diverse needs of investors. The Group is
focusing efforts on enhancing convenience for Japan’s
individual savings account (NISA) holders and users of
its online services, while expanding marketing support
functions.
The Group has proactively developed bothface‑to‑face marketing and non-face-to-facemarketing channels with IT. Since the rapid
advancement of IT has made it more important tohave a business strategy that leverages cutting-edge
technologies, the Group has newly established theArtificial Intelligence (AI) Office and the Advanced
IT Strategy Department as organizations specializing
in analysis and research in this field. The Group has
also reinforced efforts by launching conferences on
financial innovation with cutting-edge technologies
across the Group organization, headed by the CIO.

Systemic Risk Management
Daiwa Securities Group works to maintain andenhance the management of systemic risk in orderto reliably provide high-quality services to customers
while protecting information assets from various
threats and risks. The Group monitors the status ofits networks and information systems and makes
qualitative improvements to its systems based on
periodic risk assessments, in order to prevent risks
from occurring. In FY2015, in response to the launchof the Japanese government’s Individual Number
identification system, the Group introduced security
management measures using the latest in technology
to encrypt these identification numbers and restrict
access to this information.
In recent years, external threats such as
cyberattacks have grown in severity andsophistication. Since it has become more important
for the entire Group, including overseas offices, toaddress these external threats on an organizational
and technological level, the Group collaborates
with outside institutions to collect and analyze thelatest information about cyberattack methods andvulnerabilities. We have adopted a multi-layered
defense that combines defense measures on several
fronts, such as “ingress defenses” that prevent illicit
intrusions from the outside, “internal defenses” thatprevent unauthorized use, and “egress defenses”
that prevent the external leaking of information. The
Group will continue to enhance its management ofcyber security, centered on its CSIRT*.
*Computer Security Incident Response Team:The organization that manages cyber security acrossdepartments

37

Environmental Initiatives

Daiwa Securities Group CSR REPORT 2016

Environmental Initiatives

Investment inenergy-saving air
conditioning systems
for FY2015

Approach and Basic Stance¥38274.05 million(including system costs)

Protecting 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 make environmental technologies
and infrastructure more widely available. At the same time, we are working to establish asystem that efficiently collects data on Daiwa’s environmental load.
We are also focusing on raising employees’ environmental awareness to empower them toreduce the environmental burden in daily business operations.

Environmental Vision/Environmental
Principles/Basic Environmental Policies
Environmental Vision
The Group is dedicated to protecting the precious global
environment and preserving it for future generations byleveraging financial capabilities.
Environmental Principles
The Group recognizes the importance of environmental
principles such as the effort to combat global warming,
recycling and reuse of raw materials, and preserving
biodiversity, in order to create a sustainable society for the
21st century. The Group pledges to contribute to solving
environmental issues through its business as a financial service
company and to constantly seek new ways to reduce its
environmental impact as a responsible corporate citizen.
Basic Environmental Policies
1. Make positive environmental contributions throughour core business activities
We shall seek to develop and provide financial products andservices that promote a low-carbon, recycling-oriented, andsymbiotic society
2. Implement an environmental management system
We shall implement an environmental management systemand constantly seek new ways to improve environmental
activities. In addition, we shall support environmental
education and publicity efforts, while promoting
environmental protection efforts by employees.
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 of natural resources and energy, and seek ways
to improve materials and energy efficiency (including
efforts to improve business efficiency). We shall also takesteps to reduce water use and reduce, reuse, and recycle
other materials to contribute to a more environmentallyfriendly society. Furthermore, considering the importanceof biodiversity, we shall seek a symbiotic relationship withthe environment and use safe, clean methods of materials
procurement.
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 the environment to customers and society
at large.
5. S trictly observe environmental regulations
We shall always endeavor in environmental preservation,observing environmental laws and regulations in addition to
the Group’s environment policies
Takashi Hibino
President and CEO
Daiwa Securities Group Inc.
May 22, 2012

Environmental Management
Every six months, the Daiwa Securities Group holds a
meeting of our Environmental Management Council,
where representatives from major companies of
the Group share data and exchange information. In
addition, at Daiwa Securities and Daiwa Property
Co., Ltd., both of which have a significant impact on
the Group’s power consumption and CO2 emissions,the relevant departments hold a joint meeting
every week, discussing measures to reduce theirenvironmental impact, checking the progress ofimprovement measures and sharing information.
Daiwa Institute of Research also joins the meeting as
required. Moreover, 11 Group companies with offices
in Gran Tokyo North Tower attend a meeting of the
CO2 Reduction Promotion Committee hosted by
the management company of the building every six
months, working together to reduce the overall CO2
emissions of the building.
We strive to improve our efforts, while reporting
quantitative data on our environmental impact overtime, including energy and water consumption, CO2
emissions, waste disposal and recycling volume.

Company cars inJapan(Daiwa Securities)

1,036 vehicles
including

554 vehicles
Hybrid cars 40 vehicles
Eco-cars(As of March 31, 2016)•Introduction results for

FY2015137 vehicles
Hybrid cars 31 vehicles
Eco-cars•Introduction plan for

FY201664 vehicles
Hybrid cars 58 vehicles
Eco-cars

Initiatives to Reduce Environmental
Impact of Business Activities●Introduction of Environmental
Accounting
As part of our efforts to reduce environmental load,
the Daiwa Securities Group has started introducing
environmental accounting. It is expected to moreaccurately help us to track the costs and effects ofenvironmental preservation and reduce environmentalloads more effectively.

●Initiatives at Head and Branch Offices
When installing new equipment at head and branch
offices, Daiwa Securities requires that the equipment
be certified under Top Runner standards*. We also
adopted a policy of replacing our company cars withstill more fuel efficient eco-cars and hybrid vehicles*A set of energy efficiency
standards introduced in 1999
for energy intensive products.

Environmental Initiatives

within several years. The policy has been implemented
since FY2014. The planned replacement, at thetime of completion, would reduce CO2 emissions
by the amount equivalent to the CO2 absorption of
more than 40,000 Japanese cedar trees annually (anestimate by Daiwa Securities using fuel efficiency
data disclosed by automakers). The Daiwa Securities
Group also strives to choose environmentally friendly
products in the Group’s central purchasing.

●Offering Environmentally Friendly
Services
Daiwa Securities provides an online service that allows
customers to request a wide range of electronic
reports. Reports cover such areas as each transaction
or balance and other pertinent details as a substitutefor written notifications (hardcopy reports). Reports
received in an electronic format can, in principle, be
accessed and confirmed as and when required, saved
to personal computers, and printed for five years after
initial receipt.
The proportion of customers choosing the online
service was 38.7% as of the end of March 2016,
up 1.8% from the previous year. We will continue
recommending the service to increase the number ofcustomers using it.

●Carbon Dioxide Emissions
Energy consumption at the Daiwa Securities Group’s
domestic offices (on a CO2 emissions basis) fell byapproximately 9.1% in FY2015 compared with FY2014
as a result of increased efforts to conserve energy.
⇒ Refer to “CSR Related Data” on page 69 fordetails●CO2 Emissions Reduction Targets
We have set up the goal of reducing CO2 emissions
by 1% from a year earlier, in principle, on a domestic
consolidated basis, while complying with the Act on
the Rational Use of Energy and Tokyo’s environmental
protection ordinances in a continuous and systematic way.
We continue to take energy saving initiatives
including the implementation of the “Cool Biz”
program in FY2016 as well, carrying out energy
savings measures through on- and off-peak periods.

●Targets for FY2016● Continue to introduce eco-cars● Initiatives for the reduction of electricity
consumption
Achieve a reduction of at least 10% from the
FY2009 level (as of FY2020)
Achieve a reduction of at least 20% from the
FY2009 level (as of FY2030)*On a per unit area basis for both targets● Improve the accumulation of environment-related
data and hone skills to analyze those data
● Purchase products certified under the Top
Runner standards

Daiwa Securities Group CSR REPORT 2016

Initiatives in Real EstateManagement●Operation of the Sustainability
Committee
Daiwa Real Estate Asset Management launched a
Sustainability Committee in FY2013 as part of its
efforts to systematically address a variety of CSRrelated challenges. The Committee, comprising thepresident and full-time executives, draws up policy onsustainability and discusses challenges and activities
as needed.
In FY2015, the Committee held discussions on
the acquisition of Global Real Estate Sustainability
Benchmark (GRESB) Survey and Building Energyefficiency Labeling System (BELS) evaluations.

●Environmental Initiatives at Shinjuku
Maynds Tower
The following environmental initiatives have been
implemented since 2012 at the Shinjuku Maynds
Tower building, which is owned by Daiwa Office
Investment Corporation and operated by Daiwa Real
Estate Asset Management:•Adoption of Energy Management System “BEMS”
for the Central Control System (completed andput into operation in September 2015)
Building energy management system (BEMS)
functions have been added to the new central control
system, allowing for elaborate energy monitoring andcontrol of the entire building.
•Introduction of Automated Electronic Air
Conditioning Control System (completed andput into operation in September 2015)
The replacement of the existing self-contained control
system with an electronic system has helped to
optimize the efficiency of air conditioning systems andcurb energy consumption.
•Adoption of LED Lighting (2012–present)
Since 2012, we have continued to install LED
lighting systems in common-use space, such as theunderground parking lot, first basement level andentrance on the first floor. We have also adopted thegreen lease scheme* since 2014 to promote the useof LED lights in tenant-owned space. The installation
has proceeded gradually under the scheme, with bothtenant and landlord enjoying its merits. By May 2016,
the scheme has been used in three cases, including
one in which the electricity usage has been halved
compared with the pre-adoption level. We plan togradually introduce LED systems in other tenant-owned
space as well after holding discussion with tenants.
*Green Lease Scheme
A method enabling the landlord and the tenant of a rentalbuilding or other types of rental property to cooperate andreduce the environmental load in a scheme benefiting bothsides. Such methods include an arrangement where the tenant
returns part of the savings, such as a decrease in electricity
charges, attributable to the landlord’s investment in energysaving facilities, as a green lease payment to the landlord.

39

CO2 emissions
reduction by adopting
LED lighting(in comparison withthe levels prior to theintroduction of LED
lighting)•About164.5 tons

(Shinjuku Maynds Tower in 2015)

Environmental Initiatives●Acquisition of Evaluation under
Building Energy-efficiency Labeling
System (BELS)
Daiwa Office Investment Corporation newly acquireda BELS*1 evaluation for some of its portfolio properties
on March 3, 2016.

Daiwa Securities Group CSR REPORT 201640

Portfolio properties
acquiring a BELS
evaluation•Daiwa Jimbocho Building:★★★
•Daiwa Kayabacho Building:★★
*1 B
 ELS is a system initiated on April 25, 2014, based on “Theguideline on evaluation of energy efficiency performance•Shin-Yon curumu Building:★

on buildings except housing (2013)”*2 established by the
Ministry of Land, Infrastructure, Transport and Tourism.
Under the system, third-party institutions evaluate theenergy conservation performance and other related mattersof non-residential buildings, regardless of whether they are
new or existing buildings, on a five-point scale.

*2 T he guideline showing evaluation and presentation
methods and points to note concerning energy efficiency
performance with the aim of contributing to a further
improvement in energy efficiency performance for
non-residential buildings and appropriate provision of
information in the real estate market

BELS logo (Daiwa Jimbocho Building)

BELS: Acquisition of
Evaluation under
Building Energyefficiency Labeling
System (BELS) (Japanese)

Relationship with Shareholders and Other Investors

Daiwa Securities Group CSR REPORT 2016

41

Relationship with Shareholders and Other Investors
Approach and Basic Stance
The Daiwa Securities Group works hard to advance communication with shareholders andother investors. We will work hard to provide stockholders and investors with improved
communications and information that are easy to understand.

Breakdown of Shareholders
Breakdown by Investor Type (As of March 31, 2016)
Total number of shares outstanding:
1,749,378,772
Individuals
in Japan
20.8%

Other
7.4%

Financial institutionsin Japan
28.7%

Foreigninvestors
39.3%

Other corporationsin Japan
3.8%

Conferences held in Tokyo, Hong Kong and New York.
In addition, we are further developing information
disclosure on our IR websites and publishing integrated
reports and business reports for shareholders. We willcontinue to strive to make our communications evenmore accessible and precise for shareholders.
Questionnaire for Shareholders
We distribute a questionnaire to shareholders coinciding with the
distribution of rewards under our Shareholder Rewards Program at
the end of September, to gather and incorporate their views into
management and IR activities. The findings of these questionnaires
are utilized to enhance satisfaction with the shareholder reward
program and to improve our business operations.

Breakdown ofshareholders(As of March 31, 2016)•Foreign investors

39.3%(Down 6.0 points from the endof the previous fiscal year)•Individuals in Japan

20.8%(Up 2.6 points from the end of
the previous fiscal year)

September 2015 Shareholder Rewards Questionnaire
Contents

Dividend Policy
Daiwa Securities Group Inc. adopted the policy of paying
dividends semiannually at a payout ratio of approximately
30%. However, to further increase shareholder returns,
we have decided to raise the targeted payout ratio toaround 40% from the year ended March 31, 2016. The
following is our revised policy.

Dividend Policy
Daiwa Securities Group Inc. aims to continuously
provide improved value for shareholders, including
distribution of profits. In principle, dividends arepaid semiannually (interim and year-end dividends)
at a payout ratio of approximately 40% basedon consolidated financial performance. We also
actively seek ways to increase returns to ourshareholders, including share buybacks when
we have sufficient accumulated capital to pursue
further growth.

Communication with Shareholders
and Investors
Every year, many shareholders attend our general
meeting of shareholders, which is an opportunity for
us to interact directly.
Other activities include telephone conferences on thedays of earnings announcements, briefings about thecompany for individual investors, management strategy
briefing sessions, one-on-one meetings with analysts
and investors and participation in Daiwa Investment• When did you first purchase our shares?
• Why did you choose to buy the stock of Daiwa Securities?
(multiple answers allowed)• What types of disclosure and corporate communication
would you like to see enhanced in the future? (multiple
answers allowed)• Are there any products you would like for the shareholder
reward program? (multiple answers allowed)

Shareholder Reward Program
Daiwa Securities Group Inc. has been implementing
a shareholder reward program for over 10 years to
express our continuing gratitude to shareholders.
We also introduced a catalog system at the end of
March 2008 and since then have been providing
reward products posted in the catalog semiannually,at the end of March and September. Shareholders
have multiple reward options to choose from suchas regional specialties; charitable donations; “Kaisha
Shikiho,” a quarterly journal on investment; andpoints that can be used in Daiwa’s Point Program. For
those qualified at the end of each March, they arealso offered an opportunity to choose a calendar.

Initiatives in FY2015●Communication of New Medium-Term
Management Plan and Other New Information
Amid a major shift from savings to investment,
the Daiwa Securities Group actively disseminatedinformation contributing to the improvement of
the Group’s corporate value. For example, we

Stock Information

Investor Relations Information

Relationship with Shareholders and Other Investors

Daiwa Securities Group CSR REPORT 2016

communicated the summary of our previous MediumTerm Management Plan, an overview of our new Plan,and other information efficiently and effectively atearnings announcements and management strategy
briefing sessions, as well as in business reports.

●Expansion of IR Operations for
Corporate GovernanceIn overseas IR initiatives, we implement effective
activities that suit each investor base. For example, we
communicate with institutional investors by providing
explanations of the Group’s governance structure to
their staff responsible for exercising voting rights. We
are also reinforcing briefings for individual investors
held at sales branches of Daiwa Securities. Moreover,the Group holds a live seminar-style briefing forindividual investors on the Internet, attracting
participation of many investors and a large audience.
At these briefings, we provide a question-andanswer session and conduct a questionnaire, thereby
obtaining diverse feedback, in order to use such
feedback for the improvement of communication withindividual investors in the future.

●Increasing Shareholder Returns
The Daiwa Securities Group’s capital policy is to
aim to continuously improve the Group’s corporate
value while seeking to achieve an optimum balance
between maintaining financial health, raising capitalefficiency, and increasing shareholder returns. In aneffort to further increase shareholder returns, weraised the targeted payout ratio to around 40% in
FY2015, and also bought back our own shares tofurther increase returns to shareholders through theenhancement of capital efficiency.

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

42●Disclosure Policy
As a company engaged in the securities business, ininformation disclosure, we aim to be a role model forother listed companies. We will strengthen disclosureof not only financial information, but also nonfinancial information with social and environmental
aspects that are not evident in short term financial
figures.

Number of overseas
IR activities held in
FY2015•North America:

3 IR events(about 30 meetings)•Europe:2 IR events(about 30 meetings)

Disclosure Policy● The Daiwa Securities Group will provide
important information about the Group,
including financial, social and environmental
aspects, in a fair, prompt and appropriatemanner. We will thereby promote
understanding of the Group amongshareholders, investors, local communities andother stakeholders to help them to properly
evaluate us.
● The Group will comply with the Financial
Instruments and Exchange Law, other laws andregulations as well as rules implemented by
the financial instruments exchanges where ourstock is listed.
● The Group will strive to disclose information
fairly in terms of both content and timing.
● The Group will utilize various communication
channels including briefings, telephone
conferences, the Internet and printed materials
to disclose information in a manner that is easy
for investors to comprehend.
● The Group will always keep in mind our
responsibility to lead the securities market
and strive to set an example for other listedcompanies in disclosing information.
● To ensure that these policies are implemented
properly, the Group has establisheda Disclosure Rule that sets forth theestablishment of a Disclosure Committee and
the Group’s information disclosure methods.

•Asia:

3 IR events(about 25 meetings)
Number of briefings at
sales branches and live
seminar-style Internet
briefings for individual
investors and numberof participants in thesebriefings•Number of briefings at

sales branches:

9•Number of live seminar-style Internet briefings:

2•Total number ofparticipants: approximately

2,400 people
Share buyback•Buyback period

From February 17
to March 9, 2016
•Total number of shares

repurchased:

27
million shares(Percentage to total number ofissued shares excluding treasury
stock: 1.57%)•Total amount of shares

repurchased:

18.585 billion¥

Live seminar-style briefing about the company for individual investors

Briefing materials about the company for individual investors(March 2016)(March 2016 edition)

Relationship with Employees

Daiwa Securities Group CSR REPORT 2016

43

Relationship with Employees
Approach and Basic Stance
The Daiwa Securities Group believes that maximizing the motivation of our employees willlead to improved customer satisfaction and consequently enhance shareholder value. We
take a range of measures to ensure that all of our employees 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 andmindset 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 and togetherness
and thus the Group’s overall strength.

Hiring Initiatives●Hiring Approaches and Trends
The Daiwa Securities Group would like all of ouremployees to be highly motivated and to stay with
the Group from hiring to retirement. All new college
graduates recruited by the Group, including thosewith disabilities, are brought on as full and regular
employees aiming to encourage newly hired to have asense of trust and pride in the Group, and a sense ofsolidarity with their colleagues.
By providing an environment where diverse people
can perform to their full potential, we hope to beable to retain highly skilled people. We also focus
on attracting people capable of excelling globally totake a leadership role in the development of capital
markets in Japan and Asia and become the customer’s
first choice securities group.

●Fairness in Hiring
The Daiwa Securities Group has formulated andannounced its Guidelines for Fair Hiring, comprising threefundamental principles for ensuring fair hiring practices.

●Support for the Success of Veteran
Employees
The Daiwa Securities Group has in place a Senior
Advisor System that provides veteran employees witha wealth of experience to play an active role in theworkplace. Senior advisors are dispatched to locationsof their choice and engage in community-based
consulting and sales from a long-term perspective.
In accordance with the enactment of revisions to
the Act on Stabilization of Employment of Elderly
Persons in 2013, and as the careers of employees
grow longer, we associate our sustainable growth
as a company with the employment of older people
who wish to continue learning and working in ameaningful way as a part of the organization. Daiwa
Securities Co. Ltd. is greatly expanding its training
programs for employees aged 45 and older, andhas introduced a License Certification System thatprovides incentives to employees to improve their skills
and polish their acumen as professionals.
We support both work and caregiving, and arecreating an environment in which employees canmove forward enthusiastically without concerns overtheir future lifestyle.

Guidelines for Fair Hiring●Employment of People with Disabilities

1. Utmost respect for the rights of the applicants.

As of FY2015, the Daiwa Securities Group had morethan 170 employees with disabilities handling a wide
range of responsibilities in our head office, sales
branches and contact centers.
We had started recruiting new graduates withdisabilities 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, andimplementing job placement support programs foruniversity students with disabilities.
Once people with disabilities are hired, we
provide support for their career advancement, forexample, creating opportunities for them to enter the

2. E ligibility for all individuals who meet thehiring criteria.
3. Making all hiring decisions based on a fair andobjective evaluation of the applicants’ ability,
aptitude and motivation.

●Recruitment of University Graduates
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 part of our efforts tobuild a diverse workforce. These recruits receive thesame training as new graduates.

Number of new
employees for FY2016

662 people(8 group companies*)*Refer to “CSR Related Data” forcompanies covered by data

Relationship with Employees

Daiwa Securities Group CSR REPORT 2016career-track and regional career-track employment
opportunities.

support by, for example, subsidizing certification costs
so that employees can enhance their specialized skills
and become professionals.

Human Resource Development andSkill Enhancement●Intra-group Job Postings and theCareer Track Change System●Employee Training Approaches andTrendsWe have instituted a Career Track Change System thatenables non-career-track employees to transfer to careertrack and regional career-track positions. Under thesystem, more than 1,100 employees have moved to otherpositions. We have also instituted a system of intragroup job postings to help employees with skills and thedesire to realize their potential to open new career paths.

The Daiwa Securities Group’s competitiveness derives
from our employees. We have a management vision
to take a leadership role in the development of capital
markets in Japan and Asia and become the customer’s
first choice securities group. To realize 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 believe that the time when they join us is a
critical period for their training. The program ensuresthat they acquire not only basic knowledge and skills,
but understanding of our corporate philosophy andcommitment to CSR. It enables us to nurture humanresources with professional skills at an early stage.
We also believe that our employees must have afirm understanding of corporate ethics and compliancein order to 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.

●Education and Training System
The Daiwa Securities Group trains employees with
programs tailored to their skill levels based on a groupwide policy. We aim to foster a sense of solidarity
among Group employees across divisions while
offering training opportunities at group meetings.
Daiwa Securities Co. Ltd. helps employees raise
their skills to new levels, and has set up new programs
that aim to improve specializations. We also havetraining programs for managerial personnel toimprove organizational productivity further.
The Daiwa Securities Group views the first two
years of an employee’s career as a period for theirbasic training into a professional. The Daiwa Basic
Program covers this period of training, and it is being
expanded from FY2015.

●Supporting Employees Trying to Earn
Credentials
Daiwa Securities Group consistently strives tofurther enhance its expertise as a part of efforts
to be the customer’s first choice securities group.
Daiwa Securities sees Financial Planner (AFP and
CFP®) and Securities Analyst qualifications as corerequirements, and encourages employees to acquire
these certifications. Daiwa Securities Co. Ltd. had 616
employees with CFP certifications as of March 31,
2016, the highest number in the industry.
Since FY2014, we have had an Inheritance
Planner Certification program in place. Certification
candidates are selected from among employees with
CFP qualifications, undergo practical training in-house,
and those who pass are certified as personnel withadvanced expertise through an in-house qualification
system. In addition, the company provides generous

44●Evaluation System
For this purpose, we have implemented a multifaceted
evaluation system for managers. This involves
subordinates and related departments assessing
each manager’s job performance in carrying out
his/her duties and the results being fed back to the
manager. With the scheme we intend to improve themanagerial skills of those assessed and improve ouroverall productivity. We also take their compliancerelated performance 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 their careers
and to work in positions with bigger responsibilities.

Striving to Create a PleasantWorking Environment●Encouraging Work-Life Balance (WLB)
One of the Daiwa Securities Group’s targets is topromote an advanced level of WLB. The Group iscommitted to pursuing working styles that enable
employees to achieve a balance between their private
and professional lives, and makes efforts to create
an environment in which both men and women canwork in a variety of ways. Not only do we seek toestablish systems that enable diverse work styles,
but we also work to change employee awarenessby ensuring employees leave work before 7 p.m.,by encouraging them to take all their paid holidays,
and by setting a day of welcoming family visits to theworkplace.
Since FY2013, Daiwa Securities Co. Ltd. has held
meetings of the WLB Advisory Committee withWLB Advisory Committee

Number of persons
earning CFP®
certifications at Daiwa
Securities

616(At the end of March 2016)

Relationship with Employees

Daiwa Securities Group CSR REPORT 2016

directors, department managers and employees inattendance to discuss and advice on measures related
to promoting work-life balance. Meetings are held
once a quarter.
The Daiwa Securities Group has adopted systems
aimed at supporting its employees in both areas ofchild-rearing and nursing care that exceed statutory
requirements. Surveys concerning the Group’s efforts
to support both the career and childrearing needs of
its employees have been conducted to solicit input
from all Group employees. These surveys are designed
to ascertain the degree to which employees areusing the Group’s systems and to collect feedback
focusing particularly on employee needs. Drawing
on the results of the surveys, the Group is working
to further improve conditions and put in place apleasant working environment for all employees.
Prior to an employee returning to work after taking
childcare leave, interviews are conducted with relevant
department, office, and branch heads. In this manner,
energies are being channeled toward ensuring asmooth return to work. Even during childcare leave,
employees are still eligible for promotions and raises
based on their contributions to date. Starting in
FY2014, Daiwa Securities Co. Ltd. offers a Childrearing
Support Leave system that encourages male
employees to take leave and help with childrearing.
We will continue promoting initiatives designed to
attract the kind of high-caliber employees who build
an enterprise that achieves great performance.

Trends in Acquisition Rate of Childcare Leaveby Gender

Acquisition ofchildcare leave

Gender

FY2013

FY2014FY2015

Female100.0％

99.3％

100％

Male

1.6％

41.9％

73.1％

Return to work Female
rate for thosetaking childcare Male
leave

90.0％

93.2％

92.5％

100.0％

100.0％

100％●Encouraging Women to Succeed
The Daiwa Securities Group proactively appoints
talented human resources regardless of gender.
We are trying to appeal more to women’s individualinterests by introducing thriving female employees
as role models in internal publications and providing
opportunities for cross-company communication,in order to increase the number of women in
management positions. A career consultation service
has been set up on the Group’s internal initiatives for

Daiwa Woman’s ForumWLB site. Female executives as well as heads of eachdepartment, office, and branch give advice on theconcerns and inquiries of female employees. There area total of seven women in top management positions
across the Daiwa Securities Group, including two
female executives at Daiwa Securities Group Inc.
The number of women in management positions
has increased every year, totaling 316 women at
Group companies as of March 31, 2016. The ratio of
women in management positions has risen from 2.2%
(at the end of FY2004) to 7.5% at the Group, andfrom 2.3% to 8.9% at Daiwa Securities Co. Ltd. By
increasing the number of role models, we are making
it easier for the Group’s female staff to envision theircareer path. In this context, there has been a sharp
increase in female employees aspiring to advancetheir careers by switching to career-track and regional
career-track positions in recent years. To date, morethan 1,100 female employees converted to careertrack positions. An increasing number of employees
have also taken advantage of our Professional ReturnPlan, a system for re-hiring employees who left work
to raise children or care for family members, startingthem at the same level of compensation as when
they left. The scope of this system was expanded in
FY2015. This has helped us secure talented personnel
who support operations.
Starting in FY2014, Daiwa Securities launched thefemale employee career support training initiative(Daiwa Woman’s Forum) helping women to build
networks among themselves. We will continue toincrease the number of female managers, aiming todevelop female leaders who will drive the future ofJapan’s financial industry.
Daiwa Securities has a proven track record of
implementing a wide range of initiatives that help
female employees reach their full potential. The
company has also clarified its objectives through to
FY2020. In this manner, positive steps are being taken
to provide an environment in which employees withdiverse values can maximize their capabilities.
President and CEO of Daiwa Securities Group
Inc., has shown his support for the Declaration on
Action by A Group of Male Leaders Who Will Createa Society in which Women Shine spearheaded by
Japan’s Gender Equality Bureau of the Cabinet Office.

Targets for Years through FY2020(Daiwa Securities)
・Ratio of women in managerial positions:

At least 15%, more than a fivefold increase
from the FY2005 level・Ratio of women in new graduates recruited: 50% (stable)
・Ratio of women in participants in training: 50%
・Acquisition rate of annual leave: at least: 70%・Acquisition rate of childcare leave for male employees: 100%45

Number of female
executives•Daiwa Securities Group Inc.

2 people(directors and corporate
executive officers)•The entire Group

7 people(directors, corporate executive
officers, and executive officers)

Number of women in
managerial positions•The entire Group316 people(As of March 31, 2016)

Ratio of women in
managerial positions•Daiwa Securities

2.3% (At the end of March 2005)→8.9% (At the end of
March 2016)•The entire Group

2.2% (At the end of March 2005)→7.5% (At the end of
March 2016)

Refer to “CSR Related
Data” on page 66 for“Employee Support
Plans”

Relationship with Employees

Daiwa Securities Group CSR REPORT 2016

●Initiatives to Improve Employee HealthAt the Daiwa Securities Group, we regard
placing importance on personnel as one of our
Corporate Principles, and believe the source ofour competitiveness lies in the capabilities ofour employees. We recognize that creating anenvironment where employees can continue working
actively and vigorously over a long period brings
improvement in corporate value, and thus we are
actively working on health management. Our Human
Resources Departments, Health Insurance Association,and occupational health staff collaborate closely topromote relevant measures. The Daiwa Securities
Group has been working hard to improve employees’
health since specific health checkups and specificcounseling guidance were initiated at worksites in2008. We have started various initiatives and activities
to raise employees’ awareness, with the top priority
placed on measures for those who have a high risk oflifestyle diseases. As a result, the Group was selected
for two consecutive years as “Health & Productivity
Stock Selection,” a title awarded jointly by Japan’s

Structure to Promote HealthManagement
Executive office
Health Management
Promotion Section, Human
Resources Department at
Daiwa Securities Group Inc.

The Daiwa Securities Group• T he Daiwa Securities Group•D aiwa Securities Group Inc.
•D
 aiwa Securities Co. Ltd.
•D
 aiwa Asset Management Co. Ltd.
• T he Daiwa Institute of ResearchGroup•D aiwa SB Investments Ltd.
•D
 aiwa Securities Business enter
Co. Ltd.
including other Group companies

Close to100%

•Rate of participationin thorough medical
examinations(mainly cancer screening
for employees aged 35
years or older)
FY2008â
FY2015

69.4%
83%

Initiatives for Better Health● Regular health checkup● Thorough medical examination (to supplement
standard tests)● Breast cancer and cervical cancer exams● System that uses a follow-up confirmation form(known as a “yellow paper”*)● Walking challenge program● Program to promote moderate meal portions● Lecture on health literacy● Communication of health-related information to
all Group employees● Influenza vaccination● White Book on Health

Trinity Structure
Human
Resources
Department

Rate of participationin regular healthcheckups● Smoking cessation support
Health Insurance
Association

General Health
Development Centers

Health Management Promotion Meetings
at Daiwa Securities Group Inc.

Ministry of Economy, Trade and Industry and theTokyo Stock Exchange to companies promoting thehealth of their employees. This underscores the factthat our efforts are highly regarded by society.
⇒ Refer to “Third-Party Evaluations” on page 55
for details.
Our initiatives for FY2015 include the appointmentof Chief Health Officer (CHO) in October to reinforce
the Daiwa Securities Group’s structure to promotehealth management as well as the establishment of
Health Management Promotion Meetings, which areheld across the Group. We also published and released“Daiwa Securities Group White Book on Health” forthe first time ever in Japan. This book is designed tohelp employees to understand the results, issues, andpolicy of each measure and efficiently use our system.
We have conducted research on health management
jointly with the University of Tokyo since 2014 and will
work on higher levels of initiatives in the future.

46

GeneralHealthDevelopment
Centers

HealthInsurance
Association

Health & Productivity Stock Selection 2016

● Measures for those with severe diseases● Action to promote countermeasures against
cancer*System to urge employees to see doctors after their regular healthcheckups. Employees receiving this form are required to obtain adoctor’s comment within two weeks and submit it to us. This has
contributed to a higher rate of visits to medical institutions after
checkups. We have almost a 100% visit rate for employees who cansee doctors.

Health Management Promotion Meeting

Number of participantsin the FY2015 walking
challenge

2,104 people in total(Events held twice in the year)

Relationship with Employees

Daiwa Securities Group CSR REPORT 2016

●Initiatives for Mental Health●Relationship with Employee Unions

The Daiwa Securities Group’s Health Support
Promotion Department was established in August
2006 to help employees maintain and manage theirmental 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 also established arrangements with outside
specialists so that they receive prompt attention.
We also arrange for occasional talks in all branches
and departments to broaden awareness of mental
health issues as a part of our strong support for
employees’ mental health.

We regularly hold labor-management negotiations on
bonuses and other compensation and the working
environment, while increasing opportunities to learn
the opinions of our employees through questionnaires
conducted by employee unions among their members
for better mutual understanding.

Communication●Communication with Employees
We believe that good communication with employees
is vital for a better workplace environment. Ourcommunications programs include regular interviews by
the Human Resources Department and semiannual selfassessment questionnaires. We also regularly conduct
questionnaires on work-life balance to all employees,
and conduct interviews with employees returningfrom childcare leave after some time has passed inan effort to resolve any worries. This unfiltered input
from employees helps us re-examine our programs andenhance ongoing improvement efforts.

●Communication among Employees
In October 2007, Daiwa Securities introduced aprogram for supporting club activities. This program
was created to help employees enjoy their time off andto deepen their friendships with colleagues, building
more opportunities to share a sense of camaraderie
and solidarity. It is also intended to support work-lifebalance and facilitate a fuller social life for employees.
The program was expanded and enhanced in FY2009.
Under this program, employee groups that meetcertain conditions are recognized as Daiwa Clubs or
Daiwa Circles, which receive subsidies to cover someof their activity costs. As of March 2016, 18 clubs and4 circles are active across the Group.

●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 the workplace on Family Visit Day to give family
members a better understanding of our company andthe employees’ jobs.
Other initiatives for supporting our employees’
families include the creation of kid’s ceremony leaveand family day leave and the extension of mental
health support to employees’ families.

●Active Use of In-House Magazine
The Daiwa Securities Group issues an in-housemagazine, “Fuji,” whose history dates back to 1925,
when one of the company’s predecessors, Fujimoto
Bill Broker Bank, commenced its publication. The
magazine has been praised even outside of theGroup for its roles as a communication tool among
employees. We currently distribute 18,000 copiesof Fuji every other month to Group executives andemployees, their families and retirees. We also post
the magazine on our WLB promotion website for
employees so that those on leave for child rearing or
nursing care can read it at home.
The magazine covers a wide range of topics beyond
management and personnel information. It also
introduces initiatives taken by Group companies andposts serial articles on the Group’s history, humanrights issues, ESG, mental and physical health,laws and hobbies. Executives and employees also
contribute articles to the magazine.

Refer to “CSR Related
Data” on page 67 for“Number of Employee
Union Members”

Number of Family Visit
Day participants

5,675 people(FY2015)

Family Visit Day

47

Engagement with Society

Daiwa Securities Group CSR REPORT 2016Engagement with Society

48

Refer to “CSR Related
Data” on page 67
for “Corporate
Citizenship Initiatives
and Expenditures”

Approach and Basic Stance
The Daiwa Securities Group considers it important to work together with NPOs and NGOs asa good corporate citizen engaging in consistent collaboration with the local community tofoster sustainable development.
Our activities can be categorized into the following four key fields.
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. Corporate citizenship activities

Education and Research Activities
in Economics and FinanceCapitalizing on financial and economic expertise
accumulated through its securities business, theDaiwa Securities Group engages in business-academia
collaborations and supports programs for junior andsenior high school students as well as teachers. We
believe that economic and financial education isimportant in helping young people develop the capacity
to build their own lives and shape the future world.
⇒ Refer to “CSR Related Data” on page 67 for“Results in Economic and Financial Education”

Economic and Financial Education
Sustainable Developmentof the Japanese Economy
Educational
institutions

Research
institutions

Understandingof social andeconomicprinciples

Improveeconomic
and financial
knowledge

Developfinancial
specialists

Discloseresearch results
Create practicalapplications

Commercial
and businessapplicationof research
results

Elementary/junior/high school
students

Undergraduate
students

Graduatestudents

ResearchersIntellectual
property (IP)/patents

Supportteachers
Participate
in classes

Provideor endowclasses
Dispatch
instructors

Provideor endowclasses
Dispatch
instructors

Joint
researchResearchsupportSupport foruniversitylaunched
venturesand IP
headquarters

Group Employee Cooperation

KidZania Tokyo●Support for KidZania
The Daiwa Securities Group is a supporter of KidZania,
a theme park designed to offer work experiences
to children, and has been providing support to thefacilities in Tokyo and Koshien (Hyogo Prefecture) since
they opened. In the Daiwa Securities pavilions, children
act as consultants, giving advice to client investors at
a securities company, going to nearby pavilions, andconducting interviews to check their levels of traffic
and popular products. Based on the results of theinterviews, they then select where to invest and makeinvestment recommendations for their customers.

●Finance ParkThe Daiwa Securities Group cooperates with Finance
Parks operated by Junior Achievement Japan. This
program provides opportunities for junior high school
students to learn economic and financial mechanismsthat will be necessary for them in their adult life.
Finance Parks have been operating in Shinagawa,Tokyo and Kyoto since 2005 and in Iwaki, Fukushima
Prefecture and in Sendai, Miyagi Prefecture since 2014.
We have set up pseudo-branches in these parks. To
date, a total of 74,532 students have participated.

Number ofparticipants in
Finance Parks for
FY2015

15,362 people
Shinagawa: 1,660
Kyoto: 6,178
Iwaki: 3,771
Sendai: 3,753(on an application basis; surveyed●Initiatives for Economic and Financial
Education toward Junior and SeniorHigh School and College Students• For Junior High School Students
In October 2015, the Corporate Communication
Department of Daiwa Securities Group Inc. conducted
Finance Park (Sendai)

by Junior Achievement Japan)

Engagement with Society

Daiwa Securities Group CSR REPORT 2016a class on the theme of the structure of stockcompanies and the role of securities firms in KamakuraCity. In addition, in November we conducted a class
entitled “Introduction to the Securities Analyst” threetimes in KidZania, which we support.
• For Undergraduate Students
The Head Office of Daiwa Securities held a 14-weekendowment class every Thursday from October
2015 to January 2016. In December, the Mito branchof Daiwa Securities provided a class on the themeof a securities company’s business and the current
conditions of the securities industry, as part of acourse on the basic theory of finance.

●Support for Economic and Financial Education
Using the Okane-no-Mikata Website
Refer to “Open Website to Learn Finance andEconomy for Junior and Senior High School Students”
on page 15.

●Donation of Educational Books on the
EconomyIn FY2014, as a measure for economic and financial
education, Daiwa Securities started donating a bookentitled “Economic Puzzle Sleuths: Understanding
the True Meaning of Money” (written by Susumu
Okano, Senior Executive Managing Director at Daiwa
Institute of Research). The book was presented mainly
to elementary schools in regions damaged by the2011 Great East Japan Earthquake. In FY2015, we
expanded the scope of our donations, providing thebook to 20,174 elementary schools across Japan inlocations other than disaster-stricken areas, as wellas to school boards. Moreover, we donated a bookentitled “Economics American High School Students
Learn” (Japanese translation of “Economics: Principles& Practices” translated by Sachiko Hanaoka, Managing
Director of the Investment Strategy Department of
Daiwa Securities) to 4,973 high schools nationwide(1,313 private schools and 3,660 public schools).

Assistance to Communities Inside
and Outside of Japan throughFoundations and NPOs
●Daiwa Securities Health Foundation
The Daiwa Securities Health Foundation wasestablished in October 1972, in commemoration
Lecture at a college

of Daiwa Securities’ 30th anniversary, to support
medical research. Since 1973, the year following
its establishment, the Foundation has supported
outstanding research projects focusing on improving
medicine and medical care for middle-aged andelderly people. It has recently expanded the scope of
its support to research projects on health, welfare,and nursing care.

●Daiwa Securities Foundation
In March 1994, the Daiwa Securities Foundation was
launched in commemoration of the 50th anniversaryof Daiwa Securities’ establishment in order to makea contribution to society from our profits. Since its
establishment, the Foundation has provided grants
every year to organizations and groups engaging
in support activities for the elderly, people withdisabilities, and children, and other volunteer work ofhigh social significance.
Since FY2011, the Foundation has also provided
grants every year to organizations and groups involvedin volunteer work that assists victims of the 2011
Great East Japan Earthquake.

●Daiwa Anglo-Japanese Foundation(Chartered in the United Kingdom)
The Daiwa Anglo-Japanese Foundation is a UK charity
established in 1988 in part with contributions from
Daiwa Securities, for fostering closer ties between the
United Kingdom and Japan.
Principal activities include:(1) A warding grants to individuals, institutions, andorganizations working to promote ties between
the United Kingdom and Japan(2) Enabling British and Japanese students andacademics to further 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 toimprove understanding of Japan in the United
Kingdom.
The Foundation’s Tokyo office provides local
assistance to Daiwa Scholars (students from theUnited Kingdom), administers grant applications
from Japan and collaborates with other institutions
promoting Anglo-Japanese relations.
Presentation ceremony for the Tokyo region (Daiwa Securities Foundation)

49

Daiwa Securities HealthFoundation's cumulative
grants awarded
Independent
Assurance
through FY2015•Number of recipients

1,163 people•Total amount of grants¥

1.1480 billion

Daiwa Securities
Foundation's cumulative
grants awarded
Independent
Assurance
through FY2015
Volunteer Activities Grants•Number of projects receiving grants

3,012•Volunteer Activities Grants

690.85 million¥

Grants to volunteer work fordisaster recovery (the Great
East Japan Earthquake)•Number of projects receiving grants

213•Total amount of grants¥

92.34 million

Grants to research projects
on volunteer work
•Number of projects receiving grants

29•Total amount of grants¥

25.36 million

Media reports concerning
grant activities•Daiwa Securities Health Foundation

7 newspapers•Daiwa Securities Foundation

Grants to volunteer work fordisaster recovery (the Great East
Japan Earthquake)

12 newspapers
Grants to volunteer work

48 newspapers and TV stations(Surveyed by the Daiwa Securities
Health Found and the Daiwa
Securities Foundation)

Daiwa Anglo-JapaneseIndependent
Assurance
Foundation
Cumulative number ofpeople completing the Daiwa
Scholar program by FY2015

159 people
Daiwa Securities Health Foundation (Japanese)

Daiwa Securities Foundation (Japanese)

The Daiwa Anglo-Japanese Foundation

Engagement with Society

Daiwa Securities Group CSR REPORT 2016

Daiwa Scholarships in Japanese Studies was alsoestablished in 2015 as a scholarship program forstudies on Japan and Japanese language training.
This is a program in which the Daiwa Securities Groupfunds individuals from the United Kingdom for tuitionand living expenses for graduate school.
Moreover, the Daiwa Ichiban Lectures, a new seriesof annual lectures, began in collaboration with the
British Embassy in October 2015. Sir Paul Nurse, aNobel Prize winner, was the first speaker, delivering a
lecture titled “Trust in Science.” In November, we also
granted the Daiwa Foundation Art Prize, designed toprovide an opportunity for British artists to hold a solo
exhibition in Japan if they have never done so before.
This time, we invited British artist Oliver Beer and helda welcome party at the British Embassy.

●Daiwa Myanmar-Japan Foundation
On April 1, 2013, the Daiwa Securities Groupestablished the Daiwa Myanmar-Japan Foundation
to improve people’s livelihood in Myanmar and todevelop the human capital necessary for sustainableeconomic growth. The foundation focuses on
training people who will carry key responsibilities in
Myanmar’s future capital markets by implementing ascholarship program that provides junior staff of thecountry’s central government with opportunities tostudy in Japan. On December 2, 2013, the Foundation
signed a memorandum of understanding with
Myanmar Institute of Certified Public Accountants
concerning cooperation in human resource
development and has been helping with the trainingof public accountants in Yangon.

The program operates through donations froma portion of management fees from the Daiwa Eco
Fund and Russell Global Environmental Technology
Fund, with products and recipients selected based on
their alignment with the principles of these funds.
As a new initiative for FY2015, Kopernik assembled
residents in areas considered to be in need of support.
The program also held a technology fair to give
usage instructions for products and to explain theireffects directly to local people. The event drew muchattention, attracting participation from not only local
residents but also government officials.

Since establishing the Kopernik program in FY2010,
the Daiwa Securities Group has supported Kopernik,
which engages in activities to help people indeveloping countries to improve their life and standon their own feet. The organization has developed
a structure to enable contributors to go online anddonate to NPOs/NGOs in developing countries orareas of their own choosing by selecting needed
products such as simple water purifiers and solar
lamps. Kopernik shares details of recipient NPO/NGO
activities supported by donations on its website toensure transparency.

Contributions by
Daiwa MyanmarJapan Foundation•Number of Myanmar

citizens receiving
scholarships

13 people•Number of participantsin public accountant
training in Myanmar

35 people●Daiwa Securities Phoenix Japan
Program(Cumulative contributions
through FY2015)

In May 2012, the Daiwa Securities Group establishedthe Great East Japan Earthquake Relief Assistanceprogram. The program donates a portion ofmanagement fees from the Daiwa Nippon Support
Fund Vol. 3—Phoenix Japan and continues providing
assistance to local NPOs through the Japan
Earthquake Local NPO Support Fund (specifiedaid), which was set up by Japan NPO Center, acertified NPO. The program supports the humanresources development of local NPOs. Their activities
include educational assistance and reconstructing
communities in the disaster-affected areas.

Donations made to
Independent
Assurance
the Kopernik
program for FY2015

How Daiwa Securities Phoenix
Japan Program Works
Flow of funds
Flow of reports●Kopernik Program

50

Donations
寄付

Daiwa
Securities“Special aid”
selection committee(1) Region
East Flores, Indonesia
Items granted
Solar lamps, water
purifiers, cooking stoves(2) Region
Rural area of the Soppeng
Regency of South Sulawesi
Province, Indonesia
Items granted
Cooking stoves

Japan NPO Center
Japan Earthquake Local
NPO Support Fund(Special Aid)

Selection and advice

4,814,011¥(3) Region
Cambodia
Reconstruction
assistanceItems granted
Technology fair

復興支援

NPO

Operation and grant
Civil Society Initiative FundJapan NPO Center

Amount of grants
Independent
Assurance
selected to FY2015
fourth-term program for
Daiwa Securities Phoenix
Japan Program•Grant recipients

9 groups•Total amount of grants¥

36.80 million(including ¥2.5 million for joint
research assistance)
The 25th term Scholars

Technology fair (Siem Reap, Cambodia)

Kopernik Program (Japanese)

Daiwa Securities Phoenix
Japan Program (Japanese)

Engagement with Society

Daiwa Securities Group CSR REPORT 201651

Dialogue with Stakeholders - Only Connect Five years have passed since the Great East Japan
Earthquake which occurred on March 11, 2011. It has
been pointed out that the disaster aggravated issues
that many disaster-affected regions already faced, suchas an aging population and depopulation. Meanwhile,
the aging population presents challenges in many otherparts of Japan, and is expected to also affect manyother countries. The Daiwa Securities Group believes
that efforts to address these social issues in the disasteraffected regions will have significant implications when
considering broader social initiatives in the future.
In light of this view, the Group is identifying social
challenges currently faced in the disaster-affected
regions and considering what we can do for themthrough visits to the non-profit organizations (NPOs)
active in disaster-affected regions to which Daiwa
Securities Phoenix Japan Program has provided support,
and dialogue at joint workshops under the Program.

Major Opinions from NPO Staff andOrganizations Receiving Support

Interaction at a joint workshop

Photo with grant recipient groups

In FY2015, we conducted a questionnaire of organizations receiving grants under the Daiwa Securities Phoenix Japan Program in order toreflect on the program, which has been implemented since 2012. The results of the questionnaire underscore the effectiveness of our grant
program. We also learned that we are expected to provide support in leveraging the know-how we have accumulated through the Group’sbusiness activities.

■Self-assessment in human resource development(growth realization comparison)
Achieved some growth

Achieved some growth

38%

17%
Staff

Supervisor

Achieved substantial growth

Achieved substantial growth

62%

83%

■Excerpts of comments from the questionnaire●We developed the ability to view things objectively and to
think flexibly. We also learned more ways to collaborate withother groups and increased our sense of responsibility as anadministrative office.
●Our planning and execution abilities have significantly improved.
●We were able to interact with groups facing the same issues
as ours (through joint workshops under the program). Sharing
common issues and holding discussions to resolve them werevery meaningful.
●The program led to improvement in the abilities of not justindividuals, but the entire group.

Initiatives to Be Taken by the Daiwa Securities GroupIn FY2014, in light of feedback from people involved in NPOs, we revised the support target of the program to groups assisting efforts tosolve the regional issues that became evident following disasters. We now award grants by focusing on activities in two fields: support
for socially vulnerable disaster victims to rebuild their lives and support for reconstruction of towns aimed at rebuilding safe and secureresidences and living bases.
We will also continuously hold joint workshops and increase opportunities to interview local people, thereby helping the groups receiving
grants to solve the issues they face. Moreover, in order to assist efforts to revitalize regional economies, we will continue investing in unlistedcompanies in disaster-affected regions through a fund managed by Daiwa Corporate Investment.
⇒ Refer to “Initiatives through Business Activities” on page 24 for initiatives by Daiwa Corporate Investment“Only Connect” is the phrase symbolizing our wish to generate new values by connecting with various stakeholders. It is a reference to Howards End, one ofBritish author E. M. Forster’s most famous novels.

Engagement with Society●Donation to Gunma Prefecture World
Heritage and Gunma Silk Heritage
Succession Fund
Tomioka Silk Mill and Related Sites in Gunma
Prefecture were added to the UNESCO World
Heritage List in 2014. Daiwa SB Investments launched
Tomioka Silk Mill and Silk Industry Heritage Sites
Preservation Activity Support Fund (nicknamed
Gunma’s Silk Heritage) to preserve the buildings forsericulture, silk reeling, and textile manufacturingthat remain within the prefecture, as well as
folk performing arts. We donated a portion ofmanagement fees from the fund.
The initiative jointly taken by investors, sales
companies, and Daiwa SB Investments helps the
project to pass on the value of Gunma’s silk culture
and silk industry, which led Japan’s modernization, tofuture generations.

Support for Culture and the ArtsThe Daiwa Securities Group provides support for awide range of cultural and artistic activities, including
art exhibitions, classic concerts, and sports. For
example, we have been the special sponsor of theMainichi Shimbun Central Contest for Book Review
Painting, which aims to encourage reading andimprove children’s reading skills. In the contest,elementary pupils, junior and senior high school
students express their impression and images frombooks they have read in paintings. The Group has
also been supporting traditional activities, including
sponsorship of title matches of both Shogi and Go:
the Meijin Title Match (Shogi) and the Honinbo
Tournament (Go).
In March 2015, the Group was selected in Health& Productivity Stock 2015 as a listed company
proactively working to improve employees’ health,and in 2016, we also started supporting the Tokyo
Marathon as an official partner.

Corporate Citizenship Initiatives
The Daiwa Securities Group believes that participationin volunteer programs and other community actions
by employees helps broaden their perspectives andfamiliarize them with different values. We consider
that this, in turn, has a good influence on both theirwork and their lives. Through our intranet, we provide
information on volunteer opportunities for projects
planned by ourselves, 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 tovolunteer by setting up a recognition program, theVolunteer Award, among other incentives. In ourwork to encourage as many employees as possible
to participate in volunteer activities, we will seek
ongoing collaborations with external organizations,strengthen internal communications on volunteering

Daiwa Securities Group CSR REPORT 2016and volunteer opportunities and continue to pursue
increased opportunities for employees to engage.

●Volunteer Activities by Employees• The Hands-on Forest Experience 2015—
Environmental Maintenance for Sayama Hills
On April 18, 2015, 23 Group employees and theirfamilies participated in community forest preservation
activities in Sayama Hills (Tokorozawa City, Saitama
Prefecture). The participants first learned about theimportance of community village preservation in aclass provided in collaboration with the Totoro Fund,a public interest incorporated foundation. They later
carried out thinning work in areas crowded withbamboo, and tried bamboo shoot digging. The areas
were turned into a healthy bamboo forest whichallows a adequate amount of sunlight in.
• International Cooperation through a Collection
Drive
The Daiwa Securities Group has been runninga collection drive as an initiative that is easy for
employees to take part in. Pre-loved books andunusable postcards are collected and donated tothree groups: JEN BOOK MAGIC, Japan Committee“Vaccines for the World’s Children,” and Live with
Friends on the Earth. Items collected are sold bythem to fund their activities, including support
for education, medical services and agriculturaldevelopment assistance in developing countries. We
will continue the activity as its accessibility makes it
quite popular among our employees.
• TABLE FOR TWO (TFT) Program
Since the spring of 2013, the Daiwa Securities
Group has contributed to the TFT Program, which
is organized by TABLE FOR TWO, an internationallydesignated NPO. Under the program, a portion ofrevenue from purchases of food and drink by Group
officers and employees is donated to pay for school
lunches in developing countries. In 2015, we also
started selling another charity product, “Biscotti,” atin-house cafes to raise employees’ awareness of the
program and expand their chances for participation.

52

Amount of donations toGunma Prefecture World
Heritage and Gunma Silk
Heritage Succession Fund

2.63 million¥(Combined amount withdonations from The
Gunma Bank, Ltd., which
also handles the fund)(August 2015)

Culture and the Arts
•The Mainichi Shimbun

Central Contest forBook Review Painting
Special sponsor for

22 years
Number of participant
schools

6,678 schools
Total number of entries

635,263 entries
Number of exhibitionsof winning works

9 sales branches•Meijin Title Match(Shogi), Honinbo
Tournament (Go)Special sponsor for

12 years
Contribution made in
FY2015 through collection
drives (equivalent
Independent
Assurancemonetary value)•JEN BOOK MAGIC

22,394¥•Japan Committee“Vaccines for the World’sChildren”

215,965¥•Live with Friends on

the EarthEnvironmental maintenance at Sayama Hills

80,033¥

TFT Program
Independent
Assurance
Contributions madeJanuary–December, 2015

22,300Aroundschool lunches
in developing countries(Calculated on the assumption that
one meal costs ¥20)

Engagement with Society

Daiwa Securities Group CSR REPORT 2016

●Initiatives at Sales Branches of
Daiwa Securities
Daiwa Securities’ 144 sales branches nationwide
engage in a variety of activities contributing to local
communities.
For example, in FY2015, the Ikebukuro branch
participated in an activity to clean up surrounding
sidewalks. As part of efforts to help regional
invigoration, the Tokushima branch participated in
the Awa Odori dance festival, while the Tokorozawa
branch danced to Japanese traditional folk songsin the Tokorozawa festival. The Tokuyama branchoffered drinking water for disaster relief to areas
where water supply was suspended due to heavy
snow that hit Yamaguchi Prefecture in January 2016.
We are also involved in many other similar activities.

●Initiatives Taken by the Group’s
Overseas Offices• Initiatives Taken by the Group’s London
Operational Base
Daiwa Capital Markets Europe operates The Daiwa
Society, a program led by voluntary members, andengages in various support activities (e.g. Jeans Day,
New Charity Nominations Day, Quiz Night, Bake &Book Sale).

Clean-up activity by the Ikebukuro branch of Daiwa Securities

Initiative in Hong Kong (FIRST CLASS)• Initiatives Taken by the Group’s Hong Kong
Operational Base
Daiwa Capital Markets Hong Kong operates “FirstClass,” a CSR program that was established byvoluntary members in FY2012.
In FY2015, the panel running the program assisted
TKL School (Ta Ku Ling Ling Ying Public School)in new construction of an English classroom byproviding equipment for the classroom, while offering
backpacks and stationery. In October, voluntary
members, including executives, visited the schooland participated in the opening ceremony of theclassroom. The company will continue planninga wide range of CSR activities requiring directly
involvement of its employees in order to increase its
team spirit and solve social issues.
• Initiatives Taken by the Group’s New YorkOperational Base
Daiwa Capital Markets America (DCMA) has a Charity
Friday once a month, allowing employees who makea donation to wear jeans to work on the day. DCMA
also matches these donations. The total donations
are given to groups engaging in support activities forchildren, poverty, and education.
DCMA has also cooperated with New York Blood
Center (NYBC), one of the largest blood collection
organizations in the United States, participating inblood donation for more than a decade. DCMA willcontinue working to solve social issues.
• Initiatives Taken by the Group’s South Korea
Operational BaseIn FY2015, Daiwa Securities Capital Markets Korea
solicited volunteers and staged the “Love Noodle”
fair at the Korean National Red Cross for elderly
people living alone. The fair was designed to cheer
up elderly people living by themselves in South Korea,
where the number of nuclear families has recently
been increasing. The event was well received, whileproviding the company with a good opportunity tocontribute to the local community.
By continuing its CSR activities, Daiwa Securities
Capital Markets Korea will strive to contribute widelyto the Korean society.

Initiative in New York(blood donation activity)

Initiative in South Korea (Love Noodle fair)

53

Charity Friday at
DCMA(Results for FY2015)•Number of times held

12
•Amount contributed by

employees$

8,917•Total contribution

17,500$(Total amount includes
matched donation from
DCMA)Engagement with Society

Daiwa Securities Group CSR REPORT 2016

●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 twice a year toemployees and groups involved in volunteer initiatives
and activities that provide ongoing support tocommunities.
• Dissemination of Information through theInternal Network
The Daiwa Securities Group provides a wide range
of information on volunteer programs within theGroup 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 practices fromsuch volunteer work, through our in-house magazine
and internal TV broadcasts in an effort to expand therange of volunteer activities.

●Donation of Shareholder Reward Items
Daiwa Securities Group Inc. implements a shareholder
reward program. Alongside with carrying out thisprogram, we donate items returned to us due torelocation or other reasons, to organizations such as
designated NPOs and public interest incorporated
foundations as well as items received for ourshareholdings in other companies.
To expand our support to regions damaged by the2011 Great East Japan Earthquake, we also started
contributing to groups supporting disaster victims in
FY2015 through the Reconstruction Agency’s disaster
relief network operations.

●Disaster Assistance• Donations for Victims of Nepal Earthquake
Daiwa Securities Group Inc. made a donation throughJapan Platform, a certified non-profit organization,
to support the victims of the massive earthquake thatstruck Nepal in April 2015.
• Donations for Victims of Heavy Rain Caused by
Typhoon No. 18 of 2015
We made a donation through Central Community
Chest of Japan, a social welfare corporation, tosupport the victims of Typhoon No. 18 that occurredin September 2015.

An Event for Tasting Seasonal Foodand Learning about Fukushima
Supporting Areas Affected by the Great
East Japan Earthquake
Daiwa Securities Group held an event in
September 2015 as a part of efforts to
support areas affected by the Great East
Japan Earthquake. At this event, participants
could taste famous products from Fukushima
Prefecture and learn about initiatives related
to reconstruction in disaster-affected
regions.
The event, aimed at employees, offereda chance to experience the appeal of
Fukushima Prefecture. With the cooperationof local NGO “Bridge for Fukushima,” theevent introduced initiatives taking place in
Odaka District, Minamisoma City, and theactivities of agricultural and fishery business
affected by the disaster.
26 employees participatedSeasonal food tasted

Volunteer Award

54

Contribution for victimsof Central Nepal
Earthquake of 2015¥

10 million

Contribution for victimsof heavy rain caused by
Typhoon No. 18 of 2015¥

Independent
Assurance

10 million

Independent
Assurance

Third-Party Evaluations

Daiwa Securities Group CSR REPORT 2016

Third-Party Evaluations
Name

Evaluation

Dow Jones Sustainability
Asia Pacific Index

The Dow Jones Sustainability Indices (DJSI) are a stock index of companies with sustainable practices
selected by Dow Jones & Company, Inc. of the United States and RobecoSAM AG of Switzerland. Daiwa
Securities Group Inc. has been included in DJSI Asia Pacific for seven consecutive years. Since DJSI Worldwas launched in 1999, it has continually been included in DJSI.

FTSE4 Good Index
FTSE is a subsidiary of the London Stock Exchange. It develops global indexes and provides data forinvestment. Daiwa Securities Group Inc. has been included in the FTSE4Good, an index of socially
responsible companies compiled by FTSE, for eleven consecutive periods since September 2006.

Nadeshiko Brand

Daiwa Securities Group Inc. was selected as a “Nadeshiko Brand” for two consecutive years in FY2015
and FY2016. This title is awarded by the Ministry of Economy, Trade and Industry and the Tokyo Stock
Exchange to the latter’s listed companies for having excellent track records in empowering women attheir companies.
We are recognized highly for our efforts to establish specific targets for the promotion of support offemale employees and work-life balance, as well as for building an environment where individuals withdiverse values can maximize their abilities.

Health & Productivity Stock
Selection

Daiwa Securities Group Inc. was selected as “Health & Productivity Stock Selection,” a title awarded
jointly by Japan’s Ministry of Economy, Trade and Industry and the Tokyo Stock Exchange to companies
promoting the health of their employees.
We engage in various initiatives to improve employees’ health under close collaboration between our
Human Resources Departments, Health Insurance Association, and occupational health staff. The
initiatives recognized include a system to urge employees with problematic results to see doctors after
their regular health checkups, measures against lifestyle diseases, smoking cessation support, andhealth support for female employees.

“Platinum Kurumin”—Certified as a Family-Friendly Employer

The certified family-friendly employer logo (nicknamed “Kurumin”) shown 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 Institute of Research Holdings, Daiwa Institute of Research, Daiwa Institute of ResearchBusiness Innovation, and Daiwa Securities Business Center have also been certified.
Moreover, as of March 11, 2016, Daiwa Securities and Daiwa Securities Business Center were certified
as especially excellent companies among the Certified Family-friendly Employers that have implemented
higher levels of initiatives.

“Tomonin”—Logo for Promoting theProvision of Working Environment
Favorable for Balancing Work
with Long-TermCare

The Daiwa Securities Group has continuously built a working environment where employees can findit easy to use work-life balance support programs in an effort to help them to continue working whilebalancing work and nursing care.
The Ministry of Health, Labour and Welfare conferred the logo (nicknamed “Tomonin”) to us forpromoting the provision of a working environment favorable for balancing work with long-term care.

GRESB 2015
“Green Star”

For four consecutive years, Daiwa Office Investment Corporation, a REIT managed by Daiwa Real
Estate Asset Management, received the highest recognition, the Green Star, in the Global Real Estate
Sustainability Benchmark (GRESB) Survey.

55

GRI Index

Daiwa Securities Group CSR REPORT 201656

GRI Index
In compiling the Daiwa Securities Group Sustainability Report 2016, reference was made to Global Reporting Initiative (GRI) Guidelines (4thEdition).
Clauses

Indicator

Link

General Standard Disclosures
Strategy and Analysis
G4-1Statement from the most senior decision-maker of the organization (such as CEO, chair, or equivalentsenior position) about the relevance of sustainability to the organization and the organization’s strategy foraddressing sustainability

Message from Management/Integrated Report 2016

G4-2

Key impacts, risks, and opportunities

Message from Management/Initiatives throughBusiness Activities/Integrated Report 2016

Organizational Profile
G4-3

Name of the organization

Daiwa Securities Group Profile

G4-4

Primary brands, products, and services

Daiwa Securities Group Profile/Initiatives throughBusiness Activities (Provision of Quality Service toCustomers)

G4-5

Location of organization’s headquarters

Daiwa Securities Group Profile

G4-6

Number of countries where the organization operates, and names of countries where either the organization
has significant operations or that are specifically relevant to the sustainability topics covered in the report

Daiwa Securities Group Profile

G4-7

Nature of ownership and legal form

Daiwa Securities Group Profile

G4-8Markets served (including geographic breakdown, sectors served, and types of customers and beneficiaries)

Daiwa Securities Group Profile

G4-9• Scale of the organization

Daiwa Securities Group Profile

G4-10• Total number of employees by employment contract and gender• Total number of permanent employees by employment type and gender• Total workforce by employees and supervised workers and by gender• Total workforce by region and gender• Whether a substantial portion of the organization’s work is performed by workers who are legally
recognized as self-employed, or by individuals other than employees or supervised workers, including
employees and supervised employees of contractors• Any significant variations in employment numbers (such as seasonal variations in employment in the tourism
or agricultural industries)

CSR Related Data

G4-11

Percentage of total employees covered by collective bargaining agreements

Relationship with Employees (Relationship with
Employee Unions)G4-12

The organization’s supply chain

CSR of the Daiwa Securities Group/Risk Management

G4-13

Any significant changes during the reporting period regarding the organization’s size, structure, ownership, or
its supply chain

Daiwa Securities Group Profile

Commitments to External Initiatives
G4-14

Whether and how the precautionary approach or principle is addressed by the organization

Compliance/Risk Management/IT Strategy and theManagement of Systemic Risk

G4-15

Externally developed economic, environmental, and social charters, principles, or other initiatives to which theorganization subscribes or which it endorses

CSR of the Daiwa Securities Group/Initiatives throughBusiness Activities (Role and Social Responsibilities of
the Financial Services)

List memberships of associations (such as industry associations) and national or international advocacy
organizations in which the organization:• Holds a position on the governance body
• Participates in projects or committees• Provides substantive funding beyond routine membership dues• Views membership as strategic
This refers primarily to memberships maintained at the organizational level.

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

G4-16

Identified Material Aspects and Boundaries
G4-17• All entities included in the organization’s consolidated financial statements or equivalent documents• Whether any entity included in the organization’s consolidated financial statements or equivalent documents
is not covered by the report

Daiwa Securities Group Profile

G4-18• Process for defining report content and the Aspect Boundaries• How the organization has implemented the Reporting Principles for Defining Report Content

CSR of the Daiwa Securities Group (CSR Materiality of
the Daiwa Securities Group)

G4-19

All the material Aspects identified in the process for defining report content

Not reported

G4-20

Aspect Boundary within the organization for each material Aspect

Contents/Editorial Policy

GRI Index

Daiwa Securities Group CSR REPORT 2016

Clauses

Indicator

57

Link

G4-21

Aspect Boundary within the organization for each material Aspect

Contents/Editorial Policy

G4-22

Effect of any restatements of information provided in previous reports, and the reasons for such restatements

Contents/Editorial Policy

G4-23

Significant changes from previous reporting periods in the Scope and Aspect Boundaries

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

Stakeholder Engagement
G4-24

List of stakeholder groups engaged the organization

CSR of the Daiwa Securities Group (Daiwa Securities
Group Stakeholders)

G4-25

Basis for identification and selection of stakeholders with whom to engage

CSR of the Daiwa Securities Group (Daiwa Securities
Group Stakeholders)

G4-26

The organization’s approach to stakeholder engagement, including frequency of engagement by type and by
stakeholder group

CSR of the Daiwa Securities (CSR Promotion System)/
Initiatives through Business Activities (Provision of
Quality Service to Customers)/Relationship with
Shareholders and Other Investors/Relationship with
Employees/Engagement with Society

G4-27

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

Initiatives through Business Activities (Provision of
Quality Service to Customers)/Relationship with
Shareholders and Other Investors/Relationship with
Employees/Engagement with Society

Report Profile
G4-28

Reporting period (such as fiscal or calendar year) for information provided

Editorial Policy

G4-29

Date of most recent previous report (if any)

Editorial Policy

G4-30

Reporting cycle (such as annual, biennial)

Editorial Policy

G4-31

Contact point for questions regarding the report or its contents

Editorial Policy• “In accordance” option the organization has chosen• GRI Index for the chosen option• Reference to the External Assurance Report, if the report has been externally assured

This table references GRI content• The organization’s policy and current practice with regard to seeking external assurance for the report• Scope and basis of any external assurance provided if not included in the assurance report accompanying
the sustainability report• Relationship between the organization and the assurance providers• Whether the highest governance body or senior executives are involved in seeking assurance for theorganization’s sustainability report

Independent Assurance ReportGRI Index

G4-32

Assurance

G4-33

Governance
Governance Structure and Composition
G4-34

Governance structure of the organization, including committees of the highest governance body

Corporate Governance

G4-35

Process for delegating authority for economic, environmental and social topics from the highest governancebody to senior executives and other employees

CSR of the Daiwa Securities Group (CSR Promotion
System)G4-36

Whether the organization has appointed an executive-level position or positions with responsibility foreconomic, environmental and social topics, and whether post holders report directly to the highest
governance body

CSR of the Daiwa Securities Group (CSR Promotion
System)G4-37

Processes for consultation between stakeholders and the highest governance body on economic,
environmental and social topics

Corporate Governance/Relationship with Employees(Communication)

G4-38

Composition of the highest governance body and its committees

Corporate Governance

G4-39

Whether the Chair of the highest governance body is also an executive officer

Corporate GovernanceG4-40

Nomination and selection processes for the highest governance body and its committees

Corporate Governance

G4-41

Processes for the highest governance body to ensure conflicts of interest are avoided and managed

Corporate GovernanceHighest Governance Body’s Role in Setting Purpose, Values, and Strategy
G4-42

The highest governance body’s and senior executives’ roles in the development, approval, and updating of
the organization’s purpose, value or mission statements, strategies, policies, and goals related to economic,
environmental and social impacts

CSR of the Daiwa Securities Group (CSR Promotion
System)Highest Governance Body’s Competencies and Performance Evaluation
G4-43

Measures taken to develop and enhance the highest governance body’s collective knowledge of economic,
environmental and social topics

Not reported

G4-44• Processes for evaluation of the highest governance body’s performance with respect to governance ofeconomic, environmental and social topics• Actions taken in response to evaluation of the highest governance body’s performance with respect togovernance of economic, environmental and social topics

Not reported

GRI Index

Daiwa Securities Group CSR REPORT 2016

Clauses

Indicator

Link

Highest Governance Body’s Roles in Risk Management

G4-45• The highest governance body’s role in the identification and management of economic, environmental andsocial impacts, risks, and opportunities• Whether stakeholder consultation is used to support the highest governance body’s identification andmanagement of economic, environmental and social impacts, risks, and opportunities

CSR of the Daiwa Securities Group (CSR Promotion
System)

G4-46

The highest governance body’s role in reviewing the effectiveness of the organization’s risk management
processes for economic, environmental and social topics

CSR of the Daiwa Securities Group (CSR Promotion
System)G4-47

Frequency of the highest governance body’s review of economic, environmental and social impacts, risks, andopportunities

CSR of the Daiwa Securities Group (CSR Promotion
System)Highest Governance Body’s Roles in Sustainability Reporting
G4-48

The highest committee or position that formally reviews and approves the organization’s sustainability reportand ensures that all material aspects are covered

CSR of the Daiwa Securities Group (CSR Promotion
System)Highest Governance Body’s Roles in Evaluating Economic, Environmental and Social Performance
G4-49

Process for communicating critical concerns to the highest governance body

Corporate Governance/Relationship with Employees(Communication)

G4-50

Nature and total number of critical concerns that were communicated to the highest governance body andthe mechanism(s) used to address and resolve themNot reported

Remuneration and Incentives
G4-51

Remuneration policies for the highest governance body and senior executives

Corporate Governance

G4-52

Process for determining remuneration

Corporate Governance

G4-53

How stakeholders’ views are sought and taken into account regarding remuneration

Corporate Governance/Relationship with Employees(Communication)

G4-54

Ratio of the annual total compensation for the organization’s highest-paid individual in each country ofsignificant operations to the median annual total compensation for all employees (excluding the highest-paid
individual) in the same country

Not reported

G4-55

Ratio of percentage increase in annual total compensation for the organization’s highest-paid individual ineach country of significant operations to the median percentage increase in annual total compensation for all
employees (excluding the highest-paid individual) in the same country

Not reported

Ethics and Integrity
G4-56

The organization’s values, principles, standards and norms of behavior such as codes of conduct and codes of
ethicsCorporate Principles and Management Vision

G4-57

Internal and external mechanisms for seeking advice on ethical and lawful behavior, and matters related toorganizational integrity, such as helplines or advice lines

Corporate Governance

G4-58

Internal and external mechanisms for reporting concerns about unethical or unlawful behavior, and mattersrelated to organizational integrity, such as escalation through line management, whistleblowing mechanisms
or hotlines

Corporate GovernanceSpecific Standard Disclosures
Disclosures on Management Approach
G4-DMAWhy the Aspect is material

CSR of the Daiwa Securities Group (CSR Materiality of
the Daiwa Securities Group)

Category: Economic
Aspect: Economic Performance
G4-EC1

Direct economic value generated and distributed

CSR Related Data/Integrated Report 2016

G4-EC2Financial implications and other risks and opportunities for the organization’s activities due to climate change

Initiatives through Business Activities/Risk
Management

G4-EC3Coverage of the organization’s defined benefit plan obligations

Integrated Report 2016

G4-EC4

Financial assistance received from government

Impact is insignificant

Aspect: Market Presence
G4-EC5

Ratios of standard entry level wage by gender compared to local minimum wage at significant locations ofoperation

Impact is insignificant, due to the nature of ourbusiness

G4-EC6

Proportion of senior management hired from the local community at significant locations of operation

Not reported

58

GRI Index

Daiwa Securities Group CSR REPORT 2016

Clauses

Indicator

59

Link

Aspect: Indirect Economic Impacts
G4-EC7Development and impact of infrastructure investments and services supported

Initiatives through Business Activities (Support for theCreation of Our Future Society)/Engagement withSociety (Assistance to Communities Inside and Outsideof Japan through Foundations and NPOs)

G4-EC8Significant indirect economic impacts, including the extent of impacts

Not applicable

Aspect: Procurement practices
G4-EC9Proportion of spending on local suppliers at significant locations of operation

Impact is insignificant, due to the nature of ourbusiness

Category: Environmental
Aspect: Materials
G4-EN1

Materials used by weight or volume

Not applicable

G4-EN2

Percentage of materials used that are recycled input materials

Not applicable

Aspect: Energy
G4-EN3

Energy consumption within the organization

CSR Related Data

G4-EN4

Energy consumption outside of the organization

CSR Related Data

G4-EN5

Energy intensity

CSR Related Data

G4-EN6

Reduction of energy consumption

CSR Related Data

G4-EN7

Reductions in energy requirements of products and services

CSR Related Data

Aspect: Water
G4-EN8

Total water withdrawal by source

CSR Related Data

G4-EN9Water sources significantly affected by withdrawal of water

Impact is insignificant

G4-EN10Percentage and total volume of water recycled and reused

Not reported

Aspect: Biodiversity
G4-EN11

Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity
value outside protected areas

Not applicable

G4-EN12

Description of significant impacts of activities, products, and services on biodiversity in protected areas andareas of high biodiversity value outside protected areas

Not applicable

G4-EN13

Habitats protected or restored

Not applicable

G4-EN14

Total number of IUCN Red List species and national conservation list species with habitats in areas affected byoperations, by level of extinction risk

Not applicable

Aspect: Emissions
G4-EN15

Direct greenhouse gas (GHG) emissions (scope 1)

CSR Related Data

G4-EN16

Indirect greenhouse gas (GHG) emissions (scope 2)

CSR Related Data

G4-EN17

Other indirect greenhouse gas (GHG) emissions (scope 3)

CSR Related Data

G4-EN18

Greenhouse gas (GHG) emissions intensity

CSR Related Data

G4-EN19

Reduction of greenhouse gas (GHG) emissions

CSR Related Data

G4-EN20

Emissions of ozone-depleting substances (ODS)

Impact is insignificant

G4-EN21

NOx, SOx, and other significant air emissions

Impact is insignificant

Aspect: Effluents and Waste
G4-EN22

Total water discharge by quality and destination

Impact is insignificant

G4-EN23

Total weight of waste by type and disposal method

CSR Related Data

G4-EN24

Total number and volume of significant spills

Not applicable

G4-EN25

Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel
Convention (2) Annex I, II, III, and VII, and percentage of transported waste shipped internationally

Not applicable

G4-EN26

Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affectedby the organization’s discharges of water and runoff

Not applicable

Aspect: Products and Services
G4-EN27

Extent of impact mitigation of environmental impacts of products and services

Environmental Initiatives

G4-EN28

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

Not applicable

Aspect: Compliance
G4-EN29

Monetary value of significant fines and total number of non-monetary sanctions for non-compliance withenvironmental laws and regulations

Not applicable

GRI Index

Daiwa Securities Group CSR REPORT 2016

Clauses

Indicator

Link

Aspect: Transport
G4-EN30

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

Not reported

Aspect: Overall
G4-EN31

Total environmental protection expenditures and investments by typeNot reported

Aspect: Supplier Environmental Assessment
G4-EN32

Percentage of new suppliers that were screened using environmental criteria

Not applicable

G4-EN33

Significant actual and potential negative environmental impacts in the supply chain and actions taken

Not applicable

Aspect: Environmental Grievance Mechanisms
G4-EN34

Number of grievances about environmental impacts filed, addressed, and resolved through formal grievancemechanisms

Initiatives through Business Activities (Provision of
Quality Service to Customers)/Corporate GovernanceCategory: Social
Subcategory: Labor Practices and Decent Work
Aspect: Employment
G4-LA1

Total number and rates of new employee hires and employee turnover by age group, gender and region

CSR Related Data

G4-LA2

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

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

G4-LA3Return to work and retention rates after parental leave, by gender

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

Aspect: Labor/Management Relations
G4-LA4

Minimum notice periods regarding operational changes, including whether these are specified in collective
agreements

Not reported

Aspect: Occupational Health and Safety
G4-LA5Percentage of total workforce represented in formal joint management-worker health and safety committees
that help monitor and advise on occupational health and safety programs

Not reported

G4-LA6

Type of injury and rates of injury, occupational diseases, lost days, and absenteeism, and total number ofwork-related fatalities, by region and by genderNot reported

G4-LA7

Workers with high incidence or high risk of diseases related to their occupation

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

G4-LA8

Health and safety topics covered in formal agreements with trade unions

Not reported

Aspect: Training and Education
G4-LA9Average hours of training per year per employee by gender, and by employee category

Not reported

G4-LA10Programs for skills management and lifelong learning that support the continued employability of employees
and assist them in managing career endings

Relationship with Employees (Human Resource
Development and Skill Enhancement)

G4-LA11Percentage of employees receiving regular performance and career development reviews, by gender and by
employee category

Relationship with Employees (Human Resource
Development and Skill Enhancement)

Aspect: Diversity and Equal Opportunity
G4-LA12Composition of governance bodies and breakdown of employees per employee category according to gender,
age group, minority group membership, and other indicators of diversity

CSR Related Data

Aspect: Equal Remuneration for Women and Men
G4-LA13

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

Not reported

Aspect: Supplier Assessment for Labor Practices
G4-LA14

Percentage of new suppliers that were screened using labor practices criteria

Not applicable

G4-LA15Significant actual and potential negative impacts for labor practices in the supply chain and actions taken

Not applicable

Aspect: Labor Practices Grievance Mechanisms
G4-LA16

Number of grievances about labor practices filed, addressed, and resolved through formal grievancemechanisms

Corporate Governance

Subcategory: Human Rights
Aspect: Investment
G4-HR1

Total number and percentage of significant investment agreements and contracts that include human rights
clauses or that underwent human rights screening

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

G4-HR2

Total hours of employee training on human rights policies or procedures concerning aspects of human rightsthat are relevant to operations, including the percentage of employees trained

Human Rights Initiative

Aspect: Non-discrimination
G4-HR3

Total number of incidents of discrimination and corrective actions taken

Not applicable

Aspect: Freedom of Association and Collective Bargaining
G4-HR4

Operations and suppliers identified in which the right to exercise freedom of association and collective
bargaining may be violated or at significant risk, and measures taken to support these rights

Not applicable, due to the nature of our business

60

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Clauses

Indicator

61

Link

Aspect: Child Labor
G4-HR5

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

Our business entails no risk of using child labor

Aspect: Forced and Compulsory Labor
G4-HR6

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

Our business entails no risk of using forced labor

Aspect: Security Practices
G4-HR7

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

Impact is insignificant, due to the nature of ourbusiness

Aspect: Indigenous Rights
G4-HR8

Total number of incidents of violations involving rights of indigenous peoples and actions taken

Not applicable

Aspect: Assessment
G4-HR9Total number and percentage of operations that have been subject to human rights reviews or impact assessments

Not reported

Aspect: Supplier Human Rights Assessment
G4-HR10Percentage of new suppliers that were screened using human rights criteria

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

G4-HR11Significant actual and potential negative human rights impacts in the supply chain and actions taken

Not applicable

Aspect: Human Rights Grievance Mechanisms
G4-HR12

Number of grievances about human rights impacts filed, addressed, and resolved through formal grievancemechanisms

Initiatives through Business Activities (Provision of
Quality Service to Customers)/Corporate Governance

Subcategory: Society
Aspect: Local Communities
G4-SO1

Percentage of operations with implemented local community engagement, impact assessments, anddevelopment programs

Impact is insignificant, due to the nature of ourbusiness

G4-SO2

Operations with significant actual and potential negative impacts on local communities

Not applicable

Aspect: Anti-corruption
G4-SO3

Total number and percentage of operations assessed for risks related to corruption and the significant risks
identified

Risk Management/IT Strategy and the Management of
Systemic Risk

G4-SO4

Communication and training on anti-corruption policies and proceduresCompliance

G4-SO5

Confirmed incidents of corruption and actions taken

Not applicable

Aspect: Public Policy
G4-SO6

Total value of political contributions by country and recipient/beneficiary

Not reported

Aspect: Anti-competitive Behavior
G4-SO7

Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices and theiroutcomes

Not applicable

Aspect: Compliance
G4-SO8

Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws
and regulations

Not applicable

Aspect: Supplier Assessment for Impacts on Society
G4-SO9Percentage of new suppliers that were screened using criteria for impacts on society

Not applicable

G4-SO10Significant actual and potential negative impacts on society in the supply chain and actions taken

Not applicable

Aspect: Grievance Mechanisms for Impacts on Society
G4-SO11

Number of grievances about impacts on society filed, addressed, and resolved through formal grievancemechanisms

Initiatives through Business Activities (Provision of
Quality Service to Customers)/Corporate Governance

Subcategory: Product Responsibility
Aspect: Customer Health and Safety
G4-PR1

Percentage of significant product and service categories for which health and safety impacts are assessed for
improvement

Not applicable, due to the nature of our business

G4-PR2

Total number of incidents of non-compliance with regulations and voluntary codes concerning the health andsafety impacts of products and services during their life cycle, by type of outcomes

Not applicable, due to the nature of our business

Aspect: Product and Service Labeling
G4-PR3

Type of product and service information required by the organization’s procedures for product and service
information and labeling, and percentage of significant product and service categories subject to suchinformation requirements

Initiatives through Business Activities (Provision of
Quality Service to Customers)

G4-PR4

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

Not applicable

G4-PR5Results of surveys measuring customer satisfaction

Initiatives through Business Activities (Provision of
Quality Service to Customers)

GRI Index

Daiwa Securities Group CSR REPORT 2016

Clauses

Indicator

62

Link

Aspect: Marketing Communications
G4-PR6

Sale of banned or disputed products

Initiatives through Business Activities (Provision of
Quality Service to Customers)

G4-PR7

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

Not applicable

Aspect: Customer Privacy
G4-PR8

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

Not applicable

Aspect: Compliance
Monetary value of significant fines for non-compliance with laws and regulations concerning the provision anduse of products and services

G4-PR9Not applicableSpecific Standard Disclosures for the Financial Services Sector
Product and Service Impact Section
FS1

Policies with specific environmental and social components applied to business lines

CSR of the Daiwa Securities Group (CSR Promotion
System)FS2

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

Not reported

FS3

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

Compliance

FS4

Processes for improving staff competency to implement the environmental and social policies and procedures
as applied to business lines

CSR of the Daiwa Securities Group (CSR Promotion
System)/Relationship with Employees (Human Resource
Development and Skill Enhancement)

FS5Interactions with clients/investees/business partners regarding environmental and social risks and opportunities

Initiatives through Business Activities (Provision of
Quality Service to Customers)/ Relationship with
Shareholders and Other Investors

DMA

Aspect: Product Portfolio
FS6

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

Daiwa Securities Group Profile/Integrated Report 2016

FS7

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

Initiatives through Business Activities (Initiatives
through Product Development and Provision) (Support
for the Creation of Our Future Society)

FS8

Monetary value of products and services designed to deliver a specific environmental benefit for each businessline broken down by purpose

Initiatives through Business Activities (Initiatives
through Product Development and Provision) (Support
for the Creation of Our Future Society)

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

Corporate Governance

Aspect: Audit
DMA

FS9

Aspect: Active Ownership
FS10

Percentage and number of companies held in the institution’s portfolio with which the reporting organization
has interacted on environmental or social issues

Not reported

FS11

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

Initiatives through Business Activities (Role and Social
Responsibilities of the Financial Services)

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

Initiatives through Business Activities (Role and Social
Responsibilities of the Financial Services)

DMA

FS12

Social Section
Aspect: Local Communities
FS13

FS14

Access points in low-populated or economically disadvantaged areas by typeNot applicable

Initiatives to improve access to financial services for disadvantaged people

Initiatives through Business Activities (Provision of
Quality Service to Customers)/Engagement withSociety (Assistance Inside and Outside of Japanthrough Foundations and NPOs)

Aspect: Product and Service Labeling
FS15

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

Initiatives through Business Activities (Provision of
Quality Service to Customers)

FS16

Initiatives to enhance financial literacy by type of beneficiary

Engagement with Society (Education and Research
Activities in Economics and Finance)

DMA

ISO 26000 Index

Daiwa Securities Group CSR REPORT 201663

ISO 26000 Index
In compiling the Daiwa Securities Group CSR Report 2016, reference was made to the core subjects of ISO 26000.

Core Subjects and Issues
6.2
Organizational
governance

6.3
Human rights

6.4
Labourpractices

6.5
The
environment

6.6
Fair operating
practices

6.7
Consumerissues

6.8
Community
involvement
anddevelopment

Message from Management/CSR of the Daiwa Securities Group/Daiwa Securities Group
Profile/Corporate Governance/Compliance/Risk Management
Issue 1: Due diligence

Risk Management (Supply Chain Management, Human Rights Due Diligence)Issue 2: Human rights risk situations

We have no operations in areas where there are special concerns about protection of humanrightsIssue 3: Avoidance of complicity

Risk Management/Human Rights Initiative

Issue 4: Resolving grievances

Corporate Governance

Issue 5: Discrimination and vulnerable groups

Relationship with Employees (Hiring Initiatives)/CSR Related Data

Issue 6: Civil and political rights

Relationship with Employees

Issue 7: Economic, social and cultural rights

Relationship with Employees

Issue 8: Fundamental principles and rights at work

Relationship with Employees

Issue 1: Employment and employment relationships

Daiwa Securities Group Profile/Relationship with Employees (Hiring Initiatives)/CSR Related
DataIssue 2: Conditions of work and social protection

Relationship with Employees (Hiring Initiatives) (Striving to Create a Pleasant Working
Environment)

Issue 3: Social dialogue

Relationship with Employees (Communication)

Issue 4: Health and safety at work

Not applicable

Issue 5: Human development and training in the workplace

Relationship with Employees (Human Resource Development and Skill Enhancement)

Issue 1: Prevention of pollution

Not applicable

Issue 2: Sustainable resource use

Environmental Initiatives/CSR Related Data

Issue 3: Climate change mitigation and adaptation

Environmental Initiatives/Risk Management

Issue 4: Protection of the environment, biodiversity and restoration ofnatural habitats

Engagement with Society (Corporate Citizenship Initiatives)/CSR Related Data

Issue 1: Anti-corruption

Risk Management/IT Strategy and the Management of Systemic Risk

Issue 2: Responsible political involvement

Daiwa Securities Group Profile/CSR of the Daiwa Securities Group/Corporate Governance/
Compliance/Risk Management

Issue 3: Fair competition

Corporate Governance/Compliance

Issue 4: Promoting social responsibility in the value chain

CSR of the Daiwa Securities Group/Environmental Initiatives

Issue 5: Respect for property rights

Not applicable due to the nature of our business

Issue 1: Fair marketing, factual and unbiased information and faircontractual practices

Initiatives through Business Activities (Provision of Quality Service to Customers)

Issue 2: Protecting consumers’ health and safety

Not applicable due to the nature of our business

Issue 3: Sustainable consumption

Initiatives through Business Activities

Issue 4: Consumer service, support, and complaint and dispute
resolution

Initiatives through Business Activities (Provision of Quality Service to Customers)

Issue 5: Consumer data protection and privacy

IT Strategy and the Management of Systemic Risk

Issue 6: Access to essential services

Not applicable

Issue 7: Education and awarenessInitiatives through Business Activities (Communication of Information of Analysis andProposals about Economy, Society and Investment)/Engagement with Society (Education andResearch Activities in Economics and Finance)

Issue 1: Community involvement

Message from Management/Initiatives through Business Activities (Support for the Creationof Our Future Society)/Engagement with Society (Corporate Citizenship Initiatives)

Issue 2: Education and culture

Engagement with Society

Issue 3: Employment creation and skills development

Initiatives through Business Activities (Support for the Creation of Our Future Society)

Issue 4: Technology development and access

Initiatives through Business Activities (Support for the Creation of Our Future Society)

Issue 5: Wealth and income creation

Initiatives through Business Activities (Initiatives through Product Development and Provision)/
Engagement with Society (Assistance to Communities Inside and Outside of Japan throughFoundations and NPOs)

Issue 6: Health

Initiatives through Business Activities (Initiatives through Product Development and Provision)

Issue 7: Social investment

Initiatives through Business Activities

Daiwa Securities
SecuritiesGroup
GroupCSRCSR
REPORT
Daiwa
REPORT
20162016

CSR Related Data64

CSR Related DataManagement Report
Compensation Paid to Directors and Corporate Executive Officers of Daiwa Securities Group Inc. in FY2015
Type of Officer

Total Amount of Compensation, Etc. by Type

Total Amount ofCompensation,
Etc.

Basic Compensation

Stock Options¥35 million¥32 million¥3 million

Performance-Based
Compensation−¥1,130 million¥467 million¥80 million¥88 million¥88 million−

Directors
Corporate Executive
Officers
External Directors

Lump-Sum Retirement Pay

Number of Executives−

2 persons¥582 million−

13 persons−−

6 persons*Six directors also served as corporate executive officers; their compensation is included under “Corporate Executive Officers”

Social ReportCompanies covered by data
Consolidated: Entire Group (except for equity-method affiliates)
Ten Group companies: D aiwa 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 Research Business 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, 2015

As of March 31, 2016

Employees

FA*1

Male

7,526

62

Temporary
Employees−(Career track*2)

7,103

−

−

(Managers)

3,868

−

4,270

(Career track*2)

Temporary
Employees−

Employees

FA*1

7,600

56

7,196

−

−

−

3,897

−

−

80

−

4,505

68

−

2,712

−

−

2,975

−

−

(Managers)

262

−

−

316

−

−

Japan total

11,796142753

12,105124

843

Japan Female

Overseas

1,528

−

94

1,472

−

97

Total

13,324142

847

13,577124

940*The number of employees stationed overseas has been included in the “Overseas” category*1 Financial advisors*2 Including regional career-track employees and specialist

Number of New Graduates Recruited by the Daiwa Securities Group
Career-track employees/regional career-track
employees
Total(Unit: persons)April 2014

April 2015

April 2016

Male

345

345

332

Female

265

336

330

610

681

662

*This data pertains to eight Group companies

Workforce Statistics
FY2013

FY2014FY2015

Average annual salary*1 (in ten thousand yen)

1,153

1,171

1,212

Average age (years old)

41.2

41.8

42.0

Average number of years of service (years)

14.8

15.3

15.4

FY2013

FY2014FY2015

Total

38.1

38.0

37.9

Male

39.4

39.4

39.5

Female

36.0

35.9

35.6

*This data pertains to Daiwa Securities Group Inc. (including those who simultaneously work for Daiwa Securities)*1 Average annual salary includes bonuses and otherAverage Age*This data pertains to Daiwa Securities(Unit: years old)

CSR Related Data

65

Daiwa Securities Group CSR REPORT 2016

Average Number of Years of Service(Unit: years)

FY2013

FY2014FY2015

Total

13.6

13.6

13.5

Male

15.0

15.0

15.1

Female

11.6

11.5

11.3

*This data pertains to Daiwa Securities

Re-Employment under the Daiwa Master System(Unit: persons)

Number of employees hired under the Daiwa Master System

FY2013

FY2014FY201559

56

68

FY2013

FY2014FY2015

2.24

2.10

2.05

*This data pertains to Daiwa Securities

Employment Rate for Persons with Disabilities(Unit: %)Employment Rate for Persons with Disabilities*This data pertains to Daiwa Securities

Achievements of Selected Participants in Management Training
Daiwa Management Academy: Targeting department managers
Number finishing program (cumulative)

Daiwa Leadership Program: Targeting deputy general managers
Number finishing program (cumulative)(Unit: persons)

FY2013

FY2014314

335

FY2015358

FY2013

FY2014FY2015

671

734

797

FY2013

FY2014FY2015

3,464

3,949

4,392

*This data pertains to 10 Group companies

Participants in Business Skill Training(Unit: persons)

Number finishing program (cumulative)*1*This data pertains to 8 Group companies*1 The number of people completing training courses in presentation, coaching, negotiation skills, communication, logical thinking, and facilitation

Number of Persons Earning Credentials*1(Unit: persons)

As of March 31, 2014

As of March 31, 2015

As of March 31, 2016

Affiliated Financial Planner (AFP)

Credentials

5,191

5,279

5,333

Certified Financial Planner (CFP®) *2

555

590

616

1,461

1,504

1,525

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

44

50

57

1,470

1,556

1,660

164

160

168

*1 This data pertains to 10 Group companies (according to filings by employees)*2 This data pertains to Daiwa Securities

Successful Applicants in Internal Recruiting System
Held(Unit: persons)

Positions Offered

No. ofNo. ofSuccessful
ApplicantsApplicants

M&A, SMA consultants, analysts, internal wholesalers, compliance, dealers, derivatives, traders,Cumulative from FY2000*This data pertains to 10 Group companies

fund managers, principal finance specialists, venture capitalists, money managers, research,underwriting, sale, overseas, management consultant, individual and corporate sales, productdevelopment, proposals and planning, investment advisors, global trainees, etc.

983

155

CSR Related Data

Daiwa Securities Group CSR REPORT 2016

66

Working Hours and Paid Vacation Usage Rate
Annual regular working hours (hours)

FY2013

FY2014FY20151837.51845

1837.5

27.2

28.2

24.0

50

56

63

Average monthly overtime hours (hours)*1
Paid vacation usage rate (%) (including special summer vacation)*2*This data pertains to 2 Group companies*1 Figures indicate employees at the 2 companies who are members of the Daiwa Securities Group Employees’ Union*2 In 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.

Employee Welfare System Usage

Number of employees taking childcare leave*1
Number of employees taking nursing care leave(Unit: persons)

FY2013

FY2014FY2015

Female

486

576

640

Male

19

134

250

Female

10

6

4

Male

0

1

2

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

Employees Taking Childcare Leave and Other Related Plans
FY2013

FY2014FY2015

Female

100.0

99.3

100.0

Male

1.6

41.9

73.1

Female

90.0

93.2

92.5

Male

100.0

100.0

100.0

100.0

99.3

100.0

Short working hour system usage (persons)

147

180

249

Daycare subsidy usage (persons)

288

437

505

Percentage of employees taking childcare leave (%)
Return to work rate for those taking childcare leave (%)
Percentage of women working when their children
turned one (%)*This data pertains to Daiwa Securities

Main Initiatives for Work-Life Balance and Employee Support Plans
Program Name
Professional return plan (rehiring of sales staff)
Job location change system
Spouse work reassignment leave system
Childcare leave
Childcare support leave
Life support paid leave

Program Description
Offers opportunities for re-employment to former full-time employees who left their jobs for marriage or childcare(The scope of eligibility for the program has been expanded since November 2015, from those returning to work within
5 years of their retirement to those within 10 years)
Offers a position in a new location when an employee must relocate after marriage or spouse’s job transfer
Employees may opt to take leave for a certain period (up to 5 years) in the event their spouses are reassigned to work in alocation that is untenable for them to commute to work
Employees can take childcare leave until the day before their child’s third birthday
When employees’ spouse gives birth or returns to work, leave may be taken (first two weeks of pay is guaranteed forchildcare leave)
Employees can take up to 50 days’ leave due to injury, disease, nursing care preparation, or infertility treatment, except
when other types of leave are available, by accumulating expired paid leave

Short working hour system

Employees may reduce regular working hours to a minimum of 6 hours a day and leave the office early

Exemption from overtime work

Employees are exempt from overtime work until their children complete the third grade of elementary school

Restricted overtime work

Employees are exempt from overtime work exceeding a certain number of hours until their children finish elementary school

Daycare subsidy

The Group offers subsidies for daycare expenses until employees’ child begins elementary school
The company encourages employees to take paid vacation and has introduced leave for marriage preparations, kid’s
ceremony leave to attend an entrance ceremony or other events, and family day leave to give employees a chance to

Expanded leave system
Expanded support for balancing work and nursing care
Nursing care leave
Support after returning to workWeb

spend quality time with their families
The company has established a class on support for balancing work and nursing care to help resolve employees’ concerns
for future nursing care
Employees can take leave up to 4 times for not more than 365 days per family member requiring care
Enables employees to return to work after a period of childcare leave. Daiwa WLB Station, a work-life balance promotion
website that focuses on various support systems related to childrearing and nursing care, provides information for
employees on childcare leave and helps facilitate their smooth return to the workplace.

Work Life Balance Daiwa Securities Group Inc. > Corporate Information > Work Life Balance > Systems and Initiatives of the Daiwa Securities Group (Japanese)

CSR Related Data

Daiwa Securities Group CSR REPORT 2016

Female Employees and Managers at the Daiwa Securities Group

67(Unit: %)End of FY2013

End of FY2014

End of FY2015

Percent of employees who are female (Consolidated)

35.6

36.1

37.2

Percent of employees who are female (Daiwa Securities only)

38.8

39.6

40.7

Percent of managers who are female (Consolidated)

5.4

6.3

7.5

Percent of managers who are female（Daiwa Securities only）

6.3

7.5

8.9

FY2015

Women Newly Appointed to Managerial Positions
FY2013

FY2014

Number of women newly appointed to managerial positions (persons)

27

42

45

Total number of those appointed to managerial positions (persons)

156

156

166

Percent of managers who are female (%)

17.3

26.9

27.1

End of FY2013

End of FY2014

End of FY2015

6,406

6,573

6,822

63.1

63.1

64.2

*This data pertains to Daiwa Securities

Number of Employee Union Members
Number of employees’ union members (persons)Ratio of employees who are employee union members (%)*The data pertains to 8 Group companies, excluding Daiwa Asset Management, which has its own employee union, and Daiwa Property, which has no employee union

Corporate Citizenship Initiatives and Expenditures

Independent
Assurance(Unit: thousand yen)Type of Activity

FY2013

FY2014FY2015

1. Education and research in economics and finance
2. A ssistance to communities inside and outside of Japan through foundations

49,694

189,624

137,193

and NPOs
3. Support for culture and the arts

179,937

153,779

147,748

231,900

257,400

296,110

4. Corporate Citizenship Initiatives

1,790

5,476

2,706

463,321606,279

583,758

FY2013

FY2014FY2015

8,138

11,847

15,362

Total

Results in Economic and Financial Education
Program
Support for Finance Park
Support for the Student Company Program(Unit: persons)

Cumulative number since the initiation of support (in September 2003)
15
Cumulative number since the opening (in June 2005)

17

74,532
N/A
221

CSR Related Data

Daiwa Securities Group CSR REPORT 2016

Environmental ReportCompanies covered by data
Energy Consumption, CO2 Emissions, Clean Water Consumption (Domestic):
Domestic: We have incorporated figures on energy consumption and CO2 emissions for the three companies having a reporting obligation under laws andregulations—Daiwa Securities, Daiwa Property, and Daiwa Institute of Research. Daiwa Institute of Business Innovation has also been included in thecalculation in light of its significant impact on the Group’s environmental burden. The data for Gran Tokyo North Tower, where the Daiwa Securities
Group is based, includes data for Group companies other than those mentioned above.
Overseas: London, New York, Hong Kong, and Taiwan offices
Wastes: Gran Tokyo North Tower, Daiwa Yaesu Building, Toyocho Center Building, Daiwa Eitai Building, DIR Headquarters Building, and Osaka Branch Building of
Daiwa Securities
Paper consumption: Gran Tokyo North Tower

Energy Consumption

Independent
Assurance

Offices

Domestic

Type
Utility Gas (thousand Nm3)

336

326

Heavy oil (kL)

26.7

23.2

Diesel fuel (kL)

0.09

0.09

Gasoline (kL)

1,002

952

Type

FY2014

66,954FY2015

Electricity (thousand kWh)

8,892

7,526

Utility Gas (thousand Nm3)

—

94.6

Offices
Total(Domestic and overseas)

FY201570,027

Offices
Overseas

FY2014

Electricity (thousand kWh)Type

FY2014FY2015

Electricity (thousand kWh)

78,919

Utility Gas (thousand Nm3)

336

421

Heavy oil (kL)

26.7

23.2

Diesel fuel (kL)

0.09

0.09

Gasoline (kL)

1,002

952

74,48068

CSR Related Data

CO2 Emissions

Daiwa Securities Group CSR REPORT 2016

Independent
Assurance(Unit: t-CO2)

Offices

Domestic69

Type

FY2014FY2015

Electricity

33,936

Utility Gas

759

745

Heavy oil

72.3

62.7

30,717

Diesel fuel

0.23

0.23

Gasoline

2,325

2,208

Total

37,09233,733

Scope 1

831

808

Scope 233,93630,717

Scope 3

2,325

2,208

(Unit: t-CO2)

Offices
OverseasType

FY2014FY2015

Electricity

4,935

3,520

Utility Gas—

204(Unit: t-CO2)

Offices
Total(Domestic and overseas)

Type

FY2014FY2015

Electricity

38,871

Utility Gas

759

949

Heavy oil

72.3

62.7

34,237

Diesel fuel

0.23

0.23

Gasoline

2,325

2,208

Scope 1

831

1,012

Scope 238,871

34,237

Scope 3

2,325

2,208

Calculation Methods
Calculations have been made in accordance with methods stipulated in the Act on the Rational Use of Energy and the Act on Promotion of Global WarmingCountermeasures. In light of their relevance, figures for steam, cold water, and kerosene used at some offices are not included in calculations. There may also bediscrepancies in the total amounts due to rounding.
A) Electricity
Domestic: We use the CO2 emission factor (actual emission factor) for each electricity supplier.
Overseas: Figures for CO2 emission factors in 2014 are those published for each country by the International Energy Agency. Figures for CO2 emission factors
for 2015 are the latest figures published by the local government or electricity provider.
B) Utility gas
Domestic: After consumption is calculated as the volume of gas at normal condition, each provider’s CO2 emission factor or calorific value and emission factor
specified by law is used to calculate CO2 emission.
Overseas: Same calculation method as above “Domestic” (calculated based on the calorific value and emission factor defined in the Act of Promotion of
Global Warming Countermeasures). Data for FY2015 is included in calculations.
C) Heavy oil and diesel fuelCalculated on consumption basis.
D) Gasoline
The fuel used in rental cars used as company cars. Categorized in accordance with the Basic Guidelines on Accounting for Greenhouse Gas Emissions
Throughout the Supply Chain.

CO2 Emissions per Employee (Domestic)
Offices
DomesticType
Per employee (t-CO2)
Number of employees in Japan (persons)

FY2014FY2015
3.1

2.8

11,938

12,229*Data is excluded from the scope of independent assurances. Calculated based on CO2 emissions in Japan and the consolidated number of employees in Japan.

CSR Related Data

Daiwa Securities Group CSR REPORT 2016

Clean Water Consumption

70

Independent
Assurance

Offices

Type

Domestic

Clean Water (thousand m3)

FY2014FY2015
118.9

117.7

*Clean water consumption for Tama Training Center has been retroactively calculated in 2014

Wastes
FY2014Paper waste
Non-paper waste

FY2015

Amount generated (t)317.7Recycling rate (%)

93.0

93.6

Amount generated (t)

221.2

210.6

Recycling rate (%)

51.7

53.8

320.3

*Calculated based on the Reuse Plan for Large-Scale Buildings used for business, as specified by each local government

Paper Consumption
FY2014
Amount used (t)FY2015
179.6

184.2

Environmental Accounting
Boundaries
Sales branches of Daiwa Securities and Group companies residing in Gran Tokyo North Tower

Environmental Preservation Cost*1(Unit: million yen)

Description of Major
Initiatives

Type
Globalenvironment
preservation
Business area
Resource
recycling

Introduction and upgrading ofenergy-saving air conditioners
Power receiving and transforming
facilities
Eco-car leasing fee (for five years)

FY2014
Investment Amount

FY2015
Cost

510.6

274.1

139.6

802.6

Cost

563.3

308.0

Waste disposal cost*2

19.2

20.5

Dissolution process cost*3

29.5

29.8

Total

650.2

611.9

Management activity

Management of environmental data, etc.

2.0

Social activity

Environmental preservation, etc.

1.0

Total

Investment Amount

650.2

614.9

1,076.7

358.3
2.0
1.0

1,076.7

361.3*1 Other important facilities are partially included*2 Daiwa Securities branches*3 Gran Tokyo North Tower

Economic Effects Arising from Environmental Preservation Measures (Real Effects)
Amount of cost reduced
Amount of revenue
Total(Unit: million yen)

FY2014FY2015

72.3

36.4

0

0

72.3

36.4

CSR Related Data

71

Daiwa Securities Group CSR REPORT 2016

Report on Financial Capability
We report the deals we lead-managed by classifying them into items in an easy-to-understand way for our stakeholders in Japan in reference to the SASB’s FN102-17.
☆Industry Classification ... Classified based on the Tokyo Stock Exchange’s category of industry. Unlisted issuers are classified by Daiwa Securities Group Inc.
☆Scope ... Total amount of issues for which the Daiwa Securities Group served as lead manager.
For equity offerings, however, we include only the value of the Group’s book-runner deals and exclude the tranches for which the Group did not serve as book runner.
☆Figure ... There may be discrepancies in total amounts due to rounding.
(Unit: billion yen)

Large
Middle Classification
Classification
Fishery,
Agriculture &Forestry
MiningConstruction

IPO

PO

CB

REIT
(Equity)

Bond
Issued by
Corporate Government- Municipal
Bond
Affiliated
Bond
SpecialCorporation

Samurai
Bond

Japan
Housing
Finance
Agency(RMBS)

Fishery, Agriculture &Forestry
MiningConstruction
Foods

5.7

10.0

0.3

85.0

Textiles & Apparel
Pulp & Paper
Chemicals

30.0

10.0

86.5

80.0

Pharmaceutical

20.0

Oil & Coal Products
Rubber Products
Manufacturing

Glass & Ceramic Products
Iron & Steel

70.0

Nonferrous Metals
Metal Products
Machinery

1.4

Electric Appliances

20.0

20.0

20.0

158.0

Transportation Equipment
Precision Instruments

20.0
4.5

Other ProductsElectric Power
& Gas

21.3

Electric Power & Gas

295.0

Land Transportation

437.0

Marine Transportation
Transport &Information andCommunications

Commerce

Finance &Insurance

Air Transportation
Warehousing & Harbor
Transportation Services
Information &Communication
Wholesale Trade

16.0
13.0
3.7

6.1

500.0

0.5

1.3

20.0

Retail Trade
Banks
Securities & Commodity
Futures
Insurance

32.7

5.0

481.5

145.0
159.0

116.2

30.0

150.0

Other Financing Business
Real Estate

Real Estate

Services

Services
Real Estate Investment
Corporation
Public Entity

Nonclassifiable
Total

1028.5

395.0
2.9

84.1

558.7

200.7

1,256.2

351.9

30.0

130.0

50.0

242.1

15.7

242.1

2,673.7

214.0

330.0

69.5

947.3

214.0

330.0

1,098.0

947.3

Glossary

Daiwa Securities Group CSR REPORT 201672

Glossary●Active FundIn contrast to passive funds, which are managed to mirror certain indexes,
active funds are investment trusts and other funds managed by a fund manager
who makes decisions concerning the stocks, bonds, and other assets to invest inand the investment ratios based on investment policies●Microfinance
A form of financial services for people on low-income●AFP/CFP ®
Certifications for financial planners. AFP is a certification in Japan, while CFP is a
globally recognized credential.

●Nippon Individual Savings Account (NISA)Dividends and capital gains from stocks, investment trusts, and otherinvestments are subject to ordinary income tax and local taxes, but this program
exempts dividends and capital gains from new purchases up to 1 million yen fora maximum of five years●CDP
This project is an affiliation of institutional investors concerned about climatechange who demand that companies disclose information about their stance on
environmental problems and initiatives addressing such problems.

●Principles for Financial Action toward a Sustainable Society(Principles for Financial Action for the 21st Century)
Aims to expand investment and financing with the environment in mind,
formulated as voluntary efforts of financial institutions in Japan●Cluster Munitions
A bomb containing multiple bomblets in a large shell that acts as a container.
One bomb causes explosions over a wide area, enlarging the scope of damage.
It has also been indicated that dealing with multiple unexploded bomblets fromcluster bombs presents difficulties.

●Principles for Responsible Investment (PRI)
PRI is a set of six principles launched by the UNEP Finance Initiative and the
UN Global Compact in April 2006. This initiative asks corporate investors toincorporate ESG into their investment decision making practices.

●Color Universal Design
A method of design that takes into consideration the use of color so that
information can be conveyed to more people, keeping in mind people withvaried color perception●Corporate Governance
The mechanism that allows for sound and efficient corporate management.
●Engagement
Dialogue and exchange of opinion between businesses and stakeholders●Environmental Accounting
To quantify necessary investment in corporate activities and its effect in aneffort to reduce the environmental load of those activities●GRI
Global Reporting Initiative—An organization dedicated to proposing andpromoting common international guidelines for sustainability reports●HEMS
Energy management systems (EMS) for electricity, gas, and soon that use
information technology. This term includes BEMS (Building EMS), HEMS (Home
EMS), FEMS (Factory EMS), and CEMS (Community EMS).
●Hospitality
A spirit of selfless service for customers●Human Rights Due Diligence
Verification performed to minimize adverse effects on human rights issues that
could arise from business activities●Impact Investment
A method of investment that, in addition to producing economic benefit,
invests in assets with the intention of addressing social issues such as poverty
and environmental problems●ISO 26000
A worldwide standard that provides guidance for social responsibility oforganizations●LGBT
An initialism that stands for lesbian, gay, bisexual, and transgender●Materiality
The themes and aspects companies particularly focus on over the long term ina wide range of corporate activities. It is recommended that companies issuingsustainability reports should select and announce them according to the type ofbusiness and risk. (Refer to “GRI Index”)●Risk Control Self-Assessment (RCSA)
The process whereby staff assess potential risks and related controls in theworkplace. Typically, this method exposes potential risks through workshops
and surveys.
●Smart Community
A social system that has succeeded in reducing environmental load by mainly
utilizing information and communication technology (ICT) and renewableenergy●SRISocially responsible investment—An investment strategy where both financial
return and social good are sought●Stewardship CodeThe code of conduct established for institutional investors concerning theirfiduciary duties. The Japanese version was formulated by the Financial Services
Agency in February 2014.
●Supply Chain Management
To investigate issues involving a company’s suppliers of raw materials andservices, including their environmental and social challenges, to select suppliers
based on the results of such investigations, and urge them to resolve the issues●Sustainability Accounting Standards Board (SASB)
A nonprofit organization established in 2011 in the United States. This
organization aims for increased disclosure of non-financial informationof companies traded on U.S. exchanges, and proposes industry-basedsustainability standards.
●Sustainable Development Goals (SDGs)
An international agenda adopted at the September 2015 U.N. Summit
comprising 17 goals and 169 targets aiming for the eradication of poverty andthe creation of a sustainable world●UN Global Compact
A global initiative established through the advocacy of then-Secretary General
Kofi Annan. Members support 10 principles in the fields of human rights, labor,
environment, and anti-corruption in their business activities.
●Value Chain
Interlinked value-adding activities that convert inputs into outputs which, inturn, add to the bottom line and help create competitive advantage●Work-Life Balance (WLB)
Balance between an individual's work and personal lifeIndependent Assurance Report

Independent Assurance Report

Daiwa Securities Group CSR REPORT 201673