Building a Sustainable Society

Daiwa Securities GroupCSR Report
Highlight
2010 Edition

What we can do
What will the world be like whenthese 35 babies become adults?
The precious faces of these infants—
all children of Daiwa Securities Group
executives and employees—express ourhopes for the future. At the Daiwa Securities
Group, we are determined to takeresponsibility as individuals and to do ourpart as a company to create a sustainable
society living in happiness and in harmony
with an unspoiled Earth.
This report is printed using soy ink and a waterless printing method on FSC-certified paper (SA-COC-001210).

Daiwa Securities Group CSR Report 2010 Overview
Editorial Policy
The Daiwa Securities Group has been publishing this reportannually since 2002 with the aim of clearly disclosing our CSR
activities, which are intended to support the creation of asustainable society. We also use this opportunity to evaluate
the company’s current status and the challenges it is facing.
For the printed Highlight Edition of the 2010 report, wehave narrowed down the content to focus on areas weparticularly wish to communicate to as many stakeholders as
possible about our ideas and initiatives in aneasy-to-understand format.
The Full Edition of the report, which includes CSR
initiatives, challenges and goals broken down by stakeholder
group, will be available on the Web from September 2010.
Both the highlight and full editions of the report havebeen produced in line with international guidelines regarding
sustainability reports (Global Reporting Initiative; GRI*).

CSR Report 2010 — Highlight Edition (Booklet)

Highlight
EditionCommunication Tool

• Easy-to-read format• Focused on key issues

Contents
Daiwa Securities Group CSR Report 2010
Overview ............................................................... 1
Message from the President and CEO .................... 3
Daiwa Securities Group Mission
and Corporate Principles ........................................ 5
Key Issue 1
Leveraging Financial Capabilities to Contributeto a Sustainable Society ......................................... 7
Stakeholder Dialogue 1
New Ways to Help Eradicate Poverty ................... 11* GRI (Global Reporting Initiative): An organization dedicated to proposing
and promoting common international guidelines for sustainability reports.

Intended ReadershipThis report is intended for Daiwa Securities Group’s
stakeholders, which primarily include customers,
shareholders and investors, executives and employees, aswell as business partners, government agencies, non-profits(NPOs, NGOs), local communities where Daiwa Securities
has offices, educational institutions, and the families ofexecutives and employees.

Major CSR issues,
main message to
stakeholders, etc.

Full Edition (Web)

Scope of Reporting
This report basically covers the principal companies of the
Daiwa Securities Group (see page 26). The report does not,however, include all data from the Group’s principal
companies on items reported; the information is selectedbased on the respective companies’ size and type ofbusiness. Each set of numerical data specifies the scopeof coverage.

Detailed information on various activities
in areas such as management, society,and the environment

Period Covered by Report

Date of Publication
August 2010 (The previous report was published in August
2009; the next report is planned for August 2011).

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

1

Building a Rewarding Workplacefor Executives and Employees ..................... 17
Stakeholder Dialogue 2
Promoting Sustainability via the Financial
Business and CSR ................................................ 21
CSR Issues: Performance and Targets ................... 23
Daiwa Securities Group Profile ............................. 25
Description of the Daiwa Securities
Group’s Businesses .............................................. 26

Highlight Edition(Booklet)Scope of Report

Fiscal 2009 (April 1, 2009 to March 31, 2010). The report
also includes information on events and activities carried out
prior to fiscal 2008, as well as those scheduled to take place
during fiscal 2010.

Key Issue 2
Developing Sound Financial and Capital Markets
for the Next Generation ....................................... 13

CSR Report 2010 — Full Edition (Web)Contents● Report Overview/Editorial Policy● Daiwa Securities Group Profile● Message from the President and CEO● Stakeholder Dialogue 1
New Ways to Help Eradicate Poverty● Stakeholder Dialogue 2
Promoting Sustainability via the Financial
Business and CSR
Daiwa Securities Group CSR

Please see the Daiwa Securities Groupwebsite for the Full Edition of the 2010 CSR Report.

Full
EditionInformation Disclosure,
Explanatory Tool

• Breakdown of CSR
initiatives, challenges,
and goals for eachstakeholder group• Report Based on GRI
Guidelines● Daiwa Securities Group CSR● Key Issue 1
Leveraging Financial Capabilities to Contributeto a Sustainable Society● Key Issue 2
Developing Sound Financial and CapitalMarkets for the Next Generation● Building a Rewarding Workplace for
Executives and Employees
Management Report● CSR Issues: Performance and Targets● CSR Management● Corporate Governancehttp://www.daiwa-grp.jp/english/csr/report2010/● Compliance● Information Disclosure
Social Report● Relationship with Customers● Relationship with Shareholders● Relationship with Executives and Employees● Relationship with Society
Environmental Report● Environmental Impact of the Daiwa Securities
Group
Economic Report● Delivering Economic Value to Stakeholders● Third-party Opinion● Third-party Evaluations● CSR Milestone at the Daiwa Securities Group● CSR Report 2010 Questionnaire● GRI Guidelines Content Index● PDF Download

Daiwa Securities GroupCSR REPORT 20102

Daiwa Securities Group CSR Report 2010 Overview
Editorial Policy
The Daiwa Securities Group has been publishing this reportannually since 2002 with the aim of clearly disclosing our CSR
activities, which are intended to support the creation of asustainable society. We also use this opportunity to evaluate
the company’s current status and the challenges it is facing.
For the printed Highlight Edition of the 2010 report, wehave narrowed down the content to focus on areas weparticularly wish to communicate to as many stakeholders as
possible about our ideas and initiatives in aneasy-to-understand format.
The Full Edition of the report, which includes CSR
initiatives, challenges and goals broken down by stakeholder
group, will be available on the Web from September 2010.
Both the highlight and full editions of the report havebeen produced in line with international guidelines regarding
sustainability reports (Global Reporting Initiative; GRI*).

CSR Report 2010 — Highlight Edition (Booklet)

Highlight
EditionCommunication Tool

• Easy-to-read format• Focused on key issues

Contents
Daiwa Securities Group CSR Report 2010
Overview ............................................................... 1
Message from the President and CEO .................... 3
Daiwa Securities Group Mission
and Corporate Principles ........................................ 5
Key Issue 1
Leveraging Financial Capabilities to Contributeto a Sustainable Society ......................................... 7
Stakeholder Dialogue 1
New Ways to Help Eradicate Poverty ................... 11* GRI (Global Reporting Initiative): An organization dedicated to proposing
and promoting common international guidelines for sustainability reports.

Intended ReadershipThis report is intended for Daiwa Securities Group’s
stakeholders, which primarily include customers,
shareholders and investors, executives and employees, aswell as business partners, government agencies, non-profits(NPOs, NGOs), local communities where Daiwa Securities
has offices, educational institutions, and the families ofexecutives and employees.

Major CSR issues,
main message to
stakeholders, etc.

Full Edition (Web)

Scope of Reporting
This report basically covers the principal companies of the
Daiwa Securities Group (see page 26). The report does not,however, include all data from the Group’s principal
companies on items reported; the information is selectedbased on the respective companies’ size and type ofbusiness. Each set of numerical data specifies the scopeof coverage.

Detailed information on various activities
in areas such as management, society,and the environment

Period Covered by Report

Date of Publication
August 2010 (The previous report was published in August
2009; the next report is planned for August 2011).

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

1

Building a Rewarding Workplacefor Executives and Employees ..................... 17
Stakeholder Dialogue 2
Promoting Sustainability via the Financial
Business and CSR ................................................ 21
CSR Issues: Performance and Targets ................... 23
Daiwa Securities Group Profile ............................. 25
Description of the Daiwa Securities
Group’s Businesses .............................................. 26

Highlight Edition(Booklet)Scope of Report

Fiscal 2009 (April 1, 2009 to March 31, 2010). The report
also includes information on events and activities carried out
prior to fiscal 2008, as well as those scheduled to take place
during fiscal 2010.

Key Issue 2
Developing Sound Financial and Capital Markets
for the Next Generation ....................................... 13

CSR Report 2010 — Full Edition (Web)Contents● Report Overview/Editorial Policy● Daiwa Securities Group Profile● Message from the President and CEO● Stakeholder Dialogue 1
New Ways to Help Eradicate Poverty● Stakeholder Dialogue 2
Promoting Sustainability via the Financial
Business and CSR
Daiwa Securities Group CSR

Please see the Daiwa Securities Groupwebsite for the Full Edition of the 2010 CSR Report.

Full
EditionInformation Disclosure,
Explanatory Tool

• Breakdown of CSR
initiatives, challenges,
and goals for eachstakeholder group• Report Based on GRI
Guidelines● Daiwa Securities Group CSR● Key Issue 1
Leveraging Financial Capabilities to Contributeto a Sustainable Society● Key Issue 2
Developing Sound Financial and CapitalMarkets for the Next Generation● Building a Rewarding Workplace for
Executives and Employees
Management Report● CSR Issues: Performance and Targets● CSR Management● Corporate Governancehttp://www.daiwa-grp.jp/english/csr/report2010/● Compliance● Information Disclosure
Social Report● Relationship with Customers● Relationship with Shareholders● Relationship with Executives and Employees● Relationship with Society
Environmental Report● Environmental Impact of the Daiwa Securities
Group
Economic Report● Delivering Economic Value to Stakeholders● Third-party Opinion● Third-party Evaluations● CSR Milestone at the Daiwa Securities Group● CSR Report 2010 Questionnaire● GRI Guidelines Content Index● PDF Download

Daiwa Securities GroupCSR REPORT 20102

Message from the President and CEO

President and CEO Shigeharu Suzuki discusses the Daiwa Securities Group’s mission and
key CSR issues and its responsibilities to society
Corporate sustainability depends
on contributions to society

Adding a social perspective to investment

The financial crisis taught us that companies can nolonger function solely to maximize profit. The processof how profit is made is becoming increasingly
important. It is true that a company can not survive
without profit, but profit in itself should not be thebe-all, end-all. People need air and water to live, butthere is much more to life than that.
Every company has an obligation to contribute tosociety through its business, and only those that do sowill remain viable.

The Daiwa Securities Group has been in business formore than a century because our business has always
had social significance. More recently, we haveintroduced products, such as Vaccine Bonds andMicrofinance Bonds, which have direct social benefits.
Offering these products makes us proud to know weare working for society’s betterment.
For our customers, these vehicles offer the same
satisfaction as donating to worthy causes. But they are
investments, not charity, so customers receive financial

Our pursuit ofquality will ensure
continued successreturns as well as social returns. Many people in Japan
would like to do their part to make the world abetter place, so these products fit in perfectly withthat mindset.
In April 2010, we will arrange and place a waterbond to fund water infrastructure and water quality
projects in the Asia-Pacific region.
Known as “Impact Investing,” products like theones I just described offer financial returns to investors
while having a direct impact on social issues such as
poverty and environmental protection. We plan toincrease our commitment in this area and continue
working toward the sustainable developmentof society.

Fostering sound financial and capital markets
through educational and media initiatives
As a financial institution, one of our most importantroles is to pass on sound financial and capital markets
to future generations. In Japanese schools, there arefew classes that teach students basic economics; as aresult, there is also a shortage of teachers prepared toteach such classes. Children are our future, so to getthem interested in learning about the economy,
we need teachers who can make those subjects
engaging. With that in mind, we offer materials forhigh school teachers1 that make it easier for them toteach about the economy. In my mind, pragmaticefforts such as these will help us foster healthyfinancial and capital markets.
In Japan, more and more people are realizing thatthey should not only save for the future, but invest as
well. We understand the need to convey the benefitsof investing to people aged 50 and older, as they holdaround 80% of the individual financial assets in Japan.
To that end, we provide information through a variety
of media, including our television channel, Daiwa
Securities Information TV.2

Improving executive and employee motivation
Since 2007, we have been encouraging our executives
and employees to leave the office before 7:00 p.m.,and I am glad to report that they have taken that toheart. Efficiency has improved dramatically as a result
as people learned to manage their time effectively. We
1 See page 15.
2 Japan’s only TV channel devoted exclusively to investing.

3

have also begun pushing forpeople to take all of their
paid vacation days. Even if
we introduce good schemes
for improving working
conditions, if executives andemployees do not use them,the schemes might as well
not exist, so it was importantto adopt easy-to-use
schemes. We started with
our executives, branchmanagers, and department heads, because if they taketime off, that makes it easier for everyone else tofollow suit. In a recent employee survey, around 80%
of respondents considered Daiwa’s working conditions“appropriate.”
In April 2009, we promoted four female
employees to our executive team from within ourranks. Our efforts to create a workplace with limited
gender barriers over the past few years helped lead tothis moment, I think. Satisfied workers are more loyal
and motivated, so we will remain focused on
maintaining a rewarding work environment.

Quality, not size, to make difference overnext 10-20 years
In January 2010, the Daiwa Securities Group became
the first Japanese securities firm to join the UN Global
Compact.3 The Compact’s Ten Principles are fully
consistent with our own mission, and we have been
operating in the spirit of those principles. As a global
company, we signed on in order to strengthen ourpractices and help spread awareness of the principles.
Although we are a global company, over the next
10-20 years we intend to put quality ahead of size.
We would like Daiwa to be known as a top-notch
company with high-quality products and services
and one whose executives and employees take great
pride in their work. This, I think, is the key to the
Daiwa Securities Group’s sustainable success andfuture growth.

Shigeharu Suzuki
President and CEO,
Daiwa Securities Group Inc.

3 The UN Global Compact was established in 2000 under the UN Secretariat after an initiative launched in 1999 byformer Secretary General Kofi Annan. The membership consists of global corporate leaders who are expected to aligntheir business practices with ten principles in the fields of human rights, labor, environment, and anti-corruption in theirbusiness activities, in partnership with UN agencies, labor, and civil society.

Daiwa Securities GroupCSR REPORT 20104

Message from the President and CEO

President and CEO Shigeharu Suzuki discusses the Daiwa Securities Group’s mission and
key CSR issues and its responsibilities to society
Corporate sustainability depends
on contributions to society

Adding a social perspective to investment

The financial crisis taught us that companies can nolonger function solely to maximize profit. The processof how profit is made is becoming increasingly
important. It is true that a company can not survive
without profit, but profit in itself should not be thebe-all, end-all. People need air and water to live, butthere is much more to life than that.
Every company has an obligation to contribute tosociety through its business, and only those that do sowill remain viable.

The Daiwa Securities Group has been in business formore than a century because our business has always
had social significance. More recently, we haveintroduced products, such as Vaccine Bonds andMicrofinance Bonds, which have direct social benefits.
Offering these products makes us proud to know weare working for society’s betterment.
For our customers, these vehicles offer the same
satisfaction as donating to worthy causes. But they are
investments, not charity, so customers receive financial

Our pursuit ofquality will ensure
continued successreturns as well as social returns. Many people in Japan
would like to do their part to make the world abetter place, so these products fit in perfectly withthat mindset.
In April 2010, we will arrange and place a waterbond to fund water infrastructure and water quality
projects in the Asia-Pacific region.
Known as “Impact Investing,” products like theones I just described offer financial returns to investors
while having a direct impact on social issues such as
poverty and environmental protection. We plan toincrease our commitment in this area and continue
working toward the sustainable developmentof society.

Fostering sound financial and capital markets
through educational and media initiatives
As a financial institution, one of our most importantroles is to pass on sound financial and capital markets
to future generations. In Japanese schools, there arefew classes that teach students basic economics; as aresult, there is also a shortage of teachers prepared toteach such classes. Children are our future, so to getthem interested in learning about the economy,
we need teachers who can make those subjects
engaging. With that in mind, we offer materials forhigh school teachers1 that make it easier for them toteach about the economy. In my mind, pragmaticefforts such as these will help us foster healthyfinancial and capital markets.
In Japan, more and more people are realizing thatthey should not only save for the future, but invest as
well. We understand the need to convey the benefitsof investing to people aged 50 and older, as they holdaround 80% of the individual financial assets in Japan.
To that end, we provide information through a variety
of media, including our television channel, Daiwa
Securities Information TV.2

Improving executive and employee motivation
Since 2007, we have been encouraging our executives
and employees to leave the office before 7:00 p.m.,and I am glad to report that they have taken that toheart. Efficiency has improved dramatically as a result
as people learned to manage their time effectively. We
1 See page 15.
2 Japan’s only TV channel devoted exclusively to investing.

3

have also begun pushing forpeople to take all of their
paid vacation days. Even if
we introduce good schemes
for improving working
conditions, if executives andemployees do not use them,the schemes might as well
not exist, so it was importantto adopt easy-to-use
schemes. We started with
our executives, branchmanagers, and department heads, because if they taketime off, that makes it easier for everyone else tofollow suit. In a recent employee survey, around 80%
of respondents considered Daiwa’s working conditions“appropriate.”
In April 2009, we promoted four female
employees to our executive team from within ourranks. Our efforts to create a workplace with limited
gender barriers over the past few years helped lead tothis moment, I think. Satisfied workers are more loyal
and motivated, so we will remain focused on
maintaining a rewarding work environment.

Quality, not size, to make difference overnext 10-20 years
In January 2010, the Daiwa Securities Group became
the first Japanese securities firm to join the UN Global
Compact.3 The Compact’s Ten Principles are fully
consistent with our own mission, and we have been
operating in the spirit of those principles. As a global
company, we signed on in order to strengthen ourpractices and help spread awareness of the principles.
Although we are a global company, over the next
10-20 years we intend to put quality ahead of size.
We would like Daiwa to be known as a top-notch
company with high-quality products and services
and one whose executives and employees take great
pride in their work. This, I think, is the key to the
Daiwa Securities Group’s sustainable success andfuture growth.

Shigeharu Suzuki
President and CEO,
Daiwa Securities Group Inc.

3 The UN Global Compact was established in 2000 under the UN Secretariat after an initiative launched in 1999 byformer Secretary General Kofi Annan. The membership consists of global corporate leaders who are expected to aligntheir business practices with ten principles in the fields of human rights, labor, environment, and anti-corruption in theirbusiness activities, in partnership with UN agencies, labor, and civil society.

Daiwa Securities GroupCSR REPORT 20104

Daiwa Securities Group Mission
and Corporate Principles
The Daiwa Securities Group’s mission is to contribute to thesustainable development of society and the economy through daily
operations, including wealth management for investors andsupporting corporate clients’ activities with various financial tools.
The strong bond of trust we share with our stakeholders, including
customers, shareholders, employees and society, is essential to theaccomplishment of our mission and sustainable growth.

Daiwa Securities Group Stakeholders

To realize a sustainable society, the Daiwa Securities Group seeks to initiate evenmore effective CSR activities. Based on the requests and opinions we have received
from our stakeholders thus far, we have addressed the following key challenges:

1. Leveraging financial capabilities to contribute toa sustainable society.
2. Developing sound financial and capital markets forthe next generation.
People are the key to addressing these issues. We believe keeping each and every
one of our executives and employees motivated and proud of their work can help us
earn the trust of our stakeholders.
Thus, in addition to tackling these key issues,● Investors● Issuers

We are committed to improving
customer satisfaction by offering
products and services that meet theneeds of individual investors,
institutional investors, and potential
investors who are considering
investing in the future.

For private-sector enterprises, public
corporations, and other entities seeking to raise
funds through equity, debt, or other sources, we
propose optimal solutions from a wide range offinancing options and provide full-scale support,
from planning to execution.

Customers
Investors

Key Issues for Daiwa Securities Groupthe Group strives to create a rewarding workplace inwhich our executives and employees can take pride.
To achieve its corporate principles, the Daiwa Securities Groupanchors its CSR activities in these goals.

Issuers

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

● Business Partners
We maintain fair relationships
with all our business partners
and work together to create asustainable society.

Business
Partners

Shareholders

Daiwa
Securities GroupE● Employees
We are endeavoring to create aworkplace where our employees, who
create added value for all otherstakeholders, are fully motivated andcan find satisfaction in their work andlives. Our employees’ families are also
important stakeholders.

5

We fulfill our tax obligations andoffer policy suggestions to create
a better society.

yees’ Familie s

Employees

p lo

NPOs/
NGOs

Employees
Local
Communities

Building
Customer Trust● Government
Governmentm

Daiwa Securities Group Corporate Principles

Valuing
Human Resources

Society● NPOs/NGOs
We collaborate with NPOs and NGOs in suchfields as financial and economic educationand disaster relief. We reflect social values inour management through active dialogue.

● Local Communities

We stand on the trust of our customers. Prudently putting customer interests first andachieving a high standard of professional competence, we intend to become Japan’s
most appealing securities group at home and abroad.

People are the source of our competence. We highly value creative initiative by theindividual, we cherish the challenging spirit, and we appreciate the capability andcontributions of the individual.

Contributing
to Society

Our mission is to contribute to society and the economy through our daily operation in
the financial and capital markets. We will maintain high standards of ethics andself-discipline and will contribute to the sustainability of society.

Earning
Sound Profits

Our fundamental objective is to enhance shareholder value through sound business
operations. We will offer valuable services to our customers and earn adequate rewards
for distribution to our shareholders.

As members of their local communities,
our branches and overseas offices
promote community-based efforts.

Daiwa Securities GroupCSR REPORT 20106

Daiwa Securities Group Mission
and Corporate Principles
The Daiwa Securities Group’s mission is to contribute to thesustainable development of society and the economy through daily
operations, including wealth management for investors andsupporting corporate clients’ activities with various financial tools.
The strong bond of trust we share with our stakeholders, including
customers, shareholders, employees and society, is essential to theaccomplishment of our mission and sustainable growth.

Daiwa Securities Group Stakeholders

To realize a sustainable society, the Daiwa Securities Group seeks to initiate evenmore effective CSR activities. Based on the requests and opinions we have received
from our stakeholders thus far, we have addressed the following key challenges:

1. Leveraging financial capabilities to contribute toa sustainable society.
2. Developing sound financial and capital markets forthe next generation.
People are the key to addressing these issues. We believe keeping each and every
one of our executives and employees motivated and proud of their work can help us
earn the trust of our stakeholders.
Thus, in addition to tackling these key issues,● Investors● Issuers

We are committed to improving
customer satisfaction by offering
products and services that meet theneeds of individual investors,
institutional investors, and potential
investors who are considering
investing in the future.

For private-sector enterprises, public
corporations, and other entities seeking to raise
funds through equity, debt, or other sources, we
propose optimal solutions from a wide range offinancing options and provide full-scale support,
from planning to execution.

Customers
Investors

Key Issues for Daiwa Securities Groupthe Group strives to create a rewarding workplace inwhich our executives and employees can take pride.
To achieve its corporate principles, the Daiwa Securities Groupanchors its CSR activities in these goals.

Issuers

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

● Business Partners
We maintain fair relationships
with all our business partners
and work together to create asustainable society.

Business
Partners

Shareholders

Daiwa
Securities GroupE● Employees
We are endeavoring to create aworkplace where our employees, who
create added value for all otherstakeholders, are fully motivated andcan find satisfaction in their work andlives. Our employees’ families are also
important stakeholders.

5

We fulfill our tax obligations andoffer policy suggestions to create
a better society.

yees’ Familie s

Employees

p lo

NPOs/
NGOs

Employees
Local
Communities

Building
Customer Trust● Government
Governmentm

Daiwa Securities Group Corporate Principles

Valuing
Human Resources

Society● NPOs/NGOs
We collaborate with NPOs and NGOs in suchfields as financial and economic educationand disaster relief. We reflect social values inour management through active dialogue.

● Local Communities

We stand on the trust of our customers. Prudently putting customer interests first andachieving a high standard of professional competence, we intend to become Japan’s
most appealing securities group at home and abroad.

People are the source of our competence. We highly value creative initiative by theindividual, we cherish the challenging spirit, and we appreciate the capability andcontributions of the individual.

Contributing
to Society

Our mission is to contribute to society and the economy through our daily operation in
the financial and capital markets. We will maintain high standards of ethics andself-discipline and will contribute to the sustainability of society.

Earning
Sound Profits

Our fundamental objective is to enhance shareholder value through sound business
operations. We will offer valuable services to our customers and earn adequate rewards
for distribution to our shareholders.

As members of their local communities,
our branches and overseas offices
promote community-based efforts.

Daiwa Securities GroupCSR REPORT 20106

Key Issue

1

Leveraging
Financial Capabilities
to Contributeto a Sustainable Society
The world we live in is facing a host of pressing issues that threaten its verysustainability, ranging from environmental challenges—most notably climatechange—to the growing gap between rich and poor. In times like these,companies are called upon to work in the greater society’s interest and not
merely pursue profit based on market principles. In that regard, the financial
sector is uniquely positioned to support initiatives for social change. That is
why the Daiwa Securities Group develops and sells Impact Investment*
vehicles. These products offer our investors a clear way to make a difference
and channel funds toward solutions to society’s challenges.
* Investment with social objectives such as poverty reduction and environmental protection that also generates financial returns
for investors.

Impact Investment bonds soldby Daiwa Securities(Mar. 2008-Apr. 2010)

Daiwa Securities’ share of theJapanese market for Impact
Investment bonds
OthersVaccine Bonds

27%

Daiwa

73%

Daiwa Securities group2 : 11%

World CO2L Bonds

Overall Japanese market3 :Microfinance Bonds
Green World Bank Bonds
Water Bonds

Ratio of Impact Investment
bonds to total foreign
currency denominatedbonds1, 2009

Total sold: Approx. ¥260 billion(since March 2008)
Source: Daiwa Securities*Only includes bonds for retail investors (as of end-April 2010)3%

1 Uridashi Gaisai; foreign currency denominated bonds
issued overseas and sold in Japan
2 Ratio of Impact Investment Uridashi Gaisai toforeign currency denominated bonds arranged by
Daiwa Capital Markets Europe Limited and sold by
Daiwa Securities.
3 Estimate by Daiwa Securities based on Capital Eye data.

©BRAC

WEB Please visit our website for more details. http://www.daiwa-grp.jp/english/csr/report2010/kadai1

7

Daiwa Securities GroupCSR REPORT 20108

Key Issue

1

Leveraging
Financial Capabilities
to Contributeto a Sustainable Society
The world we live in is facing a host of pressing issues that threaten its verysustainability, ranging from environmental challenges—most notably climatechange—to the growing gap between rich and poor. In times like these,companies are called upon to work in the greater society’s interest and not
merely pursue profit based on market principles. In that regard, the financial
sector is uniquely positioned to support initiatives for social change. That is
why the Daiwa Securities Group develops and sells Impact Investment*
vehicles. These products offer our investors a clear way to make a difference
and channel funds toward solutions to society’s challenges.
* Investment with social objectives such as poverty reduction and environmental protection that also generates financial returns
for investors.

Impact Investment bonds soldby Daiwa Securities(Mar. 2008-Apr. 2010)

Daiwa Securities’ share of theJapanese market for Impact
Investment bonds
OthersVaccine Bonds

27%

Daiwa

73%

Daiwa Securities group2 : 11%

World CO2L Bonds

Overall Japanese market3 :Microfinance Bonds
Green World Bank Bonds
Water Bonds

Ratio of Impact Investment
bonds to total foreign
currency denominatedbonds1, 2009

Total sold: Approx. ¥260 billion(since March 2008)
Source: Daiwa Securities*Only includes bonds for retail investors (as of end-April 2010)3%

1 Uridashi Gaisai; foreign currency denominated bonds
issued overseas and sold in Japan
2 Ratio of Impact Investment Uridashi Gaisai toforeign currency denominated bonds arranged by
Daiwa Capital Markets Europe Limited and sold by
Daiwa Securities.
3 Estimate by Daiwa Securities based on Capital Eye data.

©BRAC

WEB Please visit our website for more details. http://www.daiwa-grp.jp/english/csr/report2010/kadai1

7

Daiwa Securities GroupCSR REPORT 20108

Key issue

Microfinance Bonds:
Group-wide Effort to Help Reduce Poverty

According to the World Bank, 1.4 billion people, orroughly one-fourth of the world’s population, live on
less than $1.25 per day.*
Inspired to try to make a difference through ourfinancial business activities, in November 2009 webegan underwriting and selling Microfinance Bonds, a
new type of product that utilizes bond investment tohelp reduce poverty.

©BRAC

Microfinance refers to small-scale financial
services offered to low-income people, mostly indeveloping nations. By offering unsecured loans(known as “microcredit”) and other basic offerings to
people previously considered too poor for financial
services, microfinance aims to lift people out ofpoverty and help them become economically
self-sufficient.
Microfinance Bonds are an attempt to generate
investment to help fund microfinance initiatives. Under
this scheme, the Daiwa Securities Group underwrites
and sells bonds issued by the International FinanceCorporation (IFC, member of the World Bank group).
The IFC, in turn, uses the proceeds raised from bondinvestors to fund its microfinance operations.

Group-wide effort to create a truly
innovative productSatoru Yamamoto, Deputy General Manager, Product
Planning Department, Daiwa Securities, came up with
the idea for this product. While studying in the US, helearned about a venture capital firm that used theInternet to raise funds for microfinance.
Mr. Yamamoto recalls, “I had heard about
microfinance before but assumed it had nothing to dowith the mainstream financial business. Still, I figured
if one company can turn microfinance into a business,there might be some potential for Daiwa to get
involved as well.”After returning to Japan, Mr. Yamamotoproposed offering bonds to raise money for
microfinance. His colleagues in the Product Planning
Department loved the idea. The General Manager of
his department, Ms. Sachiko Hanaoka, gave the green
light to the project. “Socially responsible investments
have attracted serious attention lately,” she said, “sothis product should definitely interest investors.” With
management’s blessing, Mr. Yamamoto’s idea got
started on the road to becoming a final product.
Daiwa Securities teamed up with another Daiwa
Securities Group company to make the idea a reality.
One Daiwa Securities Capital Markets (Daiwa CM)
employee, Jun Yamamuro, Deputy General Manager,
Capital Markets Department, began searching forcandidates to issue the bonds and eventually
approached the International Finance Corporation(IFC), which has a proven track record of approving
loans to microfinance institutions. However,* Note: 2005 figure from Martin Ravallion and Shahoua Chen World Bank report “The developing world is poorer than we thought, but no less successful
in the fight against poverty.”

9

Leveraging Financial Capabilities toContribute to a Sustainable Society

From right:
Satoru Yamamoto, Deputy General Manager, and Sachiko Hanaoka, General Manager,
Daiwa Securities Co. Ltd.
Toru Iwai, Deputy General Manager, Daiwa Securities Group Inc.
Yoshihiro Nakazawa, Associate, and Jun Yamamuro, Deputy General Manager,
Daiwa Securities Capital Markets Co. Ltd.
(Position names are as of end of March 2010)

Poverty alleviation is one of modern society’s biggest challenges.
The Microfinance Bonds we have begun to offer to our clients are ouranswer to the question: “Can we help to solve this problem by making a
new flow of money available that contributes to the challenge?”

Contributing to poverty reduction
through bond investment

1

negotiations did not go smoothly at first—the IFC had
never heard of such a bond before.
“We were persistent and patient,” recounts Mr.
Yamamuro, “and ultimately the IFC agreed to workwith us because they could tell how passionate wewere about making this product happen.”

Strong demand for innovative
products that make a difference
The decision to issue the bonds finally came in
September 2009. The announcement sent shockwaves
through the industry as it was the first such product inJapan to alleviate poverty through investment.
Naturally, the move was a big issue for employeeson the front lines, as well. Jun Hagiwara, Manager,
Asset Consultant Department, Sapporo Branch,Daiwa Securities, started reading books on microfinance and making proposals to his clients. He
explains, “I could sense strong interest in productsthat made a difference, and this one seemed like it
could fill that need. When explaining the product toclients, I focused most on details of how their investment would be used. Since this is a bond investment,
and not charity, theproducts also offer
coupon payments. I think
this fact gave clients thepeace of mind that theirmoney would be invested
in reputable instruments.
After buying the bonds,
many clients have also
followed the issuers’
progress reports regularly
to find out how theirJun Hagiwara, Manager, Asset
Consultant Department, Sapporo
money is being used.”
Branch, Daiwa Securities Co. Ltd.
For some time, Mr.
(Department and position names are
as of end of March 2010)
Hagiwara had been telling

potential buyers of socially responsible investments
about Daiwa’s CSR priorities, explaining that leveraging
financial capabilities to contribute to a sustainable
society. “It’s heartening to know that my work is
helping make the world a better place,” he says.
He goes on: “These products seem to have also
expanded our client base, because people who had
never considered buying foreign bonds before aretaking an interest in products that contribute to asustainable society. In the future, I think we’ll see more
people buying these bonds for their social objectives.”
Daiwa takes its responsibility toward society
seriously and will continue searching for innovative
ways to use finance as a means of resolving various
social issues.

A Word from a Stakeholder
Making a difference in the world
requires envisioning a richer societythat does more than merely meet
people’s economic needs

Kumi Fujisawa
Cofounder and Vice President of thethink tank, SophiaBank

Whenever I travel to poorer areas of the world, I am
reminded of how hard the Japanese have worked to
become wealthy. Thanks to such efforts, we now can enjoy
economically affluent and materially satisfying lives. I am
grateful to know our achievements are now being admiredand respected by others. And now they are watchingcarefully to see what our future vision is, as a nation that isalready economically and materially prosperous.
Issuing bonds that offer individuals opportunities toparticipate in contributing to a sustainable world is an ideal
example of how people and corporations can work
together toward further global development.

WEB Social Contribution Through Investment: Impact Investment (in Japanese only)

http://www.daiwa.jp/impact/index.html

Daiwa Securities GroupCSR REPORT 2010 10Key issue

Microfinance Bonds:
Group-wide Effort to Help Reduce Poverty

According to the World Bank, 1.4 billion people, orroughly one-fourth of the world’s population, live on
less than $1.25 per day.*
Inspired to try to make a difference through ourfinancial business activities, in November 2009 webegan underwriting and selling Microfinance Bonds, a
new type of product that utilizes bond investment tohelp reduce poverty.

©BRAC

Microfinance refers to small-scale financial
services offered to low-income people, mostly indeveloping nations. By offering unsecured loans(known as “microcredit”) and other basic offerings to
people previously considered too poor for financial
services, microfinance aims to lift people out ofpoverty and help them become economically
self-sufficient.
Microfinance Bonds are an attempt to generate
investment to help fund microfinance initiatives. Under
this scheme, the Daiwa Securities Group underwrites
and sells bonds issued by the International FinanceCorporation (IFC, member of the World Bank group).
The IFC, in turn, uses the proceeds raised from bondinvestors to fund its microfinance operations.

Group-wide effort to create a truly
innovative product
Satoshi Yamamoto, Deputy General Manager, Product
Planning Department, Daiwa Securities, came up with
the idea for this product. While studying in the US, helearned about a venture capital firm that used theInternet to raise funds for microfinance.
Mr. Yamamoto recalls, “I had heard about
microfinance before but assumed it had nothing to dowith the mainstream financial business. Still, I figured
if one company can turn microfinance into a business,there might be some potential for Daiwa to get
involved as well.”After returning to Japan, Mr. Yamamotoproposed offering bonds to raise money for
microfinance. His colleagues in the Product Planning
Department loved the idea. The General Manager of
his department, Ms. Sachiko Hanaoka, gave the green
light to the project. “Socially responsible investments
have attracted serious attention lately,” she said, “sothis product should definitely interest investors.” With
management’s blessing, Mr. Yamamoto’s idea got
started on the road to becoming a final product.
Daiwa Securities teamed up with another Daiwa
Securities Group company to make the idea a reality.
One Daiwa Securities Capital Markets (Daiwa CM)
employee, Jun Yamamuro, Deputy General Manager,
Capital Markets Department, began searching forcandidates to issue the bonds and eventually
approached the International Finance Corporation(IFC), which has a proven track record of approving
loans to microfinance institutions. However,* Note: 2005 figure from Martin Ravallion and Shahoua Chen World Bank report “The developing world is poorer than we thought, but no less successful
in the fight against poverty.”

9

Leveraging Financial Capabilities toContribute to a Sustainable Society

From right:
Satoru Yamamoto, Deputy General Manager, and Sachiko Hanaoka, General Manager,
Daiwa Securities Co. Ltd.
Toru Iwai, Deputy General Manager, Daiwa Securities Group Inc.
Yoshihiro Nakazawa, Associate, and Jun Yamamuro, Deputy General Manager,
Daiwa Securities Capital Markets Co. Ltd.
(Position names are as of end of March 2010)

Poverty alleviation is one of modern society’s biggest challenges.
The Microfinance Bonds we have begun to offer to our clients are ouranswer to the question: “Can we help to solve this problem by making a
new flow of money available that contributes to the challenge?”

Contributing to poverty reduction
through bond investment

1

negotiations did not go smoothly at first—the IFC had
never heard of such a bond before.
“We were persistent and patient,” recounts Mr.
Yamamuro, “and ultimately the IFC agreed to workwith us because they could tell how passionate wewere about making this product happen.”

Strong demand for innovative
products that make a difference
The decision to issue the bonds finally came in
September 2009. The announcement sent shockwaves
through the industry as it was the first such product inJapan to alleviate poverty through investment.
Naturally, the move was a big issue for employeeson the front lines, as well. Jun Hagiwara, Manager,
Asset Consultant Department, Sapporo Branch,Daiwa Securities, started reading books on microfinance and making proposals to his clients. He
explains, “I could sense strong interest in productsthat made a difference, and this one seemed like it
could fill that need. When explaining the product toclients, I focused most on details of how their investment would be used. Since this is a bond investment,
and not charity, theproducts also offer
coupon payments. I think
this fact gave clients thepeace of mind that theirmoney would be invested
in reputable instruments.
After buying the bonds,
many clients have also
followed the issuers’
progress reports regularly
to find out how theirJun Hagiwara, Manager, Asset
Consultant Department, Sapporo
money is being used.”
Branch, Daiwa Securities Co. Ltd.
For some time, Mr.
(Department and position names are
as of end of March 2010)
Hagiwara had been telling

potential buyers of socially responsible investments
about Daiwa’s CSR priorities, explaining that leveraging
financial capabilities to contribute to a sustainable
society. “It’s heartening to know that my work is
helping make the world a better place,” he says.
He goes on: “These products seem to have also
expanded our client base, because people who had
never considered buying foreign bonds before aretaking an interest in products that contribute to asustainable society. In the future, I think we’ll see more
people buying these bonds for their social objectives.”
Daiwa takes its responsibility toward society
seriously and will continue searching for innovative
ways to use finance as a means of resolving various
social issues.

A Word from a Stakeholder
Making a difference in the world
requires envisioning a richer societythat does more than merely meet
people’s economic needs

Kumi Fujisawa
Cofounder and Vice President of thethink tank, SophiaBank

Whenever I travel to poorer areas of the world, I am
reminded of how hard the Japanese have worked to
become wealthy. Thanks to such efforts, we now can enjoy
economically affluent and materially satisfying lives. I am
grateful to know our achievements are now being admiredand respected by others. And now they are watchingcarefully to see what our future vision is, as a nation that isalready economically and materially prosperous.
Issuing bonds that offer individuals opportunities toparticipate in contributing to a sustainable world is an ideal
example of how people and corporations can work
together toward further global development.

WEB Social Contribution Through Investment: Impact Investment (in Japanese only)

http://www.daiwa.jp/impact/index.html

Daiwa Securities GroupCSR REPORT 2010 10

We asked Dr. Fazle Hasan Abed,chairperson of BRAC, to lead aforum in Japan aimed atincreasing awareness of
microfinance on 27 October
2009. BRAC, the world’s largest
NGO, has been working toeradicate poverty throughout
Asia and Africa. Before theforum, President and CEO
Shigeharu Suzuki and Dr. Abedtalked about microfinanceprojects.

reduce the number of those in poverty, said to bearound 4 billion.
Abed: I believe it’s especially meaningful that you arehelping to address social problems such as poverty
through your mainstream business. I hope that yourproject helps to raise awareness of microfinanceamong Japanese people.
Suzuki: Our firm is committed to the sustainable
development of society and the economy through ourparticipation in the capital and financial markets. We
are glad to be serving as a bridge between microfinance institutions and Japanese investors. Awarenessof microfinance in Japan is still low, so we hope tokeep our investors informed of such initiatives throughprograms such as the Daiwa Microfinance Forum 2009.

Facilitator:

Kiyoshi Kasahara
Vice President of Rikkyo University

The social significance ofMicrofinance Bonds

Stakeholder Dialogue 1

New Ways to Help
Eradicate Poverty
Working to raise awarenessof microfinance
Abed: Since the 1970s, BRAC has worked to eradicate
poverty and empower the poor in Bangladesh as wellas throughout Asia and Africa. Around 20% of our
US$700 million budget for 2009 came from donations, but most of our revenues were generated by our
various activities and projects.
Of such projects, our core activities include a
microfinance initiative which provides small-scale loans
without requiring collateral.
Charity alone is not enough to encourage aperson suffering from poverty to take pride and leadan independent life. However, if that individual, say,borrows some money, buys a sewing machine andfabric, and earns enough to live on from what he or

Dr. Fazle Hasan Abed
Founder and Chairperson, BRAC
and honorary doctorate from Rikkyo University

Shigeharu Suzuki
President and CEO, Daiwa Securities Group Inc.

she makes, it then becomes possible for that person to
support his or her family.
Suzuki: The whole idea of extending loans without
asking for collateral is unheard of in the conventionalbanking industry. However, it’s astonishing that therepayment rate on these loans is extremely high. I thinkmicrofinance is a wonderful way to help empower
those suffering in poverty.
Our Microfinance Bond project was our firstattempt to raise funds in Japan for these microfinanceactivities.
We hope that such work on our part helps support
microfinance projects targeting those with low incomesor in poverty, who may lack access to conventionalbanking services. We are glad to be part of efforts to

Abed: In my opinion, it’s important to measure theperformance of microfinance programs like ours by
how much people’s lives have improved, and not justby how many cases we’ve handled or the amounts
loaned out.
With the launch of our US$75 million microfinancefund in January 2009 in Tanzania, Uganda, andsouthern Sudan, we have brought microfinance toregions that previously had no access to such services.
Meanwhile, BRAC Bank, our commercial banking
operations in Bangladesh provide unsecured loans of$15,000-20,000 to SMEs*. Such loans have given rise toa number of entrepreneurs,
resulting in job creation,and consequently boosting
the country’s economy. We
think it is a wise choice tosupport such entrepreneurs,
who are helping to create
new employment, whilelarge corporations are
cutting staff.
Suzuki: In that respect, I
am proud of the importantsocial role our Microfinance
Bond project has played insuch efforts. We consider
the bonds to be attractive
financial products, as they
offer a financial return on

Dr. Fazle Hasan Abed
Born in Bangladesh in 1936. Educated at the
University of Dhaka and University ofGlasgow. Served as finance director for Shell
Oil in Chittagong and made efforts to bringan early end to Bangladesh’s war withPakistan while based in London. Following
his native country’s independence, Mr. Abedestablished BRAC in northern Bangladesh in
1973, hoping to address the deep poverty
afflicting the country. Over the last three
decades, BRAC has worked to eradicate
poverty throughout Asia and Africa.

investment as well as a social return. On the sales front,
these bonds offer our staff an opportunity to explain toclients the social significance of these products and therationale behind microfinance. It is an honor for oursales staff to be part of these meaningful efforts.

Helping to address social problems
through our mainstream businessSuzuki: The Daiwa Securities Group has been in
existence for over 100 years. Companies remain inexistence only because society at large believes they arecontributing positively in some way. It’s important topursue profit while keeping in mind the public interest,and not get carried away with just making money.
Abed: I completely agree. To see what happens when
profit is placed above all other motives, one has only totake a look at the recent financial crisis that has swept
over the developed countries, starting in America. I
think we should learn from this example and reflect on
ways we humans can realize a sustainable existence on
this planet.
Suzuki: Indeed. I believe a company is a public entityand part of the broader social infrastructure. A
company’s business model is unsustainable if it fails tokeep in mind the interests of the greater society. In thepast, we’ve underwritten financial products, like our
Vaccine Bonds, that help address social problems.
These products allow us to do our part to help society
through our main line of work and enable investors toparticipate in such efforts through their investments.
At Daiwa, we are looking to pave the way for a new
era in which products we actively promote allow
financial institutions like ours to fulfill our role in the
public sphere.
* SME: Small and medium-sized enterprises

11

Daiwa Securities GroupCSR REPORT 2010 12

We asked Dr. Fazle Hasan Abed,chairperson of BRAC, to lead aforum in Japan aimed atincreasing awareness of
microfinance on 27 October
2009. BRAC, the world’s largest
NGO, has been working toeradicate poverty throughout
Asia and Africa. Before theforum, President and CEO
Shigeharu Suzuki and Dr. Abedtalked about microfinanceprojects.

reduce the number of those in poverty, said to bearound 4 billion.
Abed: I believe it’s especially meaningful that you arehelping to address social problems such as poverty
through your mainstream business. I hope that yourproject helps to raise awareness of microfinanceamong Japanese people.
Suzuki: Our firm is committed to the sustainable
development of society and the economy through ourparticipation in the capital and financial markets. We
are glad to be serving as a bridge between microfinance institutions and Japanese investors. Awarenessof microfinance in Japan is still low, so we hope tokeep our investors informed of such initiatives throughprograms such as the Daiwa Microfinance Forum 2009.

Facilitator:

Kiyoshi Kasahara
Vice President of Rikkyo University

The social significance ofMicrofinance Bonds

Stakeholder Dialogue 1

New Ways to Help
Eradicate Poverty
Working to raise awarenessof microfinance
Abed: Since the 1970s, BRAC has worked to eradicate
poverty and empower the poor in Bangladesh as wellas throughout Asia and Africa. Around 20% of our
US$700 million budget for 2009 came from donations, but most of our revenues were generated by our
various activities and projects.
Of such projects, our core activities include a
microfinance initiative which provides small-scale loans
without requiring collateral.
Charity alone is not enough to encourage aperson suffering from poverty to take pride and leadan independent life. However, if that individual, say,borrows some money, buys a sewing machine andfabric, and earns enough to live on from what he or

Dr. Fazle Hasan Abed
Founder and Chairperson, BRAC
and honorary doctorate from Rikkyo University

Shigeharu Suzuki
President and CEO, Daiwa Securities Group Inc.

she makes, it then becomes possible for that person to
support his or her family.
Suzuki: The whole idea of extending loans without
asking for collateral is unheard of in the conventionalbanking industry. However, it’s astonishing that therepayment rate on these loans is extremely high. I thinkmicrofinance is a wonderful way to help empower
those suffering in poverty.
Our Microfinance Bond project was our firstattempt to raise funds in Japan for these microfinanceactivities.
We hope that such work on our part helps support
microfinance projects targeting those with low incomesor in poverty, who may lack access to conventionalbanking services. We are glad to be part of efforts to

Abed: In my opinion, it’s important to measure theperformance of microfinance programs like ours by
how much people’s lives have improved, and not justby how many cases we’ve handled or the amounts
loaned out.
With the launch of our US$75 million microfinancefund in January 2009 in Tanzania, Uganda, andsouthern Sudan, we have brought microfinance toregions that previously had no access to such services.
Meanwhile, BRAC Bank, our commercial banking
operations in Bangladesh provide unsecured loans of$15,000-20,000 to SMEs*. Such loans have given rise toa number of entrepreneurs,
resulting in job creation,and consequently boosting
the country’s economy. We
think it is a wise choice tosupport such entrepreneurs,
who are helping to create
new employment, whilelarge corporations are
cutting staff.
Suzuki: In that respect, I
am proud of the importantsocial role our Microfinance
Bond project has played insuch efforts. We consider
the bonds to be attractive
financial products, as they
offer a financial return on

Dr. Fazle Hasan Abed
Born in Bangladesh in 1936. Educated at the
University of Dhaka and University ofGlasgow. Served as finance director for Shell
Oil in Chittagong and made efforts to bringan early end to Bangladesh’s war withPakistan while based in London. Following
his native country’s independence, Mr. Abedestablished BRAC in northern Bangladesh in
1973, hoping to address the deep poverty
afflicting the country. Over the last three
decades, BRAC has worked to eradicate
poverty throughout Asia and Africa.

investment as well as a social return. On the sales front,
these bonds offer our staff an opportunity to explain toclients the social significance of these products and therationale behind microfinance. It is an honor for oursales staff to be part of these meaningful efforts.

Helping to address social problems
through our mainstream businessSuzuki: The Daiwa Securities Group has been in
existence for over 100 years. Companies remain inexistence only because society at large believes they arecontributing positively in some way. It’s important topursue profit while keeping in mind the public interest,and not get carried away with just making money.
Abed: I completely agree. To see what happens when
profit is placed above all other motives, one has only totake a look at the recent financial crisis that has swept
over the developed countries, starting in America. I
think we should learn from this example and reflect on
ways we humans can realize a sustainable existence on
this planet.
Suzuki: Indeed. I believe a company is a public entityand part of the broader social infrastructure. A
company’s business model is unsustainable if it fails tokeep in mind the interests of the greater society. In thepast, we’ve underwritten financial products, like our
Vaccine Bonds, that help address social problems.
These products allow us to do our part to help society
through our main line of work and enable investors toparticipate in such efforts through their investments.
At Daiwa, we are looking to pave the way for a new
era in which products we actively promote allow
financial institutions like ours to fulfill our role in the
public sphere.
* SME: Small and medium-sized enterprises

11

Daiwa Securities GroupCSR REPORT 2010 12

Key Issue

Developing Sound Financial
and Capital Markets for
the Next Generation

2

Financial and capital markets are indispensable parts of the social infrastructure. At the
Daiwa Securities Group, we consider the ongoing development of fair and transparent
markets to be the core social mission of financial institutions.
To foster a strong sense of professional ethics, we require that executives andemployees comply fully with laws and internal regulations, and have set a goal of all
Daiwa Securities employees gaining specialist financial planner qualifications by the endof FY2010. We run Daiwa Securities Information TV,* Japan’s only channel dedicated tofinancial markets and the economy. With the goal of providing high-quality information
on financial and capital markets to a wide audience, it broadcasts not only analyst
research, but also a wide variety of business and economic news pertinent to daily life.
At the Daiwa Securities Group, we recognize that improving the level of financial
literacy, especially among young people, is crucial in order to develop sound financial
markets. Toward this end, we continue to participate in corporate training programs,
build academic-industrial alliances, and work in cooperation with Junior Achievement(JA), the world’s largest non-profit organization promoting economic educational
activities for youth.
* Daiwa Securities Information TV offers economic and financial programs centered on market news. It airs on Sky PerfecTV channel 766 and some cable TV channels
from 7 a.m. to 2 a.m. For more information (in Japanese only), please see http://daiwa766.jp/.

Economic and Financial Education Initiatives
Activity

Description

StartedParticipants

Support for the Student Company Program (SCP)*

JA’s student management program
Gives high school students hands-on experience simulating corporate management

Sep. 2003

151

Support for Finance Park*

JA’s student personal finance planning workshop
Lets students practice creating budgets and study how society and the economy works

Jun. 2005

18,721

Sponsorship of JA’s mainstay Global Leadership Forumfor elementary, middle, and high school teachers*

Offers multi-faceted lectures, panel discussions, and case studies on recent
developments in the global economy

2003-2007

2,159

Support for founding and operation of Japan Council
for Economic Education (JCEE)

Economic education for teachers
Text: Life is a Series of Choices

Jan. 2009—

Daiwa-JFS Sustainability College

Daiwa Eco Fund’s endowed lectures
Promotes awareness and practical action in the next generation

Oct. 2006

1,182*Programs of Junior Achievement, the world’s largest non-profit organization promoting economic educational activities for youth
Ritsumeikan Senior High School students participate in Student Company ProgramWEB

13

Please visit our website for more details. http://www.daiwa-grp.jp/english/csr/report2010/kadai2

Daiwa Securities GroupCSR REPORT 2010 14

Key Issue

Developing Sound Financial
and Capital Markets for
the Next Generation

2

Financial and capital markets are indispensable parts of the social infrastructure. At the
Daiwa Securities Group, we consider the ongoing development of fair and transparent
markets to be the core social mission of financial institutions.
To foster a strong sense of professional ethics, we require that executives andemployees comply fully with laws and internal regulations, and have set a goal of all
Daiwa Securities employees gaining specialist financial planner qualifications by the endof FY2010. We run Daiwa Securities Information TV,* Japan’s only channel dedicated tofinancial markets and the economy. With the goal of providing high-quality information
on financial and capital markets to a wide audience, it broadcasts not only analyst
research, but also a wide variety of business and economic news pertinent to daily life.
At the Daiwa Securities Group, we recognize that improving the level of financial
literacy, especially among young people, is crucial in order to develop sound financial
markets. Toward this end, we continue to participate in corporate training programs,
build academic-industrial alliances, and work in cooperation with Junior Achievement(JA), the world’s largest non-profit organization promoting economic educational
activities for youth.
* Daiwa Securities Information TV offers economic and financial programs centered on market news. It airs on Sky PerfecTV channel 766 and some cable TV channels
from 7 a.m. to 2 a.m. For more information (in Japanese only), please see http://daiwa766.jp/.

Economic and Financial Education Initiatives
Activity

Description

StartedParticipants

Support for the Student Company Program (SCP)*

JA’s student management program
Gives high school students hands-on experience simulating corporate management

Sep. 2003

151

Support for Finance Park*

JA’s student personal finance planning workshop
Lets students practice creating budgets and study how society and the economy works

Jun. 2005

18,721

Sponsorship of JA’s mainstay Global Leadership Forumfor elementary, middle, and high school teachers*

Offers multi-faceted lectures, panel discussions, and case studies on recent
developments in the global economy

2003-2007

2,159

Support for founding and operation of Japan Council
for Economic Education (JCEE)

Economic education for teachers
Text: Life is a Series of Choices

Jan. 2009—

Daiwa-JFS Sustainability College

Daiwa Eco Fund’s endowed lectures
Promotes awareness and practical action in the next generation

Oct. 2006

1,182*Programs of Junior Achievement, the world’s largest non-profit organization promoting economic educational activities for youth
Ritsumeikan Senior High School students participate in Student Company ProgramWEB

13

Please visit our website for more details. http://www.daiwa-grp.jp/english/csr/report2010/kadai2

Daiwa Securities GroupCSR REPORT 2010 14

Key issue

Raising the Next Generation with
Economic and Financial Education
To learn about the economy is to understand how society works and how
to participate in it. It teaches people they can change society through the
responsible use of their own money, encouraging them to build rich lives
and communities with the right financial decisions. Such a mindset canalso help foster sound financial and capital markets.

Teaching students that they can change
the world by making solid choices“Economic education is not about how to makemoney. It’s about teaching students they cantransform society by making careful decisions about
how to use their money as they shift it from savings toinvestments. Imparting this lesson is the goal of oureconomic and financial education efforts.” So says
Toru Iwai, Deputy General Manager, CSR Promotion
Department. “Educating as many young people aspossible about Socially Responsible Investments (SRIs)
can help lead to the development of sound financial
and capital markets.”
The Daiwa Securities Group has worked with theeconomic education organization Junior Achievement(JA) Japan on a variety of projects. “However,” says
Iwai, “this experience has made us more aware of theneed for teachers also to become more deeply
involved in economic education so that more students
can be reached.”
To encourage teachers to get more involved ineconomic education initiatives, JA joined hands with
the US Council on Economic Education (CEE) to foundthe Japan Council on Economic Education (JCEE). The
Daiwa Securities Group is the main sponsor of the
JCEE and cooperates with seven other leading firms insupporting its activities. The JCEE has created a text
entitled Life is a Series of Choices, which were basedon original CEE texts and prepared specifically for a
Japanese audience. Daiwa is working with high school
teachers and corporate volunteers on planning andediting the materials in order to make an interactive
approach to the lessons.

15

Encouraging students
to tackle problems
and find their
The JCEE’s real life-oriented
own solutions by
economy and finance text,
Life is a Series of Choices
taking action
The objective of Life is a Series of Choices is to deepen
students’ understanding of society and the economy
through interactive, hands-on lessons emphasizing
intellectual challenges and the free exchange of ideas.
Iwai explains that “so far, many schools have beenusing translated US high school economics texts, but
this one will be different, because it really reflects thesituation in Japan.
Creating the materials involved mock lessons andfeedback from teachers and students. The project
entailed heavy revision work lasting more than one
year, and the finished text will be distributed free ofcharge from June 2010 to any teacher in the country
expressing interest. There will also be supplementary
courses for teachers on how to use it.
The head of the editorial board, Hideho Motosugi,a teacher at Waseda University Senior High School,says, “Life is a Series of Choices is not supposed to be
an ordinary textbook. Rather than deal with issues thathave already been solved, it encourages students totackle problems and find their own solutions, because
in real life there are no scripted answers.”

Enriching lives by creating solid choices
Lessons begin with teachers posing questions.
Students think of possible solutions, choose fromamong these options, and then test their theories inclass-wide discussion. Students also consider the
benefits, as well as opportunity costs, of the options

Hideho Motosugi, teacher
at Waseda University
Senior High School

they decided against through role playing. “Life is aseries of decisions. What will be the implications ofyour choices for society and for you? We would likestudents to see that learning how to make choices canhelp them lead richer lives,” says Motosugi.
“Education today focuses on cramming students’heads with facts. What we’re trying to teach them is
how to think, so that they can come up with inspired
ideas on their own. Expanding their perspective andtaking on new challenges will help them grow as
citizens, which will in turn enrich society.”2

Developing Sound Financial and Capital Markets
for the Next Generation

all stages of the process. With each participant
bringing unique strengths to the table, the project has
the potential for enormous success. This is because
stakeholders in the project’s outcome are working
closely together, aiming to build a brighter future byenhancing students’ critical thinking skills througheconomic education.
Mr. Motosugi adds: “We hope to touch the livesof as many students as we can by spreading thematerials to every corner of the country. Building
awareness of the text first is critical, so getting theword out to a large audience is our mostpressing issue.”Even though the text is finally complete, the restof the work has only just begun. The Daiwa Securities
Group will continue to actively lend its support.

Economic education that produces
responsible citizens“The economy is intricately linked with everyday life.
Before students graduate, we would like them toknow that they can help chart the course of society
and that their choices can change the world,” says
Iwai. “We are not teaching students to put profit
above all else. Rather, we are trying to show them how
the pursuit of profit impacts society. Our aim is forstudents to see that economic activity and investments
should always take this into consideration. We also
hope that these lessons will help them grow into
responsible citizens who can act on their own accord
and who understand how their actions affect theirsurroundings. These are the two main goals of Daiwa’s
economic and financial education initiatives.”

Text expresses the hopes of all thoseconcerned about a brighter future
for children“I’m very happy to be involved in this project,” says
Mr. Motosugi. “The JCEE is an organization that brings
together people who are thinking about the future ofJapanese society and our children. Daiwa’s cooperation
is invaluable given its position in the real businessworld. Its support is tremendously encouraging, and I
am grateful.”
From planning to execution, the JCEE has solicitedthe direct participation of businesses and educators at

Toru Iwai, Deputy General Manager, CSR Promotion Department,
Daiwa Securities Group Inc. (second from left)

A Word from a Stakeholder
Looking forward to Daiwa’s
continued contributions
as a partner in economic
education

Takeo Shiina
Chairman of the Board,
Junior Achievement Japan andJapan Council on Economic Education

From the start, the Daiwa Securities Group has taken an
active role in our activities. In addition to financial support,
President Suzuki and the management team have actively
dispatched employees to schools and program sites. Thanks
in part to these initiatives, we have received many gratefulcomments from students who say they now feel they havethe skills with which to plot out their lives.
On behalf of the JA and the JCEE, which focus on
furthering economic education for students and teachers,
respectively, I look forward to the continued support of the
Daiwa Securities Group, a key partner in promoting
economic education.
To inquire about Life is a Series of Choices, please contact JCEE
through Junior Achievement Japan. Tel: +81-3-5414-1175.

Daiwa Securities GroupCSR REPORT 2010 16

Key issue

Raising the Next Generation with
Economic and Financial Education
To learn about the economy is to understand how society works and how
to participate in it. It teaches people they can change society through the
responsible use of their own money, encouraging them to build rich lives
and communities with the right financial decisions. Such a mindset canalso help foster sound financial and capital markets.

Teaching students that they can change
the world by making solid choices“Economic education is not about how to makemoney. It’s about teaching students they cantransform society by making careful decisions about
how to use their money as they shift it from savings toinvestments. Imparting this lesson is the goal of oureconomic and financial education efforts.” So says
Toru Iwai, Deputy General Manager, CSR Promotion
Department. “Educating as many young people aspossible about Socially Responsible Investments (SRIs)
can help lead to the development of sound financial
and capital markets.”
The Daiwa Securities Group has worked with theeconomic education organization Junior Achievement(JA) Japan on a variety of projects. “However,” says
Iwai, “this experience has made us more aware of theneed for teachers also to become more deeply
involved in economic education so that more students
can be reached.”
To encourage teachers to get more involved ineconomic education initiatives, JA joined hands with
the US Council on Economic Education (CEE) to foundthe Japan Council on Economic Education (JCEE). The
Daiwa Securities Group is the main sponsor of the
JCEE and cooperates with seven other leading firms insupporting its activities. The JCEE has created a text
entitled Life is a Series of Choices, which were basedon original CEE texts and prepared specifically for a
Japanese audience. Daiwa is working with high school
teachers and corporate volunteers on planning andediting the materials in order to make an interactive
approach to the lessons.

15

Encouraging students
to tackle problems
and find their
The JCEE’s real life-oriented
own solutions by
economy and finance text,
Life is a Series of Choices
taking action
The objective of Life is a Series of Choices is to deepen
students’ understanding of society and the economy
through interactive, hands-on lessons emphasizing
intellectual challenges and the free exchange of ideas.
Iwai explains that “so far, many schools have beenusing translated US high school economics texts, but
this one will be different, because it really reflects thesituation in Japan.
Creating the materials involved mock lessons andfeedback from teachers and students. The project
entailed heavy revision work lasting more than one
year, and the finished text will be distributed free ofcharge from June 2010 to any teacher in the country
expressing interest. There will also be supplementary
courses for teachers on how to use it.
The head of the editorial board, Hideho Motosugi,a teacher at Waseda University Senior High School,says, “Life is a Series of Choices is not supposed to be
an ordinary textbook. Rather than deal with issues thathave already been solved, it encourages students totackle problems and find their own solutions, because
in real life there are no scripted answers.”

Enriching lives by creating solid choices
Lessons begin with teachers posing questions.
Students think of possible solutions, choose fromamong these options, and then test their theories inclass-wide discussion. Students also consider the
benefits, as well as opportunity costs, of the options

Hideho Motosugi, teacher
at Waseda University
Senior High School

they decided against through role playing. “Life is aseries of decisions. What will be the implications ofyour choices for society and for you? We would likestudents to see that learning how to make choices canhelp them lead richer lives,” says Motosugi.
“Education today focuses on cramming students’heads with facts. What we’re trying to teach them is
how to think, so that they can come up with inspired
ideas on their own. Expanding their perspective andtaking on new challenges will help them grow as
citizens, which will in turn enrich society.”2

Developing Sound Financial and Capital Markets
for the Next Generation

all stages of the process. With each participant
bringing unique strengths to the table, the project has
the potential for enormous success. This is because
stakeholders in the project’s outcome are working
closely together, aiming to build a brighter future byenhancing students’ critical thinking skills througheconomic education.
Mr. Motosugi adds: “We hope to touch the livesof as many students as we can by spreading thematerials to every corner of the country. Building
awareness of the text first is critical, so getting theword out to a large audience is our mostpressing issue.”Even though the text is finally complete, the restof the work has only just begun. The Daiwa Securities
Group will continue to actively lend its support.

Economic education that produces
responsible citizens“The economy is intricately linked with everyday life.
Before students graduate, we would like them toknow that they can help chart the course of society
and that their choices can change the world,” says
Iwai. “We are not teaching students to put profit
above all else. Rather, we are trying to show them how
the pursuit of profit impacts society. Our aim is forstudents to see that economic activity and investments
should always take this into consideration. We also
hope that these lessons will help them grow into
responsible citizens who can act on their own accord
and who understand how their actions affect theirsurroundings. These are the two main goals of Daiwa’s
economic and financial education initiatives.”

Text expresses the hopes of all thoseconcerned about a brighter future
for children“I’m very happy to be involved in this project,” says
Mr. Motosugi. “The JCEE is an organization that brings
together people who are thinking about the future ofJapanese society and our children. Daiwa’s cooperation
is invaluable given its position in the real businessworld. Its support is tremendously encouraging, and I
am grateful.”
From planning to execution, the JCEE has solicitedthe direct participation of businesses and educators at

Toru Iwai, Deputy General Manager, CSR Promotion Department,
Daiwa Securities Group Inc. (second from left)

A Word from a Stakeholder
Looking forward to Daiwa’s
continued contributions
as a partner in economic
education

Takeo Shiina
Chairman of the Board,
Junior Achievement Japan andJapan Council on Economic Education

From the start, the Daiwa Securities Group has taken an
active role in our activities. In addition to financial support,
President Suzuki and the management team have actively
dispatched employees to schools and program sites. Thanks
in part to these initiatives, we have received many gratefulcomments from students who say they now feel they havethe skills with which to plot out their lives.
On behalf of the JA and the JCEE, which focus on
furthering economic education for students and teachers,
respectively, I look forward to the continued support of the
Daiwa Securities Group, a key partner in promoting
economic education.
To inquire about Life is a Series of Choices, please contact JCEE
through Junior Achievement Japan. Tel: +81-3-5414-1175.

Daiwa Securities GroupCSR REPORT 2010 16

Building a Rewarding Workplacefor Executives and Employees
Nothing is more important for the sustainable growth of the Daiwa Securities
Group than its human resources.
Positioning this belief as one of our core business strategies, the Daiwa
Securities Group has assembled the best personnel in the industry andestablished a rewarding working environment, one in which highly-motivatedexecutives and employees can challenge themselves to excel professionally on adaily basis.
With this in mind, the Group established the Work-life Balance Promotion
Committee and designated President and CEO Shigeharu Suzuki as its chairman
to realize its goal of enabling a variety of working styles.
The Group also has been striving to transform executives’ and employees’
work practices by introducing the various measures shown in the chart below.
This is because we believe there is a direct link between the high level of executive
and employee satisfaction and that of customers and shareholders.

Measures to Promote Work-life Balance and Progress
Measures

Progress
Indicator

BeforeAfter (as of FY09)

Feb 2005

Establishment of Women’s Support Action Team

Number of female managers1

75 people

Approx.
doubledOct 2005–

Expansion of childcare and nursing care programs

Number of employees
taking childcare leave

115 people(no men)Approx.
tripledApr 2007–

Job relocation system2

Number of users(cumulative since FY07)—

Jun 2007–

Directive asking executives and employees to leave office
before 7:00 p.m.

Overtime working hours(monthly avg.)

Jun 2008–

Policy to encourage executives and employees to takepaid leave

Paid leave usage rate
(per year)

320 people(incl. 16 men)48 people

Down
26.2 hours 4.1 hours
37%

159 people

22.1 hours

About
1.5-fold rise56%

1 Deputy general manager or higher
2 Offers position in new location when an employee must relocate due to marriage or spouse’s job transfer (eligible to employees who are not subject to transfersthat require change of residence).
Note: For scope of data, see our Website.

WEB Please visit our website for more details. http://www.daiwa-grp.jp/english/csr/report2010/wlb

17

Daiwa Securities GroupCSR REPORT 2010 18

Building a Rewarding Workplacefor Executives and Employees
Nothing is more important for the sustainable growth of the Daiwa Securities
Group than its human resources.
Positioning this belief as one of our core business strategies, the Daiwa
Securities Group has assembled the best personnel in the industry andestablished a rewarding working environment, one in which highly-motivatedexecutives and employees can challenge themselves to excel professionally on adaily basis.
With this in mind, the Group established the Work-life Balance Promotion
Committee and designated President and CEO Shigeharu Suzuki as its chairman
to realize its goal of enabling a variety of working styles.
The Group also has been striving to transform executives’ and employees’
work practices by introducing the various measures shown in the chart below.
This is because we believe there is a direct link between the high level of executive
and employee satisfaction and that of customers and shareholders.

Measures to Promote Work-life Balance and Progress
Measures

Progress
Indicator

BeforeAfter (as of FY09)

Feb 2005

Establishment of Women’s Support Action Team

Number of female managers1

75 people

Approx.
doubledOct 2005–

Expansion of childcare and nursing care programs

Number of employees
taking childcare leave

115 people(no men)Approx.
tripledApr 2007–

Job relocation system2

Number of users(cumulative since FY07)—

Jun 2007–

Directive asking executives and employees to leave office
before 7:00 p.m.

Overtime working hours(monthly avg.)

Jun 2008–

Policy to encourage executives and employees to takepaid leave

Paid leave usage rate
(per year)

320 people(incl. 16 men)48 people

Down
26.2 hours 4.1 hours
37%

159 people

22.1 hours

About
1.5-fold rise56%

1 Deputy general manager or higher
2 Offers position in new location when an employee must relocate due to marriage or spouse’s job transfer (eligible to employees who are not subject to transfersthat require change of residence).
Note: For scope of data, see our Website.

WEB Please visit our website for more details. http://www.daiwa-grp.jp/english/csr/report2010/wlb

17

Daiwa Securities GroupCSR REPORT 2010 18

Building a Rewarding Workplace for Executives and Employees

Work-life Balance: A Fulfilling PersonalLife as Part of Overall Job Quality
At Daiwa, we see a fulfilling personal life as essential to maintaining motivation andefficiency. The entire corporate group has made work-life balance a key component of ahuman resource strategy that seeks to enhance executive and employee output by ensuring
their lives are satisfying both in and out of the office. Our unwavering belief that our people
are the backbone of our operations serves as a constant reminder of the gravity of this policy.

Using paid leave to help address
poverty issues abroad“To work effectively, you have to be able to clearly
distinguish whether or not you’re in job mode,” explains
Yasuhiro Wakabayashi, Associate, Product Group, CapitalMarkets Department, Daiwa Securities Capital Markets.
Since joining the company in 2007, Wakabayashi’s work
has focused on bond issuances by central governments
and international organizations in Asia, as well as
corporate bonds.
Negotiations with overseas clients are a near daily
occurrence for Wakabayashi, and communication withpeople in distant time zones frequently prevents him fromleaving the office before 7:00 p.m., forcing him toconcentrate on performing his job more efficiently in theinterest of freeing up personal time. “When I’m able totake time off from work between projects, I really try to
do something meaningful. I recently spent nine days onleave in Thailand,” he said.
As a university student, Wakabayashi set up an NGO
in a poverty-stricken area of Thailand to uncover products
and technologies unique to the area that might foster

Yasuhiro Wakabayashi, Associate Product Group, Capital Markets
Department, Daiwa Securities Capital Markets Co. Ltd.

19

sustainable industry and generate steady income for the
residents. “Poverty is not intrinsic to life on this planet,and I would like to see it overcome,” he said echoing theorganization’s mission.
Wakabayashi remains active in the NGO. “Honestly
speaking, I thought having a career would spell an end to
my trips to Thailand, but thanks to the company’s flexible
vacation policies, I have been able to go twice this year,”
he stated.
“Creating a microfinancing program through the
NGO had been a dream of mine, and I could think of nobetter investment bank to handle Japan’s first
Microfinance Bond than Daiwa,” Wakabayashi said.
When he submitted a report on microfinancing to senior
management, his ambition was recognized, and hebecame involved in Daiwa’s first Microfinance Bondissuance in 2009. “It was the first time I was able to hatch
my own idea through my job. It was a terrific experience,”
he adds.

Improving job performance whileraising children
Mariko Morita of the Client Support Department,
Kameido Branch, Daiwa Securities, joined the company
after graduating from university in 1992. Three years
later, she resigned to fulfill her dream of studying aforeign language overseas, but then returned to Daiwa to
work part-time in 2000. She left the company after
having a child and joined Daiwa a third time in 2006 after
having a second child. “Daiwa has many highly motivatedpeople who I respect. It was the natural choice for me
when I decided to start working again,” Morita says.
In 2009, Morita became a full-time employee,
working in customer service. She first obtained licensing
as an Associate Financial Planner and then as afull-fledged Certified Financial Planner. Describing thereasons for her decision to obtain these credentials, she
explained, “Times at the office when I was unable toanswer customers’ questions opened my eyes to my need

Mariko Morita, Client Support Department, Kameido Branch, Daiwa
Securities Co. Ltd.

for further study. Daiwa’s support in obtaining thesequalifications was invaluable.”
In keeping with her enterprising dedication at work,
Morita was promoted to an area-based career-track
employee in April 2010. Reflecting on her success, shesaid, “The younger of my two children is six, so she stillneeds quite a bit of care. Fortunately, Daiwa has a system
in place to exempt people from overtime until children
finish third grade, making it possible for me to balance
work with my home life even with this promotion.”

Time constraints bolster efficiency
These are just two examples of Daiwa employees, juggling
NGO activities and work or seeking to advance in thecompany while raising children. On addressing thechallenge of balancing one’s goals inside and outside of
the office, Wakabayashi commented, “Work efficiency ispivotal to paring overtime. The first thing I do when I
arrive in the office in the morning is to schedule thefinishing time for every task on my plate.” Concurringwith his view, Morita adds, “I think raising children has
helped me learn how to budget my time.”
When asked about their future goals, Wakabayashi
says, “It will be something that, like microfinancing, has asignificant social impact. I would like to make adifference.” Morita adds, “I would like to build long-term
professional relationships with our customers to help
them achieve their financial goals. For this reason, I plan
to sit for the securities analyst exam.” Although they are
two very different employees with very different goals,
both are using experiences from their private lives toenhance their job performance.

Unequivocal commitment to ensuring
work-life balance
Both Wakabayashi and Morita agree that Daiwa’s
corporate culture has changed over the last two years andthe company’s dedication to ensuring work-life balance is
now unequivocal.“ I don’t think there are any otherJapanese companies where the boss nudges you out thedoor at the end of the day or encourages you to take days
off quite as enthusiastically as here,” says Wakabayashi.
Echoing the same sentiment, Morita notes, “I never
get the feeling that I shouldn’t be going home on time or
asking for a day off for one of my children’s school
activities. The job allows me to raise my children withoutworrying about being tied to my desk. When I had myfirst child, maternity leave programs were in place, butthey were not as easy to take advantage of as they are
now. Under the current rules, I don’t think I would have
had to leave the company.”“I feel Daiwa has done everything it can toaccommodate working mothers in the last few years,”Morita said. “I do what I can,” her husband chimed in,“but I’m grateful that her company is so flexible.”
Wakabayashi adds: “The company makes its
expectations clear. After that, it’s up to each person todecide what to do. For me, my life encompasses morethan just what I do outside the office. Being truly happymeans balancing work and private time,” he said. Morita
agrees, saying, “My home life is indispensable, but I don’t
think I could ever truly be happy if my job wasn’t
rewarding as well.”
Although personal fulfillment carries very different
meanings for Morita and Wakabayashi, they share acommon vision of balancing work and personal time. At
Daiwa, we feel that the diverse viewpoints of our
executives and employees will broaden the scope of thevalue we provide to society. It is in this spirit that we
believe efforts to foster work-life balance can enhance
corporate value.

A Word from a Stakeholder
A call for increasing men’s rolein the household andmobilizing employees to serve
the community

Yoshihiro Katayama
Professor of Law, Keio University

Given the dominance of Japanese men both in society and at
home, efforts to make the workplace more inviting to
women will only serve to make their lives more arduous. To
increase men’s role in the family, child-rearing programs
need to be made more accessible to men. I also support theidea that companies should encourage their people toengage in at least one community service activity, such as
firefighting, neighborhood associations, or the PTA. I believethat raising children and the experience and knowledge
gained from community service contribute to a more
fulfilling life and can enrich work as well.

Daiwa Securities GroupCSR REPORT 2010 20

Building a Rewarding Workplace for Executives and Employees

Work-life Balance: A Fulfilling PersonalLife as Part of Overall Job Quality
At Daiwa, we see a fulfilling personal life as essential to maintaining motivation andefficiency. The entire corporate group has made work-life balance a key component of ahuman resource strategy that seeks to enhance executive and employee output by ensuring
their lives are satisfying both in and out of the office. Our unwavering belief that our people
are the backbone of our operations serves as a constant reminder of the gravity of this policy.

Using paid leave to help address
poverty issues abroad“To work effectively, you have to be able to clearly
distinguish whether or not you’re in job mode,” explains
Yasuhiro Wakabayashi, Associate, Product Group, CapitalMarkets Department, Daiwa Securities Capital Markets.
Since joining the company in 2007, Wakabayashi’s work
has focused on bond issuances by central governments
and international organizations in Asia, as well as
corporate bonds.
Negotiations with overseas clients are a near daily
occurrence for Wakabayashi, and communication withpeople in distant time zones frequently prevents him fromleaving the office before 7:00 p.m., forcing him toconcentrate on performing his job more efficiently in theinterest of freeing up personal time. “When I’m able totake time off from work between projects, I really try to
do something meaningful. I recently spent nine days onleave in Thailand,” he said.
As a university student, Wakabayashi set up an NGO
in a poverty-stricken area of Thailand to uncover products
and technologies unique to the area that might foster

Yasuhiro Wakabayashi, Associate Product Group, Capital Markets
Department, Daiwa Securities Capital Markets Co. Ltd.

19

sustainable industry and generate steady income for the
residents. “Poverty is not intrinsic to life on this planet,and I would like to see it overcome,” he said echoing theorganization’s mission.
Wakabayashi remains active in the NGO. “Honestly
speaking, I thought having a career would spell an end to
my trips to Thailand, but thanks to the company’s flexible
vacation policies, I have been able to go twice this year,”
he stated.
“Creating a microfinancing program through the
NGO had been a dream of mine, and I could think of nobetter investment bank to handle Japan’s first
Microfinance Bond than Daiwa,” Wakabayashi said.
When he submitted a report on microfinancing to senior
management, his ambition was recognized, and hebecame involved in Daiwa’s first Microfinance Bondissuance in 2009. “It was the first time I was able to hatch
my own idea through my job. It was a terrific experience,”
he adds.

Improving job performance whileraising children
Mariko Morita of the Client Support Department,
Kameido Branch, Daiwa Securities, joined the company
after graduating from university in 1992. Three years
later, she resigned to fulfill her dream of studying aforeign language overseas, but then returned to Daiwa to
work part-time in 2000. She left the company after
having a child and joined Daiwa a third time in 2006 after
having a second child. “Daiwa has many highly motivatedpeople who I respect. It was the natural choice for me
when I decided to start working again,” Morita says.
In 2009, Morita became a full-time employee,
working in customer service. She first obtained licensing
as an Associate Financial Planner and then as afull-fledged Certified Financial Planner. Describing thereasons for her decision to obtain these credentials, she
explained, “Times at the office when I was unable toanswer customers’ questions opened my eyes to my need

Mariko Morita, Client Support Department, Kameido Branch, Daiwa
Securities Co. Ltd.

for further study. Daiwa’s support in obtaining thesequalifications was invaluable.”
In keeping with her enterprising dedication at work,
Morita was promoted to an area-based career-track
employee in April 2010. Reflecting on her success, shesaid, “The younger of my two children is six, so she stillneeds quite a bit of care. Fortunately, Daiwa has a system
in place to exempt people from overtime until children
finish third grade, making it possible for me to balance
work with my home life even with this promotion.”

Time constraints bolster efficiency
These are just two examples of Daiwa employees, juggling
NGO activities and work or seeking to advance in thecompany while raising children. On addressing thechallenge of balancing one’s goals inside and outside of
the office, Wakabayashi commented, “Work efficiency ispivotal to paring overtime. The first thing I do when I
arrive in the office in the morning is to schedule thefinishing time for every task on my plate.” Concurringwith his view, Morita adds, “I think raising children has
helped me learn how to budget my time.”
When asked about their future goals, Wakabayashi
says, “It will be something that, like microfinancing, has asignificant social impact. I would like to make adifference.” Morita adds, “I would like to build long-term
professional relationships with our customers to help
them achieve their financial goals. For this reason, I plan
to sit for the securities analyst exam.” Although they are
two very different employees with very different goals,
both are using experiences from their private lives toenhance their job performance.

Unequivocal commitment to ensuring
work-life balance
Both Wakabayashi and Morita agree that Daiwa’s
corporate culture has changed over the last two years andthe company’s dedication to ensuring work-life balance is
now unequivocal.“ I don’t think there are any otherJapanese companies where the boss nudges you out thedoor at the end of the day or encourages you to take days
off quite as enthusiastically as here,” says Wakabayashi.
Echoing the same sentiment, Morita notes, “I never
get the feeling that I shouldn’t be going home on time or
asking for a day off for one of my children’s school
activities. The job allows me to raise my children withoutworrying about being tied to my desk. When I had myfirst child, maternity leave programs were in place, butthey were not as easy to take advantage of as they are
now. Under the current rules, I don’t think I would have
had to leave the company.”“I feel Daiwa has done everything it can toaccommodate working mothers in the last few years,”Morita said. “I do what I can,” her husband chimed in,“but I’m grateful that her company is so flexible.”
Wakabayashi adds: “The company makes its
expectations clear. After that, it’s up to each person todecide what to do. For me, my life encompasses morethan just what I do outside the office. Being truly happymeans balancing work and private time,” he said. Morita
agrees, saying, “My home life is indispensable, but I don’t
think I could ever truly be happy if my job wasn’t
rewarding as well.”
Although personal fulfillment carries very different
meanings for Morita and Wakabayashi, they share acommon vision of balancing work and personal time. At
Daiwa, we feel that the diverse viewpoints of our
executives and employees will broaden the scope of thevalue we provide to society. It is in this spirit that we
believe efforts to foster work-life balance can enhance
corporate value.

A Word from a Stakeholder
A call for increasing men’s rolein the household andmobilizing employees to serve
the community

Yoshihiro Katayama
Professor of Law, Keio University

Given the dominance of Japanese men both in society and at
home, efforts to make the workplace more inviting to
women will only serve to make their lives more arduous. To
increase men’s role in the family, child-rearing programs
need to be made more accessible to men. I also support theidea that companies should encourage their people toengage in at least one community service activity, such as
firefighting, neighborhood associations, or the PTA. I believethat raising children and the experience and knowledge
gained from community service contribute to a more
fulfilling life and can enrich work as well.

Daiwa Securities GroupCSR REPORT 2010 20

Two major initiatives to create a brighter
future and better society

Stakeholder Dialogue 2

Promoting Sustainability via the
Financial Business and CSR

In January 2010, the Daiwa Securities Group signed the UN Global Compact.* We took the opportunity to seek input
on how we might take our commitment to CSR activities to the next level, asking experts in the field to join us for a
discussion on 15 March 2010 about our past, present, and future social obligations as a financial institution.
* The UN Global Compact was established in 2000 under the UN Secretariat after an initiative launched in 1999 by former Secretary General Kofi Annan. The membershipconsists of global corporate leaders who are expected to align their business practices with ten principles in the fields of human rights, labor, environment,
and anti-corruption in their business activities, in partnership with UN agencies, labor, and civil society.

Global compact a way for Daiwa to raise awarenessin Japan and forge ties with global leaders
Uehara: In January 2010, the Daiwa Securities Groupjoined the UN Global Compact, the first securities firmin Japan to do so. We share the principles of theCompact, so our decision to sign on was a way for us tostrengthen our commitment to social responsibility andincorporate the spirit of the Compact in our business.
Wakabayashi: By publicly announcing our reasons forjoining, we hoped to build interest about global
challenges within Japanese society and become more
involved in growing efforts to promote global
cooperation.
Arima: The Global Compact focuses on getting
companies to incorporate CSR into their businessactivities. In this sense, a securities firm is

One Akiyama
President, Integrex Inc.

Toshio Arima
Executive Corporate Advisor of
Fuji Xerox Co., Ltd.,
member of the United Nations Global
Compact Board, and Chairman,
Global Compact Board Japanwell-positioned to have a significant influence onsociety because its job is to provide funding forbusinesses and public sector organizations and to
broker deals for investors.
Wakabayashi: Developing products that channel
money to where it is needed anywhere in the world will
help us fulfill our social responsibilities. Our employees
are also very interested in doing that kind of work.
Akiyama: Changing society for the better by helping
direct the flow of funds is one of the financial
industry’s most important functions. In that sense,
finance has a major role to play in dealing with global
problems like the environment and poverty.
Arima: The Global Compact also stresses theimportance of partnerships. In particular, I expect that
finance can indirectly support improvements in thesituation of the most vulnerable—people who sufferfrom poverty, health problems, and gender
discrimination. Forming such bonds opens the door toa wide range of opportunities.
Akiyama: In the US and Europe, financial institutions
engage in various partnership initiatives, sometimes
with the UN, and they also have submitted many
proposals to their respective governments. However,that sort of partnership activity by financial institutions
has not functioned well in Japan, so I hope Daiwa
Securities Group will take the lead in that regard.
Arima: For example, there is relatively little Japanese
representation in leadership summits for top executives
or the subcommittees where member firms holddiscussions. I hope that Daiwa becomes an active
participant in these sorts of forums.

Uehara: At Daiwa, one of our major objectives is tooffer financial services that contribute to creating asustainable society. Selling Microfinance Bonds andVaccine Bonds has meant a lot for both customers andemployees as it is easy for them to see how theseproducts benefit society.
Wakabayashi: People are generally altruistic—theywant to contribute to society. It’s our job to produce
good products that reflect their good will, and in atimely fashion.
Shimazu: Offering socially responsible investments(SRI) has also had a major impact on our employees,
who feel proud to sell products that help solve society’s
problems. People are amazing—give them somethingthat makes their jobs more meaningful, and it
becomes a powerful inspiration for them.
Uehara: These bonds came from our teams on the
ground, which took the initiative in convincing us tocreate products like this. Watching how motivated they
became when working together across divisions wasreally thrilling.
Akiyama: A good product can change an entire
company. On the front lines, enlightened employees
together will start to figure out how to solve social
problems within their business domains. They thenbecome quite motivated once they see their ideas

Masaki Shimazu
Deputy President
Head of Administration Division
Daiwa Securities Co. Ltd.
(At time of dialogue: Representative
Senior Managing Director)

Takatoshi Wakabayashi
Senior Managing Director
Chief Internal Administration Supervisor
Daiwa Securities Capital Markets Co. Ltd.
(At time of dialogue: Managing Director)

Keiko Uehara
Corporate Executive Officer
Daiwa Securities Group Inc.

WEB

21

taking shape as an actual product. Having something
concrete helps make people feel proud of what
they’re doing. The customers appreciate it, too. It’s avirtuous cycle.
Shimazu: Another major objective at Daiwa is todevelop sound financial and capital markets to pass on
to future generations. We think the best way to do thisis through education.
Akiyama: I think proper financial education is very
important. Unfortunately, in Japan, money has a bad
reputation for being “dirty.” The key, thus, is to findways to shed a positive light on decent ways of making
and using money. With that in mind, I hope yourefforts will focus on helping people understand therole and basic concepts of finance.

Sustainable corporate growth—
impossible without work-life balance
Arima: “CSR is a core part of management” means
good working conditions viewed from the employee’s
perspective. I am personally very interested in thediverse ways people can work today. The term
“work-life balance” usually focuses on maternity leaveand nursing care, but it really has a wider meaning. I
feel that we should aim for higher productivity at“work” in balance with a happier “life.”
Shimazu: Every company touts its work-life balance
policies these days. However, I am confident that weare the absolute best in terms of how seriously we taketreating our employees well. Securities firms typicallyrequire brutal work hours, so encouraging people toleave at 7:00 p.m. is nothing short of revolutionary.
Uehara: If you just sit at your desk and interact onlywith your co-workers, you’ll never form new ideas
about how to approach your work. The only way toidentify the needs of your customers and society is tocome across them in your own everyday life as a
citizen in the community. Therefore, I think work-lifebalance is an effective means of improving the qualityof work, and necessary if a company is to grow.
Akiyama: Some people prefer the term “work-life
blend,” and I think that’s a more accurate description.
Basically, work is a part of life, and vice versa. Womenare usually the subject of focus when the issue ofwork-life balance comes up, but I think men need toreconsider their lifestyles, too. Employers can use
PDCA (Plan-Do-Check-Action) to find out how theirworkers feel about their efforts to promote a work-lifebalance, evaluate the effects of such programs, and fix
what needs improving.

Please visit out website for more details. http://www.daiwa-grp.jp/english/csr/report2010/dialog2

Daiwa Securities GroupCSR REPORT 2010 22

Two major initiatives to create a brighter
future and better society

Stakeholder Dialogue 2

Promoting Sustainability via the
Financial Business and CSR

In January 2010, the Daiwa Securities Group signed the UN Global Compact.* We took the opportunity to seek input
on how we might take our commitment to CSR activities to the next level, asking experts in the field to join us for a
discussion on 15 March 2010 about our past, present, and future social obligations as a financial institution.
* The UN Global Compact was established in 2000 under the UN Secretariat after an initiative launched in 1999 by former Secretary General Kofi Annan. The membershipconsists of global corporate leaders who are expected to align their business practices with ten principles in the fields of human rights, labor, environment,
and anti-corruption in their business activities, in partnership with UN agencies, labor, and civil society.

Global compact a way for Daiwa to raise awarenessin Japan and forge ties with global leaders
Uehara: In January 2010, the Daiwa Securities Groupjoined the UN Global Compact, the first securities firmin Japan to do so. We share the principles of theCompact, so our decision to sign on was a way for us tostrengthen our commitment to social responsibility andincorporate the spirit of the Compact in our business.
Wakabayashi: By publicly announcing our reasons forjoining, we hoped to build interest about global
challenges within Japanese society and become more
involved in growing efforts to promote global
cooperation.
Arima: The Global Compact focuses on getting
companies to incorporate CSR into their businessactivities. In this sense, a securities firm is

One Akiyama
President, Integrex Inc.

Toshio Arima
Executive Corporate Advisor of
Fuji Xerox Co., Ltd.,
member of the United Nations Global
Compact Board, and Chairman,
Global Compact Board Japanwell-positioned to have a significant influence onsociety because its job is to provide funding forbusinesses and public sector organizations and to
broker deals for investors.
Wakabayashi: Developing products that channel
money to where it is needed anywhere in the world will
help us fulfill our social responsibilities. Our employees
are also very interested in doing that kind of work.
Akiyama: Changing society for the better by helping
direct the flow of funds is one of the financial
industry’s most important functions. In that sense,
finance has a major role to play in dealing with global
problems like the environment and poverty.
Arima: The Global Compact also stresses theimportance of partnerships. In particular, I expect that
finance can indirectly support improvements in thesituation of the most vulnerable—people who sufferfrom poverty, health problems, and gender
discrimination. Forming such bonds opens the door toa wide range of opportunities.
Akiyama: In the US and Europe, financial institutions
engage in various partnership initiatives, sometimes
with the UN, and they also have submitted many
proposals to their respective governments. However,that sort of partnership activity by financial institutions
has not functioned well in Japan, so I hope Daiwa
Securities Group will take the lead in that regard.
Arima: For example, there is relatively little Japanese
representation in leadership summits for top executives
or the subcommittees where member firms holddiscussions. I hope that Daiwa becomes an active
participant in these sorts of forums.

Uehara: At Daiwa, one of our major objectives is tooffer financial services that contribute to creating asustainable society. Selling Microfinance Bonds andVaccine Bonds has meant a lot for both customers andemployees as it is easy for them to see how theseproducts benefit society.
Wakabayashi: People are generally altruistic—theywant to contribute to society. It’s our job to produce
good products that reflect their good will, and in atimely fashion.
Shimazu: Offering socially responsible investments(SRI) has also had a major impact on our employees,
who feel proud to sell products that help solve society’s
problems. People are amazing—give them somethingthat makes their jobs more meaningful, and it
becomes a powerful inspiration for them.
Uehara: These bonds came from our teams on the
ground, which took the initiative in convincing us tocreate products like this. Watching how motivated they
became when working together across divisions wasreally thrilling.
Akiyama: A good product can change an entire
company. On the front lines, enlightened employees
together will start to figure out how to solve social
problems within their business domains. They thenbecome quite motivated once they see their ideas

Masaki Shimazu
Deputy President
Head of Administration Division
Daiwa Securities Co. Ltd.
(At time of dialogue: Representative
Senior Managing Director)

Takatoshi Wakabayashi
Senior Managing Director
Chief Internal Administration Supervisor
Daiwa Securities Capital Markets Co. Ltd.
(At time of dialogue: Managing Director)

Keiko Uehara
Corporate Executive Officer
Daiwa Securities Group Inc.

WEB

21

taking shape as an actual product. Having something
concrete helps make people feel proud of what
they’re doing. The customers appreciate it, too. It’s avirtuous cycle.
Shimazu: Another major objective at Daiwa is todevelop sound financial and capital markets to pass on
to future generations. We think the best way to do thisis through education.
Akiyama: I think proper financial education is very
important. Unfortunately, in Japan, money has a bad
reputation for being “dirty.” The key, thus, is to findways to shed a positive light on decent ways of making
and using money. With that in mind, I hope yourefforts will focus on helping people understand therole and basic concepts of finance.

Sustainable corporate growth—
impossible without work-life balance
Arima: “CSR is a core part of management” means
good working conditions viewed from the employee’s
perspective. I am personally very interested in thediverse ways people can work today. The term
“work-life balance” usually focuses on maternity leaveand nursing care, but it really has a wider meaning. I
feel that we should aim for higher productivity at“work” in balance with a happier “life.”
Shimazu: Every company touts its work-life balance
policies these days. However, I am confident that weare the absolute best in terms of how seriously we taketreating our employees well. Securities firms typicallyrequire brutal work hours, so encouraging people toleave at 7:00 p.m. is nothing short of revolutionary.
Uehara: If you just sit at your desk and interact onlywith your co-workers, you’ll never form new ideas
about how to approach your work. The only way toidentify the needs of your customers and society is tocome across them in your own everyday life as a
citizen in the community. Therefore, I think work-lifebalance is an effective means of improving the qualityof work, and necessary if a company is to grow.
Akiyama: Some people prefer the term “work-life
blend,” and I think that’s a more accurate description.
Basically, work is a part of life, and vice versa. Womenare usually the subject of focus when the issue ofwork-life balance comes up, but I think men need toreconsider their lifestyles, too. Employers can use
PDCA (Plan-Do-Check-Action) to find out how theirworkers feel about their efforts to promote a work-lifebalance, evaluate the effects of such programs, and fix
what needs improving.

Please visit out website for more details. http://www.daiwa-grp.jp/english/csr/report2010/dialog2

Daiwa Securities GroupCSR REPORT 2010 22

CSR Issues: Performance and Targets

C S R I S S U E S : P E R F O R M A N C E A N D TA R G E T SThis section reports the fiscal 2009 results and fiscal 2010 targets for the wide range of initiatives
conducted by the Daiwa Securities Group to help build a more sustainable society.
Results for Fiscal 2009

Rating*Enhance links among group companies concerning socially responsible investment (SRI).

Established cross-departmental group links, leading to the development and sale of three Impact
Investment-based bonds (roughly ¥65 billion in total) contributing to the resolution of social issues.

◎

Develop and sell at least ¥100 billion in Impact Investment bonds.
Consider other Impact Investment products such as investment trusts.

Expand and promote economic and financial education initiatives.

Boosted domestic and overseas collaborations, including support for an entrepreneur training
exchange with Tokyo University and Peking University. Promoted business-academic collaborations
based on core operations, starting with course endowments.

◎

Strengthen ties with domestic and overseas universities and also monitor and further
promote the performance of these relationships.
Provide employees with training in financial philosophy (ethics as financial supporter).
Pursue wide distribution of the “Life is a Series of Choices” text to teachers.
Hold study sessions for students on the topic of social business.

Communicate more information about environmental issues.

Provided richer information on green innovations and other topics.

◎

Communicate more information about environmental issues (continued).

Communicate more information about sustainability on the Daiwa Securities CSR website (continued).

Provided more up-to-date and deeper information on the Daiwa Securities Group website, including
microfinance webpage.

◎

Enhance information dissemination through Daiwa Securities Information TV
and website.

Collect and provide CSR-related information.

See Key Issue 2.

Provide more CSR-related information throughout the Group.

Disseminated information through company intranet and in-house magazines.

Conduct CSR survey of executives and employees and utilize feedback in CSR activities.

Conducted CSR survey of all group executives and employees and identified key CSR issues.

◎○○

Hold dialogues with experts at least once a month to improve executive andemployee awareness, and promote internal and external communication throughthe dissemination of information.

Create documentation on internal controls for financial reporting and improve and increase the efficiency ofthe verification of these operations.

Ironed out and simplified documentation of internal controls for financial disclosure andimproved efficiency of verification operations.
Improved the effectiveness of internal controls for financial reporting by introducing a newconsolidated accounting system.

○

Establish a firmer global internal control scheme to further strengthen the trust of
stakeholders and thus ensure sustained growth.

Promote business continuity planning (BCP).

Created manual to provide executives and employees with a basic knowledge of the H1N1 virus
and related countermeasures.
Expanded the back-up office functionality of the Tama Training Center.

◎

Establish groupwide BCP scheme.

Continue to implement compliance training programs.

Checked awareness of corporate ethics and conducted related training.
Conducted compliance training through e-learning.

◎

Further ensure thorough awareness of corporate ethics and compliance.

Enhance initiatives to avoid relationships with organized crime.

Had group companies gather and collate data on organized crime.
Exchanged information with public organizations and other entities to ascertain trends in organized crime.

◎

Strengthen efforts to eradicate organized crime and block relationships with any
such elements.

Make ongoing improvements to operating quality.

Promoted initiatives with a focus on upgrading and encouraging self improvement efforts bybranches and head office units.

○

Make ongoing improvements to operating quality (continued).
Revise internal rules, operating procedures, and other guidelines.
Strengthen scheme to eliminate unfair trade.

Improve the effectiveness and efficiency of internal controls.

Achieved greater effectiveness by checking the success of related methodologies and IT support.

○

Support branch efforts to beef up internal controls.

Maintain management systems based on a review of firewall regulations and other measures.

Identified company and transaction relations subject to controls concerning conflicts of interest and appointed
managing officers to ensure upkeep of rules, revisions of control systems, and awareness through training.

◎

Take actions to address amendments to the Financial Instruments and Exchange Law.

Strengthen information safeguard system (continued).

Prepared and disseminated case studies on corporate information control.

○

Step up related initiatives, including actions against organized crime.

Continue to disclose non-financial information.

Made proactive disclosures through annual reports, business reports and other publications, aswell as through analyst meetings and other venues.

◎

Actively disclose information, including non-financial content, demonstrating the uniqueor differentiating features of the Group.

Carry out efficient IR activities.

Improved quality of IR information while staying cost effective.
Updated IR webpage.

◎

Carry out efficient IR activities (continued).

Improve and make effective use of IR channels.

Provided clearer information in disclosure documents. Overhauled IR webpage to make it moreuser friendly.

◎

Improve and make effective use of IR channels (continued).

Actively pursue post-sales follow-up (continued).

Continually provided domestic and foreign market projections through target/purpose-specific seminars.
Provided more timely information on the Daiwa Securities webpage.

○

Actively pursue post-sales follow-up (continued).

Improve skills of sales force.

Provided training for AFP, CFP, and other certifications, and encouraged TOEIC test taking.

△

Improve skills of all employees.

Improve customer-interface skills of branch counter staff.

Had head office staff carry out periodic on-site checks and continual guidance.
Provided continual hands-on hospitality training to new branch counter staff.

○

Improve customer-interface skills of branch counter staff (continued).

Take action to boost shareholder expectations.

Maintained and expanded number of individual shareholders thanks to solid shareholder expectations.

◎

Take actions to boost shareholder expectations (continued).

Develop professional workforce that combines expertise and loyalty.

Modified HR systems to ensure all executives and employees remain highly motivated.
Provided focused training to improve skills and expanded language training programs.

◎

Develop professional workforce that combines expertise and loyalty (continued).

Achieve a far-reaching work-life balance program.

Expanded short-work day programs, back-to-work support, consultation, and support web pages.
Encouraged 7PM rule and vacation taking, and promoted stronger awareness through internal seminars.

◎

Achieve a far-reaching work-life balance program (continued).

Accelerate appointment of female managers who will assume leadership roles in the Japanese financial industry.

Added four women to the executive team and appointed six new female general managers.
Additional initiatives were considered by work life balance committee and career support team.

◎Accelerate appointment of female managers who will assume leadership roles in theJapanese financial industry (continued).

Relationship with Society

Enhance information dissemination of corporate citizenship activities within the Group.

Introduced volunteer work through in-house magazines.
Joined the “Chiyoda Volunteer Club” to facilitate participation in volunteer activities.

○

Collaborate with external NPOs to provide richer information internally and increase
opportunities for action, with the aim of allowing more executives and employees toparticipate in corporate citizenship activities.

Environmental Impact of the Daiwa Securities Group

Reduce environmental impact.

Plan to report 2009 environmental performance data (CO2 emissions, energy use) on the Daiwa
Securities Group website.

̶Establish system to increase green purchases. Promote efforts internally and work with
suppliers.
Establish system for efficiently gathering environmental impact data.

Targets for Fiscal 2009
Key Issue 1
Leveraging Financial Capabilities to Contribute to a Sustainable Society

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

CSR Management

Corporate Governance

Entire Group

Compliance

Daiwa Securities

Daiwa Securities CapitalMarkets

Information Disclosure

Relationship with Customers

Relationship with Shareholder

Relationship with Executives and Employees*Rating indicates self-evaluation of fiscal 2009 results: ◎ = success (significant), ○ = success (moderate), △ = additional effort needed,

23

Targets for Fiscal 2010

= not achieved.

Daiwa Securities GroupCSR REPORT 2010 24

CSR Issues: Performance and Targets

C S R I S S U E S : P E R F O R M A N C E A N D TA R G E T SThis section reports the fiscal 2009 results and fiscal 2010 targets for the wide range of initiatives
conducted by the Daiwa Securities Group to help build a more sustainable society.
Results for Fiscal 2009

Rating*Enhance links among group companies concerning socially responsible investment (SRI).

Established cross-departmental group links, leading to the development and sale of three Impact
Investment-based bonds (roughly ¥65 billion in total) contributing to the resolution of social issues.

◎

Develop and sell at least ¥100 billion in Impact Investment bonds.
Consider other Impact Investment products such as investment trusts.

Expand and promote economic and financial education initiatives.

Boosted domestic and overseas collaborations, including support for an entrepreneur training
exchange with Tokyo University and Peking University. Promoted business-academic collaborations
based on core operations, starting with course endowments.

◎

Strengthen ties with domestic and overseas universities and also monitor and further
promote the performance of these relationships.
Provide employees with training in financial philosophy (ethics as financial supporter).
Pursue wide distribution of the “Life is a Series of Choices” text to teachers.
Hold study sessions for students on the topic of social business.

Communicate more information about environmental issues.

Provided richer information on green innovations and other topics.

◎

Communicate more information about environmental issues (continued).

Communicate more information about sustainability on the Daiwa Securities CSR website (continued).

Provided more up-to-date and deeper information on the Daiwa Securities Group website, including
microfinance webpage.

◎

Enhance information dissemination through Daiwa Securities Information TV
and website.

Collect and provide CSR-related information.

See Key Issue 2.

Provide more CSR-related information throughout the Group.

Disseminated information through company intranet and in-house magazines.

Conduct CSR survey of executives and employees and utilize feedback in CSR activities.

Conducted CSR survey of all group executives and employees and identified key CSR issues.

◎○○

Hold dialogues with experts at least once a month to improve executive andemployee awareness, and promote internal and external communication throughthe dissemination of information.

Create documentation on internal controls for financial reporting and improve and increase the efficiency ofthe verification of these operations.

Ironed out and simplified documentation of internal controls for financial disclosure andimproved efficiency of verification operations.
Improved the effectiveness of internal controls for financial reporting by introducing a newconsolidated accounting system.

○

Establish a firmer global internal control scheme to further strengthen the trust of
stakeholders and thus ensure sustained growth.

Promote business continuity planning (BCP).

Created manual to provide executives and employees with a basic knowledge of the H1N1 virus
and related countermeasures.
Expanded the back-up office functionality of the Tama Training Center.

◎

Establish groupwide BCP scheme.

Continue to implement compliance training programs.

Checked awareness of corporate ethics and conducted related training.
Conducted compliance training through e-learning.

◎

Further ensure thorough awareness of corporate ethics and compliance.

Enhance initiatives to avoid relationships with organized crime.

Had group companies gather and collate data on organized crime.
Exchanged information with public organizations and other entities to ascertain trends in organized crime.

◎

Strengthen efforts to eradicate organized crime and block relationships with any
such elements.

Make ongoing improvements to operating quality.

Promoted initiatives with a focus on upgrading and encouraging self improvement efforts bybranches and head office units.

○

Make ongoing improvements to operating quality (continued).
Revise internal rules, operating procedures, and other guidelines.
Strengthen scheme to eliminate unfair trade.

Improve the effectiveness and efficiency of internal controls.

Achieved greater effectiveness by checking the success of related methodologies and IT support.

○

Support branch efforts to beef up internal controls.

Maintain management systems based on a review of firewall regulations and other measures.

Identified company and transaction relations subject to controls concerning conflicts of interest and appointed
managing officers to ensure upkeep of rules, revisions of control systems, and awareness through training.

◎

Take actions to address amendments to the Financial Instruments and Exchange Law.

Strengthen information safeguard system (continued).

Prepared and disseminated case studies on corporate information control.

○

Step up related initiatives, including actions against organized crime.

Continue to disclose non-financial information.

Made proactive disclosures through annual reports, business reports and other publications, aswell as through analyst meetings and other venues.

◎

Actively disclose information, including non-financial content, demonstrating the uniqueor differentiating features of the Group.

Carry out efficient IR activities.

Improved quality of IR information while staying cost effective.
Updated IR webpage.

◎

Carry out efficient IR activities (continued).

Improve and make effective use of IR channels.

Provided clearer information in disclosure documents. Overhauled IR webpage to make it moreuser friendly.

◎

Improve and make effective use of IR channels (continued).

Actively pursue post-sales follow-up (continued).

Continually provided domestic and foreign market projections through target/purpose-specific seminars.
Provided more timely information on the Daiwa Securities webpage.

○

Actively pursue post-sales follow-up (continued).

Improve skills of sales force.

Provided training for AFP, CFP, and other certifications, and encouraged TOEIC test taking.

△

Improve skills of all employees.

Improve customer-interface skills of branch counter staff.

Had head office staff carry out periodic on-site checks and continual guidance.
Provided continual hands-on hospitality training to new branch counter staff.

○

Improve customer-interface skills of branch counter staff (continued).

Take action to boost shareholder expectations.

Maintained and expanded number of individual shareholders thanks to solid shareholder expectations.

◎

Take actions to boost shareholder expectations (continued).

Develop professional workforce that combines expertise and loyalty.

Modified HR systems to ensure all executives and employees remain highly motivated.
Provided focused training to improve skills and expanded language training programs.

◎

Develop professional workforce that combines expertise and loyalty (continued).

Achieve a far-reaching work-life balance program.

Expanded short-work day programs, back-to-work support, consultation, and support web pages.
Encouraged 7PM rule and vacation taking, and promoted stronger awareness through internal seminars.

◎

Achieve a far-reaching work-life balance program (continued).

Accelerate appointment of female managers who will assume leadership roles in the Japanese financial industry.

Added four women to the executive team and appointed six new female general managers.
Additional initiatives were considered by work life balance committee and career support team.

◎Accelerate appointment of female managers who will assume leadership roles in theJapanese financial industry (continued).

Relationship with Society

Enhance information dissemination of corporate citizenship activities within the Group.

Introduced volunteer work through in-house magazines.
Joined the “Chiyoda Volunteer Club” to facilitate participation in volunteer activities.

○

Collaborate with external NPOs to provide richer information internally and increase
opportunities for action, with the aim of allowing more executives and employees toparticipate in corporate citizenship activities.

Environmental Impact of the Daiwa Securities Group

Reduce environmental impact.

Plan to report 2009 environmental performance data (CO2 emissions, energy use) on the Daiwa
Securities Group website.

̶Establish system to increase green purchases. Promote efforts internally and work with
suppliers.
Establish system for efficiently gathering environmental impact data.

Targets for Fiscal 2009
Key Issue 1
Leveraging Financial Capabilities to Contribute to a Sustainable Society

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

CSR Management

Corporate Governance

Entire Group

Compliance

Daiwa Securities

Daiwa Securities CapitalMarkets

Information Disclosure

Relationship with Customers

Relationship with Shareholder

Relationship with Executives and Employees*Rating indicates self-evaluation of fiscal 2009 results: ◎ = success (significant), ○ = success (moderate), △ = additional effort needed,

23

Targets for Fiscal 2010

= not achieved.

Daiwa Securities GroupCSR REPORT 2010 24

Daiwa Securities Group Profile

Company Overview(as of 31 March 2010)

CO R P O R AT E I N F O R M AT I O N

Number of Employees (Consolidated)

Workforce Characteristics
By company

20,00015,000

Headquarters

12,561

GranTokyo North Tower
9-1, Marunouchi 1-chome,
Chiyoda-ku Tokyo 100-6751, Japan

10,000

Telephone

5,000

15,224 15,450
14,456
13,26427 December 1943
(Founded 1902)
President and CEO

Shigeharu Suzuki
Common stock¥247.3 billion
Number of employees (consolidated)

15,450

0

54

24%

87%

Daiwa Securities
Capital Markets

14%2005 2006 2007 2008 2009
End of FY

Operating Revenue
Net Operating Revenue

Billion yen
1,000

2. Wholesale Securities Business
Breakdown of Net Operating Revenue by Region (Consolidated)
Europe 28,173

Asia/Oceania

Americas 10,826825

Unit: Million yen(FY2009)

11,663
3%

6%

917
845

2%

750
579

537

526
447

413

458

Total

458,105
Japan

250

199

Shares issued and outstanding
0

Four Core Operations
Through its domestic network of 119 branches (as of April 2010), a callcenter, and the Internet, Daiwa Securities offers two retail services,
Daiwa Consulting and Daiwa Direct, which provide a wide range offinancial products and services as well as support for customer asset
management, mainly for individuals and unlisted companies. (Principal
company: Daiwa Securities)

Japan

47%

Number of equity-method affiliates

1,749,358,772

Asia/Oceania

5%

Daiwa Securities

2005

2006

2007

ABOUT DAIWA SECURITIES GROUP

The Daiwa Securities Group is composed of Daiwa Securities Group Inc., the holding company controlling the groupcompanies, and two securities companies, Daiwa Securities Co. Ltd. and Daiwa Securities Capital Markets Co. Ltd. alongwith various other companies providing securities-related services in order to offer a comprehensive range of investment
and financial services.

1. Retail Securities Business

500

7Europe 6%

Americas

2%

Other groupcompanies
in JapanOperating Revenue and Net
Operating Revenue (Consolidated)

Number of consolidated subsidiaries

2%

Group companies
outside Japan13%+81-3-5555-1111 (main)
Established

By region

Daiwa Securities Group, Inc.
(group headquarters)

Name

Daiwa Securities Group Inc.

(as of end of March 2010)

Description of the Daiwa Securities Group’s Businesses

407,44189%

2008 2009
FY

Daiwa Securities Capital Markets provides sales and brokerage services,
as well as investment banking services, to institutional investors,
corporate clients, financial institutions and public organizations in andoutside of Japan.
Sales and brokerage services: brokerage and trading of equities,
bonds, derivatives, and other financial products, mainly for institutional
investors.
Investment banking services: support for corporate operations
ranging from business expansion to finance and capital strategies, byassisting the financing activities of corporate clients, financial institutions
and public organizations.
(Principal company: Daiwa Securities Capital Markets)

3. Asset Management Business
The Group creates and manages stock, bond, and private investment
trusts, and provides other investment management services for realestate investment trusts, pensions, and other funds.

4. Investment Business
Using its own funds or through the formation of investment funds, theDaiwa Securities Group invests in areas such as private equity, venture
capital opportunities, business regeneration, monetary receivables, andreal estate.
(Principal companies: Daiwa Corporate Investment, Daiwa Securities
SMBC Principal Investments, and Daiwa PI Partners).

Group Support Operations
5. Research, Consulting, and Systems Business
The Group provides information via research reports and otherdocuments, management consulting, IT services, and other offerings toinstitutional investors, corporate clients, financial institutions, and publicorganizations in Japan and overseas.
(Principal companies: Daiwa Institute of Research, Daiwa Institute of
Research Business Innovation)

6. Support Services
The Group provides services in such areas as securities-related
administrative outsourcing and real estate consulting.
(Principal companies: Daiwa Securities Business Center andDaiwa Property)

Daiwa Securities Group Inc.

CSR Report 2010 Full Edition (Web) (available September 2010)
Details on the Daiwa Securities Group’s CSR activities areavailable on the following webpage. We are endeavoring
to provide good faith disclosures concerning important
issues for all of our stakeholders.

(Principal companies: Daiwa Asset Management, Daiwa SB Investments,
Daiwa Real Estate Asset Management)

Retailsecurities business

Wholesalesecurities business

Asset
managementbusiness

Investment
business

Research,
consulting, andsystem businessSupport services

Daiwa Securities

Daiwa Securities
Capital Markets

Daiwa AssetManagement

Daiwa Corporate
Investment*

Daiwa Instituteof Research
Holdings

Daiwa Securities
Business Center

Daiwa
Capital Markets
Europe Limited

Daiwa SB
Investments

Daiwa Securities
SMBC Principal
Investments

Daiwa
Institute of
ResearchDaiwa Property

Daiwa
Capital Markets
Hong Kong
LimitedDaiwa Real
Estate AssetManagement

Daiwa PI
Partners

Daiwa Instituteof ResearchBusinessInnovation

http://www.daiwa-grp.jp/english/csr/report2010/

Third-party Opinion
Sachiko Kishimoto, Executive Director at the Center
for Public Resources Development, a nonprofit
organization, comments on the CSR Report 2010
Highlight and Full Editions. Her comments andopinions are available in the Full Edition (Web).

Daiwa
Capital Markets
America Inc.

*Daiwa SMBC Capital changed its name to Daiwa Corporate Inventment on July 1, 2010.

25

Daiwa Securities GroupCSR REPORT 2010 26

Daiwa Securities Group Profile

Company Overview(as of 31 March 2010)

CO R P O R AT E I N F O R M AT I O N

Number of Employees (Consolidated)

Workforce Characteristics
By company

20,00015,000

Headquarters

12,561

GranTokyo North Tower
9-1, Marunouchi 1-chome,
Chiyoda-ku Tokyo 100-6751, Japan

10,000

Telephone

5,000

15,224 15,450
14,456
13,26427 December 1943
(Founded 1902)
President and CEO

Shigeharu Suzuki
Common stock¥247.3 billion
Number of employees (consolidated)

15,450

0

54

24%

87%

Daiwa Securities
Capital Markets

14%2005 2006 2007 2008 2009
End of FY

Operating Revenue
Net Operating Revenue

Billion yen
1,000

2. Wholesale Securities Business
Breakdown of Net Operating Revenue by Region (Consolidated)
Europe 28,173

Asia/Oceania

Americas 10,826825

Unit: Million yen(FY2009)

11,663
3%

6%

917
845

2%

750
579

537

526
447

413

458

Total

458,105
Japan

250

199

Shares issued and outstanding
0

Four Core Operations
Through its domestic network of 119 branches (as of April 2010), a callcenter, and the Internet, Daiwa Securities offers two retail services,
Daiwa Consulting and Daiwa Direct, which provide a wide range offinancial products and services as well as support for customer asset
management, mainly for individuals and unlisted companies. (Principal
company: Daiwa Securities)

Japan

47%

Number of equity-method affiliates

1,749,358,772

Asia/Oceania

5%

Daiwa Securities

2005

2006

2007

ABOUT DAIWA SECURITIES GROUP

The Daiwa Securities Group is composed of Daiwa Securities Group Inc., the holding company controlling the groupcompanies, and two securities companies, Daiwa Securities Co. Ltd. and Daiwa Securities Capital Markets Co. Ltd. alongwith various other companies providing securities-related services in order to offer a comprehensive range of investment
and financial services.

1. Retail Securities Business

500

7Europe 6%

Americas

2%

Other groupcompanies
in JapanOperating Revenue and Net
Operating Revenue (Consolidated)

Number of consolidated subsidiaries

2%

Group companies
outside Japan13%+81-3-5555-1111 (main)
Established

By region

Daiwa Securities Group, Inc.
(group headquarters)

Name

Daiwa Securities Group Inc.

(as of end of March 2010)

Description of the Daiwa Securities Group’s Businesses

407,44189%

2008 2009
FY

Daiwa Securities Capital Markets provides sales and brokerage services,
as well as investment banking services, to institutional investors,
corporate clients, financial institutions and public organizations in andoutside of Japan.
Sales and brokerage services: brokerage and trading of equities,
bonds, derivatives, and other financial products, mainly for institutional
investors.
Investment banking services: support for corporate operations
ranging from business expansion to finance and capital strategies, byassisting the financing activities of corporate clients, financial institutions
and public organizations.
(Principal company: Daiwa Securities Capital Markets)

3. Asset Management Business
The Group creates and manages stock, bond, and private investment
trusts, and provides other investment management services for realestate investment trusts, pensions, and other funds.

4. Investment Business
Using its own funds or through the formation of investment funds, theDaiwa Securities Group invests in areas such as private equity, venture
capital opportunities, business regeneration, monetary receivables, andreal estate.
(Principal companies: Daiwa Corporate Investment, Daiwa Securities
SMBC Principal Investments, and Daiwa PI Partners).

Group Support Operations
5. Research, Consulting, and Systems Business
The Group provides information via research reports and otherdocuments, management consulting, IT services, and other offerings toinstitutional investors, corporate clients, financial institutions, and publicorganizations in Japan and overseas.
(Principal companies: Daiwa Institute of Research, Daiwa Institute of
Research Business Innovation)

6. Support Services
The Group provides services in such areas as securities-related
administrative outsourcing and real estate consulting.
(Principal companies: Daiwa Securities Business Center andDaiwa Property)

Daiwa Securities Group Inc.

CSR Report 2010 Full Edition (Web) (available September 2010)
Details on the Daiwa Securities Group’s CSR activities areavailable on the following webpage. We are endeavoring
to provide good faith disclosures concerning important
issues for all of our stakeholders.

(Principal companies: Daiwa Asset Management, Daiwa SB Investments,
Daiwa Real Estate Asset Management)

Retailsecurities business

Wholesalesecurities business

Asset
managementbusiness

Investment
business

Research,
consulting, andsystem businessSupport services

Daiwa Securities

Daiwa Securities
Capital Markets

Daiwa AssetManagement

Daiwa Corporate
Investment*

Daiwa Instituteof Research
Holdings

Daiwa Securities
Business Center

Daiwa
Capital Markets
Europe Limited

Daiwa SB
Investments

Daiwa Securities
SMBC Principal
Investments

Daiwa
Institute of
ResearchDaiwa Property

Daiwa
Capital Markets
Hong Kong
LimitedDaiwa Real
Estate AssetManagement

Daiwa PI
Partners

Daiwa Instituteof ResearchBusinessInnovation

http://www.daiwa-grp.jp/english/csr/report2010/

Third-party Opinion
Sachiko Kishimoto, Executive Director at the Center
for Public Resources Development, a nonprofit
organization, comments on the CSR Report 2010
Highlight and Full Editions. Her comments andopinions are available in the Full Edition (Web).

Daiwa
Capital Markets
America Inc.

*Daiwa SMBC Capital changed its name to Daiwa Corporate Inventment on July 1, 2010.

25

Daiwa Securities GroupCSR REPORT 2010 26

Building a Sustainable Society

Daiwa Securities GroupCSR Report
Highlight
2010 Edition

What we can do
What will the world be like whenthese 35 babies become adults?
The precious faces of these infants—
all children of Daiwa Securities Group
executives and employees—express ourhopes for the future. At the Daiwa Securities
Group, we are determined to takeresponsibility as individuals and to do ourpart as a company to create a sustainable
society living in happiness and in harmony
with an unspoiled Earth.
This report is printed using soy ink and a waterless printing method on FSC-certified paper (SA-COC-001210).