Daiwa Securities Group
Corporate Social Responsibility Report

CSR Report2015

Message from CEO/Chairman

Daiwa Securities Group CSR REPORT 2015

■ To Our Stakeholders

Shigeharu Suzuki
Chairman of the Board
Daiwa Securities Group Inc.

Takashi Hibino
President and CEO
Daiwa Securities Group Inc.

We Aim to Be the Customer’s First Choice
Securities Group in an Era of Transition“from Savings to Investment”
In our previous Medium-Term Management Plan, “Passion for
the Best” 2014, which was launched in FY2012, we set out two
management policies: “Establish a robust business structure
capable of securing profits even under stressful economic
conditions”; and “Achieve sustainable growth by linking
Japan and growth markets of Asia.” We implemented various
plans according to the three-phased plan: the first year was
designated as the “Turnaround” phase, the second year was
the “Growth” phase, and the third year was the “Expansion”
phase. In FY2012, Daiwa Securities Group completed cost
reduction measures earlier than it had initially planned, enabling
its return to profitability, securing a “turnaround” in the firstyear of the management plan. Since FY2013, the Grouphas focused on the diversification of business activities andexpansion of stable revenues, which substantially improved its
earnings performance. Over the three-year period, the Group
has succeeded in establishing a robust business structure thatwill support its sustainable growth.
In addition, the Group has made continued efforts toresolve socio-economic issues both in Japan and overseas
through its securities business, such as elevating the social
status of women in developing countries and creating
residential facilities for senior citizens, by providing Japanese

investors with various financial products including Impact
Investment Bonds and a healthcare-related REIT. The Group
has also been providing its continued support and expertise in
Myanmar toward developing a capital market and establishing
the Yangon Stock Exchange in FY2015. The Group willcontinue contributing to the sustainable growth of society andthe economy through its securities business.
The Group aims to “take a leadership role in thedevelopment of capital markets in Japan and Asia, and become
the customer’s first choice securities group” in 2020. In pursuitof that vision, the Group has embarked on a new three-year
Medium-Term Management Plan, entitled “Passion for theBest” 2017, from this April. FY2015 will be a special year,
as the Group aims to step up to the next stage of growth,
based on the robust business structure established during theprevious Medium-Term Management Plan. All employees andexecutives of the Group pledge to work as a team to lead theera of transition “from savings to investment.”
As we work toward achieving our goal, we kindly request
the continued support and understanding of all stakeholders.

1Message from CEO/Chairman

Daiwa Securities Group CSR REPORT 2015

■ Message from the CEO

We Will Endeavor to Expand Our Customer Base and Aim for
Growth in Earnings Performance, as the Group Enters a Phaseof Sustainable Growth
In our previous Medium-Term Management Plan, that covered
the period from FY2012 to FY2014, we sought to “establish
a robust business structure capable of securing profit evenunder stressful economic conditions.” By the final year, we hadlargely completed the measures set out in that plan, and efforts
in FY2014 focused on expanding client-based, high-quality
earnings growth.
Turning to domestic business conditions in FY2014, theJapanese stock market showed upward resistance in the firsthalf amid a sense of uncertainty resulting from concerns toward
an economic slowdown due to the effects of the consumption
tax rate hike, and geopolitical risks including the Ukraine crisis.
However, stock prices exhibited an upward trend after the
Bank of Japan introduced further monetary easing measuresin late October, the Government Pension Investment Fund(GPIF) altered its basic portfolio positions, and corporations
reported strong earnings results. Stock markets in other leadingindustrialized countries including the US and Germany also
showed strong performances.
These favorable business conditions supported our earnings
performance. Net operating revenues were ¥532.2 billion,
ordinary income was ¥184.5 billion, and net income was ¥148.4
billion. Ordinary income, in particular, surpassed the target figureof ¥120.0 billion of the previous management plan for the second
consecutive year. This performance was not only the result offavorable business conditions, but also due to the significant
improvement in the Group’s earnings structure. The start of a“New” Daiwa Securities structure in 2012 has helped to fortify
intra-Group collaboration, which has enabled the Group to
reduce its operating costs while accumulating stable revenues thatare less susceptible to market fluctuations. Due to the Group’s
performance, the annualized fixed cost coverage ratio was 66%
as of the fourth quarter of FY2014, a result that significantly
exceeds the initial medium-term target of 60% or more.
FY2015 will be a special year in which we embark on a new
Medium-Term Management Plan, entitled “Passion for theBest” 2017. Under the new plan, the Group will proceed fromthe “turnaround” phase to a “sustainable growth” phase.
We plan to rapidly expand our customer base and revenue
through appropriate investment and risk-taking by using therobust business structure that was created under the previous
medium-term plan as a base on which to build. In response to
the full-fledged start of an era of transition “from savings toinvestment,” the Daiwa Securities Group will attract customers
with the industry’s highest service quality and become their best
partner. We will also devote all of our resources to efforts aimed
at contributing to the Japanese government’s growth strategy
through the development of the securities and capital markets.

Takashi Hibino
President and CEO
Daiwa Securities Group Inc.

2

Message from CEO/Chairman

Daiwa Securities Group CSR REPORT 2015

■ Message from the Chairman

The Role of Top Management Is to Foster Loyalty among Group
Employees
Daiwa Securities Group has the strength to create a newera, and the source of this strength originates from theGroup’s corporate culture. Here, employees with strong
loyalty and professionalism consistently place cooperation andcontributions to the success of the Group ahead of their own
personal gain.
The loyalty of Daiwa Group employees is an “invisible
asset.” However, it is also an essential element in the growthand health of the Group as a business organization. Loyalty
prompts improvements in the workplace and management of
the company, and raises awareness toward compliance andgovernance issues. I believe it is the role of top management
to continuously foster this “invisible asset,” and to this end,
we maintain our commitment to becoming a company that
employees want to work for. We have striven to create a morepositive work environment, raise compensation levels, expand
internal training systems, and support employees in theirefforts to achieve an ideal balance between their professional
and personal lives.

The Japanese economy is beginning to break out of its
period of prolonged deflation that has affected the country
for many years. The Japanese stock market is now showing
greater vitality than it has in recent years. I believe changes insociety not only provide the Group with business opportunities
to achieve sustainable growth, but they also present us withthe chance to contribute to the realization of a sustainable
society through our core business activities. Daiwa Securities
Group will take a leadership role in the full-fledged transitionof domestic financial assets “from savings to investment,”
driven by the strong loyalty and combined contributions of all
employees, and will aim to become the customer’s first choice
securities group.

Shigeharu Suzuki
Chairman of the Board
Daiwa Securities Group Inc.

3

4

Daiwa Securities Group CSR REPORT 2015

Contents
Message from CEO/Chairman
Editorial Policy
Daiwa Securities Group Profile

1

Corporate Principles and Management Vision7

CSR of the Daiwa Securities Group856

 CSR Key Issues for the Daiwa Securities Group8

 Daiwa Securities Group Stakeholders

8 Verification of CSR Key Issues and Responses to Changing Social Requirements

9 Communication with Stakeholders

10 CSR Promotion System

10 Building and Maintaining a Transparent and Fair Value Chain

10 Identifying CSR Materiality of the Daiwa Securities Group11

 Process of Identifying Materiality

12

Management Report

Initiatives through Business Activities

13 Close-up (1) Initiatives of Fund Wrap Services15

 Close-up (2) Initiatives of Asset Management Division16

 Close-up (3) Settlement Functions

19

 Close-up (4) Communication of Information by Daiwa’s Various Divisions

21

Corporate GovernanceCompliance
Risk Management
IT Governance and Information Security

26
29
31
33

Social Report

Relationship with Customers

34

Relationship with Shareholders and Other Investors

37

Relationship with Employees

39

Human Rights Initiative

43

Engagement with Society

44

 Dialogue with Stakeholders —in Regions Affected by the Great East Japan Earthquake Looking back on 10 Years of the Daiwa Securities Group Tsunami Reconstruction Fund

47
48

Environmental Report

Environmental Initiatives

51

Third-party Evaluations

53

GRI/ISO 26000 Index
CSR Related Data
Glossary
Independent Assurance Report

54
62
66
67

Editorial Policy

Daiwa Securities Group CSR REPORT 2015

Editorial Policy
We at the Daiwa Securities Group have been publishing a CSR report annually since fiscal 2002 for the following two objectives: todisclose our CSR activities in an easy-to-understand way and to evaluate the current state of affairs and the challenges we face. In
CSR Report 2015, we intend to disclose information for our stakeholders proactively together with our Annual Report, with which weenvisage our CSR report evolves to be integrated in the future.
Our CSR Report 2015 is only released on our website, as we believe our Annual Report 2015 contains the essential parts of our
ESG activities. It is produced referring the guidelines of the Global Reporting Initiative (GRI) and ISO 26000. Regarding GRI Guidelines,
we refer to version 4 and identify our materiality for CSR. We aim to make the report more accessible utilizing the concept of Color
Universal Design in selecting the colors of the document.
The meanings of words with underline are provided in the glossary (p.66).

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

Reporting Boundary
This report generally discusses the principal companies of the Daiwa Securities Group. It does not, however, include all data from the Group’s
principal companies on items reported. The information is selected based on the respective companies’ size and type of business. Each set of data
specifies the scope of coverage. The term “Daiwa Securities Group” refers to our entire group, while the term “Daiwa Securities Group Inc.” andthe term “Daiwa Securities” refer to Daiwa Securities Group Inc. and Daiwa Securities Co. Ltd., respectively.
Period Covered by Report
Fiscal 2014 (April 1, 2014 to March 31, 2015)
The report, however, also includes some information on events and activities carried out prior to the beginning of or after the end of fiscal 2014, orscheduled to take place during fiscal 2015.
Date of Publication
November 2015
(The previous report was published in October 2014; the next report is planned for November 2016.)
Inquiries
Daiwa Securities Group Inc. Corporate Communication Department, CSR Group
Tel: +81-3-5555-1111 (main) E-mail: daiwacsr@daiwa.co.jp Website: http://www.daiwa-grp.jp/english/csr/

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

5Daiwa Securities Group Profile

Daiwa Securities Group CSR REPORT 2015

Daiwa Securities Group Profile
Corporate Data

Description of the Daiwa Securities Group’s Businesses● NameThe Daiwa Securities Group is a financial services group and operates in such fields as
Retail, Global Markets, Global Investment Banking, Asset Management and Proprietary
Investment as its core businesses. Underpinned by the strong unity of the group, we
provide a broad range of services.

Daiwa Securities Group Inc.
● Head Office
GranTokyo North Tower
9-1, Marunouchi 1-chome, Chiyoda-ku,
Tokyo 100-6751, Japan● Tel+81-3-5555-1111 (main)

1. Retail Division
Daiwa Securities offers two retail services, Daiwa Consulting and Daiwa Direct, through its
domestic network of 140 branches, contact centers and the Internet, which provide a wide rangeof financial products and services as well as support for customer asset management, mainly for
individuals and unlisted companies.

2. Global Markets Division● EstablishedThis division provides brokerage and trading services of securities and other financial products
mainly to institutional investors.

December 27, 1943 (Founded 1902)● President and CEO

3. Global Investment Banking (Global IB) Division

Takashi Hibino

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

● Capital¥247.3 billion● Number of employees (consolidated)
13,466● Number of consolidated subsidiaries
50● Number of equity-method affiliates
84. Asset Management DivisionThis division sets up and manages investment trusts focusing on a variety of assets, whileproviding investment advice on pension assets and management services to institutional investors
in and outside Japan.

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

● Shares of Common Stock(issued and outstanding)

6. Other

1,749,378 thousand shares

The Group provides information via research reports, consulting, IT services, and other services toinstitutional investors, industrial corporations, financial institutions, and public organizations inJapan and overseas.

(As of March 31, 2015)

Daiwa Securities Group
Retail Division

Wholesale Division
Global Markets

Global IB

Daiwa Securities Co. Ltd.

Daiwa Capital Markets Europe Limited

Daiwa Capital Markets Hong Kong Limited

Daiwa Capital Markets Singapore Limited

Daiwa Capital Markets America Holdings Inc.

Asset Management
Division
Daiwa AssetManagement Co.
Ltd.

Investment Division

Daiwa Corporate
Investment Co., Ltd.

Daiwa Office
Investment
Corporation

Daiwa Institute of
Research Ltd.
Daiwa Institute of ResearchBusiness Innovation Ltd.

Daiwa SB
Investments Ltd.
Daiwa Real Estate
Asset Management
Co. Ltd.

Other

Daiwa PI Partners
Co. Ltd.

Daiwa Securities
SMBC Principal
Investments Co. Ltd.

Daiwa Next Bank,Ltd.
Daiwa Securities BusinessCenter Co. Ltd.
Daiwa Property Co.,Ltd.
* As of June 30, 20156

Corporate Principles and Management Vision

Daiwa Securities Group CSR REPORT 2015

Corporate Principles of the Daiwa Securities Group
Building trust

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

Placing importanceon personnel

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

Contributing tosociety

The Daiwa Securities Group will seek to benefit the economy and society through the developmentof healthy financial markets. In addition to scrupulously observing both regulations and internal
policies, the Group will strive to maintain a high sense of morality and duty, endeavoring to continue
contributing to the sustainable growth of the societies in which we operate.
The Group will always seek to develop healthy business operations and to increase corporate value

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

Management Vision and Strategies
The Daiwa Securities Group has formulated“Passion for the Best” 2017, a new MediumTerm Management Plan covering the period
through FY2017. The Daiwa Securities Groupwill pursue growth strategies under the basic
policies of attracting customers with the industry’s
top quality and becoming their best partner, as
the transition “from an era of savings to one ofinvestment” gains full momentum.
We believe our social mission is contributing
to the development of a sustainable society. Thiscan be achieved by continuously raising corporate
value through these growth strategies and othermeasures as well as supporting sound and stabledevelopment of global financial and capital markets.

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

Basic Management Policy
Leverage the industry's top
quality and dramatically
expand our customer baseAchieve sustainable growthby linking Japan to thegrowth of Asia

Contribute to the development of society and economy throughfinancial and capital markets

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

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

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

Numerical
targets➊ ROE: 10% or more

➋ F ixed cost coverage ratio: 75%
or more in the final fiscal year

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

7CSR of the Daiwa Securities Group

Daiwa Securities Group CSR REPORT 2015

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

Corporate
Principles

1

Leveraging financial capabilities to contribute to asustainable society

2

Developing sound financial and capital markets
for the next generation

Creating a rewarding
workplace in which
our employees
can take pride

Realization ofa sustainable
society

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

● Investors● Issuers

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

For private corporations, public
institutions and other entities
seeking to raise funds throughequity, debt, or other sources, we
propose optimal solutions from awide range of financing options
and provide full-scale support,
from planning to execution.

Shareholders
and Others

Customers
Issuers
Investors

Shareholders
and Others● Shareholders
and Others*p
Em● Investees
As an institutional investor,
we actively communicate withinvestee companies.

Business
Partners

Daiwa
SecuritiesGroup● Business Partners
Government

loyees’ Familie

Society

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

s

To earn the confidence of ourshareholders, we aim to provide
fully transparent information
disclosure, and meet their
expectations by continuallycreating value.

Investees

Employees

Employees

Local
Communities

NPO
NGO

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

* Including investors holding bonds issued
by the Daiwa Securities Group● Employees● Local Communities● NPO/NGOWe are endeavoring to create a workplace where
our employees, who create added value for all
our stakeholders, are fully motivated and can findsatisfaction in their work and lives. Our employees’
families are also important stakeholders.

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

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

8

CSR of the Daiwa Securities Group

Daiwa Securities Group CSR REPORT 2015

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

Important External Initiatives for the Daiwa Securities Group● The United Nations Global Compact (the Daiwa Securities Groupsigned the Compact in 2010)

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

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

Environment

Principle 7: Businesses should support a precautionary approachto environmental challenges;
Principle 8: undertake initiatives to promote greater
environmental responsibility; andPrinciple 9: encourage the development and diffusion ofenvironmentally friendly technologies.

Anti-Corruption

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

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

● The OECD Guidelines for Multinational Enterprises

Maintaining a Balance with Creation of Shareholder Value
In promoting CSR activities, we place a great emphasis on initiatives through business activities. Such initiatives help solve social
issues and at the same time, generate commission and fee revenue—tangible value for shareholders. Moreover, a cut in energy costs
achieved as a result of initiatives to reduce the environmental footprint of our business activities is also an example of such value.
Value for shareholders is not limited to matters that are easy to gauge. Such intangible value for our shareholders
includes trust given to us by customers, a rise in morale of employees and improvement in corporate governance andcompliance systems.
While CSR activities generate tangible and intangible value for stakeholders and shareholders, they also incur costs. As
with other business activities, due to the limitations of human and other resources, CSR activity costs may grow rapidly
when the volume of activities increases. We consider it important to analyze the cost-effectiveness of our CSR activities
whilst working on reducing their costs, in assessing value for shareholders.
The Daiwa Securities Group will continue practicing CSR activities with the aim of living up to stakeholders’ various
expectations and generating value for shareholders through those activities.

9

CSR of the Daiwa Securities Group

Daiwa Securities Group CSR REPORT 2015

Communication with Stakeholders
We have adopted the following basic policy, considering that communication with stakeholders plays an important rolein identifying social demands, which change over time.
Basic Policy (1)Basic Policy (2)The Daiwa Securities Group will strive tomaintain two-way communication witha broad range of stakeholders based on
ISO 26000 and the Charter of Corporate
Behavior of the Nippon Keidanren.

The Group will strive to deepen
communication with stakeholders alreadyknown to us, including customers,
shareholders and other investors,
business partners, employees and local
communities.

Basic Policy (3)The Group will strive to communicate
actively with third-parties in order to
identify other stakeholders.

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

Daiwa Securities Group Inc.
CEOFoundations

Direction and order

Executive officers

Daiwa Securities Health Foundation
Daiwa Securities Foundation

Stakeholders

ReportingDialogue

Customers
Shareholders & Investors

ReportingDirection and order

Daiwa Anglo-Japanese Foundation (UK)Group companies

Investees

CSR Group, Corporate
Communication
Department

Daiwa Myanmar-Japan Foundation (Myanmar)

Dialogue

Business partners

Dialogue

Government
NPOs/NGOs

Consulting andreportingCommunication of
information anddevelopment of awareness

Local communities

Departments within
Daiwa Securities Group Inc.

Employees

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

Dialogue under “Japan‘s Stewardship Code”*

Public works,
etc.

Business firms
National/local
governments
Internationalorganizations
Public corporations

Funding needs

Corporate
FinanceIssuance

Financial
CapitalMarkets

Proceeds
Securitized
assets* Refer to “As a responsible institutional investor” on page 18

Investors

Investment
Equities
Bonds

Equities
Bonds

Securities company

Issuers
Capitalexpenditure
Research anddevelopment
M&As, etc.

Investment trust
Derivatives
securitized
products

ReturnInvestment

Institutional investors

Individual retail investors

Asset management
needs

10

CSR of the Daiwa Securities Group

Daiwa Securities Group CSR REPORT 2015

Identifying CSR Materiality of the Daiwa Securities Group
Based on version 4 of the GRI Guidelines, we have identified materiality for CSR that suits our business model as a financial
services group.
To identify materiality, we reviewed the Group’s activities from three perspectives: “the provision of good-quality services tocustomers,” “being a supporter for the financial and capital markets, which are part of our social and economic infrastructure”
and “being a member of society.” We held discussions within the Group, obtaining opinions from third-party experts.

[Identified Materiality]
I.

Appropriate proposals and after-sales service in accordance with the characteristics andneeds of customers

II.

Customer service with a wealth of hospitality

III.

Development and provision of superior financial and investment productsIV.

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

V.

Maintenance and development of financial and capital market functions

VI.

Appropriate risk controls

VII.

Appropriate management of customer information

VIII. Construction and maintenance of a strong IT system
IX.

Responsible action as an institutional investor

X.

Creation of a workplace that values human resource development anddiversity of employees

XI.

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

XII.

Reduction of environmental load and responses to environmental changes

XIII. Initiatives to address social concerns and contribute to future development of society,and financial and capital markets
XIV. Contribution to local communities
XV.

Construction and maintenance of an appropriate corporate governance system

Moving forward, we will disclose information on the Group’s initiatives for materiality. We will also strive to grasp the
expectations of our stakeholders and changes in social trends through engagement and review our initiatives if necessary.
Moreover, we will verify “CSR Key Issues” in accordance with changes in materiality.

11

CSR of the Daiwa Securities Group

Daiwa Securities Group CSR REPORT 2015

Process of Identifying Materiality
Referring mainly to the process shown in version 4 of the GRI Guidelines, we have identified materiality in the following
procedures:

Step 1
Draft preparation
based on business
modelPrepare a draft on materiality, taking into account the business model of the Daiwa
Securities Group and the scope of social impact, in reference to the disclosure
requirements shown in version 4 of the GRI Guidelines, among others

Step 2
Verify the validityfrom the external
stakeholders’viewpoint

Have external experts verify the validity of the draft prepared in Step 1 from thestakeholders’ viewpoint
Add and integrate items based on the verification results

Step 3
Conduct aquestionnaire within
the GroupConduct a questionnaire on the items verified in Step 2 to relevant departments within
the Group to ask about the adaptability and validity of the items with their operations
In light of the feedback, identify the 15 items listed on page 11 as materiality

Identifying Materiality
We believe that “the provision of good-quality
services to customers” and “contribution to themaintenance and development of financial andcapital markets” are most important for the Daiwa
Securities Group’s business model. As “a memberof society,” we also hope to take a balanced
approach to the expectations of a variety of
stakeholders towards the company.
We viewed our shift to version 4 of the GRI
Guidelines as a good opportunity for the Groupto consider and realize what was truly important.
We thus prepared the draft from these threeperspectives and obtained opinions within theGroup.
The major point of discussion was that items
listed as materiality were closely related to ourbusiness and therefore seemed too common.
Meanwhile, the question was raised as to howmuch a company had to fulfil its role as a memberof society. There was also debate about whether

Yoshihisa Kaneko
Executive Officer
Daiwa Securities Group Inc.

or not we should consider matters all companies
are required to work on, such as corporate
governance, as important items for the Group.
We eventually identified 15 items as materiality
for CSR of the Daiwa Securities Group. Throughthis procedure, we have confirmed that the key
CSR issues regarded as guidelines are indeed
effective and reaffirmed that steady activities in
the Group’s businesses are directly linked to oursocial responsibility. We consider this to be amajor achievement.
Moving forward, we will continue verifying
materiality and report results in each field.

12Initiatives through Business Activities

Daiwa Securities Group CSR REPORT 2015

13

Management Report

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

Role and Social Responsibilitiesof the Financial Services

Mission for Financial Institutions toward
Solving the Global Social Issues

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

The business sector’s role in endeavoring to create asustainable society has become more important thanever. For financial institutions, materialization of such asociety through finance, their core capability, is a social
mission. At the Daiwa Securities Group, we believethat our role is not only to maintain and develop anfair and dynamic financial market, but also to incorporate a social perspective in finance and to facilitate theflow of money to build sustainable society.
In January 2010, the Daiwa Securities Group became the first Japanese financial services group whose
staple is securities business to be a signatory of theUnited Nations Global Compact (GC), a platform tohelp companies that have committed to sustainable
and responsible business practices shape their policies.
Further, in line with the United Nations Millennium
Development Goals (MDGs), the Group is endeavoring
to formulate and market products and services that
help resolve social issues.
Principles for Financial Action toward a Sustainable Society(Principles for Financial Action for the 21st Century)
The Principles for Financial Action for the 21st Century
were drawn up by a committee comprising representatives from a range of Japanese financial institutions.
They were tasked with drafting a Japanese version of
Principles for Environmental Financial Action. This was
based on a recommendation issued by Japanese Ministry of Environment’s Central Environment Council withthe objective of promoting environmental finance.
Each signatory institution is expected to endeavorreflecting ESG (environment, society and governance)
issues and concerns to its own business practices. The
Group was instrumental in the establishment of theprinciples from the drafting stage to the final framework. Both Daiwa Securities Group Inc. and Daiwa
Asset Management Co. Ltd. became signatories in
November 2011.
The Group’s Nippon Healthcare Investment Corporation, Japan’s first healthcare REIT, was selected as aGood Practice for FY2014 among initiatives taken byfinancial institutions under the Principles.
⇒Refer to page 24 for details of Nippon Healthcare Investment Corporation● S igned Global
Initiatives
Principles for Responsible

Investment (PRI)C DP
U N Global Compact(GC)Principles for Financial

Action for the 21st Century

Initiatives through Business Activities

Daiwa Securities Group CSR REPORT 2015

they will be invested in companies incorporating lowincome earners in developing countries into a value
chain as producers, consumers, retailers or distributors.
Ahead of the issue of Inclusive Business Bonds, aseminar on inclusive businesses was held at the Head
Office of Daiwa Securities. Nearly 200 participants,
including retail investors, corporate officials and students, listened deeply to the seminar.

For Addressing Social Concerns
and Contributing to Future
Development of Society and
Financial and Capital Markets
Impact Investment Bonds
Compared with typical forms of Socially Responsible
Investment (SRI), Impact Investment focuses moreon the direct impact of investment on society. It isa method that not only pursues economic benefits,
but is also a way to allocate assets solely to activities
targeted at resolving social issues, such as poverty andclimate change.
As a financial institution, we have supported the alleviation of problems in society by underwriting various
types of Impact Investment bonds.

●Cumulative resultsof Impact
Investment bonds¥616.7 billion*1

56%
Total 1109.2 billion*1

SRI funds are managed by evaluating and selecting
stocks and bonds for their issuers’ social and environmental efforts, business ethics, and other nonfinancial
performance aspects, as well as their financial results.
These include eco-funds, for which nonfinancial criteria
used in evaluation are limited to environmental performance or which invest exclusively in companies operating environment-related businesses. Investing in suchfunds enables investors to indirectly support countries
and firms actively engaged in environmental conservation efforts and CSR activities via the financial market.

In October 2014, the International Finance Corporation (IFC) issued Inclusive Business Bonds, which aredesigned to support businesses involving 4.5 billion
people, for the first time ever. Daiwa Securities offeredthose bonds mainly to retail investors in Japan.
The bond assists businesses providing products,
services and economic opportunities to people at thebase of the economic pyramid (BOP), which the IFC
calls “inclusive business models.” Proceeds from the issue will be allocated to initiatives that enable economic
growth at a wide range of businesses. For example,

Daiwa Securities
results for FY2014

Five issues¥51.3 billion in total●R esults of SRI funds Independent
Assurance*1 Source: D aiwa Securities*2 Source: D aiwa Fund
Consulting Co. Ltd.
(As of the end of
March 2015)●Equity Fund Tsubaki●2015●Daiwa New SmartGrid Fund
●Daiwa Nippon Support Fund Vol. 3●Daiwa Microfinance Fund

SRI funds●2014

Impact Investment bonds for retail investors

●2010
●2009

●JICA Bonds●Ecology Bonds●Banking on Women Bonds●Agri Bonds (2 times)●Water Bond (KEXIM)●Microfinance Bonds●Vaccine Bonds●2008●JICA Bonds●Ecology Bonds●Vaccine Bonds●Poverty Reduction Bonds for Latin America and the Caribbean

●2007
●2006
●2004

●CO2L Bonds●2012●JICA Bonds●Water Bonds (2 times)●Inclusive Business Bonds●Banking on Women Bonds●Agri Bonds●Green Bonds (2 times)●2011●DC Daiwa SRI Fund

●2001

●2013

●Daiwa/Blackrock Green New
Energy Fund●Next-Generation Environmental
Business Fund
●Eco Business Japan Stocks Open●Global
Environment
Equity Fund●Global
Environment
Foreign Bond
Balance Fund

●Daiwa SRI Fund●Global Eco GrowthFund Course A●Global Eco GrowthFund Course B¥51.0 billion*1

Total 297.4 billion*2

History of SRI Funds and Impact Investment Bonds
in Daiwa Securities Group●Six Asset Balance Fund
(distribution type)●Six Asset Balance Fund(growth type)●Daiwa Eco Fund

Daiwa Securities Groupcumulative sales

17%●Daiwa Energy Technology
Fund (limited open-type fund)●Russell Global Environment
Technology Fund●World CO2L Bonds●Vaccine Bonds

Independent
Assurance

Daiwa Securities
cumulative sales

SRI Funds

First-Ever Sale of Inclusive Business Bonds

14●Microfinance Bonds (IFC)●Vaccine Bonds●JICA Bonds●Microfinance Bonds●Green Bonds●Agri Bonds●Water Bonds●Ecology Bonds (2 times)●Microfinance Bonds (IFC)●Education Bonds for Africa●Poverty Reduction Bonds for Latin America and the Caribbean●Microfinance Bonds (EBRD)●Water Bonds●Vaccine Bonds●Green World Bank Bonds

Initiatives through Business Activities

Daiwa Securities Group CSR REPORT 201515

For Developing and Providing Superior Financial and Investment Products
Daiwa Securities Group companies have introduced new services to provide superior financial and investment products to a wide
range of customers. The Group is also making efforts to improve the performance of investment trusts. We develop products throughcommunication with customers, leading to enhanced customer satisfaction.

Close-Up

1

Initiatives of Fund Wrap Services● Fund Wrap—Mid- to Long-Term Diversified Investment
Tool for All
Daiwa Securities is focusing on Fund Wrap as a tool enablingeven busy customers or those with no investment experience tostart investment easily. It is a service tool for customers to diversify
their investment over the medium to long term. It adopts a
discretionary investment management scheme. Retail customers
can take a long-term diversified investment strategy according
to their needs and risk tolerance, as do professional institutional
investors such as those managing public pension assets.
The service has been improved several times since its
launch in November 2007, with the balance of assets in wrap
accounts topping one trillion yen in December 2014. The figure
represents one third of the balance in wrap accounts existingin Japan. We are thus one of the industry’s leaders in terms ofboth the balance of assets and the number of accounts.
● Service Delivered to Customers over the Long Term:
This Is Why We Place Importance on Close Communication
Since Fund Wrap is a service Daiwa Securities recommend to
customers not familiar with investment as well, we prepare easyto-understand materials and take enough time to explain about
diversified investment and basic approach to risk. We ensurethat customers are fully satisfied with proposals tailored to theirneeds before they enter into a discretionary investment contract.
We have also improved the service by conducting aquestionnaire survey after the signing of contracts andresponding to customer requests received through consultants
or customer service representatives. As a result, the minimum
contracted asset amount has been lowered to 3 million fromthe initial 5 million. Moreover, we now offer a service planbundled with Daiwa Next Bank’s yen time deposit. Enablingcustomers to receive funds regularly according to their needs is
another example.
Fund Wrap is a service offered to customers over the longterm. We therefore report investment performance every threemonths and hold a follow-up seminar whenever necessary
in an effort to actively provide information to customers andmaintain close communication with them.
● Harnessing Collective Efforts of the Daiwa Securities
Group to Improve Investment PerformanceFunds entrusted through Fund Wrap are managed with theconcerted efforts of the Daiwa Securities Group. Daiwa AssetManagement manages investment trusts set up specificallyfor “Daiwa Fund Wrap.” It receives advice from Daiwa Fund
Consulting, an organization mainly offering consulting services
for pension asset management. Daiwa Fund Consulting applies
the know-how institutional investors use to fund wraps,

Noriko Wakamatsu

Kenichi Matsumura

Managing Director of the Wrap Consulting
Department of Daiwa Securities

Managing Director of the Wrap Business
Department of Daiwa Securities

How Investment Trusts Set Up Specifically for
Daiwa Fund Wrap Are Managed
Daiwa Securities Co. Ltd.
Engage mainly in management operations based on
discretionary investment contracts

AdviceDaiwa Fund
Consulting Co. Ltd.
Select funds incorporated ininvestment trusts set up specificallyfor “Daiwa Fund Wrap,” provide
Adviceadvice on allocation ratio andmonitor investment performance,
among others

Set up and redeem
investment trusts exclusively
for Daiwa Fund Wrap

Daiwa AssetManagement Co. Ltd.
Set up and manage
investment trusts exclusively
for Daiwa Fund Wrapmonitor investment as needed and review the allocation ratio
and the funds selected. We are thus working to improve
investment performance by fully leveraging the know-how andexperience the Daiwa Securities Group has acquired as a whole.
● For Maintaining and Enhancing Quality
The balance of contracted assets in wrap accounts, including
Fund Wrap, stands at roughly 490 trillion* in the U.S.,
compared with around 4 trillion in Japan, with the balance forFund Wrap alone reaching roughly 130 trillion* in the U.S. The
customer base for Japan is expected to expand further as well.
We believe our mission is to establish a structureand system that will enable us to maintain the current
performance and the quality of service and offer better
services even as number of customers increases. Therefore,
we are also considering beefing up Internet services, such as
by offering plans online.
We will continue our initiatives to maintain quality of theFund Wrap service to keep attracting customers over the longterm as a good-quality investment tool and investment service.
* Balance as of the end of March 2015, calculated at ¥120 tothe dollar

Initiatives through Business Activities

Close-Up

Daiwa Securities Group CSR REPORT 2015

2

Initiatives of Asset Management Division
The asset management division of Daiwa Securities Group
strives to reinforce the asset management system andcontinues working on a variety of initiatives to offer better
returns to beneficiaries over the medium to long term.

Initiatives by Daiwa Asset Management● Working to Enhance Investment Performance with
Overall Strength
The enhancement of investment performance is the mostimportant challenge Daiwa Asset Management has addressedsince the start of business.
We began strengthening our efforts further in FY2012,
focusing on an investment reform program since then todevelop a distinguished capability in asset management. We
especially aim for the industry’s top level in active investment
in Japanese and foreign stocks and bonds.
One of the pillars to realize this goal is to take appropriate
risks in managing funds activity. We have built a comprehensive
support system by collecting information from specialists, suchas the economic research and corporate research teams. This isa backup system enabling fund managers to take risks without
undue concern.
● Human Resource Training and Organization Reform to
Achieve Outstanding Performance
Amid an accelerating shift from savings to investment, the amountof assets under management is predicted to expand. Daiwa AssetManagement is building a lean, efficient workforce to boost our
performance while gradually increasing the number of capablestaff members. Specifically, we provide our staff with portfolio
simulation training and other practical training programs.
We are also striving to improve our ability to select companies
with good prospects. Our analysts used to be divided intolarge-cap specialists and those specializing in small- andmid-cap stocks. We now adopt a system where analysts are
responsible for all companies in the industries they have focusedon. The revised system represents our efforts to pick up as
many companies with good prospects of contributing to highperformance as possible.
● Responding to the Needs of the Times
Since we invest assets on behalf of beneficiaries, we are
required to respond to their needs. We pay attention to eventsreflecting the current of the times and develop products thatsuit the needs of the times.
For example, one of the themes attracting the interestof beneficiaries is ESG, which we also focus on as a theme
that may help boost our mid- to long-term investment
performance.
Daiwa Asset Management has placed personnel in chargeof ESG within the Fund Management Division to promote ESG
investment in an organized manner as a signatory member ofboth the United Nations’ Principles for Responsible Investment(PRI) and the Principles for Financial Action for the 21stCentury. Through engagement with investee companies, we
also urge them to step up their ESG initiatives.

Shinichi Yamamoto
Investment Officer
Fund Management Divisionof Daiwa Asset Management

Meanwhile, we have been providing training and seminars
within the company in order to raise understanding andawareness of ESG investment among executives and employees.
Moreover, we have introduced appropriate topics regarding
ESG investment at the training sessions for companies
marketing our investment trusts.
Meanwhile, notable perspectives on ESG itself are changing
with time. In FY2014, we developed two new funds, among
others: “Daiwa New Growth Equity Fund—Shareholder’s
Smile” and “Equity Fund Tsubaki.” The former, set up
in September 2014, selects issues from among Japanesecompanies taking a positive stance toward dialogue withinstitutional investors and actively working to maximize
shareholder satisfaction. The latter, set up in March 2015,
focuses on companies where female employees play an activerole. We hope that the management of these investment trusts
will contribute to sustainable improvements of corporate value
and shareholder value.
● Communication with Customers and Sales Companies
Daiwa Asset Management is striving to communicate withcustomers to grasp the needs described above and develop andoffer products from our customers’ viewpoint. For example, wehold many seminars for customers, to provide information andhelp solve their questions. We also operate a unique call center,
stepping up efforts to offer detailed support.
Meanwhile, there is also a system to provide sales assistanceto companies marketing our products. The Marketing Division,
which is responsible for such assistance, boasts a workforce ofaround 150 members. It also has sections sending instructors
to seminars and preparing materials. Especially, the Fund
Promotion Department—tasked with providing seminars andtraining—is composed of 30 employees, making it one of thelargest sizes in the asset management industry in Japan.
使用開始日 2015年6月11日

投資信託説明書（交付目論見書）

投資信託説明書（交付目論見書）

4606−③

ダイワ新成長株主還元株ファンド
─ 株主の微笑み─
追加型投信／国内／株式

2015年2月16日

女性活躍応援ファンド

追加型投信／国内／株式※本文書は、金融商品取引法（昭和23年法律第25号）
第13条の規定に基づく目論見書です。

※本文書は、金融商品取引法（昭和23年法律第25号）
第13条の規定に基づく目論見書です。

●委託会社 ［ファンドの運用の指図を行なう者］
大和証券投資信託委託株式会社
金融商品取引業者 関東財務局長
（金商）
第352号
・ホームページ http://www.daiwa-am.co.jp/
・コールセンター 0120-106212（営業日の9：00〜17：00）●受託会社 ［ファンドの財産の保管および管理を行なう者］
みずほ信託銀行株式会社

ファンドに関する投資信託説明書（請求目論見書）を含む詳細な情報は委託会社のホームページで閲覧、
ダウンロードすることができます。
また、本書には約款の主な内容が含まれていますが、約款の全文
は請求目論見書に掲載されています。

●委託会社 ［ファンドの運用の指図を行なう者］
大和証券投資信託委託株式会社
金融商品取引業者 関東財務局長
（金商）
第352号
・ホームページ http://www.daiwa-am.co.jp/
・コールセンター 0120-106212（営業日の9：00〜17：00）●受託会社 ［ファンドの財産の保管および管理を行なう者］
株式会社りそな銀行

ファンドに関する投資信託説明書（請求目論見書）を含む詳細な情報は委託会社のホームページで閲覧、
ダウンロードすることができます。
また、本書には約款の主な内容が含まれていますが、約款の全文
は請求目論見書に掲載されています。

16

Initiatives through Business Activities

Daiwa Securities Group CSR REPORT 2015

Initiatives by Daiwa SB Investments● For Providing Good Returns over the Medium to Long Term
Daiwa SB Investments expects that companies’ share prices will
be affected by not just short- and mid-term earnings forecasts,
but by mid- to long-term management factors, while theJapanese economy is recovering from deflation and businesses
are restoring their competitiveness. We, therefore, conductmultifaceted corporate analyses incorporating ESG aspects. In
addition to growth potential as a business, we look at whether
companies implement appropriate internal control measuresand ensure that they are not engaged in corporate activities
adversely affecting the environment or society as well as
whether their technical competitiveness has improved throughenvironmental initiatives.
●N urture and Diversify Human Resources to Provide
Professional Management Service
Corporate analysis and research require human resource
training. Daiwa SB Investments’ training program for young
analysts places importance on employees thinking on theirown through case studies.
We have also overhauled our organizational systems as acompany, including the hiring of mid-career professionals
and evaluation system. We believe we will be able to provide
the management service that suits the needs of customers by
elevating a corporate culture as a professional managementcompany.
Along these efforts, we also strive to hire overseas andfemale staff to diversify our workforce. We aim to offer abetter quality service by connecting
people having skills acquired indifferent backgrounds.

Yuji Kuramoto
Executive Officer of
Daiwa SB Investments● Initiatives for ESG Investment
Daiwa SB Investments signed PRI in 2012. This represents
our stance to reinforce the investment method we havetraditionally adopted in order to achieve our goal of fulfilling
our responsibility to pursue maximum profits with our utmost
efforts from a long-term standpoint on behalf of beneficiaries.
We set up the ESG committee and rules to enhance ourcapacity to evaluate and analyze ESG issues of companies.
●C ommunication with Customers and Sales Companies
In the case of marketing of publicly offered investment
trusts, sales staff at companies handling our products directly
communicate with investors. It is, thus, important to first
deepen those staff’s understanding. Accordingly, we conduct
a workshop for their salespeople to enhance their marketingskills. The workshop helps them to learn the market system,
investment-related information, sales follow-up and otherskills necessary to market investment trusts. We also offer aworkshop for staff at sales companies who are responsible for
personnel training, thereby providing an opportunity to learn
more effective ways to train personnel.
In addition, we also create booklets containing informationnecessary for sales staff to explain about investment trusts, anduse them as training materials. They are designed to improve
the skills of salespeople and well received by them. There are
already 25 kinds of booklets available.

Tadao Miyazaki
General Manager of the Investment
Trust Promotion Departmentof Daiwa SB Investments

行内・社内限り資料（顧客配布厳禁）
作成日：2012年9月28日

投信販売の初心者から上級者の方まで、役立つ情報を凝縮！

まるわかり
ハンドブック

投資信託の基礎講座

投資信託の基礎講座

行内・社内限り資料（顧客配布厳禁）
作成日：2013年11月

まるわかり
ハンドブック

今 注目の 優 先 証 券を徹 底 解 説！

当資料のお取扱いにおけるご注意■当資料は、行内・社内研修を目的として大和住銀投信投資顧問が作成したものであり、金融商品取引法に基づく開示書類または販売用資料ではありません。■貴行・貴社のお客さま等、貴行・貴社外へ当資料を配布・提示することは、慎んで頂きますようお願いします。■当資料は、各種の信頼できると考えられる情報から作成しておりますが、その正確性・完全性を保証するものではありません。■当資料の中で記載されている内容、数値、図表、意見等は
当資料作成時点のものであり、今後予告なく変更されることがあります。■当資料の中で使用されているデータ・
グラフ等は過去の実績および結果を示したものです。また、他へ無断転用した場合の責任は当方にございません。

当資料のお取扱いにおける注意点

当資料のお取扱いにおけるご注意

大和住銀投信投資顧問株式会社
金融商品取引業者

関東財務局長（金商）第353号

加入協会 社団法人投資信託協会、一般社団法人日本投資顧問業協会■当資料は、
行内・社内研修を目的として大和住銀投信投資顧問が作成したものであり、金融商品取引法に基づく開示書類または販売用資料ではありません。■貴行・貴社のお客さま等、貴行・貴社外へ当資料を配布・提示することは、慎んで頂きますようお願いします。
■当資料は、各種の信頼できると考えられる情報から作成しておりますが、その正確性・完全性を保証するものではありません。
■当資料の中で記載されている内容、数値、図表、意見等は当資料作成時点のものであり、今後予告なく変更されることがあります。
■当資料の中で使用されているデータ・グラフ等は過去の実績および結果を示したものです。
また、他へ無断転用した場合の責任は当方にございません。

大和住銀投信投資顧問株式会社
金融商品取引業者 関東財務局長(金商)第353号
加入協会 一般社団法人投資信託協会
一般社団法人日本投資顧問業協会■当資料は、行内・社内研修を目的として大和住銀投信投資顧問が作成したものであり、金融商品取引法に基づく開示資料または販売用資料ではありません。 ■貴行・貴社のお客さま等、貴行・貴社外へ当資料を配布・提示することは、慎んで頂きますようお願いいたします。 ■当資料は、各種の信頼できると考えられる情報から作成しておりますが、その正確性・完全性を保証するものではありません。 ■当資料の中で記載されている
内 容、数 値、図 表、意 見 等は当 資 料 作 成 時 点 のものであり、今 後 予 告なく変 更されることがあります。 ■当資料の中で使用されているデータ・グラフ等は過去の実績および結果を示したものです。
また、他へ無断転用した場合の責任は当方にはございません。

17

Initiatives through Business Activities

Daiwa Securities Group CSR REPORT 201518

As a Responsible Institutional Investor
Adoption of “Japan’s Stewardship Code”
In February 2014, Japan’s Financial Services Agency(FSA) announced the “Principles for Responsible
Institutional Investors, also known as “Japan’s
Stewardship Code.” The code was drawn up topromote sustainable growth of businesses, in
response to “The Japan Revitalization Strategy,”which was approved by Cabinet on June 14, 2013,
through constructive dialogue between businesses
and various types of institutional investors whilst
the latter duly fulfilling their fiduciary duties. The
stewardship for institutional investors signifies carefulmanagement of assets for the maximum benefit ofclients and beneficiaries and taking action to promotesustainable growth of companies invested in.

Initiatives by Daiwa Asset Management
The Chief Investment Officer (CIO) of Daiwa
Asset Management participated in the process ofdrawing up the Code as a member of the “Councilof Experts Concerning the Japanese Version of the
Stewardship Code” established by the FSA, and thecompany announced its adoption of the Code in
May 2014.
Antecedently, Daiwa Asset Management
had begun actively working on guidelines andvoluntary restrictions considered to contribute to
the realization of a sustainable society, such as the
PRI and the Oslo Convention on Cluster Munitions.
In adopting the Stewardship Code, all membersof the Fund Management Division participatedin discussions in adopting the Stewardship Code,and drew up a policy with the goal of becoming
the first company creating a model policy for theindustry.
It is also vital for an asset managementcompany to properly understand the conditions ofinvestees and share such knowledge. Daiwa AssetManagement, therefore, conduct meetings withinvestee companies as needed after adopting the
Stewardship Code in order to exchange opinions
on proposals to be discussed at shareholders
meetings and other issues. In FY2014, wereceived many requests for dialogue on corporate
governance. The number of such governancemeetings held in FY2014 was about 100, a morethan 50% increase from FY2013’s 60.
In holding dialogue, we endeavor to discuss
issues in a constructive manner, while introducing
our engagement policy based on the spirit of“three-way satisfaction.” The policy is aimed to
improve corporate value in a way satisfying theshareholders, customers and employees of abusiness. We keep in mind that we should discuss
issues in a long-term perspective, without being
obsessed too much with short-term improvementof dividends or ROE.

Initiatives by Daiwa SB Investments
At Daiwa SB Investments, we are also stepping up
dialogue with investees and initiatives to fulfill ourstewardship responsibility.
We have increased the number of meetings
with the management of companies, such as
representative directors and CFOs. We havelong focused on engagement with companies
antecedently and by actively holding dialogue,
urged investee companies to turn their potential
into actual business results.
We believe that, as an institutional investor,
Daiwa SB Investments has responsibilities toprovide investees with advice on how to exercise
their potential and how to rebuild themselves andprevent recurrence when there is a problem. We
consider that taking various opportunities to raiseissues and urge improvement is our responsibility
as an institutional investor and also our mission forthe customers entrusting their assets.

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

Web

Daiwa AssetManagement Co. Ltd.
Daiwa Asset Management>
Company Information>
Our Stewardship Activities(Japanese)
Daiwa Asset Management>
Company Information>
Investment Principles
against Cluster Munitions
Producers (Japanese)Web

Daiwa SB Investments Ltd.
Daiwa SB Investments>
Company Information>
Stewardship Policy>
Our initiatives on theJapanese Version of the
Stewardship Code (Japanese)

Initiatives through Business Activities

Daiwa Securities Group CSR REPORT 2015

For Maintaining and Developing Market Functions
Close-Up

3

Settlement Functions
The securities business, the core business of the Daiwa Securities Group, functions
as an important social and economic infrastructure. It facilitates the smooth flow ofmoney by matching fundraising needs through issuance of securities and investment
needs of investors via financial and capital markets. Securities settlement—a mainstayof the Group’s overall operations—is the delivery of stocks or bonds and transaction
payment to the buyer and seller of a securities transaction respectively. If a delay insecurities settlement should occur, this could not only have a significant impact on
our earnings or reputation, but also lead to distrust in the entire market, even causing
detrimental economic effects across the globe.
The Daiwa Securities Group is aware that the securities business assumes the mission
to contribute to the development of economy, improvement of corporate value andrealization of an affluent life for people and that securities settlement is a key to thefulfilment of the business’ social responsibility. With such awareness in mind, we are
striving to build a structure enabling the smooth execution of settlement operations.

Koji Nakajima
Managing Director of the Operations Departmentof Daiwa Securities

Suppliers of funds

Users of funds
Investment

Retail investor
Institutional
investor

Securities
company
Purchase of securities

fundraising

Financial & Capital
markets(stock, bond)● Development of Settlement Infrastructure andAccumulation and Visualization of Know-How
At Daiwa Securities, we handle more than 10,000 settlementtransactions every day in trading by Japanese and overseas
institutional investors alone. This translates into roughly 3 million
transactions annually. The number of settlement transactions
has been surging following stock market rallies in recent
years. The trend is led by not just institutional investors but theaccelerating shift of funds from savings to investment among
retail investors. The increase in transactions is also significantly
attributed to the fact that a wide range of investors have started
actively using a trading method leveraging computers forfrequent trading. Meanwhile, measures to speed up settlement,
including reduction in time required between trade execution
and settlement, are also under consideration. Daiwa Securities
uses a settlement infrastructure based on an IT system that isreliable and has a high processing capability to appropriately
respond to a growing number of settlement deals. We thereby
secure the accuracy and timeliness of settlement.
However, even if operations are systematized, the mostimportant thing for the securities settlement business is eachstaff member’s capabilities of executing operations, including
their ability to judge and respond. For example, when an

Securities
company
Issue of stocks or bonds

Company
Government &Municipality

irregular event occurs, they need to grasp the situation quickly
and respond to it appropriately, thereby minimizing the impact
on investors and the market. The staff is also required to makea tailored response in many occasions, such as in derivatives
trading and settlement in overseas markets. They need to haveknow-how that allow them to provide an appropriate solution
to each customer as well as capabilities of satisfying the needsof customers from their perspective.
The settlement business also demands not just knowledgeof the operations an employee is responsible for, but a wide
range of knowledge, such as the understanding of related
businesses and the mechanism of trading and settlement.
Thus, each employee engaged in the business needs tomaximize their skills. For that reason, we are making efforts
to visualize and accumulate the experience and know-how
acquired through daily settlement operations by maintaining
manuals appropriately as we view them as a large asset.
Employees are required to rotate their tasks regularly to
expand the scope of operations they can cover.
Daiwa Securities is striving to improve operational levels,
considering that facilitating the flow of funds is the company’s
responsibility toward finance, market economy and society.

19Initiatives through Business Activities

Daiwa Securities Group CSR REPORT 2015●T
 o Continue the Settlement Business Even in
Unforeseen Circumstances
We have drawn up a business continuity plan (BCP) andregularly conduct training in preparation for unforeseen
circumstances that interfere with our operations, such as
natural disasters, terrorism and interruption of electricity
supply. The BCP contains, among others, the development of
scenarios and plans and the construction of a backup system.
Following the BCP, we will continue our operations, while
ensuring that assets are securely maintained and protected.
No matter what happens, unless the settlement business is
continued, the function of society would stop. In order to fulfill
the mission, we are stepping up our initiatives.
●P reparation for Reducing Settlement Time
Efforts are underway globally to reduce settlement time—theduration from the trade date (T) to the delivery date forsecurities and payment. In Japan, there is also a move toconsider a plan to set the delivery date one business day after
T (T+1) for government bonds and two business days after
T (T+2) for stocks. Since this is an issue the entire industry
should address, the Japan Securities Dealers Association, aself-regulatory organization of the securities industry, hastaken the leadership in establishing a working group andholding discussions. Daiwa Securities is playing a central rolein the working group and actively making proposals on issues
that are likely to arise.
The reduction in settlement time would increase
convenience and reduce settlement risk, bringing benefits
to both investors and securities companies. Meanwhile, itwould require securities companies to develop a system andimplement a variety of measures to prepare for unforeseeable
circumstances stemming from market participants, including
a failure to deliver securities or money on the settlement date.
As a leading company in the industry, we will make all possible
preparations, while keeping step with industry peers, in orderto ensure that settlement transactions are not disrupted.
●T o Become a More Reliable Securities Company
The shift from savings to investment is accelerating, helping
to broaden the customer base for securities companies. To
maintain this virtuous circle, the reliability of settlement isextremely important. It is also one of the most important issues
for the Daiwa Securities Group to maintain customer trust.
We believe that the role we are expected to play is to enable
customers to invest in securities without worries as well as
quickly provide solutions that meet increasingly sophisticatedcustomer needs. This can be achieved through a reliable
settlement infrastructure and the experience and know-how
we have accumulated over the long term.

Father of Value Investing and Securities Settlement
Fujimoto Bill Broker Bank, one of the predecessors of the
Daiwa Securities Group, imported government bonds issued
by the U.K. and France during World War I, when their prices
plunged. This paved the way for the company’s expansion ofoverseas operations.
In 1919, when the Versailles Treaty was signed, Fujimoto sent
representative officers to New York. That was because Fujimotoat that time realized that there would be great demand inJapan for bonds issued by the Japanese government overseas
at the time of Japanese-Russo War to raise funds for war
because the price of those bonds had plunged, providing an
opportunity to gain high yields. However, the denominations of
those Japanese government bonds were small, making themextremely cumbersome to settle, involving purchasing themin overseas markets and transporting them to Japan. One ofthe people who became the bank’s partners at that time wasa young Benjamin Graham, who is now called “the father ofvalue investing.” He later described securities settlement andother transactions with Fujimoto and his interchange with therepresentatives in his autobiography.

Bonds that arrived at the Fujimoto Bill Broker Bank headquarters

20

Initiatives through Business Activities

Daiwa Securities Group CSR REPORT 2015

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

Close-Up

4

Communication of Information by Daiwa's Various Divisions● Easy-to-Understand Communication of Information That
Accelerate the Shift from Savings to Investment[Investment Strategy Dept. Equity Research Dept. and
Fixed Income, Currency and Commodities Research Dept.
of Daiwa Securities]
Daiwa Securities transmits information to a wide range of people
from institutional and retail investors to those who are about tostart investment.
The Investment Strategy Department is composed of 38
staff members as of FY2014. Each member focuses on theirown specialized fields such as Japanese equities, currencies
and analyses, with information for both institutional and retailinvestors covered by the same members. This is the featurethat does not exist in other securities companies. The largest
advantage of this system is that it enables experts to exchange
their information and opinions within a single department. The
Equity Research Department, meanwhile, has 63 members inJapan. Analysts in the department focus on certain industries andrelease highly specialized reports that provide up-to-the-minuteinformation and at the same time offer unique analysis. In the
Fixed Income, Currency and Commodities Research Department,
17 members—mostly analysts and strategists—conduct analysis
and release reports on the fixed income and currency markets,
including government and corporate bonds and securities
products. These activities have received high scores in a variety ofanalyst rankings based on results of our recommendations, stock
price performance and evaluation by institutional investors.
Information communicated to retail investors needs to be
more easy-to-understand than that for institutional investors,
investment professionals. We thus incorporate more visualized
reporting for retail investors. Even though we use different
presentation approaches, however, the information to retail andinstitutional investors is both offered by the same person basedon close analysis and collection of data. Thus, the bases of thetwo types of information are the same.
Securities investment or securities companies tend to beperceived as “complicated.” The removal of such image is also
one of the roles securities companies assume. Accordingly, we
strive to fulfill our missions, which we believe include maintaining

Yukiko Hanaoka
Managing Director of theInvestment Strategy Department of
Daiwa Securities

Hitoshi Suzuki
Chief Researcher at
Daiwa Institute of Research
Head of Public Policy Team

expertise that satisfies the high needs of institutional investors,
while communicating our analysis in an easy-to-understand way.
● Our Mission Is to Provide a Comprehensive
Communication and Policy Proposal Activities[Daiwa Institute of Research]
The think tank role of the Daiwa Securities Group is assumed by
Daiwa Institute of Research, which has three functions: research,
consulting and systems. We play the role of providing wideranging analysis and communicating information to the public.
Our research activities are centered on the financial andeconomic field, covering both Japan’s and other world
economies, policy analysis, and research on trends in thefinancial and capital markets and financial businesses, taxationof financial transactions, and CSR. By leveraging specialized
knowledge and analysis know-how acquired through a broad
range of long-term research activities, we communicate
information and present policy proposals in a comprehensive
manner. Recent research themes include “sustainability of theeconomy and society,” “Asia and globalization” and “fromsavings to investment.” We are also stepping up transmission of
ESG information, communicating wide-ranging information via
our website and quarterly journals regarding local revitalization,
SRI, environmental problems, corporate governance and otherissues. In FY2014, we released a total of 79 ESG reports andcommentary articles on ESG keywords.
The Daiwa Securities Group’s operations contribute to avariety of stakeholders, such as institutional and retail investors,
businesses, governments and municipalities. At Daiwa Instituteof Research, we consider it our mission to carry out fundamental
research on the real economy, which is inextricably linked tofinance, and engage in comprehensive communication and policy
proposal activities.
To offer high-value-added research information, we always
pursue up-to-date, detailed information and a unique perspectivethat others do not have. We have also established a researchsystem to ensure that we display our collective strength as anorganization as the situation demands.
In order to communicate information that satisfies the needsof the public, it is important to grasp the currents and trends ofsociety. Major pillars of research also include discussions with21

Initiatives through Business Activities

companies, investors, governments, mass media and overseas
think tanks. Moreover, we determine what kind of information issought by analyzing the trends of access to research informationon our website, interview requests from the media and requests
for workshops and lectures from third parties.

Diversifying Communication Media
according to Needs
With significant progress in communication technology,
customer needs for information transmission media are greatlychanging. The Daiwa Securities Group, therefore, uses a wide
range of media to meet these needs.
● Use lectures and Media Appearances with Reports
Playing a Central Role
Methods of communicating information vary widely, including
reports, quarterly journals, contribution to newspapers
and economic magazines, interviews with the media, TV
appearances, lectures, seminars, presentation at workshops andpublication of books.
For example, Daiwa Institute of Research posted over 620
reports in FY2014 alone on its website, one of our maincommunication tools. As a private-sector think tank, we strive
to explain complex contexts plainly, thereby making our reports
easier to utilize. The full texts of the reports are available on our
website. Recently, the number hits on the research division’s page
has increased three- to four-fold compared to five years ago.
We also place importance on the quality of reports. The facts
described and expressions used in reports undergo reviews by
a specialized section, in addition to rigorous checks within thedepartments issuing those reports. We secure the reliability of ourreports by requiring them to go through a strict review process.
We also express our opinions on various occasions. This
includes speaking at a variety of lectures and seminars,
contributing articles to third-party economic magazines,
appearing on TV programs, posting comments throughinterviews with newspapers and other media, holding meetings
or workshops with customers concerning research information,and participating in government councils.
● Continuing to Hold a Wide Variety of Seminars
Meanwhile, each sales branch of Daiwa Securities holds aninvestment seminar on the fifth of every month and continues
to provide information on Japanese and overseas markets. We
also hold a variety of seminars, covering topics including NISA
and inheritance, in an effort to provide information. In particular,
we have been expanding the scale of seminars for Fund Wrap in
response to a recent increase in balance of its assets, as well as
seminars for investment beginners and women.
Across all branches, over 106,000 people attended more than
9,100 seminars held in FY2014.
There are also large-scale seminar events, in addition to those
held at each sales branch. In April and October 2014, we held
seminars entitled “Top Strategist Seminar” in Tokyo, Osaka andNagoya, attracting over 1,300 people. We also held “Daiwa
New Year’s Lectures for 2015” in January and February 2015 at

Daiwa Securities Group CSR REPORT 2015

eight venues, including Sapporo, Yokohama, Kobe, Kyoto andFukuoka, attracting more than 4,400 people.
In response to growing awareness, Daiwa Securities continues
to arrange ESG seminars. In July 2014, we sponsored a symposiumon the Stewardship Code jointly with Japan Sustainable
Investment Forum (JSIF). It consisted of two parts—lectures andpanel discussions—attracting a number of participants, such as
investors and businesses. Besides, we held a total of four ESG
seminars on corporate governance and other issues. In January
2015, we arranged an IR event on ESG for a business.
● Issuing Brochures and Books for General Customers
The Investment Strategy Department’s major tools forcommunicating information to general customers are “Daiwa
Investment Weekly” and “Daiwa investment Monthly.” They areboth distributed to sales branches of Daiwa Securities and alsoavailable on the Internet. We also transmit information in various
ways, including selling books through publishers and producing
desk calendars that contain information on financial events.
In April 2015, we published a book titled “Forecasts of Growth
Industries & Companies by Investment Theme 2015-2016”(written and edited by the Investment Strategy Department). The
book provides timely information on a variety of themes, while
explaining mid- to long-term prospects for those topics. It thus
well reflects our distinctive capabilities.
Seminars are also an important tool to communicate
information to customers. In addition to ones held at sales
branches of Daiwa Securities, live seminars presented on theInternet now play a central role. They can be viewed over theInternet in real time and are also available on an on-demandbasis, allowing anyone to learn anytime, anywhere. These live
seminars are designed to communicate the significance ofinvestment to potential customers by using the Internet—an easy
way to participate. Meanwhile, we also hope that they will serveas an opportunity for investors to start supporting the Japanese
economy in the long run.
The number of accesses is on the rise, with popular seminars
receiving as many as over 10,000 hits. There are now morethan 2,000 accesses on the day of a seminar being held. We aremaking efforts to boost the number further.

22

Initiatives through Business Activities

Daiwa Securities Group CSR REPORT 2015

Yoshinobu Matsuzaki
General Manager
Daiwa Securities Media Networks Co. Ltd.

● Distributing Timely Market Information over Internet TV
Since 2000, Daiwa Securities had distributed “Daiwa Securities
Information TV,” Japan’s only channel dedicated to securities
information, on multichannel pay TV broadcast service “SKY
Perfect TV!” Since April 2011, we have been producing “Daiwa
Internet TV” at our own studio and distributing it over theInternet in an effort to target a wider range of viewers. The
program is available to anyone on the Internet.
We distribute timely market information three times a dayfrom Mondays through Fridays—before securities trading starts,
after the morning session ends and after the daily trading ends.
We also offer information from Hong Kong and New Yorkevery business day. Analysts at Daiwa Securities and Daiwa
Institute of Research appear as “Specialist Report” in programs
which provide comments on timely issues or offer corporate
information, among others.
The number of visitors to the channel was 50,000 per monthin 2011, when the service began, but increased to 120,000 in
March 2015. The number of page views (PVs) doubled fromthe initial 350,000 to 760,000, underscoring the fact that thechannel has been attracting a lot of viewers. Since the Internet
service allows anyone to view their favorite programs at theirfavorite time of day and is also available through smartphones
and tablets, it is well received by retail investors. We are
stepping up our initiatives with the immediate goal of achieving
one million PVs.

For Making Communications Even More
Accessible
We will make our communications even more accessible in responseto rapid changes in society and economy, thereby contributing tosound development of finance and capital economy.
●R einforcing Useful Research in Response to Growing
Information Needs
The Research Division of Daiwa Institute of Research has morethan 40 researchers.
It is composed of the Economic Research Department, which
specializes in domestic and overseas macro economies, the Financial
Research Department, which looks into the financial and capital
markets as well as systems and law, and the Economic Environment
Research Department, which investigates environmental issues andother challenges surrounding the economy.
Moreover, in 2014, two teams were separated from the abovementioned three departments, which engage in fundamental
research: the Economic Intelligence Team and the Public PolicyTeam. The former is responsible for providing a wide range of
economic analyses through GDP projections and other means, while
the latter makes policy proposals from a long-term perspective, 30
to 50 years ahead. These teams promulgate our views more actively
to the public and we intend to further reinforce their activities in
2015, including dissemination through the media and participationin government councils.
Currently, global monetary policy is in the midst of big
changes. We are certain that there will be growing needs for
information on income disparity issues in industrialized countries
and uncertainty over China and other emerging economies.
The challenge for Japan is to find what will be necessary to turn
Abenomics into a means of more sustainable economic growth.
In the course of recovering from deflation, a variety of changes
are expected to occur. How should we evaluate such changes
and how should companies and individuals react? We will workon these issues, carrying the belief that as a think tank, we areresponsible for grasping changes in economic and social trends,
and for fulfilling the role of a reliable “compass.”●C reating Programs from a Neutral Standpoint for
Raising Awareness
The themes of “Daiwa Internet TV” programs are chosen fromtimely subjects. They are produced in collaboration with Group
companies such as the Investment Strategy Department of
Daiwa Securities and Daiwa Institute of Research. We continue
conducting surveys to meet requests from viewers. We plan tocultivate a new audience showing interest in our programs.
We also provide contents explaining about products developed by
Daiwa Securities. However, we consider that our biggest mission is
to raise awareness of finance, rather than advertising ourselves, andthus communicate information from a neutral stance.

23

Initiatives through Business Activities

Daiwa Securities Group CSR REPORT 2015

Online Initiatives
In 1986, Daiwa Securities began a service enabling investors to place stock trading orders through personal
computers for the first time in Japan. Thereafter, we also introduced services using the Internet*1 andcellphones*2 ahead of other companies.
We believe that a service providing investment information and allowing the placement of trading orders
anytime, anywhere is useful especially for retail customers in trading of securities, whose prices constantly
change on the market.
Due to the recent wide-spread use of Wi-Fi services and smartphones, more and more customers are
obtaining and analyzing information and placing trading orders with their own devices. We expect thistrend to accelerate further down the road. Accordingly, we will use state-of-the-art technology to makeour services easier to use and thereby improve customer convenience, while striving to further offer
valuable investment information.
In FY2014, we implemented a service related to NISA, a new investment program, while starting a service
for smartphone users at Daiwa Next Bank, Ltd. In FY2015, we plan a major redesign of our website. Moreover,Daiwa Securities offers a service enabling customers to receive face-to-face consulting, along with online
services. We thereby differentiate ourselves from Internet-only securities companies. At Daiwa Securities, wewill further enhance our customer services to become a securities company chosen by customers.
*1 Began in 1996
*2 Began in 1999

Support for the Creation of Our
Future SocietySupport for Cultivating a Capital Market
in Myanmar
Daiwa Institute of Research Ltd. (DIR), Tokyo
Stock Exchange Group, Inc. (currently, theJapan Exchange Group, Inc.), and the Central
Bank of Myanmar signed a memorandumof understanding pertaining to cooperation
toward establishing a securities exchange andsupporting the development of a capital market
in Myanmar in May 2012. A major componentof the memorandum is the establishment of astock exchange in 2015. The bourse is expected
to provide companies in Myanmar fund-raising
opportunities while facilitating investors’ wealthcreation. In the ensuing period, DIR has put inplace a variety of measures, such as providing
recommendations to government officials, holding
seminars in Myanmar, and accepting trainees.
On May 29, 2014, DIR received an order fromthe Central Bank of Myanmar to build the
ICT infrastructure necessary to operate a corecomputer system that mainly handles funds
settlement, government bond settlement andcollateral management. IT and its operating
Signing ceremony in Myanmar

know-how provided through the deal will enable
the smooth and efficient accomplishment ofoperations within the central bank. This initiative isalso considered to represent the modernization offinance in Myanmar.
Furthermore, on December 23, 2014, DIR signed
a joint venture agreement with Myanma Economic
Bank and the Japan Exchange Group, Inc. toestablish the Yangon Stock Exchange, Myanmar’s
first-ever stock exchange, and set up a bourse
preparatory company. The company will continuebuilding a close cooperative relationship withrelated authorities in Japan and Myanmar, aiming
to launch the new exchange in 2015.
Going forward, the Daiwa Securities Group willcontinue to harness its collective strengths to help
cultivate a capital market in Myanmar.

Japan’s First Real Estate Investment
Trust (REIT) Specializing in Healthcare
Facilities● Listing of Nippon Healthcare Investment
Corporation
In January 2014, in response to the progressive
aging of society, Daiwa Real Estate AssetManagement Co. Ltd. established Nippon
Facilities in which Nippon Healthcare Investment Corporation invests● Total amount ofassets acquired by
Nippon Healthcare
Investment
Corporation

Roughly

14.9 billion(as of June 1, 2015)24

Initiatives through Business Activities

Healthcare Investment Corporation as the first REIT
in Japan specializing in healthcare facilities. The REIT
began its operation in March and went listed on theTokyo Stock Exchange on November 5 of that year.
The Japanese government’s “Japan Revitalization
Strategy,” unveiled in June 2013, positioned thedevelopment of an industry that helps extend thenation’s healthy life expectancy as a strategic field.
It mainly incorporated measures to strengthen
medical and nursing care services as well as upgrade
the living environment for the elderly by utilizing
private-sector funds. Accordingly, initiatives areunderway to develop a system necessary to expand
healthcare facilities by using private-sector funds.
These efforts are aimed to resolve a shortageof housing for the elderly in Japan through theestablishment of healthcare REITs.
With demand for facilities and houses for theelderly growing, there will also be a surge in thenumber of paid retirement houses and serviced
residential facilities operated by corporations.
Amid such circumstances, we hope that Nippon
Healthcare Investment Corporation will contributeto society by focusing on investment in facilities
for the elderly, an important social infrastructure,and that its initiatives will lead to the growth of the
expanding senior market.

Fund to Support Unlisted Companies inDisaster-Stricken Areas
Daiwa Corporate Investment Co., Ltd. operates theEast Japan Earthquake SME Reconstruction Support
Fund, receiving investment from the Organizationfor Small & Medium Enterprises and Regional
Innovation, JAPAN (SME Support Japan), The 77
Bank, Ltd., Bank of Iwate, Ltd., The Toho Bank,
Ltd., The Aomori Bank, Ltd. and other institutions.
Targeting unlisted private companies, the fundaims to expeditiously provide risk finance mainlyin the form of equity. By supplying finance fora variety of purposes, including restoration andreconstruction following the earthquake disaster,
new business development, the shift to a new
industry or line of business, business reorganizationand succession, and business incubation, the goal
is to actively support companies in their efforts
to secure renewed growth and development.
Daiwa Corporate Investment has set up a Tohoku
branch to operate the fund. It takes advantage of
the Daiwa Securities Group’s extensive network
and also works closely with the SME Support
Japan, regional financial institutions and otherorganizations, thereby assisting the growth ofinvestee companies. To strengthen the operationof the fund, the number of staff members in the
Tohoku branch was increased last year.

Initiatives for the “Data Health Plan”“The Japan Revitalization Strategy,” which wasapproved by the Cabinet in FY2013, incorporated
the goal of “extending the nation’s healthy life

Daiwa Securities Group CSR REPORT 2015

expectancy.” In accordance with this goal, healthinsurance associations across Japan are analyzing
data such as medical information on health insurance
claims and medical checkups of their members.
By utilizing such analysis, they are also working
to develop, announce, implement and evaluate
a project program called “Data Health Plan” tomaintain and improve their members’ welfare.
Daiwa Institute of Research Business Innovation
Ltd. provides data processing systems to more than
400 of Japan’s roughly 1,400 health insurance
associations. In order to assist the government’s
strategy as a provider of such systems, thecompany has built and started offering information
analyzing systems based on a database of medical
information on approximately 7.5 million people
accumulated from its operational systems.
It will utilize the business base and medical
information database it has built by providing dataprocessing systems to these associations in FY2015
as well, thereby helping facilitate their making
of Data Health Plans. The company will continue
to carry out initiatives of social significance, suchas presenting the government with measures toimprove welfare and to reduce medical expenses.

Participation in Smart Community
Projects Promoted by National andLocal Governments
As part of environmental initiatives, Daiwa Instituteof Research Business Innovation has been involvedin three smart community projects promoted eachby the Ministry of Economy, Trade and Industry,
Saitama Prefecture and Kawasaki City. They haveprovided life-related, regional administrative services
using the Home Energy Management System(HEMS) to promote energy management andrevitalization of Japan’s local communities. Throughthese projects, we have assisted their efforts tobring about beneficial changes in the convenienceof people’s lives, regional economies andenvironmental consciousness of local communities.

Renewable Energy Generation Project
Since the introduction of the renewable energy
feed-in tariff system in July 2012, Daiwa PI
Partners Co., Ltd. has been actively developing
and investing in multiple photovoltaic and otherrenewable energy projects by leveraging theGroup’s network.

25● Data Health Planrelated seminars held
for health insurance
associations across
Japan

11

seminars
A total of(three different series)

1,900 participantsfrom a combined
500 associations

Corporate Governance

26

Daiwa Securities Group CSR REPORT 2015

Management Report

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

Features of the Corporate
Governance System
In 1999, we became the first listed Japanese company toadopt a holding company structure. Since then, we havebeen pursuing a highly transparent and objective corporate
governance system that maximizes synergies between
Group companies while valuing the independence andunique expertise of each Group member.
In June 2004, Daiwa Securities Group Inc. madethe transition to a “Committee System” of corporate
governance (a “Company with a Nominating
Committee, etc. system” as of May 1, 2015) andenhanced the decision-making process by transferringa substantial portion of authority from the Board of
Directors to corporate executive officers. In addition, we
strengthened the management oversight by increasing
the number of outside directors and establishing
the Nomination Committee, Audit Committee, andCompensation Committee. The representative directorsof major Group companies also serve as corporate
executive officers of the holding company, thereby
allowing them to efficiently implement individual
business strategies based on those of Group.
In FY2014, the Nomination Committee discussed thecomposition of the Board of Directors and its effect on

corporate governance, the basic policy for nominating
candidates for directorships and the selection ofthese candidates. The Nomination Committee selects
candidates for directorships in light of the Group’s
selection standards for the appointment of directors.
These standards include criteria that ensure theindependence of outside directors.
The Audit Committee audited the activities of
directors and corporate executive officers, business
reports and financial statements, among others, while
preparing audit reports.
The Compensation Committee discussed thepolicy on director compensation, determined thecompensation amount for each director and alsostudied a group-wide incentive plan aimed at
improving consolidated earnings results.
The corporate governance code formulated by the
Tokyo Stock exchange was introduced on June 1,
2015. It is a set of corporate governance principles tofulfill responsibilities to stakeholders, with the aim ofcontributing to the sustainable growth of companies
and mid- to long-term improvement of corporate
value. The code stipulates companies’ obligations toensure shareholder rights and secure transparency in
information disclosure as well as the responsibilities ofboards of directors.

● Number of times
each Committee met(FY2014)

Nomination
Committee:
Audit
Committee:
Compensation
Committee:
Board ofDirectors:

3
12
5
10

● Rate of attendanceat Board of Directors
meetings by outside
directors

96%

Web

Report on Corporate
Governance (Japanese)

Corporate Governance System at Daiwa Securities Group
Shareholders’ Meeting
Board of Directors,
12 members

Nomination Committee,
6 members(including 4 outside directors)

Audit Committee, 4 members(including 3 outside directors)

Compensation Committee,
5 members(including 3 outside directors)

Nominates directors for selection, or
recommends dismissal

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

Sets policy for compensation of
directors and corporate executive
officers, and determines compensation
amount for eachGroup Risk Management
Committee

Disclosure Committee

Group IT Strategy Committee

Overseas
Management
Committee

Gathers information on the system andcurrent situation of risk management,
and sets policy and strategy regarding
risk management

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

Discusses and determines measures to unify
management and IT strategies, expedite
decision-making process for IT investment andraise efficiency of IT investment

Makes decisions on issues
related to the managementof overseas offices andother operations abroad(including 5 outside directors)

Basic management policy

Executive Management
Committee, 13 members
Group-wide businessstrategy and management
issues, important financial
matters

Representative
Executive Officer

Group Internal Audit Committee
Makes decisions on issues relating to the internal audit systemand the verification of internal control activities(As of June 30, 2015)

Corporate Governance

Daiwa Securities Group CSR REPORT 2015

Daiwa Securities Group Inc. had exchanged opinionswith the Tokyo Stock Exchange and other relatedparties before the code was formulated. We willcontinue taking appropriate action, leveraging thefeature of our governance structure as a “Company
with a Nominating Committee, etc. system.”

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

Preventing Conflict-of-Interest
Transactions between Group Companies
Conflict-of-interest transactions between Group
companies can occur in situations such as intra-Group
trading. The Daiwa Securities Group applies rules
regarding conflicts of interest stipulated by Japan’sCompanies Act to Executive Committees as well as
Board meetings. Conflicts of interest within the Groupare prevented through a rule prohibiting an executive
officer from voting when he or she is also the directorof an interested Group company.

Internal Control System and Internal Audit

Supervisory Function
The Board of Directors consists of 12*1 directors,
including five outside directors*2 and two female
directors. The Board of Directors determines key
management policy and oversees executive duties. In
order to perform this supervisory role from multiple
viewpoints in accordance with the demands ofsociety, the policy for selecting new board members
states that candidates must have a strong sense of
ethics and demonstrate initiative and leadership.
Additionally, outside directors are experts in such fields
as management and accounting. In addition, thesupervisory function of Daiwa Securities Group Inc. isreinforced by the Audit Committee and the Office of
the Audit Committee. The Audit Committee, which
consists of a majority of outside directors,*2 plays apivotal role in the supervision of executive duties. The
Audit Committee is assisted by the Office of the Audit
Committee, which is a department independent ofexecution of business.
*1 As of June 30, 2015
*2 Outside
directors as defined by Article 2-15 of Japan’sCompanies Act

In recognition that management is responsible formaintaining an effective internal control system toensure the sound and proper execution of business,
the Group, under the main initiative of Daiwa
Securities Group Inc., has established a system for
managing the Group’s major business risks. The Groupalso maintains this internal control system for ensuring“business effectiveness and efficiency,” “reliablefinancial reporting,” “compliance with laws related tobusiness activities,” and “asset preservation.”
The Internal Audit Department verifies theinternal control system. The department, establishedindependently from all other departments andreporting to a dedicated corporate executive officer,
ensures internal audits to act as an important functionof raising Group value through the creation of soundand efficient internal controls. The department’s
internal auditing plans and the results of internal
audits are reported to and approved by the GroupInternal Audit Committee, which is directly under
the control of the CEO of Daiwa Securities Group
Inc. Plans and results are also reported to the Audit
Committee.
Daiwa Securities Group Inc. seeks to raise corporate
value by effectively conducting internal audits, andimplements risk-based internal audits primarily throughits Internal Audit Department.
The Internal Audit Department pays special attention
to certain aspects of Group internal auditing activities,

Internal Audit System of the Daiwa Securities Group
Daiwa Securities
Group Inc.

CEOGroup Internal Audit
Committee(chaired by the CEO)Internal Audit
Department

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

Deliberation, decision making,and reporting

Exchange of
opinions

Delegation of audit
work and reporting

Overseeing and reporting

Accounting
auditorCommunication
and adjustment

Internal audit staff member
works at the Internal
Audit Department ofboth companies

Daiwa Securities Internal Audit Department

Board of Directors
Audit Committee

Monitoring/collaboration/
direct auditing

Direct auditing

Domestic Group companies without
an internal auditing section

Domestic Group companies withan internal auditing section

Monitoring/collaboration/direct auditing

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

Overseas Group companies

27

Corporate Governance

Daiwa Securities Group CSR REPORT 201528

including the internal control systems at Daiwa
Securities Co. Ltd. and the Group’s overseas businessoffices as a global financial services group, the internal
control systems at Daiwa Next Bank, Ltd. as a bank, thestatus of Group-related businesses, and the status ofcontrols over Group companies at the parent company.
The Group Internal Audit Committee hears reports
on not only the results of audits conducted at Daiwa
Securities Group and Daiwa Securities, but also
important matters found in audits conducted at Group
companies in and outside of Japan.
The Internal Audit Department collaborates with
the internal auditing section of each Group company
through periodic meetings, monitoring activities, andperforming audits. It also formulates policies that apply
to all Group internal audits, plans risk-based audits,and monitors these activities.
The Internal Audit Department maintains
communications with the Audit Committee andExternal Auditor, making any necessary adjustments toensure that audits are performed efficiently. The Audit
Committee on occasionally asks the Internal Audit
Department to conduct an audit.
All of these internal audit activities are regularly
subjected to third-party review. They are assessed interms of achievement levels relative to “International
Standards for the Professional Practice of Internal
Auditing,” a global standard for internal auditing drawn
up by The Institute of Internal Auditors. The evaluations
received from the independent, external institution
helps us to continue strengthening our system.
Structure and Achievement of Whistle-Blowing
System (Corporate Ethics Hotline)
Since January 2003, the Daiwa Securities Grouphas been operating a Corporate Ethics Hotline,
through which employees can report problems in
the workplace directly to a corporate ethics officer of
Daiwa Securities Group Inc. or an outside lawyer.
When the Hotline is contacted, the corporate ethics
officer, in cooperation with the internal control officers
at each Group company, carries out a factfinding
investigation, while taking steps to protect the caller.
The Group is working to make the Corporate Ethics
Hotline well known to all employees, including staff ataffiliated companies and temporary workers, in orderto ensure that anyone can use it without hesitation.
We are also making efforts to respond as quickly as
possible when calls are received. The Group is taking
steps to improve the Hotline so that it can work
effectively as a deterrent to prevent problems before
they occur, not just as a measure to solve problems.

Increase employees’ awareness of whistle-blowing system● Number of reports
received throughwhistle-blowing system
for FY201441(up 12 from FY2013)

Compliance

Daiwa Securities Group CSR REPORT 2015

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

Improving Compliance AwarenessIn order to make our executives and employees
contribute to sustainable growth of the society withelevated ethical mindset, we always take steps to
educate and train them to uphold external regulations,
exercise self-discipline and appropriate conducts. These
compliance training programs commence as soon
as employees join the Group and continue throughregularly scheduled training sessions encompassing theircareers, thus ensuring that every employee is awareof, and thoroughly understands, compliance related
issues. As the Group pursues new business ventures inareas where the regulatory structure is still incomplete,employees are trained to approach all matters withstrong self-discipline and legal awareness, refer toexisting legal precedents whenever possible, and always
adhere to accepted social norms of proper behavior.
In FY2014, to further push forward these initiatives,
we documented the Minimum Points to Fulfill at
Daiwa Securities Group (hereafter “Group MinimumStandards”). Specifically, in addition to the existingGroup Minimum Standards for Information Security,
we have instituted and disseminated Group MinimumStandards to prevent insider trading and to eliminate
relations with anti-social groups, and checked theimplementation of these initiatives within the Group.

Measures for Maintaining
Information Security
We at Daiwa Securities Group have implemented
numerous preventive measures vis-à-vis privileged
information entrusted to us by customers, including
but not limited to personal information, to acquire theirstrong confidence and to fulfill our social duty of being
responsible for a sound capital and securities market.
The Group has created Minimum Standards on
Information Security, which form the basic policy
followed by Group companies when they make theirown regulations.
Since FY2014, as part of the Group’s education andtraining on cyber security, executives and employees

experience “targeted email attack,” a type ofcyberattack, in simulation. The training is designed to
instill a sense of caution, improve the Group’s ability torespond and raise attention to suspicious emails.

Anti-corruption Initiatives
In line with the principles of the United Nations
Global Compact, the Daiwa Securities Group has
established an anti-corruption system that requires
each of our Group Companies in and outside of Japan
to implement rules appropriate for its operations,applicable laws and regulations and other specificmatters of concern. For example, we have set rules
on entertainment of business partners, including
government officials, at our operational bases inJapan and overseas. Moreover, we ensure that when
we make a donation, our officers and those withmanagerial responsibilities in multiple departments
check the receiver, purpose and amount of donation.
We have also implemented a system requiring theroutine monitoring of transactions executed bybusiness partners and others on an individual basis.
The system is aimed to prevent our business partners
from engaging in money laundering, stock pricemanipulation, insider trading or other unfair tradepractices through the Group.

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

29Compliance

Basic Policy on Avoiding Any
Involvement with Anti-social Forces
To ensure fairness and the sound development of
the securities market and protect our customers
and employees, the Daiwa Securities Group has
created a framework to eliminate the influenceof organized anti-social forces, gang members,
corporate extortionists, and other criminal
elements and takes systematic measures to avoid
all ties with such elements.
1. T he Daiwa Securities Group will not carryout any transactions whatsoever with antisocial forces.
2. If it is determined that parties alreadyhaving transactions with the Daiwa
Securities Group are anti-social forces, wewill swiftly take appropriate measures toterminate dealings with them.

Daiwa Securities Group CSR REPORT 2015

Compliance Initiatives at Daiwa
Securities Co. Ltd.
Daiwa Securities Co. Ltd. is taking measures in line withthe compliance program to ensure the effective operationof our internal control system and strict compliance of
our sales activities with laws and regulations.
In FY2014, the company worked on measures to put
greater emphasis on sales activities from the customer’s
perspective and reinforce company-wide internal
controls as well as establish sound information security
policy and systems to exclude anti-social forces.
For FY2015, in order to reinforce the initiatives taken
in FY2014, Daiwa Securities formulated a complianceprogram incorporating the three pillars outlined below,
under the keyword “Customer First Principle.” Thecompany will strive to bolster its internal management
systems further.

3. T he Daiwa Securities Group will provide nofunds to anti-social forces.

Compliance Program

4. T he Daiwa Securities Group will accept no
unfair demands from anti-social forces. If
it is determined that an unfair demand has
been made by anti-social forces, we willtake legal action in the civil or criminal court
against the party making the demand.

1. Greater emphasis on sales activities from thecustomer’s perspective

5. T he Daiwa Securities Group establishes
close cooperative relationships with outside
parties such as the police force, the National
Center for the Elimination of Boryokudan(anti-social forces), legal experts, and others.

2. Construction of internal control systems at
headquarters departments and sections
3. E
 xercise of proper functions as a gatekeeper
to the market

Daiwa Securities’ Compliance Framework
Person in charge of compliance(Head of Internal Administration Supervisors)
Compliance Section
Compliance Control Department

Compliance Training

Compliance Department

Inspection

Consultations
and reports

Education andsupportSales branches
Sales supervisor
Customers

The Daiwa Securities Group provides regulartraining and testing to improve compliance awarenessand to ensure that all employees embrace Daiwa’s
Corporate Principles and that self-discipline is exercisedunder all circumstances. For example, in addition to
the existing Information Security Training throughe-learning for employees of each Group company,
in FY2014, we enhanced our compliance training
by conducting training on the Prevention of Insider
Trading and the Elimination of Relations with Antisocial Groups. Moreover, every year, Daiwa Securities
conducts a broad range of training with a practicalemphasis, including Compliance Training for all
employees, compliance education and instruction for
new graduates and newly appointed managers, grouptraining and training on firewall regulations.

Internal administration supervisor
Verification, guidance
and oversightSales branch employees
Headquarters

Calling alert to prevent fraudulent saleof unlisted stocks
Daiwa Securities Co. Ltd. has been warning its
customers of fraudulent solicitations by showing
a reminder message “Watch out for solicitationof investment in unlisted stocks or bonds byswindlers who call themselves Daiwa Securities”
on a prominent part of the top page of its
website and improving the website’s contents.
Similar measures have been implemented
by Daiwa Securities Group Inc., Daiwa AssetManagement, and Daiwa SB Investments Ltd.

30

Risk Management

Daiwa Securities Group CSR REPORT 2015

31

Management Report

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

Risk Management Policy

Type of Risks

Daiwa Securities Group Inc. has established “The Rulesof Risk Management” governing all activities by Group
companies to manage risk in order to ensure that they
conform to the following basic policies.

We face various risks in the course of our businessactivities and thus believe it is important to properly
identify, evaluate, and manage these risks inorder to maintain robust financial and earnings
structures. Daiwa Securities Group Inc. engages inrisk management to clearly identify risks based on
respective Group companies’ business characteristics
and risk profiles. The types of risks that have been
deemed important to manage include market
risk, credit risk, liquidity risk, operational risk, andreputational risk.

Basic Policy
1. Management’s proactive involvement inrisk management.
2. Implementing a risk management systemcommensurate with the nature of suchrisks in the Group’s management.

Risk Management System

3. Understanding comprehensive risk
based on integrated risk management,
strengthening capital and securing thesoundness of liquidity.

The Board of Directors of Daiwa Securities Group Inc.
has approved “The Rules of Risk Management.” This
rule defines basic policies related to risk management,
the types of risks that are necessary to be managed,
and the executive and department for each major risk.
Each subsidiary conducts risk management suitable forthe risk profile and size of each business in accordancewith these basic policies related to risk management.

4. Clarifying the risk management process.

Limits are set for each type of risk within a levelsuitable for the risk management strength of the Group.

Risk Management System
Daiwa Securities Group Inc.

Group companies

Nomination CommitteeD aiwa Securities

Board of Directors

Audit Committee

Executive Management Committee

Compensation Committee

Representative Executive Officer

Group Internal Audit Committee

 aiwa Capital Markets Europe
D
Policyformulation andinstruction

Group Risk Management Committee

CRO*

Discussion andreporting*Chief Risk Officer

D aiwa Corporate Investment Daiwa Securities SMBC
Principal Investments

Operational risk
Credit risk Liquidity risk Operations
Systems risk
risk

 aiwa Office Investment
D
Corporation
 Daiwa PI Partners

Risk Management Department
Market riskD aiwa Capital Markets
AmericaD aiwa Asset Management

ReportingComprehensive risk management structure aiwa Capital Markets HongD
KongInformation
security risk

Compliance risk

Legal risk

Humanresources
risk

Physicalassets risk Daiwa Next Bank Other Group companies(As of July 1, 2015)

Risk Management

Daiwa Securities Group Inc. monitors the system andsituation of its subsidiaries’ risk management.
Each subsidiary conducts risk management
appropriate to the risk profile and size of eachbusiness in accordance with these basic policies
related to risk management, while Daiwa Securities
Group Inc. monitors the system and situation of its
subsidiaries’ risk management. The risk exposuresof subsidiaries found through monitoring and issues
concerning the risk management system of eachsubsidiary are reported to the Group Risk Management
Committee, which is a sub-committee of the Executive
Management Committee of Daiwa Securities Group
Inc., and it discusses and resolves any issues that arereported.
The Group Risk Management Committee
understands the Group’s risk management system andrisk exposures, discusses and determines the policy
on risk management and specific measures. It holds a
meeting, chaired by the CEO, generally every month.
In addition, major Group companies regularly holdrisk management committee meetings in order tostrengthen their risk management.

Supply Chain Management andHuman Rights Due Diligence
The Daiwa Securities Group regularly checks the
documents disclosed by major business partners,
including providers of IT equipment and services,
as well as news reports about these companies andtheir reputation on the Internet in order to manage
problems in the Group’s supply chain. If any issues
found, we take steps, such as urging the business
partners to make improvements. We also collectinformation provided by public institutions in andoutside of Japan and exchange information withexternal parties to be aware of human rights issues
that exist in the countries where the Group conducts
business operations. We then consider taking
appropriate measures for issues of importance.

Daiwa Securities Group CSR REPORT 2015

switch to the alternate system in case of an emergency
at headquarters. We can thereby continue vital
operations through a substitute office location.

*Prioritized operations to be restored
or continued:
1. C arrying out securities transactions tradedin the markets and yet to be settled
2. P
 ayment to our customers
3. N ew orders from customers to sell, cancel
or withdraw for the products below:
・Domestic listed shares, including closing
long positions on margin transactions
・MRF (money reserve funds), MMF (money
market funds), medium-term government
bond funds
・Japanese government bonds forindividual investors
・Cash deposits

Initiatives on Impact of Climate
ChangeA significant rise in sea levels and the occurrence of
extremely large typhoons due to global warming haverecently raised concerns over potential large-scale
flood damage. Some of the Daiwa Securities Group’s
important business bases are located in places not very
far from the seashore or rivers and may be affectedshould floods occur. We are not just taking generalprecautions against flood damage, but promoting suchmeasures as setting up key equipment and facilities
at different sites and moving machinery to the upper
stories of our office buildings, in order to mitigate theimpact of disasters on our business operations as muchas possible.

Business Continuity Plan
To be prepared for emergencies, we have drawn up abusiness continuity plan (BCP) prioritizing important
operations* to be restored and continued in orderto keep the financial markets open and to protect
customers’ economic activities. Envisioned emergencies
which might make our head office functions,branches and data centers or other important facilities
inoperative include: earthquakes, fires, storms, floods,
other extraordinary weather conditions, terrorism,
serious outbreaks of infectious diseases, such as new
strains of influenza, and serious disruptions of social
infrastructures and services due to such events.
In accordance with this plan, we will not only
ensure the safety of customers, our employees, andprotection of our assets but will strive to continue ourvital operations in the financial markets where ourbusiness serves public interests.
For example, we have begun operating Japan’shighest-level backup center, which enables us to easily

Construction to relocate power receiving and transforming facilities
performed on the rooftop of the Osaka branch building

32

IT Governance and Information Security

Daiwa Securities Group CSR REPORT 2015

Management Report

IT Governance and Information Security
Approach and Basic StanceAt the Daiwa Securities Group, we leverage our information technology (IT) strategy toprovide customers with highly value-added products and services swiftly, accurately,
and at an appropriate cost as “the customer’s first choice securities group.”
Furthermore, we protect information assets including personal information from a wide range ofinternal and external threats, and take steps to mitigate systematic risks by monitoring information systems ona daily basis so that we can provide safe and stable services to customers.

IT Governance System
The Daiwa Securities Group has established the GroupIT Strategy Committee as a subcommittee of the
Executive Management Committee. This committee
deliberates and makes decisions on such issues asbudgets for IT investment and the allocation of IT
functions among the Group companies. IT investment
budgets are prepared bearing in mind the importanceof synchronizing management and IT strategies, andfunds are prioritized for investment budgets that
contribute to the achievement of Group managementtargets and business strategies. While systematicallyand flexibly responding to the trend toward tighter
global financial regulations such as Basel III, we control
group-wide IT costs at an appropriate level.
We have also established the Group IT Management
Committee, which serves as a prior consultation
mechanism for the Group IT Strategy Committee.
We thereby implement a system where responsible
executive officers discuss medium-term IT strategies
and issues common to each Group company.

IT Strategy (Basic IT Policies)
To achieve the management vision of “leading thecapital markets in Japan and Asia and becoming thecustomer’s first choice securities group,” the Daiwa
Securities Group is pursuing two IT strategies (Basic IT
Policies): “Strategic IT Investment” and “Strengthening
IT Governance.” These are included in the Group’s
Medium-Term Management Plan, “Passion for theBest” 2017, which commenced in FY2015.
In FY2014, while responding to the trend oftighter regulations on the financial industry, theGroup worked to improve the efficiency and quality
in executing Nippon Individual Savings Account(NISA) and other sales activities, and concentrated
allocation of resources to areas that enhance customer
convenience. In this way, we strived to create aplatform from which the Group can play a leadershiprole in the shift “from savings to investment” in Japan.
In FY2015, we will expand our service platform tobecome the customer’s best partner, while responding
flexibly to global regulations and government policies,
including NISA, integration of financial income
taxation and Japan’s My Number national identification
system.
Moreover, to raise the quality of our customer
proposals and increase our flexibility, we will expand
support tools for sales staff, with a focus on smart
devices. We will also actively utilize artificial intelligence(AI) and information communications technology (ICT),and further enhance customer services.

Information Security
The Daiwa Securities Group is proactively
strengthening information security measures andpursuing measures to protect privileged assets,
including personal customer information, while
appropriately incorporating the latest technologicaltrends.
In particular, cyber-attacks and other external
threats have become more serious and more advanced
in recent years. We recognize the importance ofdeveloping an organizational structure in response tothese threats, and have set up a Computer Security
Incident Response Team (CSIRT), in the IT Department,that specializes in cyber security measures. The Group
works on the prevention and early detection ofproblematic behavior, either from outside of or within
the Group.

Malfunction Countermeasures
Daiwa Securities Group promotes the internal
development and standardization of systems andworks to provide stable, high-quality services tocustomers.
Regular discussions take place on the operational
status of information systems with Daiwa Institute of
Research and Daiwa Institute of Research Business
Innovation in order to analyze and ascertain patterns
of previous faults. That information is used to shorten
recovery times and to prevent the recurrence of thesimilar faults.

33

Relationship with Customers

Daiwa Securities Group CSR REPORT 2015

Social Report

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

Building Deeper, Stronger Trustwith Customers
Appropriate Explanations for Customers
We aim to build customer satisfaction throughquality services, built on understanding customer
needs quickly and proposing the best solutions foreach customer. Providing faithful and appropriate
explanations is paramount for us.
Japan’s Financial Instruments and Exchange
Law prohibits “solicitation that is improper in lightof a customer’s knowledge, experience, financial
situation and objectives.” Daiwa Securities’
approach is rooted in this law, but as a part ofour hospitality-based service, we strive to deliver
explanations that exceed the legal requirements
when promoting our financial products.
When selling Impact Investment products aimed
at addressing social issues, including Vaccine Bonds
and Water Bonds, Daiwa Securities explains to ourcustomers how their investments contribute tosociety, deepening their understanding of these
Impact Investments.

Active Post-Sale Follow Up
Completing the sale of a product is only the
beginning of a securities company’s relationshipwith the customer. Follow up is a key elementin building the relationship of trust with thecustomer. To alleviate customer dissatisfaction orconcerns arising after trading, we offer thoroughexplanations and appropriate proposals andpromote initiatives to reinforce our relationship oftrust with customers.
Investment seminarImproving In-Branch Customer Service

Quality

Our employees interacting with a great variety ofcustomers need not only specialized knowledge ofthe markets and financial products, but polishedservice skills with an emphasis on customer
attentiveness as well.
At Daiwa Securities, our goal is to provide quality
customer services with a spirit of hospitality. In
addition to group training, we require regularcheck-up tests on an ongoing basis using its internal
e-learning system. Staff from our head office
perform onsite checks to provide guidance to drive
greater improvements in quality.
In the previous fiscal year, we also announced
our commitment to provide enhanced services andexplanations to customers and since then, have
stepped up our efforts to improve hospitality.
Moreover, we currently conduct a customer
satisfaction survey once every half year at all the
branches of Daiwa Securities, yielding diverse
opinions from customers present. This feedback
helps us to further improve our service quality,
address challenges and enhance customer
convenience and comfort.
Accessible Services for Diverse Customers
When Daiwa Securities renovates existing sales
branches or plans new branches, we work to ensurethat they are accessible to more customers, throughmeasures such as reduced variations in floor level
and installation of bigger counters.

Displayed at counters of all sales branches

34

Relationship with Customers

Daiwa Securities Group CSR REPORT 2015

The company also provides necessary
explanations through written communication andintroduces its Internet banking services to customers
with hearing difficulties.

Further Improvement of Consulting Services on
Inheritance and Business Succession
To meet the inheritance and business successionrelated needs of customers, the head officeand some branches of Daiwa Securities have“inheritance consultants.” We have also introduced
an “Inheritance Planner Certification” program andstarted offering better quality service to customers.
The program is an in-house qualification systemfor employees with advanced expertise accumulated
through the certification for financial planners(CFP®) qualifications and completion of in-housetraining. It helps us to enhance our inheritance andbusiness succession-related consulting services tocustomers.
Inheritance consultants are staff members who
not only handle procedures within Daiwa Securities
but also comprehensively support any inheritanceprocedure for customers at the time of inheritance.
They also arrange tax accountants, judicial
scriveners and agents for inheritance proceduresin accordance with requests from customers.
Inheritance consultants undergo lectures, training
programs and OJT for the first three months andalso receive training regularly thereafter.

improve our ability to accept orders in the event ofan emergency and to decentralize operational risks
by splitting our contact center functions between
two sites.
The center has been a key channel fortransactions, sustaining the company’s businessmodel whose cornerstones are Daiwa Consulting
and Daiwa Direct transaction courses. The center
now handles calls coming in to sales branches andexecutes some of the transactions. Thus it acts
as our comprehensive remote contact center forcustomers.
Efforts to Improve Telephone Customer

Service Quality

Daiwa Securities’ Contact Center participates in a
telephone customer service competition* organizedby the Japan Telecom Users Association, a Public
Interest Incorporated Foundation.
The purpose of the participation is to improveContact Center service quality significantly byreceiving quality evaluations from a third-party.
In pursuit of high marks in the competition, we
encourage our staff at the Contact Center to work
constantly to improve customer service and verbal
skills; we believe this will help strengthen thecapabilities and motivation of our telephone service
representatives. Improving the level of remote
service provided by service representatives also
helps bring about increased customer satisfaction.

Strengthening Contact Center Functions
On April 1, 2014, Daiwa Securities’ Call Center was
renamed the Contact Center. The new Contact
Center now undertakes more functions, receiving
all calls made to sales branches. In July 2014, we
also expanded the scale of the two sites wherecontact center functions are located. The expansionof the service points has enabled us to further

Daiwa’s Point Program*Japan Telecom Users Association Telephone
Customer Service Competition
This competition is a forum for companies to compare theirtelephone customer services with others and to increasecustomer satisfaction by improving the verbal quality of theircustomer handling. At the annual competition, participatingcompanies test the results of their many hours of accumulated
telephone customer-service training and preparation as apart of efforts to improve customer service and verbal skills.
Nationwide, over 10,000 people compete in this widelyrecognized event.

Daiwa’s Point Program rewards customers basedon their transactions. Points earned can beexchanged for goods or used to make a varietyof charitable donations using a conversion rateof one point for 1 yen.

Organizations to which donations
can be made• UNICEF• Médecins Sans Frontières Japan
Association• WWF Japan• The United Nations World Food
Programme (WFP)• Japan Platform• Japan Philharmonic Orchestra• Arts Support Kansai(As of April 2015)

Tokyo Contact Center35● Number of sales
branches newly
introducing Daiwa
Securities inheritanceconsultants

31 branches(from October 2014 to April 2015)● Number of accredited
inheritance planners

171(as of March 2015)● Financial institution
with the highest
number of CFP ®
accredited staff

590(as of March 2015)● Scale of Contact
Center620 service points(500 in Tokyo, 120 in Osaka)* This data pertains to
Daiwa Securities

Relationship with Customers

Daiwa Securities Group CSR REPORT 2015

Working to Incorporate
Customer Voices
Contact Center Initiatives
Employees at the Contact Center, which serves
as our comprehensive remote contact point,
have direct contact with customers and play anincreasingly crucial role not only as a transaction
channel but also in customer support andmarketing. In order to maintain and improve
contact center operations to meet the demandfor high-quality service, we provide training andregular level checks for all Telephone Service
Representatives (TSR).
The Contact Center analyzes inquiries, other
input from customers and related data to identify
the causes of any issues raised. The Contact Center
provides feedback and information to our head
office and sales branches as part of our efforts toimprove services and customer interaction and toincrease customer satisfaction.
Following the start of the Nippon Individual
Savings Account (NISA) program on January 1,
2014, the Contact Center received a numberof requests for increased trading services for
smartphone users taking advantage of the
program. We therefore improved related
smartphone services at the end of January 2015,
while redesigning the entire online trading sectionof Daiwa’s website to make the section easier touse on smartphones and tablets.

calls—roughly 900 less than FY2013 and about
the same level as in FY2012. Both inquiries andcomplaints decreased in number, while thenumber of complaints about customer service,
such as inadequate post-sale follow-up and lack ofcommunication, remained almost unchanged.
Everyday, Customer Support Center members
share the feedback received from customers andthe action taken in response. They also study
together every morning to improve their operational
knowledge and continue working to enhance theirservice quality. The Center staff appreciates thevalue of customer feedback and complaints and will
strive to improve customer service.

Calls Received at theCustomer Support Center

FY

(FY)
2009
2009
2010

77%

23% 4,144

2010
2011

80%

20% 4,224

2011
2012

82%

18%

2012
2013

83%

2013
2014

82%

2014

83%
0

Daiwa Securities’ Systems for
Utilizing Customer Feedback
Customers

Opinions, comments,
and requests
Questionnaire

postcards available
at branches

Telephone E-mailCustomer Support Center
Contact Center

Sales
branches

Management

Departmentsin charge

Improvement

Improvement

Improvement

Customer Support Center Initiatives
Daiwa Securities’ Customer Support Center isa department within head office that handles
customer feedback and complaints directly. It works
to respond promptly and appropriately to customer
complaints and shares this input with Daiwa
Securities’ sales branches and related departments
at head office to avoid the recurrence of problems.
In FY2014, the Center received 5,393

1,000

2,000

5,119

17% 5,436
18% 6,289
17% 5,393
3,000

4,000

5,000

6,000

7,000
(Calls)Inquiries

Complaints

36

Relationship with Shareholders and Other Investors

Daiwa Securities Group CSR REPORT 201537

Social Report

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

Breakdown of Shareholders
Breakdown by Investor Type (as of March 31, 2015)
Total number of shares outstanding:
1,749,378,772
Other
4.8%

Individuals in
Japan
18.3%

Foreigninvestors
45.3%

Financial institutionsin Japan
27.7%
Other corporationsin Japan
3.9%

activities to create new communication opportunities.
Such activities include telephone conferences on thedays of earnings announcements, briefings about
the company for individual investors, management
strategy briefing sessions, one-on-one meetings withanalysts and investors and participation in Daiwa
Investment Conferences held in Tokyo, Hong Kong
and New York.
In addition, we are further developing information
disclosure on our IR websites and publishing annual
reports and business reports for shareholders. We
will continue to strive to make our communications
even more accessible and precise for shareholders.
Questionnaire for Shareholders

Dividend Policy
Daiwa Securities Group Inc. adopted the policy of
paying dividends semiannually at a payout ratio of
approximately 30%. However, to further increase
shareholder returns, we have decided to raise thetargeted payout ratio to around 40% from theyear ending March 31, 2016. The following is ourrevised policy.

Dividend Policy
Daiwa Securities Group Inc. aims to continuously
provide improved value for shareholders, including
distribution of profits. In principle, dividends arepaid semiannually (interim and year-end dividends)
at a payout ratio of approximately 40% based on
consolidated financial performance. This policy
is applied to the interim dividends to be paid in
December 2015 and beyond. We also actively
seek ways to increase returns to our shareholders,
including share buybacks when we have sufficientaccumulated capital to pursue further growth.

Communication with
Shareholders and Investors
Every year, many shareholders attend our general
meeting of shareholders—an opportunity for us tointeract directly. There were 2,329 shareholders at
the 78th regular general meeting of shareholders,
held on June 25, 2015. We also engage in various IR

We distribute a questionnaire to shareholders coinciding with the
distribution of rewards under our Shareholder Rewards Programat the half-year end, to gather and incorporate their views into
management and IR activities. The findings of these questionnaires
are utilized to enhance satisfaction with the shareholder reward
program and to improve our business operations.

● Breakdown ofshareholders(as of the end of March 2015)

Foreign investors

45.3%(down 0.9 points from the endof the previous fiscal year)

Individuals in Japan

18.3%(down 0.6 points from the endof the previous fiscal year)● Total number ofshareholders attending
the general meeting ofshareholders

2,329

September 2014 Shareholder Rewards Questionnaire
Contents•• When did you first purchase our shares?
•• Why did you choose to buy the stock of Daiwa Securities?
(multiple answers allowed)•• What types of disclosure and corporate communication
would you like to see enhanced in the future? (multiple
answers allowed)•• Are there any products you would like for the shareholder
reward program? (multiple answers allowed)

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

Web

Stock Information
Web

Investor Relations Information

Relationship with Shareholders and Other Investors

Initiatives in FY2014

Daiwa Securities Group CSR REPORT 2015

Disclosure System

Increase the Provision of Information in

the “Growth” Phase

Amid a major shift from savings to investment,
the Daiwa Securities Group actively disseminatedinformation contributing to the improvement of
the Group’s corporate value. For example, we
communicated the summary of our previous
Medium-Term Management Plan and otherinformation efficiently and effectively at earnings
announcements and management strategy briefing
sessions, as well as in business reports.
Implement Effective IR Activities That

Suit Each Investor BaseIn overseas IR initiatives, we implement effective
activities that suit each investor base. In particular,
in FY2014, we strengthened communications
with institutional investors by starting to provide
explanations of the Group’s governance structure to
their staff responsible for exercising voting rights.
We are also reinforcing briefings for individual
investors held at sales branches of Daiwa Securities.
In FY2014, the Group held a live seminar-stylebriefing for individual investors on the Internet for
the first time ever, attracting participation of many
investors and a large audience. Meetings focusing
on specific themes were also held for the first timein six years. The theme of the briefings was theretail business, a field that investors are particularlyinterested in.

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

Disclosure Policy
As a company engaged in the securities business, ininformation disclosure, we aim to be a role modelfor other listed companies. We will strengthen
disclosure of not only financial information, butalso non-financial information with social andenvironmental aspects that are not evident in shortterm financial figures.

North America:

2 IR events (25 meetings)
Europe:2 IR events (30 meetings)
Asia:

2 IR events (23 meetings)●N umber of participantsin a live seminar-stylebriefing for individual
investors on the Internet

1,400● The Daiwa Securities Group will provide
important information about the Group,
including financial, social and environmental
aspects, in a fair, prompt and appropriatemanner. We will thereby promote
understanding of the Group amongshareholders, investors, local communities andother stakeholders to help them to properly
evaluate us.
● The Group will comply with the Financial
Instruments and Exchange Law, other laws andregulations as well as rules implemented by
the financial instruments exchanges where ourstock is listed.
● T he Group will strive to disclose information
fairly in terms of both content and timing.

Internet live seminar● Number of overseas IR
activities held in FY2014

Total of roughly

Disclosure Policy● The Group will utilize various communication
channels including briefings, telephone
conferences, the Internet and printed materials
to disclose information in a manner that is easy
for investors to comprehend.
● The Group will always keep in mind our
responsibility to lead the securities market
and strive to set an example for other listedcompanies in disclosing information.
● To ensure that these policies are implemented
properly, the Group has establisheda Disclosure Rule that sets forth theestablishment of a Disclosure Committee and
the Group’s information disclosure methods.

38

Relationship with Employees

Daiwa Securities Group CSR REPORT 201539

Social Report

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

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

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

Support for the Success of Veteran Employees
The Daiwa Securities Group has in place a Senior
Advisor System that provides veteran employees witha wealth of experience to play an active role in theworkplace. Senior advisors are dispatched to locationsof their choice and engage in community-based
consulting and sales from a long-term perspective.
In accordance with the enactment of revisions to
the Act on Stabilization of Employment of Elderly
Persons in 2013, and as the careers of employees
grow longer, we associate our sustainable growth
as a company with the employment of older people
who wish to continue learning and working in ameaningful way as a part of the organization. Daiwa
Securities Co. Ltd. is greatly expanding its training
programs for employees aged 45 and older, andhas introduced a License Certification System thatprovides incentives to employees to improve theirskills and polish their acumen as professionals.
In addition, the Daiwa Securities Group offers
the “Daiwa Master Program” to actively support
the success of highly motivated and skilled veteranemployees. Senior advisors can work up to the ageof 70 under the Daiwa Master Program.

Employment of People with Disabilities
Guidelines for Fair Hiring
1. Utmost respect for the rights of the applicants.
2. E
 ligibility for all individuals who meet thehiring criteria.
3. Making all hiring decisions based on a fair andobjective evaluation of the applicants’ ability,
aptitude and motivation.

Recruitment of University Graduates
In FY2011, we began hiring recent university
graduates who had obtained their diploma within
the preceding three years with or without any work
experience during the period as part of our efforts tobuild a diverse workforce. These recruits receive thesame training as new graduates.

As of FY2014, the Daiwa Securities Group hadaround 170 employees with disabilities handlinga wide range of responsibilities in our head office,sales branches and contact centers.
We had started recruiting new graduates withdisabilities as regular employees (general office staff)
in FY2008, and in FY2011 broadened the scheme
to the career-track employee, regional career-track
employee, and employee for customer services.
We have also vigorously increased recruitment
opportunities by holding briefings about thecompany for new graduates, participating in career
expos, and implementing job placement support
programs for university students with disabilities.
Once people with disabilities are hired, we provide
support for their career advancement, for example,
creating opportunities for them to enter the career-track
and regional career-track employment opportunities.

●N umber of new
employees for FY2015

681(eight group companies*)* Refer to “CSR Related Data”
for companies coveredby dataRelationship with Employees

Daiwa Securities Group CSR REPORT 2015

Human Resource Development
and Skill Enhancement

costs so that employees can enhance their
specialized skills and become professionals.

Employee Training Approaches and Trends

Track Change System

The Daiwa Securities Group’s competitivenessderives from our employees. We have amanagement vision to take a leadership role in thedevelopment of capital markets in Japan and Asiaand become the customer’s first choice securities
group. To realize this vision, we focus on humanresource development with the aim of creatingclusters of professionals. We offer extensive training
programs to newly hired employees as we believethat the time when they join us is a critical period fortheir training.
The program ensures that they acquire not only
basic knowledge and skills, but understandingof our corporate philosophy and commitment to
CSR. It enables us to nurture human resources withprofessional skills at an early stage.
We also believe that our employees must havea firm understanding of corporate ethics andcompliance in order to ensure the development ofsound financial and capital markets—a key issue forthe Daiwa Securities Group.
Accordingly, we offer regular training on
information security and compliance.

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

Supporting Employees Trying to Earn Credentials
The Daiwa Securities Group encourages employees
to improve their English skills as a part of theirprofessional training into globally effective
personnel. Daiwa Securities Co. Ltd. sees Financial
Planner (AFP and CFP®) and Securities Analyst
qualifications as core requirements, and encourages
employees to acquire these certifications. Daiwa
Securities Co. Ltd. had 590 employees with CFP
certifications as of March 31, 2015, the highest
number in the industry.
Since FY2014, we have had an Inheritance
Planner Certification program in place. Certification
candidates are selected from among employees with
CFP qualifications, undergo practical training
in-house, and those who pass are certified as
personnel with advanced expertise through an
in-house qualification system.
In addition, the company provides generous
support by, for example, subsidizing certification

Intra-group Job Postings and the Career
We have instituted a Career Track Change Systemthat enables non-career-track employees to transfer
to career-track and regional career-track positions.
Under the system, more than 1,000 employees have
moved to other positions. We have also instituteda system of intra-group job postings to help
employees with skills and the desire to realize theirpotential to open new career paths.

Evaluation System
For this purpose, we have implemented amultifaceted evaluation system for managers. This
involves subordinates and related departments
assessing each manager’s job performance incarrying out his/her duties and the results being fed
back to the manager. With the scheme we intend to
improve the managerial skills of those assessed andimprove our overall productivity. We also take theircompliance-related performance into account.
In addition, we endeavor to create a personnel
evaluation system that motivates all employees,
regardless of years they are with us, whether they
are young, middle of their careers, or experienced
veterans, to challenge the next stage of their careers
and to work in positions with bigger responsibilities.

Striving to Create a PleasantWorking Environment
Encouraging Work-Life Balance (WLB)
One of the Daiwa Securities Group’s targets is topromote an advanced level of WLB. The Group iscommitted to pursuing working styles that enable
employees to achieve a balance between theirprivate and professional lives, and makes efforts
to create an environment in which both men andwomen can work in a variety of ways.
Not only do we seek to establish systems thatenable diverse work styles, but we also work tochange employee awareness by ensuring employees
leave work before 7 p.m., by encouraging them totake all their paid holidays, and by setting a day of
welcoming family visits to the workplace.
Since FY2013, Daiwa Securities Co. Ltd. has held
meetings of the WLB Advisory Committee withdirectors, department managers and employees
in attendance to discuss and advice on measuresrelated to promoting work-life balance. Meetings
are held once a quarter.

40

Relationship with Employees

The Daiwa Securities Group has adopted systems
aimed at supporting its employees in both areas ofchild-rearing and nursing care that exceed statutory
requirements. Surveys concerning the Group’s
efforts to support both the career and childrearingneeds of its employees have been conducted tosolicit input from all Group employees. These surveys
are designed to ascertain the degree to which
employees are using the Group’s systems and tocollect feedback focusing particularly on employee
needs. Drawing on the results of the surveys, theGroup is working to further improve conditions
and put in place a pleasant working environment
for all employees. Prior to an employee returning
to work after taking childcare leave, interviews are
conducted with relevant department, office, andbranch heads. In this manner, energies are being
channeled toward ensuring a smooth return towork. Even during childcare leave, employees arestill eligible for promotions and raises based on theircontributions to date.
Starting in FY2014, Daiwa Securities Co. Ltd.
offers a Childrearing Support Leave system thatencourages male employees to take leave and help
with childrearing.
We will continue promoting initiatives designed to
attract the kind of high-caliber employees who build
an enterprise that achieves great performance.

Daiwa Securities Group CSR REPORT 2015

family members, starting them at the same level ofcompensation as when they left. This has helped us
secure talented personnel who support operations.
Starting in FY2014, Daiwa Securities Co. Ltd.
has held the Daiwa Woman’s Forum as a means
to support career development for women, byoffering help with career planning, skill acquisition,
and an opportunity for networking among female
employees.
We will continue to increase the number offemale managers, aiming to develop female
leaders who will drive the future of Japan’s financial
industry.

Initiatives to Improve Employee Health
The Daiwa Securities Group considers employee
health an indispensable capital for both thecompany and society. Our Personnel Departments,
Health Insurance Association, and occupational
health staff work closely to improve employees’
health.
Specific initiatives for better health● System enabling employees to track the past resultsof regular health checkups anytime on a website● Initiative using in-house magazines to raise
employees’ awareness of health issues

Encouraging Women to Succeed● Walking program

The Daiwa Securities Group proactively appoints
talented human resources regardless of gender.
Promotions are based on fair evaluations, and webelieve creating a work environment where people
from diverse backgrounds can maximize theirabilities will lead to improvement in corporate value.
We are trying to appeal more to women’s
individual interests by introducing thriving female
employees as role models in internal publications
and providing opportunities for cross-company
communication, in order to increase the number ofwomen in management positions.
A career consultation service has been set up on
the Group’s internal initiatives for WLB site. Female
executives as well as heads of each department,
office, and branch give advice on the concerns andinquiries of female employees. There are a total ofseven women in top management positions acrossthe Daiwa Securities Group, including three female
executives at Daiwa Securities Group Inc.
The number of women in management positions
has increased every year, totaling 262 women at
Group companies as of March 31, 2015. The ratioof women in management positions has risen from
2.2% (at the end of FY2004) to 6.3% at the Group,and from 2.3% to 7.5% at Daiwa Securities Co. Ltd.
By increasing the number of role models, weare making it easier for the Group’s female staff toenvision their career path. In this context, there has
been a sharp increase in female employees aspiring
to advance their careers by switching to careertrack and regional career-track positions in recent
years. To date, more than 850 female employees
converted to career-track positions. An increasing
number of employees have also taken advantage of
our Professional Return Plan, a system for re-hiring
employees who left work to raise children or care for● Action to promote countermeasures against cancer● Quit-smoking campaign● Program to promote moderate meal portions● Health campaign for female employees● Breast cancer and cervical cancer exams● Measures for those with severe diseases● System that uses a follow-up confirmation form(known as a “yellow paper”)* to urge employeeswith problematic data to see doctors after theirregular health checkups* Employees receiving this form are required to obtain a doctor’scomment within two weeks and submit it to us. This has contributed
to a higher rate of visits to medical institutions after checkups.

The Daiwa Securities Group’s efforts to promote
employees’ health have substantially raised theirhealth awareness and favorably affected the test
results of regular health checkups. Aiming for aneven higher quality, we have been conducting
research into health management jointly with the
University of Tokyo since December 2014.
The Group’s efforts have attracted much attention
from other companies and municipalities. For
example, the details of our initiatives were posted in“Annual Health, Labour and Welfare Report 20132014.” The Group was also selected as a “Kenko
Keiei Brand,” a title awarded jointly by Japan’s
Ministry of Economy, Trade and Industry and theTokyo Stock Exchange to companies promoting thehealth of their employees.
⇒ Refer to “Third-Party Evaluations” onpage 53 for details.

41● Number of female
executives
Daiwa Securities
Group Inc.

3
(directors, executives andexecutive officers)

The entire Group7(directors, executives andexecutive officers)● Number of women in
managerial positions
The entire Group262(As of the end of March 2015)● Ratio of women in
managerial positions
Daiwa Securities
2.3%(at the end of March 2005)→ 7.5%(at the end of March 2015)

The entire Group
2.2%(at the end of March 2005)→ 6.3%(at the end of March 2015)

Relationship with Employees

Daiwa Securities Group CSR REPORT 2015

Mental Health

Initiatives for Families

The Daiwa Securities Group’s Health Support
Promotion Department was established in August
2006 to help employees maintain and manage
their mental and physical health. The HealthSupport Promotion Department has two certified
clinical psychologists on its staff to provide
consultations to support Group employees, aswell as to their families. We have also establishedarrangements with outside specialists so that theyreceive prompt attention.
We also arrange for occasional talks in all
branches and departments to broaden awareness ofmental health issues as a part of our strong support
for employees’ mental health.

We work to ensure that members of employees’
families share their pride to be part of the Group.
Since FY2008, we welcome employees’ families
to the workplace on Family Visit Day to give family
members a better understanding of our company
and the employee’s jobs.
Other initiatives for supporting our employees’
families include family day leave and the extensionof mental health support to employees’ families.

Communication
Communication with Employees
We believe that good communication with
employees is vital for better workplace environment.
Our communications programs include regularinterviews by the Personnel Department and semiannual self-assessment questionnaires.
We also regularly conduct a questionnaire on
work-life balance. This unfiltered input from ouremployees helps us re-examine our programs andenhance ongoing improvement efforts.

Communication among Employees
In October 2007, Daiwa Securities introduced
a program for supporting club activities. This
program was created to help employees enjoy
their time off and to deepen their friendships withcolleagues, building more opportunities to sharea sense of camaraderie and solidarity. It is also
intended to support work-life balance and facilitate
a fuller social life for employees. The program
was expanded and enhanced in FY2009. Under
this program, employee groups that meet certain
conditions are recognized as Daiwa Clubs or Daiwa
Circles, which receive subsidies to cover some of
their activity costs. As of March 2015, 18 clubs and4 circles are active in the Group.

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

Relationship with Employee Unions
The questionnaires conducted by the employee’s
union among its members have been an important
opportunity for the Group as a whole to learn theopinions of its employees and a tool for better
mutual understanding.

Family Visit Day

In-house magazine “Fuji”

42● Number of
Employees’ Union
Members

6,573(As of the end of March 2015)● Number of guests on
Family Visit Day

5,088(FY2014)

Human Rights Initiative

Daiwa Securities Group CSR REPORT 201543

Social Report

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

Basic Policy for Initiatives Addressing
Human Rights and Social Integration Issues
1. Daiwa Securities Group Inc. supports and complies
with the protection of human rights as advocatedinternationally and does not infringe on human rights
within the boundaries of its influence.
2. T he Daiwa Securities Group educates and instructs Group
employees with accurate information on human rights
and social integration issues.
3. A
 t the same time, the Group views human rights andsocial integration issues as our own problem, notsomebody else’s problem, and fosters a sensitivity thatenables empathy with the suffering of others.

in pursing the committee’s goals. Besides the committee,
all Group managers at the head office or branch level act
in a promotional role, using education and awarenessactivities to ensure that employees correctly understand andacknowledge human rights and social integration issues.
The committee revised and released the Group’s Basic
Policy for Initiatives Addressing Human Rights and Social
Integration Issues in May 2011.
The Daiwa Securities Group has been a member of theIndustrial Federation for Human Rights, Tokyo, since 1998.
The Federation is composed of 124 companies mostly
headquartered in Tokyo with a combined total of one million
employees (as of April 2015). Federation members work
together to improve their employees awareness of humanrights issues through research and communication.

4. W
 e provide an equitable working environment thatvalues people and is free of discrimination.

Composition of Human Righters Awareness Promotion Committee

5. E ach employee is a member of society unburdened by
prejudice.

Chair: t he director as Human Resources Officer at Daiwa Securities
Group Inc.

Specific Efforts

Vice Chair: t he director as deputy Human Resources Officer andhead of the Human Resources Department

1. We highly value the human rights of every stakeholder
and our staff will always address clients, local
communities and their members with great awarenessof human rights.

Committee Member: five department heads including Executive
Officer and General Manager of the
Corporate Communications

2. We work to ensure that our hiring and recruiting,personnel evaluations and labor management practices
are always fair.
3. The Group is continually improving internal humanrights education and awareness programs, including
regular training and feedback and response loops.
May 18, 2011: Human Rights Awareness Promotion Committee

Human Rights Education andAwareness
In 1984, the Daiwa Securities Group set up the Human
Rights Awareness Promotion Committee. Its establishment
is aimed to promote activities and training for raising
human rights awareness, thereby encouraging better
understanding and appreciation of social integration andother human rights issues including so called Dowa-mondai
in Japan, which refers to centuries-old discrimination andostracism against a specific group in Japanese society. Since
the committee’s establishment, we have been working
to achieve the its objective. The committee is currently
chaired by our director in charge of HR, with the deputy
human resources officer and the head of HR as deputy
chairs, along with five division leaders including the headsof the Compliance Control Division, the Communications
Division and the General Affairs Department—all active

Initiatives in FY2014
The Group’s new employees underwent group training on
human rights immediately after their induction ceremony.
In July, human rights training was also conducted for
those newly becoming general managers, managers andassociate managers.
We solicited human rights awareness slogans in acontest for all of the Group’s executives and employees,
as well as their families between October and December.
The contest was designed to promote a broader anddeeper understanding of human rights issues, and thewinning entries were presented in our in-house magazine.
In addition, in November 2014, the Group held Human
Rights Awareness Workshop, anannual event to consider humanrights from multiple viewpoints.
We watched the educational video“Syokuba-to-Jinken (Workplace andHuman Rights)” and held discussions.
The program addresses the issueof how we create a good working
environment while respecting thehuman rights of colleagues indifferent positions with different
work conditions in a workplace
where a variety of human relations
exist between a diversity of workers.

●H uman rights
education for
employees
for FY2014
Training participants

610 new employees
Objective

To acquire basic
knowledge concerning
human rights
To understand and raiseawareness of the Group’s
fundamental principles
concerning respect forhuman rights
Training participants

521 promoted
employees
Objective

To acquire knowledge
and raise awarenessconcerning humanrights required for theirrespective positions

Employee education on human rights

Engagement with Society

Daiwa Securities Group CSR REPORT 201544

Social Report

Engagement with Society
Approach and Basic Stance
The Daiwa Securities Group considers it important to work together with NPOs and NGOs as a good corporate
citizen engaging in consistent collaboration with the local community to foster sustainable development.
Our activities can be categorized into the following four key fields:
1. Education and research activities in economics and finance
2. Assistance to communities inside and outside of Japan through foundations and NPOs
3. Support for culture and the arts 4. Corporate citizenship activities

Education and Research Activities
in Economics and FinanceCapitalizing on accumulated financial and economic
expertise to make public contributions, the Daiwa
Securities Group engages in business-academia
collaborations and supports programs for juniorand senior high school students as well as teachers.
We believe that economic and financial education
is important in helping young people develop thecapacity to build their own lives and shape thefuture world.
⇒ Refer to “CSR Related Data” on page 64 for“Results in Economic and Financial Education”

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

Research
institutions

Understandingof social andeconomicprinciples

Improveeconomic
and financial
knowledge

Developfinancial
specialists

Disclose research
results
Create practicalapplications

Commercial
and businessapplicationof research
results

Elementary/junior/high school
students

Undergraduate
students

Graduatestudents

ResearchersIntellectual
property (IP)/patents

Supportteachers
Participate
in classes

Provideor endowclasses
Dispatch
instructors

Provideor endowclasses
Dispatch
instructors

Joint
researchResearchsupportSupport foruniversitylaunched
ventures and IP
headquarters

KidZania
The Daiwa Securities Group is a supporter of
KidZania, a theme park designed to offer work
experiences to children and has been providing
securities consulting pavilions at their facilities
in Tokyo and Koshien (Hyogo Prefecture) since
their opening. In the pavilions, children become
a consultant giving advice to client investors at asecurities company, go to other nearby pavilions andconduct interviews to check their levels of trafficand hot-selling products. Based on the results of
the interviews, they then select where to invest
and make investment recommendations for theircustomers.

Finance ParkThe Daiwa Securities Group cooperates with Finance
Parks operated by Junior Achievement Japan. This
program provides opportunities for junior highschool students to learn economic and financial
mechanisms that will be necessary for them in theiradult life.
Since 2005, Finance Parks have been operating in
Shinagawa in Tokyo and Kyoto, where we have set
up pseudo-branches. In addition, new facilities werealso opened in Iwaki in Fukushima Prefecture andSendai in Miyagi Prefecture in FY2014. To date, a
total of 59,170 students have participated.

Group Employee Cooperation

Daiwa Securities’ KidZania pavilion

Finance Park in Iwaki⇒ Refer to “CSR Related
Data” on page 64 for“Corporate Citizenship
Initiatives andExpenditures”●Number of participantsin Finance Parks
for FY2014

11,847
Shinagawa: 1,569
Kyoto: 5,396
Iwaki: 3,584
Sendai: 1,298(on an application basis;surveyed by Junior
Achievement Japan)

Engagement with Society

Student Company Program(Hands-on Company Management Program)
We cooperate with the Student Company
Program operated by Junior Achievement Japan.
The program teaches high school students about
corporate management and organization by
allowing them to run a real company.
In FY2014, as in FY2013, first-year students
from a Tokyo metropolitan high school
incorporated a company as part of their
extracurricular activities. They marketed key rings
made from recycled paper and were ultimately
able to generate a profit, under the corporate
philosophy of raising awareness of environmental
issues. Group employees served as outside
directors for six months and provided advice
concerning preparation of financial materials andcompany management.

Daiwa Securities Health Foundation
The Daiwa Securities Health Foundation wasestablished in 1972, in commemoration of
Daiwa Securities’ 30th anniversary, to support
medical research. Since 1973, the year following
its establishment, the Foundation has supported
outstanding research projects focusing on improving
health, medical care and welfare for middle-aged
and elderly people.

Daiwa Securities Foundation

CEE-Japan* was established in January 2009 toprovide economic education training for school
teachers. Since its establishment, the Daiwa
Securities Group has been a sponsor for CEE Japan,
which seeks to implement programs tailored forJapanese schools.
* Japanese Licensee of the Council for Economic Education (CEE) of the US

Donation of Educational Books on the

EconomyIn March 2015, as a measure for economic andfinancial education, Daiwa Securities donateda book titled “Economic Puzzle Sleuths:
Understanding the True Meaning of Money”(written by Susumu Okano, a Senior Executive
Managing Director at the Daiwa Institute of
Research). The book was presented to all elementary
schools in Sendai City and Kesennuma City in Miyagi
Prefecture, Iwaki City in Fukushima Prefecture andin Iwate Prefecture—regions damaged by the Great
East Japan Earthquake. We plan to donate the bookto all public libraries in Japan, and eventually to allelementary schools across Japan.
Holding Events with Sign Language

Interpretation and Simultaneous Captioning

Book presentation ceremonysystems with sign language interpretation andsimultaneous captioning. In October 2014, we held theSocial Finance Seminar, introducing various methods
for social finance and projects undertaken in Japan.
We also distribute a digest video program on the CSR
site of Daiwa Securities Group Inc. for those who wereunable to participate on the day of the event.

Assistance to Communities Inside and Outsideof Japan through Foundations and NPOsC
 ooperation with Council for Economic
Education Japan (CEE Japan)

As part of the Group’s CSR activities, the Daiwa
Securities Group holds events to promote Impact
Investment and to learn about economic and financial

45

Daiwa Securities Group CSR REPORT 2015

In 1994, the Daiwa Securities Foundation was
launched, in commemoration of the 50th anniversaryof Daiwa Securities’ establishment, to contribute tosociety out of our profits. Every year, the Foundation
provides grants to organizations and groups doing
volunteer work in welfare and medical care.
Since FY2011, the Foundation has also provided
grants to organizations involved in volunteer
work that assists victims of the Great East Japan
Earthquake.

Daiwa Anglo-Japanese Foundation(Chartered in the UK)
The Daiwa Anglo-Japanese Foundation is a UKcharity established in 1988 in part with contributions
from Daiwa Securities, for fostering closer ties
between UK and Japan.
Principal activities include:(1) Awarding grants to individuals, institutions,and organizations working to promote ties between
the UK and Japan(2) Enabling British and Japanese students andacademics to further their education by providing
opportunities for joint research and supporting
exchanges and other bilateral initiatives(3) Awarding Daiwa Scholarships for British
graduates to study Japanese and undertake work
assignments in Japan

Social Finance Seminar

Presentation ceremony for the Tokyo region(Daiwa Securities Foundation)

Independent

Assurance●Daiwa Securities
Health Foundation's
cumulative grants
awarded throughFY2014

Number of recipients

1,132

Total amount of grants¥1.117 billion●Daiwa Securities
Independent
Assurance
Foundation's
cumulative grants
awarded throughFY2014
Volunteer Activities Grants
Number of projects
receiving grants

2,851
Total amount of grants¥654.67 million
Grants to volunteer work fordisaster recovery (the Great
East Japan Earthquake)
Number of projects
receiving grants

189
Total amount of grants¥82.19 million●Daiwa AngloJapanese Foundation's
cumulative grants
awarded throughFY2014
Number of people
completing the Daiwa
Scholar program

153

Independent
Assurance

Number of projects
receiving grants

2,676
Total amount of grants￡11,652,184
Approximately¥2.2687 billion(Amounts in pounds areconverted to yen using theexchange rate at the end of eachfiscal year)

Web

Daiwa Securities Health Foundation(Japanese)Web

Daiwa Securities Foundation(Japanese)Web

The Daiwa Anglo-JapaneseFoundation (Japanese)Web

Social Finance Seminar (Japanese)

Engagement with Society(4) Organizing a year-round calendar of events toimprove understanding of Japan in the UK.
The Foundation’s Tokyo office provides local
assistance to Daiwa Scholars (students from theUK), administers grant applications from Japanand collaborates with other institutions promoting
Anglo-Japanese relations.
In commemoration of its 25th anniversary,
the Foundation held a celebratory event at theambassador’s residence at the British Embassy inTokyo on October 14, 2014. Approximately 160
people participated in the big event, including
the UK Deputy Head of Mission to Japan, all thetrustees of the Foundation, Daiwa Securities Group
personnel, Daiwa Scholars living in Japan and otherpeople associated with the Foundation.

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

Kopernik Program
Kopernik is a US-based NPO established in 2009 withthe goal of improving quality of life and reducing
poverty in developing countries; it began operationsin Japan in 2010. Kopernik has developed a program
to enable contributors in developed countries to
go online and donate to NPOs/NGOs in developing
countries or areas of their own choosing by selecting
needed products such as simple water purifiers andsolar lamps. Kopernik shares details of recipient NPO/NGO activities supported by donations on its website
to ensure transparency.

Daiwa Securities Group CSR REPORT 2015

Donations sourced from our revenue from the
Daiwa Eco Fund and Russell Global Environmental
Technology Fund are granted to this program withproducts and recipients selected based on theirconsistency with the principles of these funds.

3keys Program
In 2012, the Daiwa Securities Group began offering
support to the 3keys Program, a designated NPO
working to improve learning opportunities in grouphomes. The program, which also receives funding
relating to the Daiwa SRI Fund, helps to foster
greater confidence and ambition in children.

Daiwa Securities Phoenix Japan Program
In May 2012, the Daiwa Securities Groupestablished the Great East Japan Earthquake
Relief Assistance program. The program donates
a portion of management fees from the Daiwa
Nippon Support Fund Vol. 3—Phoenix Japanand continues providing assistance to local NPOs
through the Japan Earthquake Local NPO Support
Fund (specified aid), which was set up by Japan NPO
Center, a certified NPO. The program supports local
NPOs’ human resources development. Their activities
include educational assistance and reconstructing
communities in the disaster-affected areas.

46●Contributions by
Daiwa Myanmar-JapanFoundation
Number of Myanmar citizens
receiving scholarships

8

Number of participants inpublic accountant training in
Myanmar22(Cumulative contributions throughFY2014)●Donations made to thekopernik program
Independent
Assurance
for FY2014¥4,984,935●Projects receiving grants
under Kopernik program
RegionPapua Province,
Indonesia
Items granted

Solar lamps
RegionPoso, Indonesia
Items granted

Water purifiers, cooking
stovesRegionAtauro Island, East Timor

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

Japan NPO Center
Japan Earthquake Local NPO
Support Fund
(special aid)

Selection and advice
Donations

Daiwa
Securities

Items granted

Solar lamps“Special aid”
Selection committee●Donations made to
Independent
the 3keys Program Assurance
for FY2014
Reconstruction
assistanceNPO

Operation and grant
Civil Society Initiative FundJapan NPO Center¥1,197,090●Amount of grants
Independent
Assurance
selected to FY2014
third-term program for
Daiwa Securities
Phoenix Japan
ProgramNumber of projects
receiving grants

9
Total amount of grants¥32.1 million

The UK ambassador and the 24th term Scholars

Project receiving grants
under Kopernik (Papua
Province, Indonesia)(including ¥2.0 million for joint
research assistance)
Project receiving grants under Kopernik(Poso, Indonesia)

Web

Kopernik Program(Japanese)Web

Daiwa Securities
Phoenix Japan Program(Japanese)

Engagement with Society

Daiwa Securities Group CSR REPORT 201547

Dialogue with Stakeholders —in Regions Affected by Great East Japan Earthquake

Four years have passed since the Great East Japan Earthquake.
Some people have noted that many disaster-affected regions
already faced various issues, such as aging population anddepopulation, which were aggravated further by the disaster.
Meanwhile, the aging population presents challenges in manyother parts of Japan, and is expected to also affect many othercountries. The Daiwa Securities Group believes that efforts toaddress these social issues in the disaster-affected regions will
have significant implications when considering broader social
initiatives in the future.
In light of this view, the Group is identifying social challenges
currently faced in the disaster-affected regions and considering
what we can do for them through visits to the non-profit
organizations (NPOs) active in disaster-affected regions towhich Daiwa Securities Phoenix Japan Program has provided
support and dialogue at joint workshops under the Program.

Interaction at a joint workshop

Major Opinions from NPO Staff and Organizations
Receiving Support

With NGO staffs● “The biggest problem faced by regional cities is falling population. Human resource shortages havemade them unable to promote regional industries and improve welfare.”

Issuesraised●“ Post-disaster reconstruction work is expected to be substantially cut, raising concerns over the
impact of the down-scaling of regional economies.”● “Some of the issues in disaster-affected regions are social challenges common in other parts ofJapan, but we should remember that some are particularly noticeable in those regions, including
psychological care and the double loan problem.”● “In some cases, support from municipalities is reduced once a profit-making business is launched.
This adversely affects the finances of organizations assisting reconstruction efforts.
● “Since prior to the disaster, these regions had few experts in child welfare and medical care andreceived little governmental support. Accordingly, in many cases, children fail to be protected by
support safety nets, and this issue has become particularly noticeable following the disaster.”● “We would like to increase the number of participants in support activities to promote interaction
with disaster-affected regions, but we do not know how to.”Findings● “Thanks to NPO activities, as well as volunteer work by people coming from other areas after thedisaster, the affected regions have started incorporating opinions from third parties, especially fromyounger people.”● “Efforts to address social issues in disaster-affected regions may be communicated nationwide as a
new model.”● “Daiwa Securities Phoenix Japan Program, which is designed to develop human resources, is uniqueamong corporate programs providing financial support to disaster-affected regions.”● “NPOs would like to incorporate the problem-solving abilities and know-how on organization
management that companies possess.”

Initiatives to Be Taken by the Daiwa Securities GroupWe will extend the scope of support under Daiwa Securities Phoenix Japan Program to groups aiming to address social
issues that have worsened since the disaster, not just organizations engaging in post-reconstruction efforts. Throughjoint workshops and meetings with the organizations we support, we will increase opportunities that help deal with theirconcerns and challenges. Moreover, in order to assist efforts to revitalize regional economies, we will continue investing inunlisted companies in disaster-affected regions through a fund managed by Daiwa Corporate Investment.
⇒ Refer to “Engagement with Society” on page 46 for “Daiwa Securities Phoenix Japan Program”⇒ Refer to “Initiatives through Business Activities” on page 25 for initiatives by Daiwa Corporate Investment

Engagement with Society

Daiwa Securities Group CSR REPORT 2015

Looking back on 10 Years of the Daiwa Securities Group Tsunami Reconstruction FundAs recovery assistance to regions affected by the December 2004 Indian Ocean earthquake and tsunami, the Daiwa Securities
Group established a fund and disbursed ¥10 million annually for 10 years from 2005 through 2014, thereby providing support
worth a total of ¥100 million.

Independent
Assurance

Damage Caused by the Indian Ocean Earthquake and Tsunami

Grants Provided for 10 Years

At 7:58 a.m. on Sunday, December 26, 2004 (Western
Indonesian local Time), a magnitude 9.1 earthquake occurred
off the northwest coast of the Indonesian island of Sumatra. It
triggered a massive tsunami that struck Indonesia and other 15
countries around the Indian Ocean, resulting in an unprecedented
catastrophe that killed approximately 230,000 people.

The Fund supported the following projects: educational support
to children, business development and microfinance (MF) for
women in Sri Lanka (grants totaling up to ¥29.358 million for
two projects); mental health care for children (seven years) anddisaster mitigation education at 17 junior high schools (fouryears) in Indonesia (grants totaling up to ¥21.255 million for two
projects); and vocational training and MF for the handicapped (sixyears), collective business development and MF for women (fouryears) and creation of a disaster-resilient community (four years)
in India (grants totaling up to ¥32.667 million for three projects).
The grants mentioned above were used to support approximately
49,180 households (246,000 people) over the 10-year period.

Overview of Tsunami Reconstruction FundIn March 2005, about three months after the disaster, a special
fund “Daiwa Securities Group Tsunami Reconstruction Fund”
was established within the Asian Community Trust (ACT), a
charitable trust. The Fund provides grants to projects working
in Indonesia, Sri Lanka and India on the following initiatives:
1. Mental Health Care for Children; 2. Provision of Educational
Opportunities for Children; and 3. Restoration of Economic and
Living Bases through Microfinance Operations. Since FY2011,
the Fund has expanded its scope by adding a new initiative, 4.
Promotion of Interaction and Cooperation Activities between
Tsunami Victims and Sharing and Spreading of Experiences andInformation.

How Daiwa Securities Group Tsunami Reconstruction Fund Works
Flow of funds

ACT

Flow of reporting

Trustee

Trust bank

Donations

Advice and approval

Self-reliance ofdisaster victims

Daiwa
SecuritiesGroup

ACT Executive Advisory
Committee

Local NPO

Identifying potential grant projects
and monitoring

ACC21(Secretariat of ACT)

Messages from
beneficiaries

Secretariat of the Asian Community Trust
Asian Community Center 21 (ACC21) (Specified Nonprofit Corporation)
Board member & Executive Secretary

Ms. Mari Suzuki(right)Chairperson of “Kadaloli Pengal Sangam” (women’sorganization) based in Mullative District, Northeastern Province

Ms. Karunadas Pathima Nithwin(Sri Lanka, 37 years old)

All of our 68 members lost their families and assets
due to the tsunami and civil war and have lived throughlong, agonizing years. The intervention by the project isso effective that we are engaged in different livelihoods,
improved our economic status enabling us to maintainour families and our children can now go to school everyday. Our group fund, which comprises deposits andrepayment interest, has expanded
to approximately 570,000
rupees (roughly ¥520,000). I amvery proud to say that we havedeveloped strong, self-supporting
sixty eight families due to thegenerous assistance received from
Daiwa Security Group through ACT.

Web

We have visited the project sites every year since 2005 for monitoring and recognizedchanges in each and every individual, such as the expansion of business scale and theadvancement of children to college. We have thereby developed a close relationship thatenables us to have heart-to-heart talks with them. The leader of a female organization in
Sri Lanka told us how much they were encouraged by long-term support from Japan, despite
the distance between the two countries. For the past four years, we have been actively
involved in efforts to promote cooperation between disaster victims and disaster-mitigation
activities, generating a significant ripple effect especially in Indonesia and India. On behalf ofbeneficiaries and the local partner NGOs, we would like to express our gratitude to the Daiwa
Securities Group for walking a solid path toward self-reliance together with us for the decade.

Former Principal of SMPN 1 Peukan Bada
(Peukan Bada Junior High School 1)

Member of Kuruvapullam Panchayat Level Federation

Mr. Muhardi

Mr. Meera P.

(Indonesia, 45 years old) (center)(India, 31 years old)

Over 300 people from our school lost their lives
from the tsunami. In response, we focused on training
on the use of facilities and on relief operations in
the event of a disaster, using music and pictures todisseminate information. TDMRC* regularly visited
our school and provided us such trainings throughmentoring. As a result, we received an excellent school
award for being ahealthy and disasterprepared school in
2013. We still carry out
a simulation activity for
new students every year.

Our federation, stimulated by thisproject, serves as a platform to reach theunreached by facilitating existing welfare
and livelihood policy and services such aspensions and technical trainings. These
activities are well recognized and received
by the local people. I
am happy and I realize
there is much more that
we can do.

* A local partner NGO

Initiatives by Daiwa Securities Group Tsunami Reconstruction Fund for each fiscal year Daiwa Securities Group Tsunami Reconstruction Fund (Japanese)48

Engagement with Society

Daiwa Securities Group CSR REPORT 2015

Support for Culture and the ArtsThe Daiwa Securities Group provides ongoingsupport for a wide range of cultural and artistic
activities. For example, we have been the special
sponsor of the Mainichi Shimbun Central Contest
for Book Review Painting. The contest aims toencourage reading and improve children’s reading
skills by awarding prizes for paintings based on theirimpression and images from books they have read.
Prizes are awarded to elementary pupils, junior andsenior high school students.
Since 2005, the Group has also been supporting
traditional Japanese activities, including sponsorshipof title matches of both Shogi and Go (Japaneseboard games): Meijin Title Match (Shogi) and the
Honinbo Tournament (Go).

Corporate Citizenship Initiatives
The Daiwa Securities Group believes thatparticipation in volunteer programs and othercommunity actions by employees helps broaden
their perspectives and familiarize them withdifferent values. We consider that this, in turn,has a good influence on both their work and theirlives. Through our intranet, we provide information
on volunteer opportunities for projects plannedby ourselves, other businesses and NPOs/NGOs as
well as events that help educate employees andraise their awareness. We also strive to create anenvironment that makes it easy for employees tovolunteer by setting up a recognition program, theVolunteer Award, among other incentives. In ourwork to encourage as many employees as possible
to participate in volunteer activities, we will seek
ongoing collaborations with external organizations,strengthen internal communications on volunteeringand volunteer opportunities and continue to pursue
increased opportunities for employees to engage.

● International Cooperation through aCollection Drive
The Daiwa Securities Group has been runninga collection drive as an initiative that is easy for
employees to take part in. Pre-loved books andunusable postcards are collected and donated tothree groups—JEN BOOK MAGIC, Japan Committee“Vaccines for the World’s Children,” and Live with
Friends on the Earth. Items collected are sold bythem to fund their activities, including support
for education, medical services and agriculturaldevelopment assistance in developing countries. We
will continue the activity as its accessibility makes it
quite popular among our employees.
● TABLE FOR TWO (TFT) Program
The Daiwa Securities Group contributes to the TFT
Program, which is organized by TABLE FOR TWO, aninternationally designated NPO.
The program aims at eradicating starvation indeveloping countries and reducing the occurrenceof lifestyle diseases in developed countries. We
have utilized 23 vending machines in Gran Tokyo
North Tower since the spring of 2013 that make anautomatic donation of ¥10 to the charity from eachpurchase of healthy drinks. Our Toyocho Center
Building’s employee cafeteria also participated in
the program, making a ¥20 donation each timea healthy menu item is chosen. The donations
are used to pay for school lunches in developing
countries. In March 2014, we won a “GoldSupporter” award for our contributions. We aim
to encourage participation and further expand ouractivities in the future.

Donation of Shareholder Reward Items● Maintenance Activity for Nature Study Paths
in Odaira (Mt. Takao)

Daiwa Securities Group Inc. implements a shareholder
reward program. We donate program reward items
returned to us due to relocation or other reasons,and items we receive for our shareholdings in othercompanies, to organizations such as designated NPOs
and public interest incorporated foundations.

On April 18, 2014, 31 employees and theirfamilies joined the Hands-on Forest Experiencein Odaira National Forest (Tokyo’s Mount
Takao) to experience pathway maintenance.
The participants learned about village forests
under the guidance of Takao Forest Center, adepartment of the Kanto Regional Forest Office.
They later carried out maintenance work fornature study paths, using lumber made throughthe previous year’s forest-thinning activity.

Daiwa Securities’ 140 sales branches nationwide
engage in a variety of activities contributing tolocal communities.
For example, in FY2014, the Tottori branch
participated in the Tottori Sand Dunes Cleanup
campaign twice a year, while employees at theNagasaki branch presented a dance performancein “Nagasaki Kunchi” Festival, a famous event for

Volunteer Activities by Employees

Maintenance work for pathways

Initiatives at Sales Branches of Daiwa Securities

Examples of donated shareholder reward items

49● Culture and the Arts Supported the Mainichi
Shimbun Central
Contest for Book
Review Painting as the
special sponsor for 21
years in a row
 Held an exhibition ofaward-winning works
at 10 sales branchesof Daiwa Securities(FY2014)● Contribution madeIndependent
in FY2014 through Assurance
collection drives(equivalent monetary value)
JEN BOOK MAGIC¥36,472
Japan Committee“Vaccines for the World’sChildren”¥63,735
Live with Friends on theEarth¥57,398● TFT Program
Contributions made Independent
Assurance
January–December,
2014

35,800Aroundschool lunches indeveloping countries(calculated on the assumptionthat one meal costs ¥20)

Engagement with Society

Daiwa Securities Group CSR REPORT 2015

the prefecture. We are thus involved in a variety ofactivities in the fields of environment, culture andart, health, sports, and others.
Initiatives Taken by the Group’s Hong

Kong Operational Base
Daiwa Securities Capital Markets Hong Kong
operates “First Class,” a CSR program that wasestablished by voluntary members.
In FY2014, the panel running the program
focused on participatory initiatives as they preferred
activities enabling employees and their families tocontribute to resolution of social issues more actively
and directly.
In the summer of 2014, they participated in afood packaging and handout event sponsoredby Sunshine Action, a local charity group, andemployees and their families delivered food tohomeless people in Hong Kong. In addition, many
employees joined a charity soccer match organizedby Vine Community Services Ltd., a NGO supporting
refugees, from fall to winter to raise awareness ofsuch support activities, as well as a charity marathon
for preservation of marine mammals sponsored by
Ocean Park Hong Kong.
Daiwa Securities Capital Markets Hong Kong willcontinue planning a wide range of CSR activities andseek to increase its team spirit, while also working tosolve social issues.

Disaster Assistance● Donations for Victims of Torrential Rain
Disaster in Hiroshima
The Daiwa Securities Group made contributions anddonations to express our deepest condolences tovictims of the torrential rain disaster that occurred in
Hiroshima in August 2014.

●C
 ontributions
Independent
made by the Group Assurance
to victims of theHiroshima City
8.20 torrential raindisaster¥10 million●D onations made byemployees to victimsof the Hiroshima City
8.20 torrential raindisasterApproximately¥5.1 million

Initiatives to Promote Volunteer Activities● Volunteer Award
Daiwa Securities has the President’s Awards
program to recognize outstanding achievements byemployees. As part of the program we introduced
the Volunteer Award in FY2007, which is given
twice a year to employees and groups involvedin volunteer initiatives and activities that provide
ongoing support to communities.
● Dissemination of Information through theInternal Network
The Daiwa Securities Group provides a wide range
of information on volunteer programs within
the Group through our intranet, believing thatvolunteer activities help broaden the perspectivesof employees and provide benefits by making themaware of various social issues. We introduce the bestpractices from such volunteer work, through our
in-house magazine and internal TV broadcasts in aneffort to expand the range of volunteer activities.

Daiwa Staff in Hong Kong participating in the charity
soccer match

Brochure for the charity
soccer match

50

Environmental Initiatives

Daiwa Securities Group CSR REPORT 2015

51

Environmental Report

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

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

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

Initiatives to Reduce Environmental
Impact of Business Activities
Introduction of Environmental Accounting
As part of our efforts to reduce environmentalload, the Daiwa Securities Group has started
introducing environmental accounting. It is expected
to more accurately help us to track the costs andeffects of environmental preservation and reduce
environmental loads more effectively.

Initiatives at Head and Branch Offices
When installing new equipment at head and branch
offices, Daiwa Securities requires that the equipment
be certified under Top Runner standards. We also
adopted a policy of replacing our company cars
with still more fuel efficient eco-cars and hybrid
vehicles within several years. The policy has been
implemented since FY2014.

● Results for FY2014
Investment in energy-saving
air conditioning systems¥510.63 million(including setting-up and other costs)

Company cars in Japan(Daiwa Securities)

1,021 vehicles(As of the end of March 2015)

including

418 vehicles
Hybrid cars 9 vehicles
Eco-cars● Introduction plan for
FY2015142 vehicles
Hybrid cars 25 vehicles
Eco-cars

Environmental Initiatives

The planned replacement, at the time ofcompletion, would reduce CO2 emissions by theamount equivalent to the CO2 absorption of morethan 40,000 Japanese cedar trees annually (anestimate by Daiwa Securities using fuel efficiency
data disclosed by automakers). The Daiwa Securities
Group also strives to choose environmentally friendly
products in the Group’s central purchasing.

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

Carbon Dioxide Emissions
Energy consumption at the Daiwa Securities Group’s
domestic offices (on a CO2 emissions basis) fell by
4.3% in FY2014 compared with FY2013 as a resultof increased efforts to conserve energy.
⇒ Refer to “CSR Related Data” on page 65 for details

CO2 Emissions Reduction Targets
We have set up the goal of reducing CO2 emissions
by 1% from a year earlier, in principle, on adomestic consolidated basis, while complying with
the Act on the Rational Use of Energy and Tokyo’s
environmental protection ordinances in a continuousand systematic way.
We continue to take energy saving initiatives
including the implementation of the “Cool Biz”
program in FY2015 as well, carrying out energy
savings measures through on- and off-peak periods.

Targets for FY2015● Continue to introduce eco-cars● Initiatives for the reduction of electricity
consumption
Achieve a reduction of at least 10% from the
FY2009 level (as of FY2020)
Achieve a reduction of at least 20% from the
FY2009 level (as of FY2030)*On a per unit area basis for both targets● Improvethe accumulation of environment-related
data and hone skills to analyze those data
● P urchase products certified under the Top
Runner standards

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

Daiwa Securities Group CSR REPORT 2015

52

They held discussions on the Global Real Estate
Sustainability Benchmark (GRESB) Survey and otherenvironmental certifications in FY2014.

Environmental Initiatives at Shinjuku
Maynds Tower
The following environmental initiatives have been
implemented since 2012 at the Shinjuku Maynds
Tower building, which is owned by Daiwa Office
Investment Corporation and operated by Daiwa Real
Estate Asset Management:●A doption of Energy Management System“BEMS” for the Central Control System (Theentire installation work is scheduled to becompleted in September 2015)
Building energy management system (BEMS)
functions will be added to the new central control
system, allowing for elaborate energy monitoring
and control of the entire building. The BEMS has
been put into operation in sequence, starting fromthe floors where installation works have been
completed.
● Introduction of Automated Electronic
Air Conditioning Control System (to becompleted in September 2015)
The replacement of the current self-contained
control system with an electronic system is expected
to help optimize the efficiency of air conditioning
systems and curb energy consumption.
●A doption of LED Lighting (2012–present)
Since 2012, we have continued to install LED
lighting systems in common-use space, such as theunderground parking lot, first basement level andentrance on the first floor.
On some of the floors used exclusively by tenants,
the introduction of LED lighting systems (completed
in 2014) has helped halve the electricity usage
compared with the pre-adoption level. To install thesystem, the green lease scheme* was used.
We plan to cooperate with tenants to gradually
introduce LED systems in other tenant-owned space.
*Green Lease Scheme
A method enabling the landlord and the tenant of a rentalbuilding or other types of rental property to cooperate andreduce the environmental load in a scheme benefiting bothsides. Such methods include an arrangement where the tenant
returns part of the savings, such as a decrease in electricity
charges, attributable to the landlord’s investment in energysaving facilities, as a green lease payment to the landlord.

● CO2 emissions reduction
by adopting LED
lighting
About

147.2 tons

(Shinjuku Maynds Tower in 2014)

Third-Party Evaluations

Daiwa Securities Group CSR REPORT 2015

Third-Party Evaluations
Name
Dow Jones Sustainability Asia PacificIndexes

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

FTSE4 Good Index

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

Nadeshiko Brand

In FY2014, Daiwa Securities Group Inc. was selected as a “Nadeshiko Brand,” a title awarded
by the Ministry of Economy, Trade and Industry and the Tokyo Stock Exchange to latter’s listedcompanies for having excellent track records in empowering women at their companies.
We are recognized highly for our efforts to encourage women’s career advancement and promotea work-life balance among all employees.

Health Management

In March 2015, Daiwa Securities Group Inc. was selected as a “Health & Productivity Stock
Selection” for FY2014, a title co-sponsored by the Ministry of Economy, Trade and Industry and
the Tokyo Stock Exchange.

Certified Family-friendly Employer

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

GRESB 2014 “Green Star”

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

53

GRI Index

Daiwa Securities Group CSR REPORT 2015

54

GRI Index
In compiling the Daiwa Securities Group Sustainability Report 2015, reference was made to Global Reporting Initiative (GRI) Guidelines (4thEdition) and the Financial Services Sector Supplement (2008).
Clauses

Indicator

Link

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

To Our Stakeholders/Message from CEO/Message
from Chairman

G4-2

Key impacts, risks, and opportunities

To Our Stakeholders/Message from CEO/Message
from Chairman/Initiatives through Business Activities

Organizational Profile
G4-3

Name of the organization

Daiwa Securities Group Profile

G4-4

Primary brands, products, and services

Daiwa Securities Group Profile/Initiatives throughBusiness Activities

G4-5

Location of organization’s headquarters

Daiwa Securities Group Profile

G4-6

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

Daiwa Securities Group Profile

G4-7

Nature of ownership and legal form

Daiwa Securities Group Profile

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

Daiwa Securities Group ProfileG4-9 Scale of the organization

Daiwa Securities Group Profile

G4-10 T otal number of employees by employment contract and gender T otal number of permanent employees by employment type and gender T otal workforce by employees and supervised workers and by gender T otal workforce by region and genderW hether a substantial portion of the organization’s work is performed by workers who are legally
recognized as self-employed, or by individuals other than employees or supervised workers, including
employees and supervised employees of contractors
A ny significant variations in employment numbers (such as seasonal variations in employment in the tourism
or agricultural industries)

CSR Related Data

G4-11

Percentage of total employees covered by collective bargaining agreements

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

The organization’s supply chain

Building and Maintaining Transparent and Fair Value
Chain/Risk Management

G4-13

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

Daiwa Securities Group Profile

Commitments to External Initiatives
G4-14

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

Compliance
Risk Management
IT Strategy, Information Security, and Disclosure

G4-15

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

Initiatives through Business Activities

Memberships of associations (such as industry associations) and national or international advocacy organizations
in which the organization:H olds a position on the governance body P articipates in projects or committees P rovides substantive funding beyond routine membership duesV
 iews membership as strategic
This refers primarily to memberships maintained at the organizational level.

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

G4-16

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

Daiwa Securities Group Profile

G4-18

 P rocess for defining report content and the Aspect Boundaries
H ow the organization has implemented the Reporting Principles for Defining Report Content

Process of Identifying CSR Materiality

G4-19

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

Not reported

G4-20

Aspect Boundary within the organization for each material Aspect

Contents/Editorial Policy

G4-21

Aspect Boundary outside the organization for each material Aspect

Contents/Editorial Policy

G4-22

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

Contents/Editorial Policy

G4-23

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

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

Daiwa Securities Group CSR REPORT 2015

Clauses

Indicator

Link

Stakeholder Engagement
G4-24

List of stakeholder groups engaged by the organization

Daiwa Securities Group Stakeholders

G4-25

Basis for identification and selection of stakeholders with whom to engage

Daiwa Securities Group Stakeholders

G4-26

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

CSR Promotion System
Engagement with Customers
Engagement with Shareholders and OtherEngagement with Employees
Engagement with Society

G4-27

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

Engagement with Customers
Engagement with Shareholders and OtherEngagement with Employees
Engagement with Society

Report Profile
G4-28

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

Contents/Editorial Policy

G4-29

Date of most recent previous report (if any)

Contents/Editorial Policy

G4-30

Reporting cycle (such as annual, biennial)

Contents/Editorial Policy

G4-31

Contact point for questions regarding the report or its contents

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

This table references GRI content

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

Independent Assurance ReportGRI Index
G4-32

Assurance

G4-33

Governance
Governance Structure and Composition
G4-34

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

Corporate Governance

G4-35

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

CSR Promotion System

G4-36

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

CSR Promotion System

G4-37

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

Corporate GovernanceEngagement with Employees (Communication)

G4-38

Composition of the highest governance body and its committees

Corporate Governance

G4-39

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

Corporate GovernanceG4-40

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

Corporate Governance

G4-41

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

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

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

CSR Promotion System

Highest Governance Body’s Competencies and Performance Evaluation
G4-43

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

Not reported

G4-44

 P rocesses for evaluation of the highest governance body’s performance with respect to governance ofeconomic, environmental and social topics
A ctions taken in response to evaluation of the highest governance body’s performance with respect togovernance of economic, environmental and social topics

Not reported

Highest Governance Body’s Roles in Risk Management

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

CSR Promotion System

G4-46

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

CSR Promotion System

G4-47

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

CSR Promotion System

55

GRI Index

Daiwa Securities Group CSR REPORT 2015

Clauses

Indicator

Link

Highest Governance Body’s Roles in Sustainability Reporting
G4-48

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

CSR Promotion System

Highest Governance Body’s Roles in Evaluating Economic, Environmental and Social Performance
G4-49

Process for communicating critical concerns to the highest governance body

Corporate Governance/Engagement with Employees(Communication)

G4-50

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

Remuneration and Incentives
G4-51

Remuneration policies for the highest governance body and senior executives

Corporate Governance

G4-52

Process for determining remuneration

Corporate Governance

G4-53

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

Corporate GovernanceEngagement with Employees (Communication)

G4-54

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

Not reported

G4-55

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

Not reported

Ethics and Integrity
G4-56

The organization’s values, principles, standards and norms of behavior such as codes of conduct and codes of
ethicsCorporate Principles of the Daiwa Securities Group

G4-57

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

Corporate Governance

G4-58

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

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

Identifying CSR Materiality of the Daiwa Securities
Group
Process of Identifying CSR Materiality

Category: Economic
Aspect: Economic Performance
G4-EC1

Direct economic value generated and distributed

CSR Related Data
Annual Report 2015

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

Initiatives through Business Activities

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

Annual Report 2015

G4-EC4

Financial assistance received from government

Impact is insignificant

Aspect: Market Presence
G4-EC5

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

Impact is insignificant, due to the nature of ourbusiness

G4-EC6

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

Not reported

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

Initiatives through Business Activities
Engagement with Society

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

Not applicable

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

Impact is insignificant, due to the nature of ourbusiness

56

GRI Index

Daiwa Securities Group CSR REPORT 2015

Clauses

Indicator

Link

Category: Environmental
Aspect: Materials
G4-EN1

Materials used by weight or volume

Not applicable

G4-EN2

Percentage of materials used that are recycled input materials

Not applicable

Aspect: Energy
G4-EN3

Energy consumption within the organization

CSR Related Data

G4-EN4

Energy consumption outside of the organization

CSR Related Data

G4-EN5

Energy intensity

CSR Related Data

G4-EN6

Reduction of energy consumption

CSR Related Data

G4-EN7

Reductions in energy requirements of products and services

CSR Related Data

Aspect: Water
G4-EN8

Total water withdrawal by source

CSR Related Data

G4-EN9Water sources significantly affected by withdrawal of water

Impact is insignificant

G4-EN10Percentage and total volume of water recycled and reused

Not reported

Aspect: Biodiversity
G4-EN11

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

Not applicable

G4-EN12

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

Not applicable

G4-EN13

Habitats protected or restored

Not applicable

G4-EN14

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

Not applicable

Aspect: Emissions
G4-EN15

Direct greenhouse gas (GHG) emissions (scope 1)

CSR Related Data

G4-EN16

Indirect greenhouse gas (GHG) emissions (scope 2)

CSR Related Data

G4-EN17

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

CSR Related Data

G4-EN18

Greenhouse gas (GHG) emissions intensity

CSR Related Data

G4-EN19

Reduction of greenhouse gas (GHG) emissions

CSR Related Data

G4-EN20

Emissions of ozone-depleting substances (ODS)

Impact is insignificant

G4-EN21

NOx, SOx, and other significant air emissions

Impact is insignificant

Aspect: Effluents and Waste
G4-EN22

Total water discharge by quality and destination

Impact is insignificant

G4-EN23

Total weight of waste by type and disposal method

CSR Related Data

G4-EN24

Total number and volume of significant spills

Not applicable

G4-EN25

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

Not applicable

G4-EN26

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

Not applicable

Aspect: Products and Services
G4-EN27

Extent of impact mitigation of environmental impacts of products and services

Environmental Initiatives

G4-EN28

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

Not applicable

Aspect: Compliance
G4-EN29

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

Not applicable

Aspect: Transport
G4-EN30

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

Not applicable

Aspect: Overall
G4-EN31

Total environmental protection expenditures and investments by typeNot applicable

Aspect: Supplier Environmental Assessment
G4-EN32

Percentage of new suppliers that were screened using environmental criteria

Not applicable

G4-EN33

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

Not applicable

Aspect: Environmental Grievance Mechanisms
G4-EN34

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

Not applicable

57

GRI Index

Daiwa Securities Group CSR REPORT 2015

Clauses

Indicator

Link

Category：Social
Subcategory: Labor Practices and Decent Work
Aspect: Employment
G4-LA1

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

CSR Related Data

G4-LA2

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

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

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

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

Aspect: Labor/Management Relations
G4-LA4

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

Not reported

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

Not reported

G4-LA6

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

G4-LA7

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

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

G4-LA8

Health and safety topics covered in formal agreements with trade unions

Not reported

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

Not reported

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

Engagement with Employees (Human Resource
Development and Skill Enhancement)

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

Engagement with Employees (Human Resource
Development and Skill Enhancement)

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

CSR Related Data

Aspect: Equal Remuneration for Women and Men
G4-LA13

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

Not reported

Aspect: Supplier Assessment for Labor Practices
G4-LA14

Percentage of new suppliers that were screened using labor practices criteria

Not applicable

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

Not applicable

Aspect: Labor Practices Grievance Mechanisms
G4-LA16

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

Not reported

Subcategory: Human Rights
Aspect: Investment
G4-HR1

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

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

G4-HR2

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

Human Rights Initiative

Aspect: Non-discrimination
G4-HR3

Total number of incidents of discrimination and corrective actions taken

Not applicable

Aspect: Freedom of Association and Collective Bargaining
G4-HR4

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

Not applicable, due to the nature of our business

Aspect: Child Labor
G4-HR5

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

Our business entails no risk of using child labor

Aspect: Forced and Compulsory Labor
G4-HR6

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

Our business entails no risk of using forced labor

Aspect: Security Practices
G4-HR7

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

Impact is insignificant, due to the nature of ourbusiness

Aspect: Indigenous Rights
G4-HR8

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

Not applicable

58

GRI Index

Daiwa Securities Group CSR REPORT 2015

Clauses

Indicator

Link

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

Not reported

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

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

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

Not applicable

Aspect: Human Rights Grievance Mechanisms
G4-HR12

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

Not reported

Subcategory: Society
Aspect: Local Communities
G4-SO1

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

Impact is insignificant, due to the nature of ourbusiness

G4-SO2

Operations with significant actual and potential negative impacts on local communities

Not applicable

Aspect: Anti-corruption
G4-SO3

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

Risk Management
IT Strategy, Information Security, and Disclosure

G4-SO4

Communication and training on anti-corruption policies and proceduresCompliance

G4-SO5

Confirmed incidents of corruption and actions taken

Not applicable

Aspect: Public Policy
G4-SO6

Total value of political contributions by country and recipient/beneficiary

Not reported

Aspect: Anti-competitive Behavior
G4-SO7

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

Not applicable

Aspect: Compliance
G4-SO8

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

Not applicable

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

Not applicable

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

Not applicable

Aspect: Grievance Mechanisms for Impacts on Society
G4-SO11

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

Not reported

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

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

Not applicable, due to the nature of our business

G4-PR2

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

Not applicable, due to the nature of our business

Aspects: Product and Service Labeling
G4-PR3

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

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

G4-PR4

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

Not applicable

G4-PR5Results of surveys measuring customer satisfaction

Engagement with Customers (Working to Incorporate
Customer Voices)

Aspect: Marketing Communications
G4-PR6

Sale of banned or disputed products

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

G4-PR7

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

Not applicable

Aspect: Customer Privacy
G4-PR8

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

Not applicable

Aspect: Compliance
G4-PR9

Monetary value of significant fines for non-compliance with laws and regulations concerning the provisionand use of products and services

Not applicable

59

GRI Index

Daiwa Securities Group CSR REPORT 2015

Clauses

Indicator

60

Link

Specific Standard Disclosures for the Financial Services Sector
Product and Service Impact Section
FS1

CORE

Policies with specific environmental and social components applied to business lines

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

CORE

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

Not reported

FS3

CORE

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

Compliance

FS4

CORE

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

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

FS5

CORE

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

Engagement with Customers (Building Deeper,
Stronger Trust with Customers)/Engagement with
Shareholders and Others

Aspect: Product Portfolio
FS6

CORE

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

Daiwa Securities Group Profile/Initiatives throughBusiness Activities

FS7

CORE

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

Initiatives through Business Activities

FS8

CORE

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

Initiatives through Business Activities

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

Corporate Governance

Aspect: Audit
FS9

CORE

Aspect: Active Ownership
FS10

CORE

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

Not reported

FS11

CORE

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

Initiatives through Business Activities

FS12

CORE

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

Initiatives through Business Activities

Social Section
Aspect: Local Communities
FS13

FS14

CORE

CORE

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

Initiatives to improve access to financial services for disadvantaged people

Engagement with Customers (Building Deeper, Stronger
Trust with Customers)/Engagement with Society(Assistance Inside and Outside of Japan throughFoundations and NPOs)

Aspect: Product and Service Labeling
FS15

CORE

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

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

FS16

CORE

Initiatives to enhance financial literacy by type of beneficiary

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

ISO26000 Index

Daiwa Securities Group CSR REPORT 2015

ISO26000 Index
In compiling the Daiwa Securities Group CSR Report 2015, reference was made to the core subjects of ISO 26000.

Core Subjects and Issues
6.2
Organizational
governance

6.3
Human rights

6.4
Labourpractices

6.5
The
environment

6.6
Fair operating
practices

6.7
ConsumerissuesMessage from CEO/Message from Chairman/CSR of the Daiwa Securities Group/Daiwa
Securities Group Profile/Corporate Governance/Compliance/Risk Management
Issue 1: Due diligence

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

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

Issue 3: Avoidance of complicity

Risk Management (Supply Chain Management, Human Rights Due Diligence)/Human Rights Initiative

Issue 4: Resolving grievances

Corporate Governance

Issue 5: Discrimination and vulnerable groups

Engagement with Employees (Hiring Initiatives)/CSR Related Data

Issue 6: Civil and political rights

Engagement with Employees

Issue 7: Economic, social and cultural rights

Engagement with Employees

Issue 8: Fundamental principles and rights at work

Engagement with Employees

Issue 1: Employment and employment relationships

Daiwa Securities Group Profile/Engagement with Employees/CSR Related Data

Issue 2: Conditions of work and social protection

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

Issue 3: Social dialogue

Engagement with Employees (Communication)

Issue 4: Health and safety at work

Not applicable

Issue 5: Human development and training in the workplace

Engagement with Employees (Human Resource Development and Skill Enhancement)

Issue 1: Prevention of pollution

Not applicable

Issue 2: Sustainable resource use

Environmental Initiatives/CSR Related Data

Issue 3: Climate change mitigation and adaptation

Environmental Initiatives/Risk Management

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

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

Issue 1: Anti-corruption

Risk Management/IT Strategy and Information Security

Issue 2: Responsible political involvement

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

Issue 3: Fair competition

Corporate Governance/Compliance

Issue 4: Promoting social responsibility in the value chain

CSR of the Daiwa Securities Group/Environmental Initiatives

Issue 5: Respect for property rights

Not applicable, due to the nature of our business

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

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

Issue 2: Protecting consumers’ health and safety

Not applicable, due to the nature of our business

Issue 3: Sustainable consumption

Initiatives through Business Activities(Role and Social Responsibilities of the Financial Services)(Mission for Financial Institutions toward Solving the Global Social Issues)(For Addressing Social Concerns and Contributing to Future Development of Society and
Financial and Capital Markets)

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

Engagement with Customers (Working to Incorporate Customer Voices)

Issue 5: Consumer data protection and privacy

IT Governance and Information Security

Issue 6: Access to essential services

Not applicable

Issue 7: Education and awareness
Issue 1: Community involvement

6.8
Community
involvement
anddevelopment

Engagement with Society (Education and Research Activities in Economics and Finance)
Initiatives through Business Activities (Analysis and transmission of proposals on information
about economy, society and investment)
Message from CEO/Message from Chairman/Initiatives through Business Activities/Engagementwith Society (Corporate Citizenship Initiatives)

Issue 2: Education and culture

Engagement with Society(Education and Research Activities in Economics and Finance)(Assistance Inside and Outside of Japan through Foundations and NPOs)(Support for culture and the arts)

Issue 3: Employment creation and skills development

Initiatives through Business Activities (Support for the creation of our future society)

Issue 4: Technology development and access

Initiatives through Business Activities (Support for the creation of our future society)

Issue 5: Wealth and income creation

Initiatives through Business Activities (For Addressing Social Concerns and Contributing toFuture Development of Society and Financial and Capital Markets)/Engagement with Society(Assistance Inside and Outside of Japan through Foundations and NPOs)

Issue 6: Health

Initiatives through Business Activities (Establishment of Healthcare Investment Corporation)

Issue 7: Social investment

Initiatives through Business Activities(For Addressing Social Concerns and Contributing to Future Development of Society and
Financial and Capital Markets)(As a Responsible Institutional Investor)(Support for the creation of our future society)61

CSR Related Data

62

Daiwa Securities Group CSR REPORT 2015

CSR Related DataManagement Report
Compensation Paid to Directors and Corporate Executive Officers of Daiwa Securities Group Inc. in FY2014
Total Amount ofType of Officer Compensation,
Etc.
Directors
Corporate Executive
Officers
External Directors

Total Amount of Compensation, Etc. by Type
Basic Compensation

Stock Options¥35 million¥32 million¥3 million

Performance-Based
Compensation−¥1,035 million¥435 million¥81 million¥88 million¥88 million−

Lump-sum Retirement Pay

Number of Executives−

2 persons¥518 million−

13 persons−−

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

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

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

As of March 31, 2014

As of March 31, 2015

Employees

FA*1

Male

7,458

65

Temporary
Employees−(Career track*2)

7,009

−

−

(Managers)

3,827

−

−

3,868

4,124

102

−

(Career track*2)

2,485

−

(Managers)

221

Japan total

11,582

Japan Female

Temporary
Employees−

Employees

FA*1

7,526

62

7,103

−

−

−

−

4,270

80

−

−

2,712

−

−

−

−

262

−

−

167

563

11,796142

753

Overseas

1,568

−

103

1,528

−

94

Total

13,150167

666

13,324142

847* The number of employees stationed overseas has been included in the “Overseas” since FY2015.” Data as of the end of March 2014 have been retroactively restated.
*1 Financial advisors*2 Including regional career-track employees and specialist

Number of New Graduates Recruited by the Daiwa Securities Group
Career-track employees/regional career-track
employees(Unit: persons)April 2013

April 2014

April 2015

Male

296

345

345

Female

227

265

336

523

610

681

Total
*This data pertains to eight Group companies

Workforce Statistics
FY2012FY2013

FY2014

Average annual salary*1 (in ten thousand yen)

888

1,153

1,171

Average age (years old)

40.5

41.2

41.8

Average number of years of service (years)

14.3

14.8

15.3

FY2012FY2013

FY201461

59

56*This data pertains to Daiwa Securities Group Inc. only
*Numbers include those who simultaneously work for Daiwa Securities*1 Average annual salary includes bonuses and other

Re-Employment under the Daiwa Master System
Number of employees hired under the Daiwa Master System*This data pertains to two Group companies(Unit: persons)

CSR Related Data

63

Daiwa Securities Group CSR REPORT 2015

Employment Rate for Persons with Disabilities(Unit: %)Employment rate for persons with disabilities

End of FY2012

End of FY2013

End of FY2014

2.31

2.24

2.10

FY2013

FY2014*This data pertains to Daiwa Securities

Achievements of Selected Participants in Management Training
Daiwa Management Academy: Targeting department managers

FY2012

Number finishing program (cumulative)

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

291

314

335

FY2012FY2013

FY2014

631

671

734

FY2012FY2013

FY2014

2,862

3,464

3,949

*This data pertains to 10 Group companies

Participants in Business Skill Training(Unit: persons)

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

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

As of March 31, 2013

As of March 31, 2014

As of March 31, 2015

Affiliated Financial Planner (AFP)

5,183

5,191

5,279

Certified Financial Planner (CFP®)*2

497

555

590

1,446

1,461

1,504

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

42

44

50

1,383

1,470

1,556

154

164

160

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

Successful Applicants in Internal Recruiting System(Unit: persons)

Positions Offered

No. ofApplicants

No. ofSuccessful
Applicants

M&A, SMA consultants, analysts, internal wholesalers, compliance, dealers, derivatives, traders,fund managers, principal finance specialists, venture capitalists, money managers, research,underwriting, sale, overseas, management consultant, individual and corporate sales, productdevelopment, proposals and planning, investment advisors, global trainees, etc.

965

152

Held

Cumulative from FY2000

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

FY2012FY2013

FY20141837.51837.5

1845

25.7

27.2

28.2

52

50

56

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

CSR Related Data

64

Daiwa Securities Group CSR REPORT 2015

Employee Welfare System Usage

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

FY2012FY2013

FY2014

Female

436

486

576

Male

17

19

134

Female

8

10

6

Male

0

0

1

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

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

Program Description

Professional return plan (rehiring of sales staff)

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

Job location change system

Offers a position in a new location when an employee must relocate after marriage or spouse’s job transfer
Employees may opt to take leave for a certain period (up to five years) in the event their spouses are reassigned to work in alocation that is untenable for them to commute to work
Employees can take childcare leave until the day before their child’s third birthday.

Spouse work reassignment leave system
Childcare leave
Childcare support leave

When employees’ spouse gives birth or returns to work, leave may be taken (first two weeks of pay is guaranteed for childcare leave)

Exemption from overtime work

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

Restricted overtime work

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

Daycare subsidy

The Group offers subsidies for daycare expenses until employees’ child begins elementary school
The company encourages employees to take paid vacation and has introduced leave for marriage preparations or "familyday" leave to give employees a chance to spend quality time with their families.
Enables employees to return to work after a period of childcare leave. Daiwa WLB Station, a work-life balance promotion
website that focuses on various support systems related to childrearing and nursing care, provides information for employees
on childcare leave and helps facilitate their smooth return to the workplace.

Expanded leave system
Support after returning to work

*Number of employees using the program at Daiwa Securities as of the end of March 2015, 162 (cumulative)
Web

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

Female Employees and Managers at the Daiwa Securities Group(Unit: %)End of FY2012

End of FY2013

End of FY2014

Percent of employees who are female

35.6

35.6

36.1

Percent of managers who are female

4.8

5.4

6.3

*This data pertains to all consolidated Group companies

Number of Employees’ Union Members(Unit: persons)

End of FY2012

End of FY2012

End of FY2014

6,490

6,406

6,573

Employees’ union membership*The data pertains to eight Group companies (nine until the end of FY2011), excluding Daiwa Asset Management, which has its own employees union, and Daiwa Property, which has no employees union.

Corporate Citizenship Initiatives and Expenditures

Independent
Assurance

Type of Activity(Unit: ¥ thousand)

FY2012FY2013

1. Education and research activities in economics and finance

63,52549,694

189,624

2. Assistance to communities inside and outside of Japan through foundations and NPOs

165,851

179,937

153,779

3. Support for culture and the arts

272,500

231,900

257,400

4. Corporate Citizenship Initiatives

2,328

1,790

5,476

504,204

463,321606,279

Total

FY2014

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

FY2012FY2013

FY2014

7,721

8,138

11,847

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

15

Cumulative number since the opening (in June 2005)

59,17017221

CSR Related Data

65

Daiwa Securities Group CSR REPORT 2015

Environmental Report
We have revised boundaries and calculation methods, relating to energy consumption and CO2 emissions for offices in Japan for the data for FY2013, and received independent
assurances. (published in June 2015)

Energy Consumption
Offices

Independent
Assurance

Independent

CO2 Emissions Assurance

TypeElectricity(thousand kWh)Gas (thousand Nm3)

Domestic

Offices
Overseas

FY2013

FY2014

71,95470,027372

336

Heavy oil (kL)

25.4

26.7

Diesel fuel (kL)

0.08

0.09

Gasoline (kL)*1

997

1,002

Type

FY2013

Electricity(thousand kWh)

12,586*2

Offices(Unit: t-CO2)

TypeElectricity

Domestic

FY20148,892

FY2013

FY201435,44233,936

Gas

848

759

Heavy oil

68.8

72.3

Diesel fuel

0.19

0.23

Gasoline*1

2,314

2,325

Total

38,67337,092

Scope 1

917

831

Scope 235,44233,936

Scope 3*1

2,314

2,325
(Unit: t-CO2)

Offices
Total(Domestic andoverseas)Type

FY2013

FY2014

Offices

84,540*2

78,919Overseas372

336

Heavy oil (kL)

25.4

26.7

Diesel fuel (kL)

0.08

0.09

Electricity

Gasoline (kL)*1

997

1,002

Gas

848

759

Heavy oil

68.8

72.3

Electricity(thousand kWh)Gas (thousand Nm3)

Type
Electricity

Offices
Total(Domestic andoverseas)

Type

Domestic

Number of employees in Japan (persons)Clean Water Consumption

FY2013

FY2013

FY201442,427*2

38,8710.19

0.23

Gasoline*1

2,314

2,325

Scope 1-

38,871831
2,325

FY2014

3.3

3.1

11,74911,938*Data for FY 2013 is excluded from the scope of independent assurances.

Independent
Assurance

Offices

Type

FY2013

FY2014

Domestic

Clean Water (thousand kL)

119.5

108.3

Boundaries

4,935

*1 G
 asoline for leased vehicles as company cars. It is categorized and calculated in line with thegovernment’s guidelines.
*2 D ata for FY2013 is excluded from the scope of independent assurances. The boundaries of overseas
sites are set on a consolidated-basis.

CO2 Emissions per Employee (Domestic)
Type

FY2014

Diesel fuelScope 3*1

Per employee (t-CO2)

6,985*2(Unit: t-CO2)

Scope 2

Offices

FY2013*Data for FY2013 is excluded from the scope of independent assurances.
The boundaries are set on a consolidated-basis.

We have incorporated figures for the three companies having a reporting obligation under laws and regulations—Daiwa Securities, Daiwa Property and Daiwa
Institute of Research. Data for Daiwa Institute of Research Business Innovation has also been included in the calculation, in light of its significant impact on theGroup’s environmental loads.
The energy consumption of Gran Tokyo North Tower, where the Daiwa Securities Group is based, includes data for Group companies other than those mentioned
above, in light of the importance of the building. The data for overseas offices covers figures for London, New York, Hong Kong and Taipei offices.
Calculations have been made in accordance with methods stipulated in the Act on the Rational Use of Energy and the Act on Promotion of Global WarmingCountermeasures.

Calculation
Methods

A）The emission factor used for calculation of CO2 emissions from electricity use:
We use the actual emission factor for each electricity supplier in calculating CO2 emissions from electricity use at domestic offices.
Emissions at overseas offices are calculated by using the figures published for each country by the International Energy Agency.
 tility gas: Consumption represents the volume of gas at standard conditions calculated by using temperature and supply pressure data. Calorific values areB）U
based on figures from the providers.
 eavy oil and diesel fuel: Heavy oil and diesel fuel are both stated on a consumption basis.
C）H team, cold water and kerosene: Steam, cold water and kerosene used at some offices are not included in calculations.
D）S

WastesType
Paper waste
Non-paper waste

FY2013

FY2014

346.0

317.7

Recycling rate (%)

87.9

93.0

Amount generated (t)

246.1

221.2

*Calculated based on the Reuse Plan for Large-Scale Buildings
used for business, as specified by each local government(GranTokyo North Tower, Daiwa Yaesu Building, Toyocho
Center Building, Daiwa Eitai Building, DIR Headquarters
Building and Osaka Branch Building)

Recycling rate (%)

84.2

51.7

*Data is excluded from the scope of independent assurances

Amount generated (t)Glossary

Daiwa Securities Group CSR REPORT 2015

66

Glossary● AFP/CFP®

● My Number

Certifications for financial planners. AFP is a certification in Japan, while CFP isa globally recognized credential.

The numbers scheduled to be assigned to people in Japan to identify individuals
for administrative procedures● Base of the Economic Pyramid (BOP) Business● Nippon Individual Savings Account (NISA)

In many countries, the poorest of the poor make up a large portion of thelower segment of the population pyramid distributed by wealth, but these
are undeveloped markets, and this business focuses on the potential of suchmarkets to become major markets and seeks to solve social issues and raise thequality of life by providing sustainable products and services.

Dividends and capital gains from stocks, investment trusts, and otherinvestments are subject to ordinary income tax and local taxes, but thisprogram exempts dividends and capital gains from new purchases up to 1
million yen for a maximum of five years● NPO/NGO● Carbon Disclosure Project (CDP)

Non-profit organization/Non-governmental organization

This project is an affiliation of institutional investors concerned about climatechange who demand that companies disclose information about their stanceon environmental problems and initiatives addressing such problems.

● Principles for Financial Action toward a Sustainable Society (Principles● Cluster Bomb/Cluster Munitions

A bomb containing multiple bomblets in a large shell that acts as a container.
One bomb causes explosions over a wide area, enlarging the scope of damage.
It has also been indicated that dealing with multiple unexploded bomblets fromcluster bombs presents difficulties.
● Color Universal Design

A method of design that takes into consideration the use of color so that
information can be conveyed to more people, keeping in mind people withvaried color perception● Corporate Governance

The mechanism that allows for sound and efficient corporate management● Corporate Governance Code

Guidelines established by the Tokyo Stock Exchange concerning the corporate
governance system that listed companies should embracing both in purpose
and spirit.

for Financial Action for the 21st Century)
Aims to expand investment and financing with the environment in mind,
formulated as voluntary efforts of financial institutions in Japan● Principles for Responsible Investment (PRI)

PRI is a set of six principles launched by the UNEP Finance Initiative and the
UN Global Compact in April 2006. This initiative asks corporate investors toincorporate ESG into their investment decision making practices.
● REITA real estate investment trust● Smart Community

A social system that has succeeded in reducing environmental load by mainly
utilizing information and communication technology (ICT) and renewableenergy● Social Finance

Financing that aims to generate social and public benefits such as local
revitalization and solutions to poverty, environmental and other social concerns● Engagement● SRI

Dialogue and exchange of opinion between businesses and stakeholders

Investment strategy where both financial return and social good are sought● Environmental Accounting● Stakeholders

To quantify necessary investment in corporate activities and its effect in aneffort to reduce the environmental load of those activities

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

Environment/Social/Governance● Green Procurement/Clean Methods of Materials Procurement

To buy environmentally-friendly products for reducing environment load ofcorporations and others● GRI

Global Reporting Initiative—An organization dedicated to proposing and promoting
common international guidelines for sustainability reports● HEMS/BEMS

Energy management systems (EMS) for electricity, gas, and so on that use
information technology. BEMS (Building EMS) are for commercial buildings, andHEMS (Home EMS) are for homes● Hospitality

A spirit of selfless service for customers● Human Rights Due Diligence

Verification performed to minimize adverse effects on human rights issues that
could arise from business activities.

● Stewardship CodeThe code of conduct established for institutional investors concerning theirfiduciary duties. The Japanese version was formulated by the Financial Services
Agency in February 2014.
● Supply Chain Management

To investigate issues involving a company’s suppliers of raw materials andservices, including their environmental and social challenges, to select suppliers
based on the results of such investigations and urge them to resolve the issues.
● Trade Execution

Matching of a buy and sell order of securities such as stocks and bonds● TSR

Telephone service representative—Telephone operator with the expertise● UN Global Compact

A global initiative established through the advocacy of then-Secretary General
Kofi Annan. Members support ten principles in the fields of human rights,
labor, environment, and anti-corruption in their business activities.
● United Nations Millennium Development Goals (MDGs)● Impact Investment

The MDGs consist of eight goals adopted at the UN Millennium Summit.

A method of investment that, in addition to producing economic benefit,
invests in assets with the intention of addressing social issues such as poverty
and environmental problems● Value Chain● ISO 26000

A worldwide standard that provides guidance for social responsibility oforganizations● Materiality

The themes and aspects companies particularly focus on over the long term ina wide range of corporate activities. It is recommended that companies issuingsustainability reports should select and announce them according to the type ofbusiness and risk. (Refer to “GRI Index”)● Microfinance

A form of financial services for people on low-income

Interlinked value-adding activities that convert inputs into outputs which, inturn, add to the bottom line and help create competitive advantage● Work-Life Balance (WLB)

Balance between an individual's work and personal lifeGlossary

Independent Assurance Report

Daiwa Securities Group CSR REPORT 201567