CSR Report
Integrated Repor t Supplement

2 018

﻿

Daiwa Securities Group CSR REPORT 2018

Contents
Editorial Policy
Overview of Company and Businesses

2

The Daiwa Securities Group’s Businesses and Role in Society

4

CSR of the Daiwa Securities Group5

3

CSR of the Daiwa Securities Group5

CSR Management

7

The Daiwa Securities Group and SDGs

9

CSR Materiality of the Daiwa Securities Group

11

Communication with Stakeholders and Improvement of Corporate Value

13

Message from CSR Officer

13

Initiatives through Business Activities

14■ Close-up/Support Women’s Active Participation in Society through Products—Daiwa Women Supporter Fund (Nicknamed “Tsubaki”)

15

Role and Social Responsibilities of the Securities Business

17

Provision of Quality Service to Customers

19

Initiatives through Product Development and Provision24

Maintenance and Development of Financial and Capital Market Functions

29

Dissemination of Analysis and Proposals on the Economy, Society, and Investment Information30

Support for the Creation of Our Future Society

33

Initiatives for Supporting Business Activities

37■Close-up/Initiatives for Child Poverty Issues

38

Corporate Governance

40

Compliance44

Human Rights Initiatives

48

Risk Management

49

IT Strategy and the Management of Systemic Risk

53

Environmental Initiatives

54

Relationship with Shareholders and Other Investors

57

Relationship with Employees

59

Engagement with Society

66

Third-Party Evaluations73

GRI Content Index/ISO 26000 Index

75

CSR Related Data

87

Glossary98

Independent Assurance Report

99

1

﻿
Editorial
PolicyDaiwa Securities Group CSR REPORT 2018

Editorial Policy
We at the Daiwa Securities Group have been reporting our CSR activities annually since FY2002 for the following two objectives: to disclose
our CSR activities in an easy-to-understand way and to evaluate the current state of affairs and the challenges we face. This CSR Report isdesigned to disclose non-financial information in a more detailed manner as a supplement to the Integrated Report.
The CSR Report, which is only released on our website, is produced referring to the standards of the Global Reporting Initiative (GRI)and ISO 26000. We have referred to the GRI Sustainability Reporting Standards 2016 since FY2017 and have identified and disclosed ourmateriality. (In FY2015, we also started to take account of the provisional sustainability accounting for the financial sector issued by the
Sustainability Accounting Standards Board.) Moreover, we aim to make the report more accessible by utilizing the concept of Color Universal
Design in selecting the colors of the document.
The meanings of underlined words are provided in the glossary (page 98).

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

Reporting Boundary
This report generally discusses the principal companies of the Daiwa Securities Group. It does not, however, include all data 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 ofdata specifies the scope of coverage. The term “Daiwa Securities Group” refers to our entire group, while the term “Daiwa Securities Group
Inc.” and the term “Daiwa Securities” refer to Daiwa Securities Group Inc. and Daiwa Securities Co. Ltd., respectively.

Period Covered by Report
FY2017 (April 1, 2017, to March 31, 2018)
The report, however, also includes some information on events and activities carried out prior to the beginning of or after the end of FY2017,
or scheduled to take place during FY2018.

Date of Publication
November 2018
(The previous report was published in November 2017; Publication of the English edition of the next report is planned for November 2019.)

Inquiries
SDGs Promotion Office, Corporate Planning Department, Daiwa Securities Group Inc.
Tel: +81-3-5555-1111 (Main) E-mail: daiwacsr@daiwa.co.jp Website: http://www.daiwa-grp.jp/english/csr/

Reference Guidelines
GRI Sustainability Reporting Standards 2016
ISO 26000: Guidance on social responsibility
Sustainability accounting standards for the Financials sector, Sustainability Accounting Standards Board (SASB)
Role and Social Responsibilities of the Securities Business
Daiwa Securities Group CSR REPORT 2018
Environmental
Accounting Guidelines 2005, Ministryof the Environment, Japan

Daiwa Securities Group CSR REPORT 201817

Composition of This CSR Report
Role and Social Responsibilities of the Securities Business
Daiwa Securities Group CSR REPORT 2018

Role and Social Responsibilities of the Securities Business

Daiwa Securities Group CSR REPORT 201817

Role and Social Responsibilities of the Securities Business
Relevant
CSR
Materiality

IX.

Responsible action as an institutional investor

XIII.

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

RelatedSustainable
Development
Goals (SDGs)

Mission for Financial Institutions
toward Solving 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 a fairand dynamic financial market, but also to incorporatea social perspective in finance and to facilitate the flowof money to build a sustainable society.

In January 2010, the Daiwa Securities Group signed
the United Nations Global Compact (UNGC), a platformto help companies that have committed to sustainable
and responsible business practices shape their policies,
and have proceeded with business activities incompliance with the principles. We also incorporate into
our activities the Sustainable Development Goals (SDGs)
adopted in September 2015 at the United Nations
Sustainable Development Summit.

●Principles for Financial Action towarda Sustainable Society (Principles for
Financial Action for the 21st Century)
The Principles for Financial Action for the 21stCentury were drawn up by a committee comprising
representatives from a range of Japanesefinancial institutions. They were tasked withdrafting a Japanese version of the Principles forEnvironmental Financial Action. This was based ona recommendation issued by Japanese Ministry of
the Environment’s Central Environment Council withthe objective of promoting environmental finance.
Each signatory institution is expected to endeavor toreflect ESG (environment, society and governance)
issues and concerns to its own business practices.
The Group was instrumental in the establishmentof the principles from the drafting stage to thefinal framework. Both Daiwa Securities Group Inc.
and Daiwa Asset Management Co. Ltd. became
signatories in November 2011.

Responsible Action as an Institutional
Investor●Initiatives by Daiwa Asset Management
Daiwa Asset Management announced its adoptionof the Japanese version of the Stewardship Code in
May 2014 and has been actively working to fulfill
its stewardship responsibility. It has been striving to
improve its initiatives, renewing the announcement of
its adoption in November 2017 following the revisionof the Code in May 2017.
In January 2017, Daiwa Asset Management set up
the “Stewardship Supervisory Committee,” which
is designed to manage conflicts of interest faced infulfilling its stewardship responsibility. The committee
supervises the company’s overall stewardship activities
and is responsible for making reports to the Board of
Directors and issuing recommendations to improvestewardship activities as necessary. The committee iscomposed of outside directors and the complianceofficer, who takes charge of overseeing themanagement of conflicts of interest, thereby securing

IX.

Responsible action as an institutional investor

XIII.

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

RelatedSustainable
Development
Goals (SDGs)* Refer to pages 11 and 12 for details on materiality at the Daiwa Securities Group.

* Refer to pages 11 and 12 for details on materiality at the Daiwa Securities Group.

The securities business, the core business of the Daiwa
Securities Group, plays a key role in society, by buildinga bridge 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 assistanceto companies in their efforts to raise money forequipment investment or R&D, as well as to national
governments, local governments, international
institutions, and public corporations seeking to raise
funds for public works projects.
On the asset management side, the Group provides
appropriate investment information and advice, as
well as a comprehensive and diverse lineup of financial
products and services to meet the various needs ofindividuals, companies, institutional investors, andpension funds. In these ways, the securities businessfacilitates the smooth flow of money by matching
demand and supply through financial and capital
markets. The Group fulfills an important role andresponsibility in society by contributing to sustainable
development through the channeling of funds intobusinesses that solve social issues and create newtechnologies, for example.
On investing in securities, the Daiwa Securities
Group promotes methods of investment that take ESG(environment, society, and governance) factors, suchas environmental and social initiatives into accountin addition to financial information. In recent years,
the Group has put its emphasis on the promotion offinancial products based on the concept of Impact
Investment, a type of Socially Responsible Investment(SRI), which refers to making more direct, quick-acting
investments to resolve social issues. From its position
as a financial institution, the Daiwa Securities Groupis endeavoring to contribute to society by developing
and marketing these products. In addition to pursuingeconomic gain, the Group is dedicated to resolving ahost of social issues.

Relevant
CSR
Materiality

This CSR Report describes relevant SDGs and CSR materiality on the top of the page for each item. We
The securities
the core businessof theDaiwa
January 2010,
the external
Daiwa Securities
Group signed
considersuchbusiness,composition
to beimportantin Ininternal
andcommunication.
Securities Group, plays a key role in society, by building

Support for global
initiatives•The United Nations-

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

Compact (UNGC)•Principles for Financial

Action for the 21stCentury•Task Force on Climate-

related Financial
Disclosures (TCFD)•United Nations

Environment Programme– Finance Initiative(UNEP-FI)

the United Nations Global Compact (UNGC), a platformto help companies that have committed to sustainable●Materiality
assets and those of private and public sectors to raise
and responsible business practices shape their policies,
funds On the fund-raising side through underwriting
and have proceeded with business activities in
The equities
Sustainable
Goals (SDGs),compliance with theThe
Daiwa
Securities
reviews andand bonds,Development
and arranging other securities
principles.
We alsoincorporateGroup
into
products,
thecreatedGroup provides
and assistance
Development
Goals (SDGs)
which
were
by advicememberstates of theour activities the Sustainable
strengthens
its CSR
activities by focusing on theto companies in their efforts to raise money for
adopted in September 2015 at the United Nations
UnitedNations
andoraR&D,
variety
oftoorganizations
equipment
investment
as well as
national
Sustainable Development
Summit.
15 items
that the Group identified as materiality
local governments, internationaland governments,
people, wereadopted by the UN in 2015
as
FY2014.
institutions, and public corporations seeking to raise●Principles forinFinancial
Action toward
funds
for public works
projects.
goals
commonto allhumankind. Each countrya Sustainable Society (Principles forRefer
5–6 and 11–12 for details.
On the asset management side, the Group provides
Financial Action
for tothepages
21st Century)
Support for global
has promisedto actively
work
towardappropriate investment
information
and advice,as theThe Principles for Financial Action for the 21st
initiatives
well as a comprehensive and diverse lineup of financial
Century were drawn up by a committee comprisinga bridge between the needs of investors to manage●SDGs

achievement of these goals.

products and services to meet the various needs ofindividuals, companies, institutional investors, andReferto page 9 for details.
pension funds. In these ways, the securities businessfacilitates the smooth flow of money by matching
demand and supply through financial and capital
markets. The Group fulfills an important role andresponsibility in society by contributing to sustainable
development through the channeling of funds intobusinesses that solve social issues and create newtechnologies, for example.
On investing in securities, the Daiwa Securities
Group promotes methods of investment that take ESG(environment, society, and governance) factors, suchas environmental and social initiatives into accountrepresentatives from a range of Japanesefinancial institutions. They were tasked withdrafting a Japanese version of the Principles forEnvironmental Financial Action. This was based ona recommendation issued by Japanese Ministry of
the Environment’s Central Environment Council withthe objective of promoting environmental finance.
Each signatory institution is expected to endeavor toreflect ESG (environment, society and governance)
issues and concerns to its own business practices.
The Group was instrumental in the establishmentof the principles from the drafting stage to thefinal framework. Both Daiwa Securities Group Inc.
and Daiwa Asset Management Co. Ltd. became•The United Nations-

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

Compact (UNGC)•Principles for Financial

Action for the 21stCentury•Task Force on Climate-

related Financial

2﻿Overview of Company and Businesses

Daiwa Securities Group CSR REPORT 2018

Overview of Company and Businesses
The Daiwa Securities Group is a comprehensive securities group that operates in such fields as Retail, Wholesale, AssetManagement, and Proprietary Investment as its core businesses. The Group provides a wide range of financial services.

Daiwa Securities Group Inc.
Retail Division

Asset Management
Division

Wholesale Division

Daiwa AssetManagement Co. Ltd.

Daiwa Securities Co. Ltd.

Retela Crea
Securities Co., Ltd.

Daiwa Capital Markets Europe Limited

Daiwa SB Investments
Ltd.

Daiwa Capital Markets Hong Kong Limited

Daiwa Real Estate
Asset Management
Co. Ltd.

Daiwa Capital Markets Singapore Limited

Mi-Casa AssetManagement Inc.
Daiwa Office
Investment
Corporation

Daiwa Capital Markets America Inc.

Investment Division

Other

Daiwa Institute of
Research Ltd.

Daiwa Corporate
Investment
Co., Ltd.

Daiwa Institute of ResearchBusiness Innovation Ltd.
Daiwa PI Partners
Co. Ltd.

Daiwa Next Bank,Ltd.
Daiwa Securities BusinessCenter Co. Ltd.

Daiwa Securities
SMBC Principal
Investments
Co. Ltd.

Daiwa Property
Co., Ltd.
(As of June 30, 2018)

Net Operating Revenue

472.7

Ordinary Income

505.3

155.6
135.6

Retail Division
Wholesale Division
Asset Management Division
Investment Division
Other
FY2016FY2017FY2016FY2017(billion yen)

Corporate Data
● NameDaiwa Securities Group Inc.

● Established
December 27, 1943 (Founded 1902)● Head OfficeGran Tokyo North Tower
9-1, Marunouchi 1-chome,
Chiyoda-ku,
Tokyo 100-6751, Japan● President and CEO
Seiji Nakata● Tel+81-3-5555-1111 (Main)● Capital¥247.3 billion● Number of employees (consolidated)
13,836● Number of consolidated
subsidiaries
59● Number of equity-method
affiliates
10● Shares of common stock(issued and outstanding)
1,699,378,772 shares(As of March 31, 2018)

3

﻿The Daiwa Securities Group’s Businesses and Role in Society

Daiwa Securities Group CSR REPORT 2018

The Daiwa Securities Group’s Businesses and Role in Society
Japanese securities companies support direct financing and conduct a variety of businesses in the financial and capital
markets. In simple terms, they can be viewed as “intermediaries in financing and the capital market” because of their wide
range of businesses. Securities companies thus connect those who need money with those who wish to provide money in the
primary and secondary markets, thereby helping circulate money throughout the world.

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

Primary Market
Fundprocurement

Issuers
Businessfirms

Secondary Market

Issuance
Issuance

Equities

Proceeds
Proceeds

Securitized
assetsInvestment

National
government

Equities
Return
Bonds
Investment
trust
Securitized
Investment
assetsFinancial/CapitalMarkets

Bonds

Investors
Assetmanagement
institutions
Individuals
in JapanRole of Securities Companies
Fund procurement

Support for initialby companies, etc.

public offerings

Assistance intrading of securities

Assistance in wealthmanagement

Information analysis
and provision

Protect market trust—Work to ensure a fair and sound market

The Daiwa Securities Group’s Businesses
Retail Division

Wholesale
Division

Asset
Management
Division

Investment
Division

Other** Including IT services, management consulting, and online banking.

Refer to page 8 for initiatives to leverage financial capabilities in order to achieve asustainable society.

4﻿CSR of the Daiwa Securities Group

Daiwa Securities Group CSR REPORT 20185

CSR of the Daiwa Securities GroupAs the world undergoes rapid changes, such as those in social trends and the global environment, the Daiwa Securities
Group attaches great importance to our corporate principles as being “unchanging.” Based on these corporate principles,
we have set up three pillars in promoting CSR, which also form our foundation: “Key Issue 1,” “Key Issue 2,” and “Striving
to create a pleasant working environment.” We would like to contribute to the development of society and economy
through activities for the 15 items of materiality identified based on these.

Two Key CSR Issues
Corporate Principles
Building trust

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

Placing
importance on
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-directedworking environment that encourages their abilities andappropriately rewards their contributions.

Contributing tosociety

The Daiwa Securities Group will seek to benefit the economy
and society through the development of healthy financial
markets. In addition to scrupulously observing both regulations
and internal policies, the Group will strive to maintain ahigh sense of morality and duty, endeavoring to continue
contributing to the sustainable growth of the societies in which
we operate.

Maintaining
healthy earnings
results

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

Daiwa Spirit
Our corporate culture has been nurtured since the foundation of ourbusiness. After analyzing it using our corporate principle as a compass, we
sorted out the basic philosophy and mindset inherent to our group andarticulated them as the Daiwa Spirit, our behavioral guidelines.
Exercises self-discipline and complies fully with the law, recognizing that sustainable

1． growth hinges on winning the trust of customers, financial and capital markets, andsociety at large.
Secures sound profits by contributing to societal and economic development

2． through its actions in financial and capital markets.

3． Exerts unflagging efforts to build strong, sustainable, trust-based customer relations.
Continues to pioneer products and services in financial and capital markets, with

4． each employee fulfilling his/her mission with confidence and pride.

Cultivates unbeatable competitiveness to overcome challenges, underpinned by

5． strong company-employee trust and solidarity between colleagues.

Aims to be the securities group with the highest ambitions, a positive attitude that

6． turns hardships into opportunity, and unmatched speed.

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

Key Issue 1

Leveraging financial capabilities to contributeto a sustainable society

Key Issue 2

Developing sound financial and capital
markets for the next generation

Striving to create apleasant working
environment

Verification of Key CSR Issues and
The Daiwa Securities Group recognizes that we areresponsible to various stakeholders (refer to page 7)
as a corporate citizen when selecting key CSR issues.
Meanwhile, social requirements for companies may changeover time, and we need to constantly verify whether
significant changes are occurring and whether our key
issues accommodate these changes.
We believe social requirements for corporations froma wide range of stakeholders have become increasingly
diversified and thus 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 inJapan and overseas and promoted activities that use various
codes in order to identify properly and respond to corporate
CSR trends. The codes listed on the right side are those thatwe place a special emphasis on.

﻿CSR of the Daiwa Securities Group

Daiwa Securities Group CSR REPORT 2018

CSR Materiality of the Daiwa Securities Group

Contribute to thedevelopment ofsociety and economy
through financial andcapital markets

In FY2014, the Daiwa Securities Group identified CSR materiality based on the three pillars.
We have disclosed information on the Group’s initiatives for materiality. We have also
strived to grasp the expectations of our stakeholders and changes in social trends throughengagement and will review our initiatives if necessary.

I.

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

II.

Customer service with a wealth of hospitality

III. Development and provision of superior financial and investment products
IV. Dissemination of analysis and proposals on the economy, society, and investment information
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 and diversity of employees

XI. Creation of a corporate culture to comply with laws, regulations and codes in Japan and overseas,
based on self-discipline (including appropriate anti-corruption and 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, andfinancial and capital markets
XIV. Contribution to local communities
XV. Construction and maintenance of an appropriate corporate governance system

Responses to Changing Social Requirements
Responsibility to a wide rangeof stakeholders● ISO 26000

Contributing to asustainable society● The OECD Guidelines
for Multinational
Enterprises● The United Nations
SDGs

The Daiwa Securities Group’s
sustainable growth●T he Tokyo Stock Exchange’s
Corporate Governance CodeRisk control● The Core Labor Standardsof the International Labour
Organization● The United Nations
Guiding Principles on
Business and Human
Rights● The Charter ofCorporate Behavior of
the Nippon Keidanren● The Japanese versionof the Stewardship
Code (“Principles for
Responsible Institutional
Investors”)● Task Force on Climaterelated Financial
Disclosures (TCFD)

About Each Initiative●T he United Nations Global Compact (the Daiwa Securities
Group signed the Compact in 2010)

Human Rights

Principle 1: B usinesses should support and respect theprotection of internationally proclaimed humanrights; andPrinciple 2: m ake sure that they are not complicit in humanrights abuses.

LabourPrinciple 3: B usinesses should uphold the freedom of
association and the effective recognition of theright to collective bargaining;
Principle 4: t he elimination of all forms of forced andcompulsory labour;
Principle 5: t he effective abolition of child labour; andPrinciple 6: t he elimination of discrimination in respect of
employment and occupation.

Environment

Principle 7: B usinesses should support a precautionary
approach to environmental challenges;
Principle 8: u
 ndertake initiatives to promote greater
environmental responsibility; andPrinciple 9: e
 ncourage the development and diffusion ofenvironmentally friendly technologies.

Anti-corruption

Principle 10: B usinesses should work against corruption in allits forms, including extortion and bribery.

● ISO 26000●T he Charter of Corporate Behavior of the Nippon Keidanren (Japan Business
Federation)● The United Nations Guiding Principles on Business and Human Rights● The OECD Guidelines for Multinational Enterprises ● TCFD
● The UN Sustainable Development Goals (SDGs)● The United Nations Environment Programme - Finance Initiative (UNEP FI)

6

﻿CSR of the Daiwa Securities Group

Daiwa Securities Group CSR REPORT 2018

CSR Management
Daiwa Securities Group Stakeholders

Communication with Stakeholders
Issuers

We believe that deepening the bond of trust we share with our stakeholders isessential to the sustainable accomplishment of our social mission and achievementof growth.

Investors

Daiwa
Securities
Group

Shareholders
and others● Policy on Communication with Stakeholders

Employees

Basic Policy (1)Business
partners

Government

Local
communities

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

The Daiwa Securities Group will strive tomaintain two-way communication witha broad range of stakeholders based on
ISO 26000 and the Charter of Corporate
Behavior of the Nippon Keidanren.

Investees

NPOs
NGOs

Basic Policy (2)Basic Policy (3)The Group will strive to deepen communication
with stakeholders already known to us,
including customers, shareholders and otherinvestors, business partners, employees and local
communities.

The Group will strive to communicate
actively with third-parties in order to
identify other stakeholders.

● Summary of Communication
Stakeholders

Policy on Communication

Investors

We use the feedback received from customer input and questionnaires for the improvement of our business.

Issuers

We communicate with issuers as needed to check whether we have helped them to solve their issues or whether there are any points for
improvement.

Investees

Analysts and fund managers actively hold dialogue with management level personnel of investees.

Shareholders andothers

We conduct meetings with shareholders and others as well as briefings for individual investors (including online briefings).

Business partners

We engage in communication according to level of importance, in addition to communication via business deals, to confirm the management
status of information provided by the Daiwa Securities Group and check disclosure and reports related to ESG information.

Government

Experts in the think-tank division make proposals in various committees and councils set up by government offices and assemblies.

NPOs/NGOs

We strive to gain an understanding of the current status of social issues through visits to the operational frontline and meetings.

Local communities
Employees

We seek a symbiotic relationship with local communities through participation in local events and volunteer work.
We strive to reflect employees’ input and feedback in management via our whistle-blowing system and various questionnaires.

CSR Promotion System
Our officers and employees endeavor to implement our corporate principles through their business operations for the materialization of asustainable society and our vision.
Specifically, the SDGs Promotion Office of the Corporate Planning Department at Daiwa Securities Group Inc. actively seeks information andholds dialogues at external and internal meetings. These activities are conducted under the direction and orders of the Corporate Planning
Officer, an executive officer under the supervision of the CEO. CSR issues and our progress are shared regularly with the executive officer atmeetings and other occasions.
Furthermore, information on CSR is taught to the Group’s newly hired employees. The SDGs Promotion Office promotes and raises
awareness of CSR issues throughout branches and departments across Japan and major overseas sites and builds a network of cooperation.
Foundations
Daiwa Securities Health Foundation
Daiwa Securities Foundation
Daiwa Anglo-Japanese Foundation (UK)Daiwa Myanmar-Japan Foundation(Myanmar)

DialogueGroup companies

Dialogue

Daiwa Securities Group Inc.

Stakeholders

CEO

Investors
Issuers
Investees
Shareholders and others
Business partners
Government
NPOs/NGOs
Local communities
Employees

Direction and order

ReportingExecutive officers
Direction and order

Reporting

SDGs Promotion Office, Corporate
Planning Department
Communication of informationand development of awarenessConsulting and reporting

Departments within
Daiwa Securities Group Inc.

Dialogue(As of April 1, 2018)

7

﻿CSR of the Daiwa Securities Group

VOICE

Daiwa Securities Group CSR REPORT 2018

As part of the Group’s efforts to leverage financial capabilities in order to achieve a sustainable
society, Daiwa PI Partners Co. Ltd. (PIP) operates a wood pulp biomass power generation plant(refer to page 35). We interviewed Green Thermal Co. Ltd., which jointly developed and manages
the plant with PIP.

Development of Wood Pulp Biomass Power Generation Plants Using Tree Trimmings as FuelGreen Thermal Co. Ltd. engages in the development and operation of wood pulp
biomass power generation systems and the securing of tree trimmings that serve as
their primary source of fuel, as well as the forestry business.
We focus on thermal use as a new demand source for wood resources in theestablishment of Green Thermal. The company is aimed at revitalizing the forestry
industry and promoting local employment through transforming wood resources
into electricity with high economic value—in other words, promoting the power
generation business, thereby contributing to the realization of a resource recyclingoriented society.
We have accumulated experiences in a variety of fields, from purchase and salesof wood fuel to feasibility studies and development of biomass power generation
plants. Going forward, we will focus on conducting the forestry business, fuelprocessing, and the wood pulp biomass power generation plant operation business.
Power Generation Plants Developed by
Green Thermal

OutputInitiation of
Operation

Development

Green Hatsuden Aizu Co. Ltd.

5,700 kW

July 2012

Development

Power Generation Oita

5,750 kW

December 2013

Development

Green Biomass Factory Co. Ltd.

5,750 kW

June 2014

Development

Biomass Power Station Daito

5,750 kW

December 2015

Development

Biomass Power Station Niigata

5,750 kW

September 2016

Development &Operation

SGET Green Power Generation Sanjo LLC

6,250 kW

September 2017

Development &Operation

DS Green Power Generation Yonezawa LLC(invested in by PIP)

6,250 kW

January 2018

Development &Operation

DS Green Power Generation Wakayama LLC(invested in by PIP)

6,800 kW

Under construction

Makoto Takizawa
President and Representative Director
Green Thermal Co. Ltd.

Contributing to Rebuilding of the Forestry Industry and Securing of Regional
Baseload Electricity Sources
The increasing necessity of felling trees planted during the 1960s, when Japan’s rapid growth began, is an important
issue that Japan’s forestry industry faces. However, the industry is effectively putting off the felling as much as possible
because it is not profitable due to low demand for wood resources resulting mainly from a decrease in the number of
newly-built wooden houses and paperless trends driven by digital home appliances. When the felling is put off, various
problems occur in regional resource recycling, such as an increase in forest density (deterioration of wood quality), a
delay in new tree planting, grown trees becoming unable to absorb carbon dioxide,and difficulty developing human resources for the forestry industry.
Green Thermal believes that increasing the use of wood pulp biomass power
generation systems—a new demand source for such unused timber from forest
thinning—is the key to rebuilding of the forestry industry and securing regional
baseload electricity sources and that our mission is to play a role in turning the wood
pulp biomass power generation business into an industry.

Working Together with the Daiwa Securities Group
Since forming a capital and business alliance in 2015, we have been working with PIP as a joint development partner.
Our relationship is not limited to the provision of capital but extends even to investment in and financing arrangements
for biomass power generation plants developed by Green Thermal.
Our corporate philosophy is to protect the wealth of the land and sea through wood pulp biomass power generationand thereby contribute to the growth of regional economies. This philosophy is in accordance with the “Daiwa Securities
Group’s SDGs Declaration” (refer to page 10), and we consider PIP to be highly reliable and the best partner for us.
We will continue to actively promote the development of new projects while leveraging our capital and business alliancewith PIP, thereby contributing to the rebuilding of the forestry industry and the establishment of a clean energy society.

8﻿CSR of the Daiwa Securities Group

Daiwa Securities Group CSR REPORT 2018

The Daiwa Securities Group and SDGs
The most important objective of companies is no longer to maximize shareholder profits, and the current age demands
business activities that can socially win the sympathy of all stakeholders. These worldwide trends are reflected in Sustainable
Development Goals (SDGs), which were adopted by the UN General Assembly in 2015. Expectations for companies are
growing as a driving force for solving social issues.
The Daiwa Securities Group has implemented initiatives to resolve social issues until now, including promotion of impact
investment and SRI funds. However, they are merely a small portion of the initiatives for the grand goals of SDGs.
It is necessary to sincerely consider what specific actions we should take to contribute more to the achievement of SDGs
as the Daiwa Securities Group, and to execute such actions.
We have therefore started some initiatives while implementing measures to raise awareness of SDGs in and outside of
the Group.

●●Establishment of SDGs Promotion Committee
In 2018, the Daiwa Securities Group newly establishedthe SDGs Promotion Committee, chaired by the president
and CEO, to discuss the Group’s response to SDGs. Keio
University Professor Norichika Kanie, President of Cre-en
Inc. Ayako Sonoda, and Head of PRI (UN Principles for
Responsible Investment) Japan Michiyo Morisawa attend thecommittee as outside committee members. The committee
considers various matters, capitalizing on fresh ideas andthe latest information obtained externally.

Daiwa Securities Group SDGs
Promotion Committee
Chair: President and CEO Seiji Nakata

Daiwa Securities Group Inc.

* Set up SDGs Promotion OfficeGroup companies
Daiwa Securities Co. Ltd., Daiwa Asset Management Co.
Ltd., The Daiwa Institute of Research Group, Daiwa Next
Bank, Ltd., overseas sites, etc.

Holding the 1st SDGs Promotion Committee Meeting
The 1st SDGs Promotion Committee meeting was held in
May 2018. The committee exchanged opinions, including
those from the outside committee members, regarding future
initiatives to promote SDGs at the Daiwa Securities Group.
Going forward, in addition to the committee meetings,
we will use internal communication tools and holdworkshops in which officers and employees can participate
in order to increase the awareness of the Group as a wholeand promote SDG initiatives.

The United Nations Sustainable Development Goals
Sustainable Development Goals (SDGs) are
17 goals common to all humankind thatwere created by member states of the United
Nations and a variety of organizations andpeople and adopted by the UN in 2015. Eachcountry has promised to actively work toward
the achievement of these goals. The Daiwa
Securities Group views the SDGs as critical goals
that will lead the future direction of the world,
and will address the 17 social issues of the SDGs
by positioning them as a common language for
deploying business in and outside Japan.

9﻿CSR of the Daiwa Securities Group

Daiwa Securities Group CSR REPORT 2018●●Formulation of “Passion for SDGs 2018 —Daiwa Securities Group’s SDGs Declaration—"
The Daiwa Securities Group announced SDGs Declaration in May 2018. Going forward, we will enhance our initiatives
through dialogue with our stakeholders.

Passion for SDGs 2018
—Daiwa Securities Group’s SDGs Declaration—
The Daiwa Securities Group views the Sustainable Development Goals (SDGs)
adopted by the UN in 2015 as important world-leading goals. Through theGroup’s businesses, we will actively work on realizing an affluent society andenriching people’s lives by balancing companies’ pursuit of economic values withsolutions for social challenges.

Creation of Shared Values
As a comprehensive securities group that provides a wide range of services for various
customer needs, we will work on providing solutions for social challenges with a flexible
mindset not bound by preconceptions to create economic and social values as a company
simultaneously.

Partnerships with Stakeholders
By leveraging the Group’s unique role to connect countries, companies, and investors, etc.,
we aim to contribute to solving a wide range of social issues through our partnership witheach stakeholder.

Development of Various Human Resources and Realization of Diverse
Work Styles
We will develop various human resources and realize diverse work styles by promoting
a work-life balance, encouraging female and older employees to play active roles, andcreating an environment that enables all employees, irrespective of sex and age, to feel
motivated to work and show the best of their abilities.

Enhancement and Penetration of Recognition
As a supporter for the financial and capital markets, we will promote understanding andpenetration of SDGs among all officers and employees while contributing to enhancing
customers’ recognition of SDGs through the Group’s businesses.

●●Initiatives for SDGs
The details of the Daiwa Securities Group’s approach to SDGs are shown in “Daiwa Securities Group CSR booklet” ([Web]http://www.daiwa-grp.jp/csr/pdf/csr_booklet2018.pdf; available only in Japanese), in addition to this CSR Report.
The CSR booklet is available at our head and branch offices for customers visiting these offices.
We have also distributed SDGs badges to Group employees to raise their awareness of SDGs.

10

﻿CSR of the Daiwa Securities Group

Daiwa Securities Group CSR REPORT 201811

CSR Materiality of the Daiwa Securities Group
Materiality

Selection reason

I.

Appropriate proposals
and after-sales service
in accordance with thecharacteristics and needsof customers

The Daiwa Securities Group’s major businesses involve proposing a variety of financial products to our customers for investment. While
investment in financial products provides expected returns, various risks are also entailed. Accordingly, we are strictly required by laws andregulations to recommend products that suit the experience and characteristics of our customers. Moreover, to build sustainable customer
trust in the Group, it is indispensable to conduct sales activities that put customer needs first while complying with laws and regulations. It
is also important to continuously provide information to customers who have already purchased our financial products in order to obtain
their trust as we are a professional group that handles financial products subject to price fluctuations.

II.

Customer service with awealth of hospitality

The Daiwa Securities Group needs to be a group that is continually chosen by customers to achieve sustainable growth amid fierce
competition among financial institutions. We believe that in addition to the quality of the proposals and information that we offer, carefulattention with a wealth of hospitality is vital to satisfy our customers when trading with the Group.

III.

Development and provisionof superior financial andinvestment products

The main businesses that the Daiwa Securities Group conducts in financial and capital markets include (1) the provision of services
and solutions to business corporations that raise funds through securities and other means, (2) the establishment and management ofinvestment trusts that incorporate securities, and (3) assistance to various customers in investing in securities and other financial products.
To be continually chosen by customers, the Group believes that it is vital to continue to develop and provide advanced, good-quality
products and services.

IV.

Dissemination of analysis andproposals on the economy,society, and investment
information

To be chosen by customers, the Daiwa Securities Group needs to provide advanced, good-quality analysis of and information oncompanies issuing securities and financial and capital markets. As the trends of the overall economy and society are also important factors
for investment decisions, the analysis of and information on such trends are indispensable. Moreover, we believe that proposing economic
policies to be taken and measures for society as a whole while capitalizing on such analysis and information provision ability is also an
important role that the Daiwa Securities Group takes on for the creation of a sustainable society.

V.

Maintenance anddevelopment of financial andcapital market functions

Financial and capital markets function as an important social and economic infrastructure that facilitates the smooth flow of money bymatching fundraising needs and the investment needs of investors. The settlement of securities and funds relies on trust in the market,
where countless transactions by investors are interconnected. The maintenance of this function is critical for major financial institutions.
Moreover, developments such as the reduction of settlement time are also vital for the development of financial and capital markets, andthe Daiwa Securities Group plays a vital role as a major financial institution.

VI.

Appropriate risk controls

As a major financial institution, the Daiwa Securities Group is faced with the risks arising from various transactions, such as liquidity risks forfunding, the market risk resulting from price fluctuations, and credit risk for business partners. Failure to appropriately manage these risks
could cause massive losses and significantly affect our business.

VII.

Appropriate management ofcustomer information

The Daiwa Securities Group retains the details of transactions by numerous customers and their personal information. We also
obtain important information from customers that could lead to insider trading, including plans to issue securities. The obligationsof management and confidentiality related to such information are stipulated by laws and regulations. However, as a major financial
institution, we believe that information management that goes beyond the requirements imposed by laws and regulations is vital to ensurethat we do not betray the trust of our customers and other stakeholders.

VIII.

Construction andmaintenance of a strong
IT system

For major financial institutions, large-scale and sophisticated IT systems are indispensable as they are integrated with the promotion ofbusiness. The superiority of IT systems directly affects the competitiveness of financial institutions. On the other hand, should a large-scale
system failure occur, it may have a major impact on the Group’s business until the system returns to normal while also significantly affecting
financial and capital markets. In light of external intrusions and other numerous events occurring in recent years that have threatened thestability of IT systems, it is also extremely important to implement measures to prevent system failures associated with such incidents.

IX.

Responsible action as an
institutional investor

The Daiwa Securities Group has asset management companies that manage the funds entrusted by customers by investing them insecurities and other assets. It is important for these asset management companies to actively engage in dialogue with investees as
institutional investors, thereby helping those investees to achieve sustainable growth.

X.

Creation of a workplacethat values human resource
development and diversityof employees

For the sustainable growth of the Daiwa Securities Group, it is extremely important for Group employees to raise their skills as
professionals and provide customers with services exceeding those of other companies. To enable employees to exhibit theircapabilities, the creation of a workplace environment that gives them a sense of job satisfaction is also vital.

XI.

Creation of a corporate
culture to comply with laws,
regulations and codes inJapan and overseas, basedon self-discipline (including
appropriate anti-corruption
and human rights measures)

The Daiwa Securities Group is subject to not only laws and regulations related to the sales and trading of financial instruments, but also
a variety of other laws and regulations in and outside of Japan. We are also required to give consideration to anti-corruption and humanrights issues at home and abroad. A corporate culture that fosters self-discipline among officers and employees is a key foundation.

XII.

Reduction of environmentalload and responses toenvironmental changes

In light of resource limitations and global warming, it is important to strive to minimize the environmental burden resulting from businessactivities as a member of society.

XIII.

Initiatives to address social
concerns and contributeto future development ofsociety, and financial andcapital markets

A variety of stakeholders are increasingly asking companies to resolve various social issues through their businesses. The Daiwa Securities
Group is making efforts to resolve social issues using the functions of financial and capital markets, while taking on responsibility for thedevelopment of markets.

XIV.

Contribution to local
communities

The Daiwa Securities Group carries out business at various sites in and outside of Japan. We have the important responsibility ofcontributing to local communities as a member of society.

XV.

Construction andmaintenance of an
appropriate corporate
governance system

The Daiwa Securities Group has shareholders and other stakeholders, and their expectations for the Group vary. An appropriate corporate
governance system is vital for us to raise shareholder value and give balanced consideration to these expectations.

﻿CSR of the Daiwa Securities Group

Daiwa Securities Group CSR REPORT 2018

Division in charge
RetailDivision

Asset
Investment
Wholesale Management
Division
Division
Division

Other

Relevant items for CSR Report 2018

◎

◎

◎

△

△

Provision of Quality
Service to Customers

◎

◎

◎

◯

◯

Provision of Quality
Service to Customers

◎

◎

◎

◎

◯

Initiatives throughProduct Development
and Provision

◎

◎

◎

△

◎

Dissemination of Analysis andProposals on the Economy, Society,and Investment Information

◎

◎

◯

×

◎

◎

◎

◯

◎

◎

◎

◎

◎

◎

◎

◯

△

×

◎

×

×

Role and Social
Responsibilities of the
Financial Services

◎

◎

◎

◎

◎

Relationship with
Employees

◎

◎

◎

◎

◎

Compliance

Risk
Management

◎

◎

◎

◎

◎

Environmental
Initiatives

Risk
Management

◎

◎

◎

◎

◎

Role and Social
Responsibilities of the
Financial Services

Initiatives throughProduct Development
and Provision

◎

◎

◎

◎

◎

Engagementwith Society

◎

◎

◎

◎

◎

Corporate
Governance

(DIR)

◎

Compliance

Support for theCreation of Our Future
Society

Maintenance andDevelopment of Financial
and Capital Market Functions

Risk
Management(Property)

RiskManagement

IT Strategy and theManagement of
Systemic Risk◎

Compliance

IT Strategy and theManagement of
Systemic Risk

(DSC)

◯

◎
(DIR)

IT Strategy and theManagement of
Systemic Risk

IT Strategy and theManagement of
Systemic Risk

Initiatives throughProduct Development
and Provision

We identified materiality for CSR in
FY2014 and have stepped up our CSR
activities by focusing on the important
aspects identified. We referred tothe disclosure requirements shownin the G4 Sustainability Reporting
Guidelines, in addition to otherguidelines, in an effort to identify
important aspects that suit ourbusiness model as a financial services
group. To identify materiality, we firstreviewed the Group’s activities fromthree perspectives: “the provision of
good-quality services to customers,”“being a supporter for the financial
and capital markets, which arepart of our social and economic
infrastructure” and “being a memberof society.” We held discussions
within the Group, obtaining opinionsfrom third-party experts. We
then determined materiality after
conducting a questionnaire to relevant
departments within the Group to ask
about the adaptability and validityof the aspects identified with theiroperations.
We have disclosed information on
the Group’s initiatives for materiality.
We have also strived to grasp the
expectations of our stakeholders
and changes in social trends throughengagement and will review ourinitiatives if necessary. Moreover, we
will verify “Key CSR Issues” (refer topage 5) in accordance with changes inmateriality.

Human Rights
Initiatives

Support for theCreation of Our Future
SocietyBlue

Initiatives throughbusiness activities

Red

Initiatives for supporting
business activities

12﻿CSR of the Daiwa Securities Group

Daiwa Securities Group CSR REPORT 2018

Communication with Stakeholders and Improvement of Corporate Value
The Daiwa Securities Group will seek to optimize the entire social supply chain by aiming to improve its corporate value
through resolution of social issues identified by communicating with stakeholders.

Relevant Descriptions
Communication
We will strive to identify social issues and expectations for us through communication
with stakeholders.

The Daiwa
Securities Groupand SDGs

Human Rights Education
and Awareness-raising
Initiatives

Environmental
Initiatives

Relationship with
Shareholders andOther Investors

Relationship with
Employees

Engagement withSociety

The Daiwa
Securities Groupand SDGs

Relationship with
Employees

Engagement withSociety

The Daiwa
Securities Groupand SDGs

Role and Social
Responsibilities of
the Financial Services

Provision of
Quality Service toCustomers

Initiatives throughProduct Development
and Provision

Maintenance and Development of
Financial and Capital Market Functions

Collaborations
We will aim to contribute to solving social issues by capitalizing on the Group’s
knowledge and experience.

Business Rollout
We will develop and provide products and services that can be used to resolve social
issues as business opportunities.

Dissemination of Analysis andProposals on the Economy, Society,and Investment Information

Risk Management +Support for theCreation of Our
Future Society

Engagement

In light of social issues and expectations of the Daiwa Securities Group, we will step up
engagement with investees, supply chain management and due diligence in relation toRole and Social
Responsibilities of
the Financial Services

Risk Management

Environmental
Initiatives

ESG (environment, society, and governance).

Message from CSR Officer
Daiwa Securities Group considers that communication with various stakeholders
will become more important than ever before to contribute to achieving the
Sustainable Development Goals (SDGs). We believe that understanding society’s
expectations for us and social challenges and addressing them sincerely will allow
the optimization of the entire social supply chain surrounding the Group.
The SDGs are very effective tools as a common language for this. We consider
the CSR materiality we identified a few years ago to be still effective in termsof meeting stakeholders’ expectations on our current business. However, in thecourse of working on the SDGs down the road, we may have to make additions orreview some items of the materiality. For example, there is a possibility that a newservice introduced to solve a social issue will bring impact that we do not anticipate
antecedently. We think that it is vital to hold discussions on what field we should
work on and how we will maximize benefits while minimizing undesirable effects.
For these discussions, it is vital that the executives and employees of the Daiwa
Securities Group have a variety of backgrounds and great sensitivity. We therefore
consider initiatives for diversity and inclusion to be important. Meanwhile, we willraise awareness of our corporate principles and the Daiwa Spirit among executives
and employees as an unchanging sense of value, and work on new fields.

Tomonori Tsuji
Executive Officer
Senior Managing Director
Daiwa Securities Group Inc.

13

Daiwa Securities Group CSR REPORT 2018

Initiatives throughBusiness Activities

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

Contents●C lose-up: Support Women’s Active Participation inSociety through Products—Daiwa Women Supporter
Fund (Nicknamed “Tsubaki”)●R ole and Social Responsibilities of the Financial
Services● P rovision of Quality Service to Customers● Initiatives through Product Development andProvision●M aintenance and Development of Financial andCapital Market Functions●D issemination of Analysis and Proposals on the
Economy, Society, and Investment Information● S upport for the Creation of Our Future Society

14Support Women’s Active Participation in Society through Products

Daiwa Securities Group CSR REPORT 201815

Support Women’s Active Participation inSociety through Products

Close-up—Daiwa Women Supporter Fund (Nicknamed “Tsubaki”)—

The Daiwa Securities Group focuses on and promotes ESG (environment, society, andgovernance) investment as it helps to boost the long-term performance of investment products
the Group manages while also contributing to solving issues facing society.
As part of such efforts, Daiwa Asset Management launched the Daiwa Women Supporter Fund(nicknamed “Tsubaki”) at the end of March 2015.

●Focus on Companies That Can Be Expected to Grow
with Women’s Success
Against the backdrop of a labor shortage associated with its aging
population and falling birthrate, Japan is now faced with the urgent
issue of creating a society with comfortable working conditions for
women. Meanwhile, to promote more active roles being played by
women, it is necessary for the entire society to provide support in a
multifaceted manner.
The Daiwa Women Supporter Fund (nicknamed “Tsubaki”) is a
product that aims for growth of trust assets by investing in companies
that can be expected to grow with women’s success among a wide
range of issues, including not only large-cap stocks but also small- to
medium-cap stocks.
The main feature of this product is that it evaluates women’s
success from four perspectives.

The fund selects, in addition to companies considered to help
women to play an active role from an ESG perspective, companies
supporting women’s active participation in society; companies
providing products and services that target women or are popularwith women; and companies benefiting from increases in women’s
incomes. It thus takes into account the ripple effects of women’s
success when selecting investees.
The fund therefore pays attention to a wide range of industries,
such as those related to human resources, fashion spending,extending healthy longevity, child education, travel, hobbies, andbeauty. This has contributed to urging growth of companies thatprovide a pleasant working environment for women, expanding
markets for products and services created from women’s perspective,
and making people’s lives richer and more convenient.

Tsubaki’s Four Perspectives
Companies helping women
to play an active role
● Put in place a pleasant working

environment and system for
women, etc.

be mainly used by women

Companies supporting women’s
active participation in society

Supportactive社会進出をparticipation
サポート
in society● Businesses that assist women instarting work, services that support
working women, etc.

Focus on
women’s successCompanies providing products
and services that target womenor are popular with women● Services, products, etc. that can

Promote活躍を推進
women’s
success・

Provideproducts
女性向け
targeting
women
商品提供

Benefit from
所得増加のincreased
恩恵
incomesCompanies benefiting fromincreases in women’s income● Products and services with highadded value, etc.

Major Invested Issues (as of May 31, 2018)
Contributed field
Company nameCompany overview

Success
promotion

Social participation
supportProduct
provision

Benefits fromincreased income

●

●

1

EnigmoOperates BUYMA, a social shopping site enabling the purchase of
fashion items across the world by personal shoppers—individuals
providing items for sale—who live overseas.

2

DIP

Operates Baitoru, a website for part-time work, and others●

3

HABA Laboratories

Manufactures and sells additive-free skin care products and othercosmetics, as well as nutritional supplements.

●

4

Genky DrugStores

A Fukui Prefecture-based drug store. Drug stores have manyfemale customers as products include cosmetics and health foods.

5

FANCL

Main products include additive-free cosmetics and supplements.

●

●

6

START TODAY

Rolls out ZOZOTOWN, a fashion shopping site targeting female
customers.

●

●

7

istyleOperates @cosme, a beauty information site.

●

●

●
●
●

Daiwa Securities Group CSR REPORT 2018

●A Broad Range of Benchmarks to Evaluate Women’s Success
When selecting a potential investee, we refer to objective evaluations by thenational government and media, details of corporate interviews, and the like. We
place particular emphasis on the details of human resource strategies to cope withlabor shortages.
In the evaluation of companies helping women to play more active roles, it isimportant to check whether companies put in place a fair evaluation system andenvironment, alongside their quantitative personnel data (ratios of female employees,
female managers, etc.).
In addition, when evaluating companies providing products and services that target
women or are popular with women as well as companies benefiting from increases inwomen’s income, we pay attention to consumer needs and trends. It is women who
create trends and brands. We believe that companies that excel in identifying needs
and can lead trends will be able to receive larger ripple effects of women’s success.
The fund thus views the theme of women’s success in a broad sense, and we areconfident that it is a product that has been able to approach the theme deeply as it
evaluates even small- to medium-cap issues.

●Product Concept and Good Performance Highly EvaluatedExternallyThe fund has won various prizes from evaluation institutions as its product concept andgood performance are highly evaluated.
The good performance has been achieved as women’s participation in society has
progressed considerably, partly backed by the government’s promotion of work stylereform in recent few years, and women’s consumption has increased accordingly, as
well as inbound demand has grown. Besides such external factors, we believe that our
research ability to find growth companies has also contributed significantly.
We recognize that a social perspective centered on women’s success, such ascompanies expected to achieve growth by resolving the labor shortage—a structuralissue in society—and companies capable of identifying global trends generated by
women, provides us with an opportunity to find new growth companies.

Continue to Promote Growth of ESG Investment
The Daiwa Securities Group develops and provides various ESG-oriented
products other than the Daiwa Women Supporter Fund (nicknamed“Tsubaki”), such as World Impact Investment Fund and Impact
Investment bonds.
We aim to solve social issues, albeit indirectly, by leveraging thestrength of private-sector companies while pursuing economic benefits
for assets under our management at the same time. Through the Daiwa
Securities Group’s function as a financial and capital market infrastructure,
we will continue to fulfill the role of simultaneously increasing both socialand economic values.

Ryo Shiina
Fund Manager
Equity Management Department
Daiwa Asset Management

16Role and Social Responsibilities of the Securities Business

Daiwa Securities Group CSR REPORT 201817

Role and Social Responsibilities of the Securities Business
Relevant
CSR
Materiality

IX.

Responsible action as an institutional investor

XIII.

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

RelatedSustainable
Development
Goals (SDGs)* Refer to pages 11 and 12 for details on materiality at the Daiwa Securities Group.

The securities business, the core business of the Daiwa
Securities Group, plays a key role in society, by buildinga bridge 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 assistanceto companies in their efforts to raise money forequipment investment or R&D, as well as to national
governments, local governments, international
institutions, and public corporations seeking to raise
funds for public works projects.
On the asset management side, the Group provides
appropriate investment information and advice, as
well as a comprehensive and diverse lineup of financial
products and services to meet the various needs ofindividuals, companies, institutional investors, andpension funds. In these ways, the securities businessfacilitates the smooth flow of money by matching
demand and supply through financial and capital
markets. The Group fulfills an important role andresponsibility in society by contributing to sustainable
development through the channeling of funds intobusinesses that solve social issues and create newtechnologies, for example.
On investing in securities, the Daiwa Securities
Group promotes methods of investment that take ESG(environment, society, and governance) factors, suchas environmental and social initiatives into accountin addition to financial information. In recent years,
the Group has put its emphasis on the promotion offinancial products based on the concept of Impact
Investment, a type of Socially Responsible Investment(SRI), which refers to making more direct, quick-acting
investments to resolve social issues. From its position
as a financial institution, the Daiwa Securities Groupis endeavoring to contribute to society by developing
and marketing these products. In addition to pursuingeconomic gain, the Group is dedicated to resolving ahost of social issues.

Mission for Financial Institutions
toward Solving Social Issues
The business sector’s role in endeavoring to 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 a fairand dynamic financial market, but also to incorporatea social perspective in finance and to facilitate the flowof money to build a sustainable society.

In January 2010, the Daiwa Securities Group signed
the United Nations Global Compact (UNGC), a platformto help companies that have committed to sustainable
and responsible business practices shape their policies,
and have proceeded with business activities incompliance with the principles. We also incorporate into
our activities the Sustainable Development Goals (SDGs)
adopted in September 2015 at the United Nations
Sustainable Development Summit.

●Principles for Financial Action towarda Sustainable Society (Principles for
Financial Action for the 21st Century)
The Principles for Financial Action for the 21stCentury were drawn up by a committee comprising
representatives from a range of Japanesefinancial institutions. They were tasked withdrafting a Japanese version of the Principles forEnvironmental Financial Action. This was based ona recommendation issued by Japanese Ministry of
the Environment’s Central Environment Council withthe objective of promoting environmental finance.
Each signatory institution is expected to endeavor toreflect ESG (environment, society and governance)
issues and concerns to its own business practices.
The Group was instrumental in the establishmentof the principles from the drafting stage to thefinal framework. Both Daiwa Securities Group Inc.
and Daiwa Asset Management Co. Ltd. became
signatories in November 2011.

Responsible Action as an Institutional
Investor●Initiatives by Daiwa Asset Management
Daiwa Asset Management announced its adoptionof the Japanese version of the Stewardship Code in
May 2014 and has been actively working to fulfill
its stewardship responsibility. It has been striving to
improve its initiatives, renewing the announcement of
its adoption in November 2017 following the revisionof the Code in May 2017.
In January 2017, Daiwa Asset Management set up
the “Stewardship Supervisory Committee,” which
is designed to manage conflicts of interest faced infulfilling its stewardship responsibility. The committee
supervises the company’s overall stewardship activities
and is responsible for making reports to the Board of
Directors and issuing recommendations to improvestewardship activities as necessary. The committee iscomposed of outside directors and the complianceofficer, who takes charge of overseeing themanagement of conflicts of interest, thereby securing

Support for global
initiatives•The United Nations-

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

Compact (UNGC)•Principles for Financial

Action for the 21stCentury•Task Force on Climate-

related Financial
Disclosures (TCFD)•United Nations

Environment Programme– Finance Initiative(UNEP-FI)Role and Social Responsibilities of the Securities Businessindependence from management in stewardship
activities from management and business execution.
Regarding dialogue with investee companies, basedon the Policy to Hold Constructive Dialogue with
Investee Companies announced in June 2014, Daiwa
Asset Management aims to accurately understand theconditions of investees, share such assessments, andcreate medium- to long-term corporate value. It has
also devised a unique way of carrying out dialogue,
having such dialogue led by three parties: analysts at
the Research Department; those in charge of corporate
governance at the Investment Planning Department;
and an engagement team comprised of analysts at the
Research Department and fund managers at the Equity
Management Department.
The analysts at the Research Department engage
in stewardship activities to contribute to enhancing
corporate value and sustainable growth as part oftheir usual research activities, and held engagementwith approximately 490 companies in fiscal 2017.
As fundamental tools for dialogue, Daiwa AssetManagement has prepared and utilized (a) the Analyst
Handbook, which summarizes the fundamental
stance and knowledge that serves as a basis foranalyst activities (b) a business strategy reference bookthat analyzes companies’ management strategies(c) qualitative evaluation that evaluates companies
from a medium- to long-term standpoint, and (d) the
long-term corporate value model that determines themedium- to long-term fair value of companies.
Those in charge of corporate governance at theInvestment Planning Department collect information
on investee companies required for exercising voting
rights. In dialogue with investee companies, they
explain their policy on exercising voting rights andwhat they expect from companies with respect
to corporate governance, thereby sharing theirknowledge with the investee companies. They
conducted engagement with approximately 130
companies in fiscal 2017. Moreover, in March
2017, they disclosed their policy in more detail thanpreviously, recognizing that deepening investee
companies’ understanding of their policy andstandards for exercising voting rights would contributeto constructive dialogue. They also disclosed how they
exercised their voting rights for individual proposals
from shareholder meetings held from April 2017
onwards.
The engagement team, comprising analysts at the
Research Department and fund managers at the Equity
Management Department, held engagement withapproximately 25 companies in fiscal 2017, focusing
on small- to medium-cap issues mainly incorporated
in active investment funds for medium- to long-term
investment. It carried out constructive dialogue,
delivering the “Long-term Vision and Medium-termManagement Plan,” which summarizes points on
information disclosure from a long-term perspective,
and “Introduction of Daiwa Asset Management’s
Engagement Policy,” which mainly describes what
Daiwa Asset management expects for investee
companies and the issues that it wants to discuss
through constructive dialogue.

Daiwa Securities Group CSR REPORT 201818

Daiwa Asset Management has released a Report on
the Status of Stewardship Activities on its website (onlyavailable in Japanese). The report includes the status ofengagement, such as policy, structure, and the numberof engagement times by theme, as well as ESG
investment, the status of exercising of voting rights,
and measures to improve stewardship activities.

Investment Principles 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. Refer to its website for details ofthese principles.

●Initiatives by Daiwa SB Investments
Daiwa SB Investments is also stepping up dialogue
with investees, steadily promoting initiatives to fulfill its
stewardship responsibility, and further strengthening
such initiatives.
In April 2016, Daiwa SB Investments newly
established the Stewardship Promotion Section as asection dedicated to ESG activities. It has been thus
stepping up its efforts to hold constructive dialogue
with the management of companies, such as
representative directors and CFOs, from a medium- tolong-term perspective to urge them to boost theirprofitability, appropriately control ESG risks, and also
expand their corporate value by addressing SDGs andother social issues. It has long focused on engagementwith companies antecedently and by actively holding
dialogue, urged investee companies to turn theirpotential into actual business results.
Daiwa SB Investments believes that, as an
institutional investor, it has a responsibility to provide
investees with advice on how to exercise theirpotential and how to respond and prevent recurrence
when there is a problem. The company considers thattaking various opportunities to raise issues and urge
improvement is its responsibility as an institutional
investor and that helping to raise corporate value
through such activities is also its mission for thecustomers entrusting their assets.
To receive feedback on its activities from an external
viewpoint, Daiwa SB Investments invited two highly
independent outside directors in FY2016 while setting
up the Responsible Investment Committee, a majorityof whose members are independent outside directors.
It is thus aiming to further enhance its customeroriented business operation.

Number of corporate
governance-related
dialogues held (FY2017)
Approximately

130* Results from Daiwa Asset Management

Daiwa Asset Management Co. Ltd.
Japan's Stewardship CodeInvestment Principles against
Cluster Munitions Producers

Company Information > Our
Stewardship Activities > Our
Stewardship Policy > Policy
on Exercise of Voting Rights(Japanese)

Daiwa SB Investments Ltd.
Company Information >Responsible Action as an
Investor > Our Stewardship
Activities > Our Initiatives
on the Japanese Versionof the Stewardship Code(Japanese)
Company Information >Responsible Action as an
Investor > Our Stewardship
Activities > Stewardship
Activities > Objective andBasic Approach for Exerciseof Voting Rights and Other
Activities (Japanese)Provision of Quality Service to Customers

Daiwa Securities Group CSR REPORT 2018

19

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

Approach andBasic Stance

Relevant
CSR
Materiality

I.

RelatedSustainable
Development
Goals (SDGs)

Appropriate proposals and after-sales service in accordance with thecharacteristics and needs of customers

II.

Customer service with a wealth of hospitality* Refer to pages 11 and 12 for details on materiality at the Daiwa Securities Group.

Building Deeper, Stronger Trust with
Customers
Daiwa Securities aims to build customer satisfaction
through quality services, built on understanding
customer needs quickly and proposing thebest solutions for each customer. We consider
providing faithful and appropriate explanations
to be paramount. A principle of Japan’s Financial
Instruments and Exchange Law prohibits “solicitationthat is improper in light of a customer’s knowledge,
experience, financial situation and objectives.” Daiwa
Securities’ approach is rooted in this principle. As
a part of our hospitality-based service, we strive todeliver explanations that exceed the legal requirements
when promoting our financial products. We havealso agreed with the purport of the “Principles for
Customer-Oriented Business Conduct” announced
by the Financial Services Agency in March 2017
and expressed our adoption of the principles, while
drawing up and announcing our “Basic Policy on
Customer-first Operations.”
To improve our services and the quality of our
response further, we are continuing to conducta customer service survey. We survey customers
regarding their degree of satisfaction with ourservices and response, and solicit their feedback
and requests. Based on the survey results, we havestrengthened our initiatives to improve the quality of
post-sale follow up and enhanced the convenience ofe-mail services in FY2017.

●Improving In-Branch Customer Service
Quality
At Daiwa Securities, we have announced ourcommitment to serve customers sincerely, and strive
to provide services that can satisfy any customer. With
the aim of creating sales branches enabling senior
customers and customers with disabilities to feelsecure, we have placed dementia supporters*1, mostly
comprising employees engaged in in-house customer
service, at all branches. We also completed placing
employees with service assistant*2 certifications at all
branches in FY2016.
We also conduct regular training to maintain andfurther enhance the quality of customer services.
Moreover, we undergo checks on customer services
at our branches by external institutions, while staff at
our head office check services provided by telephone
representatives, whenever necessary.

Number of respondents:
Total of120,905 people(August 2017)•Overall score ofsatisfaction with Daiwa
Securities*

4.86 (up 0.09 points
year-on-year)* Average score of evaluation on a scaleof 1 to 7 (1: very dissatisfied, 7: verysatisfied)

Number of Daiwa
Securities employees
who have become
dementia supporters

2,572 people		*1 Dementia supporter
A dementia supporter is a person who has an accurate knowledge(As of March 31, 2017)of dementia and pays warm attention to people with dementia andtheir families. The Ministry of Health, Labour and Welfare has been
stepping up the training of supporters across the country as part ofits “Dementia Supporter Caravan” project.

*2 Service assistant

Number of Daiwa
Securities employees
who have become
service assistants

A service assistant is a person certified as having acquired

314 people		hospitality and safe assistant skills for providing tailored support for(As of March 31, 2018)senior customers and customers with disabilities.
Service assistant logo

●Active Post-Sale Follow Up
Completing the sale of a product is only the
beginning of a securities company’s relationship withthe customer. Follow up is a key element in building
the relationship of trust with the customer. To
alleviate customer dissatisfaction or concerns arising
after trading, we offer thorough explanations,appropriate proposals, and information regarding
market conditions, products, and services as a partof initiatives to reinforce our relationship of trustwith customers.

FY2017 customer
service survey

Service assistant skill training classProvision of Quality Service to Customers

Daiwa Securities Group CSR REPORT 2018

●Accessible Services for Diverse
Customers

It helps us to enhance our inheritance and businesssuccession-related consulting services to customers.

When renovating existing sales branches or planning
new branches, Daiwa Securities works to ensure thatthey are accessible to more customers, through barrierfree measures such as reduced variations in floor level
and the installation of larger counters. In FY2017,
we strived to further improve our barrier-free system,
introducing a slope to the entrance of 52 branches toeliminate steps.
We have also been stepping up our efforts to place
writing communication boards, communication sheets,cane holders, and other equipment to enhance safety
and convenience for senior customers and customers
with disabilities visiting our sales branches. In FY2017,
we introduced hearing assistance devices to allbranches with the aim of facilitating communication
with customers who are hard of hearing.

●Further Improvement of Consulting
Services on Inheritance and BusinessSuccession
To meet the inheritance and business successionrelated needs of customers, we are successively
increasing the number of sales branches that haveinheritance consultants. We have also introduced an
Inheritance Planner Certification® program and started
offering even better quality service to customers.
Inheritance consultants are staff members who not
only handle procedures within Daiwa Securities but
also comprehensively support any procedure forcustomers at the time of inheritance. They also arrange
tax accountants, judicial scriveners and agents forinheritance procedures in accordance with requests
from customers. Inheritance consultants undergo
lectures, training programs and OJT for the first six
months and also receive training regularly thereafter.
The Inheritance Planner Certification program is
an in-house qualification system for employeeswith advanced expertise accumulated through thecertification for financial planners (CFPR) qualifications
and completion of in-house training.

Ear Mark symbol

Communication sheet for people with hearing impairments●Starting Pilot Rollout of Anshin Planners
and Financial Consultants
Since October 2017, we have been introducing
anshin (peace of mind) planners—a new type of sales
agent—and financial consultants as an initiative toprovide each one of our customers with optimum
consulting and solutions. The initiative has been so far
been rolled out at 17 branches and is scheduled to be
implemented at all branches.
Anshin planners are mainly responsible for senior
customers, providing comprehensive consulting forcustomers’ senior lives. The scope of their work is
not limited to asset management but includes theprovision of information on health, long-term care,etc. and solutions on gifts, inheritance, etc. to next
generations. With the establishment of the anshinplanner system, we have also introduced “Daiwa’s
Anshin Plus,” a new service enabling the use ofa senior monitoring service provided by a security
company and telephone health consulting, etc. under
preferential conditions. Financial consultants are
responsible for customers who our conventional sales
personnel have been unable to support fully, including
those in the asset building stage. They propose a wide
range of products and solutions that meet customers’
needs.
We work to provide optimum support to every
customer whom we serve by subdividing our sales
personnel and making careful proposals according to
the life stage of each customer.

Daiwa’s Point Program

20

Number of sales
branches with Daiwa
Securities inheritanceconsultants

100 branches(As of April 2018)

Number of accredited
inheritance planners®

434 people(As of March 2018)

Number of CFP®
accredited staff

698 people

Highest number among
financial institutions in
Japan(As of March 2018)

Daiwa’s Point Program•Amount of donations to

Daiwa’s Point Program rewards customers
based on their transactions. Points earned
can be exchanged for goods or used tomake charitable donations to various
groups using a conversion rate of one point
for one yen.
Organizations to which donations canbe made• Japan Committee for UNICEF• Medecins Sans Frontieres Japan
Association• WWF Japan• United Nations World Food Programme• Save the Children Japan• Japan Platform• New Japan Philharmonic• Arts Support Kansai• The Kidney Foundation, Japan(As of April 2018)

eligible organizations

113.00 million¥(Cumulative amount from April 2003 to
March 2018)•Donations made throughJapan Platform to workthat assists victims of
the Great East Japan
Earthquake

33.19 million¥(Cumulative amount from May
2011 to October 2016)

Donations made as
disaster relief assistancefunds

1.89 million¥(Cumulative amount from
November 2016 to March 2018)

Provision of Quality Service to Customers●Continuing to Hold a Wide Variety of
Seminars
Each sales branch of Daiwa Securities holds a variety
of seminars covering topics including Japaneseand overseas markets and inheritance to provide
information. The company has also expanded seminars
targeting customers in the asset building stage, suchas those on installment-type Nippon (Japan) Individual
Savings Account (NISA) and iDeCo, a defined
contribution pension plan for individuals.
FY2017, we had approximately 18,400 seminars intotal as we actively held small-scale seminars at sales
branch counters as well as seminars at branch halls.
There were also large-scale seminar events, in addition
to those held at sales branches. We held “Daiwa New
Year’s Lectures for 2018” at five venues nationwide,“Global Investment Seminars” with the theme ofoverseas investment, and “Seminars on Asset Building
for Beginners” that target novice investors.

●Acceptance of Applications for
Installment-Type NISA Starts
Since October 2017, Daiwa Securities has been
accepting applications for the installment-type NISA
program launched in January 2018. It is a new NISA
program created to support stable asset building.
We actively introduce the program to customers,
especially those in the asset building stage, in order toencourage more customers to start making investment
in installments, while having a product lineup thatis easy to understand for even novice investors andcarrying out attractive campaigns. We will step up our
initiatives to expand the number of installment-type
NISA users.

●Providing Junior and Senior High SchoolStudents with Opportunities to Learn
about Finance and Economy

Daiwa Securities Group CSR REPORT 2018

and parents with opportunities to start learning
about money.

Seminars held by
Daiwa Securities●Information Website for Child Rearing
and Money “SODATTE”•Approximately

Daiwa Securities opened “SODATTE,” an information
website for child rearing and money, in April 2016 forthe child-rearing generations.
With two years having passed since its opening, it
has grown to be a website visited by many fans, with
140 columns and more than 800,000 monthly pageviews on average.
The website sets up five categories, including“Money Lesson,” “Family Finances,” and “Education
Funds” and disseminates columns that provide tips
to child-rearing generations. In May 2017, we also
started a feature named “Diagnosis of Your Family
Finances,” which posts articles on financial planners’
advice on money-related concerns. We will continue
to update columns monthly as an information sitepractically supporting child rearing for parents toenable them to learn in an enjoyable way.

18,400 times(Results at sales branches for
FY2017)

Basic Policy on Customer-first Operations
The Daiwa Securities Group has agreed
with the purport of the “Principles for
Customer-Oriented Business Conduct”
announced by the Financial Services Agency
on March 30, 2017 and expressed its
adoption of the principles. The Group has
also drawn up and announced its “Basic
Policy on Customer-first Operations.”* Refer to websites for the Group companies for details.

We launched Okane-no-mikata, a website forlearning about finance and economy, in March
2016 following the start of a Junior NISA program.
We also launched jiyu-kenkyu-no-mikata, a website
with content that primarily supports summer holiday
research assignments for children. In addition, we
held events titled “Challenge for Children andParents: Learn Money & Economy through Quiz” atthree venues nationwide. The events, mainly targeted
toward elementary and junior high school students,
were designed to provide the participating children

Okane-no-mikata
A website to learn how
money works (Japanese)“SODATTE”
An information website forchild rearing and money(Japanese)

Major Group companies
implementing initiatives
based on the Basic Policy on
Customer-first Operations•Daiwa Securities Group
Inc. > Home > Corporate
Information > Management
Policy > Basic Policy on
Customer-first Operations•Daiwa Securities > Policy on
Customer-first Operations(Japanese)

Okane-no-mikata, a website to learn how money works“SODATTE,” an information website for child rearing and money•Daiwa Asset Management
Co. Ltd. > Policy on Customerfirst Operations (Japanese)•Daiwa SB Investments Ltd.
> Policy on Customer-first
Operations (Japanese)•Daiwa Next Bank, Ltd. >Initiatives Based on the Daiwa
Securities Group’s “Basic
Policy on Customer-first
Operations” (Japanese)21

Provision of Quality Service to Customers

Daiwa Securities Group CSR REPORT 2018

●Contact Center Functions
The Contact Center has been a key channel fortransactions, sustaining the company’s business model
whose cornerstones are Daiwa Consulting and Daiwa
Direct transaction courses. The center now handles
calls coming in to sales branches, thereby acting as
Daiwa Securities’ comprehensive remote contact
center for customers. To strengthen the functions of
the center, we first expanded the scale of services
points in Tokyo and Osaka in FY2014 and thenestablished a contact center function in Fukuoka in
FY2016 as our third service point. We also expanded
the floor area of our service point in Osaka in FY2017.
By further expanding the ability to take calls, we aim
to enhance our support functions for sales branches
going forward to increase customer convenience.

●Achieving High Evaluation from ExternalInstitutions
In a benchmark rating program hosted by HDI-Japan,
we earned three stars—the highest possible rating—in
the FY2017 Customer Support and Website Support
categories of the securities industry. This is the third
consecutive year that we have won three stars in
the Customer Support category, which evaluates thequality of services by operators. We will seek to further
improve our overall services through training, aiming
to achieve three stars again in the next fiscal year.

●Initiative to Get Closer to Customers
In FY2016, we started showing pictures of ouroperators on the website page for telephone inquiries
in the hope that this would give customers a sense of
security and familiarity with the Contact Center.

Working to Incorporate Customer
Voices●Contact Center Initiatives
Employees at the Contact Center, which serves as
our comprehensive remote contact point, have directcontact with customers and play an increasingly crucialrole not only as a transaction channel but also incustomer support and marketing. In order to maintainand improve contact center operations to meet thedemand for high-quality service, we provide training
and regular level checks for all Telephone Service
Representatives (TSR). We thus strive to appropriately
respond to customer true needs.

Customer Feedback Sent toContact Center
The Contact Center receives numerous
comments and requests on online tradingand Daiwa Securities’ other products andservices.
We share such customer feedback
information and requests with management
and relevant departments and sections of
the head office and utilize them to enhance
our services and customer interaction.
(The number of major improvements
implemented in FY2017 was 45.)
We also show some of the inquiries
received from customers on our website as“frequently asked questions,” while sharing
them with sales branches in some cases
to speed up our responses. We are thus
working to raise customer satisfaction fromvarious perspectives.

Telephone inquiry screen (Daiwa Securities website)

Daiwa Securities’ Systems for
Utilizing Customer Feedback
Customers

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

Telephone/e-mailTaking calls

Customer Support Center
Contact Center

Sales
branches

Management

Departmentsin charge

Improvement

Improvement

Improvement

22

Scale of Contact Center

820 service points(500 in Tokyo, 210
in Osaka, and 110 in
Fukuoka)

Provision of Quality Service to Customers

Daiwa Securities Group CSR REPORT 2018

●Customer Support Center Initiatives
Daiwa Securities’ Customer Support Center isa department at the head office that handles
customer feedback and complaints directly
by phone. It is set up within the ComplianceDepartment of Daiwa Securities.
The Center promptly gives feedback and complaints
from customers to relevant sales branches anddepartments and sections of the head office. It alsosorts and analyzes such feedback and complaints,
shares them with officers, sales branches, and head
office departments, and capitalizes on them as
precious information in the aim of “customer-first
operations” and “pursuit of best quality.”
To respond to customers’ calls thoroughly,
accurately, and promptly, Customer Support Center
members study the securities tax code and Daiwa
Securities’ services together on a daily basis, and work
to improve the quality of their customer services.
FY2017, the Center received 4,990 calls, 206 downfrom the previous fiscal year.

Calls Received at the Customer
Support Center
(FY)

2013

82％

2014

83％

2015

82％

2016

73％

18％ 6,289
17％ 5,393
18％ 5,958
27％ 5,196

82％

2017
0

1,000

2,000

18％ 4,990
3,000

4,000

5,000

6,000 7,000(calls)Inquiries

Complaints

23

Calls received at theCustomer Support
Center in FY2017
No reports indicating
violation of human rights,
environmental pollution
by Daiwa Securities, orother matters raising
extremely serious concern
in general social terms

Initiatives through Product Development and Provision

24

Daiwa Securities Group CSR REPORT 2018

Initiatives through Product Development and Provision
Relevant
CSR
Materiality

III.

Development and provision of superior financial and investment products

IX.

Responsible action as an institutional investor

XIII.

Initiatives to address social concerns and contribute to future developmentof society, and financial and capital markets

RelatedSustainable
Development
Goals (SDGs)* Refer to pages 11 and 12 for details on materiality at the Daiwa Securities Group.

For Addressing Social Issues andContributing to Future Developmentof Society and Financial and CapitalMarkets

Green Bonds for Retail Investors Sold by
Daiwa Securities
Issuers●Impact Investment Bonds
Compared with typical forms of Socially Responsible
Investment (SRI), Impact Investment focuses moreon the direct impact of investment on society.
It is a 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 and climate change. As a financial
institution, we have supported the alleviation ofproblems in society by underwriting various types of
Impact Investment bonds.
• Initiatives in FY2017
Among various issues faced by the world today, global
warming has become a serious threat to all countries.
Developing countries are being impacted first andwith the gravest results. Global warming may destroy
the social initiatives for poverty issues that have beensteadily carried out over the last several decades. It is
no longer impossible to separate poverty issues fromglobal warming issues.
In May 2017, Daiwa Securities sold Green Bonds
issued by the Asian Development Bank. The bonds
are aimed at eliminating poverty from the Asia-Pacificregion through economic growth that brings benefits
to all people, sustainable growth in harmony withthe environment, and the promotion of regional
integration.
In December 2017, we also sold Tokyo Green Bonds(foreign currency-denominated), which were issued by
the Tokyo Metropolitan Government for the first timeever as a domestic municipality (sold by five securities
companies—Daiwa, Mizuho, Nomura, Mitsubishi
UFJ Morgan Stanley, and SMBC Nikko Securities).
Through the sale of these bonds, we helped to create
a trend for using precious funds in Japan for domestic
environmental measures.
Daiwa Securities also underwrote and sold, or soldGreen Bonds for retail investors shown in the table on
the right in FY2016 and FY2017.
The Daiwa Securities Group will continue tocontribute to solving social issues through its businessactivities including the underwriting and sale of Green
Bonds and other Impact Investment bonds.

Crédit Agricole
CIB (twocurrencies)

FY2016The Central
American Bank
for Economic
Integration
The AsianDevelopment
Bank (threecurrencies)

FY2017
The Tokyo
Metropolitan
Government

Use of funds

Salesamount(estimate)

Results of Impact
Investment bonds forretail investors•Daiwa Securities

cumulative sales

685.8 billion*

Provide lending
to companies andprojects contributing
to environmentallyfriendly economic
and social
development¥6.3 billion

Support projects
aimed at reducing
and adapting toclimate change inCentral America¥7.7 billion¥

Independent
Assurance• Daiwa Securities’ sharein the Japanese market

52%
Total ¥1,319.9 billion** Figures have been rounded* Source: Daiwa Securities Co. Ltd.

(From March 2008 to March 2018)•Environment-related
Address climatechange in the AsiaPacific region¥8.0 billion

Appropriated fordevelopment ofsmart energy cities,¥2.0 billion
conservation of thenatural environment,
adaptation toclimate change, etc.

* The Green Bonds issued by the Tokyo Metropolitan Government

bonds for retail investors
sold by Daiwa
Securities in
Independent
Assurance
FY2017

Two issues totaling¥10.0 billion* Figures have been rounded

SDGs related to Impact
Investment bonds soldin the past

were underwritten by five companies, including Daiwa Securities.
(The sales amount shown above represents the amountunderwritten by Daiwa Securities.)●SRI Investment Trusts
SRI investment trusts are a mixture of stocks andbonds that take into account factors other thanfinancial performance, such as ethics and social andenvironmental objectives, in addition to assessments ofthe sales and profits of the investment candidates. We
offer eco funds that limit non-financial assessments
to environmental performance, and investment trusts
that limit their stock portfolios to environment-related
businesses. By investing in these trusts, throughfinancial markets, investors can indirectly support
countries and corporations that are proactively
involved in CSR and environmental programs.

Results of SRI
investment trusts•Daiwa Securities Group

net assets

146.5

Independent
Assurance¥
billion*1•Daiwa Securities’ sharein the Japanese market

32%
Total ¥460.1 billion*2*1 Source: Daiwa Securities Co. Ltd.
*2 Source: D aiwa Fund Consulting Co.
Ltd. (As of March 31, 2018)

Initiatives through Product Development and Provision

Daiwa Securities Group’s
History of SRI Funds andImpact Investment Bonds* By sale year

Daiwa Securities Group CSR REPORT 2018

● Daiwa ETF FTSE Blossom Japan Index●D aiwa ETF MSCI Japan ESG Select Leaders Index●D aiwa ETF MSCI Japan Empowering Women
Index (WIN)SRI funds
Impact Investment bonds● 2016● World Impact Investment Fund●D
 aiwa ETF MSCI Japan Human &Physical Investment Index● 2015● Daiwa Women Supporter Fund

● 2014● 2013● 2012● JICA Bonds● Microfinance Bonds● Green Bonds● Agri Bonds● Water Bonds● 2017● Water Bonds● Green Bonds (2 times)

Major “Fund Wrap”
services newly
introduced or improved
in FY2017•Balance of domestic

Wrap accounts¥

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

●Initiatives of Fund Wrap Services
Daiwa Fund Wrap is a service enabling even those
who are busy or have no investment experience
to easily start medium- to long-term diversified
investment. Under a discretionary investment
contract, Daiwa Securities invests and manages
assets on behalf of our customers. We offer plansthat enable each customer to make diversified
global investments according to their investment
policy, as do professional institutional investors
such as those managing public pension assets. It
has become more important than ever for a large
number of investors to manage their assets efficiently
and stably through diversified global investment, inparticular as a measure to address prolonged low
interest rates, which have made it difficult to findattractive investment options. Daiwa Fund Wrap is
a service offered to customers over the medium tolong term. We provide thorough explanations before
the conclusion of a contract, report investment
performance regularly every three months, and hold7,984.3 billion•Balance of Wrap

● Water Bonds● Inclusive Business Bonds● Green Bonds (2 times)

accounts at Daiwa
Securities*¥

1,971.2 billion* From data released by the Japan
Investment Advisers Association (As of
March 31, 2018)● Water Bonds● Green Bonds•January 2018

Start of Daiwa Fund
Wrap Online “Asset
Planning Support”● Green Bonds (2 times)● Water Bonds (2 times)● Agri Bonds● Banking on Women Bonds● Inclusive Business Bonds● JICA Bonds•March 2018 Start of

Daiwa Fund Wrap Online“Regular Installment
Service”
Daiwa Social
Contribution Wrap—
Daiwa Fund Wrap witha donation service● JICA Bonds● Ecology Bonds● Banking on Women Bonds● Agri Bonds (2 times)● Water Bonds (KEXIM)● Microfinance Bonds● Vaccine Bonds•Amount donated in

FY2017¥Development and Provision of Superior
Financial and Investment Products

25

follow-up seminars whenever necessary. We thus
ensure close communication with customers and seek
to build a relationship of trust with them.
In addition, Daiwa Fund Wrap Premium, launchedin October 2016, now offers a more detailed service,
enabling customers to have multiple investment
portfolios and design them in a highly customized
manner while specifying a beneficiary in case ofinheritance in advance.
Moreover, Daiwa Fund Wrap Online, launched in
January 2017, proposes the most suitable investment
style by utilizing Robo-Advisor technology, enablingcustomers to easily manage globally diversified
investments online. We also started a Regular
Installment Service enabling an automatic monthly
contribution of ¥10,000 or more in March 2018.
To keep attracting customers over the long term,
we will continue our initiatives to implement a better
structure and system so as to improve our performanceand the quality of our services.
Daiwa Fund Wrap Premium

Daiwa Fund Wrap Online

22.53 million* Total donated amount from customers
and from Daiwa Securities•Donated toUnited Nations World
Food Programme,
Medecins Sans Frontieres
Japan Association, WWF
Japan, Japan Committee
for UNICEF, Japan
PlatformInitiatives through Product Development and Provision

Daiwa Securities Group CSR REPORT 201826

●Initiatives by the Asset Management
Division
The asset management division of Daiwa Securities
Group strives to reinforce the asset management
system and continues working on a variety of
initiatives to offer better returns to beneficiaries overthe medium to long term.
• Initiatives by Daiwa Asset Management
For Daiwa Asset Management, one of the pillars tobuilding a stable, distinguished asset management
capability is to take appropriate risks in managing
active funds. We have therefore built a support system
by collecting information from the research divisionand other relevant specialist teams. This is a systemenabling fund managers to take risks after thoroughexamination. In particular, we are striving to improve
our ability to select companies with good prospects,
hoping that this will become a major source for strong
investment performance. We especially focus on ESG
information from a long-term perspective. Daiwa AssetManagement has placed personnel in charge of ESG
within the Fund Management Division to promote
ESG investment in an organized manner as a signatory
member of both the United Nations’ Principles for
Responsible Investment (PRI) and the Principles for
Financial Action for the 21st Century. Since adopting
the Japanese version of the Stewardship Code, wehave been working to deepen our dialogue withinvestee companies by such means as holding dialogue
with the theme of integrated reports.
It is especially important to always grasp current
trends and customer needs for the development of
products. We are therefore striving to maintain close
communication by holding seminars for customers
and through operation of our unique call center. We
are also building a structure that assists companies
marketing our products to support a shift from savings
to asset formation.

Initiatives for ESG Investment
At Daiwa Asset Management, we actively use
ESG when making investment decisions. ESG isused for our overall active equity investment.
The company’s analysts make ESG evaluation,in addition to financial evaluation, for the issues
they are responsible for. We use ESG evaluation,
integrating it into our investment decisionmaking factors through the method of reflecting
ESG evaluation in estimates of capital costs andother means.
The Passive Management Department also
listed three ETFs linked to Japanese stockindexes using ESG evaluation on the Tokyo

Stock Exchange in September 2017 for the
first time ever in Japan. The indexes tracked
by these ETFs are calculated by FTSE andMSCI—global index calculation companies—
and adopted by Government Pension
Investment Fund (GPIF) for its Japanese stock
investment. The use of ETFs has enabled not
only institutional investors but also individual
customers to make stock investment that uses
these ESG evaluation indexes. We hope that
the ETFs will help to increase the popularity of
ESG investment in Japan.

Notice on new funds
Daiwa ETF
FTSE Blossom Japan
Index (Japanese)

Daiwa ETF
MSCI Japan ESG
Select Leaders Index(Japanese)

Daiwa ETF
MSCI Japan
Empowering Women
Index (WIN) (Japanese)

Initiatives through Product Development and Provision• Initiatives by Daiwa SB Investments
As a variety of medium- to long-term management
factors are expected to affect companies’ shareprices, there is a growing need for multifaceted
corporate analysis, including the ability to analyze andpredict non-financial information over the medium
and long term that covers companies’ research anddevelopment ability and overseas project management
ability. In light of these perspectives, we newly
established the Stewardship Promotion Section at
Daiwa SB Investments in April 2016 with the aimof strengthening the company’s analytical skill bydeepening collaboration with corporate analysts
belonging to the Equity Research Department. We
have also stepped up our initiatives to help companies
to increase their profitability by means of constructive
dialogue with them.
Since corporate analysis and research require humanresources, Daiwa SB Investments places importanceon nurturing and promoting professionals who haveacquired the ability to think on their own throughtraining and other means. We have also overhauled
our organizational systems as a company, including
the adoption of a performance-linked evaluation

Daiwa Securities Group CSR REPORT 2018

system. Moreover, we strive to elevate a corporate
culture as a professional management company andto diversify our workforce by hiring overseas andfemale staff, with the aim of respond to diversifying
needs and providing quality services. We have also
focused on the education of sales staff at companies
handling our products, who directly communicate withcustomers. We conduct workshops for those sales staff
to enhance their marketing skills and knowledge on
investment trusts while creating booklets containing
information necessary for them to explain tocustomers. We are thus working to help those staff toimprove their communication abilities.
Following the signing of the PRI in 2012, weestablished the ESG committee and rules to enhance
our capacity to evaluate and analyze ESG issues ofcompanies. These initiatives reflect our efforts to fulfill
our responsibility to pursue maximum profits with ourutmost efforts from a long-term standpoint on behalfof beneficiaries. We will continue with our initiatives toprovide good returns over the medium to long term in
our multifaceted corporate analysis, including analysis
focusing on ESG.

World Impact Investment Fund
On August 26, 2016, Daiwa SB Investments
established and started managing World Impact
Investment Fund (nicknamed Better World).
“Impact Investment” is the idea of capitalizingon the power of private-sector companies toresolve various social issues that cannot be
resolved solely by governments or charitableorganizations while pursuing economic benefits
at the same time.
At Daiwa SB Investments, in order tocommunicate the new idea of Impact
Investment to a wider range of customers,
we work on customer-oriented provision of
information. To increase the popularity andawareness of Impact Investment, we havedrawn up “Impact Investment,” which gives thedetails of the investment approach, and “ESG
Investment—Impact Investment Existing Beyond
It,” which describes the idea of ESG investment.
Both materials incorporate the idea of universal
communication design and have obtained an“Easy-to-read Design” certification from the

Universal Communication Design Association(UCDA). To deepen customers’ understandingof the features of our funds, we have also
created a special page on our website and havesupplemented information with visual contents.
Impact Investment

27

Initiatives through Product Development and Provision●Investment Companies and Other
Initiatives to Resolve Social Problems
Daiwa Real Estate Asset Management Co. Ltd.
manages investments and infrastructure assets forsolving social issues through investment companies
and fund structures.
Nippon Healthcare Investment Corporation, which
was listed on the Tokyo Stock Exchange in November
2014, invests in healthcare facilities that are likely tosee stronger demand from society over the longer
term as the number of senior citizens increases.
The company’s infrastructure division has also been
managing photovoltaic power stations since FY2014,
and was entrusted in FY2017 with the operation
work of a biomass power generation plant invested
in by Daiwa PI Partners. Daiwa Real Estate AssetManagement has been continuously expanding
the balance of its assets under management while
striving to accumulate knowledge of investment
and management in the renewable energy field. The
company will fulfil its role of providing funds not
only to the renewable energy field but also to thedevelopment of a broad range of social infrastructure,including logistics facilities, and the privatization of
publicly-operated businesses.
* Refer to page 36 for initiatives of Nippon Healthcare Investment
Corporation.

●Response to FinTech and AI
Since starting Daiwa Online Trade, Japan’s first
Internet-based securities brokerage service, in 1996,
Daiwa Securities has provided various products
and services successively over a period of morethan 20 years. Due to the widespread use of
portable information devices and the developmentof information communications technology, theimportance of Internet channels has increased evenmore in recent years, with the number of accounts
held under contracts for Daiwa Online Trade topping
3.2 million as of the end of March 2018. Of Daiwa
Securities’ total stock transactions, approximately
80% are carried out via the online trading service,
underscoring the fact that Daiwa Online Trade has
become an indispensable channel for Daiwa Securities.
At Daiwa Securities, we started the Fund Wrap
Online service on January 27, 2017 as a new seriesof Daiwa Fund Wrap, which has received favors
from many customers since its launch in 2007. Fund
Wrap Online is a new type of asset management

Daiwa Securities Group CSR REPORT 2018service that is fully provided on the Internet andutilizes Robo-Advisor function. We have preparedan animation movie to promote the service on theInternet, including on our website. We also started
the Kabu Talk service on Daiwa Securities’ website on
December 27, 2017. Kabu Talk is a tool to provide
the latest market information through a chatbot thatutilizes artificial intelligence (AI) technology. Moreover,
we started providing the Daiwa Securities Market
Information skill for Amazon Alexa—the cloud-based
voice service offered by Amazon—on February 14,
2018. We believe that we can contribute to Japan’ssound economic development by actively advancing
these AI-related initiatives and other initiatives for
new technologies, including FinTech—an integrationof finance and information technology—in an effort
to stimulate interest in securities investment amongindividuals who have not previously been familiar withsecurities investment, especially younger generations,and thereby support a shift from savings to asset
formation.
As the use of various AI-based services is currently
spreading and the development of FinTech isaccelerating, we are ushering in an era where newfinancial services leveraging these technologies areeasily available. We will keep track of such trends andendeavor to continue to enhance convenience andprovide quality services as a channel chosen by nextgeneration affluent customers centered on those fromabroad and young customers.

28

Nippon Healthcare
Investment Corporation
Total amount of assets
acquired
Approximately

19.3 billion¥(As of March 31, 2018)

Management results at
renewable energy power
plants and logistics
facilities
Renewable energy
power plants•Number of deals:

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

Approximately

54 MW•Balance of assets undermanagement:
Approximately¥

19.3 billion

Logistics facilities•Balance of assets undermanagement:
Approximately

11 billion¥(As of March 31, 2018)
Fund Wrap Online promotion movie

Daiwa Online Trade•Number of contract

accounts

3,214,579 accounts(As of the end of March 2018)

Fund Wrap Online
promotion movie(Japanese)

A facility in which Nippon Healthcare Investment Corporation invests

Alexa-based smart speaker Amazon Echo

Maintenance and Development of Financial and Capital Market Functions

Daiwa Securities Group CSR REPORT 201829

Maintenance and Development of Financial and Capital Market Functions
Relevant
CSR
Materiality

V.

RelatedSustainable
Development
Goals (SDGs)

Maintenance and development of financial andcapital market functions* Refer to pages 11 and 12 for details on materiality at the Daiwa Securities Group.

The securities business, the core business of the
Daiwa Securities Group, serves as an importantsocial and economic infrastructure. It facilitates thesmooth flow of money by matching fundraising needs
through the issuance of securities and investment
needs of investors via financial and capital markets.
We recognize that maintaining and developing thisinfrastructure is about developing sound financial andcapital markets for the next generation, which is oneof our key CSR issues, and is considered to be a major
mission for the Group.

●Settlement Functions
Securities settlement—a mainstay of the Group’s
overall operations—is the delivery of stocks, bonds,
or other instruments and funds both to and fromboth the buyer and seller of a securities transaction. In
trusted markets, financial instruments can be reliably
converted into cash when necessary. This is the very
reason why such markets attract investment moneyand enable companies and others with funding
demand to procure funds. If anything that could stall
securities settlement should occur, it would not only
affect us but also damage trust in markets as a whole.
It could even have a significant impact on the global
economy. We consider it vital to settle transactions
accurately and promptly as required in order to ensurethat markets function as a social infrastructure andbecome a driver for economic development. We are
therefore striving to build a structure enabling thesmooth execution of settlement operations. Amid theemergence of investors engaged in frequent trading
leveraging computers, we have implemented a reliable
system that has high processing capability and canreliably settle a massive number of transactions. We
believe, however, that no matter how well operations
are systematized, the most important thing for the
securities settlement operation is still human resources.
Staff members must have a wide range of knowledge
that goes beyond the operations that each of them is
responsible for in order to grasp the situation quickly
when an irregular event occurs and then respondto it appropriately. For that reason, we are making

efforts to visualize and accumulate the experience andexpertise acquired through our daily operations andexpand the business knowledge of each individual
and the scope of operations that they can cover by
providing cross-business training and continuously
rotating tasks. Meanwhile, the securities industry
recognizes that it is necessary to further increase
convenience and strengthen risk management toboost the competitiveness of Japan’s financial andcapital markets. With this awareness, the entire
industry is currently working on reducing settlement
time. Daiwa Securities has played a central role ina working group launched by the Japan Securities
Dealers Association, identifying and examining avariety of issues towards the reduction of settlement
time. The T+1 (trade date plus one day) settlement
cycle already started for government bond trading inMay 2018, with the T+2 settlement cycle scheduled to
be implemented for stock trading in 2019. Moreover,cross-border foreign exchange transactions entail
settlement risk (for example, the risk of being unable
to receive dollars in U.S. time even when paying yen
in Japan time) associated with time differences insettlement for the currencies involved. Daiwa Securities
is the only Japanese securities company that directly
participates in continuous linked settlement as asettlement member. We will fulfill greater responsibility
for the stability of financial markets by reducing thesettlement risk of foreign exchange transactions.
We are determined to continue the settlement
operations no matter what happens. Under suchdetermination, we have drawn up a business
continuity plan (BCP) and regularly conduct training
in preparation for unforeseen circumstances, such as
natural disasters and terrorism. With the possibility
increasing that a major money shift from savings toasset formation will occur, the reliability of settlement
is extremely important for maintaining customer trust.
We will continue to meet increasingly sophisticatedcustomer needs and quickly provide solutions bytaking advantage of a reliable settlement infrastructureand human resources.
* Continuous Linked Settlement

Investment

Retail investors

Institutional
investors

Purchase of securities

Financial & capital
markets(stocks, bonds, etc.)

Securities company

Suppliers offunds

Securities company

Securities Companies' Role in Financial and Capital Markets

Fundraising

Users of funds
Companies

Issue of stocks or bonds

Government &municipalities

Number of settlementtransactions handled•Daily11,000transactions on average•Annually

Approximately

2.8 million transactions(mainly by institutional investors in andoutside of Japan)

Dissemination of Analysis and Proposals on the Economy, Society, and Investment Information

Daiwa Securities Group CSR REPORT 2018

30

Dissemination of Analysis and Proposals on the Economy,
Society, and Investment Information
Relevant
CSR
Materiality

IV.

Dissemination of analysis and proposals on theeconomy, society, and investment information

RelatedSustainable
Development
Goals (SDGs)* Refer to pages 11 and 12 for details on materiality at the Daiwa Securities Group.

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

Easy-to-Understand Communication ofInformation
Daiwa Securities publishes information to a wide rangeof people from institutional and retail investors to
those who are about to start investment. The central
role in provision of information is played by highly
specialized analysts and strategists at the Investment
Strategy, Equity Research, and Fixed Income, Currency
and Commodities Research departments. They
provide information mainly through reports basedon their unique analysis. Our information is based on
close analysis and collection of data, and we tailor
our presentation for retail investors and institutional
investors, who are investment professionals, even if thesame person is providing that information. For retailinvestors, we incorporate more visualized reporting.
To remove the general perception that securities
investment or securities companies are complicated,
we believe it is one of our missions to work
toward communicating our analysis in an easy-tounderstand way.

Initiatives to Provide Information on
ESG
Daiwa Securities’ Equity Research Department isa group of analysts and strategists. They analyze
and evaluate information released by companies,
and provide investment information and ideas toinstitutional investors.
The department has designated multiple staff
members as responsible for ESG information aspart of its efforts to put an organizational structure
in place to respond to increased demand for
ESG investment following the signature of PRI by
Government Pension Investment Fund (GPIF) in 2015.
Specifically, they provide investment information
useful for ESG integration to institutional investors,
set up ESG meetings between investors andcompanies, and host expert seminars by subject.
For example, in regard to the environment, we
held a meeting on biodiversity and natural capitalin FY2017, inviting chemical, food, and housing
manufacturers. We also held seminars introducing
research on the environmental load caused bycompanies and the capital cost of stocks to university
researchers.
Institutional investors have diverse needs, inreflection of their respective investment policies. We
will further enhance our ESG information by boosting
the analytical skills and communication capabilities of
our analysts and strategists.

Comprehensive Provision ofInformation and Policy Proposal
Activities
Daiwa Institute of Research (DIR), which assumes thethink-tank role of the Daiwa Securities Group, provides
wide-ranging economic and financial analysis andinformation to the public.
At DIR, we consider it our mission to engage incomprehensive provision of information and policy
proposal activities concerning the financial and capital
markets and the real economy. We have always sought
to provide up-to-date and in-depth information anda unique viewpoint that has never been presented byothers. In order to provide information that satisfies
the needs of the public, we also exchange informationand hold discussions with businesses, investors, public
institutions including governments and municipalities,
and various economic groups as well as overseas
think-tanks and media. In this way, we are able toanalyze the currents and trends of society and share
information in the form of published reports. We
are also stepping up the release of ESG information,communicating wide-ranging information via our
website and “DIR Research Quarterly Review” (ourquarterly journal) regarding community vitalization,
environmental problems, women’s active participation
in society, workstyle reform, corporate governance andother issues.

Strengthening the Provision ofInformation
The Research Division of DIR launched the Policy
Research Department in FY2017. In addition toproviding information on the macro economy andfinancial and capital markets in and outside of Japan,
the company is now focusing on making policy
proposals based on multifaceted analysis of such
issues as measures for maintaining the sustainabilityof government finances and the social security system,
the directions that society and businesses are required
to pursue from an ESG perspective. DIR contributes tosociety through the communication of information,
including realistic proposals aimed at solving issues.

Reports and seminars
on ESG•Release of ESG reports andcommentary articles on
ESG keywords (DIR)

38 reports and articles(Results for FY2017)•Number of ESG

seminars held (Daiwa
Securities)

16 seminars(Results for FY2017)

Provision of
information throughdiverse media by DIR•Number of reports

posted on the website

561 reports(Results for FY2017)•Number of recent

hits on the researchdivision’s page forthe full texts of thereports available on thewebsite3.33 million hits
(Results for FY2017)

Dissemination of Analysis and Proposals on the Economy, Society, and Investment Information

To fulfill the role of a reliable compass as a thinktank, we are engaging in useful research that grasps
changes in economic and social trends and satisfies
growing needs for information.

Daiwa Regional AI (Regional Love)Index
DIR has been releasing the Daiwa Regional AI(Regional Love) Index, which calculates economic
sentiment by region, since July 2017 to contribute to
the development of regional society.
Japan is faced with the important issue of breaking
the vicious cycle of population decline and contractionof regional economies to realize regional revitalization.
To promote such regional revitalization, it is necessary
to properly understand the current state of regional
economies, in addition to executing the policies thatsuit regional characteristics
The Daiwa Regional AI (Regional Love) Index utilizes
a state-of-the-art AI (Artificial Intelligence) model andalso incorporates economists’ knowledge to calculate
overall economic sentiment by region.
The index has the following advantages:(1) demonstrating overall economic sentimentquantitatively and promptly by region (2) grasping
regional economic sentiment in a historical manner,and (3) enabling analysis on which field (such as“consumption” and “exports”) provides impact andcauses changes in overall economic sentiment. We
calculate the index every quarter using the AI model
developed by DIR, and release it on our website.

Daiwa Securities Group CSR REPORT 2018

them to undergo reviews by a specialized section. As
a result, the information we provide has improved inboth quality and quantity, and we are communicatingwith customers on a continuously increasing numberof occasions.

●Issuance of Books and Booklets
The Investment Strategy Department of Daiwa
Securities issues “Daiwa Investment Weekly”
and “Daiwa Investment Monthly” as tools forcommunicating information to general customers.
They are both distributed to sales branches of Daiwa
Securities and are also available on the Internet. For“Daiwa Investment Monthly,” readers can also view
videos with a smartphone. We are further evolving
our booklets to make them easier to understand.
We also provide information in various ways togeneral customers, including books available throughpublishers and producing desk calendars withinformation on financial events and wall-hanging
market charts.
Daiwa Investment Monthly

Provision of Information throughDiverse Media●Lectures and Media Appearances
The Research Division of DIR adopts a variety ofmethods for providing information, including thewriting of reports, contribution to Research Quarterly
Review, newspapers and economic magazines,
media interviews, TV appearances, lectures, seminars,
presentations at workshops, the publication of books,
and participation in government councils as members.
We strive to plainly explain complex issues related tothe economy, society, and policy issues in and outsideof Japan, while emphasizing the quality of reports.
We ensure the reliability of our reports by requiring

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

Hitoshi Suzuki
Managing Director, Policy
Research Department, DIR
Pictured: Panel discussion at the
Genron NPO

Holding iDeCo Seminars for theWorking Generation
A Total of 19 Seminars Attracting 4,021 Attendees

Daiwa Securities held iDeCo Tie-in Seminars
for the working generation on holidays andweekday nights from April 2017 to March2018 in collaboration with newspaper,
FinTech and other companies. Inviting
various well-known experts, we held
seminars across Japan, starting from one
held together with The Yomiuri Shimbun
in April. We thus provided working people
who find it difficult to attend seminars
or other events on weekdays with good
opportunities to realize the importance ofasset building.
Moreover, Daiwa’s iDeCo introduced afree defined contribution plan administrator
service in September 2017, eliminating
fees for such services for all participants
unconditionally in September 2017. We
will continue to work on the creation of anaffluent society through the increased useof securities savings.

31

Dissemination of Analysis and Proposals on the Economy, Society, and Investment Information

Internet-based Initiatives●Live Web Seminars
The Daiwa Securities Group regularly holds live web
seminars where popular strategists and analysts of theGroup appear as lecturers, in addition to seminars heldat sales branches of Daiwa Securities. Customers canview them over the Internet in real-time and are also
allowed to directly ask lecturers questions by typing
into the bulletin board function. A large number ofcustomers participate in our seminars each time.
We will continue to make efforts to communicate
market conditions and outlook and other information
to a larger number of people as plainly as possible
through our live web seminars.

●Daiwa Internet TV
In 2000, Daiwa Securities began “Daiwa Securities
Information TV,” Japan’s only channel dedicatedto securities information, on multichannel pay TV
broadcast service “SKY Perfect TV!” Since April 2011,
we have been producing “Daiwa Internet TV” atour own studio and distributing it online in an effort
to target a wider range of viewers. We distributeinformation on the Tokyo market five times a dayin a timely manner, while providing local market
information from Hong Kong and New York every day.
In addition, we distribute corporate information as
well as video reports where analysts and economists
at Daiwa Securities and DIR provide commentaries oncurrent issues in an easy-to-understand way.
Our Daiwa Internet TV initiative was introduced by
the SDG Industry Matrix for Financial Services (issued
jointly by the United Nations Global Compact and
KPMG International in 2015) as a case for Goal 4“Quality Education.” The report highlighted Daiwa’stimely and free of charge provision of a variety offinancial and investment information.
We will continue to make efforts to produce
programs that can be viewed by not only investors but
also those who are new to investment, and that can
support the journey from savings to asset formation.

Daiwa Securities Group CSR REPORT 2018

●Increasing Popularity of Nico Nico LiveIn FY2017, the Daiwa Securities Group started a
Nico Nico Live program jointly with DWANGO Co.,
Ltd., explaining the latest trends of foreign exchange
and stocks at the time of the announcement of U.S.
employment statistics on the first Friday of eachmonth. The program attracts many viewers every time.
We will continue to work on various initiatives
going forward to help investors build their assets
and to raise interest in asset building among
inexperienced investors.

Original Content by Group Companies●Daiwa Asset Management Co. Ltd.
Daiwa Asset Management substantially updated its
website in December 2017. The revamp has madeit easier for viewers to access topics useful for asset
building, and videos—which have recently been
increasing in number—in addition to the latest
information on funds and market trends from the top
page of the website.
The company has also renewed its iDeCo Tour dePension Guide page, which explains iDeCo, a defined
contribution pension plan for individuals, in an easyto-understand way as well as the NISA page following
the start of installment-type NISA.

●Daiwa SB Investments Ltd.
On the website of Daiwa SB Investments, we provide“Learn and Benefit from Movies!” which enables
viewers to learn about information on markets andfunds as well as the basics of asset management. We
also distribute a wealth of information free of charge
in a timely manner, including “Daiwa SB 5min,”which delivers important points in five minutes, and“Study Asset Management through Cartoons.” These
programs are understandable even to those who havelittle knowledge of investment trusts.

iDeCo Tour de Pension Guide (Daiwa Asset Management)

Daiwa Internet TV website
Be Smart and Form Future with NISA (Daiwa Asset Management)

FUNDROID (Daiwa Asset Management)

32

Live web seminars(Results for FY2017)
Total 24 seminars held
Annual number ofparticipants

69,739 participants

Support for the Creation of Our Future Society

Daiwa Securities Group CSR REPORT 2018

Support for the Creation of Our Future Society
Relevant
CSR
Materiality

III.

Development and provision of superior
financial and investment products

XIII.

Initiatives to address social concerns andcontribute to future development of society,

RelatedSustainable
Development
Goals (SDGs)

and financial and capital markets* Refer to pages 11 and 12 for details on materiality at the Daiwa Securities Group.

Developmental Support for CapitalMarkets in Myanmar
The Daiwa Securities Group’s support for Myanmar
dates way back to 1996, and we have continuously
assisted the country in developing capital markets.
Specific examples of such support include ourinitiatives at the Myanmar Securities Exchange Centre
and the Yangon Stock Exchange (YSX).
The Myanmar Securities Exchange Centre wasestablished in June 1996 as a joint venture between
DIR and the Myanmar Economic Bank. In addition to
the securities business handling stocks and bonds,
the Centre currently engages in the advisory businessto increase the number of listed companies and theconsulting business that provides information to
Japanese companies expanding into Myanmar.
In December 2014, the YSX was established asa venture company between the Daiwa Instituteof Research, Japan Exchange Group, Inc., and the
Myanmar Economic Bank with broad support from thepublic and private sectors in Japan. Later, the exchange
had its first listing in March 2016 and its fifth listingin January 2018, when TMH Telecom Public Co.,
which engages in the communications business, waslisted. TMH Telecom Public raised funds from generalinvestors through Myanmar’s first initial public offering
involving the Myanmar Securities Exchange Centre
as lead underwriter. The YSX and the Centre havecontinued their initiatives to increase the number oflisted companies successively while undertaking strict
due diligence. The YSX also started providing an online
trading service in December 2017 and implemented
a measure to increase the number of times for trade
matching in March 2018.
As another public-private collaborative initiative,
the Daiwa Securities Group, the Financial Services
Agency, and Japan Exchange Group, Inc. delivereda support plan for activation of the capital market
of Myanmar on January 25, 2018. The support planis intended to develop a shared awareness of issues
and challenges in Myanmar’s capital market between
Japan and Myanmar, and implement and suggest theefforts and measures to further invigorate the capital
market of Myanmar. We will continue to support
the development of the capital market in Myanmar,
leveraging the expertise that we have nurtured
through our securities business.

Private Equity Investment in Myanmar
Since 2016, Daiwa PI Partners has been considering
private equity investment in Myanmar in earnest
following the country’s move to revise its laws andregulations, including the corporate law and theinvestment law, alongside its opening up of theeconomy and deregulation. Daiwa PI Partners has so
far invested in two companies in Myanmar—Frontiir
Pte. Ltd., a major Internet service provider, and Oway
Pte, Ltd., which engages in the online travel agency
business and the mobile application-based taxi allocation
business. In Myanmar, in which economic development
has just begun, there are a large number of start-up
companies with growth potential. We believe that, bycontinuing to provide growth funds to these companies,
we will be able to promote corporate growth andcontribute to enhancing the social infrastructure andliving standards of people in Myanmar.

Support for Capital Market
Development in Mongolia
DIR has worked to provide technical support aimed
at development of capital markets in Mongolia since
entrusted by the Japan International Cooperation Agency(JICA) in 2014. Specifically, with the aim of enhancing
the regulatory and supervisory capabilities of the Financial
Regulatory Commission (FRC), the supervisory authorities
of Mongolia’s capital market, and we have provided
various kinds of support, such as providing training to
FRC staff members visiting Japan three times. We havealso worked to strengthen the organizational capabilities
and functions of the Mongolian Stock Exchange (MSE)and the Mongolian Association of Securities Dealers(MASD) as self-regulatory organizations and enhanced
financial literacy, including the preparation of textbooks
for securities broker representative certification, as
well as holding seminars to promote the listing ofMongolian companies. These support methods havebeen implemented in the aim of creating a foundationindispensable to the development of Mongolia’s
capital market. These activities are expected to help
boost interest in listing by Mongolian companies andimprove investors’ trust in capital markets, leading to
the revitalization of its capital market. Support to thedevelopment of capital markets are aimed at contributing
to the economic development of relevant countries,
and DIR intends to actively provide support not only to
Mongolia but also to other emerging countries.

33

Support for the Creation of Our Future Society

Considering Application of Blockchain/
Distributed Ledger Technology to
Securities Post-trade Business
In September through December 2017, Daiwa
Securities and DIR played central roles in carrying out
a project to consider the application of blockchain/
distributed ledger technology (DLT) to the securities
post-trade operations. The project was conductedjointly with 17 financial institutions, using an industrial
collaborative framework of Japan Exchange Group.
Under the project, we discussed ideal rules,
standards, business flows, and related elements
required in the domestic securities industry in orderto unify the system for the trade matching businessthrough the application of DLT. After verificationby the prototype application developed by DIR andcomparison with conventional technologies, we
also reached the conclusion that DLT satisfies therequirements for the trade matching operations andwill be able to present a new solution. The resultsof the project were released as a working paper inJanuary 2018.
The Daiwa Securities Group expects that theresults of this project and further initiatives across theindustry will lead to the reduction of costs in the entire
domestic securities industry and the enhancementof convenience, which will ultimately contribute to
the benefits of investors. We will continue to actively
advance our initiatives to provide customers with
useful services.

East Japan Earthquake SME
Reconstruction Support Fund
Daiwa Corporate Investment Co., Ltd. operates theEast Japan Earthquake SME Reconstruction Support
Fund, receiving investment from the Organization for
Small & Medium Enterprises and Regional Innovation,
JAPAN (SME Support Japan), The Aomori Bank, Ltd.,Bank of Iwate, Ltd., The 77 Bank, Ltd., The Toho
Bank, Ltd., and other institutions. Targeting unlisted
private companies, the fund aims to expeditiously
provide risk finance mainly in the form of equity.
The goal is to actively support companies in theirefforts to secure renewed growth and development
by supplying finance for a variety of purposes,
including restoration and reconstruction following
the 2011 earthquake disaster, including new businessdevelopment, the shift to a new industry or line ofbusiness, business reorganization and succession, andbusiness incubation.

University-born Venture Forum in TOHOKU

Daiwa Securities Group CSR REPORT 2018

University-Born Venture Forum in
TOHOKU
Tohoku University and Organization for Small &Medium Enterprises and Regional Innovation, Japan
jointly held “University-born Venture Forum in
TOHOKU” on November 7, 2017. The forum, heldat Tohoku University, attracted approximately 130
participants, including students and venture business
managers.
An executive of Daiwa Corporate Investment
participated in a panel discussion titled “Requirements
for Success of University-born Ventures from the
Perspective of Funds.” He introduced East Japan
Earthquake SME Reconstruction Support Fund, which
Daiwa Corporate Investment operates, and casesof investment in university-born ventures in Tohoku
while engaging in active discussion. Tohoku University
has been chosen as one of only three designatednational universities alongside The University of Tokyoand Kyoto University, and has been focusing on theconstruction of an innovation ecosystem to produce
university-born ventures with global competitiveness.
Daiwa Corporate Investment will continue to workon the cultivation and development of next-generation
growth companies and the provision of growth funds
in collaboration with Tohoku University and otheruniversities, research institutions, regional financial
institutions, and operating companies.

34

Support for the Creation of Our Future Society

Support for the “New Tohoku”
Restoration Business Contest 2017
To further deepen the activities carried out by the East
Japan Earthquake SME Reconstruction Support Fund,
Daiwa Corporate Investment supported the “NewTohoku” Restoration Business Contest 2017, organizedby the Reconstruction Agency, in collaboration with
Daiwa Securities Group Inc., which engages in various
disaster relief activities.
The contest aims to generate momentum to create
local industries for industrial restoration in disasteraffected areas. At the award ceremony held on
November 8, 2017, “Daiwa Securities Group Phoenix
Award” was given to MORIUMIUS, a non-profit
organization operating the MORIUMIUS, a learningcomplex providing children with opportunities to gain
hands-on experience on the coast of Miyagi Prefecture.

Renewable Energy Power Generation
Projects
Daiwa PI Partners Co. Ltd. (PIP) has aggressively
invested in the development and operation ofrenewable energy power generation projects,
leveraging the network of the Daiwa Securities Group,
since the renewable energy feed-in tariff system wasintroduced in July 2012.
Of the seven photovoltaic power stations developedand invested in by PIP as of the end of March
2018, the six stations on which construction wascompleted have all been operating stably, including
the Iwamizawa Photovoltaic Power Station, which PIP
developed independently in Iwamizawa, Hokkaido.
The mega-solar plant currently under constructionin Tomakomai, Hokkaido (38.4 MW/with a storage
battery) will be completed by the end of 2018.
In the biomass power generation field, PIP has
been successively promoting the development ofwood biomass power generation plants that use tree
trimmings in Japan as their primary source of fuel. The
development is underway with Green Thermal Co.
Ltd., with which PIP has formed a capital and businessalliance (refer to page 8). The commercial operationof a plant in Yonezawa, Yamagata Prefecture began
in January 2018 as the first alliance deal, while thedevelopment of a plant in Kamitonda, Wakayama
Prefecture was initiated as the second deal with an eye
toward completion in 2020.

“New Tohoku” Restoration Business Contest 2017

Daiwa Securities Group CSR REPORT 2018

Initiatives for the Wood Pulp Biomass
Power Generation Field
PIP has formed a capital and businessalliance with Green Thermal, a leading
company for the development andoperation of wood pulp biomass power
generation plants, and Biomass Fuel Co.,
Ltd., which boasts a top-class biomass fuelsupply share in Japan, and has been actively
promoting the expansion of its value chain
in the biomass field.
As PIP’s first investment in a biomass
power generation plant, the commercial
operation of Yonezawa Minami Power
Generation Station, which was developed
jointly by Green Thermal in Yonezawa,
Yamagata, was started in January 2018.
In collaboration with Biomass Fuel, PIP
plans to expand the procurement of palm
kernel shell (PKS)—fuel for biomass power
generation—and develop wood pellet
manufacturing plants mainly in Southeast Asia.
The wood-based biomass power
generation business uses carbon-neutral
power generation facilities that do notaffect the amount of carbon dioxide.
Moreover, since it adds a new value as fuelto wood trimmings in forests and PKS thathave been left and discarded, it is expected
to generate new industries and employment
and contribute to regional economies inJapan as well as the promotion of industry
in developing countries.

Power stations
developed/invested in
by PIP
Photovoltaic power
stations•Output: Approximately

88.7

MW in total
A breakdown is shown
below.
•Stations in operation:
Approximately

50.3 MW(total for six stations)•Stations underconstruction:
Approximately

38.4 MW(one station)•Projected amount ofelectricity generated
annually:
Equivalent to the amountfor approximately

21,000 households
Biomass power
generation plant•Output: Approximately

6.2 MW in total•Projected amount ofelectricity generated
annually:
Equivalent to the amountfor approximately

DCI Partners
DCI Partners has been investing in the biotechnology andhealthcare fields for more than 20 years, including theperiod of NIF Ventures (now Daiwa Corporate Investment).
We at DCI Partners manage the Daiwa TaiwanJapan Biotech Fund Investment Limited Partnership,
the largest specialized venture capital fund in Japan,
providing risk money to companies with growthpotential that will shoulder future of the biotech
industry. We also provide hands-on support by utilizing
our expertise in clinical development, intellectual
property, and business development, as well as our
network across research institutions, drug discovery
ventures, pharmaceutical companies and others, andexpand the possibilities that investee companies haveby working with partners not only in Japan but also in
Taiwan. We are also involved in establishing ventures
under the leadership of funds without waiting forfunctions as a company to be put in place. Suchinvestment is designed to leverage the possibilities
of seeds to the maximum extent possible in the drug
discovery field, in which the distance between scienceand businesses is closer than anywhere else.
With regard to recent activities, DCI Partners
established J-mab Therapeutics on its own initiative35

12,000 households* Measured in terms of electricity
consumption per household

Support for the Creation of Our Future Society

and introduced revolutionary seeds of anticancer
drugs from Juntendo University and RIKEN. We aim todeliver therapeutic agents to cancer patients as soon
as possible by leading management and operating
the company together with experts in development
and intellectual property. We have also acquired theright to develop a cancer therapeutic agent from
Mitsubishi Tanabe Pharma through Open Innovation
Partners Co., Ltd., a company that we have newly
created. DCI Partners has been thus promoting
development to provide therapeutic options to cancer
patients by taking over the possibilities of seeds frompharmaceutical companies.
Diseases that used to be incurable can now betreated with drugs developed by our predecessors.
DCI Partners recognizes that new drugs are a precious
asset that can be passed onto next generations. We
will effectively use financial assets through investment
in drug discovery ventures and work to contribute topeople’s health.

Contribution to Local Communities
through Investment Activities ofInvestment Corporation
Daiwa Real Estate Asset Management Co. Ltd.
manages Nippon Healthcare Investment Corporation,
which was listed on the Tokyo Stock Exchange inNovember 2014 as Japan’s first REIT focusing on
healthcare facilities. The investment corporation mainly
invests in healthcare facilities such as private nursing
homes, which are likely to see stronger demand
from society over the medium to long term as the
population continues to age.
Employees of the investment company visit thefacilities of their investees nationwide several times
each year. They participate in hands-on events held
within the facilities, such as family get-together
meetings and meetings to show respect to the elderly,
while assisting daily work at the facilities, including
cleaning the periphery of the facilities, pruning plants
in the courtyards, and pulling out weeds. In FY2017,
they newly participated in hands-on training toexperience work as facility employees in an effort todeepen their understanding of frontline work.
As the owner of its investees’ facilities, theinvestment company started these initiatives to deepen
its understanding of the services provided to residents.
The initiatives are now becoming local community
contribution activities through the core business, andwe will continue to actively work on these initiatives.
J-mab Therapeutics management (DCI Partners)

Daiwa Securities Group CSR REPORT 2018

Regional Revitalization-Related Initiatives
The Management Consulting Division of DIR is actively
involved in regional revitalization, on which thegovernment has its focus.

●FY2015• Dispatched an employee to Ayabe City of Kyoto
Prefecture under the regional revitalization personnel
support system* and assisted the city in formulating
its population vision and comprehensive strategy.
• Supported the formulation of comprehensive
strategies by multiple municipalities such as Honjo
City of Saitama Prefecture by leveraging the expertise
mentioned above.
* Regional revitalization personnel support system: A system ofdispatching personnel selected by the national government fromamong national government employees, university researchers, andthose working in the private sector as assistants to the heads ofmunicipalities with a population of not more than 50,000 that havebeen actively working for regional revitalization.

●FY2016• Analyzed the current status of measures for regional
revitalization strategy implemented by Kyoto Prefecture,
made future predictions, and examined effects.
• Provided support to the development of nursing careservices on behalf of Fukushima Prefecture.

●FY2017• Provided support to the formulation of tourism
strategy implemented by Kyoto Prefecture (the Mori
(Forest) of Kyoto and Ocha no (Tea of) Kyoto areas).
• Entrusted by the Cabinet Office with “Research on
the Ripple Economic Effects of the Comprehensive
Special Zone System,” etc.
We will continue to work on initiatives formunicipalities to revitalize regions and thereby
revitalize Japan as a whole.

The Daiwa Securities Group & the Universityof Tokyo: Future of Finance Forum
Daiwa Securities Group Inc. and DIR, along with the
University of Tokyo, launched the “Daiwa Securities
Group & the University of Tokyo: Future of Finance
Forum,” holding a total of seven forums in FY2017.
In the forums, those engaged in the financial businessat the Daiwa Securities Group and researchers
participating in multiple departments of sciences
and literatures at the University of Tokyo shared theiropinions regarding themes common to social issues
in the society of the near future and the financial
business. In the course of opinion sharing, theygrasped the current status and organized problems to
be worked on and research issues.
Holding these forums has helped further strengthen
the relationship between the DIR Group and the
University of Tokyo as organizations promoting
industry-university collaborative innovation. The resultsof discussions at the forums have been developed into
other initiatives such as joint studies on specific themes.

36Daiwa Securities Group CSR REPORT 2018

Initiatives for Supporting
Business Activities

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

Contents●C lose up:
Initiatives for Child Poverty Issues●C orporate Governance●C ompliance●H uman Rights Initiatives●R isk Management● IT Strategy and the Management of Systemic Risk
● E nvironmental Initiatives●R elationship with Shareholders and Other Investors●R elationship with Employees● E ngagement with Society

37

Daiwa Securities Group CSR REPORT 201838

﻿Close-up

Initiatives for Child Poverty Issues

The financial and capital markets are a symbol of capitalism, and its benefit securities companies have been enjoying.
Meanwhile, capitalism can generate a disparity, becoming a cause for child poverty—which is a distortion of society.
For this reason, we recognize the need to contribute to solving the poverty issue by using sound profits that wehave gained from our business activities. Child poverty, in particular, generates many side effects, such as inadequate
education, possibly leading to a situation where the children shouldering the future of Japan cannot acquire enoughqualities as members of society.
The Daiwa Securities Group has started the “For Your Dreams – Daiwa Securities Group Smiles to Children Project”
with the aim of improving the environment for children in poverty and breaking the chains of poverty. We will work on
various activities so that all children will be able to picture a bright future.

●Creation of “Daiwa Securities Group Child Support Fund for Bright
Future”

Commemorative picture with the three support recipients

As part of its “Child Smile Project,” the Daiwa Securities Group has created “Daiwa
Securities Group Child Support Fund for Bright Future” in collaboration with Public
Resources Foundation, a public interest incorporated foundation. The fund is designed
to improve the environment for children and break the chains of poverty. It assists
groups working on child poverty issues.
The Daiwa Securities Group intends to contribute a total of around ¥100 million in
the initial five years.
The first call for proposals attracted 104 applications nationwide. As a result of strict
assessment by the selection committee, the following three organizations were chosen
as support recipients.
Organization nameLocation

Theme

Amount ofsupportSOS Children's Villages Japan (Certified NPO)

Fukuoka City, Fukuoka
Prefecture

Business development of “Support Project for Families’ Future”¥3 million

PIECES (Certified NPO)

Bunkyo Ward, Tokyo

Business development of “Regional Outreach Human Resources
Development Program for Isolated Children”¥3 million

Learning for ALL (Certified NPO)

Shinjuku Ward, Tokyo

Business development of “Transmission of Knowledge in
Learning Support”¥3 million* Support period: January to December 2018

• Implementation of Santa Charity Program 2017
We implemented a Santa Charity Program as an initiative in which the executives andemployees of the Daiwa Securities Group can participate as one. Contributions ofmore than ¥7 million were collected from executives, employees, and former membersof the Daiwa Securities Group. With these contributions, we purchased 2,100 setsof assorted snacks (worth ¥3,000) and 84 sets of assorted toys (worth ¥20,000). The
items were then donated to approximately 52 sites nationwide, including children’s
homes and livelihood support facilities for fatherless families, as well as organizations
working on countermeasures against child poverty such as learning support providers
and operators of children’s dining rooms, through Second Harvest Japan, the largest
food bank in Japan. Children receiving presents later sent us many joyful messages. The
Group’s volunteers also continued to engage in an activity to present Christmas cakes,
delivering 107 cakes to children.

Christmas party

Daiwa Securities Group CSR REPORT 201839

﻿●New Product Enabling Social Contribution through Deposits
Launched by Daiwa Next Bank

Commemorative picture with a representative of a supported organization (right)

Daiwa Next Bank started providing support term deposits that have added a new value
other than interest to deposits.
The bank currently implements a structure enabling customers to choose fromamong organizations working on three social challenges—self-reliance support tochildren in poverty, medical support to children, and support for sports for disabled
people—and assist such organizations through these deposits.
The bank adds its contribution to the difference between interest on a customer’s
deposit and regular interest, and makes a donation to the organization chosen by thecustomer as a token of support.

Eight Supportable Organizations
Support subject

Supported organization

Self-reliance support to children in poverty
Senior high-school third graders leaving a children’s homeChildren’s home in Ibaraki Prefecture

Future dreams of children at a child welfare institution

Child Support Net Aichi (NPO)

Promotion of children’s dining rooms

Operator of a children’s dining room in Ishikawa Prefecture

For Your Dreams—Daiwa Securities Group Smiles to Children Project

Public Resources Foundation (public interest incorporated foundation)

Medical support to childrenChildren under home medical care

Osaka Prefectural Hospital Organization (independent administrative agency)

Momiji House, a hospice care facility

National Center for Child Health and Development (national research and development
agency)Children under long-term hospitalization

Support for sports for disabled people“Feel winds” with artificial legs for sports

Tetsudou Kousaikai Prosthesis Support Center (public interest incorporated foundation)

Horse therapy (horse riding for disabled people)

Japan Riding Association for the Disabled (general incorporated foundation)

Corporate Governance

40

Daiwa Securities Group CSR REPORT 2018

Corporate GovernanceApproach andBasic Stance

Relevant
CSR
Materiality

Daiwa Securities Group clearly separates the supervisory and executive functions of its management to create ahighly transparent and objective corporate governance system. As with Corporate Executive Officers of Daiwa
Securities Group Inc., employees responsible for head office functions also hold similar roles for the securities
subsidiary. Under this structure, the Group is pursuing a management structure that improves the efficiency of head
office operations and that maximizes synergies between Group companies.

XV.

Construction and maintenance of an appropriate corporate governance system* Refer to pages 11 and 12 for details on materiality at the Daiwa Securities Group.

Basic Stance on Corporate Governancedirectors with highly specialized skills, andbetter transparency in management from theestablishment of the Nominating Committee,
Audit Committee and Compensation Committeewith outside directors a majority of their members
and serving as chairpersons; and(c) Highly independent and ethical outside directors
providing advice from an outside perspective tothe Board of Directors and the three committees
based on their knowledge and experiences.
The Group also proactively engages in CSR activities
to gain the trust of stakeholders. CSR encompasses
providing excellent products and services to customers
with integrity, appropriately returning profits anddisclosing information to shareholders, creating
pleasant work environments and fair personnel
evaluation systems for employees, strictly observing
regulations and following corporate ethics, managing
the environment, and contributing to society.

With group management based on a holding company
structure, Daiwa Securities Group aims to achieve ahighly transparent and objective governance structure
in international terms.
The Group has built a unified group management
system that elicits synergies among group companies
with highly efficient and specialized oversight of groupcompanies.
The Group has adopted a company with Three
Committees System with the objective of supervising
management through:(a) Better decision-making agility by having theBoard of Directors assign significant authority tocorporate executive officers while clarifying thedivision of duties among corporate executive
officers;(b) More effective supervisory functions at the Boardof Directors from the appointment of outside

Number of times eachcommittee met(FY2017)•Nominating Committee:

4•Audit Committee:

12•Compensation Committee:

6•Board of Directors:

11
Rate of attendanceat Board of Directors
meetings by outside
directors

94%

Corporate Governance System at Daiwa Securities Group
Shareholders’ Meeting

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

Nominating Committee,
7 members(including 5 outside directors)

Audit Committee, 5 members(including 4 outside directors)

Compensation Committee,
5 members(including 3 outside directors)

Nominates directors for selection,or recommends dismissal

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

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

Determination of the BasicManagement Policy andother matters

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

Executive Management
Committee, 14 members
Deliberates and decides onmatters relating to important
operations, Group-widebusiness strategy as well asbasic policies concerning
structural and other issues thatcrossover Group companies
Representative
Executive Officer

Group Risk Management
Committee

Disclosure Committee

Group IT Strategy Committee

Overseas
Management
Committee

Gathers information on the system andcurrent situation of risk management aswell as deliberates and decides on policies
and strategies regarding risk management

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

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

Deliberates and decides
on issues related to the
management of overseas offices
and other operations abroad

Group Internal Audit Committee
Deliberates and decides on issues relating to the internal audit systems and the verification of internal control activities

Corporate GovernanceThrough these initiatives, the Group aims to further
enhance its corporate governance structure in termsof transparency, agility, and efficiency, in order tocontinuously improve corporate value.
The corporate governance structure consists of
the Board of Directors and the three committees(Nominating Committee, Audit Committee, andCompensation Committee) as supervisory functions.
Business execution functions are embodied in
the Executive Management Committee andits subcommittees comprising the Group Risk
Management Committee, the Disclosure Committee,
the Group IT Strategy Committee, and the Overseas
Management Committee, as well as the GroupInternal Audit Committee, the internal audit
organization that reports directly to the Chief Executive
Officer (CEO).

Major Initiatives in Corporate
Governance
History of Daiwa’s Corporate Governance
June 1998

Elected outside auditors
Became the first listed Japanese company
to adopt a holding company structure

April 1999

Established the Advisory Board
Established the Group Management
Committee

June 2000

Established the Compensation Committee
Elected outside directors

June 2002

Shortened directors’ terms of office fromtwo years to one year

July 2003

Established the Internal Control Committee

June 2004

Shifted to a Committee System (currently, acompany with Three Committees System)

October 2015

Complied with the Corporate Governance
Code
Established the Outside Directors Council

April 2017

Appointed outside directors as chairpersonsof all three committees

Point• Published the Corporate Governance Report detailing

Daiwa Securities Group CSR REPORT 2018

41

Supervisory Function
The Board of Directors consists of 14*1 directors,
including six outside directors*2 and two female
directors. The Board of Directors determines key
management policy and oversees executive duties. In
order to perform this supervisory role from multiple
viewpoints in accordance with the demands of society,the policy for selecting new board members statesthat candidates must have a strong sense of ethics anddemonstrate initiative and leadership.
Additionally, outside directors are experts in suchfields as management and accounting. In addition, thesupervisory function of Daiwa Securities Group Inc. isreinforced by the Audit Committee and the Office of
the Audit Committee. The Audit Committee, which
consists of a majority of outside directors, plays apivotal role in the supervision of executive duties. The
Audit Committee is assisted by the Office of the Audit
Committee, which is a department independent ofexecution of business.
*1 As of June 30, 2018*2 O utside directors as defined by Article 2-15 of Japan’s Companies Act●Audit Committee’s Activities
The Daiwa Securities Group’s Audit Committee isengaged in auditing activities for duties executedby directors and corporate executive officers as partof corporate governance. In particular, it focuses onverifying the construction and operational status of theinternal control system.
In FY2017, the Audit Committee conductedhearings with a wide range of divisions, including
the sales, product, human resources, compliance,and IT divisions, to confirm the Group’s initiative forcustomer-first business operation—an important issue
in its audit policy.
Outside directors asked in-depth questions andactively exchanged opinions. They also made an
on-site inspection of sales branches and the Tokyo
Contact Center, directly checking the conditions ofworksites and engaging in dialogue with employees
at each department and section. These activities
provided them with opportunities to deepen theirunderstanding of the Group’s businesses. We willcontinue with our initiatives to strengthen our
corporate governance system.

our response to the Corporate Governance Code• Decided more than two members and more than

one third of the Board of Directors should be
independent outside directors• Established the Outside Directors Council in FY2015
for the purpose of increasing communication
amongst outside directors• Have elected one additional outside director andsix out of 14 Board of Directors as outside directors
since FY2016• Strengthened management transparency and oversightfunctions by increasing the ratio of outside directors on
the Nominating Committee and the Audit Committee• Determined that the chairpersons of the threecommittees be outside directors from FY2017 while
taking steps to further improve the governance system

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.

Refer to page 72 of our
FY2018 securities reportfor details.
> Policy on Selecting
Director Candidates> Composition of theBoard of Directors

Corporate Governance

Daiwa Securities Group CSR REPORT 2018

Executive Compensation That Is Closely
Linked to Performance
Compensation for directors and corporate executive
officers is based on the following basic policy.

Basic Policy• Compensation should contribute to increasing

shareholder value through sound businessdevelopment and function effectively as anincentive that leads to the improvement of businessperformance in the short term as well as the medium
to long term.
• Compensation should be at a level that iscompetitive not just in Japan but internationally as asecurities group that carries out global business.
• Compensation should help business execution andsupervision to function effectively as a company witha Three Committee system.
Compensation for directors and corporate executive
officers is determined by the Compensation
Committee. Executive compensation has threecomponents: basic compensation; performance-based
compensation; and share price-linked compensation.
• Basic Compensation
Basic compensation is compensation fixed according
to post, duties, and role.
• Performance-Based Compensation
Performance-based compensation is determinedaccording to the degree of contribution by theindividual after comprehensively taking into accountROE and consolidated ordinary income, along withother factors such as the results of managementtargets as outlined in the Medium-Term Management
Plan. Directors who do not concurrently serve as
corporate executive officers are not entitled to receive
performance-based compensation.
• Share Price-linked Compensation

To increase correlation with shareholder value, stock
options and others that are worth a certain percentage
of basic compensation are granted as share pricelinked compensation. Outside directors are not entitled
to receive share price-linked compensation.
• Restricted Stock Compensation Plan
From FY2018, a restricted stock compensation plan
has been introduced to increase incentives for the
directors, corporate executive officers, executive
officers, and other eligible officers (“Eligible Officers,etc.”) of Daiwa Securities Group Inc. and its
subsidiaries to enhance performance in the medium
and long term as well as to further promote thesharing of values between the Eligible Officers, etc.
and shareholders. Following the introduction of
the plan, the Group has decided to no longer issue
the stock options previously granted to the Eligible
Officers, etc. with an exercise price of ¥1.

Internal Control System and Internal Audit
In recognition that management is responsible formaintaining an internal control system to ensure thesound and appropriate execution of business, theGroup, under the main initiative of Daiwa Securities
Group Inc., has established a system for managing
the Group’s major business risks. Through thissystem, the Group endeavors to ensure business
effectiveness and efficiency, reliable financial
reporting, compliance with laws related to businessactivities, and asset preservation.
The Internal Audit Department verifies the internal
control system. This department sits independently
from all other departments, reports to a dedicatedcorporate executive officer, and ensures internal audits
to act as an important function of raising Group value
through the creation of a sound and efficient internal
control system. By conducting effective audits basedon risk, the Department strives to enhance the Group’s
corporate value.

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

ReportingGroup Internal Audit Committee(Chairman: CEO)• Authorization of internal audit
plans and other importantmatters, including the revision
and/or abolition of internal audit
rules and regulations

Reporting

Collaboration• Consent of internal audit plans, the revision
and/or abolition of internal audit rules andregulations, and appointment/assignmentsof personnel responsible for internal audits• Audit delegation

ReportingInter nal Audit Department
Direct audit/Monitoring/
Collaboration

Daiwa Securities Co. Ltd.

Global/Internal Audit

Internal Audit Department

Overseas securities subsidiaries

Internal Audit Department staff holdconcurrent positions at Daiwa Securities
Group’s internal audit department

Europe/Middle East region
Asia/Oceania region
Americas region

Communication/
Adjustments
Direct audit/Monitoring/
Collaboration

Domestic Group companies

Accounting
auditors

Board of Directors

42Corporate Governance

Daiwa Securities Group CSR REPORT 2018

The Internal Audit Department pays special
attention to certain aspects of the Group’s businessactivities. They include the internal control systems
at Daiwa Securities Co. Ltd. and overseas offices as aforeign business operator, the internal control systems
at Daiwa Next Bank, Ltd. as a bank, the status ofbusinesses that involve the collaboration between
Group companies, and the status of control overGroup companies by the holding company.
The authorization of internal audit plans andreporting of audit results are undertaken by theGroup Internal Audit Committee. Internal audit
plans are authorized by the Audit Committee or adesignated member of the Audit Committee who
has received the prerequisite authority from the Audit
Committee. The results of audits are also reported to
the Audit Committee.
Reports to the Group Internal Audit Committee are
not limited to the audit results conducted at Daiwa
Securities Group Inc. and Daiwa Securities Co. Ltd.,but also include highly important findings made during
audits conducted on companies in Japan and overseas.
The Internal Audit Department collaborates with
the internal auditing divisions of Group companies
through periodic meetings, monitoring, and audits.
The Internal Audit Department maintains
communications with the Audit Committee andaccounting auditor, making any necessary adjustments
to ensure that audits are performed efficiently, andreceives audit requests from the Audit Committee.
The degree to which these internal auditing
activities satisfy The Institute of Internal Auditors’“International Standards for the Professional Practiceof Internal Auditing,” the global standard for internal
auditing, is routinely evaluated by independent outside
third parties. The Group thus strives to constantly
improve its system.

Structure and Achievements ofWhistleblowing System (Corporate
Ethics Hotline)
Since January 2003, the Daiwa Securities Group has
been operating a Corporate Ethics Hotline, throughwhich employees can report problems in the workplace
directly to a corporate ethics officer of Daiwa Securities
Group Inc. or outside lawyers. The system mainly
aims to detect corporate misconduct—which includes
violations of the Financial Instruments and Exchange
Law and other laws, regulations and rules including

bribery and corruption—in its early stages andpreventing such misconduct from occurring.
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 thecaller. In 2017, 53 reports were received through thewhistleblowing system.
The Group is working to ensure that all employees
are familiar with the Corporate Ethics Hotline,
including staff at affiliated companies and temporary
workers, in order to ensure that anyone can use it
without hesitation. We are also making efforts to
respond quickly when calls are received. The Group is
taking steps to improve the hotline so that it can work
effectively as a deterrent to prevent problems before
they occur, not just as a measure to solve problems.

Tax Policy
The Daiwa Securities Group has enacted the “Daiwa
Securities Group Tax Policy” in aiming to develop
corporate tax governance. It describes our code of
conduct and standard of judgments in taxation.

Daiwa Securities Group Tax Policy
1. The Daiwa Securities Group complies withlaws and ordinances, and contributes tosustainable development of the society
through appropriate tax payments with highethical standards.
2. The Daiwa Securities Group rewards ourshareholders by achieving sound profits
based on proper and fair tax planning.
3. For cross border intra-group transactions, The
Daiwa Securities Group sets appropriate price,which can achieve adequate accountability
under transfer price tax regulations.
4. The CFO, executive officer in charge ofFinance, and Head of Finance Department of
Daiwa Securities Group Inc. from time to time
provide guidance and advice to subsidiaries
and other departments within the groupas necessary, so that corporate governanceover tax matters can be well shared andimplemented throughout the Daiwa
Securities Group.

An outside director checks a phone call recorded at a sales branch
Use of the intranet to increase employee awareness(Audit Committee’s activities)

43

Number of reports
received throughwhistleblowing system
for FY201753(up 12 from FY2016)* No reports indicating violation ofhuman rights, environmental pollution
by Daiwa Securities, or other matters
raising extremely serious concerns ingeneral social terms

Compliance

Daiwa Securities Group CSR REPORT 201844

ComplianceApproach andBasic Stance

Relevant
CSR
Materiality

The Daiwa Securities Group has four corporate principles. They are “building trust,” “placing importance on
personnel,” “contributing to society,” and “maintaining healthy earnings results.” The Group believes that complianceis a significant element for achieving these 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, markets, society, and stakeholders.
I.

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

VII.

Appropriate management of customer information

XI.

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

RelatedSustainable
Development
Goals (SDGs)* Refer to pages 11 and 12 for details on materiality at the Daiwa Securities Group.

Compliance System
The compliance section of the Daiwa Securities Groupconsists of the Compliance Control Department
and the Compliance Department. The former ismainly responsible for overall compliance planningand formulation and also plays a role as a gatekeeper to the market, while the latter is tasked with
providing support to sales branches and headquarters
departments and sections. The two collaborate tobuild a compliance system, working concurrently
for Daiwa Securities Group Inc. and its subsidiary
Daiwa Securities. At the Daiwa Securities Group, thecompliance system supports Daiwa Securities andother Group companies while focusing on three key
issues: securing the fairness and transparency of themarket, eliminating any relations with anti-social
forces, and maintaining information security.
At Daiwa Securities, the Compliance Department
monitors transactions and solicitation by sales
branches, identifies challenges and issues, and visitssales branches to check their business status andprovide instructions. The department also regularly

conducts on-site inspections. Moreover, it visits thework sites of headquarters departments and sections
directly, identifying issues and providing training
support. The Customer Support Center, establishedwithin the Compliance Department, comprehensively
handles customer feedback and complaints andreflects them in the business to improve customer
satisfaction. One of Daiwa Securities’ strengths lies
in its stationing of full-time internal administrators
belonging to the Compliance Department at all
sales branches. The internal administrator works on
improving the effectiveness of the PDCA cycle (plan,do, check, act) at each sales branch, while closelycooperating with the Compliance Department, in aneffort to build a solid compliance system.
As of the end of March 2018, the compliancesection consists of approximately 260 staff, composedof 42 staff at the Compliance Control Department,
73 at the Compliance Department, and approximately
140 working as internal administrators at sales
branches. The staff members are striving to strengthen
the Daiwa Securities Group’s compliance system.

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

Group Risk Management Committee

Reporting

Reporting

Reports andconsultations

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

Instructions andmonitoring

Reporting ofcompliancerelated meetings

Overseas subsidiaries
Compliance Section

SupportReporting ofcompliancerelated meetings

Daiwa Securities

Other Group companies

Compliance Control Department and Compliance Department

Compliance Section

Instructions andmonitoring

Reporting andconsultations

Addressing complaints
and disputes
Checking anti-social
forcesSales branches and headquarters
departments and offices

Opinions,
comments,
and requests

Customers

ComplianceFull Implementation of “Customer First”
Daiwa Securities is taking measures in line with thecompliance program to ensure the effective operationof our internal control system and strict complianceof our sales activities with laws and regulations. For
FY2018, we set up the pillars outlined below, while
maintaining “Customer First” as the keyword as in theprevious fiscal year:
1. Realization and evolution of customer-firstbusiness operation
2. Reinforcement of countermeasures againstmoney laundering/funding of terrorism
3. Exercise of proper functions as a gatekeeper tothe market
Daiwa Securities markets a wide range offinancial products including investment trusts.
When soliciting investment from customers, weensure compliance with the principles of integrity
and fairness, the principle of suitability, and theprinciple of self-responsibility from the perspective ofinvestor protection. We have adopted the practiceof systematically providing continuous and thoroughafter-sale follow-ups, rather than leaving it toindividual sales staff, especially when the market is on
a downward trend. We consider providing thorough,face-to-face explanation to customers and maintaining
customer trust and a sense of security at the timeof market fluctuations to be part of the practice ofCustomer First for Daiwa Securities as a marketer offinancial products. We will continue stepping up suchinitiatives going forward.

The Daiwa Securities Group’s Customer
Inspection System
The Daiwa Securities Group recognizes that thefinancial and capital markets are an important
infrastructure for society and that sustaining trust in
the markets is an important role that we must play.
For example, to maintain trust, it is important for
financial institutions, such as the Daiwa Securities
Group, to eradicate anti-social forces in response
to particularly strong social demands in Japan.
Internationally, it is also important to prevent the use of
the financial and capital markets by terrorists, organizedcriminal groups engaged in money laundering andother crimes as well as organizations, individuals, andothers designated by international institutions.
For this reason, the Daiwa Securities Group has put
in place a structure to inspect new and existing clients
1. We undertake the following procedures for all
new clients, including customers opening a new
account with Daiwa Securities.
(1) Compare with our own database constructedusing information obtained from news reports,
the Internet, and other sources.
(2) Compare with databases provided by public
institutions(3) Utilize overseas information provided by Japan

Daiwa Securities Group CSR REPORT 2018

Center for International Finance
2. We regularly check for matters of concern
related to existing clients and conduct further
investigation if necessary. When a problem is
identified, we promptly terminate or exclude
trading.
3. We strive to obtain the latest informationin collaboration with the police, the bar
association, and other external organizations
aimed at eradicating anti-social forces.
4. We conduct training for executives andemployees at our Group companies every
year to raise their awareness of importanceand share knowledge of the latest laws andregulations as well as relevant cases.
In particular, the importance of countermeasuresagainst money laundering and the provision of funds
to support terrorism has grown worldwide, increasing
the need for implementing a more effective structure
to prevent such acts from occurring. We will work on
the reinforcement of our structure as an importantmanagement issue to ensure that the Daiwa Securities
Group is not used for money laundering or funding
terrorism.

Securing the Fairness and Transparencyof the Market
The Daiwa Securities Group is working to secure thefairness and transparency of the market from twostandpoints. These are how to check and prevent illicit
transactions by investors and by Daiwa Securities itself.
To prevent illegal transactions by investors, Daiwa
Securities checks daily transactions by extracting
deals that go beyond certain criteria, such as whether
they have an excessive impact on the market. In
particular, in order to prevent insider trading fromoccurring, we ask customers’ place of employment
and positions within their companies before registering
their information. This practice allows us to checktransactions as soon as trading orders are placed bycustomers who are in a position to acquire internal
information. We also check the past transactions
conducted with us retroactively when timely disclosure
is made for important information.
To prevent illegal transactions within the Daiwa
Securities Group, we strictly manage not just material
facts of listed companies but broader information
related to them in a similar way. We have also
introduced a system managing their information,
keeping track of people obtaining information andwhere information has been sent. Through these
efforts, we have constructed a structure to prevent
illegal transactions.

Eliminating Any Relations with AntiSocial Forces
At the Daiwa Securities Group, we are continuously
persisting in activities to eradicate “anti-social”
forces based on our recognition of the large role45Compliancethat financial institutions play in this area. We alsocollaborate with the police and lawyers to eliminate
any relations with such forces.
We have implemented a structure that prevents
any relationship with anti-social forces fromcommencing by collecting a variety of information
related to them and closely checking suchinformation when accounts are to be opened. We
also constantly accumulate new information andregularly check existing accounts in an effort totighten the management of ongoing transactions. All
Group executives and employees, including personnel
serving customers at sales branches, regularly
undergo training to constantly stay alert.

Basic Policy on Avoiding Involvementwith Anti-Social Forces
To ensure fairness and the sounddevelopment of the securities market andprotect our customers and employees,
the Daiwa Securities Group has created aframework to eliminate the influence oforganized anti-social forces, their associates,
corporate extortionists, and other criminal
elements and takes systematic measures toavoid all ties with such elements.
1. The Daiwa Securities Group will notcarry out any transactions whatsoever
with anti-social forces.
2. If it is determined that parties
already having transactions with the
Daiwa Securities Group are antisocial forces, we will swiftly takeappropriate measures to terminate
dealings with them.
3. The Daiwa Securities Group will
provide no funds to anti-social forces.
4. The Daiwa Securities Group will
accept no unfair demands from antisocial forces. If it is determined thatan unfair demand has been madeby anti-social forces, we will takelegal action in the civil or criminal
court against the party making thedemand.
5. The Daiwa Securities Groupestablishes 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.

Daiwa Securities Group CSR REPORT 2018

Initiatives against Bribery and Corruption
In line with the principles of the United Nations
Global Compact, the Daiwa Securities Group works
to prevent corruption. Daiwa Securities’ code of
ethics and conduct prohibits employees from giving
or receiving rewards or entertaining customers.
Headquarters departments and offices have also
incorporated the status of observance of management
rules on entertainment into self-inspection items since
FY2015. Each department and office therefore inspects
their practice voluntarily, and the results of inspections
are checked by relevant departments and sections.
Officers in charge or relevant departments and sections
also monitor the use status of entertainment expenses
at sales branches to confirm that such expenses areappropriately spent.
With respect to dealings with government officials,
headquarters departments and offices and sales
branches all manage them separately from other deals,
thereby keeping an especially close eye on them, as
entertaining government officials is prohibited by law.
Our management rules on entertainment also prohibit
employees from giving benefits to the government
officials of foreign countries. In addition, we provide
periodic e-learning training and engage in otherawareness-raising activities for employees to ensurethat we are not involved in bribery or corruption.
We have also built a structure that prevents thefraudulent granting of benefits at overseas worksites
by establishing internal rules that suit local laws andregulations.

Information Security
We at the Daiwa Securities Group have implemented
numerous information security measures to protect
personal information entrusted to us by customers in asafe and precise manner.
In many personal information leakage incidents
arising in recent years, leakage has occurred at third
parties to which operations have been entrusted.
Accordingly, when and after signing an outsourcing
contract with a third party, we thoroughly check theinformation management structure of the party. We
also continue with our initiative to conduct on-site
visits before outsourcing to examine the businesspractices of the potential outsourcer.
Following the enforcement of the Individual
Number Act (the Act on the Use of Numbers to
Identify a Specific Individual in the Administrative
Procedure) in October 2015, we now ask customers
to provide us with their Individual Numbers. We havecontrolled access to information entrusted to us bycustomers, including Individual Numbers, by isolatingsuch information physically and managing themwith extra care. No matter how much information
is systematized, there always remains a humanelement. To ensure that a mistake does not occur,
we focus on training for sales personnel to recognize
the importance of information management, while

46

Compliancekeeping the number of employees authorized toaccess personal information at the minimum necessarylevel. Daiwa Securities also bans employees fromtaking personal information out of the company
in principle. When it is absolutely necessary totake information out for business purposes, we
require employees to obtain prior approval froman internal administrator or other superiors andto keep records, thereby strictly managing suchinformation. We also strictly manage the printing of
personal information and output to external recording
media, while constantly monitoring whether there
is any unauthorized use. Moreover, since some ofthe documents received from customers are paperbased, we have implemented an initiative to prepare
special storage portfolios to avoid the risk of losing
documents within the company.

Fostering Compliance Awareness
The Daiwa Securities Group considers it extremely
important for each employee to always maintain ahigh level of compliance awareness. We have therefore
adopted a compliance-related program in training
for new employees and a number of other internal
training courses, while giving tests on complianceregularly through e-learning. At Daiwa Securities,
we post a “Personal Information Check Test” and“Compliance Digest” every Monday on our intranet
and also broadcast compliance-related contents
twice a month in our internal TV program that isaired every morning. Moreover, at Daiwa Securities’sales branches, the branch chief and the internal
administrator lead an initiative to provide training andinstructions that suit each workplace on a daily basis.
The branch chief also chairs a compliance meeting inwhich all branch members participate. We have thus
implemented various systems to keep the complianceawareness of all employees at a high level, andcontinue to foster awareness among employees.

Important Issues for FY2018 andBeyondWe will continue with our initiatives toward therealization and evolution of customer-first business
operation. At the same time, we will reinforce ourcountermeasures against money laundering/funding ofterrorism as a challenge for particular focus this fiscal
year. It is imperative that we comply with set rules,
and we consider that the goal of our initiatives should
not be just such adherence. Compliance is a common
theme that must be addressed by the entire industry
and also a matter of trust in the securities industry
as a whole. We will therefore exchange information
with industry peers and proceed with measures while
sharing good practices with one another. The Daiwa
Securities Group will strive to strengthen compliance asa leading company of the industry going forward andmake efforts to contribute to enhancing trust in theentire securities industry.

Daiwa Securities Group CSR REPORT 201847

Human Rights Initiatives

Daiwa Securities Group CSR REPORT 201848

Human Rights Initiatives
Approach andBasic Stance

Relevant
CSR
Materiality

The Daiwa Securities Group is further strengthening efforts to educate its employees about human rights with the aimof improving a corporate culture rooted in the basic principles of human rights as its corporate principles state that “theGroup will strive to maintain a high sense of morality and duty, endeavoring to continue contributing to the sustainablegrowth of the societies in which we operate.” We therefore respect the Universal Declaration of Human Rights, theOECD Guidelines for Multinational Enterprises, ISO 26000, the UN Guiding Principles on Business and Human Rights,
and the Act on Promotion of Education and Enlightenment of Human Rights, and have joined the UN Global Compact.
XI.

Creation of a corporate culture to comply with laws, regulations and codes
in Japan and overseas, based on self-discipline (including appropriate anticorruption and human rights measures)

RelatedSustainable
Development
Goals (SDGs)* Refer to pages 11 and 12 for details on materiality at the Daiwa Securities Group.

Basic Policy for Initiatives Addressing
Human Rights and Social Integration Issues
1. The Daiwa Securities Group supports andcomplies with the protection of humanrights as advocated internationally and does
not infringe on human rights within theboundaries of its influence.
2. The Daiwa Securities Group educates andinstructs Group employees with accurate
information on human rights and social
integration issues.
3. At the same time, the Group views humanrights and social integration issues as ourown problem, not somebody else’s problem,and fosters a sensitivity that enables
empathy with the suffering of others.
4. We provide an equitable working
environment that values people and is freeof discrimination or human rights violations
based on race, nationality, biological sex,
sexual orientation, or gender identity.
5. Each employee is a member of society
unburdened by prejudice.

Specific Efforts
1. We highly value the human rights of every
stakeholder and our staff will always addressclients, local communities and their memberswith great awareness of human rights.
2. We work to ensure that our hiring andrecruiting, personnel evaluations and labor
management practices are always fair.
3. The Group is continually improving internal
human rights education and awarenessprograms, including regular training andfeedback and response loops.
Human Rights Awareness Promotion Committee
Revised on August 12, 2016

Human Rights Education and AwarenessIn 1984, the Daiwa Securities Group set up the
Human Rights Awareness Promotion Committee.
Its establishment is aimed to promote activities andtraining for raising human rights awareness, thereby
encouraging better understanding and appreciation ofsocial integration and other human rights issues. Since
the committee’s establishment, we have been working
to achieve its objective. Besides the committee,
all Group managers at the head office or branchlevel act in a promotional role, using education andawareness activities to ensure that employees correctly
understand and acknowledge human rights and social
integration issues.
The Daiwa Securities Group has been a memberof the Industrial 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 April2017). Federation members work together to improvetheir employees’ awareness of human rights issues
through research and communication.
Composition of Human Rights Awareness Promotion Committee
Chair: the director as Human Resources Officer at Daiwa Securities Group Inc.
Vice Chair: Head of the Human Resources Department
Committee Members: F ive department heads including the head of the
Corporate Planning Department, General Affairs
Department, and Compliance Control Department

Human rights educationfor employees for
FY2017•Training participants

574 new employees•Objective

To acquire basic
knowledge concerning
human rights and tounderstand and raiseawareness of theGroup’s fundamental
principles concerning
respect for human rights•Training participants

Initiatives in FY2017
In FY2017, we provided human rights education as partof training for the Group’s new employees conducted
immediately after their induction ceremony as well as intraining for young employees (annex education) and for
those newly becoming general managers, managers,
and associate managers. The chief of the Human Rights
Awareness Promotion Committee Secretariat tookcharge of all of these training courses. We have also
been providing training on LGBT issues since FY2015.
It has been conducted for those in compliance andhuman resources divisions, and the issues are also taken
up in training for new employees every year. LGBT issues
are also included in training for promoted employees as
an opportunity to deepen their understanding further.
The cumulative number of employees participating in
training on LGBT issues is now 2,277.
The Group also held a Human Rights AwarenessWorkshop to consider human rights from multiple
viewpoints for all executives and employees.
Discussions between participants were held after
watching an educational video entitled “Call &Response,” which focuses on the importance ofcommunication in workplaces.
We also solicited human rights awareness slogans
between October and November in a contest designed
to promote a broader and deeper understanding of
human rights issues. Contest participation was open notjust to employees but also to their families. The winning
entries were presented in our in-house magazine.

439 promoted employees•Objective

To acquire knowledge
and raise awarenessconcerning humanrights required for theirrespective positions

Risk Management

Daiwa Securities Group CSR REPORT 2018

49

Risk Management
Approach andBasic Stance

Relevant
CSR
Materiality

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

Maintenance and development of financial and capital
market functions

XI.

VI.

RelatedSustainable
Development
Goals (SDGs)

Appropriate risk controls

Creation of a corporate culture to comply with laws,
regulations and codes in Japan and overseas, based on

self-discipline (including appropriate anti-corruption and human rights measures)
XII.

Reduction of environmental load and responses to environmental changes* Refer to pages 11 and 12 for details on materiality at the Daiwa Securities Group.

Risk Type and Degree of Importance
Risks that are particularly important for the Daiwa
Securities Group are those related to our key securities
business, securities transactions, and market making,which is associated with such trading. We focus
in particular on managing risk for foreign currency
liquidity, which reflects the liquidity of funds, due tothe considerable size of transaction amounts. We alsoneed to control such risks as the market risk resulting
from fluctuations of securities prices, credit risk forbusiness partners and issuers, and the operationalrisk that inevitably arises in the execution of business.
Moreover, we manage the integration risk bymeasuring impact on the Group’s capital and liquidityfrom a forward-looking perspective.
For major risks and their management, refer to ourIntegrated Report.

Risk Appetite Framework
Concept Chart

Risk Management and Risk Appetite
Framework*

Refer to pages 87–91 of
our Integrated Reportfor risk management.

As one of Japan’s Domestic Systemically Important
Banks (D-SIBs), Daiwa Securities Group Inc. not only
complies with the Basel rules, which are internationalbanking regulations, but has also drawn up the “Risk
Appetite Statement,” which has been decided by
the Board of Directors. The Statement is designed toclarify the policy on risk-taking and risk management
frameworks that are consistent with the overallbusiness strategy of the Daiwa Securities Group. In linewith its business profiles as a security group, it defines
risk categories, quantitative indicators to be managed,
risk culture based on the corporate principles, and thegovernance structure supporting these matters. Basedon this risk appetite framework, we at Daiwa Securities
Group Inc. control risk according to the profile andthe size of risk at each business, and monitor the

Corporate Principles

Building trust, placing importance on personnel, contributing to society, maintaining healthy earnings results* Risk Appetite
Framework
This risk appetite
framework defines risk
appetite as the type andtotal amount of risk thatshould be assumed inorder to achieve businessstrategies. It is a common
phrase used internally to
discuss risk-taking policies
within the context ofbusiness management.

Social Role Required
Realizing a fair and transparent market

Risk Culture

Not undertaking risks that go against corporate principles

Risk Capacity■ Maximum allowable risk in light of liquidity and capital requirements

Business Strategy

Capital Buffer

Preparation for management environment risk

Action Plan

Risk Appetite■	Establishment of risk appetite in terms of profitability and quantitative andqualitative elements to achieve business strategy

Financial Strategy
Risk LimitsFirst Defensive Line
Governance System/Management Information System

Inspection
by Internal
AuditRisk Management

Daiwa Securities Group CSR REPORT 2018

risk management systems and risk exposures of our
subsidiaries. Risk exposures and issues are discussed
at the Group Risk Management Committee, which
is a sub-committee of the Executive Management
Committee. The Risk Management Department plays acentral role in these risk controls.

●System Adequate to Prevent Risk at
Worksites (Three Lines of Defense)
The Risk Management Department has set up
groups according to risk fields, comprising market
risk management, credit risk management, liquidity
risk management, operational risk management,
and planning groups. Each group is responsible forcontrolling risk in their fields. The department also hasan IT & Administration group that provides IT support
due to the elaborate calculations required in risk
measurement. Moreover, overseas business bases andmajor group companies also have risk control divisions.
We thus manage risk at home and abroad throughgroup-wide collaboration.
It is a fact that risk materializes where business is
executed. The Risk Management Department monitors
risk based on measurement of indicators, but always
communicates with business units because numerical
data is sometimes not enough to determine businessconditions. The department has also employed Risk
Control Self-Assessment (RCSA), identifying risks
at each business unit along with people working
there and implementing measures to avoid risk. We
thus help them, where risk arises, to control risk on
their own. The first line of defense to prevent risk
from emerging is each business unit, which controls
risk based on self-discipline. The second is the risk
management, compliance, and other divisions tasked

50with controlling risk in a cross-organizational andcomprehensive manner. The third is the Internal Audit
division. We endeavor to control risk by utilizing thesethree defense lines.

ESG Due Diligence including Supply
Chain Management and Human Rights
IssuesThe Daiwa Securities Group regularly checks the
documents disclosed by major business partners,
including providers of IT equipment and services, aswell as news reports about these companies and theirreputation on the Internet in order to address issues
in the Group’s supply chain, including ones related tothe environment, society, human rights, informationand cyber security. If any issues are found, we takesteps, such as urging the business partners to make
improvements.
We also collect information provided by public
institutions in and outside of Japan and exchange
information with external parties to be aware ofhuman rights issues that exist in the countries where
the Group conducts business operations. We thenconsider taking appropriate measures for issues ofimportance.
We carry out due diligence in deals underwritten,
considering not only business performance andfinancial aspects, but also ESG issues.
When we find issues regarding business model of
an issuer or its planned use of proceeds, we conduct
more thorough due diligence through such means
as field work and meetings, and sometimes makeproposals for improvement to the issuer.
If there still remains a major concern even after

Response to the UK
Modern Slavery Act 2015

Risk Management System

Daiwa Securities Group Inc.

Group companies
Nominating Committee

Board of Directors

Policyformulation
andinstruction

Audit Committee
Compensation Committee

Executive Management Committee

ReportingOutside Directors Council

Reporting

Representative Executive Officer

Discussion
andreporting

ReportingCRO*•D aiwa Corporate Investment•O ther Group companies

Risk Management Department
Operational risks
Information Compliance
Security risk
risk•D aiwa Asset Management•D aiwa Next Bank

Comprehensive Risk Management Structure

Liquidity
Operations System
risk
risk
risk

•D
 aiwa Capital Markets Hong
Kong Limited•D aiwa PI Partners* Chief Risk Officer

Creditrisk•D aiwa Capital Markets Europe
Limited•D aiwa Capital Markets
America Inc.

Group Internal Audit Committee

Group Risk Management Committee

Marketrisk•D aiwa Securities(As of June 30, 2018)

Legal
risk

Human
resource
risk

Physicalassetsrisk

Risk Management

Daiwa Securities Group CSR REPORT 2018

taking such measures, we report it to Chief Risk Officer(CRO).
Similarly, we also carry out due diligence in selfinvestment deals.

BCP
To be prepared for emergencies, we have drawn up abusiness continuity plan (BCP) prioritizing important
operations to be restored or continued* in orderto keep the financial markets open and to protect
customers’ economic activities. Emergencies whichmight make our head office functions, branches anddata centers or other important facilities inoperative
include: earthquakes, fires, storms, floods, otherextraordinary weather conditions, terrorism, serious
outbreaks of infectious diseases, such as new
strains of influenza, and serious disruptions of social
infrastructures and services due to such events.
In accordance with this plan, we will not only
ensure 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 havebegun operating Japan’s highest-level backup center,
which enables us to easily switch to the alternate
system in case of an emergency at headquarters.
We can thereby continue vital operations through a
substitute office location.
* Prioritized operations to be restored orcontinued
1. Carrying out securities transactions traded in the markets andyet to be settled
2. Payment to our customers
3. New orders from customers to sell or cancel the products below
and sell securities back to exit a long position in margin trading•

Domestic listed shares, including closing long positions on
margin transactions•

MRF (money reserve funds)•

Japanese government bonds for individual investors•

Ordinary deposit

51●Initiatives on Impact of Climate Change
A 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.
In June 2017, the Financial Stability Board
announced Recommendations of the Task Force on
Climate-related Financial Disclosures (Final Report).
The announcement was made in response toconcerns over adverse effects on the financial systemthat could be caused by physical and transition risks
in the course of a shift to a lower-carbon society.
Going forward, the Daiwa Securities Group willappropriately manage these risks through strict
due diligence that matches the risk of subjects andengagement with clients and investees.
• Impact on the Daiwa Securities Group During
Transition to a Lower-carbon Economy
The table below describes what the Daiwa Securities
Group currently recognizes based on the Paris
Agreement as major events that may adversely affect
the Group’s businesses in the course of transition toa lower-carbon economy, measures that are expected
to reduce such effects, and the developments andopportunities anticipated to occur in the future, andthe effects that could remain.
The Daiwa Securities Group will continuously verify
the implications of climate change and transition toa lower-carbon economy on our businesses basedon scientific knowledge and expectation on climatechange and appropriately respond to them as animportant management issue.

Impact on the Daiwa Securities Group in the Course of a Transition to a Lower-Carbon Economy
Risk typeTransition
risk

Major event
Decrease in business fromcompanies and others
significantly affected in
the course of a transition
Increase in underwriting
risk
Decrease in the assets
under management
resulting from a decline
in the value of assets held
by funds

Physicalrisk

Affected division• Wholesale Division• Investment Division• Wholesale Division• Asset Management

DivisionGroup companies• Development of new industries andcompanies that contribute to transition
into a lower-carbon economy• Implementation of strict due diligence• Utilization of ESG information forinvestment decision• Review of engagement with investees

Anticipated events andEffects that

opportunities

can remain• Increase in funding demand torespond to a lower-carbon economy• Increase in opportunities to invest in

Low

new industries and companies• Enhancement of disclosure bycompanies

Low• Enhancement of disclosure bycompanies• Increase in opportunities to invest in

Low

new industries and companies• Enhancement of disclosure by

Decline in the value of
assets held and decrease
in selling opportunities• Investment Division

Flood and other damageat important sites due tomajor natural disaster• The entire Group• Implementation of strict due diligencecompanies• Flexible review of assets held

• Increase in opportunities to invest in

Low

new industries and companies• Transfer of important equipment• Making important sites redundant• Repair and transfer of facilities* We consider that the importance of the impact resulting from lending to companies and project financing is low at the Group.

• Steady progress toward a lower-

carbon economy

LowRisk Management●Measures to Address Disaster Risk by
RegionDaiwa Securities has offices across Japan. As disasterrisk differs amongst regions, it has formulated adisaster response plan for each sales branch andis preparing disaster relief supplies that reflect thedisaster risk for each branch. The General Affairs
Department sends the hazard maps created by themunicipalities of respective regions to branches andmakes them available on our intranet.

Daiwa Securities Group CSR REPORT 201852

IT Strategy and the Management of Systemic Risk

Daiwa Securities Group CSR REPORT 2018

53

IT Strategy and the Management of Systemic Risk
Approach andBasic Stance

Relevant
CSR
Materiality

Under its Medium-Term Management Plan, “Passion for the Best” 2020, Daiwa Securities Group is
promoting the IT strategy (basic IT policy) of establishing an IT platform that provides momentum for thedigital transformation. The Group is also working to further strengthen IT governance in order to address
the diversification of its business portfolios and the evolution of technology.
V.
VI.
VII.

Maintenance and development of financial and capital market functions
Appropriate risk controls
Appropriate management of customer information

VIII.

Construction and maintenance of a strong IT system

RelatedSustainable
Development
Goals (SDGs)* Refer to pages 11 and 12 for details on materiality at the Daiwa Securities Group.

IT Governance Structure
Daiwa Securities Group has established the GroupIT Strategy Committee as a sub-committee of the
Executive Management Committee and createdthe IT Strategy Committee at Daiwa Securities, thecore company of the Group, as a subcommittee ofthe Management Committee. These committeesdeliberate and decide medium- to long-term IT
investment policies and plans after taking into
account business needs and trends in the businessenvironment, such as systems and regulations.
Against a backdrop of globally tightening financial
regulations, increasingly serious and sophisticatedcyberattacks, greater digitalization enabled bytechnological evolution, and unbundling of financial
services, the chief information officer (CIO) has beenplaced in charge of overseeing all IT-related operations
across the Group, including overseas bases, toensure Group-wide risk management and business
innovation. By managing IT resources and further
strengthening collaboration within the Group, the CIO
is working to enhance the Group’s IT capabilities.

Strategic IT Investment
Daiwa Securities Group has been making IT investments
for the purpose of enhancing customer satisfaction
through the delivery of products and services that meeta diverse range of needs, strengthening profitability
through greater operational efficiency, addressing
the infrastructure platforms and responding to legal
systems that are essential for business continuity, as
well as strengthening the risk management framework.
In FY2017, along with making investments in theenhancement of accumulated-type NISA, Fund Wrap,and online services, the Group advanced initiatives
into operational efficiency and business process reform
utilizing voice recognition, artificial intelligence (AI),RPA*1, and other technologies. In addition, efforts
were also made to further strengthen cybersecurity
countermeasures and management of the Social
Security and Tax Numbers submitted by customers as
initiatives aimed at ensuring that customers can conductbusiness free from worry.
In the Medium-Term Management Plan, “Passion
for the Best” 2020, initiated in FY2018, our IT strategy
is designed to support a customer-oriented sales

system and the delivery of products and services, whileat the same time promoting the establishment of an
IT platform that provides momentum for the digitaltransformation. In this light, the Group is building an
API*2 platform that can flexibly and swiftly extend
alliances with outside companies and services, as wellas intra-Group cooperation, and a next-generation
office infrastructure that provides a safe, secure
location-independent business environment. At thesame time, the greater operational efficiency enabled
by voice recognition, AI, RPA, and other technologies,
will allow employees to use their time for higher
value tasks instead, thereby creating a positive cyclethat links to more advanced customer service and thedevelopment of innovative services.
*1 Robotic Process Automation: Mechanism for automation of office
work and other operations based on the use of AI, etc.
*2 Application Programming Interface: A mechanism that enables
connections between systems via a standard protocol.

Systemic Risk Management
Daiwa Securities Group has worked to maintain andenhance the management of systemic risk in order toreliably provide high-quality services to customers while
protecting information assets from various threats andrisks. In particular, the Group has positioned the needto ensure cybersecurity as an important issue for its
risk management in the context of recent increases
in the threat of cyberattacks. As a result, the Grouphas established the Daiwa-CSIRT*3, a Group-widecross-sectional specialist organization that collects
and analyzes the latest information on cyberattack
methods and vulnerability while coordinating withexternal institutions. Along with increasing the layersof technological countermeasures and establishing asystem that can detect and prevent attacks that slip
past one of these countermeasures, the Group is also
developing an analysis environment that can rapidly
discover evidence of an attack and a system that canaddress incidents 24 hours a day, 365 days a year.
The Group will continue to strengthencountermeasures against cyberattacks, including buildinga Daiwa Standard cybersecurity countermeasure platform,in looking ahead to alliances with outside companies andservices and a greater diversity in its business portfolios.
*3 Computer Security Incident Response Team: A cyber security
management organization.

Environmental Initiatives

Daiwa Securities Group CSR REPORT 201854

Environmental Initiatives
Approach andBasic Stance

Relevant
CSR
Materiality

Protecting the global environment, the basis of our livelihoods, is essential for a sustainable society. Throughour 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 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 theenvironmental burden in daily business operations.

XII.

Reduction of environmental load and responses toenvironmental changes

RelatedSustainable
Development
Goals (SDGs)* Refer to pages 11 and 12 for details on materiality at the Daiwa Securities Group.

Environmental Vision
The Group is dedicated to protecting the precious global environment and preserving it for future
generations by leveraging financial capabilities.
Environmental Principles
The Group recognizes the importance of environmental principles such as the effort to combat
global warming, recycling and reuse of raw materials, and preserving biodiversity, in order to createa 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 through our core business activities
We shall seek to develop and provide financial products and services that promote a low-carbon,
recycling-oriented, and symbiotic society.
2. Implement an environmental management system
We shall implement an environmental management system and constantly seek new ways toimprove environmental activities. In addition, we shall support environmental education andpublicity efforts, while promoting environmental protection efforts by employees.
3. Take steps to save natural resources, reduce energy consumption, and promote biodiversity
systemWe 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 businessefficiency). We shall also take steps to reduce water use and reduce, reuse, and recycle othermaterials to contribute to a more environmentally friendly society. Furthermore, considering theimportance of biodiversity, we shall seek a symbiotic relationship with the 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 theenvironment to customers and society at large.
5. Strictly observe environmental regulations
We shall always endeavor in environmental preservation, observing environmental laws andregulations in addition to the Group’s environment policies.
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 theGroup’s power consumption and CO2 emissions, therelevant departments hold a joint meeting every week,
discussing measures to reduce their environmental
impact, checking the progress of improvement
measures and sharing information.
Moreover, Group companies with offices in Gran
Tokyo North Tower attend a meeting of the CO2
Reduction Promotion Committee hosted by the

IT Strategy and the Management of Systemic Risk

management company of the building every six
months, working together to reduce the overall CO2
emissions of the building. We strive to improve ourefforts, while reporting quantitative data on ourenvironmental impact over time, including energy andwater 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 environmental load,
the Daiwa Securities Group prepares and discloses
environmental accounting. It is expected to moreaccurately help us to track the costs and effects ofenvironmental preservation and reduce environmentalloads more effectively.

●Initiatives at Group Companies
When installing new equipment at head and branch
offices, Daiwa Securities requires that the equipment
be certified under Top Runner standards. For example,
we replaced 12 multifunction copiers at the head
office in FY2017, thereby reducing the power usage
for these machines to approximately half the previous
level (an estimate by the manufacturers). We have also
been replacing our company cars successively since
FY2014 with eco-cars and hybrid vehicles that havesignificantly improved in fuel efficiency.
The replacement, at the time of completion, would
reduce CO2 emissions by the amount equivalent to
the CO2 absorption of more than 40,000 Japanesecedar trees annually (an estimate by Daiwa Securities
using fuel efficiency data disclosed by automakers).
The introduction of LED lights into the head officeof DIR was completed in the summer of 2017.
In addition, the Daiwa Securities Group strives tochoose environmentally friendly products in its central
purchasing.

●Initiatives to Raise Environmental
Awareness
The Daiwa Securities Group is striving to raise theenvironmental awareness of each employee throughvarious initiatives. For example, our in-house magazine,“Fuji,” has a column entitled “Eco-Initiatives at the
Office,” which mainly shares the status of the Group’s
environmental initiatives and introduces environmental
measures that can be implemented by employees
depending on each individual’s awareness.
With respect to the printing of documents, werecommend aggregate printing and double-sided
printing. We are also encouraging the reduction of
paper usage by showing operational guidance andthe rate of reduction in paper usage for every threemonths in the areas within offices where multifunction
copiers are installed. We reduced paper consumption
by 3.4% year on year in FY2017, within the same
scope as FY2016.

Daiwa Securities Group CSR REPORT 201855

●Offering Environmentally Friendly
Services
Daiwa Securities provides an online service allowing
customers to request various electronic reports,
including those on the details of transactions andtransaction balances, or electronic prospectuses as a
substitute for written notifications (hardcopy reports
or prospectuses). Reports and prospectuses received
in an electronic format can, in principle, be accessedand confirmed as and when required, saved topersonal computers, and printed for five years after
initial receipt. The proportion of customers choosing
the online service was 41.8% as of the end of March
2018, up 1.6% from the previous year. We willcontinue recommending the service to increase thenumber of customers using it.

●CO2 Emissions
Energy consumption at the Daiwa Securities Group’s
domestic offices (on a CO2 emissions basis) fell byapproximately 6.0% in FY2017 compared with
FY2017 as a result of increased efforts to conserve
energy, within the same scope as FY2016.
➔ Refer to page 93 of “CSR Related Data” 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 FY2017 as well, carrying out energy
savings measures through on- and off-peak periods.

●Targets for FY2018

Company cars in Japan(Daiwa Securities)

1,049 vehicles
including

743 eco-cars
142 hybrid cars
(As of March 31, 2018)•Introduction results for

FY2017●Continue●
to introduce eco-cars●●Initiatives for the reduction of electricity
consumption
Achieve a reduction of at least 10% from the
FY2009 level (as of FY2020)
Achieve a reduction of at least 20% from the
FY2009 level (as of FY2030)* On a per unit area basis for both targets●●Improve the accumulation of environment-related
data and hone skills to analyze those data
●●Purchase products certified under the Top Runnerstandards

7 3 eco-cars
46 hybrid cars
•Introduction plan for

FY2018131 eco-cars
17 hybrid cars
Cases of soil andgroundwater pollution
found within officesites•FY2017

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 of CSR
related challenges. The Committee, comprising
the president and full-time executives, increased its

0
Investment in energysaving air conditioning
systems for FY2017¥

7.05 million(including installation costs)

IT Strategy and the Management of Systemic Risk

Daiwa Securities Group CSR REPORT 2018

personnel in FY2017. It continuously draws up policies
on sustainability and discusses challenges and activities
as needed.

●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 LED Lighting (2012–present)
Since 2012, we have continued to install LED
lighting systems in common-use space, such as
the underground parking lot, first basement level,
and entrance on the first floor. As a result, we haveinstalled LED lights in approximately 70% of commonuse space. We have also adopted the green lease
scheme* since 2014 to promote the use of LED
lights in tenant-owned spaces. The installation has
proceeded gradually under the scheme, with bothtenants and landlords enjoying its merits.
We expect LED lights to be introduced into
approximately 80% of the area of tenant-owned
spaces by the end of November 2018. In somecases, the electricity usage of lights has been halved
compared with the pre-adoption level. We plan togradually introduce LED systems in other tenant-owned
space as well after holding discussion with tenants.
* Green lease scheme
A method enabling the landlord and the tenant of a rentalbuilding or other types of rental property to cooperate and reduce
the environmental load in a scheme benefiting both sides. Suchmethods include an arrangement where part of the tenant’s savings
attributable to the landlord’s investment in energy-saving facilities,
such as a decrease in electricity charges, is returned to the landlord
as a green lease payment.

The proportion of the area into which
LED lights have been introduced in
the tenant-occupied space of Shinjuku
Maynds Tower
77.3%

80.0%

72.2%

70.0%

67.5%

60.0%
50.0%
40.0%

33.9%

30.0%
20.0%
10.0%

3.4% 3.4%

6.9%

18.2%
10.3%

0.0%
PeriodPeriodPeriodPeriodPeriodPeriodPeriodPeriodPeriod
ended
ended
ended
ended
ended
ended
ended
ended
ended
Nov. 2014 May 2015 Nov. 2015 May 2016 Nov. 2016 May 2017 Nov. 2017 May 2018 Nov. 2018

* The proportion of the area for the period ended November 2017 is an estimatethat was made as of July 2017.

56●Environmental Initiatives at Daiwa RiverGate
The following environmental initiatives were
implemented in 2017 at Daiwa River Gate—a property
owned by Daiwa Office Investment Corporation, which
is operated by Daiwa Real Estate Asset Management:• Improvement of Water Use Efficiency throughReuse of Wastewater and Rainwater
We repaired a filtering device set up as part of theexisting water recycling facility for the purpose ofreusing water draining from outdoor-air processing
units during humidifying operations as well as waterfrom rainwater storage tanks. The repaired device wasbrought into operation in June 2017. By switchingfrom tap water to filtered water for toilet flushingand other uses, we will be able to cut our annual
water usage by approximately 24% from the level
prior to the facility repair. We plan to consider the
repair or introduction of facilities to improve the water
use efficiency of other properties as well, dependingon the situation, and successively implement suchmeasures going forward.

●Shinjuku Maynds Tower Maintains DBJ
Green Building Certification*
We are engaged in environment-conscious officebuilding management at Shinjuku Maynds Tower. For
example, we continuously improve its facilities to beenvironmentally friendly and to conserve energy andalso conduct awareness-raising activities for building
tenants. In addition to these operations, the building’s
environmentally and socially friendly aspects have beenhighly evaluated. Shinjuku Maynds Tower therefore
continued to be certified by the Development Bankof Japan (DBJ) as a “building with exceptionally highenvironmental and social awareness (Four Stars)” in
February 2017.
* Scoring model of DBJ Green Building
Certification
A comprehensive scoring model uniquely developed by theDevelopment Bank of Japan Inc. (DBJ). The DBJ grants certification
to real estate properties with high environmental and social
awareness (“Green Building”) based on a five-level ranking system.

CO2 emissions
reduction by adopting
LED lighting(in comparison withthe levels prior to theintroduction of LED
lighting)•Approximately

501.7 tons

(Shinjuku Maynds Tower in 2017)

Relationship with Shareholders and Other Investors

Daiwa Securities Group CSR REPORT 2018

57

Relationship with Shareholders and Other Investors
Approach andBasic Stance

The Daiwa Securities Group works hard to advance communication with shareholders and otherinvestors. We will work hard to provide stockholders and investors with improved communications andinformation that are easy to understand.

Breakdown of Shareholders
Breakdown by Investor Type (As of March 31, 2018)
Total number of shares outstanding:
1,699,378,772 shares
Other
9.0%

Foreigninvestors
29.8%
Other
corporations in
Japan
3.9%

Questionnaire for Shareholders

Financial
institutions in
Japan
33.3%

(As of March 31, 2018)

We distribute a questionnaire to shareholders coinciding with the
distribution of rewards under our Shareholder Rewards Program at
the end of September, to gather and incorporate their views into
management and IR activities. The findings of these questionnaires

Individuals in
Japan
24.0%

Breakdown ofshareholders

are utilized to enhance satisfaction with the shareholder reward
program and to improve our business operations.

Shareholder Rewards Questionnaire Contents atthe End of September•

When did you first purchase our shares?

•

Why did you choose to buy the stock of Daiwa Securities?

•Foreign investors

29.8%(Down 7.7 points from the end of theprevious fiscal year)•Individuals in Japan

24.0%(Up 1.4 points from the end of theprevious fiscal year)(multiple answers allowed)

Dividend Policy
In principle, dividends are paid semiannually (interim
and year-end dividends) at a payout ratio of 50% ormore based on consolidated financial performance.
We also actively seek ways to increase returns to ourall our shareholders, including share buybacks when
we have sufficient accumulated capital to pursue
further growth.

Communication with Shareholders andOther Investors
Every year, many shareholders attend our general
meeting of shareholders, which is an opportunity for
us to interact directly with everyone. Other activities
include telephone conferences on the days of earnings
announcements, briefings about the company for
individual investors, management strategy briefing
sessions, one-on-one meetings with analysts andinvestors in Japan and overseas 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 integrated reports and business reports
for shareholders. We will continue to strive to makeour communications even more accessible and precise
for shareholders.

•

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 for rewards at theend of March 2008 and significantly expanded our
lineup of products posted in the catalogue from 24 to
50 items at the end of March 2016. Reward products
are provided semiannually, at the end of March and
September. Shareholders have multiple reward options
to choose from such as regional specialties; charitable
donations; “Kaisha Shikiho,” a quarterly journal on
investment; and points 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.
Starting with the shareholder benefits offered toshareholders of record on September 30, 2017, if
shareholders request the use of shareholder benefit
points to exchange them with shareholder benefit
items on our website, we donate 20 yen per case to“Daiwa Securities Group Children Support Fund for
Bright Future,” established in the Public Resources
Foundation, to support activities for improving theenvironment surrounding children and break the cycleof poverty through NPOs engaged in fighting childpoverty.

Investor Relations➔ Refer to page 38 for related information.

For Shareholders

Relationship with Shareholders and Other Investors

Daiwa Securities Group CSR REPORT 2018

Initiatives in FY2017

Disclosure System●Dissemination of Information to Various
Stakeholders

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.

With an expectation for a shift from savings
to investment, the Daiwa Securities Group is
actively spreading information contributing to theimprovement of the Group’s corporate value. For
example, we communicated the progress of our
Medium-Term Management Plan, an overview of ourmanagement policy for FY2017, and other information
efficiently and effectively at earnings announcements
and management strategy briefing sessions, as well as
in integrated reports and business reports.
For institutional investors in Japan and abroad, we
implement effective activities that suit each investor
base. In FY2017, we nurtured relationships of trustwith the staff responsible for exercising voting rights,
in addition to analysts, portfolio managers, and others.
We also held an IR roadshow by top management foroverseas institutional investors.
Moreover, the Group holds live seminar-stylebriefings for individual investors on the Internet aswell as briefings at sales branches of Daiwa Securities,
attracting the participation of many investors and alarge audience. Following the increase in the ratio
of individual investors, we increased the numberof briefings for individual investors. In addition, we
participated in briefings organized by Daiwa Investor
Relations Co., Ltd. (Daiwa IR), a subsidiary of theGroup, with the aim to increase contact points withindividual investors. At these briefings, we provide
a question-and answer session and conduct aquestionnaire, thereby obtaining diverse feedback, inorder to use such feedback for the improvement ofcommunication with individual investors in the future.

●Increasing Shareholder Returns
The Daiwa Securities Group, aiming to achievesustainable growth through ensuring sound profits,
will implement a financial and capital policy thatgives consideration to all stakeholders by seeking toachieve an optimum balance between making growthinvestments, raising capital efficiency, maintaining
financial health, and increasing shareholder returns.
While we raised the target payout ratio to 50% ormore from FY2018, we also actively seek ways toincrease returns to our shareholders, including sharebuybacks when we have sufficient accumulated capital
to pursue further growth.
Briefing materials about the company for individual investors●Disclosure Policy
As a company engaged in the securities business, ininformation disclosure, we aim to be a role model forother listed companies. We will strengthen disclosureof not only financial information, but also nonfinancial
information with social and environmental aspects thatare not evident in short term financial figures.

Disclosure Policy●The Daiwa Securities Group will provide
important information about the Group,
including financial, social and environmental
aspects, in a fair, prompt and appropriatemanner. We will thereby promote
understanding of the Group amongshareholders, investors, local communities
and other stakeholders to help them toproperly evaluate us.
●The Group will comply with the Financial
Instruments and Exchange Law, other laws
and regulations as well as rules implemented
by the financial instruments exchanges
where our stock is listed.
●The Group will strive to disclose information
fairly in terms of both content and timing.
●The Group will utilize various communication
channels including briefings, telephone
conferences, the Internet and printed
materials to disclose information in a mannerthat 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
established a Disclosure Rule that sets forth
the establishment of a Disclosure Committee
and the Group’s information disclosure
methods.

58

Number of overseas
IR activities held in
FY2017•North America

2 IR events(23 meetings)•Europe2 IR events(22 meetings)•Asia

2 IR events(20 meetings)
Company briefings forindividual investors held
in FY2017•Number of briefings at

sales branches of Daiwa
Securities

11•Number of briefings

organized by Daiwa IR

3•Number of live seminar-style

Internet briefings

1•Total number of participants

Approximately

2,700 people
Share buyback•Buyback period

From November 2, 2017
to March 8,2018•Total number of shares

repurchased

52
million shares(Percentage to total number of issued
shares excluding treasury stock:
3.12%)•Total amount of shares

repurchased¥

37,170 million

Relationship with Employees

Daiwa Securities Group CSR REPORT 2018

59

Relationship with Employees
Approach andBasic Stance

Relevant
CSR
Materiality

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 ofmeasures to ensure that all of our employees feel a sense of job satisfaction and that their families andpartners 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 coreof Daiwa’s identity. We have taken steps to crystallize the basic philosophy and mindset of the Groupinherent 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 theGroup’s overall strength.
X.

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

RelatedSustainable
Development
Goals (SDGs)* Refer to pages 11 and 12 for details on materiality at the Daiwa Securities Group.

Hiring Initiatives●Hiring Approaches and Trends

The Daiwa Securities Group wants all of our employees
to work with a high level of loyalty and motivation.
All new college graduates recruited by the Group,
including those with disabilities, are brought on as fulland regular employees aiming to encourage newly
hired to have a sense of trust and pride in the Group,
and a sense of solidarity with their colleagues.
We are making efforts to provide an environment wherea diverse range of people can perform to their full potential.
We also focus on attracting people capable ofexcelling globally to develop a global network andstrengthen alliance strategy, with the aim to take aleadership role in the development of capital markets
in Japan and Asia and become the customers’ first
choice securities group.
The Daiwa Securities Group offers internshipprograms to provide an opportunity to gain firsthandexperience in the securities business throughinteraction with employees.

●Fairness in Hiring

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

Guidelines for Fair Hiring
1. Utmost respect for the rights of theapplicants
2. Eligibility for all individuals who meet thehiring criteria
3. Making all hiring decisions based on a fairand objective 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.

Refer to page 5 for the
Daiwa Spirit.

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.
Highly-motivated and talented employees cancontinue working after retirement under our Daiwa
Master System. In FY2017, we started allowing senioradvisors to continue working regardless of their age.
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 tocontinue learning and working in a meaningful way
as a part of the organization. Daiwa Securities Co.
Ltd. is greatly expanding its training programs for
employees aged 45 and older, and has introduced a
License Certification System that provides incentives
to employees to improve their skills and polish theiracumen as professionals. In addition, we introduceda Superior Managing Director System as the highest
employee position and enhanced the personnel systemfor veteran employees who have outstanding expertiseand knowledge and made remarkable achievements.
We support both work and caregiving, and arecreating an environment in which employees can move
forward enthusiastically without concerns over their
future lifestyle.

Employment of People with Disabilities
As of FY2017, the Daiwa Securities Group had morethan 190 employees with disabilities handling a wide
range of responsibilities in our head office, sales
branches and contact centers.
We started recruiting new graduates withdisabilities as regular employees (general office staff)
in FY2008, and in FY2011 broadened the scheme

Number of new
employees for FY2018

578 people(8 group companies*)* Refer to page 88 of “CSR Related
Data” for companies covered by data.

Relationship with Employees

to the career-track employee, regional career-track
employee, and employee for customer services.
We have also vigorously increased recruitment
opportunities by holding briefings about the company
for new graduates, participating in career expos,
and implementing job placement support programs
for university students 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 andregional career-track employment opportunities.

Human Resource Development and Skill
Enhancement●Employee Training Approaches andTrendsThe Daiwa Securities Group’s competitiveness derives
from our employees. Accordingly, we focus on thedevelopment of human resources based on the basic
policy of providing high-value-added solutions throughthe use of “Quality No. 1” consulting capabilities. In
particular, we offer extensive training programs to
newly hired employees as we believe that this is a
critical period for their training. We adopt a system thatallows employees to acquire not only basic knowledge
and skills, but also to hone their knowledge,
techniques and mindsets through corporate philosophy,
CSR, and a variety of other programs in the curriculum.
It enables us to nurture top-quality human resources
with professional skills at an early stage.
We believe that our employees must have a firm
understanding of corporate ethics and compliance inorder to ensure the development of sound financial
and capital markets, which is a key issue for the Daiwa
Securities Group. Accordingly, we offer regular training
on information security and compliance.

●Education and Training System

The Daiwa Securities Group seeks to be a cluster oftrue professionals who keep aiming high. We havedeveloped an education system for our employees notjust to let them acquire skills necessary for their current
work assignments but to encourage them to makeconsistent effort toward achieving their career visions.
In this way, we support the self-motivated careerformation of each employee.
In addition, we aim to foster a sense of solidarity
among Group employees across divisions while
offering training opportunities at group meetings.
•T raining for Young Employees
The Daiwa Securities Group views the first two yearsof an employee’s career as a period for their basic
training to become a professional. The Daiwa Basic
Program covers this period of training, and the scopeof the program was greatly expanded in FY2015. To
train employees, we now set the items and levels thatshould be acquired, and organically combine grouptraining, OJT, e-learning, and support for the acquisitionof qualifications. Since FY2017, for employees intheir third to fifth year of employment, we haveintroduced an educational program called “Qroad.”This program helps to improve their knowledge,
techniques, and mindsets to achieve the industry’s best
quality. It presents high-level goals until the fifth year of
employment to further promote employees’ growth.

Daiwa Securities Group CSR REPORT 2018

• Skill Training
We provide skill training aimed at enhancing the skills
and techniques that employees themselves want
to improve as an opportunity for them to acquirevarious skills and special knowledge. We enhanced
the e-learning program from FY2017 and developed
a training system that can better satisfy employees’
motivation for self-development.

Number of times skill
training was held in
FY2017• Training for Veteran Employees
Since FY2015, we have been providing the Advanced
Skill-building Program, a training program for
employees aged 45 and older that is designed tocontinuously improve skills. We have also introduced alicense certification system that provides incentives to
employees who continue to work on improving theirskills. In the three years since its introduction, 1,500
employees, accounting for approximately 60% of
personnel aged 45 and older, undertook over 15,000
training programs.

9,362 people

21 training courses
held 48 times•Cumulative number ofparticipants:

Cost for the Group’s
educational investment¥

2.1 billion●Supporting Employees Trying to Earn
Credentials
The Daiwa Securities Group focuses on the developmentof human resources who can provide high-valueadded solutions through the use of our “Quality
No. 1” consulting capabilities. Daiwa Securities sees
Financial Planner (AFP and CFP®) and Securities Analyst
qualifications as core requirements, and encourages
employees to acquire these certifications. As a result,Daiwa Securities has 698 employees with CFP®
certifications, the highest level in the industry. CFP® is ahigh-level credential certifying knowledge and skills in
the tax system, inheritance, and real estate fields needed
to provide financial planning services. Moreover, as aresult of the introduction of the Daiwa Basic Program,an educational training program covering the first two
years of employment, 97% of employees in their second
year of employment acquire AFP, while 50% havepassed the Chartered Member of the Securities Analysts
Association of Japan (CMA) examination (Level 1).
We have also introduced an Inheritance Planner
Certification® as an in-house qualification system.
Certification candidates undergo practical in-housetraining based on an extensive knowledge obtained
through the acquisition of CFP® certification andacquire skills for providing services targeting highnet worth individuals. In addition, the company
provides generous support by, for example, subsidizing
certification costs so that employees can enhance their
specialized skills and become professionals.

●Intra-Group Job Postings and the Career
Track Change System
We have instituted a Career Track Change Systemthat enables non-career-track employees to transfer tocareer-track and regional career-track positions. Under
the system, more than 1,200 employees have moved toother positions. We have also instituted a system of intragroup job postings to help employees with skills and thedesire to realize their potential to open new career paths.

●Evaluation System

To ensure that all employees can continue working witha high level of motivation, it is important to have a fairand convincing evaluation system. For this reason, theDaiwa Securities Group has implemented a multifaceted

60

Number of persons
earning CFP®
certifications

698(As of the end of March 2018)

Number of Chartered
Members of the
Securities Analysts
Association of Japan(CMA)®

1,613 people(As of the end of March 2018)

Relationship with Employees

evaluation system for managers whereby subordinates
conduct evaluation. This involves subordinates assessing
each manager’s job performance in carrying out daily
duties and the results being fed back to the manager.
The scheme aims to help managers to identify theirchallenges and improve their managerial skills throughtraining programs and other means, thereby improving
our overall productivity. The multifaceted evaluation
system covers all managers, including executives, theheads of departments, offices, and sales branches, andsection chiefs.
We also take their compliance-related performance
into account. In addition, we endeavor to createa 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 andto work in positions with bigger responsibilities.

Striving to Create a Pleasant Working
Environment●Initiatives for Work Style Reform

Daiwa Securities Group has a proven track record of
implementing initiatives for work style reform to help
all employees to work efficiently within set working
hours and live a fulfilling life, such as the female
employee support plan (since 2005), encouraging
employees to leave the workplace before 7 p.m. (since2007), and promoting work-life balance (since 2008).
In April 2017, Daiwa Securities Group announced
the “Joint Declaration of Promotion of Work Style
Reform” by Chairman of the Board and President andCEO. In addition, with establishment of the “Business
Reform and Productivity Improvement Committee”
chaired by the President and CEO, we undertaketo enhance employees’ satisfaction including their
engagement through improved productivity as an
endeavor for higher value-added operations, andcontribution to customers and society.

●Encouraging Work-Life Balance (WLB)

One of the Daiwa Securities Group’s targets is topromote an advanced level of WLB. The Group iscommitted to pursuing working styles that enable
employees to achieve a balance between their private
and professional lives, and makes efforts to create
an environment in which both men and women canwork in a variety of ways. Not only do we seek toestablish systems that enable diverse work styles,
but we also work to change employee awareness by
ensuring employees leave work before 7 p.m. and by
establishing family days at the workplace.
We hold Work-Life Balance Committee Meetings,
which are co-chaired by the Chairman of the Board
and President and CEO and participated by executives
and employees from various posts and divisions,
ranging from executives, managers at the head officeand branches, and to young employees, and conduct
active discussions on various measures under strong
leadership on a quarterly basis. The Daiwa Securities
Group has adopted systems aimed at supporting its
employees in both areas of child-rearing and nursing
care that exceed statutory requirements. Surveys
concerning the Group’s efforts to support boththe career and childrearing needs of its employees
have been conducted to solicit input from all Group
employees. These surveys are designed to ascertain

Daiwa Securities Group CSR REPORT 2018

the degree to which employees are using the Group’ssystems and to collect feedback focusing particularly
on employee needs. Drawing on the results of thesurveys, the Group is working to further improveconditions 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, and branch heads. In this manner, energies arebeing channeled toward ensuring a smooth return
to work. Even during childcare leave, employees arestill eligible for promotions and raises based on theircontributions to date.
We set up a Childrearing Support Leave system
in FY2014, which resulted in the acquisition rateof childcare leave for male employees significantly
increasing from 2% to 100%. In recent years, wehave also focused on support for employees’ efforts
to balance work and nursing care, and have expanded
a variety of support programs. For example, we haveallowed employees to divide their nursing care leave
into up to four periods while extending the total
length of such leave to three years. We have also
introduced Nursing Care Concierge Service, establisheda work-from-home system, as well as life support
paid leave, and started offering an e-learning course
supporting initiatives for work-life balance. Moreover,all departments, offices, and sales branches of Daiwa
Securities hold a study meeting on how to respond to
the aging of society and balance work and nursing care.
We are thus working to increase employees’ awarenessand foster an environment that facilitates the utilizationof these support programs. In order to promote the useof annual paid vacation, we introduced kid’s ceremonyleave and leave for celebrating parent’s longevity in2016 and long service leave in August 2017, to further
promote the scheduled use of paid leave by clarifying
the purpose of leave.
We set up the Work-Life Balance Hotline in April
2018 to create an environment for employees to
consult casually on various concerns and worries, suchas balancing work and child care/nursing care andtheir future career.

●Encouraging Women to Succeed

The Daiwa Securities Group proactively appoints
talented human resources regardless of gender.
We are trying to appeal more to women’s individualinterests by introducing thriving female employees
as role models in internal publications and providing
opportunities for cross-company communication, inorder to increase the number of women in management
positions. A career consultation service has been set upon the Group’s internal initiatives for WLB promotion
website. Female executives as well as heads of eachdepartment, office, and branch give advice on theconcerns and inquiries of female employees.
The Daiwa Securities Group has a total of seven
women in top management positions who work as
directors, corporate executive officers, and executive
officers. They include two female executives at Daiwa
Securities Group Inc., who serve as directors andcorporate executive officers. The number of womenin management positions is increasing year by year,with the Group’s total number standing at 424 asof the end of March 2018. The ratio of women in
management positions has risen from 2.2% at the endof FY2004 to 9.4% on a group-wide basis (up from61

Number of female
executives•Daiwa Securities Group Inc.

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

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

Number of women in
managerial positions•The entire Group424 people(As of March 31, 2018)

Ratio of women in
managerial positions•Daiwa Securities

2.3%(At the end of March 2005)→11.6%(At the end of March 2018)•The entire Group

2.2%(At the end of March 2005)→9.4%(At the end of March 2018)* Refer to page 91 of “CSR Related
Data” for “Employee Support Plans.”Relationship with Employees• Ratio of women in managerial positions:

At least 15%, more than a fivefold
increase from the FY2005 level• Ratio of women in new graduates
recruited: 50% (stable)• Ratio of women in participants in training:50%• Acquisition rate of annual leave: At least
70%• Acquisition rate of childcare leave for male
employees: 100%
In 2015, the current Chairman of the Board of
Daiwa Securities Group Inc. showed his support for
the Declaration on Action by A Group of Male Leaders
Who Will Create a Society in which Women Shine
spearheaded by Japan’s Gender Equality Bureau of the
Cabinet Office.
Daiwa Securities Group Inc. has been selected asa “Nadeshiko Brand” for four consecutive years,
since FY2014. This title is awarded by the Ministryof Economy, Trade and Industry and the Tokyo Stock
Exchange to listed companies for having excellent trackrecords in empowering women at their companies.
We were selected in recognition of our Group-wide
endeavors for empowering women at the workplaceby promoting diversity management under the strong
leadership as represented by Work-Life BalanceCommittee Meetings held quarterly, as well as various
efforts for improving productivity, such as encouraging
employees to leave the workplace before 7 p.m.

At the Daiwa Securities Group, we regard
placing importance on personnel as one of our
Corporate Principles, and believe the source ofour competitiveness lies in the capabilities of ouremployees. Based on this view, we are working
strategically on promoting health managementwith the objectives of achieving a balance between
employee happiness and company productivity
improvement and creating an environment where
employees can continue working actively andvigorously over a long period.
We started our initiatives to improve employees’
health in earnest in 2008, when specific healthcheckups and specific counseling guidance were
initiated at worksites, through close collaboration
between Human Resources Department, Health
Insurance Association, and occupational health staff.
In 2015, to further reinforce the Group’s structure
to promote health management, we appointed a
Chief Health Officer (CHO) and established HealthManagement Promotion Section within the Human
Resources Department. In addition, we hold HealthManagement Promotion Meetings, organized by the
CHO and attended by executives of group companies,
on a quarterly basis. Health Management Promotion
Meetings are participated by occupational healthstaff, Health Insurance Association, Employee Union,and external experts and examine and share ourinitiatives for health management. Our efforts arehighly regarded by society and the Group was selected
for four consecutive years since FY2014 as “Health &Productivity Stock Selection,” a title awarded jointly by
Japan’s Ministry of Economy, Trade and Industry and
the Tokyo Stock Exchange to companies promoting
the health of their employees.
➔ Refer to page 73 of “Third-Party Evaluations” for details.

Structure to Promote
Health Management
Executive office

The Daiwa Securities Group
Health Management Promotion
Meetings at Daiwa Securities
Group Inc.

The Daiwa Securities Group
Human Resources Department
Health Management Promotion
Section, Human Resources Department
at Daiwa Securities Group Inc.

The Daiwa Securities Group• Daiwa Securities Group Inc.
• Daiwa Securities Co. Ltd.
• Daiwa Asset Management Co. Ltd.
• The Daiwa Institute of Research• Daiwa SB Investments Ltd.
• Daiwa Securities Business Center
Co. Ltd.
including other Group companies

Trinity Structure
Human
Resources
Department

GeneralHealthDevelopment
Centers

HealthInsurance
Association

62

Health-related Data*•Rate of participation in

regular health checkups
Close to100%

•Rate of participationin thorough medical
examinations, which
are voluntary screenings(mainly cancer screenings
for employees aged 35
years or older)
FY2016FY201786%
87%•Percentage of overweight

employees

30.5%•Percentage of employees

who smoke

23.7%•Percentage of employees

who regularly exercise

19.4%•Percentage of employees

who took the stress check

92.4%•Proportion of thoseseeing doctors after
regular health checkups
in employees withproblematic results in suchcheckups

86.4%* Excerpted mainly from “Daiwa
Securities Group White Book on
Health 2017”

Health Insurance
Association

Targets for Years through FY2020(Daiwa Securities)●Initiatives to Improve Employee HealthGeneral Health
Development Centers

2.3% to 11.6% at Daiwa Securities).
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 1,200 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 forfamily members, starting them at the same level ofcompensation as when they left. The scope of thissystem was expanded in FY2015. This has helped us
secure talented personnel who support operations.
Starting in FY2014, Daiwa Securities launched thefemale employee career support training initiative(Daiwa Woman’s Forum) helping women to build
networks among themselves.
We will continue to increase the number of female
managers, aiming to develop female leaders who will
drive the future of Japan’s financial industry.
Daiwa Securities has a proven track record of
implementing a wide range of initiatives that help
female employees reach their full potential. The
company has also clarified its objectives through to
FY2020. In this manner, positive steps are being taken
to provide an environment in which employees withdiverse values can maximize their capabilities.

Daiwa Securities Group CSR REPORT 2018

Relationship with Employees

Daiwa Securities Group CSR REPORT 2018

We also published “Daiwa Securities Group WhiteBook on Health” to help employees to understandthe results, issues, and policy of each measure andefficiently use our system. In light of the White Book,
we implement various measures so that our employees
have a good understanding of their health, have ahigh level of health awareness, and can maintain or
improve their health.

Initiatives for Better Health*1●Regular●health checkup●Support●plan for cancer patients among
employees●Thorough●medical examination (cancer
screening) (to supplement standard tests)+ options for employees of specific ages
●Breast●cancer and cervical cancer exams●System●that uses a follow-up
confirmation form (known as a “yellow
paper”*2)●Helicobacter●
pylori test and hepatitis
virus testing (for the prevention of gastriccancer and liver cancer)●Action●to Promote Countermeasures
Against Cancer●KA-RA-DA●
iki-iki Project●Walking●
challenge program●Program●
to promote moderate meal
portions●Lecture●on health literacy●Measures●for those with severe diseases●Smoking●
cessation support●Influenza●
vaccination●Issuance●of Daiwa Securities Group WhiteBook on Health●Mental●and Physical Beauty Campaign(awareness-raising for female-specifichealth problems)●Communication●of health-related
information to all Group employees●Daiwa●Clubs(12 sports activity groups and 8 culturalactivity group)●In-house●
events support system*1 Excerpted mainly from “Daiwa Securities Group White Book on
Health 2017”*2 System to urge employees to see doctors after their regular healthcheckups. Employees receiving this form are required to obtain adoctor’s comment within two weeks and submit it to us. This has
contributed to a higher rate of visits to medical institutions after
checkups.
Health Management Promotion Meetings

63

Number of participantsin the FY2017 walking
challenge

KA-RA-DA iki-iki Project
In November 2016, we introduced the“KA-RA-DA iki-iki Project—HealthyLifestyle” in collaboration with the
Human Resources Department, the Health
Insurance Association, and the General
Health Development Centers. The Programaims to raise health awareness among all
employees, including young employees who
previously had little interest in health. We
grant reward points based on employees’
degree of participation in the following
events to improve health. Points earned
can be exchanged for gifts such as healthrelated goods and can also be used to makedonations to TABLE FOR TWO.
Events● 10 minutes per day of physical activity (Plus 10)● No alcohol challenge program ● Breakfast Everyday● Diet recording ● Stop eating between meals● KA-RA-DA iki-iki seminars● Harahachi program to promote moderate meal portions● Walking challenge program● Smoking cessation challenge program

For the Health of It
This year was another successful year for
Daiwa Capital Markets' Wellness Initiative“For the Health of It.” Many programs andevents have been held this year to continue
our commitment on encouraging a healthierlifestyle for all of our employees. With
programs that ranged from big to small,
we were truly able to promote a life of notjust physical fitness, but a healthier lifestyleoverall. Programs such as the 401k info
sessions, EAP info cards and the new benefit
options helped our employees to be moreaware of their financial status and seek theright help they need, when they need it.
Monthly newsletters, CPR classes, blood drive,
yoga classes, therapeutic massages and fresh
fruits and snacks have also been offered tocreate awareness and extend our knowledge
on physical health as well. Overall, it was agreat year of consciousness and awareness ofhealth in every way possible.
Yoga class

2,216 people in total(Events held twice in the year)

Relationship with Employees

Daiwa Securities Group CSR REPORT 201864

Employment Support Plan for Employees with Cancer
We have introduced an employment support plan for employees with cancer, a support system for balancing
work and cancer treatment, since October 2017. The plan consists of a flexible work system, including shorter
working hours and work-from-home, provision of financial support, and establishment of a consultation
service to create a pleasant working environment by facilitating understanding of employees with cancer.
Leave/Unpaid leave—Operation/
Hospitalization

Medical examination/
Health checkups
•

•

•

•

Return to work—Balancing
work and cancer treatment

Thorough medical examination (cancer•

Annual leave•

Short working hour system

screening) (employees aged 35 years or older)•

Life support paid leave•

Restricted overtime work

Breast cancer and cervical cancer exams•

Unpaid leave•

Exemption from overtime work

(Employees aged younger than 35 years)•

Treatment support time

Options for employees of specific ages•

Annual leave by the hour

(Employees aged 50 and 55 years)•

Work-from-home system

Recommendation for receiving•

Appearance support (subsidizing the costfurther testing after thorough medicalof wigs and artificial breasts, etc.)

examinations•

Stomach cancer risk screening/Hepatitis
screening

Consultation service•

Telephone consultation services for mental and physical health • Best Doctors® Service (best doctor referral service)•Consultation for supporting in balancing work and cancer treatment (Health Consultation Services at General Health Development
Centers)
Financial support•

Medical expenses loans•

Loans for advanced medical care expenses
Fostering supportive environments•

Declaration and dissemination of our basic policy regarding support for cancer patients•

Raising awareness among employees on coping with both work and cancer treatment through training●Initiatives for Mental Health
Maintaining and managing both physical and mental
health is vital for the sound career development of
employees. The Mental Health Support Office has two
full-time certified clinical psychologists on its staff toprovide consultations for employees themselves, theirsubordinates, colleagues, families, and others.
Staff members on the Mental Health Support Officealso visit departments, offices, sales branches, andgroup companies to provide training for self-care, linecare, mental health management, and mental strengthand to hold interviews with young sales personnel.
We are thus focusing on measures to prevent
mental health problems, while providing the “Returnto-work Support Plan” designed to help those on
leave to return to work smoothly, in an effort to create
an environment where all employees can work withpeace of mind.

Employee receiving counseling in the Mental Health Support Office• Interviews with Young Sales Personnel
Young employees may feel a lot of stress from lives
as working adults and from having so many newexperiences. However, they sometimes do not talkabout their worries or do not realize that they arein a poor mental condition. We therefore conductindividual interviews with young sales personnel
in their first to fourth years of employment whenproviding training at sales branches (individual requests
for interviews are also accepted).
Through these interviews, we increase interest inmental health among such employees and remind themthat we have implemented an internal support structure.
We refer them to certified clinical psychologists
within the Mental Health Support Office forcounselling, depending on the need.
Even if employees cannot undergo counselling at
the Mental Health Support Office due to geographicalor timing constraints, they will be able to receive
counselling in their local areas through a third-party
institution providing telephone consultation services
for mental and physical health with which our Health
Insurance Association ties up.
• Training for line care
In the field of mental health, line care is defined as
mental health care provided by managers to theirsubordinates. Managers, who have daily contact
with their subordinates, play an important role fromthe perspective of line care. The Mental HealthSupport Office conducts group training of managers
during visits to branches and departments. Such

Training on mental
health•Training at sales offices

and branches

62 branches(including 12 sales offices)•Group company training

4 timesInterviews with young
sales personnel

455 people(FY2017)

Relationship with Employees

training includes how to communicate effectively
with subordinates, notice change in their physicalconditions or guide them to counseling services, withthe aim of promoting line care to function adequatelyfrom the aspects of both improvement of the working
environment by managers and providing consultation
services to each employee.
•R eturn-to-work Support Plan
We send a notice on the “Overview of Non-workrelated Medical Leave System” to employees goingon leave. The notice states that they can use a followup service, depending on their needs, based on the
Return-to-work Support Plan prepared by the Mental
Health Support Office.
When the Mental Health Support Office receives
a request from someone planning to return to work,
it prepares a plan after conducting hearings on past
duties and so on from that person and the head of theoffice that the person belongs to. The prepared plan isthen sent to the office head. This system enables theoffice head and the person returning to work to sharethe support information and is expected to further
reinforce follow-ups.
We are now considering drawing up the “Return-towork Support Guide for Managers and Supervisors” todistribute it to the heads of relevant offices because there
are still few cases where this system has been used.

Communication●Communication with Employees
We believe that good communication with employees
is vital for a better workplace environment. We havethus implemented a semiannual self-assessment system
whereby employees can communicate their careerplans to their superiors and the Human Resources
Department. Under the system, employees can also
communicate not only their career visions but also theirthoughts on the duties that they assume, personnel
and training systems, the workplace environment, andother factors to the Human Resource Department. The
Daiwa Securities Group uses such feedback to develop
an environment that enables employees to work with ahigh level of motivation.
To give feedback on assessment results, we conduct
interviews with department and sales branch heads
twice a year, thereby sharing future goals and careerdevelopment with them and providing appropriate
instructions and advice to each employee.
We also regularly conduct questionnaires on worklife balance for all employees. We incorporated thevoices of employees and expanded the scope ofchildren covered by the short working hour system(from until the children completes third grade atelementary school to until the children completes sixth
grade), expanded the scope of use of life support paid
leave (to include the use of leave to look after a childwith illness up to the end of third grade at elementary
school), and introduced Nursing Care Concierge
Service to eliminate employees’ worries about nursing
care. Moreover, we conduct interviews with employees
returning from childcare leave after some time has
passed in an effort to resolve any worries. This input
from employees helps us to identify areas to be

Daiwa Securities Group CSR REPORT 201865

improved in our systems and initiatives and to create abetter workplace environment.

●Communication among Employees
In October 2007, Daiwa Securities introduced aprogram for supporting club activities. This program
was created to help employees enjoy their time off andto deepen their friendships with colleagues, building
more opportunities to share a sense of camaraderie
and solidarity. It is also intended to support work-lifebalance and facilitate a fuller social life for employees.
The program was expanded and enhanced in FY2009.
Under this program, employee groups that meetcertain conditions are recognized as Daiwa Clubs or
Daiwa Circles, which receive subsidies to cover someof their activity costs. As of March 2018, 20 clubs andfour circles are active across the Group.

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

●Initiatives for Families
We work to ensure that members of employees’
families share their pride to be part of the Group.
Since FY2008, we welcome employees’ families to theworkplace on Family Visit Day to give family members
a better understanding of our company and theemployees’ jobs.
Other initiatives for supporting our employees’
families include the new creation of kid’s ceremonyleave, family day leave, and leave to celebrate parents’longevity, as well as the extension of mental healthsupport to employees’ families.

●Active Use of In-House Magazine
The Daiwa Securities Group issues an in-housemagazine, “Fuji,” whose history dates back to 1925,
when one of the company’s predecessors, Fujimoto Bill
Broker Bank, commenced its publication. The magazine
has been praised even outside of the Group for its roles
as a communication tool among employees.
We currently distribute 19,000 copies of Fuji every
other month to Group executives and employees, theirfamilies and retirees.
We also post the magazine on our work-life balancepromotion website for employees so that those on
leave for child rearing or nursing care can read it athome. The magazine covers a wide range of topics
in addition to information on management andpersonnel measures. It also covers initiatives taken byGroup companies and is used to enlighten executives
and employees of Group companies on topics, such as
human rights issues, ESG, the framework and status of
usage of the whistle-blowing system, and awarenessraising on environmental issues. In addition, themagazine posts serial articles on the Group’s history,
mental and physical health, laws, and hobbies, as well
as articles contributed by executives and employees.

Number of Employee
Union members

7,134 people(As of March 31, 2018)* Refer to page 91 of “CSR Related
Data” for companies covered by data.

Number of Family Visit
Day participants

6,418 people(FY2017)

Engagement with Society

Daiwa Securities Group CSR REPORT 201866

Engagement with Society
Approach andBasic 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, the Arts, and Sports Activities
4. Corporate Citizenship Initiatives

Relevant
CSR
Materiality

XIV. Contribution to local communities

RelatedSustainable
Development
Goals (SDGs)* Refer to pages 11 and 12 for details on materiality at the Daiwa Securities Group.

Education and Research Activities in
Economics and FinanceCapitalizing on financial and economic expertise
accumulated through its securities business, theDaiwa Securities Group engages in business-academia
collaborations and supports programs for 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 the futureworld.
* Refer to page 91 of “CSR Related Data” for “Results in Economic
and Financial Education.”

Economic and Financial Education
Sustainable Development of theJapanese Economy
Research
institutions

Schools
Understandingof social andeconomicprinciples

Improveeconomic
and financial
knowledge

Developfinancial
specialists

Discloseresearch results
Create practicalapplications

Commercial
and businessapplication ofresearch results

Elementary/junior/high school
students

Undergraduate
students

Graduatestudents

ResearchersIntellectual
property (IP)/patents

Support forteachers
Participate inclasses

Provide or
support classes
Dispatch
instructors

Provide or
support classes
Dispatch
instructors

Joint
researchResearchsupportSupport foruniversity
launched
ventures and IP
headquarters

Group Employee Cooperation●Finance ParkThe Daiwa Securities Group cooperates with Finance
Parks operated by Junior Achievement Japan. This
program provides opportunities for junior high school
students to learn economic and financial mechanismsthat will be necessary for them in their adult life.
Finance Parks have been operating in Shinagawa,Tokyo and Kyoto since 2005 and in Iwaki, Fukushima
Prefecture and in Sendai, Miyagi Prefecture since
FY2014. We have set up pseudo-branches in theseparks. To date, a total of 113,976 students haveparticipated.

●Initiatives for Junior and Senior HighSchool and College Students• For Elementary, Junior High and High SchoolStudents
Daiwa Securities Yokohama Nishiguchi Branchcooperated in a community event in October 2017 inwhich we disseminated knowledge on securities forchildren from the early grades of elementary school tojunior high school and their parents by playing a gameto experience stock price fluctuations and quizzes
using stock price charts. In December 2017, Daiwa
Securities Nakano Branch cooperated in vocational
study program “Let’s Think About Work” at a juniorhigh school in Nakano Ward, and provided a visiting
lecture mainly on the business of securities firms
and what we bear in mind in order to be selected bycustomers. In March 2018, Daiwa Securities Sendai
Branch provided a lecture on the theme of “secrets ofmoney” in the Children’s Future Support Program for
local elementary and junior high school students at theGreat East Japan Earthquake Recovery Support Event
sponsored by a local newspaper.
The Daiwa Securities Group also accepts requests
for corporate training at head offices and sales
branches. At such training, we mainly explain theroles of securities firms and the details of the securities
business to help participants to determine their future
course and occupation.
• For College Students and Others
In August 2016, Daiwa Securities Group Inc.
established the University of Tokyo Hongo Tech Garage
as a site to advance entrepreneurship education in
the University of Tokyo (a donation project by the
Daiwa Securities Group). The project aims to create anenvironment that enables students at the Universityof Tokyo to voluntarily promote their projects while
expanding educational programs. Under the project,
we are engaging in initiatives that lead to the creationof start-ups that would play a major role in the next
generation and the development of human resources
for innovation. From the current fiscal year (from
April 2018), we started to support D-Data program,a development program for nurturing specialists
in advanced data analysis, as part of an industryacademia partnership with Waseda University.
By participating in the consortium led by Waseda
University, which aims to cultivate experts in the advanced

Refer to page 91 of“CSR Related Data” for“Corporate Citizenship
Initiatives andExpenditures.”
Number of participantsin Finance Parks for
FY2017

19,183

peopleShinagawa: 1,931
Kyoto: 6,545
Iwaki: 3,059
Sendai: 7,648(on an application basis; surveyed by
Junior Achievement Japan)

Engagement with Society

Daiwa Securities Group CSR REPORT 2018

data technology field, we hope to train university students
as well as working professionals to develop humanresources such as data scientists and data analysts.
In addition, the Branch Manager of Daiwa Securities
Okayama Branch gave a lecture on the theme ofcorporate management to 150 students at a university
in Okayama City for two days in November andDecember 2017. On the first day, lectures were given
on our Corporate Principles and initiatives to practicethem, market trends, and financial products, suchas installment investment. On the second day, a
discussion was held on the importance of installment
investment. In December 2017, Branch Manager of
Daiwa Securities Mito Branch served as a lecturer
in the Basic Finance Theory course at a university in
Mito City, and gave a lecture on the theme of “Social
Missions Executed by Securities Firms and Diverse
Business Fields.” Daiwa Securities Group gives our
support to financial and economic education throughinvestment in local universities.

●Support to “Job Almanac 2017”
The Daiwa Securities Group Headquarters, continuingfrom FY2016, provided support to “Job Museum,”a career education material for elementary school
children released by The Asahi Shimbun Company. In
FY2017, we explained securities firms’ role of raisingfunds in an article entitled “How can companies
raise funds to grow their businesses?” The material
conforms to the government guideline for teaching
and is available in both book and website versions.
The book version “Job Almanac 2017” was donatedto elementary schools and junior high schools acrossJapan. The web version “Job Museum Kids” has a quizand other features that make it possible to enjoy thesite like a game.
Financial Education Textbook“Let’s Learn about Stocks”“Job Almanac 2017”●Preparing Financial Education Textbook“Let’s Learn about Stocks”
Since the end of 2016, the Corporate Planning
Department of Daiwa Securities Group Inc. has been
preparing “Let’s Learn about Stocks,” a financial
education textbook targeting upper-grade elementary
school children and above, with support from school
teachers. The textbook comes in two types, forstudents and for instructions. Readers learn aboutcompanies in the basic course and stocks, which are amethod for companies to raise funds, in the advanced
course. The textbook was first used in schools in
FY2017, and about 2,200 children in 35 elementary
schools across Japan participated in the education
program.
During the summer vacation period in FY2017,
we held parent-child interactive workshops using
the “Stock Trading Card Game” that comes with the
textbook.

●Support for Economic and Financial
Education Using the Okane-no-Mikata
WebsiteRefer to page 21 of “Providing Junior and Senior HighSchool Students with Opportunities to Learn about
Finance and Economy.”

Assistance to Communities inside andoutside of Japan through Foundations
and NPOs●Daiwa Securities Health Foundation
In commemoration of Daiwa Securities’ 30th
anniversary, the Daiwa Securities Health Foundation wasestablished in 1972 to support medical research. Since
the year following its establishment, the Foundation
has provided grants to outstanding research projects
focusing on medicine and medical care for middle-aged
and elderly people. In light of the increasing importanceof collaboration between medical care and nursing
care in recent years, the Foundation has expanded thescope of its support to research projects on health,welfare, and nursing care, in addition to conventional
medical research projects. In FY2017, which marked
the Foundation’s 44th year of support, applications
from projects on nursing care and locomotive syndrome
among the elderly, in particular, started to increase.
Applications from young researchers and professionals
other than doctors also stood out.

67

“Job Almanac 2017”
Donation of

48,300 copies(published on June 14, 2017)

Daiwa Securities
Health Foundation's
cumulative grants
awarded throughIndependent
Assurance
FY2017•Number of recipients

1,223 people•Total amount of grants

1,208 million¥

Daiwa Securities
Foundation's cumulative
grants awarded
Independent
Assurance
through FY2017
Volunteer Activities Grants•Number of projects receiving grants

3,339•Total amount of grants¥

771.87 million

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

247•Total amount of grants¥

101.73 million

Grants to volunteer workfor disaster recovery (theKumamoto Earthquakes)•Number of projects receiving grants

70•Total amount of grants

19.97 million¥

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

31•Total amount of grants

27.36 million¥

Media reports concerning
grant activities•Daiwa Securities Health Foundation

5

newspapers and TV stations•Daiwa Securities Foundation
Grants to volunteer work for disaster recovery:“Stock Trading Card Game” workshop

Presentation ceremony at the Welfare Foundation (Wakayama Branch)

37

1

newspapers and TV station(Surveyed by the Daiwa Securities HealthFound and the Daiwa Securities Foundation)

Job Museum Kids (Japanese)

Daiwa Securities HealthFoundation (Japanese)

Engagement with Society

Daiwa Securities Group CSR REPORT 2018

●Daiwa Securities Foundation
In 1994, the Daiwa Securities Foundation was launchedas part of commemorative activities for the 50th
anniversary of Daiwa Securities’ establishment in order
to contribute to society from our profits. Since theyear of its establishment, the Foundation has provided
grants to support activities for the elderly, people withdisabilities, and children, and other volunteer workof high social significance. In FY2017, two kinds ofvolunteer activity grants were awarded: Volunteer
Activities Grants, which marked 24th time of awarding
and grants to volunteer support for the torrential raindisaster in Northern Kyushu. The Foundation also
made its 24th round of grants to research projects onvolunteer work. We also continued to provide grants tovolunteer work for disaster recovery (Great East Japan
Earthquake) that began in 2011 and grants to support
activities for victims of the Kumamoto Earthquakes,
which occurred in April 2016, from Volunteer Activities
Grants.

●Daiwa Anglo-Japanese Foundation(Chartered in the United Kingdom)
As a UK charity for fostering closer ties between the
United Kingdom and Japan, the Daiwa Anglo-JapaneseFoundation, which was established in 1988 with
contributions from Daiwa Securities, is welcoming its
30th anniversary this year. Principal activities include:(1) Awarding grants to individuals, institutions, andorganizations working to promote ties between the
United Kingdom and Japan(2) Enabling British and Japanese students andacademics to further their education by providing
opportunities for joint research and supporting
exchanges and other bilateral initiatives(3) Awarding Daiwa Scholarships for British graduates
to study Japanese and undertake work assignments
in JapanDaiwa Ichiban Lectures(4) Organizing a year-round calendar of events toimprove understanding of Japan in the United
Kingdom (at the Headquarters in London)
The Foundation’s Tokyo office provides local
assistance to Daiwa Scholars (students from the United
Kingdom), administers grant applications from Japanand collaborates with other institutions promoting
Anglo-Japanese relations.
In Daiwa Ichiban Lectures, which began in FY2015
in collaboration with the British Embassy in Tokyo,
we held a lecture titled “A Life of Dancing” by Ms.
Darcey Bussell, a former British ballerina and also a
judge on BBC’s reality show “Strictly Come Dancing,”
in March 2018.
Moreover, in Daiwa Scholarships in JapaneseStudies, established in FY2015 as a scholarshipprogram for studies on Japan and Japanese language
training, three persons were selected for FY2017. Thisis a program in which the Daiwa Securities Groupfunds the tuition and living expenses in Japan for
individuals from the United Kingdom.
Cumulative number of people completing the
Daiwa Scholar program by FY2017 is 170.

●Daiwa Myanmar-Japan Foundation
On April 1, 2013, the Daiwa Securities Groupestablished the Daiwa Myanmar-Japan Foundation
to improve people’s livelihoods in Myanmar and todevelop the human capital necessary for sustainableeconomic growth. Since its establishment, thefoundation has implemented a scholarship student
support program that provides junior staff of thecountry’s central government with opportunities tostudy in Japan. It has also continued to plan andimplement a training program for certified public
accountants in Myanmar based on the tripartite
memorandum of understanding signed with the
Myanmar Institute of Certified Public Accountants andthe Japanese Institute of Certified Public Accountants.
The Daiwa Myanmar-Japan Foundation is also
positioned as one of the measures that Japan’s
public and private sectors have worked on together
to invigorate Myanmar’s capital market. It contributes
to developing and forming a network of the humanresources forming the country’s future leaders.

Cumulative number ofpeople completing the
Daiwa Scholar
program by
Independent
Assurance
FY2017170 people
Contributions by
Daiwa Myanmar-JapanFoundation•Number of Myanmar citizens
receiving scholarships

22 people•Number of participants in public
accountant training

54 people(Cumulative contributions until
FY2017)●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 operations
The Daiwa Scholar program completion ceremony

68

Training completion ceremony (Daiwa Myanmar-Japan Foundation)

Daiwa Securities Foundation(Japanese)

The Daiwa Anglo-JapaneseFoundation

Engagement with Society

Daiwa Securities Group CSR REPORT 2018

in 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.
Donations sourced from our revenue from the
Daiwa Eco Fund and Russell Investment Global
Environmental Technology Fund are granted to thisprogram with products and recipients selected basedon their consistency with the investment policies ofthese funds.

●Daiwa Securities Phoenix Japan ProgramMay 2012, the Daiwa Securities Group establishedthe Great East Japan Earthquake Relief Assistanceprogram. The program donates a portion ofmanagement fees from the Daiwa Nippon Support
Fund Vol. 3. Phoenix Japan and continues providing
assistance to local NPOs through the Japan Earthquake
Local NPO Support Fund (specified aid), which was set
up by Japan NPO Center, a certified NPO. The programsupports the human resources development of local
NPOs. Their activities include educational assistanceand reconstructing communities in the disasteraffected areas.

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“Special aid”
selectioncommittee

Reconstruction
assistanceNPO

Support for Culture, the Arts, andSports Activities
The Daiwa Securities Group provides support for awide range of cultural and artistic activities, including
art exhibitions, classic concerts, and sports.
For example, we have been the special sponsor of
the Central Contest for Book Review Painting since
FY1994. This contest, targeting elementary, juniorhigh and senior high school students, aims to fosterrich expressive ability among children through painting
pictures, as well as encourage children to read andimprove their reading skills. In FY2017, which marks
the 29th contest, 688,672 applications were submitted
from 6,434 elementary, junior high, and high schools
across Japan, and some of the prize-wining works,
selected through rigorous screening, were put on
display at Daiwa Securities’ branches.
In February 2018, we also supported the Tokyo
Marathon, for which we have been an official partner
since FY2015, to mark, in part, the Group’s selection
as a listed company proactively working to improve
employees’ health in the “Health & Productivity Stock”
program in 2018 for four consecutive years. We also
assist a broad range of sports activities including thoseof the Japanese Para-Sports Association, a public interest
incorporated foundation, and the Japanese ParaSwimming Federation, a general incorporated association.

Donations made to the
Kopernik program
Independent
Assurance
for FY2017

3,353,010¥

Region Indonesia

11 projects(demonstration experiments)(1) Storage method that
improves the quality ofagricultural products(2) Testing of low-costseawater desalination
technology(3) Extraction of honeyusing tubular filters(4) Study on recyclable
sanitary napkins andgirls’ school attendance(5) Testing of effects ofhandmade solar drying
machine(6) Improvement of solarbased cacao processing
method(7) Homemade solar
lantern(8) Solar drying machine(9) Gas detector for
keeping watch on forest
fires(10) Testing of water quality
sensor(11) Plastic waste recycling
systemCorporate Citizenship Initiatives
Kopernik Program (Japanese)

The Daiwa Securities Group believes that participationin volunteer programs and other community actions
by employees helps broaden their perspectives andfamiliarize them with different values. We consider
that this, in turn, has a good influence on both theirwork and their lives. Through our intranet, we provide
information on volunteer opportunities for projects
At a ceremony of the Japanese Para-Swimming Federation

Amount of grants
selected to FY2017 sixthterm program for Daiwa
Securities
Phoenix Japan
Independent
Assurance
Program•Grant recipients

Operation and grant

9 groups

Civil Society Initiative FundJapan NPO Center•Total amount of grants

31.53 million¥●Donation to Gunma Prefecture World
Heritage and Gunma Silk Heritage
Succession Fund
Tomioka Silk Mill and Related Sites in Gunma
Prefecture were added to the UNESCO World
Heritage List in 2014. Daiwa SB Investment launched
Tomioka Silk Mill and the Silk Industry Heritage
Sites Preservation Activity Support Fund (nicknamed
Gunma’s Silk Heritage) to preserve the buildings forsericulture, silk reeling, and textile manufacturingthat remain within the prefecture, as well as folk
performing arts. We donate a portion of management
fees from the fund.
The initiatives jointly undertaken by investors, sales
companies, and Daiwa SB Investments help the project topass on the value of Gunma’s silk culture and silk industry,
which led Japan’s modernization, to future generations.

69

Daiwa Securities Phoenix
Japan Program (Japanese)

The 29th Central Contest for Book Review Painting

Amount of donations
to Gunma Prefecture
World Heritage andGunma Silk Heritage
Succession Fund3.13 million¥(total amount of donations by sales
companies and the trustor company)(July 2017)

Engagement with Society

70

Daiwa Securities Group CSR REPORT 2018

planned by ourselves, other businesses and NPOs/
NGOs as well as events that help educate employees
and raise their awareness. We also strive to create
an environment that makes it easy for employees tovolunteer by setting up a recognition program, theVolunteer Award, among other incentives. In ourwork to encourage as many employees as possible
to participate in volunteer activities, we will seek
ongoing collaborations with external organizations,strengthen internal communications on volunteeringand volunteer opportunities and continue to pursue
increased opportunities for employees to engage.

officers and employees to pay for school lunches indeveloping countries. In FY2016, a donation to the
TFT Program was adopted as one of the gifts for which
points granted to participants in “KA-RADA iki-iki
Project,”* which was designed to improve employees’
health, can be exchanged. In 2017, we expanded theplatform for participating in the TFT activities by taking
measures, such as introducing the TFT menu at thecafeteria in the headquarters building and the staff
cafeteria in Daiwa Research Institute.
* Refer to page 63 of “Relationship with Employees” for “KA-RADA iki-iki Project.”•The Mainichi Shimbun

Central Contest forBook Review Painting
Special sponsor for

24 years
Number of participant
schools

6,434 schools
Total number of entries●Volunteer Activities by Employees●Donation of Christmas Cakes•T he Hands-on Forest Experience 2017—Nature
Experience in Sayama Hills
As part of the Group’s efforts to conserve biodiversity,
the Daiwa Securities Group conducts a volunteer
activity every year with participation of Group
employees. For FY2017, 31 Group employees and theirfamilies participated in an activity in Sayama Hills in
Saitama Prefecture on April 8. It was the third year thatthe activity was held in Sayama Hills. Bamboo forest
maintenance activity was initially scheduled for the day.
Due to rain in the morning, the schedule was changed,
and participants learned about the importance ofsatoyama landscape preservation in a class provided
in collaboration with the Totoro Fund. Participants
then observed nature in satoyama landscapes andlearned about the importance of preserving satoyama
landscapes, feeling spring in the air in Sayama Hills.
• International Cooperation through a Collection Drive
The Daiwa Securities Group has been running a collection
drive as an initiative that is easy for employees to take partin. Pre-loved books and unusable postcards are collected
and donated to three groups: JEN BOOK MAGIC, Japan
Committee “Vaccines for the World’s Children,” and Livewith Friends on the Earth. The proceeds from the sale ofitems collected are used to fund their activities, including
support for education, medical services and agriculturaldevelopment assistance in developing countries. We willcontinue the activity as its accessibility makes it quite
popular among our employees.
•T ABLE FOR TWO (TFT) Program
Since the spring of 2013, the Daiwa Securities
Group has contributed to the TFT Program, which
is organized by TABLE FOR TWO, an internationallydesignated NPO. This is an initiative aimed atcorrecting food imbalances between developing anddeveloped countries by donating a portion of revenue
from the purchase of food and drink by Group

Since 2013, voluntary members of Daiwa Securities
employees have engaged in an activity to present
cakes marketed by a business partner of the company
in a Christmas campaign to children at child support
facilities through Second Harvest Japan, an NPO. In
FY2017, we donated 107 Christmas cakes to a total of
six organizations, including organizations that provide
children with places to spend time with peace of mind,
meals, and study support.

Nature observation in Sayama Hills

Culture, the arts, andsports activities

688,672 entries
Number of exhibitions of
winning works

9 sales branches
Contribution madein FY2017 throughcollection drives(equivalent
Independent
monetary value) Assurance●Initiatives at Sales Branches of Daiwa Securities•JEN BOOK MAGIC

Daiwa Securities’ 152 sales branches nationwide
engage in a variety of activities contributing to local
communities.
In FY2017, we conducted various activities in local
communities. For instance, members from Aomori
Branch participated in Aomori Nebuta Festival, one of
the three major festivals in Tohoku as the haneto (Nebuta
dancers); and members from Miyazaki Branch set up
a stage in Erekocha Miyazaki and added excitement
to the festival through a wide variety of events, suchas dancing and kagura (sacred music and dancing). In
March 2018, seven years after the Great East Japan
Earthquake, volunteers from Morioka Branch participatedin planting cherry trees along the tsunami inundation line
in Rikuzentakata and passing down knowledge of thetsunami inundation point to future generations.

¥●Initiatives Taken by the Group’s Overseas Offices• Activities at the Group’s Hong Kong Operational BaseCorporate Silver Sponsorship to FABBAs—donated
HK$50,000
The FABBAs (otherwise known as the FundManagers’, Asian Bankers’ and Brokers’ Awards)
which is managed by The Asia Brokers Charity Ltd,is an entirely voluntary organization that does great
work for others less fortunate. The FABBAs is an
Donation to FABBAs (Fund Managers’, Asian Bankers’ and Brokers’ Awards)

19,033•Japan Committee “Vaccines

for the World’s Children”

252,420¥•Live with Friends on the

Earth
¥

94,506

TFT Program

Independent
Assurance

Contributions madeJanuary–December, 2017

43,224

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

Engagement with Society

annual event at which members of the region’s
finance industry come together to raise money for
those in need.
• Activities at the Group’s London Operational Base
Daiwa Capital Markets Europe will continue engaging
in various CSR activities in FY2018.
1. Donation to two charity organizations: The Lily
Foundation and The Rainbow Trust
2. Holding a fund-raising event through The Daiwa
Society
3. Holding Green Road Show(seminar on food issues, such as food mileage andfood loss)
In addition, we work on recycling paper and plastic
waste from offices and energy saving. Moreover, some
employees actively participate in charity run. Daiwa
Capital Markets Europe will continue conducting
various CSR activities in FY2017. Daiwa CapitalMarkets Europe will continue engaging in various CSR
activities in FY2018•A ctivities at the Group’s New York OperationalBase
Daiwa Capital Markets America hosts a “Charity
Friday” once a month in which employees are allowed

CSR activities conducted by Daiwa Capital Markets Europe

Recycling activities at Daiwa Capital Markets Europe

Daiwa Securities Group CSR REPORT 2018

to wear jeans for their $5 donation to a selectedcharity. DCMA matches double the collection amounteach Charity Friday, increasing the impact of ourdonation and furthering our commitment to thevarious causes we support.
In 2017, as part of DCMA’s response to thehumanitarian tragedy caused by the recent
catastrophic Hurricanes, a “Special Charity Friday” washeld in September to support the relief and recovery
efforts to “One America Appeal.” With the Daiwa
firm contribution, our total donation was $10,155.
The response to the tragedy caused by Hurricanes
Harvey, Irma and Maria proves our commitment tohelping in the wake of disaster. The money raised willassist in bringing the affected areas one step closer torebuilding their homes and businesses.
“One America Appeal” is a joint appeal by all
five living former American Presidents to encourage
their fellow citizens to support recovery efforts from
Hurricane Harvey—which inundated the Texas Gulf
Coast with unprecedented flooding. This special
appeal has been expanded to include those affectedlast weekend by Hurricane Irma in Florida.
DCMA will continue to support both local andwidely known charities that benefit research andsupport education, finding cures for disease, assisting
after disasters, and other important causes.
•A ctivities at the Group’s South Korea Operational Base
Daiwa Securities Capital Markets Korea participatedin the “Love Bread Fair” event held by the Korean
National Red Cross. In this event, participants makeand provide bread filled with cheese and muffins
under the supervision of bakers, as part of efforts to
support children without adequate food, who havebeen receiving media attention in recent years. By
providing not only nutrients but also the pleasure andjoy of eating to children who are cut off from society,the event made us re-acknowledge the importanceof sharing and provided a good opportunity for
us to contribute to the local community. Since
the inauguration of the current administration in
FY2017, the Korean government has been driving
forward with efforts for volunteer activities for thesocially vulnerable and the achievement of worklife balance. Given that companies are conducting
corporate activities in line with the government’s
policy, Daiwa Securities Capital Markets Korea has
set out the following goals: (1) Encouraging proactive
participation in social service activities (consideration“Love Bread Fair” (Daiwa Securities Capital Markets Korea)

71

Engagement with Society

and introduction of social contribution activity
programs and provision of compensatory leave toemployees who participated in weekend volunteering
activities), (2) Creating comfortable work environments
for women (improvement of welfare programs ateach stage of pregnancy, childbirth, and child rearing:allowing adjustment of working hours and providing
time to visit doctor for pregnant employees, setting
up a nursing room and providing to time for nursing
at the discretion of the head of department), and (3)Encouraging employees to leave office on time andtake their annual paid leave (employees are required
to submit their annual paid leave plan through theend of period) and enhancing the welfare benefit
system (supporting employees’ self-development
expenses and expenses for promoting and maintaining
health). The company will continue with these CSR
activities and proactively respond to the corporate
image expected by the Korean society in an effort tocontribute more extensively to Korean society.

Daiwa Securities Group CSR REPORT 201872

Daiwa Securities Foundation supported volunteering
activities of Council of Social Welfare in Asakura
City, Higashimine Village, and Hita City, which wereaffected by the torrential rain disaster.

●Initiatives to Promote Volunteer Activities•V olunteer Award
Daiwa Securities has the President’s Awards program
to recognize outstanding achievements by employees.
As part of the program we introduced the Volunteer
Award in FY2007, which is given twice a year toemployees and groups involved in volunteer initiatives
and activities that provide ongoing support tocommunities.
• Dissemination of Information through theInternal Network
The Daiwa Securities Group provides a wide range
of information on volunteer programs within theGroup through our intranet, believing that volunteer
activities help broaden the perspectives of employees
and provide benefits by making them aware of various
social issues. We introduce the best practices fromsuch volunteer work through our in-house magazine
and other means in an effort to expand the range ofvolunteer activities.

●Donation of Shareholder Reward Items
Daiwa Securities Group Inc. implements a shareholder
reward program. Together with the operation of thisprogram, we donate items returned to us due to therelocation of shareholders and so on, as well as items
received for our shareholdings in other companies,
to organizations such as designated NPOs and public
interest incorporated foundations.

●Disaster Assistance•D onation for the torrential rain disaster inNorthern Kyushu in FY2017
Daiwa Securities Group Inc. made a donation throughthe Central Community Chest of Japan, a social
welfare corporation, to support the victims of thetorrential rain disaster centering on Northern Kyushu
in July 2017 and to assist reconstruction work in thedisaster-affected areas.

Contribution to areas
damaged by the
FY2017 torrential raindisaster inIndependent
Northern Kyushu Assurance

10 million¥

Third-Party Evaluations

Daiwa Securities Group CSR REPORT 2018

Third-Party Evaluations

Name

Evaluation

Dow Jones Sustainability Indices
The Dow Jones Sustainability Indices (DJSI) are stock indices of companies with sustainable practices selected by
Dow Jones & Company, Inc. of the United States and RobecoSAM AG of Switzerland. Daiwa Securities Group
Inc. is a constituent of DJSI World. Since DJSI World was launched in 1999, it has continually been included in
DJSI.

FTSE Indices
FTSE is a subsidiary of the London Stock Exchange. It develops global indexes and provides data for investment.
Daiwa Securities Group Inc. has been included in the FTSE4Good, an index of socially responsible companies
compiled by FTSE, for 13 consecutive periods since September 2006.
In July 2018, Daiwa Securities Group Inc. was included in the FTSE Blossom Japan Index. This index is used as an
ESG passive management benchmark by the Government Pension Investment Fund.

MSCI Indices
MSCI measures and publishes various indices.
In July 2018, Daiwa Securities Group Inc. was selected a constituent of the MSCI Japan Empowering Women
Index. In the same month, Daiwa Office Investment Corporation was included in the MSCI Japan ESG SelectLeaders Index.
These indices are used as ESG passive management benchmarks by the Government Pension Investment Fund.

Nadeshiko Brand
Daiwa Securities Group Inc. has been selected a “Nadeshiko Brand” for four consecutive years since FY2014.
This title is awarded by the Ministry of Economy, Trade and Industry and the Tokyo Stock Exchange to listedcompanies for having excellent track records in empowering women at their companies.
Daiwa Securities received the award in recognition of its achievement in women’s active participation in theworkplace across the company through the promotion of diversity management under strong leadership byholding Work-Life Balance Committee Meetings on a quarterly basis, and efforts to improve productivity byencouraging employees to leave the workplace before 7 p.m.

Health & Productivity Stock
Selection
Daiwa Securities Group Inc. has been selected as a “Health & Productivity Stock Selection” for four consecutive
years since FY2014. This title is awarded jointly by Japan’s Ministry of Economy, Trade and Industry and theTokyo Stock Exchange to companies promoting the health of their employees.

Competitive IT Strategy Companies

In May 2018, the Daiwa Securities Group was selected as a “Competitive IT Strategy Company for 2018.”
The title is awarded jointly by the Ministry of Economy, Trade and Industry and the Tokyo Stock Exchange
to companies for engaging in strategic and proactive IT investment that enhances corporate value andcompetitiveness from the perspective of medium- to long-term corporate management. The Group proactively
works on initiatives to utilize new digital technologies, such as the construction of an API platform to implement
an alliance with external companies and services and collaboration within the Group in a flexible and timely
manner, and the implementation of an artificial intelligence (AI)-based real-time stock trading volume prediction
model in algorithmic trading services. The award was given in light of high evaluation of the potential for thegrowth and expansion of such initiatives.

73

Third-Party Evaluations

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

Daiwa Securities Group CSR REPORT 2018

Evaluation

The certified family-friendly employer logo (nicknamed “Kurumin”) shown is the certification symbol forfamily-friendly employers provided by Japan’s Ministry of Health, Labour and Welfare based on the Act on
Advancement of Measures to Support Raising the Next Generation of Children. In addition to Daiwa Securities
Group Inc. obtaining certification as a family-friendly employer on June 9, 2008, Daiwa Securities, Daiwa
Institute of Research Holdings, Daiwa Institute of Research, Daiwa Institute of Research Business Innovation, andDaiwa Securities Business Center have also been certified.
Moreover, as of March 11, 2016, Daiwa Securities and Daiwa Securities Business Center were certified as
especially excellent companies among the certified family-friendly employers that have implemented higher
levels of initiatives.

“Tomonin”—Logo for Promoting
Work Environments
for Balancing Work
with Long-Term Care

“Recognition of companies withoutstanding initiatives to help
employees with cancer maintain goodbalance between treatment and work”
and “Excellence Award” given by Tokyo
Metropolitan Government

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

Tokyo Metropolitan Government recognizes companies with outstanding initiatives to help employees withcancer to maintain good balance between treatment and work as an effort to support balancing between
cancer treatment and work. We received the Excellence Award in recognition of our initiatives for helping
employees to balance work and cancer treatment. (14 award-winning companies)

GRESB 2017 “Green Star”

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

ISO Certification● ISO 14001
Daiwa Institute of Research Business Innovation Ltd. has received ISO 14001 certification, which is aninternational standard for environmental management systems. Through its business activities, Daiwa Institute of
Research Business Innovation has endeavored to realize a harmonious relationship with the global environment,
and actively works to reduce environmental load.
● ISO 27001
Daiwa Institute of Research Ltd. and Daiwa Institute of Research Business Innovation Ltd. have received ISO
27001 certification, which is an international standard for information security management systems. In order tomaintain and manage the confidentiality, integrity, and availability of their information assets, both companies
continue to improve their information security.
● ISO 20000
Daiwa Institute of Research Ltd. and Daiwa Institute of Research Business Innovation Ltd. have received ISO
20000 certification, which is an international standard for IT service management systems. In order to provide
their customers with a high-quality IT service, both companies are engaged in organizational enhancements
to the quality of their IT services including cost management, business process optimization, and continuous
improvements.

74

GRI Content Index (GRI Standards)

Daiwa Securities Group CSR REPORT 201875

GRI Content Index (GRI Standards)
In compiling the Daiwa Securities Group CSR Report 2018, reference was made to the GRI Standards 2016 of the Global Reporting Initiative (GRI).
General Disclosures
ClausesOrganizational
profileDisclosures

Links

102-1

a. Name of the organization

Overview of Company and Businesses

102-2

a. A description of the organization’s activitiesb. P rimary brands, products, and services, including an explanation of any products or services that arebanned in certain markets

Overview of Company and Businesses/The
Daiwa Securities Group’s Businesses and Rolein Society/Initiatives through Business Activities(Provision of Quality Service to Customers)

102-3

a. Location of the organization’s headquarters

Overview of Company and Businesses

102-4

a. N
 umber of countries where the organization operates, and the names of countries where it has
significant operations and/or that are relevant to the topics covered in the report

Overview of Company and Businesses/
Integrated Report 2018

102-5

a. Nature of ownership and legal form

Overview of Company and Businesses

102-6

a. Markets served, including:i. Geographic locations where products and services are offeredii. Sectors servediii. Types of customers and beneficiaries

Overview of Company and Businesses/
Integrated Report 2018

102-7

a. Scale of the organization, including:i. Total number of employees
ii. Total number of operations
iii. Net sales (for private sector organizations) or net revenues (for public sector organizations)
iv. Total capitalization (for private sector organizations) broken down in terms of debt and equity
v. Quantity of products and services provided

Overview of Company and Businesses

102-8

a. Total number of employees by employment contract (permanent and temporary), by genderb. Total number of employees by employment contract (permanent and temporary), by regionc. Total number of employees by employment type (full-time and part-time), by genderd. W
 hether a significant portion of the organization’s activities are performed by workers who are not
employees. If applicable, a description of the nature and scale of work performed by workers who
are not employees.
e. A ny significant variations in the numbers reported in Disclosures 102-8-a, 102-8-b, and 102-8-c(such as seasonal variations in the tourism or agricultural industries)
f. An explanation of how the data have been compiled, including any assumptions madeCSR Related Data

102-9

a. A
 description of the organization’s supply chain, including its main elements as they relate to theorganization’s activities, primary brands, products, and services

The Daiwa Securities Group’s Businesses
and Role in Society/Communication with
Stakeholders and Improvement of Corporate
Value/Risk Management102-10a. Significant changes to the organization’s size, structure, ownership, or supply chain, including:i. Changes in the location of, or changes in, operations, including facility openings, closings, andexpansions
ii. Changes in the share capital structure and other capital formation, maintenance, and alteration
operations (for private sector organizations)iii. Changes in the location of suppliers, the structure of the supply chain, or relationships with
suppliers, including selection and termination

Not applicable102-11a. Whether and how the organization applies the Precautionary Principle or approach

Compliance/Risk Management/IT Strategy andthe Management of Systemic Risk

102-12a. L ist of externally-developed economic, environmental and social charters, principles, or otherinitiatives to which the organization subscribes, or which it endorses

CSR of the Daiwa Securities Group/ Initiatives
through Business Activities (Role and Social
Responsibilities of the Financial Services)102-13a. A
 list of the main memberships of industry or other associations, and national or international
advocacy organizations

Principal Member Qualification• Nippon Keidanren• Japan Securities Dealers Association• Principles for Financial Action for the 21stCentury • PRI • CDP• Global Compact Network Japan• UNEP-FI, etc.

102-14a. A
 statement from the most senior decision-maker of the organization (such as CEO, chair, or
equivalent senior position) about the relevance of sustainability to the organization and its strategy
for addressing sustainability

CSR of the Daiwa Securities Group/Integrated
Report 2018

102-15a. A description of key impacts, risks, and opportunities

CSR of the Daiwa Securities Group/ Initiatives
through Business Activities /Integrated Report
2018

Ethics andintegrity

102-16

a. A description of the organization’s values, principles, standards, and norms of behavior

CSR of the Daiwa Securities Group

102-17a. A description of internal and external mechanisms for:i. Seeking advice about ethical and lawful behavior, and organizational integrity
ii. Reporting concerns about unethical or unlawful behavior, and organizational integrity

Corporate Governance

Governance102-18a. G
 overnance structure of the organization, including committees of the highest governance bodyb. Committees responsible for decision-making on economic, environmental, and social topics

Corporate Governance102-19a. P rocess for delegating authority for economic, environmental, and social topics from the highest
governance body to senior executives and other employees

CSR of the Daiwa Securities Group102-20a. W
 hether the organization has appointed an executive-level position or positions with responsibility
for economic, environmental, and social topic
b. Whether post holders report directly to the highest governance body

CSR of the Daiwa Securities Group

Strategy

GRI Content Index (GRI Standards)

Governance

Daiwa Securities Group CSR REPORT 201876

102-21a. P rocesses for consultation between stakeholders and the highest governance body on economic,
environmental, and social topics
b. If consultation is delegated, describe to whom it is delegated and how the resulting feedback isprovided to the highest governance body

CSR of the Daiwa Securities Group /Corporate
Governance/Relationship with Employees(Communication)

102-22a. Composition of the highest governance body and its committees by:
i. Executive or non-executive
ii. Independenceiii. Tenure on the governance bodyiv. Number of each individual’s other significant positions and commitments, and the nature of thecommitments
v. Gender
vi. Membership of under-represented social groupsvii. Competencies relating to economic, environmental, and social topics
viii. Stakeholder representation

Corporate Governance/Integrated Report2018102-23a. Whether the chair of the highest governance body is also an executive officer in the organizationb. If the chair is also an executive officer, describe his or her function within the organization’s
management and the reasons for this arrangement

Corporate Governance/Integrated Report2018102-24a. Nomination and selection processes for the highest governance body and its committees
b. C riteria used for nominating and selecting highest governance body members, including whether
and howi. Stakeholders (including shareholders) are involved
ii. Diversity is considerediii. Independence is considerediv. Expertise and experience relating to economic, environmental, and social topics are considered

Corporate Governance/Integrated Report
2018/Corporate Governance Report102-25a. Processes for the highest governance body to ensure conflicts of interest are avoided and managedb. Whether conflicts of interest are disclosed to stakeholders, including, as a minimum:
i. Cross-board membership
ii. Cross-shareholding with suppliers and other stakeholdersiii. Existence of controlling shareholder
iv. Related party disclosures

Corporate Governance/Integrated Report
2018/Corporate Governance Report102-26a. H
 ighest governance body’s and senior executives’ roles in the development, approval, and updatingof the organization’s purpose, value or mission statements, strategies, policies, and goals related toeconomic, environmental, and social topics

CSR of the Daiwa Securities Group102-27a. M
 easures taken to develop and enhance the highest governance body’s collective knowledge of
economic, environmental, and social topics

Not reported

102-28a. P rocesses for evaluating the highest governance body’s performance with respect to governance ofeconomic, environmental, and social topics
b. W
 hether such evaluation is independent or not, and its frequencyc. W
 hether such evaluation is a self-assessmentd. A ctions taken in response to evaluation of the highest governance body’s performance with respect
to governance of economic, environmental, and social topics, including, as a minimum, changes inmembership and organizational practiceNot reported

102-29a. H
 ighest governance body’s role in identifying and managing economic, environmental, and social
topics and their impacts, risks, and opportunities—including its role in the implementation of due
diligence processesb. W
 hether stakeholder consultation is used to support the highest governance body’s identificationand management of economic, environmental, and social topics, and their impacts, risks, andopportunities

CSR of the Daiwa Securities Group

102-30a. H
 ighest governance body’s role in reviewing the effectiveness of the organization’s risk
management processes for economic, environmental, and social topics

CSR of the Daiwa Securities Group

102-31a. F requency of the highest governance body’s review of economic, environmental, and social topics
and their impacts, risks, and opportunities

CSR of the Daiwa Securities Group

102-32a. T he highest committee or position that formally reviews and approves the organization’ssustainability report and ensures that all material topics are covered

CSR of the Daiwa Securities Group

102-33a. Process for communicating critical concerns to the highest governance body

CSR of the Daiwa Securities Group /Corporate
Governance102-34a. Total number and nature of critical concerns that were communicated to the highest governance bodyb. Mechanism(s) used to address and resolve critical concerns

Corporate Governance102-35a. R
 emuneration policies for the highest governance body and senior executives for the following
types of remuneration:i. Fixed pay and variable pay, including performance-based pay, equity-based pay, bonuses, anddeferred or vested shares
ii. Sign-on bonuses or recruitment incentive payments
iii. Termination payments
iv. Clawbacks
v. Retirement benefits, including the difference between benefit schemes and contribution rates forthe highest governance body, senior executives, and all other employeesb. H ow performance criteria in the remuneration policy relate to the highest governance body’s andsenior executives’ objectives for economic, environmental, and social topics

Corporate Governance/CSR Related Data

102-36

a. Process for determining remunerationb. W hether remuneration consultants are involved in determining remuneration and whether they are
independent of managementc. Any other relationships which the remuneration consultants have with the organization

Corporate Governance/Corporate Governance
Report102-37a. How stakeholders’ views are sought and taken into account regarding remuneration
b. If applicable, the results of votes on remuneration policies and proposals

Corporate Governance102-38a. R
 atio of the annual total compensation for the organization’s highest-paid individual in eachcountry of significant operations to the median annual total compensation for all employees(excluding the highest-paid individual) in the same country

Not reported

102-39a. R
 atio of percentage increase in annual total compensation for the organization’s highest-paid
individual in each 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

GRI Content Index (GRI Standards)

Stakeholder
engagement

Reportingpractice

Management
approachDaiwa Securities Group CSR REPORT 2018

102-40a. A list of stakeholder groups engaged by the organization

CSR of the Daiwa Securities Group

102-41a. Percentage of total employees covered by collective bargaining agreements

Relationship with Employees(Communication)/CSR Related Data

102-42a. The basis for identifying and selecting stakeholders with whom to engage

CSR of the Daiwa Securities Group

102-43a. T he organization’s approach to stakeholder engagement, including frequency of engagementby type and by stakeholder group, and an indication of whether any of the engagement wasundertaken specifically as part of the report preparation process

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

102-44a. Key topics and concerns that have been raised through stakeholder engagement, including:i. How the organization has responded to those key topics and concerns, including through its
reportingii. The stakeholder groups that raised each of the key topics and concerns

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

102-45a. A
 list of all entities included in the organization’s consolidated financial statements or equivalent
documentsb. W
 hether any entity included in the organization’s consolidated financial statements or equivalent
documents is not covered by the report

Overview of Company and Businesses

102-46a. An explanation of the process for defining the report content and the topic Boundaries
b. A
 n explanation of how the organization has implemented the Reporting Principles for defining
report content

Editorial Policy (Reporting Boundary)/CSR of
the Daiwa Securities Group

102-47a. A
 list of the material topics identified in the process for defining report content

CSR of the Daiwa Securities Group

102-48a. T he effect of any restatements of information given in previous reports, and the reasons for such
restatements

Not applicable

102-49a. S ignificant changes from previous reporting periods in the list of material topics and topic
Boundaries

Not applicable, because there have been no
significant changes since the previous report102-50a. Reporting period for the information provided

Editorial Policy

102-51a. If applicable, the date of the most recent previous report

Editorial Policy

102-52

a. Reporting cycle

Editorial Policy

102-53a. The contact point for questions regarding the report or its contents

Editorial Policy

102-54a. T he claim made by the organization, if it has prepared a report in accordance with the GRI
Standards, either:i. “This report has been prepared in accordance with the GRI Standards: Core option”
ii. “This report has been prepared in accordance with the GRI Standards: Comprehensive option”

Editorial Policy

102-55a. T he GRI content index, which specifies each of the GRI Standards used and lists all disclosures
included in the reportb. F or each disclosure, the content index shall include:
i. The number of the disclosure (for disclosures covered by the GRI Standards)
ii. The page number(s) or URL(s) where the information can be found, either within the report or inother published materials
iii. If applicable, and where permitted, the reason(s) for omission when a required disclosure cannot
be madeThis table references GRI content

102-56a. A
 description of the organization’s policy and current practice with regard to seeking external
assurance for the reportb. If the report has been externally assured:i. A reference to the external assurance report, statements, or opinions. If not included in theassurance report accompanying the sustainability report, a description of what has and what
has not been assured and on what basis, including the assurance standards used, the level ofassurance obtained, and any limitations of the assurance process
ii. The relationship between the organization and the assurance provider
iii. Whether and how the highest governance body or senior executives are involved in seeking
external assurance for the organization’s sustainability report

Independent Assurance Report andIndependent Assurance Mark

103-1

a. An explanation of why the topic is materialb. The Boundary for the material topic, which includes a description of:i. Where the impacts occur
ii. The organization’s involvement with the impacts. For example, whether the organization has
caused or contributed to the impacts, or is directly linked to the impacts through its business
relationshipsc. Any specific limitation regarding the topic Boundary

CSR of the Daiwa Securities Group

103-2

a. An explanation of how the organization manages the topic
b. A statement of the purpose of the management approachc. A description of the following, if the management approach includes that component:i. Policies
ii. Commitments
iii. Goals and targets
iv. Responsibilities
v. Resources
vi. Grievance mechanismsvii. Specific actions, such as processes, projects, programs and initiatives

CSR of the Daiwa Securities Group

103-3

a. An explanation of how the organization evaluates the management approach, including:i. The mechanisms for evaluating the effectiveness of the management approachii. The results of the evaluation of the management approachiii. Any related adjustments to the management approach

CSR of the Daiwa Securities Group77

GRI Content Index (GRI Standards)

Daiwa Securities Group CSR REPORT 201878

Economic
Economic
performance

201-1

a. D
 irect economic value generated and distributed (EVG&D) on an accruals basis, including the basic
components for the organization’s global operations as listed below. If data are presented on a
cash basis, report the justification for this decision in addition to reporting the following basic
components:
i. Direct economic value generated: revenues
ii. Economic value distributed: operating costs, employee wages and benefits, payments to providersof capital, payments to government by country, and community investments
iii. Economic value retained: “direct economic value generated” less “economic value distributed”
b. W here significant, report EVG&D separately at country, regional, or market levels, and the criteria
used for defining significanceCSR Related Data/ Disclosure Report 2018
(Consolidated Statements of Income/Consolidated Statements of Changes in Net
Assets)/Integrated Report 2018

201-2

a. R
 isks and opportunities posed by climate change that have the potential to generate substantive
changes in operations, revenue, or expenditure, including:i. A description of the risk or opportunity and its classification as either physical, regulatory, or otherii. A description of the impact associated with the risk or opportunityiii. The financial implications of the risk or opportunity assumed before action is taken
iv. The methods used to manage the risk or opportunity
v. The costs of actions taken to manage the risk or opportunity

Risk Management/Environmental Initiatives

201-3

a. If the plan’s liabilities are met by the organization’s general resources, the estimated value of thoseliabilities
b. If a separate fund exists to pay the plan’s pension liabilities: items
i. The extent to which the scheme’s liabilities are estimated to be covered by the assets that havebeen set aside to meet themii. The basis on which that estimate has been arrived atiii. When that estimate was madec. If a fund set up to pay the plan’s pension liabilities is not fully covered, explain the strategy, if any,
adopted by the employer to work towards full coverage, and the timescale, if any, by which theemployer hopes to achieve full coveraged. Percentage of salary contributed by employee or employer
e. L evel of participation in retirement plans, such as participation in mandatory or voluntary schemes,
regional, or country-based schemes, or those with financial impact

Disclosure Report 2018 (AccountingStandards for Significant Allowances)

201-4

a. T otal monetary value of financial assistance received by the organization from any government
during the reporting period, including:i. Tax relief and tax credits
ii. Subsidies
iii. Investment grants, research and development grants, and other relevant types of grantiv. Awards
v. Royalty holidays
vi. Financial assistance from Export Credit Agencies (ECAs)vii. Financial incentives
viii. Other financial benefits received or receivable from any government for any operationb. The information in 201-4-a by countryc. Whether, and the extent to which, any government is present in the shareholding structure

Impact is insignificant

202-1

a. W
 hen a significant proportion of employees are compensated based on wages subject to minimum
wage rules, report the relevant ratio of the entry level wage by gender at significant locations ofoperations to the minimum wageb. W
 hen a significant proportion of other workers (excluding employees) performing theorganization’s activities are compensated based on wages subject to minimum wage rules, describe
the actions taken to determine whether these workers are paid above the minimum wagec. W
 hether a local minimum wage is absent or variable at significant locations of operation, bygender. In circumstances in which different minimums can be used as a reference, report which
minimum wage is being used.
d. The definition used for “significant locations of operation”

Impact is insignificant, due to the nature ofour business

202-2

a. P ercentage of senior management at significant locations of operation that are hired from the local
communityb. The definition used for “senior management”
c. The organization’s geographical definition of “local”
d. The definition used for “significant locations of operation”

Not reported

203-1

a. Extent of development of significant infrastructure investments and services supportedb. C
 urrent or expected impacts on communities and local economies, including positive and negative
impacts where relevantc. Report whether these investments and services are commercial, in-kind, or pro bono engagements

Initiatives through Business Activities (Support
for the Creation of Our Future Society)/
Engagement with Society (Assistance toCommunities Inside and Outside of Japanthrough Foundations and NPOs)

203-2

a. E xamples of significant identified indirect economic impacts of the organization, including positive
and negative impactsb. S ignificance of the indirect economic impacts in the context of external benchmarks andstakeholder priorities, such as national and international standards, protocols, and policy agendas

Not applicable

Procurement
practices

204-1

a. Percentage of the procurement budget used for significant locations of operation spent on suppliers
local to that operation (such as percentage of products and services purchased locally)b. T he organization’s geographical definition of “local”
c. T he definition used for “significant locations of operation”

Impact is insignificant, due to the nature ofour businessAnti-corruption

205-1

a. Total number and percentage of operations assessed for risks related to corruption
b. Significant risks related to corruption identified through the risk assessment

Compliance/Risk Management

205-2

a. T otal number and percentage of governance body members that the organization’s anti-corruption
policies and procedures have been communicated to, broken down by regionb. T otal number and percentage of employees that the organization’s anti-corruption policies andprocedures have been communicated to, broken down by employee category and regionc. T otal number and percentage of business partners that the organization’s anti-corruption policies
and procedures have been communicated to, broken down by type of business partner and region.
Describe if the organization’s anti-corruption policies and procedures have been communicated toany other persons or organizations.
d. T otal number and percentage of governance body members that have received training on anticorruption, broken down by region
e. T otal number and percentage of employees that have received training on anti-corruption, broken
down by employee category and region

Compliance

205-3

a. Total number and nature of confirmed incidents of corruption
b. T otal number of confirmed incidents in which employees were dismissed or disciplined forcorruptionc. T otal number of confirmed incidents when contracts with business partners were terminated or not
renewed due to violations related to corruptiond. P ublic legal cases regarding corruption brought against the organization or its employees during
the reporting period and the outcomes of such cases

Not applicable

206-1

a. N
 umber of legal actions pending or completed during the reporting period regarding anticompetitive behavior and violations of anti-trust and monopoly legislation in which the organization
has been identified as a participant
b. Main outcomes of completed legal actions, including any decisions or judgments

Not applicableMarketpresence

Indirect
economic
impacts

Anticompetitive
behavior

GRI Content Index (GRI Standards)

Daiwa Securities Group CSR REPORT 2018

Environmental
Materials

Energy

Water

301-1

a. T otal weight or volume of materials used to produce and package the organization’s primary
products and services during the reporting period, by:i. Non-renewable materials used
ii. Renewable materials used

Not applicable301-2

a. P ercentage of recycled input materials used to manufacture the organization’s primary products
and services

Not applicable

301-3

a. Percentage of reclaimed products and their packaging materials for each product categoryb. How the data for this disclosure have been collected

Not applicable302-1

a. T otal fuel consumption within the organization from non-renewable sources, in joules or multiples,and including fuel types usedb. T otal fuel consumption within the organization from renewable sources, in joules or multiples, andincluding fuel types used
c. In joules, watt-hours or multiples, the total:
i. Electricity consumption
ii. Heating consumptioniii. Cooling consumption
iv. Steam consumption
d. In joules, watt-hours or multiples, the total:
i. Electricity soldii. Heating soldiii. Cooling soldiv. Steam solde. Total energy consumption within the organization, in joules or multiples
f. Standards, methodologies, assumptions, and/or calculation tools used
g. Source of the conversion factors used

CSR Related Data

302-2

a. Energy consumption outside of the organization, in joules or multiples
b. Standards, methodologies, assumptions, and/or calculation tools usedc. Source of the conversion factors used

CSR Related Data

302-3

a. Energy intensity ratio for the organizationb. Organization-specific metric (the denominator) chosen to calculate the ratioc. T ypes of energy included in the intensity ratio; whether fuel, electricity, heating, cooling, steam, or
alld. Whether the ratio uses energy consumption within the organization, outside of it, or both

CSR Related Data

302-4

a. A
 mount of reductions in energy consumption achieved as a direct result of conservation andefficiency initiatives, in joules or multiples
b. Types of energy included in the reductions; whether fuel, electricity, heating, cooling, steam, or allc. B asis for calculating reductions in energy consumption, such as base year or baseline, including therationale for choosing it
d. Standards, methodologies, assumptions, and/or calculation tools used

CSR Related Data

302-5

a. R
 eductions in energy requirements of sold products and services achieved during the reporting
period, in joules or multiples
b. B
 asis for calculating reductions in energy consumption, such as base year or baseline, including therationale for choosing it
c. Standards, methodologies, assumptions, and/or calculation tools used

CSR Related Data

303-1

a. Total volume of water withdrawn, with a breakdown by the following sources:
i. Surface water, including water from wetlands, rivers, lakes, and oceans
ii. Ground wateriii. Rainwater collected directly and stored by the organization
iv. Waste water from another organizationv. Municipal water supplies or other public or private water utilities
b. Standards, methodologies, and assumptions used

CSR Related Data

303-2

a. Total number of water sources significantly affected by withdrawal by type:i. Size of the water source
ii. Whether the source is designated as a nationally or internationally protected areaiii. Biodiversity value (such as species diversity and endemism, and total number of protected species)
iv. Value or importance of the water source to local communities and indigenous peoples
b. Standards, methodologies, and assumptions used

Impact is insignificant

303-3

a. Total volume of water recycled and reused by the organizationb. T otal volume of water recycled and reused as a percentage of the total water withdrawn as
specified in Disclosure 303-1
c. Standards, methodologies, and assumptions used

Not reported

79

GRI Content Index (GRI Standards)

Biodiversity

Emissions

Daiwa Securities Group CSR REPORT 2018

304-1

a. F or each operational site owned, leased, managed in, or adjacent to, protected areas and areas ofhigh biodiversity value outside protected areas, the following information:i. Geographical locationii. Subsurface and underground land that may be owned, leased, or managed by the organizationiii. Position in relation to the protected area (in the area, adjacent to, or containing portions of theprotected area) or the high biodiversity value area outside protected areas
iv. Type of operation (office, manufacturing or production, or extractive)v. Size of operation site in km2 (or another unit, if appropriate)vi. Biodiversity value characterized by the attribute of the protected area or area of high biodiversity
value outside the protected area (terrestrial, freshwater, or maritime ecosystem)vii. Biodiversity value characterized by listing of protected status (such as IUCN Protected Area
Management Categories, Ramsar Convention, national legislation)

Not applicable

304-2

a. N
 ature of significant direct and indirect impacts on biodiversity with reference to one or more of
the following:i. Construction or use of manufacturing plants, mines, and transport infrastructure
ii. Pollution (introduction of substances that do not naturally occur in the habitat from point andnon-point sources)iii. Introduction of invasive species, pests, and pathogens
iv. Reduction of species
v. Habitat conversion
vi. Changes in ecological processes outside the natural range of variation (such as salinity or changes
in groundwater level)b. S ignificant direct and indirect positive and negative impacts with reference to the following:i. Species affected
ii. Extent of areas impacted
iii. Duration of impacts
iv. Reversibility or irreversibility of the impacts

Not applicable304-3

a. S ize and location of all habitat areas protected or restored, and whether the success of therestoration measure was or is approved by independent external professionalsb. W
 hether partnerships exist with third parties to protect or restore habitat areas distinct from where
the organization has overseen and implemented restoration or protection measuresc. Status of each area based on its condition at the close of the reporting period
d. Standards, methodologies, and assumptions used

Not applicable304-4

a. T otal number of IUCN Red List species and national conservation list species with habitats in areas
affected by the operations of the organization, by level of extinction risk:
i. Critically endangered
ii. Endangerediii. Vulnerable
iv. Near threatenedv. Least concern

Not applicable

305-1

a. Gross direct (Scope 1) GHG emissions in metric tons of CO2 equivalentb. Gases included in the calculation; whether CO2, CH4, N2O, HFCs, PFCs, SF6, NF3, or allc. Biogenic CO2 emissions in metric tons of CO2 equivalentd. Base year for the calculation, if applicable, including:i. The rationale for choosing it
ii. Emissions in the base yeariii. The context for any significant changes in emissions that triggered recalculations of base year
emissionse. S ource of the emission factors and the global warming potential (GWP) rates used, or a reference
to the GWP source
f. Consolidation approach for emissions; whether equity share, financial control, or operational control
g. Standards, methodologies, assumptions, and/or calculation tools used

CSR Related Data

305-2

a. G
 ross location-based energy indirect (Scope 2) GHG emissions in metric tons of CO2 equivalentb. If applicable, gross market-based energy indirect (Scope 2) GHG emissions in metric tons of CO2
equivalentc. If available, the gases included in the calculation; whether CO2, CH4, N2O, HFCs, PFCs, SF6, NF3, or all
d. Base year for the calculation, if applicable, including:i. The rationale for choosing it
ii. Emissions in the base yeariii. The context for any significant changes in emissions that triggered recalculations of base year
emissionse. S ource of the emission factors and the global warming potential (GWP) rates used, or a reference
to the GWP source
f. Consolidation approach for emissions; whether equity share, financial control, or operational control
g. Standards, methodologies, assumptions, and/or calculation tools used

CSR Related Data

305-3

a. Gross other indirect (Scope 3) GHG emissions in metric tons of CO2 equivalentb. If available, the gases included in the calculation; whether CO2, CH4, N2O, HFCs, PFCs, SF6, NF3, or allc. Biogenic CO2 emissions in metric tons of CO2 equivalentd. Other indirect (Scope 3) GHG emissions categories and activities included in the calculatione. Base year for the calculation, if applicable, including:i. The rationale for choosing it
ii. Emissions in the base yeariii. The context for any significant changes in emissions that triggered recalculations of base year
emissionsf. S ource of the emission factors and the global warming potential (GWP) rates used, or a reference to
the GWP source
g. Standards, methodologies, assumptions, and/or calculation tools used

CSR Related Data

305-4

a. GHG emissions intensity ratio for the organizationb. Organization-specific metric (the denominator) chosen to calculate the ratioc. T ypes of GHG emissions included in the intensity ratio, whether direct (Scope 1), energy indirect(Scope 2), and/or other indirect (Scope 3)
d. Gases included in the calculation; whether CO2, CH4, N2O, HFCs, PFCs, SF6, NF3, or all

CSR Related Data

305-5

a. GHG emissions reduced as a direct result of reduction initiatives, in metric tons of CO2 equivalentb. Gases included in the calculation; whether CO2, CH4, N2O, HFCs, PFCs, SF6, NF3, or allc. Base year or baseline, including the rationale for choosing itd. Scopes in which reductions took place; whether direct (Scope 1), energy indirect (Scope 2), and/or
other indirect (Scope 3)
e. Standards, methodologies, assumptions, and/or calculation tools used

CSR Related Data

80

GRI Content Index (GRI Standards)

Emissions

Daiwa Securities Group CSR REPORT 2018305-6

a. P roduction, imports, and exports of ODS in metric tons of CFC-11 (trichlorofluoromethane)equivalentb. Substances included in the calculationc. Source of the emission factors used
d. Standards, methodologies, assumptions, and/or calculation tools used

Impact is insignificant

305-7

a. Significant air emissions, in kilograms or multiples, for each of the following:i. NOxii. SOxiii. Persistent organic pollutants (POP)iv. Volatile organic compounds (VOC)v. Hazardous air pollutants (HAP)vi. Particulate matter (PM)vii. Other standard categories of air emissions identified in relevant regulations
b. Source of the emission factors usedc. Standards, methodologies, assumptions, and/or calculation tools used

Impact is insignificant

306-1

a. Total volume of planned and unplanned water discharges by:i. Destinationii. Quality of water, including treatment methodiii. Whether the water was reused by another organizationb. Standards, methodologies, and assumptions used

Impact is insignificant

306-2

a. T otal weight of hazardous waste, with a breakdown by the following disposal methods whereapplicable:
i. Reuse
ii. Recyclingiii. Compostingiv. Recovery, including energy recovery
v. Incineration (mass burn)vi. Deep well injection
vii. Landfill
viii. On-site storageix. Other (to be specified by the organization)b. T otal weight of non-hazardous waste, with a breakdown by the following disposal methods whereapplicable:
i. Reuse
ii. Recyclingiii. Compostingiv. Recovery, including energy recovery
v. Incineration (mass burn)vi. Deep well injection
vii. Landfill
viii. On-site storageix. Other (to be specified by the organization)c. How the waste disposal method has been determined:
i. Disposed of directly by the organization, or otherwise directly confirmed
ii. Information provided by the waste disposal contractor
iii. Organizational defaults of the waste disposal contractor

CSR Related Data

306-3

a. Total number and total volume of recorded significant spills
b. T he following additional information for each spill that was reported in the organization’s financial
statements:
i. Location of spill
ii. Volume of spilliii. Material of spill, categorized by: oil spills (soil or water surfaces), fuel spills (soil or water surfaces),
spills of wastes (soil or water surfaces), spills of chemicals (mostly soil or water surfaces), and other(to be specified by the organization)c. Impacts of significant spills

Not applicable306-4

a. Total weight for each of the following:i. Hazardous waste transported
ii. Hazardous waste imported
iii. Hazardous waste exported
iv. Hazardous waste treatedb. Percentage of hazardous waste shipped internationallyc. Standards, methodologies, and assumptions used

Not applicable

306-5

a. W
 ater bodies and related habitats that are significantly affected by water discharges and/or runoff,
including information on:i. The size of the water body and related habitat
ii. Whether the water body and related habitat is designated as a nationally or internationallyprotected areaiii. The biodiversity value, such as total number of protected species

Not applicable

Environmental
compliance

307-1

a. S ignificant fines and non-monetary sanctions for non-compliance with environmental laws and/or
regulations in terms of:i. Total monetary value of significant fines
ii. Total number of non-monetary sanctions
iii. Cases brought through dispute resolution mechanisms
b. If the organization has not identified any non-compliance with laws and/or regulations, a brief
statement of this fact is sufficient

Not applicable

Supplier
environmental
assessment

308-1

a. Percentage of new suppliers that were screened using environmental criteria

Not applicable308-2

a. Number of suppliers assessed for environmental impactsb. N umber of suppliers identified as having significant actual and potential negative environmental impacts
c. Significant actual and potential negative environmental impacts identified in the supply chaind. P ercentage of suppliers identified as having significant actual and potential negative environmental
impacts with which improvements were agreed upon as a result of assessmente. P ercentage of suppliers identified as having significant actual and potential negative environmental
impacts with which relationships were terminated as a result of assessment, and why

Not applicable

Effluents and
waste

81

GRI Content Index (GRI Standards)

Daiwa Securities Group CSR REPORT 201882

SocialEmployment

401-1

a. T otal number and rate of new employee hires during the reporting period, by age group, gender,and regionb. T otal number and rate of employee turnover during the reporting period, by age group, gender,and region

CSR Related Data

401-2

a. B
 enefits which are standard for full-time employees of the organization but are not provided
to temporary or part-time employees, by significant locations of operation. These include, as aminimum:
i. Life insurance
ii. Health careiii. Disability and invalidity coverage
iv. Parental leave
v. Retirement provisionvi. Stock ownershipvii. Othersb. The definition used for “significant locations of operation”

Relationship with Employees (Striving toCreate a Pleasant Working Environment)

401-3

a. Total number of employees that were entitled to parental leave, by genderb. Total number of employees that took parental leave, by genderc. T otal number of employees that returned to work in the reporting period after parental leave
ended, by genderd. T otal number of employees that returned to work after parental leave ended that were still
employed 12 months after their return to work, by gendere. Return to work and retention rates of employees that took parental leave, by gender

Relationship with Employees (Striving toCreate a Pleasant Working Environment)/CSR
Related Data

Labor/
management
relations402-1

a. Minimum number of weeks’ notice typically provided to employees and their elected representativesprior to the implementation of significant operational changes that could substantially affect themb. F or organizations with collective bargaining agreements, whether the notice period and provisions
for consultation and negotiation are specified in collective agreements

Not reported

Occupational
health andsafety403-1

a. T he level at which each formal joint management-worker health and safety committee typicallyoperates within the organizationb. P ercentage of workers whose work, or workplace, is controlled by the organization, that are
represented by formal joint management-worker health and safety committees

Not reported

403-2

a. T ypes of injury, injury rate (IR), occupational disease rate (ODR), lost day rate (LDR), absentee rate(AR), and work-related fatalities, for all employees, with a breakdown by:
i. Region
ii. Genderb. T ypes of injury, injury rate (IR), and work-related fatalities, for all workers (excluding employees)
whose work, or workplace, is controlled by the organization, with a breakdown by:
i. Region
ii. Genderc. The system of rules applied in recording and reporting accident statistics

Not reported

403-3

a. W
 hether there are workers whose work, or workplace, is controlled by the organization, involved in
occupational activities who have a high incidence or high risk of specific diseases

Relationship with Employees (Striving toCreate a Pleasant Working Environment)

403-4

a. Whether formal agreements (either local or global) with trade unions cover health and safetyb. If so, the extent, as a percentage, to which various health and safety topics are covered by these
agreements

Relationship with Employees (Striving toCreate a Pleasant Working Environment/
Communication)

404-1

a. A
 verage hours of training that the organization’s employees have undertaken during the reporting
period, by:i. Gender
ii. Employee category

Relationship with Employees (Human
Resource Development and Skill
Enhancement)

404-2

a. Type and scope of programs implemented and assistance provided to upgrade employee skills
b. T ransition assistance programs provided to facilitate continued employability and the managementof career endings resulting from retirement or termination of employment

Relationship with Employees (Human
Resource Development and Skill
Enhancement)

404-3

a. P ercentage of total employees by gender and by employee category who received a regularperformance and career development review during the reporting period

Relationship with Employees (Human
Resource Development and Skill
Enhancement)

405-1

a. P ercentage of individuals within the organization’s governance bodies in each of the following
diversity categories:
i. Gender
ii. Age group: under 30 years old, 30–50 years old, over 50 years oldiii. Other indicators of diversity where relevant (such as minority or vulnerable groups)
b. Percentage of employees per employee category in each of the following diversity categories:
i. Gender
ii. Age group: under 30 years old, 30–50 years old, over 50 years oldiii. Other indicators of diversity where relevant (such as minority or vulnerable groups)

CSR Related Data/Integrated Report 2018

405-2

a. R
 atio of the basic salary and remuneration of women to men for each employee category, by
significant locations of operationb. The definition used for “significant locations of operation”

CSR Related Data

Nondiscrimination

406-1

a. Total number of incidents of discrimination during the reporting periodb. Status of the incidents and actions taken with reference to the following:i. Incident reviewed by the organization
ii. Remediation plans being implemented
iii. Remediation plans that have been implemented, with results reviewed through routine internalmanagement review processes
iv. Incident no longer subject to action

Corporate GovernanceFreedom of
associationand collective
bargaining

407-1

a. O
 perations and suppliers in which workers’ rights to exercise freedom of association or collective
bargaining may be violated or at significant risk in terms of:i. Type of operation (such as manufacturing plant) and supplierii. Countries or geographic areas with operations and suppliers considered at riskb. M
 easures taken by the organization in the reporting period intended to support rights to exercise
freedom of association and collective bargaining

Not applicable due to the nature of ourbusiness

Training andeducation

Diversityand equal
opportunity

GRI Content Index (GRI Standards)

Daiwa Securities Group CSR REPORT 2018Child labor

408-1

a. Operations and suppliers considered to have significant risk for incidents of:i. Child labor
ii. Young workers exposed to hazardous workb. O perations and suppliers considered to have significant risk for incidents of child labor either interms of:i. Type of operation (such as manufacturing plant) and supplierii. Countries or geographic areas with operations and suppliers considered at riskc. M
 easures taken by the organization in the reporting period intended to contribute to the effective
abolition of child labor

Our business entails no risk of using childlabor

Forced andcompulsory
labor

409-1

a. O
 perations and suppliers considered to have significant risk for incidents of forced or compulsory
labor either in terms of:i. Type of operation (such as manufacturing plant) and supplierii. Countries or geographic areas with operations and suppliers considered at riskb. M
 easures taken by the organization in the reporting period intended to contribute to theelimination of all forms of forced or compulsory labor

Our business entails no risk of using forced
labor

Securitypractices

410-1

a. P ercentage of security personnel who have received formal training in the organization’s humanrights policies or specific procedures and their application to security
b. Whether training requirements also apply to third-party organizations providing security personnel

Impact is insignificant, due to the nature ofour businessIndigenous
rights411-1

a. T otal number of identified incidents of violations involving the rights of indigenous peoples during
the reporting periodb. Status of the incidents and actions taken with reference to the following:i. Incident reviewed by the organization
ii. Remediation plans being implemented
iii. Remediation plans that have been implemented, with results reviewed through routine internalmanagement review processes
iv. Incident no longer subject to action

Not applicable

Assessment

412-1

a. T otal number and percentage of operations that have been subject to human rights reviews orhuman rights impact assessments, by country

Risk Management

412-2

a. T otal number of hours in the reporting period devoted to training on human rights policies orprocedures concerning aspects of human rights that are relevant to operations
b. P ercentage of employees trained during the reporting period in human rights policies or procedures
concerning aspects of human rights that are relevant to operations

Human Rights Initiatives

412-3

a. T otal number and percentage of significant investment agreements and contracts that include
human rights clauses or that underwent human rights screeningb. The definition used for “significant investment agreements”

Risk Management

413-1

a. P ercentage of operations with implemented local community engagement, impact assessments,
and/ or development programs, including the use of:i. Social impact assessments, including gender impact assessments, based on participatory processes
ii. Environmental impact assessments and ongoing monitoringiii. Public disclosure of results of environmental and social impact assessments
iv. Local community development programs based on local communities’ needs
v. Stakeholder engagement plans based on stakeholder mappingvi. Broad based local community consultation committees and processes that include vulnerable
groupsvii. Works councils, occupational health and safety committees and other worker representation
bodies to deal with impacts
viii. Formal local community grievance processes

Impact is insignificant, due to the nature ofour business

413-2

a. Operations with significant actual and potential negative impacts on local communities, including:i. The location of the operations
ii. The significant actual and potential negative impacts of operations

Not applicable

Supplier social
assessment

414-1

a. Percentage of new suppliers that were screened using social criteria

Not applicable

414-2

a. Number of suppliers assessed for social impacts
b. Number of suppliers identified as having significant actual and potential negative social impacts
c. Significant actual and potential negative social impacts identified in the supply chaind. P ercentage of suppliers identified as having significant actual and potential negative social impacts
with which improvements were agreed upon as a result of assessmente. P ercentage of suppliers identified as having significant actual and potential negative social impacts
with which relationships were terminated as a result of assessment, and why

Not applicablePublic policy

415-1

a. T otal monetary value of financial and in-kind political contributions made directly and indirectly by
the organization by country and recipient/beneficiaryb. If applicable, how the monetary value of in-kind contributions was estimated

CSR Related Data

Customerhealth andsafety416-1

a. P ercentage of significant product and service categories for which health and safety impacts areassessed for improvement

Not applicable due to the nature of ourbusiness

416-2

a. Total number of incidents of non-compliance with regulations and/or voluntary codes concerning
the health and safety impacts of products and services within the reporting period, by:i. Incidents of non-compliance with regulations resulting in a fine or penalty
ii. Incidents of non-compliance with regulations resulting in a warningiii. Incidents of non-compliance with voluntary codesb. If the organization has not identified any non-compliance with regulations and/or voluntary codes,a brief statement of this fact is sufficient

Not applicable due to the nature of ourbusiness

Local
communities

83

GRI Content Index (GRI Standards)

Product andservice labeling

Daiwa Securities Group CSR REPORT 2018

417-1

a. W
 hether each of the following types of information is required by the organization’s procedures for
product and service information and labeling:i. The sourcing of components of the product or service
ii. Content, particularly with regard to substances that might produce an environmental or social
impactiii. Safe use of the product or service
iv. Disposal of the product and environmental or social impacts
v. Other (explain)b. P ercentage of significant product or service categories covered by and assessed for compliance withsuch procedures

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

417-2

a. T otal number of incidents of non-compliance with regulations and/or voluntary codes concerning
product and service information and labeling, by:i. Incidents of non-compliance with regulations resulting in a fine or penalty
ii. Incidents of non-compliance with regulations resulting in a warningiii. Incidents of non-compliance with voluntary codesb. If the organization has not identified any non-compliance with regulations and/or voluntary codes,a brief statement of this fact is sufficient

Not applicable

417-3

a. Total number of incidents of non-compliance with regulations and voluntary codes concerningmarketing communications, including advertising, promotion, and sponsorship, by:i. Incidents of non-compliance with regulations resulting in a fine or penalty
ii. Incidents of non-compliance with regulations resulting in a warningiii. Incidents of non-compliance with voluntary codesb. If the organization has not identified any non-compliance with regulations and/or voluntary codes,a brief statement of this fact is sufficient

Not applicable

Customer
privacy

418-1

a. Total number of substantiated complaints received concerning breaches of customer privacy,
categorized by:i. Complaints received from outside parties and substantiated by the organization
ii. Complaints from regulatory bodies
b. Total number of identified leaks, thefts, or losses of customer datac. If the organization has not identified any substantiated complaints, a brief statement of this fact issufficient

Not applicable

Social andeconomic
compliance419-1

a. Significant fines and non-monetary sanctions for non-compliance with laws and/or regulations inthe social and economic area in terms of:i. Total monetary value of significant fines
ii. Total number of non-monetary sanctions
iii. Cases brought through dispute resolution mechanisms
b. If the organization has not identified any non-compliance with laws and/or regulations, a brief
statement of this fact is sufficientc. The context against which significant fines and non-monetary sanctions were incurred

Not applicable

84

GRI Content Index (GRI Standards)

Daiwa Securities Group CSR REPORT 201885

Specific Standard Disclosures for Financial Services (GRI)

Clauses
Products andservices

DMA

Indicators

Links

FS1

Policies with specific environmental and social components applied to businesslines

CSR of the Daiwa Securities Group/Initiatives throughBusiness Activities (Role and Social Responsibilities of the
Financial Services/Provision of Quality Service to Customers)

FS2

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

Risk Management

FS3

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

Compliance

FS4

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

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

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

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

Aspect: Product Portfolio
FS6

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

Overview of Company and Businesses/Disclosure Report
2018/Integrated Report 2018

FS7

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

Initiatives through Business Activities (Initiatives throughProduct Development and Provision/Support for theCreation of Our Future Society)

FS8

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

Initiatives through Business Activities (Initiatives throughProduct Development and Provision/Support for theCreation of Our Future Society)Aspect: Audit
DMA

FS9

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

Corporate Governance

Aspect: Active Ownership
FS10

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

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

FS11

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

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

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

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

DMA
Society

FS12

Aspect: Local Communities
FS13

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

FS14

Initiatives to improve access to financial services for disadvantaged people

Initiatives through Business Activities (Provision of Quality
Service to Customers)/Engagement with Society (Assistanceto Communities Inside and Outside of Japan throughFoundations and NPOs)

Aspect: Product and Service Labeling
FS15

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

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

FS16

Initiatives to enhance financial literacy by type of beneficiary

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

DMA

ISO 26000 Index

Daiwa Securities Group CSR REPORT 201886

ISO 26000 Index
In compiling the Daiwa Securities Group CSR Report 2018, reference was made to the core subjects of ISO 26000.
Core Subjects and Issues
6.2
Organizational
governance
6.3
Human rights

6.4
Labor practices

6.5
The
environment

6.6
Fair operating
practices

6.7
Consumerissues

6.8
Community
involvement
anddevelopment

Overview of Company and Businesses/CSR of the Daiwa Securities Group/Corporate Governance/
Compliance/Risk Management
Issue 1: Due diligence

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

Risk Management

Issue 3: Avoidance of complicity

Risk Management/Human Rights Initiatives

Issue 4: Resolving grievances

Corporate Governance

Issue 5: Discrimination and vulnerable groups

Human Rights Initiatives/Relationship with Employees (Hiring Initiatives)/CSR Related Data

Issue 6: Civil and political rights

Relationship with Employees

Issue 7: Economic, social and cultural rights

Human Rights Initiatives/Relationship with Employees

Issue 8: Fundamental principles and rights at work

Relationship with Employees

Issue 1: Employment and employment relationships

Overview of Company and Businesses/Relationship with Employees (Hiring Initiatives)/CSR Related Data

Issue 2: Conditions of work and social protection

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

Issue 3: Social dialogue

Relationship with Employees (Communication)

Issue 4: Health and safety at work

Not applicable

Issue 5: Human development and training in the workplace

Relationship with Employees (Human Resource Development and Skill Enhancement)

Issue 1: Prevention of pollution

Not applicable

Issue 2: Sustainable resource use

Environmental Initiatives/CSR Related Data

Issue 3: Climate change mitigation and adaptation

Environmental Initiatives/Risk Management/SR Related Data

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

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

Issue 1: Anti-corruption

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

Issue 2: Responsible political involvement

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

Issue 3: Fair competition

Corporate Governance/Compliance

Issue 4: Promoting social responsibility in the value chain

CSR of the Daiwa Securities Group/Environmental Initiatives

Issue 5: Respect for property rights

Not applicable due to the nature of our business

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

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

Issue 2: Protecting consumers’ health and safety

Not applicable due to the nature of our business

Issue 3: Sustainable consumption

Initiatives through Business Activities

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

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

Issue 5: Consumer data protection and privacy

IT Strategy and the Management of Systemic Risk

Issue 6: Access to essential services

Not applicable

Issue 7: Education and awarenessInitiatives through Business Activities (Dissemination of Analysis and Proposals on the Economy, Society,and Investment Information)/Engagement with Society (Education and Research Activities in Economics andFinance)

Issue 1: Community involvement

Initiatives through Business Activities (Support for the Creation of Our Future Society)/Engagement withSociety (Corporate Citizenship Initiatives)

Issue 2: Education and culture

Engagement with Society

Issue 3: Employment creation and skills development

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

Issue 4: Technology development and access

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

Issue 5: Wealth and income creation

Initiatives through Business Activities (Initiatives through Product Development and Provision)/ Engagementwith Society

Issue 6: Health

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

Issue 7: Social investment

Initiatives through Business Activities/CSR Related Data

CSR Related Data

Daiwa Securities Group CSR REPORT 201887

CSR Related DataManagement Report
Compensation Paid to Directors and Corporate Executive Officers of Daiwa Securities Group Inc. in FY2017(1) Total Amount of Compensation, Etc. by Type of Officer, Total Amount of Compensation, Etc. by Type, and the Number of Executives

Total amount of compensation, etc. by type (million yen)Type of officer

Total amount ofcompensation, etc.
(million yen)

Directors
Corporate Executive
Officers
External Directors

35

32

1,331

561

112

112

—

Basic compensation

Number of executives(persons)

Performance-based
compensation

Lump-sum retirement
pay

3

—

—

2

89

681

—

14

—

—

6

Stock options* Seven directors also served as corporate executive officers; their compensation is included under “Corporate Executive Officers.”(2) Total Amount of Consolidated Compensation, Etc. by Officer

NameTotal amountof consolidated
compensation,etc. (million yen)Takashi Hibino

226

Seiji Nakata

271

Shinya Nishio

185

Kazuo Takahashi

Toshihiro Matsui

Keiko Tashiro

Mikita Komatsu

Masahisa Nakagawa

132

109

109

109

107

Type ofofficer
Corporate
executive
officer
Corporate
executive
officer
Corporate
executive
officer
Corporate
executive
officer
Corporate
executive
officer
Corporate
executive
officer
Corporate
executive
officer
Corporate
executive
officer

Total amount of consolidated compensation, etc. by type (million yen)Company nameBasiccompensation

Stock options

Performance-based
compensation

Lump-sum
retirement pay

Daiwa Securities Group Inc.

69

10

99

—

Daiwa Securities Co. Ltd.

46

—

—

—

Daiwa Securities Group Inc.

69

10

144

—

Daiwa Securities Co. Ltd.

46

—

—

—

Daiwa Securities Group Inc.

61

8

89

—

Daiwa Securities Co. Ltd.

25

—

—

—

Daiwa Securities Group Inc.

19

6

—

—

Daiwa Securities Co. Ltd.

46

—

59

—

Daiwa Securities Group Inc.

43

5

49

—

Daiwa Securities Co. Ltd.

10

—

—

—

Daiwa Securities Group Inc.

43

5

49

—

Daiwa Securities Co. Ltd.

10

—

—

—

Daiwa Securities Group Inc.

43

5

49

—

Daiwa Securities Co. Ltd.

10

—

—

—

Daiwa Securities Group Inc.

42

5

49

—

Daiwa Securities Co. Ltd.

10

—

—

—

* Only officers whose total amount of consolidated compensation, etc. exceeds 100 million yen are listed.
* Type of Officer is the same as that for Daiwa Securities Group Inc.
* Under Type of Officer, directors who concurrently serve as corporate executive officers are designated as corporate executive officer.

Social Report
Scope of 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 ResearchBusiness 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.

CSR Related Data

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

As of March 31, 2017

Overseas

88

Daiwa Securities Group CSR REPORT 2018

As of March 31, 2018

Employees

FA*1

Temporaryemployees

Employees

FA*1

Temporaryemployees

Male

7,552

52

—

8,077

49

—

(Career track*2)

7,018

—

—

7,642

—

—

(Managers)

3,901

—

—

4,081

—

—

Female

4,660

59

—

4,938

51

—

(Career track*2)

3,116

—

—

3,466

—

—

(Managers)

375

—

—

424

—

—

Japan total

12,212111855

13,015100848(Career track*2)

10,134——

11,108——(Managers)

4,276

—

—

4,505

—

—

Male

—

—

—

1,110

—

—

(Managers)

—

—

—

579

—

—

Female

—

—

—

566

—

—

(Managers)

—

—

—

140

—

—

1,513

—

90

1,676

—

98

719

—

—

945

14,691100

946

Overseas total(Managers)
Total

—

—

13,725111* The number of employees stationed overseas has been included in the “Overseas” category.
*1 Financial advisors*2 Includes regional career-track employees and specialists

Number of New Graduates Recruited by the Daiwa Securities Group(Unit: persons)April 2016

April 2017

April 2018

Male

332

345

289

Female

330

333

289

662

678

578

FY2015FY2016FY2017

1,212

1,072

1,045

42

42.1

41.9

15.4

15.3

15.0

FY2015FY2016FY2017

Total

37.9

38.0

38.0

Male

39.5

39.6

39.6

Female

35.6

35.7

35.7

FY2015FY2016FY2017

Total

13.5

13.6

13.7

Male

15.1

15.2

15.3

Female

11.3

11.4

11.4

FY2015FY2016FY20173

3

3

Career-track employees/regional career-track
employees
Total* This data covers eight Group companies.

Workforce Statistics
Average annual salary*1 (ten thousand yen)
Average age (years old)
Average number of years of service (years)* This data pertains to Daiwa Securities Group Inc. (including those who simultaneously work for Daiwa Securities).
*1 Average annual salary includes bonuses and other. There is no wage gap based on gender or nationality.

Average Age(Unit: years old)

* This data covers Daiwa Securities.

Average Number of Years of Service(Unit: years)* This data covers Daiwa Securities.

Employee Turnover Statistics
Total* This data covers Daiwa Securities.

(Unit: %)CSR Related Data

89

Daiwa Securities Group CSR REPORT 2018

Re-Employment under the Daiwa Master System
Number of employees hired under the Daiwa Master System(Unit: persons)

FY2015FY2016FY2017

68

69

72* This data covers Daiwa Securities.

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

End of FY2015

End of FY2016

End of FY2017

2.05

2.02

2.10

* This data covers Daiwa Securities.

Achievements of Selected Participants in Management Training(Unit: persons)Daiwa Management Academy: Targeting department
managers

FY2015FY2016FY2017

Number of people who have completed training (cumulative)

358

380

403

Daiwa Leadership Program: Targeting deputy generalmanagers

FY2015FY2016FY2017

Number of people who have completed training (cumulative)

797

862

929

FY2015FY2016FY2017

6,073

7,507

9,362

* This data covers 10 Group companies.

Participants in Skill Training(Unit: persons)

Number of people who have completed training (cumulative)*1* This data covers eight Group companies.
*1 The number of people completing training in coaching, presentation, negotiation skills, logical thinking, communication, inheritance and business succession master course, investment analysis basic course, derivatives
basic course, medium-sized corporations master course, real estate basic course, financial modeling basic course, time management (intermediate course), motivation management, time management (basic course),
question-asking abilities enhancement, corporate analysis basic course (intermediate accounting course), corporate analysis master course (how to read annual securities reports), IB origination, behavioral science (secretart of teaching/skills to continue trying), stress management, coaching (basic course), or facilitation.

Number of Persons Earning Credentials*1(Unit: persons)Credential
Affiliated Financial Planner (AFP)

As of March 31, 2016

As of March 31, 2017

As of March 31, 2018

5,333

5,626

6,811

Certified Financial Planner (CFP®)*2
Chartered Member of the Securities Analysts Association of Japan(CMA)
Chartered Financial Analyst (USA credential)

616

643

698

1,525

1,542

1,613

57

59

59

TOEIC (730–990)

1,660

1,752

1,830

168

173

177

Overseas MBA program, etc.
*1 This data covers 10 Group companies (according to filings by employees).
*2 These figures cover Daiwa Securities.

Successful Applicants in Internal Recruiting System(Unit: persons)

Held

Cumulative from FY2000

No. ofSuccessful
applicants applicants

Positions offered
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.

1,029

164

* This data covers 10 Group companies.

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

FY2015FY2016FY2017

1,837.5

1,837.5

1,837.5

24

23.5

23.2

63

66

68

* This data covers two Group companies.
*1 Figures indicate employees at the two companies that 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

Daiwa Securities Group CSR REPORT 2018

Employee Welfare System Usage

Number of employees taking childcare leave*1
Number of employees taking nursing care leave

90(Unit: persons)

FY2015FY2016FY2017

Female

640

671

695

Male

250

327

437

Female

4

0

2

Male

2

2

3

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

Employees Taking Childcare Leave and Other Related Plans
FY2015FY2016FY2017

Female

100

100

100

Male

73

97

100

Female

93

92

90

Male

100

100

100

Women working when their children turned one (%)

100

100

100

Short working hour system usage (persons)

249

324

373

Daycare subsidy usage (persons)

505

625

702

Employees taking childcare leave (%)
Return to work rate for those taking childcare leave(%)* This data covers Daiwa Securities.

Initiatives for Work-Life Balance and Supporting Diverse Work Styles
Systems to support balancing of work and childcare
Program name

Program description

Expanded leave system

This system encourages employees to take paid vacation and has introduced leave for marriage preparations, kid’s ceremony leave to attend an
entrance ceremony, graduation ceremony or other events, family day leave to give employees a chance to spend quality time with their families,
leave for celebrating parent’s longevity so that employees can celebrate the longevity of their parents, and long service leave so that employees
can take up to 5 days off in their 20th year and 30th year at the company

Childcare leave

Employees can take childcare leave until the day before their child’s third birthday

Childcare support leave

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

Support after returning to work

Enables employees to return to work after a period of childcare leave. Daiwa WLB Station, a work-life balance promotion website that focuseson 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

Reduced-hour work arrangements

System by which employees can leave work earlier by up to 90 minutes per day (by increments of 10 minutes) until the child graduates fromelementary school

Exemption from overtime work

Employees are exempt from work outside regular working hours (overtime work) until their children complete the third grade of elementary
school (childrearing), and from the time that they start providing nursing care until the time that reasons for providing nursing care havedisappeared (nursing care)

Restricted overtime work

Employees can restrict work outside regular working hours (overtime work) to not more than 24 hours per month and 150 hours per year
until their children graduate from elementary school (childrearing), and from the time that they start providing nursing care until the time thatreasons for providing nursing care have disappeared (nursing care)

Life support paid leave

Employees can take up to 50 days’ leave due to injury, disease, nursing care preparation, infertility treatment or caring for a sick child who has
yet to complete the third grade of elementary school, except when other types of leave are available, by accumulating expired paid leave

Daycare subsidy

The Group offers subsidies for daycare expenses until employees’ child begins elementary school

Babysitter system

Employees can use the babysitter services of service providers with which the company has signed a corporate contract at discount rates

Reduced work hours (securing time for nursing care)

Employees can shorten their work hours by up to two hours per day

Flex work system

Employees may work from home for up to 5 days per month to provide nursing care to a family member designated as requiring nursing care(including requiring support) or if they have contracted cancer but are able to work if the burden of commuting is reduced

Nursing care leave

Employees can take leave up to 4 times for not more than 1,095 days per family member requiring care

Nursing care concierge service

A consultation window has been established where employees can consult with external nursing care experts regarding worries and problems
related to nursing care and receive support such as proxy services for applying for nursing care insurance and referrals to nursing care facilities

Expanded support for balancing work and nursingcare

The company has established a class on support for balancing work and nursing care to help resolve employees’ concerns for futurenursing care

Job location change system

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

Spouse work reassignment leave system

Employees may opt to take leave for a certain period (up to 5 years) in the event their spouses are reassigned to work in a location that is
untenable for them to commute to work

Professional return plan (rehiring of sales staff)

Offers opportunities for re-employment to former full-time employees who left their jobs for marriage or childcare. (The scope of eligibility forthe program has been expanded since November 2015, from those returning to work within 5 years of their retirement to those within 10
years)Web

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

CSR Related Data

Daiwa Securities Group CSR REPORT 2018

Female Employees and Managers at the Daiwa Securities Group

91(Unit: %)End of FY2015

End of FY2016

End of FY2017

Percentage of employees who are female (Consolidated)

37.2

38.1

37.9

Percentage of employees who are female (Daiwa Securities only)

40.7

41.4

42.2

Percentage of managers who are female (Consolidated)

7.5

8.8

9.4

Percentage of managers who are female (Daiwa Securities only)

8.9

10.6

11.6

End of FY2017

Women Newly Appointed to Managerial Positions
End of FY2015

End of FY2016

Number of women newly appointed to managerial positions (persons)

45

62

40

Total number of those appointed to managerial positions (persons)

166

192

164

Percentage of managers who are female (%)

27.1

32.3

24.4

* This data covers Daiwa Securities.

Number of Employee Union Members
End of FY2015

End of FY2016

End of FY2017

Number of employee union members (persons)

6,822

6,943

7,134

Ratio of employees who are employee union members (%)

64.2

64

64.4

* The data covers eight Group companies, excluding Daiwa Asset Management, which has its own employee union, and Daiwa Property, which has no employee union.

Corporate Citizenship Initiatives and Expenditures

Independent
Assurance(Unit: thousand yen)Type of activity

FY2015FY2016FY2017

1. Education and research in economics and finance

137,193

42,351130,122

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

147,748

128,594

149,441

3. Support for culture and the arts

296,110323,110437,458

4. Corporate citizenship initiatives

2,706

3,400

2,501

583,758

497,457

719,523

FY2015FY2016FY20173030—

FY2015FY2016FY2017

15,362

20,261

Total

Political Contribution(Unit: million yen)Type of activity
Political contribution* Data for the previous fiscal year is published each year around November.

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

Cumulative number since the initiation of support (in September 2003)
N/A

N/A

Cumulative number since the opening (in June 2005)

19,183113,976
N/A
221

CSR Related Data

Daiwa Securities Group CSR REPORT 2018

Environmental Report
Boundary of data
Energy consumption, CO2 emissions, clean water consumption:
Domestic: W
 e have incorporated figures on energy consumption and CO2 emissions for the three companies having a reporting obligation under laws and regulations.
Daiwa Securities, Daiwa Property, and Daiwa Institute of Research. Daiwa Institute of Business Innovation has also been included in the calculation in lightof its significant impact on the Group’s environmental burden. The data for Gran Tokyo North Tower and Daiwa Yaesu Building, where the Daiwa Securities
Group is based, includes data for Group companies other than those mentioned above.
Overseas: London, New York, Hong Kong, Taipei, Singapore, Seoul, Baltimore, Mumbai and Manila offices (The last five offices were added to the boundary in FY2017.)
Waste: Gran Tokyo North Tower, Daiwa Yaesu Building, Toyocho Center Building, Daiwa Eitai Building, DIR Headquarters Building, and Osaka Branch Building of
Daiwa Securities
Paper consumption:
Domestic: Group overall (limited to companies that have handled Daiwa office services.) (Until FY2016, Gran Tokyo North Tower only.)
Overseas: (from FY2017) London, New York, Hong Kong, Taipei, Singapore, Seoul, Baltimore, Mumbai and Manila offices

Energy Consumption

Independent
Assurance

OfficeJapan

FY2015FY2016FY2017

Electricity (thousand kWh)Type

71,182

69,496

65,982

Utility gas (thousand Nm3)

326

320

302

Heavy oil (kL)

23.2

21.1

9.2

Diesel fuel (kL)

0.09

0.07

0.06

Kerosene (kL)

16.53

0.00

0.00

Steam and cold water*1 (GJ)

—

—

1,200

Total (GJ)*2——

673,980

FY2017*1 Steam and cold water consumption is calculated from FY2017.
*2 GJ: Gigajoule (109 joules). Calculated using coefficients from the Act on the Rational Use of Energy for each energy type.
For utility gas, the coefficient from the Act on Promotion of Global Warming Countermeasures is used.

OfficeOverseas

FY2015FY2016

Electricity (thousand kWh)

Type

7,526

6,387

7,378

Utility gas*1 (thousand Nm3)

91.5

101.9

111.4

Cold water*2 (GJ)

—

—

825

Total (GJ)*3——

79,671*1 Until FY2016, only utility gas in London was calculated. From FY2017, Seoul was added.
*2 Cold water consumption in Taipei and Singapore is calculated from FY2017.
*3 GJ: Gigajoule (109 joules). Calculated using coefficients from the Act on the Rational Use of Energy for each energy type.
For utility gas, the coefficient from the Act on Promotion of Global Warming Countermeasures is used.

OfficeTotal(Japan and overseas)

FY2015FY2016FY2017

Electricity (thousand kWh)Type

78,70875,88373,360Utility gas (thousand Nm3)

418

422

414

Heavy oil (kL)

23.2

21.1

9.2

Diesel fuel (kL)

0.09

0.07

0.06

Kerosene (kL)

16.53

0.00

0.00

Steam/cold water (GJ)

—

—

2,025

Total (GJ)*1——

753,651*1 GJ: Gigajoule (109 joules). Calculated using coefficients from the Act on the Rational Use of Energy for each energy type.
For utility gas, the coefficient from the Act on Promotion of Global Warming Countermeasures is used.

92

CSR Related Data

Daiwa Securities Group CSR REPORT 201893

Independent

CO2 Emissions Assurance(Unit: t-CO2)

Office

Japan

Type

FY2015FY2016FY2017

Electricity

32,852

31,70829,663

Utility gas

745

731

691

Heavy oil

62.7

56.9

24.9

Diesel fuel

0.23

0.16

0.14

Kerosene

—

—

41.11

Steam/cold water

—

—

68

2,208

2,079

1,942

Commuting (bus/railroad)*2

—

1,443

1,466

Business travel*3

—

—

1,290

35,86836,01835,186

Rental cars*1

Total
Scope 1

808

788

757

Scope 232,852

31,70829,731

Scope 3

2,208

3,521

4,698

*1 Rental cars: Gasoline used by rental cars.
*2 CO2 emissions from commuting by Daiwa Securities’ officers and employees are calculated from FY2016.
*3 CO2 emissions from overseas business travel (airplane use) by Daiwa Securities Group Inc. and Daiwa Securities’ officers and employees are calculated from FY2017.
(Unit: t-CO2)

OfficeOverseasType

FY2015FY2016FY2017

Electricity

3,520

3,064

3,353

Utility gas

204

227

241

Steam/cold water

—

—

47

Business travel*

—

—

591

FY2015FY2016FY201733,015* CO2 emissions from overseas business travel (airplane use) by London and Hong Kong office officers and employees are calculated from FY2017.
(Unit: t-CO2)

OfficeTotal(Japan and overseas)

TypeElectricity

36,372

34,772

Utility gas

949

958

932

Heavy oil

62.7

56.9

24.9

Diesel fuel

0.23

0.16

0.14

Kerosene

—

—

41.11

Steam/cold water

—

—

115

Rental cars

2,208

2,079

1,942

Commuting

—

1,443

1,466

Business travel

—

—

1,880

Scope 1

1,012

1,015

998

Scope 236,372

34,77233,131

Scope 3

2,208

3,521

5,288

CSR Related Data

Daiwa Securities Group CSR REPORT 2018

Calculation methods
Scope 1 and scope 2
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. (Disclosed figures have been rounded)A) Electricity
Domestic: W
 e use the CO2 emission factor (actual emission factor) for each electricity supplier.
Overseas: Figures for CO2 are calculated using the latest figures published by the local government or electricity provider.
Figures for CO2 emission factors in regions for which data is difficult to obtain are the latest published for each country by the International Energy Agency (IEA).
B) Utility gas
Domestic: A fter consumption is calculated as the volume of gas at normal condition, each provider’s CO2 emission factor or calorific value and emission factor
specified by law is used to calculate CO2 emissions.
Overseas: S ame calculation method as above “Japan” (calculated based on the calorific value and emission factor defined in the Act of Promotion of Global WarmingCountermeasures).
C) Heavy oil, diesel fuel, kerosene, steam, cold waterCalculated on a consumption basis.

Scope 3Calculated using discharge rate from a discharge rate database (Ver. 2.5) for calculating organization global warming gas emissions etc. throughout the supply chain.
(Disclosed figures have been rounded)D) Rental cars
The fuel used in rental cars used as company cars. Categorized in accordance with the Basic Guidelines on Accounting for Greenhouse Gas Emissions Throughout theSupply Chain.
E) Commuting
Calculated by multiplying commuting costs paid by Daiwa Securities to officers and employees by discharge rate.
F) Business travel
Calculated by tallying up persons/km involved in overseas business travel (international airline use) at the Daiwa Securities Group Inc., Daiwa Securities, London andHong Kong by discharge rate.

CO2 Emissions per Employee (Japan)
OfficeJapan

Type
Per employee (t-CO2)
Number of employees in Japan(persons)

FY2015FY2016FY2017

2.9

2.9

2.7

12,22912,323

13,115* FY2016 figures revised.
* Data is excluded from the scope of independent assurances. Calculated based on CO2 emissions in Japan and the consolidated number of employees in Japan.

94

CSR Related Data

Daiwa Securities Group CSR REPORT 2018

Independent

Clean Water Consumption Assurance
OfficeFY2015FY2016FY2017Japan

Clean water (thousand m3)

Type

117.7

117.1

119.1

Overseas*

Clean water (thousand m3)

—

—

11.6

Total (Japan and overseas)

Clean water (thousand m3)

—

—

130.7

* Clean water consumption in London, Taipei, and Seoul is calculated from FY2017.

Waste

Paper waste
Non-paper waste

FY2015FY2016FY2017

Amount used (t)

320.3

310.4

324.6

Recycling rate (%)

93.6

92.4

94.6

Amount used (t)

210.6

211.5

237.1

Recycling rate (%)

53.8

48.4

44.8

Paper Consumption
FY2015FY2016FY2017

Japan*1

OfficeAmount used (t)

Type

184.2

175.6

1,065.8

Overseas*2

Amount used (t)

—

—

46.0

Total (Japan and overseas)

Amount used (t)——1,111.8*1 Until FY2016, only calculated for Gran Tokyo North Tower. From FY2017, calculated for the Group overall.
*2 From FY2017, calculated for London, New York, Hong Kong, Taipei, Singapore, Seoul, Baltimore, Mumbai, and Manila offices.

95

CSR Related Data

96

Daiwa Securities Group CSR REPORT 2018

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

Environmental Preservation Cost (Classified in Accordance with Business Activities)*1
Description of major
initiatives

Type

Cost within business area

Globalenvironment
preservation

Resource
recycling

Investment
amount(Unit: million yen)

FY2016
Cost

Investment
amount

FY2017
Cost

Investment
amountIntroduction and upgrading ofenergy-saving air conditioners

274.1

439.1

7.1

Power receiving and transforming
facilities

802.6

122.8

119.4

Cost

Eco-car leasing fee (for five years)

308.0

291.8

232.3

Waste disposal cost*2

20.5

20.9

21.6

Dissolution process cost*3

29.8

29.7

Total
Management activity cost

Management of environmental
data, etc.

Social activity cost

Environmental preservation, etc.
Total

FY2015

1,076.7

358.3

561.9

342.4

2.0

361.3

285.7

2.0

1.0
1,076.7

31.8
126.4

2.0

1.0
561.9

345.4

1.0
126.4

288.7

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

Economic Effects Arising from Environmental Preservation Measures (Real Effects)
Amount of cost reduced
Amount of revenue (recycle, etc.)
Total

FY2015FY2016FY2017

36.4

23.9

16.4

0

0

0

36.4

23.9

16.4

CSR Related Data

97

Daiwa Securities Group CSR REPORT 2018

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

(Unit: billion yen)

IPO

Fishery,
agriculture &forestry

Fishery, agriculture& forestry

MiningMiningConstruction

Construction

PO

REIT
(equity)CB

Bondissued by
Corporate government- Municipal
bondaffiliatedbondspecialcorporation

Samuraibond

Bonds insideand outsideof Japan(benchmark
bonds)

Japan
housingfinanceagency(RMBS)

4.6

147
84

Foods

320
100

Textiles & apparel

35

Pulp & paper
Chemicals

1.1

127

124.8

30

Pharmaceutical
Oil & coal products

Manufacturing

Rubber products

25

Glass & ceramic
products

1060

Iron & steel

13.4

Nonferrous metals

30

30
3

Metal products
Machinery

12.1

120
351.1

Electric appliances

10

255

Transportationequipment
Precision
instruments
Other productsElectric power& gas

Commerce

Finance &insurance

1.4
1,070

Electric power & gas
Land transportation

Transportation &information andcommunications

240

127.6

869

15

Air transportation
Warehousing & harbortransportation services
Information &communication

31
2.4

31.9

130

Wholesale trade

25.6

Retail trade

12.5

55

Banks

3.9

359

Securities &commodity futures

5.2

75

50

657

106

106.3
106.3

240

Insurance
Other financing
business

8.4

Real estate

Real estate

37.8

7.5

Services

Services

30.7

1,312.7

Nonclassifiable

Real estate
investment
corporation

585
255
40

100
181.4

41.6

181.4

5,433.6

Public entity
Total

98.8

Marinetransportation

220.4

1,946.4130.0

1,132.5

1,462

30

2,395.9814.7

1,132.5

1,462.0687.0

2,739.1

814.7

Glossary

Daiwa Securities Group CSR REPORT 201898

Glossary●AFP/CFP ®
Certifications for financial planners. AFP is a certification in Japan, while CFP is a
globally recognized credential.
●Biomass Power Generation Plant
A method of generating power by combusting and fermenting biologicalorganic resources such as wood chips or food waste. Garnering attention as aform of renewable energy that can be stably generated.
●Blockchain
A system of distributed ledger recording/managing transaction history acrossmultiple computers on the network. Participants share all the data, which makes
it difficult to falsify data. Blockchain is used in transactions using virtual currency,such as Bitcoin. The use of blockchain is being expanded to other application
areas.
●CDP
This project is an affiliation of institutional investors concerned about climatechange who demand that companies disclose information about their stance on
environmental problems and initiatives addressing such problems.
●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 with the aim to enhance
corporate governance, which is a framework for companies to carry outtransparent and fair, as well as prompt and decisive decision making, from theperspective of stakeholders. Securities Listing Regulations of the Tokyo Stock
Exchange set out provisions requiring listed companies to comply with the
Corporate Governance Code.
●Engagement
Dialogue and exchange of opinion between businesses and stakeholders.
●Environmental Accounting
To quantify necessary investment in corporate activities and its effect in an effort
to reduce the environmental load of those activities.
●ESG Due Diligence
A verification process performed to minimize adverse effects on ESG issues
including issues related to human rights.
●GRI
Global Reporting Initiative. An organization dedicated to proposing andpromoting common international guidelines for sustainability reports.
●iDeCo (Individual-Type Defined Contribution)
Corporate-type and individual-type defined contribution pension plans
have been in place, and iDeCo is a nickname for the individual-type defined
contribution pension plan with a broadened scope of eligibility. iDeCo is a
private pension plan in which participants make contributions and decide whichinvestment products to invest in and receive benefits based on the total of theircontributions and investment returns. Special tax breaks apply to contributions.
●Impact Investment
A method of investment that, in addition to producing economic benefit, invests
in assets with the intention of addressing social issues such as poverty andenvironmental problems.
●ISO 26000
A worldwide standard that provides guidance for social responsibility oforganizations.
●Issuers
Entities that issues stocks/bonds to raise funds.
●LGBT
An initialism that stands for lesbian, gay, bisexual, and transgender.

●Materiality
The themes and aspects companies particularly focus on over the long term ina wide range of corporate activities. It is recommended that companies issuingsustainability reports should select and announce them according to the type ofbusiness and risk. (Refer to “GRI Index”)●Microfinance
A form of financial services for people on low incomes.
●Nippon Individual Savings Account (NISA)Dividends and capital gains from stocks, investment trusts, and otherinvestments are subject to ordinary income tax and local taxes, but this program
exempts dividends and capital gains from new purchases up to 1.20 million yen
for a maximum of five years.
●Principles for Financial Action toward a Sustainable Society(Principles for Financial Action for the 21st Century)
Aims to expand investment and financing with the environment in mind,
formulated as voluntary efforts of financial institutions in Japan.
●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.
●Risk Control Self-Assessment (RCSA)
The process whereby staff assess potential risks and related controls in theworkplace. Typically, this method exposes potential risks through workshops andsurveys.
●SRI
Socially responsible investment. An investment strategy where both financial
return and social good are sought.
●Stewardship CodeThe code of conduct established for institutional investors concerning theirfiduciary duties. The Japanese version was formulated by the Financial Services
Agency in February 2014.
●Supply Chain Management
To investigate issues involving a company’s suppliers of raw materials andservices, including their environmental and social challenges, to select suppliers
based on the results of such investigations, and urge them to resolve the issues.
●Sustainability Accounting Standards Board (SASB)
A nonprofit organization established in 2011 in the United States. This
organization aims for increased disclosure of non-financial information ofcompanies traded on U.S. exchanges, and proposes industry-based sustainability
standards.
●Sustainable Development Goals (SDGs)
An international agenda adopted at the September 2015 U.N. Summit
comprising 17 goals and 169 targets aiming for the eradication of poverty andthe creation of a sustainable world.
●Task Force on Climate-related Financial Disclosures (TCFD)
A task force established by the Financial Stability Board (FSB) to discuss how climatechange affects company operation. In June 2017, a proposal on the disclosure of
information related to climate change risks by companies was compiled.
●UN Global Compact (UNGC)
A global initiative established through the advocacy of then-Secretary General
Kofi Annan. Members support 10 principles in the fields of human rights, labor,
environment, and anti-corruption in their business activities.
●United Nations Environment Programme Finance Initiative (UNEP-FI)
A partnership concluded between the United Nations Environment Programme(UNEP) and over 200 global financial institutions to promote financial activities
taking sustainability into consideration.
●Value Chain
Interlinked value-adding activities that convert inputs into outputs which, inturn, add to the bottom line and help create competitive advantage.
●Work-Life Balance (WLB)
Balance between an individual's work and personal life.

Independent Assurance Report

Independent Assurance Report

Daiwa Securities Group CSR REPORT 201899