Daiwa Securities Group Inc.

Index
Message from CEO
Our strategy for Sustainability

Sustainability Management

Daiwa Securities Group SDGs Declaration

Stakeholder Engagement
Statements

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Business��Sustainable Finance��Support for Asset Building
Sustainability-Fueled Business Expansion
Governance����Corporate Governance��

Tax Policy��CompliancePrevention of corruption
Risk Management

IT Strategy and Management of Systems Risk
AI Governance Mission Statement
SocialRespect for Human Rights

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Supply Chain Management

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Hiring Initiatives

���Initiatives for Customer-First Services
Diversity and Inclusion

Human Resource Development and Skill

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Enhancement���Communication with Employees

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Health Management

Social Contribution Activities

Basic Policy for Social Contribution Activities
Financial Education and Research

For Your Dreams - Daiwa Securities Group Children’s

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Smile Project���Children���

Why Daiwa Securities Group is Working to Support
Disparity in children’s environments

Sustainability in Our BusinessRole and Social Responsibilities of the Securities

Sustainability report ����Daiwa Securities Group Future Support Bonds

���Child Support Group Sustainable Fund���

Bright Future���

Daiwa Securities Group Child Support Fund for
Support for culture and the arts

Contribution through Foundations and NPOs
Kopernik Program

Corporate Citizenship Initiatives
Environment

Environmental Management

Initiatives for Environmental Load Reduction

Response to Climate Change (Disclosure Based on
the TCFD Recommendations ����)Introduction
Governance
Strategy

Risk Management

Metrics and Targets

Response as an Asset Manager
Future Outlook

Approach for Measuring GHG Emissions within
Investment and Loan portfolios

Issuance of Green Bonds

Please refer to the SDGs site (https://www.daiwa-grp.jp/english/sustainability/) for the latest information.

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Daiwa Securities Group Inc.

Index
Sustainability Library

Sustainability Data Edition
Sustainability Archive

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ESG Information Index���

Third-Party Evaluations

���Participation in Initiatives
GRI content index
SASB Index

Editorial Policy

Sustainability report ����

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Please refer to the SDGs site (https://www.daiwa-grp.jp/english/sustainability/) for the latest information.

* This report is current as of November ��, ����.

* Detailed data related to Sustainability and ESG are collected separately in Sustainability Data Edition.
Sustainability Data Edition
https://www.daiwa-grp.jp/english/sustainability/data/pdf/daiwa_sustainability_data_2023.pdf* As a digest version of the Sustainability Report, we also publish "Sustainability Booklet," a compact andeasy-to-understand summary of our way of thinking about the Sustainability and the details of various initiatives.
Sustainability Booklet
https://www.daiwa-grp.jp/english/sustainability/data/pdf/daiwa_sustainability_en_booklet_2023sec.pdf

Sustainability report 2023

Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersMessage from CEO
Promoting Sustainable Management
In 2018, Daiwa Securities Group Inc. established the SDGs Promotion Committee (later
renamed the Sustainability Promotion Committee), which I chair for discussions aboutsustainability promotion measures. As required, the Board of Directors also deliberates
the relevant measures to foster sustainability groupwide.
The Daiwa Securities Group upholds “Contributing to society” as one of its Corporate
Principles, and promoting sustainability is not a new goal for us: we have long beencommitted to sustainability promotion as an integral part of our business activities,
measures to solidify our management foundation and of our social contribution

Seiji Nakata

activities. We have systematized the promotion measures to enhance sustainable

President and CEO

management as a basis to contribute to society appropriately in line with the needs of

Daiwa Securities Group Inc.

the times.
Going forward, we will continue to contribute to the development of society and theeconomy through financial and capital markets and make a groupwide effort to create asustainable and prosperous society toward becoming an entity that is truly needed by
all stakeholders. Please stay tuned for more initiatives about our sustainability-related
measures.

Message from the Head of Sustainability
Enhancing Corporate Value
The impact of the pandemic and the emergence of geopolitical risks have accelerated
the imperative for companies to embrace sustainability-oriented business operations
where they are not only expected to pursue economic returns, but also to minimize thenegative impacts and maximize the positive impacts of their operations on theenvironment and society. As an integrated securities group, it is our pivotal mission to
support fundraising symbolized by transition finance, which has gained significant
attention as a financing mechanism for the transition to a carbon-neutral society.
The promotion of sustainable finance is the key for companies to ensure that

Keiko Tashiro

contributing to sustainability through business is not just as a temporary movement,

Director, Deputy President

but a medium- to long-term strategy to increase their own resilience. Recognizing this,Executive Head of Overseas Operations,

Daiwa Securities Group will enhance its system to promote sustainable finance in line

Head of Sustainability and Think Tank

with our “Vision 2030”. We will engage with both investors and issuers to help them

Daiwa Securities Group Inc.

3

Sustainability report 2023

Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

Othersunderstand its significance, and support the enhancement of corporate value thatbrings positive outcomes.
Companies are expected to assume the role of facilitators in addressing social issues. To
meet this expectation, all employees will make a collaborative effort to establish a newcycle of funds that contribute to the realization of a sustainable society.

4Sustainability report 2023

Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersSustainability Management
Daiwa Securities Group's Management Vision "Vision 2030"

Materiality

Sustainability Promotion Structure

History of Sustainability Promotion

Daiwa Securities Group's Management Vision "Vision 2030""Vision 2030" -From savings to SDGsDaiwa Securities Group has outlined its goals in "Vision 2030," which is rooted in its Corporate Principles and the Daiwa Spirit; 2030 isalso the year by which it seeks to realize the SDGs.
Vision 2030 takes as its core concept "From savings to SDGs" and, through this Vision, the Group intends to realize the SDGs by creatinga sustainable capital cycle.

Vision 2030-From savings to SDGs-Concept Video
Corporate Principles
The Daiwa Spirit

5Sustainability report 2023

Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersMateriality"Vision 2030" and materiality
In "Vision 2030," Daiwa Securities Group identified priority areas and priority issues it should focus on as "Materiality."priority areaspriority issues

years of life
Realization of a society where everyone canspend 100 years of life affluently

1. Support for household asset formation and conservation toward
the realization of a prosperous 100-year life
2. Realization of local revitalization with private funds
3. Financial support for economic growth in Asia
4. Support for accelerating corporate metabolism toward therealization of innovation that enriches society

Innovation
Innovation that enriches society Promote and5. Reform of business portfolio to create new added value

realize your own transformation

6. Leading social transformation as a one-of-a-kind financial
platformer

Green & Social
Promoting the transition to a carbon-freesociety and realizing a resilient society

7. Promotion of green finance to support the realization of a carbonfree society
8. Development and provision of new financial products and services
that contribute to the realization of a sustainable society

Foundation of sustainable management
Diversity & Inclusion
9. Fostering human resources who can provide added value

0

0

1

Realization of a society where everyone canplay an active role by acknowledging diverse
personalities-Strengthening the foundation that supports
sustainable corporate management-

10. Building an organization where everyone can play an active roleby acknowledging diverse personalities
11. Strengthening a sound and highly transparent management base
12. Leading the maintenance and development of financial and capital
markets
13. Creating a beautiful global environment that will lead to the next
generation
14. Realization of a better future community / society

6Sustainability report 2023

Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersDaiwa Securities Group Key Performance Indicators (KPIs)
The Medium-term Management Plan "Passion for the Best" 2023 maps out strategies for the first three years of Vision 2030 andincorporates KPIs for managing progress as it seeks to achieve its vision.

KPIs and Key Areas Related to KPIs (Targets to achieve in FY2023)
Performance

Wealth Management

Hybrid Strategy

Financial Base

Hybrid-related ordinary

Consolidated total

Retail Division asset

incomecapital ratio

based revenue ratio¥50 billion or more

Maintain at 18% orBusiness
ROE
10% or higher
Financial KPIs

Ordinary income¥200 billion or more

50% or higher*1

higherHybrid-related ordinary
income ratio
Around 25%

Human Resources

Wealth Management

Sustainability

Business
Number of Digital IT

In top 3

MasterDaiwa Securities assets'Ouen(Supporting)' term deposits balance

200 personnel or more

under custody (AUC)¥200 billion or more

¥90 trillion or more

Balance of investment in SDGs-related business

Number of CFP and CMA
Non-financial

SDGs bond league table¥150 billion or more

3,000 personnel or more

Ratio of women on the boards of directors

KPIs

30% or higher*2
Ratio of women in management positions
25% or higher*3
Employee satisfaction*1.

4Q, FY2023*2.

By 2030*3.

FY2025

7

Maintain at 80% or higher

Sustainability report 2023

Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersMateriality Identification Process
Daiwa Securities Group identified important environmental and social issues in the formation of its medium- to long-term Vision. The
Group also identified "Materiality (priority areas and priority issues)" based on the requests of society it understood throughcommunication with shareholders as well as the Group's impact on society.
The Group seeks to achieve "Vision 2030" by managing progress based on KPIs initiatives in order to improve the Group's value andrealize a sustainable society.

Identification Process

Incorporating sustainability perspective as the basis of our business strategy
In 2018, Daiwa Securities Group established the Sustainability Promotion Committee (formerly SDGs
Previously

Promotion Committee), chaired by President and CEO Seiji Nakata. It subsequently formulated the"Passion for SDGs -Daiwa Securities Group Action Plan-," which detailed the Group's commitment toactively contributing to SDGs through its businesses.

Understanding and assessing environmental and social issues
Based on its Corporate Principles, and taking into consideration various international frameworks(GRI, ISO 26000, SASB, TCFD, etc.), international initiatives such as the UN Global Compact, indices
STEP1

established by ESG evaluation organizations, and issues raised by governments and economic
organizations, Daiwa Securities Group identified important environmental and social issues thatmight either provide opportunities or pose risks.
It then drew up a long-list of 65 issues which it could engage with in order to strengthen its
management foundations.

Dialogue with internal and external stakeholders
Through communications with both internal and external stakeholders, the Group evaluated theimpact and the importance to society of the environmental and social issues it identified in Step 1.
To this end, it consulted with outside members of the Sustainability Promotion Committee (formerly
STEP2

SDGs Promotion Committee) and internal experts on which priority issues and directions it should
focus on in the medium and long term. The Group also engaged in dialogue with Sustainability
Promotion Managers at various headquarters and Group companies, and with young employees whowill comprise the heart of the Group's workforce in 2030, on the topic of what goals it should set for
2030.

Formulation of the Materiality (draft)
Based on the results of the evaluations outlined in Step 2, Daiwa Securities Group identified 10 issues
STEP3

it should engage with through its businesses, and 4 issues it should engage with in order tostrengthen its management foundations.
The Group then discussed what opportunities and risks the formulated Materiality (draft) would
present and pose.

8Sustainability report 2023

Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersDiscussions and decisions made by the management
The Materiality (draft) was discussed by outside directors, outside members of the Sustainability
Promotion Committee (formerly SDGs Promotion Committee), and the management at Board of
Directors, Executive Committee of the Group, and Sustainability Promotion Committee (formerly
STEP4

SDGs Promotion Committee) meetings.
Vision 2030, including Materiality, was resolved at the Board of Directors meeting. At the same time, aset of KPIs was drawn up to manage the progress of Materiality initiatives.
Going forward, the Materiality will be continually revised, according to international trends inenvironmental and social issues, changes in business environments, and feedback from both internaland external stakeholders.

Taking on Materiality and realizing Vision 2030
Representatives of various headquarters and Group companies will carry out progress management,
Going forward

seek to understand issues, and implement related measures.
The state of progress will be regularly monitored by the management at committees, including the
Sustainability Promotion Committee (formerly SDGs Promotion Committee) and Board of Directors.

Click to see the dialogue.

Sustainability Promotion Structure
Chaired by the president and CEO, the Sustainability Promotion Committee (formerly the SDGs Promotion Committee) was establishedby Daiwa Securities Group in 2018 as the decision-making organization for its sustainability promotion policies.
This Committee regularly reports the details of its discussions regarding sustainability promotion to the Board of Directors and the
Executive Management Committee, which deliberate on these where appropriate. The Board of Directors also makes decisions onimportant policies regarding sustainability. The Group will continue to enhance the Board of Directors' supervisory functions covering
the status of the Group's response to sustainability-related issues.
The Group invites external experts to the Committee on a regular basis, which enables it to utilize the experience and insights of thoseexperts in its discussions.
Based on decisions made by the Committee, the Corporate Planning Department's Sustainability Promotion Office works to deploy
sustainability promotion initiatives throughout the Group, and endeavors to strengthen collaboration and raise awareness ofsustainability within the Group.

9Sustainability report 2023
Our strategy for
Sustainability

Message from CEO

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersSome directors (including nonexecutive directors) participate ascommittee members

Board of Directors
Executive Management Committee

Sustainability Promotion Committee
Chair: President and CEO Seiji Nakata
Head of Sustainability: Deputy President Keiko Tashiro

Internal committee members: 16 Outside committee members: 3
Sustainability Managers
Headquarters andGroup companies

Internal Expert WG
Sustainability Advisory Group
Chair: Head of Sustainability

Head offices

Sustainability-related WGs
Sustainable Business WG(Headquarters,
Group companies andmajor overseas offices)

Theme-based Groups

ESG Response WG(Head offices)

Sustainability
Disclosure WG

Scope 3EmissionsMonitoring Team

Secretariat: Sustainability Promotion O ce, Corporate Planning Department(as of April 1, 2023)
Head of Sustainability

Promotes businesses that contribute to sustainability throughout the Group, and oversees
initiatives to enhance the foundation for sustainable management

Sustainability Managers

Promote SDGs/ESG-related businesses and conduct KPI progress management for eachorganization (Headquarters and Group companies) within the Group

Sustainable Business

Monitor the KPIs, ascertain the progress status of SDGs/ESG-related businesses, identify issues, andWG

plan and implement measures for these issues under the direction of sustainability managers

ESG Response WG

Enhance and strengthen ESG response in reference to external evaluations (investors andevaluation organizations) regarding ESG

Sustainability Advisory

Composed of internal experts with extensive knowledge in sustainability who exchange opinionsGroup

regarding challenges for the Group and future action

Sustainability

Cross-departmental organizations that aim to expand the disclosure of sustainability information

Disclosure WG

from the perspective of integrated reporting

Scope 3 Emissions

Monitors emissions relating to the investment and loan portfolios, and sets targets

Monitoring Team10

Sustainability report 2023

Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

Sustainability Promotion Committee members list
ChairmanSeiji Nakata
President and CEO

Committee Members

Toshihiro Matsui

Keiko Tashiro

Akihiko Ogino

Shinsuke Niizuma

Deputy President

Deputy President

Deputy President

Deputy President

COO and Head of Wholesale

Executive Head of Overseas

Executive Head of Corporate

Head of Retail

Operations, Head ofPlanning,

Sustainability

Human Resources andand Think Tank

Financial & Public Institutions
Banking

11

OthersSustainability report 2023

Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersEiji Sato

Kana Shirakawa

Tsutomu Kobayashi

Sachiko Hanaoka

Senior Executive Managing

Senior Executive Managing

Executive Managing Director

Director

Director

Director

CRO

CFO and Head of Corporate

Head of Human Resources

Planning

and CHO

Mikita Komatsu

Atsushi Mochizuki

Tomoo Fujioka

Isao Tsujioka

President

President

Senior Executive Managing

Senior Executive Managing

Daiwa Asset Management Co.

Daiwa Institute of Research

Director

Director

Ltd.

Ltd.

Daiwa Securities Co. Ltd.

Daiwa Securities Co. Ltd.

Head of Global Markets

Head of Corporate Institution

Divisionand Global Markets Strategic
Planning

12

Sustainability report 2023

Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Junichi Serizawa

Toru Yamamoto

Toyo Abe

Senior Executive Managing

Senior Executive Managing

Senior Managing Director

Director

Director

Deputy Head of Corporate

Daiwa Securities Co. Ltd.

Daiwa Securities Co. Ltd.

Planning

Head of Retail Marketing

Head of Global Investment

Head of Legal and Financial

Division

Banking Division

Education

Outside Members* The names are arranged in alphabetical order in JapaneseToshihide Arimura

Arisa Kishigami

Daisuke Takahashi

Professor, School of Political

Independent consultant,Partner Attorney at Shinwa

Science and Economics,

En-CycleS (Engagement Cycle

Law

Waseda University

for Sustainability)

Faculty Fellow, The Research

Trustee, Japan SustainableInstitute of Economy, Trade

Investment Forum (JSIF)

and Industry

13

Environment

OthersSustainability report 2023

Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersHistory of Sustainability Promotion
September 2015
Adopted SDGs (Sustainable Development Goals)
The SDGs (Sustainable Development Goals) are the 17 common goals of humankind that were created by UN member countries,
various organizations and people, and adopted by the United Nations in 2015. It has been promised that each country will actively
work to achieve these goals. Daiwa Securities Group considers the SDGs to be important goals that give direction to the world, and willapproach social issues as an important common language when conducting business in Japan and overseas.

Statements

February 2018
Established "Sustainability Promotion Committee (formerly SDGs Promotion
Committee)"In 2018, we established the Sustainability Promotion Committee (formerly SDGs Promotion Committee) chaired by Seiji Nakata,President and CEO. External committee members always participate to bring in fresh ideas and cutting-edge information from outside
the company, and we are making Group-wide efforts to contribute to sustainability.

Structure of Sustainability Promotion

April 2018
Formulation of "Medium-Term Management Plan (FY2018-FY2020) 'Passion for theBest' 2020"
In our Medium-term Management Plan "Passion for the Best" 2020, the basic policy is to "provide high value-added solutions throughour No. 1 quality consulting capabilities" and "provide new value as a hybrid comprehensive securities group." We aim to be a "pioneerin the financial and capital markets that creates the future," which creates a virtuous cycle of expanding customers' assets and growing
the companies that drive the Japanese economy.

14

Sustainability report 2023

Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersMay 2018
Announcement of "Daiwa Securities Group SDGs Declaration (Passion for SDGs
2018)"The Sustainability Promotion Committee (formerly SDGs Promotion Committee) has clearly stated that we will actively promote
initiatives that contribute to the SDGs through our Group business in the "Daiwa Securities Group SDGs Declaration (Passion for SDGs
2018)."

Daiwa Securities Group SDGs Declaration (Passion for SDGs)

May
Announcement of SDGs Materiality and SDGs Promotion Action Plan
In order to promote sustainability in the entire Group, we believe that not only top-down promotion but also bottom-up efforts byemployees are important, and we solicited a wide range of sustainability-related initiatives and ideas from employees. When soliciting
ideas, we incorporated two perspectives: Forecasting that considers what we can do now, and Backcasting that considers what we cando based on the "ideal image" of the Group in 2030, the deadline for achieving the SDGs. As a result, for Forecasting we gathered morethan 4,200 ideas not only from the headquarters departments, but also from branch offices in Japan, Group companies, and overseas
bases. In the Backcasting approach, about 120 volunteers gathered through internal recruitment and made a proposal for therealization of the Group's "Vision 2030".
We identified issues from this bottom-up initiative, and summarized them by collating them with the demands from society, which we
uncovered through communication with stakeholders and the knowledge of outside experts. Then, after discussions at the
Sustainability Promotion Committee (formerly SDGs Promotion Committee), we finalized the "Daiwa Securities Group's Priority Issues(SDGs Materiality)."
Furthermore, from this bottom-up initiative, we identified the matters that should be focused on to solve the priority issues, and

8

1

0

May 2020
Announcement of SDGs Promotion KPIs for FY2020

2

compiled the "Passion for SDGs 2019 -Daiwa Securities Group Action Plan-."

9

1

0

2

We have only 10 years left before 2030, the deadline for achieving the SDGs. Aiming to build a "Daiwa version of an SDG value chain"that generates a sustainable flow of funds, in order to accelerate the initiatives of our SDGs promotion action plan, we have set SDGs
promotion KPIs for each action theme for this fiscal year, and have started trial operation. Based on these KPIs, we monitored thestatus of progress and made revisions if necessary, aiming for full-scale operation in the following fiscal year and beyond.

15

Sustainability report 2023

Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersApril 2021
Announcement of the management vision "Vision 2030" and the Medium-termManagement Plan (FY2021-FY2023) "Passion for the Best" 2023
Moving forward to 2030, we formulated and announced the management vision "Vision 2030" in May 2021 for all executives andemployees to share what Daiwa Securities Group wants to be and what the Group should be, and to work as one on the creation ofshared values. "Vision 2030" takes as its core concept "From savings to SDGs" and, through this Vision, the Group intends to realize theSDGs by creating a sustainable capital cycle.
The Medium-term Management Plan "Passion for the Best" 2023 maps out strategies for the first three years toward the realization of"Vision 2030".
Daiwa Securities Group will continue to contribute to the creation of a sustainable and prosperous society.

Daiwa Securities Group's management vision "Vision" and Materiality

FY2021-FY2023

Basic Policies

Pursuing the best mix of digital and real
Digital transformation

Corporate strategy0

30Financial & capital/Risk management/
Compliance/HR/Overseas
2

Initiatives in sustainability

In the Medium-term Management Plan "Passion for the Best" 2023, we have incorporated an SDGs perspective as the basis of ourbusiness strategy, and have continued to adopt and will further strengthen the basic policies of "achieving Customer First & Quality
No.1" and "creating a new capital recycling system through a hybrid strategy." In light of the increased importance of promotion ofdigital transformation (DX), we have also set "pursuing the best mix of digital and real" as the third pillar.
In addition to these three basic policies, we have established the slogan of staying close to customers and becoming "The best partner
for co-creating the future -Be with you-."
We will further step up our sustainability initiatives, including SDGs and ESG initiatives, and corporate strategies at head office divisions
as the foundations that support individual strategies.

16

Sustainability report 2023

Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersSDGs(Sustainable Development Goals)

International goals up to 2030 adopted by the United Nations Summit in September 2015. 17 goals and 169 targets were set
to realize a sustainable world. The SDGs question the ideal state of not only developing countries but also advanced
countries including Japan, and pledge that "No one will be left behind" in the process of the initiatives.

17

Sustainability report 2023

Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersDaiwa Securities Group SDGs Declaration
Daiwa Securities Group recognizes Sustainable Development Goals adopted by the United Nations in 2015 as overarching goals to leadthe world. Through our group business, we will work actively for realization of a prosperous society and improved people's life by
pursuing both company's economic values and solution of social challenges at the same time.

Creation of Shared values
As an integrated securities group that provides wide range of services for various customer needs, we will address solutions of social
challenges with flexible mindset to create company's economic values and social values at the same time.

Developing and realizing work styles for diverse human resources
With measures like promotion of better work-life balance and success of female and veteran employees to create working environment
in which our employees, regardless of their gender and age, would feel satisfying to work and they would demonstrate their potential
fully, we will endeavor to develop diverse human capital and work styles.

Stakeholders and Partnership
By utilizing our group quality of taking a leading role in connecting countries, companies and investors, we aim for contribution tovarious social business solutions through partnership with each of our stakeholders.

Increase recognition and enhance penetration
We will try to increase awareness and deeper understanding of sustainability among both our employees and customers through ourgroup business as a main player in financial and capital market.

18

Sustainability report 2023

Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersStakeholder Engagement
Daiwa Securities Group recognizes that, as a company, it has an important mission not only to resolve social issues, but also to grasp
what social issues need to be addressed.
In light of the rapid changes in the economy and society in recent years, social issues are also expected to change with the times. We
place importance on dialogue as a part of engagement with various stakeholders as a method of continuing to grasp such changing
social issues. Through our business, we will resolve social issues identified by active engagement with a broad range of stakeholders,
including customers, shareholders, investors, local communities, and NPOs, in pursuit of balancing social values and economic values.

Basic Policy on Stakeholder Engagement(1) Daiwa Securities Group will strive to engage with a broad range ofstakeholders based on ISO 26000 and the Charter of Corporate Behavior of
the Nippon Keidanren (Japan Business Federation).
(2) The Group will strive to deepen engagement with stakeholders alreadyknown to us, including customers, shareholders and other investors,
business partners, employees and local communities.
(3) The Group will strive to actively communicate and engage with third-party
institutions, organizations, and individuals, etc. with whom we havepreviously had no contact in order to identify other stakeholders.
Stakeholders
Customers

Investors

Method of Engagement

Main Contact Points

We strive to improve customer,

Retail Division

Initiatives for Customer-

satisfaction by providing productsContact CenterFirst Services

and services that meet the needs

Customer Support Centerand risk tolerance of individual

Wholesale Division

Support for Asset Building

investors, institutional investors,

Environmental and Social
Policy Framework

and potential investors who are
considering investing.
Issuers

Relevant Web Pages

We propose optimal financing
methods among from a wide rangeof methods to corporations, publicorganizations, and others seeking toraise funds through the issuance ofstocks and bonds, and provide total
support for their financing fromformulation of plans to execution.

19

Sustainability report 2023

Message from CEO

Our strategy for
Sustainability

Stakeholders
Society

Investees

Sustainability in
Our BusinessGovernance

Method of Engagement

SocialSocial Contribution
Activities

Main Contact Points

OthersRelevant Web Pages

As an institutional investor, we

Asset Management Division

Role and Social

strive to maintain active

Investment Division

Responsibilities of thecommunication, including

Retail Division

Securities Businessengagement with investee

Wholesale Divisioncompanies.

Risk Management

Supply Chain Management

Department
Business

We maintain fair relationships withpartners

all our business partners, including

Government

Environment

General Affairs Department

Environmental and Social
Policy FrameworkTax Policy

suppliers, and collaborate with

Sustainability Promotion

them in order to create a

Political Contributions

Office, Corporate Planningsustainable society.

(Sustainability Data

Department

Edition (formerly SDGs

Daiwa Securities Foundation

Data Edition))

We comply with the Daiwa
Securities Group Tax Policy, fulfill
our tax obligations and disclose theamount of tax paid in each country.
We also present policy

Daiwa Anglo-JapaneseFoundation
Corporate Communication
Department

recommendations in order to create

Financial Education andResearch
Contribution throughFoundations and NPOs
Corporate Citizenshipa better society.

Initiatives

When making politicalSponsorship Activities forcontributions, we comply with

Culture and the Arts

internal regulations and all relevantlaws and regulations, and we

Daiwa Securities Group

properly disclose the amount of120th Anniversary

contributions.

Children's Future Project⟨Japanese only⟩

NPOs/NGOs

We collaborate with NPOs/NGOs in
economic and financial educationand disaster relief assistance. We
also incorporate the perspective ofresolving social issues in ourbusiness strategies through active
dialogue with them.

Local

As a member of the local

communities

communities where Daiwa
Securities Group's head and branch
offices and overseas subsidiaries
are located, we engage incommunity-based activities.

Employees

Employees

We create an environment in which

Human resources

Communication withand their

employees, who provide added

Department

Employees

families

value for all stakeholders, are able

Corporate communication

to feel motivated to work andDepartment

demonstrate their abilities andSustainability Promotion

enthusiasm, and we strive to

Office, Corporate Planning

improve employee satisfaction.

Department

Families of employees are also ourimportant stakeholders.

20Sustainability report 2023

Message from CEO

Our strategy for
Sustainability

Stakeholders

Sustainability in
Our BusinessGovernance

Method of Engagement

SocialSocial Contribution
Activities

Main Contact Points

Environment

OthersRelevant Web Pages

Shareholders

Shareholders

We endeavor to be transparent in

Investor Relations Office,Engagement withand others

and others(*)

our disclosure of information and to

Corporate Planning

Shareholders andmeet the expectations ofDepartment

Investors

shareholders and others throughthe sustainable improvement ofcorporate value.

(*) Including investors in bonds
issued by Daiwa Securities GroupEngagement through participation in initiatives
Daiwa Securities Group actively participates in, signs, and supports various initiatives in Japan and overseas, and in addition toutilizing their standards, we also encourage society through engagement.
For more details, see Participation in Initiatives

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Sustainability report 2023

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Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersStatements
Introducing Daiwa Securities Group's various statements.

Management
Corporate Principles

Daiwa Spirit [PDF: 80 KB] (Japanese)

Management Policy

Daiwa Securities Group's Management Vision "Vision2030"·Materiality

Basic Policy on Stakeholder Engagement

Sustainability in general
Daiwa Securities Group’s SDGs Declaration

Daiwa Asset Management Co. Ltd. "Sustainability Policy"(including "Environmental Policy" and "Human Rights Policy")(Japanese)

Daiwa Asset Management Co. Ltd. "ESG Investment Policy"

Daiwa Real Estate Asset Management Co.Ltd. "Sustainability
Policy"Daiwa Capital Markets America Inc. "Corporate Social

Daiwa Capital Markets Europe Ltd. "Corporate Social

Responsibility"

Responsibility"

Environment
Environmental Vision, Environmental Principles, and Basic Environmental Policies
The Daiwa Securities Group Net Zero Carbon Declaration
Response to Climate Change (Disclosure Based on the TCFD Recommendations 2023)

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Sustainability report 2023

Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersSociety
Customer support
Basic Policy on Customer-first Operations
Daiwa Securities Group
Daiwa Securities Co. Ltd. (Japanese)
Daiwa Asset Management Co. Ltd.(Japanese)
Daiwa Real Estate Asset Management Co.Ltd.
Daiwa Corporate Investment Co., Ltd. (Japanese)
Daiwa Next Bank, Ltd (Japanese)
Daiwa Connect Securities Co., Ltd. (Japanese)

Human Capital
Guidelines for Fair Hiring

Human Rights Policy

Health Management (Approaches and Policy, Promotion

Daiwa Capital Markets Europe Ltd. "Equity, Diversity &System, Targets, and, Examples of Major Initiatives andInclusion"

Results, etc.)
Daiwa Capital Markets Europe Ltd. "Modern Slavery Act 2015"

Daiwa Capital Markets America Inc. "WORK FOR US" >"Culture"

Investment and Financing Policy
Environmental and Social Policy Framework

Daiwa Asset Management Co. Ltd. "ESG Investment Policy"

Daiwa Asset Management "Investment and Other Activities
Related to Cluster Bomb Manufacturing Companies"

Daiwa Securities Group Suppliers' Code of Conduct
Basic Policy for Social Contribution Activities

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Sustainability report 2023

Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

GovernanceCorporate GovernanceCorporate Governance Guidelines

Basic Views on Corporate Governance

Policies on Determination of Remuneration of Directors andCorporate Executive Officers

Compliance
Daiwa Securities Group Anti-Corruption Policy
Privacy Policy
Daiwa Securities Group
Daiwa Securities Co. Ltd.(Japanese)
Daiwa Asset Management Co. Ltd.

Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT)Securing the Fairness and Transparency of the Market～Prevention of unfair transactions such as insider trading～
Basic Policy on Avoiding Involvement with Anti-Social Forces
AI Governance Mission Statement
Management Policy for Conflict of Interest
Daiwa Securities Group
Daiwa Securities Co. Ltd.(Japanese)
Daiwa Asset Management Co. Ltd.(Japanese)

Information disclosure
Disclosure Policy

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OthersSustainability report 2023

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Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

Risk Management
Risk Appetite Framework [PDF: 3,342 KB]
Environmental and Social Policy Framework

Tax affairs
Daiwa Securities Group "Tax Policy"

Daiwa Capital Markets Europe "UK Tax Strategy"

Japan's Stewardship Code
Daiwa Securities "Accepting the Japanese Stewardship Code"

Daiwa Asset Management Co. Ltd. "Stewardship"(Japanese)25

OthersSustainability report 2023

Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersRole and Social Responsibilities of the Securities Business
At Daiwa Securities Group, we believe that our role is not only to maintain and develop a fair and dynamic financial market, but also toincorporate a social perspective in finance in order to contribute to building a sustainable society. For example, the securities business- our core operations - plays a key role in society by building a bridge between the needs of investors to manage assets and those of theprivate and public sectors to raise funds.
On investing in securities, we promote methods of investment that take ESG (environment, society, and governance) factors, such asenvironmental and social initiatives into account together with financial information.

Supporting Sound Financial and Capital Markets-Six Roles of the Daiwa Securities GroupWe support companies that need funds, from listing support to consulting. We will continue to support social infrastructure by creating
a flow of funds, contributing to the creation of an environment in which innovation is easy to occur, and the creation of a more active
and stable financial market.

Global Network
Role 1: Fund procurement by companies,

Role 2: Support for initial public offerings

Role 3: Assistance in trading of securities

Role 5: Analysis and provision ofRole 6: Protect market trust

etc.
Role 4: Assistance in asset building

information

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Sustainability report 2023

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Our strategy for
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Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

Others

Initiatives for Maintaining Market Functions
Role and Importance of 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 from the buyer and seller of a securities transaction. Settlement functions also serve as a social infrastructure, andtherefore security, reliability, and convenience are important. In secure and trusted markets, financial instruments can be reliably
converted into cash when necessary. This is the very reason why such markets attract investment money from all over the world andenable companies and others with funding needs to procure funds.

Responsibility as a Securities Company
Any delay in settlement functions could lead to a loss of trust in the market as a whole, which in turn could have a significant impact on
the global economy. Daiwa Securities considers it vital to settle transactions accurately and promptly as required in order to ensurethat markets function as a social infrastructure and become a driver for economic development. It is therefore continually striving tobuild the best structure for ensuring the smooth execution of settlement operations.
For this reason, Daiwa Securities has implemented a reliable system that has high processing capability to reliably settle a massive
number of transactions. In addition, the company is carrying out its settlement operations with the best mix of the digital world andthe real world. This includes the digital transformation (DX) of its operations to ensure efficiency and greater accuracy and personnel
with a wide range of knowledge and expertise to quickly grasp the situation and respond appropriately in the event of an irregularity.
Meanwhile, recognizing the need to further increase convenience and strengthen risk management in order to boost thecompetitiveness of Japan's financial and capital markets, the entire securities industry is working on reducing settlement time. T+1(trade date plus one day) settlement began for government bonds in May 2018, T+2 settlement for stocks in July 2019, and T+2
settlement for domestic corporate bonds in July 2020. We are also continuously examining various ways to further improve theefficiency of settlement operations in collaboration with settlement institutions and other organizations.
We are determined to continue settlement operations no matter what happens. In accordance with such determination, we havedrawn up a business continuity plan (BCP) and regularly conduct training in preparation for unforeseen circumstances, such as the
spread of new infectious diseases, natural disasters, and terrorism.
The reliability of settlement is extremely important for maintaining customer trust. We will continue to meet increasingly sophisticatedcustomer needs and quickly provide solutions by taking advantage of our reliable settlement infrastructure and human resources.

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Sustainability report 2023

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Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersResponsible Action as an Institutional Investor
Adoption of "Japan's Stewardship Code"The Financial Services Agency of Japan published "Principles for Responsible Institutional Investors (Japan's Stewardship Code)" inFebruary 2014. The Code, which has been revised twice, encourages institutional investors to fulfill their responsibilities of enhancing
the medium- to long-term investment returns for their clients and beneficiaries by improving and fostering the investee companies'
corporate value and sustainable growth through constructive engagement, or purposeful dialogue, based on consideration of mediumto long-term sustainability including ESG factors consistent with their investment management strategies.
In our Group, Daiwa Securities and Daiwa Asset Management have announced their adoption of the Code.

Adoption of Principles for Responsible Institutional Investors (Japan's Stewardship Code)
Daiwa Securities ⟨Japanese only⟩
Daiwa Asset Management

System at Daiwa Asset Management
Daiwa Asset Management became a signatory to the United Nations-supported Principles for Responsible Investment (PRI) in May
2006. It takes into account ESG initiatives taken by companies when making investment decisions, as it considers that such initiatives
can lead to expanding growth capabilities over the medium to long term and reducing risks. Moreover, Daiwa Asset Management
published its "ESG Investment Policy" in January 2020 to clarify its approach to ESG. In principle, the Policy applies to all investment
strategies of the company.
After announcing its adoption of Japan's Stewardship Code in May 2014, Daiwa Asset Management renewed the announcement of its
adoption of the Code in September 2020 in line with the revision of the code, and has since been continuously and actively fulfilling its
stewardship responsibilities and striving to improve its initiatives. The company's basic approach to stewardship activities is shown in
its Stewardship Policy. Details of its stewardship activities, including status of engagement (such as policy, structure, and a breakdownof activities by category), are released annually in its Stewardship Report. The report's name has been changed to Sustainability Report
starting from the April 2023 issue. In addition to the existing contents, the report introduces the sustainability-oriented managementthat we are working on as a corporation.
ESG Investment Policy
Stewardship Policy
Sustainability Report 2022

ESG Education, Training and Exchange of Information
Daiwa Asset Management has adopted "Enhance Global Sustainability" as part of its action guidelines, and is taking systematic
measures that will contribute to the sustainable growth of society.

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Activities

Environment

Others

Education and Training for Executives and Employees
Daiwa Asset Management provides all executives and employees with internal training designed to share knowledge of stewardship
activities that should be undertaken by an asset management company as well as overall knowledge of ESG. As ESG, in particular, is afield where new initiatives are being taken daily, the company organizes study meetings aimed at the updating of specific themes asneeded. In FY2022, the company held a total of three training sessions and study meetings, including training to deepen understandingof its stewardship activities.

ESG Exchange Meetings for Investee Companies
Daiwa Asset Management places importance on investee companies' ESG initiatives as it considers that such initiatives can lead toexpanding growth capabilities over the medium to long term and reducing risks. On the other hand, it became aware during dialogs
with investee companies that the investees were struggling with appropriate methods for ESG disclosure and collection of information.
The company therefore invites multiple investees and holds ongoing ESG-related information exchange meetings based on the ideathat investees' sharing their initiatives and exchanging information with each other will not only be beneficial to the company but also
to future initiatives of the investees. The first meeting in February 2021 was on the topic "gender diversity," and the second meeting inMay 2022 was on the topic "human capital."
Report on the 2nd ESG Exchange Meeting ⟨Japanese only⟩29

Sustainability report 2023

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Sustainability in
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Activities

Environment

OthersSupport for Asset Building
While the importance of asset management in the "100-year life era" is increasingly gaining attention, Daiwa Securities considers thedevelopment and provision of superior products to be one of our major missions in society, and strives to develop new products andimprove their quality.

Products o ered to pursue shared value
Sustainable FinanceInitiatives through Business Activities Such as the Underwriting and Sale of SDG
Bonds
Climate change has become a serious threat to all countries. It is said that developing countries are being impacted first and with thegravest results. Climate change may destroy the social initiatives for poverty reduction that have been steadily carried out over the last
several decades, and it is impossible to separate it from poverty issues.
In the past few years, initiatives for sustainability have spread worldwide, and along with the expansion of the market for relatedbonds, customers' interest in sustainability has been growing. As a pioneer for SDG bonds in Japan (including conventional Impact
Investment bonds), Daiwa Securities provides customers with opportunities to invest in bonds issued by public organizations, financial
institutions, and other issuers for the purpose of solving social issues.
Daiwa Securities Group will continue to contribute to solving social issues through its business activities, including the underwriting
and sale of Green Bonds and other SDG bonds.

)

ff

SDG Bonds for Retail Investors Sold by Daiwa Securities (FY

Issuers

Use of funds

Sales amount(estimate)

Green Bond¥100 million

Kitakyushu City*

Sustainability Bond¥200 million

NH Foods Ltd.*

Sustainability Bond

¥3 billion

Yamaguchi Financial Group, Inc.*

Green Bond

¥10 billion

TOKYU CORPORATION*

Sustainability Bond¥2.5 billion

2

Mie Prefecture*2¥13.0 billion

0

Sustainability Link Bond2

AEON MALL Co., Ltd.*30

Sustainability report 2023

Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernance

Issuers

SocialSocial Contribution
Activities

Use of funds

Tokyo Metropolitan Government*

Green BondJapan International Cooperation

Social Bond

Environment

OthersSales amount(estimate)¥1.9 billion¥900 million

Agency (JICA)** Sold by multiple companies including Daiwa Securities (the sales amounts shown above are those underwritten by Daiwa Securities).

ESG Funds
ESG funds are investment trusts that place an emphasis on ESG factors when selecting companies to invest in, including companies
that are working to achieve ESG and SDG targets toward a sustainable society. These funds can disclose ESG information.
By investing in these funds in the financial market, investors can indirectly support countries and companies that are actively working
on sustainability.
We are expanding our product lineup to meet diverse customer needs.

Initiatives in Funds for Decarbonization (Daiwa Asset Management)
Daiwa Asset Management has established and manages a carbon neutral technology equity fund (nicknamed "Carbon ZERO"). The
fund invests primarily in solution companies that contribute to a decarbonized society from among global equities and have a low
carbon footprint relative to the MSCI All Country World Index. Candriam S.C.A., which provides investment advice, aims to achieve zerocarbon as a fund by contributing a portion of the fees earned from fund advice to green projects aimed at reducing CO2. The fund's ESG
information is disclosed in its Impact Report.
Candriam and some of its sales companies, including Daiwa Securities, donate a portion of trust fees to tree-planting activities inJapan through NPOs. In this way, we create opportunities to walk together with the beneficiaries toward a decarbonized society.
Special feature on the Carbon Neutral Equity Fund (Carbon Zero) ⟨Japanese only⟩

Initiatives of Fund Wrap Services
In the era of living 100 years, managing assets for the medium to long term is critical. Daiwa Fund Wrap is a service that enables
customers with no investment experience or too busy to make investment decisions themselves to start long-term diversified
investment by having Daiwa Securities invest in and manage assets on their behalf under a discretionary investment agreement. In
providing our services, we strive to communicate closely with our customers to build a relationship of trust.
To keep attracting customers over the long term, we will continue our initiatives to implement better structures and systems so as toimprove our performance and the quality of our services.
Balance of domestic Wrap accounts: ¥ 14,647.2 billion (As of March 31, 2023)* Source: Data released by the Japan Investment Advisers Association

Balance of Wrap accounts at Daiwa Securities: ¥3,095.5 billion (As of March 31, 2023)* Source: Data released by the Japan Investment Advisers Association

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Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersDaiwa Social Contribution Wrap - Daiwa Fund Wrap with a donation service
Amount donated in FY2022: ¥7.58 million (cumulative donations in the last 3 years: ¥59.67 million yen)
* Total donated amount from customers and from Daiwa Securities* Donated to: Food aid (UN WFP), medical care (Doctors Without Borders Japan), child support (Japan Committee for UNICEF), environment (WWFJapan), and disaster recovery (Japan Platform)

Initiatives for Solutions Business
Many small- and medium-sized companies and small-scale enterprises are now facing the issue of business succession due to theaging of their management team or owners. It is said that about half the managers exceeding the age of 70-the average retirement agein the next 10 years are yet to decide on their successors. Moreover, even the continuity of their business activities, which support
regional economies, has recently been at risk. Daiwa Securities recognizes that it is its duty, as a financial institution, to firmly support,
in financial terms, small- and medium-sized companies' efforts to pass down their valuable business resources, employment, andtechnologies to the next generations, thereby helping to maintain regional supply chains. We will support the sustainable developmentof local communities and the Japanese economy by encouraging the continuation, development, and growth of small- and mediumsized companies of good standing by providing solutions to inheritance, business succession, M&A, and other issues.

System Product WEB Service
System Product WEB Service is offered as a support tool for customers building assets. Its aim is to realize a prosperous era of the 100year life.
The service enables customers to centrally manage their stock-based employee benefit plans (such as stock ownership plans,
workplace NISA, and defined contribution pension plans) and stock-based compensation plans (such as specified transfer-restricted
stock (RS) and stock options) on a single online platform. The service enables us to support asset-building to help our customers
realize their life plans and to actively encourage participation in a company's employee benefit plans, such as stock ownership plans
and installment-type investment plans.
Utilizing the latest technologies in the context of digital transformation (DX), for companies and their employees, we are working tobuild highly flexible coordination based on an application programming interface (API), to provide a high degree of convenience, suchas making use of cloud services to make opening accounts more effortless and less time-consuming, and to completely eliminate theneed for paper and personal seals in various procedures.

Expansion of Services for Asset-Building Customers through Smartphone-only
Securities Company, "Daiwa Connect Securities"
Smartphones and other technical innovations are changing the common perception that securities companies are used only byaffluent customers and that securities transactions require an advanced level of financial knowledge. We recognize that generating
securities services available to all people in consideration of financial inclusion is an issue facing not only Daiwa Securities Group but
also the securities industry as a whole.
Daiwa Connect Securities, which launched its services in July 2020, is a new type of securities company established by the Daiwa
Securities Group. It features services that allow everything from account opening to securities trading and asset management to becompleted via smartphone and allows beginners to start investing with small amounts easily.
Daiwa Connect Securities also partners with external companies to provide a game app that allows people to learn about investing in a
fun way, a reward point investment service that allows people to use the reward points they earn from other services to invest, and a32

Sustainability report 2023

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Our strategy for
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Sustainability in
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Otherscredit card regular investment service where cardmembers pay for their investments by credit card, allowing them to earn reward
points from card use. These services provide opportunities to easily learn financial literacy with a small amount of money and diversify
access to financial services.
Daiwa Connect Securities will continue to develop and provide its services so that all people will be able to access better financial
services.

Initiatives Using REITs, Funds and Other Structures to Solve Social Issues
Investment in Healthcare Facilities
Daiwa Real Estate Asset Management managed Nippon Healthcare Investment Corporation, which was Japan's first REIT focusing on
healthcare facilities. On April 1, 2020, that REIT was merged with Japan Rental Housing Investments Inc., a REIT focusing on housingthat was also managed by Daiwa Real Estate Asset Management, and Daiwa Securities Living Investment Corporation ("DLI"), the JREIT with the largest amount of healthcare facility assets under management in Japan, was established. DLI invests in prime healthcare
facilities that are likely to see stronger demand from society over the medium to long term as the population continues to age. Throughsuch investment, it will contribute to the "Achievement of Good Health and Longevity," a priority issue in Japan identified in the SDGs
Implementation Guiding Principles formulated by the government's SDGs Promotion Headquarters.
DLI has also established a social finance framework to provide ESG investment opportunities to investors through social financing andreceived a Social 1 (F) rating, the highest rating, from Japan Credit Rating Agency, Ltd. (JCR). Based on this framework, DLI has
borrowed ¥9,920 million through a social loan as of March 2023 and issued ¥2.0 billion of social bonds in January 2022, using the funds
raised to acquire healthcare facilities.

Total amount of investment in healthcare facilities
Approximately ¥108.2 billion (as of May 31, 2023)

Investment in Renewable Energy
With regard to infrastructure assets, Daiwa Real Estate Asset Management has been managing photovoltaic power stations since
FY2014, and was entrusted in FY2017 with the management of a biomass power generation plant invested in by Daiwa Energy &Infrastructure. In September 2021, the company was entrusted with management of DSREF Amaterasu Core Fund, Investment Limited
Partnership, a private fund targeting investment in a solar power project which was established by soliciting investments fromdomestic institutional investors. The company will continue to expand the balance of its assets under management while striving toaccumulate knowledge of investment and management in the renewable energy field.

Management results of renewable energy power plants
Number of deals: 23(Hokkaido, Tohoku, Hokuriku, Kanto, Chubu, Kansai, Chugoku, and Shikoku regions)
Output: Approximately 252MW from solar power plants (excluding output from assets on land with leasehold interest), 13 MW frombiomass power plants
Annual energy output (April 2022 to March 2023): 331,977MWh(Assumed CO2 reduction of 152,290 t-CO2, calculated using emission factors of each regional electric utility)

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Activities

Environment

OthersBalance of assets under management: Approximately ¥87.5 billion

FY2022 Initiatives Taken by the Group's Overseas Offices
Underwriting diverse ESG bonds to help solve global environmental and social issues
Serving as the lead manager of four key ESG Bonds in 2022, Daiwa Capital Markets America ("DCMA") is helping to solve social issues
and protect the global environment. In July 2022, DCMA underwrote a sustainable development bond issued by the International Bankfor Reconstruction and Development (IBRD). The raised funds will be used to build a road safety support system. In September, DCMA
underwrote a forest conservation bond issued by the Inter-American Development Bank, realizing investments in forest conservation
projects. In December, DCMA underwrote a green bond issued by Aguas Andinas, a Chilean water utility company, and the first blue
bond issued by the Central American Bank for Economic Integration (CABEI). The funds raised by these bonds were used for water
utility enhancement and marine conservation, respectively.
DCMA will continue contributing to the SDGs achievement and ESG investments through its activities.

Supporting ESG bonds and contributing to the SDGs
As a member of the Daiwa Securities Group, Daiwa Capital Markets Europe Limited ("DCME") is committed to the SDGs. It combines
investments with the SDGs, recognizing the importance of its role as a securities firm that can positively impact society.
DCME has supported the issuance of ESG bonds since 2008 and has led more than 100 transactions that are aligned with the SDGs.
Daiwa Securities Group and DCME will continue to support the financing of environmental and social initiatives.

Key webinars and conferences in the Asia region
In September 2022, Daiwa Capital Markets Singapore hosted Daiwa ESG Conference 2022, a webinar on Asian ESG bonds. Speakers
from Daiwa Securities' Sustainability Solutions Department, bond issuers, and ESG rating agencies were invited to discuss the current
status and outlook of ESG bond markets in Japan and Asia.
In November of the same year, at the Daiwa Capital Markets Conference (DCMC), held face-to-face with audience for the first time inthree years, we arranged a speech on blue bonds (samurai bonds) by the Director of Government Bonds, Ministry of Finance ofIndonesia. This led to the country's first blue bond issuance in May 2023.

Structuring and selling green bonds issued by Aguas Andinas to Hong Kong investors
In December 2022, Daiwa Capital Markets Hong Kong and DCMA structured and sold green bonds issued by Aguas Andinas, a public
service company engaged in the sale of drinking water and wastewater treatment services in Chile, to Hong Kong investors. The bonds
were issued under the Green Bond Framework, which aims to improve water and wastewater services in Chile, which in turn willcontribute to social and economic development. The raised funds will be used for infrastructure projects in Chile, including drinking
water supply, wastewater treatment, and water distribution systems.

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Activities

Environment

OthersProviding Analysis/Proposals on the Economy, Society, and Investment
Information
Daiwa Securities Group as an integrated securities group provides, in addition to investment information, a wide range of informationon the economy and society. We hope that the measures we propose from a long-term perspective will be helpful to customers,
investors and a variety of stakeholders.

Initiatives to Provide Information on ESG (Daiwa Securities)
Daiwa Securities' Equity Research Department is a group of analysts and strategists. They analyze and evaluate information released bycompanies, and provide stock price information and investment strategies and ideas to institutional investors (such as asset
management companies, banks, insurance companies, pension funds).
International agendas, such as the SDGs and the Paris Agreement, have gained much attention in recent years. Against this backdrop, a
growing number of investors are using nonfinancial information in relation to the environment, society, and corporate governancewhen making medium to long term investment decisions. Therefore, in May 2019, Daiwa Securities established the ESG Research
Section, which specializes in handling ESG information, within the Equity Research Department, thereby putting in place a system forcomprehensively analyzing and evaluating financial and nonfinancial information. The ESG Research Section works on writing analysis
reports focusing on topics such as climate change, human rights and gender issues, corporate governance systems, and social impact,
as well as holding ESG seminars and other activities.
ESG information will become more and more important for companies and society as a whole for achieving sustainable growth overthe long term. We strive to provide appropriate ESG information in a timely manner so that institutional investors will be able toexpand their investment returns in the medium to long term through responsible investment and purposeful dialogue (engagement).
In October 2021, Securitization and SDG bonds Group was formed under Fixed Income, Currency and Commodities (FICC) Research
Dept., which focuses on sustainability in the bond market. The aim of the Section is to meet the growing information needs ofinstitutional investors, including trends in the SDG bond market, climate change and bond markets, and ESG investment performance.

Comprehensive Provision of Information and Policy Proposal Activities
Daiwa Institute of Research (DIR), which assumes the think-tank role of Daiwa Securities Group, provides wide-ranging analysis andinformation to the public. At DIR, we consider it our mission to engage in comprehensive 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 indepth information and a unique viewpoint that has not been presented by others. In order to provide information that satisfies theneeds of the public, we also exchange information and 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 disseminate information.
We also actively deliver ESG information, with the ESG Research Section playing a central role in researching, analyzing, anddisseminating related information. In recent years, sustainability disclosure frameworks have evolved rapidly worldwide, with growinginterest from both issuers and investors. In FY2022, the Section published 25 reports related to the SDGs and ESG and visited 65
financial companies and business companies to provide SDG/ESG information.

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Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersProvision of information by DIR through diverse media
Number of reports posted on the website: 506 reports (Results for FY2022)
Full texts of reports available on the website
Number of recent hits on the research division's page: 4.26 million hits (Results for FY2022)

The DIR Research Division conducts a wide range of information dissemination activities, including reports, media appearances, andbook publications. The Research Division provides clear explanations of complex economic and social issues and produces highquality reports, which has increased opportunities to communicate with clients.
The Research Production Dept. of Daiwa Securities publishes Daiwa Investment Information Monthly and other periodicals to provide
information to the general public. It uses many other means to dispatch information to the general public, including books publishedby publishing houses, desktop calendars with information on financial events, and market charts for wall-hanging.
Daiwa Securities Group hosts live webinars by popular strategists and analysts and provides interactive information to many customers
through the chat function. Approximately 43,000 people participated in FY2022. The Group will continue efforts to disseminate
information in an easy-to-understand manner.

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Sustainability report 2023

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Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersSustainable FinanceIn recent years, Sustainable finance markets in Japan and overseas have expanded, and we believe this trend will continue in the
future.
Daiwa Securities started to work on Sustainable finance ahead of others. In 2008, the company sold Vaccine Bonds for individual
investors, Japan’s first impact investment bonds.
We have also worked to develop standards for Sustainable finance in Japan and overseas. In 2017 and 2020, we served as a member of
the Green Bond Review Committee set up by the Ministry of the Environment to develop the Green Bond Guidelines. In 2020, we
became Asia’s only underwriter selected as a member of the Advisory Council of the International Capital Market Association (ICMA).
In 2020, Daiwa Securities Group established a team specialized in Sustainable finance within Daiwa Securities to further enhance thecompany’s underwriting system. We strive to contribute to spreading and expanding Sustainable finance while offering products,
services, and proposals that meet the needs for Sustainable finance from issuers and investors, who are our customers.

Promotion of Sustainable Finance
The Sustainability Solutions Department is committed to supporting sustainable finance, whichseeks economic outcomes while considering the aspects of Environment, Social, and Governance(ESG). While traditional finance has focused on profitability and risk, addressing social issues asclimate change is imperative in sustainable finance.
Solving climate change and other social issues requires substantial funding and collaboration
between the public and private sectors. By promoting the vitality of sustainable finance, we canenhance the functioning of the private financial market and support businesses in their ESG
Mami Negishi
Managing Director
Sustainability Solutions Dept.
Daiwa Securities Co. Ltd.

initiatives.
Moreover, by linking a company's significant corporate actions, such as fundraising, to its
materiality regarding social issues, we envision the integration of ESG into the core of corporate
management, bringing us closer to realizing a sustainable society.
As stated in the Daiwa Securities Group's 2030 Vision "From Savings to SDGs – Realize the SDGs bycreating a sustainable capital cycle -", we will continue to make concerted efforts to contribute to asustainable future as a bridge connecting market participants such as issuers and investors.

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Sustainability report 2023

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Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersMajor Results
Japan
July 7, 2023

Sustainability

Nagoya Railroad Co., Ltd.

July 5, 2023

Sustainability Linked

NEC Corporation ⟨ Japanese only ⟩⟨ Japanese only ⟩Sustainability Rights Offering

June 22, 2023

TESS Holdings Co., Ltd.
⟨ Japanese only ⟩June 9, 2023

Sustainability Linked

Kao Corporation ⟨ Japanese only ⟩FY2022

Sustainability Linked

March 16, 2023

KAJIMA CORPORATION⟨ Japanese only ⟩GreenJanuary 18, 2023

TOKYU REIT, Inc. ⟨ Japanese only ⟩Green

December 9, 2022

Kyoto City ⟨ Japanese only ⟩March 3, 2023

Sustainability

Nankai Electric Railway Co.,
Ltd. ⟨ Japanese only ⟩December 9, 2022

Sustainability

National University
Corporation Tokyo Instituteof Technology ⟨ Japanese only ⟩Sustainability Linked

December 2, 2022

Shiseido Company, Limited⟨ Japanese only ⟩GreenFebruary 22, 2023

Tokyu Fudosan Holdings
Corporation ⟨ Japanese only ⟩Green

December 9, 2022

Samty Residential
Investment Corporation⟨ Japanese only ⟩Sustainability

November 30, 2022

Sustainability Linked

TOKYU RAILWAYS Co., Ltd.
⟨ Japanese only ⟩Transition

November 17, 2022

October 21, 2022

Sustainability

TOHO GAS Co., Ltd.

KDDI CORPORATION⟨ Japanese only ⟩⟨ Japanese only ⟩Green

October 7, 2022

Sumitomo Metal Mining
Co., Ltd. ⟨ Japanese only ⟩September 16, 2022

Sustainability

Green

October 14, 2022

Tokyo Metropolitan
Government ⟨ Japanese only ⟩Green

September 8, 2022

The Gunma Bank, Ltd.

INFRONEER Holdings Inc.

⟨ Japanese only ⟩⟨ Japanese only ⟩38

Sustainability report 2023

Message from CEO

Social

Our strategy for
Sustainability

August 5, 2022

New Kansai International
Airport Company, Ltd.

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

July 6, 2022

Sustainability Linked

NEC Corporation ⟨ Japanese only ⟩Environment

Green

OthersJune 10, 2022

Sanken Electric Co., Ltd.
⟨ Japanese only ⟩⟨ Japanese only ⟩GreenJune 9, 2022

Sotetsu Holdings, Inc.

June 3, 2022

Sustainability

Air Water Inc. ⟨ Japanese only ⟩⟨ Japanese only ⟩Social

Green

Sumitomo Corporation⟨ Japanese only ⟩April 14, 2022

FUJIFILM Holdings
Corporation ⟨ Japanese only ⟩April 13, 2022

SDGs-IPO

Fuluhashi EPO Corporation⟨ Japanese only ⟩FY2021[Transition] Japan Airlines Co., Ltd. (February 22, 2022) ⟨ Japanese only ⟩[Sustainability] NEC Capital Solutions, Ltd. (February 22, 2022) ⟨ Japanese only ⟩[Green] Asahi Printing Co., Ltd. (January 28, 2022) ⟨ Japanese only ⟩[Sustainability] Nagoya Railroad Co., Ltd. (December 10, 2021) ⟨ Japanese only ⟩[Social] The University of Tokyo (December 10, 2021) ⟨ Japanese only ⟩[Sustainability] Hankyu Hanshin Holdings, Inc. (December 3, 2021) ⟨ Japanese only ⟩[Sustainability Linked] Tokyu Fudosan Holdings Corporation (October 5, 2021) ⟨ Japanese only ⟩[Sustainability] Yokohama Reito Co., Ltd. (September 17, 2021) ⟨ Japanese only ⟩[Green] SCSK Corporation (June 1, 2021) ⟨ Japanese only ⟩FY2020[SDGs-IPO] TESS Holdings Co., Ltd. (March 24, 2021) ⟨ Japanese only ⟩[Sustainability Linked Green] Takamatsu Construction Group Co.,Ltd. (March 12, 2021) ⟨ Japanese only ⟩[Sustainability] Shinsei Bank Ltd. (March 5, 2021) ⟨ Japanese only ⟩[Social-PO] Gakken Holdings Co., Ltd. (February 26, 2021) ⟨ Japanese only ⟩[Sustainability] Mitsui Fudosan Logistics Park Inc. (February 5, 2021)[SDGs-IPO] Poppins Holdings Inc. (December 21, 2020) ⟨ Japanese only ⟩39

May 18, 2022

Sustainability report 2023

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Sustainability in
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Activities

Environment

Others[Green] Central Nippon Expressway Co., Ltd. (November 25, 2020) ⟨ Japanese only ⟩[Green] The Sumitomo Warehouse Co., Ltd. (October 2020)[Green] SENKO Group Holdings Co., Ltd. (September 11, 2020) ⟨ Japanese only ⟩[Green] Daiwa Office Investment Corporation (September 4, 2020)

FY2019[Social] Gakken Holdings Co., Ltd. (March 6, 2020)[Green] DAIKEN CORPORATION First issuance of green bonds in Japan’s building materials industry (September 13, 2019) ⟨Japanese only ⟩[Green] The Sumitomo Warehouse Co., Ltd. First issuance of green bonds by a warehousing company (September 13, 2019) ⟨Japanese only ⟩[Sustainability] Mitsui O.S.K. Lines, Ltd. First issuance of sustainability bonds for individual investors in Japan (July 12, 2019) ⟨Japanese only ⟩[Green] ORIX JREIT Inc. (July 11, 2019)

FY2018[Green] Tokyo Tatemono Co., Ltd. (March 8, 2019) ⟨ Japanese only ⟩[Green] Daiwa Securities Group Inc. (November 22, 2018) ⟨ Japanese only ⟩[Green] Sumitomo Forestry Co., Ltd. Issuance of green convertible bonds (September 11, 2018) ⟨ Japanese only ⟩[Green] Mitsui O.S.K. Lines, Ltd. First issuance of green bonds for individual investors in Japan (August 24, 2018) ⟨ Japanese
only ⟩

Overseas
Sustainable development

July 31, 2023

Inter-American Development
Bank ⟨ Japanese only ⟩July 28, 2023

Blue

Central American Bank for
Economic Integration⟨ Japanese only ⟩40

SDG Housing

June 29, 2023

Nederlandse
Waterschapsbank ⟨ Japanese only ⟩Sustainability report 2023

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Blue

December 29, 2022

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersFY

Central American Bank for
Economic Integration

September 13, 2022

Green

African Development Bank
⟨ Japanese only ⟩⟨ Japanese only ⟩Sustainable

September 9,

development2022

Inter-American
Development Bank
⟨ Japanese only ⟩April 26, 2022

SocialAfrican Development Bank
⟨ Japanese only ⟩FY2021[Green] Hungary (February 2022) ⟨ Japanese only ⟩[EYE] Inter-American Development Bank (February 2022) ⟨ Japanese only ⟩[Sustainable development] Inter-American Development Bank (February 2022) ⟨ Japanese only ⟩[Gender] Asian Development Bank (February 2022)[Water] Asian Development Bank (October 2021)

2

2

0

2

[Decarbonization] Inter-American Investment Corporation (October 2021) ⟨ Japanese only ⟩[Climate resilience] European Bank for Reconstruction and Development (EBRD) (July 2021) ⟨ Japanese only ⟩[Nutrition] Corporación Andina de Fomento (July 2021)

FY[Sustainable development] Inter-American Development Bank (IDB) (March 2021) ⟨ Japanese only ⟩[Green transition] European Bank for Reconstruction and Development (EBRD) (January 2021) ⟨ Japanese only ⟩[Social] International Finance Corporation (IFC) (November 2020) ⟨ Japanese only ⟩[COVID-19 Vaccine] Central American Bank for Economic Integration (CABEI) (November 2020) ⟨ Japanese only ⟩[Green] Hungary (September 2020)
0

2

0

2

[Sustainable development] Inter-American Development Bank (IDB) (June 2020)[Social] International Finance Corporation (IFC) (April 2020)41

Sustainability report 2023

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Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersActivity

Report on Media Appearance
Economic education program “Manabiya-”

Yukino Yamada, the Equity Research Department of Daiwa Securities,
appeared on BS-TBS' economic educational program "Manabiya-17(Seventeen)," which conveys ESG investment in an easy-to-understandmanner.
This program was supervised by the Public Institutions Dept., the Debt CapitalMarket Dept. (II), and Sustainability Solutions Dept. of Daiwa Securities. It wasplanned for SDGs beginners, and introduced companies' efforts to achieve
SDGs.

⟨ Issuers Introduced in the Program *in order of appearance ⟩Fuji Film Co., Ltd.
Japan Railway Construction, Transport and Technology Agency

Report on Media Appearance : Economic Education Program “Sustainable Every Day-What Economy Can Do for the Future”

Report on Media Appearance
7

1

Economic Education Program “Sustainable Every Day-What Economy Can Do for the Future”

Yukino Yamada, Chief ESG Strategist at Daiwa Securities, appeared in “Sustainable
Every Day-What Economy Can Do for the Future,” a TV program (broadcast on BS
TV TOKYO) communicating ESG in an easy-to-understand manner.
The program was supervised entirely by the Public Institutions Banking Dept. andthe Debt Capital Market Deprt. (I) to (III) of Daiwa Securities. It was planned for
those engaged in business and college students who have a great interest in social
contribution. Showing specific cases, the program introduced corporate activities
aimed at achieving the SDGs and fund procurement methods.

⟨ Issuers Introduced in the Program *in order of appearance ⟩Poppins Holdings Co., Ltd.
Gakken Holdings Co., Ltd.

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Sustainability report 2023

Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersNidec Corporation
Japan Railway Construction, Transport and Technology Agency
KDDI CORPORATION

Selected as Member of ICMA’s Advisory Council of the Green Bond and Social Bond Principles
Daiwa Securities Co. Ltd. was selected as a member of the Advisory Council of the Green Bond and Social Bond Principles(“Green Bond Principles, etc.”) of the International Capital Market Association (ICMA), becoming Asia’s only underwriter selected
for the Council.
We believe that this selection was due to the high evaluation of our efforts and achievements related to SDGs. Daiwa Securities
Group will strive to establish and develop new frameworks, such as sustainability linked bonds and transition bonds, in addition
to existing green bonds, social bonds, and sustainability bonds, and will continue to contribute to creating a sustainable society.
For details, click here ⟨ Japanese only ⟩Selected as Top Performer in IFC’s ESG Scoring Survey (July 2020)
In an ESG survey for underwriters conducted for the first time by International Finance Corporation (IFC), Daiwa Securities was
selected as a top performer, becoming one of only six companies receiving the highest rank title among 44 companies.

Major check points
ESG policy
Handling of ESG-related products
Collaboration with stakeholders
Initiatives to reduce environmental impact
Reporting on nonfinancial information, etc.

Daiwa Securities Group Inc.’s MSCI ESG Rating Upgraded to A for the First Time (December 2019)MSCI Inc. is the world’s largest ESG index provider.
The ESG index assesses companies comparatively by industry on a global scale and assigns ratings on a seven-point scale from
AAA to CCC. The initiatives we implemented in our core businesses to achieve the SDGs were highly evaluated by the externalorganization.

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Sustainability report 2023
Our strategy for
Sustainability

Message from CEO

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersHolding of Seminars
Daiwa Securities Group holds various sustainability-themed seminars while receiving support from issuers, investors, and rating
agencies. We aim to spread and expand Sustainable finance by communicating the latest topics and approaches to customers.

September 25, 2023

June 7, 2023

February 3, 2023

th Seminar:
Impact Investing to Changeth Seminar:
Possibilities of transitionth Seminar:
Roadmap for achieving

the World

bonds - now and in the future-carbon neutrality

November 25, 2022

August 30, 2022

June 22, 2022

44

3

1

0

Valuation Methodology fromthe Perspective of European
Companies

1

and Its Utilization4social bonds

1th Seminar:
SDGs Bond Market and1th Seminar:
ESG Disclosure Required Now

1

th Seminar:
The future opened up by

Sustainability report 2023

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Our strategy for
Sustainability

Sustainability in
Our BusinessGovernance

June 7, 2022

th Seminar:
Passion for ZERO Carbon

SocialSocial Contribution
Activities

Environment

OthersFebruary 24, 2022

November 25, 2021

th Seminar:
New Trends in the SDGs Bond
Marketth Seminar:
SDGs Bond Market Leading toRealization of
Decarbonization and Poverty
Reduction

August 5, 2021

th Seminar:
Disaster and Climate Change
Measures and SDGs Bonds

8

7th Seminar:
ESG Investment in Post
COVID-19 Era with a View toZero Emissions in 2050

May 28, 2021

August 4, 2020

54November 10, 2020nd Seminar:
Basics of SDGs Investment for
Beginners

1st Seminar:
ESG Investment Strategy in
the COVID-19 Era

2

close
45

February 4, 2021

rd Seminar:
Japan’s Roadmap to
Becoming a Major Power in
SDGs Bonds

Sustainability report 2023

Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersHolding of Engagement Meetings
Daiwa Securities Group arranges engagement meetings with issuers and investors with the aim of further enhancing Sustainablefinance.
In these meetings, we communicate investors’ frank opinions to SDGs bond issuers, thereby contributing to the positive developmentof SDGs bond markets for both issuers and investors.

- Japan Automobile Recycling Promotion Center× Kitakyushu
City (November 30, 2022)

For details,click here. ⟨ Japanese only ⟩Engagement discussion at Kitakyushu City HallOn November 30, 2022, an engagement meeting was held
between the Japan Automobile Recycling Promotion Center andKitakyushu City, the issuer of sustainability bonds.

Engagement discussion at Kitakyushu City Hall

Realization of a green society through regional revitalization and development of transportation infrastructure- JRTT×Kiraboshi Bank, Ltd. (April

)

1

2

0

2

For details, click here ⟨ Japanese only ⟩46

Sustainability report 2023

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Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersSupport for students being required now- Japan Student Services Organization×Japanese Red Cross Toyota College ofNursing (January 2021)

For details, click here ⟨ Japanese only ⟩Holding of Community-Based Seminars -SDGs×Regional Revitalization-

Since 2021, our sales branches across Japan have been holding seminars (webinars) that introduce initiatives taken by variousorganizations toward achievement of the SDGs.
For details, click here. ⟨ Japanese only ⟩47

Sustainability report 2023

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Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersSustainability-Fueled Business Expansion
While maintaining the core securities business that has been valued since its foundation, Daiwa Securities Group has started solution
businesses for social problems in various fields, such as FinTech, healthcare, energy infrastructure, and agriculture, leveraging theknowledge of various securities and financial businesses cultivated by the Group.

Fintertech Co., Ltd.
Creation of Next Generation Financial Services
Established in April 2018, Fintertech Co., Ltd. aims to create next-generation financial services through the use of state-of-the-art
technologies and collaboration with external companies.
The company began offering digital asset-backed loans in March 2020, followed by a crowd-based tipping system in April 2020, realestate investment loans in April 2021, and loan-type crowdfunding in November 2021. Going forward, the company will continue todevelop new financial services to satisfy the diverse needs of customers.
Fintertech Co., Ltd. ⟨ Japanese only ⟩Daiwa Energy & Infrastructure Co., Ltd.
Promotion of Investment and Financing in Energy
Daiwa Energy & Infrastructure Co., Ltd. (DEI) was launched as the successor to the energy investment division of Daiwa PI Partners, andstarted operation on October 1, 2018. The company aims to provide new value as a member of an integrated securities group with ahybrid business model, and contribute to the SDGs through investment and financing in the renewable energy, infrastructure, andresource fields.
Daiwa Energy & Infrastructure Co., Ltd.

Renewable Energy Power Generation Projects
DEI has been actively working on development of and business investment in renewable energy generation projects, taking advantageof the Daiwa Securities Group's network. In the solar power generation field, the 9 owned solar photovoltaic power plants whose
construction has been completed as of May 2023 are all operating stably. The Tochigi solar photovoltaic power plant (51 MW) underconstruction is scheduled for completion in 2024.
In the biomass power generation field, DEI has been steadily promoting the development of wood biomass power generation plants

48

Sustainability report 2023

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Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

Othersthat use tree trimmings in Japan as their primary source of fuel. The development is underway with Green Thermal Co., Ltd., withwhich DEI has formed a capital and business alliance. The commercial operation of a plant in Yonezawa, Yamagata began in January
2018 as the first alliance project, and a plant in Kamitonda, Wakayama as the second project also began operation in June 2020. The
plant in Kai, Yamanashi, which is under construction as the third project, is scheduled to be completed in 2023.

Stations developed/ invested in by DEI

OutputPhotovoltaic power stations

Biomass power generation plant

Stations in operation: Approx. 138 MW (total

Stations in operation: Approx. 13 MW (total forfor 9 stations)

2 stations)

Stations under construction: Approx. 51 MW

Stations under construction: Approx. 7 MW

(total for 1 station)(total for 1 station)

Total

Approx. 189 MW

Approx. 20 MW

Projected amount ofEquivalent to the amount for approximately

Equivalent to the amount for approximately

electricity generated

46,000 households

25,000 households

annually:* Total generation fromoperating power
plants

Initiatives for the Woody Biomass Power Generation Field
DEI has formed a capital and business alliance with Green Thermal, a leader in the development and operation of woody biomass
power generation plants, and Biomass Fuel Co., Ltd., a biomass fuel supplier. It has been actively promoting the construction of power
plants and the expansion of its value chain in the biomass field.
In collaboration with Biomass Fuel, DEI has been working to expand the procurement of palm kernel shell (PKS) - fuel for biomass
power generation - and develop wood pellet manufacturing plants mainly in Southeast Asia. Preparations are currently underway forthe construction of a new pellet plant in Vietnam.
The woody biomass power generation business uses carbon-neutral power generation facilities that do not affect the amount ofcarbon dioxide. Moreover, since it adds new value as fuel to wood trimmings from forests and PKS that have been left and discarded, it
is expected to generate new industries and employment and contribute to local economies in Japan as well as the development ofindustry in developing countries.

Private Core Solar Fund
DEI offers DSREF Core Amaterasu Fund, Investment Limited Partnership (hereinafter, "Amaterasu") as a vehicle to invest in brownfieldsolar power projects in Japan. The fund was originally established by Daiwa Real Estate Asset Management. DEI plans to provide
stable-operating solar power plants to Amaterasu.
The Group will develop a capital recycling model in the renewable energy sector by combining DEI's investment and financing function
with Daiwa Real Estate Asset Management's infrastructure asset management function. The Group will continue these initiatives tomeet the needs of investors in alternative assets.

49

Sustainability report 2023

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Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersDaiwa Food & Agriculture Co., Ltd.
Promotion of Sustainable Agricultural Production BusinessJapan's agricultural business faces various social issues, such as the aging of people engaged in farming, a decreasing number of new
farmers, shortages of successors, and an increase in abandoned farmlands.
Daiwa Food & Agriculture Co., Ltd. (DFA), which was established in November 2018, will contribute to solving various issues faced by
Japan's agriculture and food-related businesses, such as expansion of scale and increase in efficiency of the agricultural production
business and new business initiatives, through the provision of risk capital.
Daiwa Food & Agriculture Co., Ltd. ⟨ Japanese only ⟩Agricultural Production Initiatives Using Large-scale Horticultural Facilities
Following on from the large-scale cultivation of tomatoes in Kusu, Oita, DFA entered the paprika production and sales business in
October 2021 as a new agricultural production business. By farming in state-of-the-art environmentally controlled greenhouses, DFA
has become one of Japan's leading centers of paprika production.
By taking advantage of cultivation using large-scale horticultural facilities and its expertise in operating such facilities, DFA willcontinue to pursue expansion of scale and increase in efficiency of agricultural production, thereby engaging in business that
contributes to the stable supply of food in Japan and overseas and to the revitalization of local economies.

Paprika production farm that boasts one of the largest cultivation areas in

Paprika at harvest time

Japan

Good Time Living Co., Ltd.
Securing nursing care services of high quality is an important social issue to be addressed in Japan's super-aging society. Good Time
Living is developing an environment where the staff can demonstrate their expertise and improving the nursing care quality by utilizing
network communications to improve work efficiency.

50

Sustainability report 2023

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Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersProvision of High-Quality Nursing Care Services
Good Time Living is working to improve service quality with an emphasis on communication and reduce the amount of labor spent on
indirect operations by using network communications to share information and knowledge among caregivers. By switching from oldpaper records to mobile devices, records on the health and daily life of residents of care facilities are input in a timely manner.
Coordinating information among multiple professions helps to provide services tailored to the individual, such as environmental
improvements and reviews of types of nursing care provided. LINE WORKS, a business chat tool, has been introduced at all locations,aiming to further strengthen staff communication that will provide residents more safety and a peaceful mind.
In order to change the current state of nursing care services to address the progressive aging of the population, Good Time Living willfurther increase operational efficiency on the nursing care frontline and develop an environment that allows nursing care staff todemonstrate their expertise. The company will thereby contribute to the achievement of SDG Goal 3 "Good Health and Well-being" andGoal 8 "Decent Work and Economic Growth."
Good Time Living Co., Ltd. ⟨ Japanese only ⟩Specific Case of IT Use

Example of Monitoring Assistance system display

Example of [Notes] screen of LINE WORKS
business chat toolon PC screen
Body motion sensors are placed under the bed

Communication and information sharing about
residents between staff members, traditionallydone verbally or in writing, is digitized. The tool
can convey information more quickly and reliably.
It also facilitates active communication across jobboundaries, including caregivers and nurses.
Important points to consider when giving care toeach resident and other various knowledge is also
accumulated and shared between different
professions, leading to more attentive services.

mattress to detect body movements (such as
rolling over, heartbeat, breathing) of residents in
CareWiz Toruto, an AI service for analyzing physicalbed. We have begun to create an environment
where residents' conditions (measurement results)

functionscan be monitored using mobile devices and otherdevices.

We utilize CareWiz Toruto, a physical function

The aim is to reduce staff workload and provide
better services to residents by understanding andanalysis AI service, to measure the effectiveness ofrehabilitation programs.
When a person is video recorded walking a
distance of about 5 meters, the video is analyzed inabout 2 minutes. The walking condition is scored infour indicators: speed, rhythm, reeling, and leftright difference. Measurement results are output
on a single sheet, enabling more specific andtimely feedback to residents and their families.
Feedback from residents and staff
It is specific, easy to understand, and easy tocompare with previous results. (Resident)
I was surprised to find that I could walkstraighter than I thought I could. (Resident)
Toruto analysis with and without a cane showedthat the resident could walk more stably with acane, leading to more personalized care.
(Caregiving staff member)

51

monitoring changes in the residents' physicalconditions based on the measurement results.

Sustainability report 2023

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Our strategy for
Sustainability

Management of resident data with mobile devices
carried by staff
Data on residents' health and lives, which used tobe handwritten by care-giving staff members, isnow entered into the care-giving record system.
The system automatically creates progress graphs
using vital data such as temperature and bloodpressure. It has also made it easier to retrieve
recorded data and reduced indirect work.
Feedback from staff
We didn't have enough opportunities to look at
care given by other staff members, but we are
now able to learn points for good care by looking
at records.
CARE KARTE has reduced the time required forrecording data, enabling us to increase time forconversation with residents.

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersFace recognition system with a thermography
cameraWhen a person stands in front of the thermography
camera, the system shows the person's
temperature and registered name.
* The person can be identified even when wearing
a maskGood Time Living has set up a thermography
camera equipped with face recognition AI in awindbreak chamber. When a person enters thebuilding, the face recognition system conducts
temperature measurement and identifies whether
or not the person is registered. The automateddoor is then opened and closed. Thermography
cameras with the same specifications are also
placed inside the rooms to prevent residents fromgoing out alone if it is inadvisable for them to goout on their own due to their physical conditions.

A screen of the smartphone portal site exclusively
for residents and their families
Good Time Living established this portal site tofacilitate the provision of information and enhance
the convenience of residents and their families.
The site has enabled the company to provide, in atimely manner, information on invoices andpayment receipts, various notices, and crisis
management information that used to be given byposting notices in the building or individuallygiving or mailing letters. The portal site is expected
to help reduce monthly administrative work by 400
hours per facility (in the case of a facility with 80
rooms).
A new [Photo Gallery] function was also added.
Families of residents can freely view photos of thedaily life and activities in care facilities at any time,
which helps to foster their sense of security.
Feedback from residents' families (Photo Gallery
function)
I was happy to see the residents enjoying theirtime with the staff members.

Daiwa Corporate Investment Co., Ltd.
Creation of Next Generation Industries and Services
Daiwa Corporate Investment Co., Ltd., a venture capital firm of Daiwa Securities Group, helps to solve social issues through investment
in ventures, thereby contributing to the realization of a sustainable society.
Daiwa Corporate Investment manages multiple venture funds that invest in ventures. Some of these funds are strongly related to theSDGs, such as funds specializing in biotechnology and an environmental fund managed jointly with a Chinese environmental firm.
The firm incorporates an SDGs perspective into its investment activities for other funds as well, such as selection of investee companies
and management support provided after investment. In recent years, Daiwa Corporate Investment has been especially strengthening
efforts to relate its activities to the SDGs due in part to an increase in the number of entrepreneurs who have a strong awareness ofsolving social issues.

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OthersDaiwa Corporate Investment Co., Ltd.

Investing in Ventures That Solve Social Issues (FY2022)
Daiwa Corporate Investment invests in many ventures. They include many companies related to the SDGs as shown below.
Cardio Intelligence ⟨ Japanese only ⟩(DVGF) : An AI diagnostic support system developed for the early detection of atrial

fibrillation based on electrocardiogram data
Cell Fiber(DVGF): A cell mass production technology developed for cell therapy applications based on the core technology of "cellfiber" to form cords cell clusters.
Sonire Therapeutics(DVGF): A next-generation high-intensity focused ultrasound (HIFU) therapeutic device for refractorypancreatic cancer.

CECEP Environmental FundIn October 2020, in collaboration with the China Energy Conservation and Environmental Protection (CECEP) Group, China's only stateowned company specializing in the environment, Daiwa Corporate Investment established a fund in Wuhan, Hubei Province, to invest
in environment-related companies in China. The fund aims to contribute to the SDGs, and is engaged in investment business based on
the principles of the Chinese government's policy to protect the Yangtze River. In 2022, the fund received an investment from the China
National Green Development Fund, a joint fund established by the Chinese central government (Ministry of Finance, and Ministry of
Ecology and Environment) and the Shanghai Municipal Government, bringing the current total investment fund to approximately 6.5
billion yen as of May 31, 2023. The fund mainly invests in unlisted Chinese blue chips in the fields of energy conservation, theenvironment, circular economy, new energy, new materials, and equipment manufacturing. It invested in the following companies in
FY2022:
Anhui Yingfa Ruineng Technology Co., Ltd. (Tianchang, Anhui Province): Manufacture of photovoltaic cells
Hunan Yacheng New Materials Co., Ltd. ⟨ Chinese only ⟩(Changsha City, Hunan Province): Manufacture of lithium battery

materials
Through investment in these companies, among the 17 SDGs, Daiwa Corporate Investment aims to make concrete contributions toGoal 6 Clean Water and Sanitation,, Goal 7 Affordable and Clean Energy, and Goal 9 "Build resilient infrastructure, promote inclusive
and sustainable industrialization and foster innovation."

Investment in Drug Development Ventures and Other Businesses by DCI
Partners
DCI Partners is a venture capital firm that has been investing in the biotech field for more than 20 years, including the period of NIF
Ventures (now Daiwa Corporate Investment). The firm currently manages two of Japan's largest bio-venture funds, making
investments in Japan and Taiwan. In addition to existing bio-venture investments, the firm may expand the scope of investment to themany promising drug candidates that exist in pharmaceutical companies and academia, establish companies under the direction of
the fund, and promote the drug development business. Leveraging its human resources, expertise, and financial strength of the fund to53

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Othersprovide managerial resources through the fund, DCI Partners is committed to advancing development beyond hands-on support, fromstrategy planning to implementation. The government's Five-Year Plan for Developing Startup Businesses, formulated in November
2022, includes a plan to strengthen support for drug-development ventures. Under this Plan, a project to support the development ofpractical applications of new drugs started in cooperation with approved venture capital firms. This field is expected to flourish greatly
in the future. DCI Partners was selected as an accredited venture capital firm. The majority of new drugs developed in recent years havebeen developed by bio-ventures. DCI Partners will support these companies through its investment activities and strive to build afoundation for industry and technological innovation and contribute to the health of all people and society.
DCI Partners Co., Ltd.

Taiwan-Japan Bio Venture Fund
DCI Partners is a venture capital firm that invests in biotech startups in Japan and Taiwan, with a focus on drug development. It
manages one of Japan's largest bio-venture investment funds. Following Fund I, established in January 2015 with a total capital of¥11.6 billion, Fund II was established in December 2020 with a capital commitment of ¥15.3billion.

DCI Partners' Major Investees
Surv BioPharma ⟨ Japanese only ⟩: A biopharmaceutical company founded in August 2022 under the leadership of a fundmanaged by DCI Partners, which utilizes research results from Kagoshima University to develop innovative cancer drugs.
Tims(listed on TSE Growth Market on Nov. 2022): A company that develop drugs for cerebral infarction.

The Great East Japan Earthquake SME Reconstruction Support Fund
Daiwa Corporate Investment Co., Ltd. operates the Great East 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., The Bank of Iwate, Ltd., The 77 Bank, Ltd., The Toho Bank, Ltd., and other institutions. Targeting unlisted private companies
in the disaster-affected areas, the fund aims to expeditiously provide risk finance. The goal is to actively support companies in theirefforts to secure renewed growth and development by supplying finance for a variety of purposes. These include restoration andreconstruction following the 2011 earthquake disaster, new business development, the shift to a new industry or line of business,business reorganization and succession, and business incubation. The fund thereby aims to contribute to the early restoration andsustainable development of the disaster-affected areas.

Daiwa ACA HealthCare Inc.
Daiwa ACA HealthCare Inc. ⟨ Japanese only ⟩54

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Daiwa ACA Business Succession
Daiwa ACA Business Succession Fund [PDF:151KB]

55

SocialSocial Contribution
Activities

Environment

OthersSustainability report 2023

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Our BusinessGovernanceSocialSocial Contribution
Activities

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OthersCorporate GovernanceCorporate Governance Report[PDF:1,697KB]

Basic Views on Corporate GovernanceCorporate Governance Guidelines

Corporate Governance System

Preventing Conflict-of-Interest Transactions between Group Companies
Performance -linked remuneration system for Directors and Corporate Executive Officers (Shikkoyaku)
Internal Control System and Internal Audit

Basic Views on Corporate Governance
Daiwa Securities Group Inc. will respect the rights and interests of the shareholders, consider the position of all stakeholders and strive
for sustainable growth and improvement of medium to long term corporate value through realization of our corporate principles"Building trust," "Placing importance on personnel," "Contributing to society," and "Maintaining healthy earnings results."
For that purpose, the Company practices group management based on a holding company structure, establishes a highly transparent
and objective governance environment that conforms to international standards, realizes highly efficient oversight of group companies
and builds a unified group management system that elicits synergies among group companies.

The Company has adopted Three Committees system (a company with nominating committee, etc.) as an institutional design in orderto supervise management through the following (1) and (2).
(1) Making swift and decisive decisions by having the Board of Directors assign wide-ranging authority to Corporate Executive Officers
and clarifying the division of the duties among Corporate Executive Officers(2) Improving transparency and fairness of the management by establishing three committees: the Nominating Committee, Audit
Committee, and Compensation Committee with highly independent Outside Directors as a majority of the members
Furthermore, the Company positively addresses corporate social responsibility activities in order to obtain trust from all of the
stakeholders. There are indeed various aspects to corporate social responsibility, such as providing superior products, services, andsincere responses to customers; returning profits appropriately and disclosing information to shareholders appropriately; taking
measures for labor environment and evaluation of the employees; establishing legal compliance and corporate ethics; environmental
management; as well as social contribution.

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OthersThe Company believes that these approaches, together with a strengthened corporate governance system which emphasizes
transparency, mobility and efficiency will lead to the sustainable improvement of the corporate value.

Corporate Governance Guidelines
The Company’s Corporate Governance Guidelines define the basic framework and policies of the Daiwa Securities Group’s corporate
governance.

Daiwa Securities Group Inc. Corporate Governance Guidelines
Preamble: Purpose of our corporate governance

Article 13: The role of Corporate Executive Officers(Shikkoyaku)

Article 1: Basic approach to corporate governance and thepositioning of these Guidelines

Article 14: The role of the Nominating Committee

Article 2: Organizational design (adoption of a Three

Article 15: Succession plans for the position of CEO

Committees system)

Article 16: The role of the Compensation Committee

Article 3: Role of the Board of Directors

Article 17: The authority and role of the Audit Committee

Article 4: Composition of the Board of Directors

Article 18: Internal control systems

Article 5: Chair of the Board of Directors

Article 19: Information disclosure

Article 6: Composition of the Committees

Article 20: Securing equality of shareholders

Article 7: Agenda setting and management of Board of

Article 21: Related party transactions

Directors meetings

Article 22: Dialogue with shareholders and investors

Article 8: The role and requirements of Directors

Article 23: Dialogue with stakeholders

Article 9: The role and requirements of Outside Directors

Article 24: Basic policy on strategic shareholding

Article 10: The Outside Directors' Committee

Article 25: Amendments to and revocation of the Guidelines

Article 11: Support systems for Directors (including theprovision of information and training)
Article 12: Evaluating the effectiveness of the Board of
Directors

Corporate Governance Guidelines(as of June 1, 2023) Complete Text

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OthersCorporate Governance System
The corporate governance system of the Company consists of the Board of Directors and the Three Committees (Nominating
Committee, Audit Committee, and Compensation Committee) as a supervising body, Outside Director’s Committee as a subcommitteeof the Board of Directors, Executive Management Committee and its subcommittees (Group Risk Management Committee, Group
Compliance Committee, Disclosure Committee, Group IT Strategy Committee, and Overseas Management Committee) as an executive
body, and Group Internal Audit Committee, which is in direct control of the CEO as an internal audit body.

Corporate Governance System at Daiwa Securities Group (as of June 28, 2023)

Board of Directors and Committees: Roles, Duties, Composition and Activities
For roles, duties, composition and activities of the Board of Directors and the Committees, refer to:
Corporate Governance Report
Securities Reports
Daiwa Securities Group Integrated Reports
Sustainability Data Edition

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List of Items
Board of Directors

ReportRole and responsibility
Members and their status ofattendance
Evaluating the effectiveness

●

●

●

Nomination policies, etc.

●●

Role and responsibility●●

Composition

●

●

●

●

Audit Committee’s activities●●

Role and responsibility●●

Composition

●

●

●

●

●

●

Role and responsibility●●

Composition●●

Subcommittees●●

Role and responsibility●●

Composition●●

attendanceRole and responsibility

Committee

Committee

Group Internal Audit
Committee●●

Members and their status of

Executive Management●

Composition

attendanceOutside Directors'●●

Members and their status ofCompensation Committee●●

attendance

59

OthersSecurities Report

Role and responsibility

Members and their status ofAudit Committee

Environment●of the Board of Directors
Nominating Committee

Social Contribution
Activities

SocialSustainability report 2023

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OthersThe Skill Matrices of Internal Directors
Years
Title and charge in the Company

onCorporate

Finance /Legal /

management

Accounting

Compliance

DX / ICT

Globalbusiness

Board
Takashi Hibino

Chairperson of theBoard and Corporate
Executive Officer

Seiji Nakata

Nominating

Compensation

19

Committee

Committee

years

Nominating

Compensation

8

Committee

Committee

years

●

Member of the Board,
Representative
Corporate Executive
Officer,President and CEO

Toshihiro Matsui

Member of the Board,
Representative
Corporate Executive

7

Officer,years

Deputy President and
COO,
Head of Wholesale
Keiko Tashiro

Member of the Board,
Corporate Executive
Officer and Deputy
President,

9

Executive Head ofyears

Overseas Operations,
Head of Sustainability
and Think Tank
Akihiko Ogino

Member of theBoard,
Corporate
Executive Officer
and Deputy

3

President

years

Executive Head ofCorporate
Planningand Human
Resources
Sachiko Hanaoka

Hiromasa Kawashima

Member of the Board

Member of the Board

Audit

4

Committee

years

Audit

3

Committee

years

60

They have expertise and experience to executeadequately the management and control of the Group.

●Sustainability report 2023

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OthersThe Skill Matrices of Outside Directors
NumberTitle and charge in the Companyof years

Corporate

Finance /Legal /

management

Accounting

Compliance

DX / ICT

Globalbusinessin officeHirotaka Takeuchi

Ikuo Nishikawa

Eriko Kawai

Katsuyuki Nishikawa

Toshio Iwamoto

Yumiko Murakami

Noriko Iki

Outside Director

Nominating

Compensation

7

Committee

Committee★

years

Outside Director

Outside Director

Outside Director

Outside Director

Compensation

7

Committee

years

Nominating

Compensation

5

Committee

Committee

years

Nominating

Audit

4

Committee

Committee

years

Nominating

Compensation

3

Committee★

Committee

years

Outside Director

Outside Director

Audit
Committee★

Audit

Compensation

2

Committee

Committee

years

Nominating

Audit

0

Committee

Committee

years

●

●

●

●

●

●

●

●

●

●

●

●

●

★ indicates a Chairperson of the committee

Preventing Conflict-of-Interest Transactions between Group Companies
Conflict-of-interest transactions can occur between Daiwa Securities Group Inc. and Group companies in situations such as intra-Grouptransactions. Daiwa Securities Group applies rules regarding conflicts of interest stipulated by Japan’s Companies Act to the Executive
Management Committee as well as the Board of Directors. Conflicts of interest between Daiwa Securities Group Inc. and Group
companies are appropriately prevented through a rule prohibiting an executive officer from voting when he or she concurrently serves
as an officer of an interested Group company and thus has a special interest in a matter to be decided.

Performance -linked remuneration system for Directors and Corporate
Executive Officers (Shikkoyaku)
At Daiwa Securities Group, Inc., as stipulated by the Companies Act, the Compensation Committee has determined "Policies for
Determination of Remuneration of Directors and Corporate Executive Officers."

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Policies for Determination of Remuneration of Directors and Corporate Executive O cers
Compensation for Directors and Corporate Executive Officers is based on the following fundamental policies.
To create effective incentives, which contribute to the increase of shareholders’ value through sound business development and also leadto the improvement of business performance in the short-term and in the medium/long-term.
To maintain a remuneration level which is competitive enough to recruit and retain people not only in Japan but also in the world as a
global securities company group.
To ensure the execution and supervision functions operate effectively as a company with Three Committees (a company with nominating
committee, etc.).

Remuneration of Directors and Corporate Executive Officers consists of base remuneration, Performance-linked
remuneration and Stock-linked remuneration, and determined at the Compensation Committee which are specifically as
below.
Base remuneration
A fixed amount calculated based on his/her position, duties and role, and paid monthly and in cash.

Performance-linked remuneration
Determined depending on the level of individual contribution, mainly on the basis of consolidated ROE and consolidated ordinary
income, which are set as Performance KPIs of the Medium-Term Management Plan, while also comprehensively taking into accountachievement status of the managerial goals set in the Medium-Term Management Plan and the other relevant factors and provided at a
certain time every year.
A certain limit is set for the cash payment regarding performance-linked remuneration based on business performance. If performancelinked remuneration exceeds the limit, the part exceeding the limit will be replaced from cash to restricted stock.
It does not apply to Directors who do not serve as Corporate Executive Officers.

Stock-linked remuneration
To increase the link between remuneration and shareholders’ value, the Company grants, as stock-linked remuneration, restricted stock,etc., the value of which corresponds to a certain percentage of base remuneration as non-monetary remuneration at a certain time every
ffi

year.
It does not apply to Outside Directors.

< Performance-linked remuneration >The Company refers to KPIs, which are set as the Group numerical goals in the Medium-Term Management Plan "Passion for the Best"
2023 to calculate Performance-linked remuneration.
The performance assessments used in calculating Performance-linked remuneration reflect the financial performance evaluation,
which is based on the Performance KPIs using the financial information and the quality evaluation, which is a comprehensive
assessment of the KPIs other than the performance KPI. The Financial Performance Evaluation and the Quality Evaluation aredetermined by the Compensation Committee.
Performance-linked remuneration is calculated by multiplying the reference amount determined for each position and theperformance evaluation, and reflecting the degree of individual contribution. The same calculation formula is applied to all positions
for performance evaluation.
The indicators pertaining to Performance-linked remuneration are as shown below.

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OthersReference Value is determined at Compensation Committee, based on Medium-Term Management Plan.
The figure of consolidated total capital adequacy ratio is as of the end of December 2022.

< Image of remuneration >In order to foster a system that incentives long-term
performance improvement and sustainable growth better, if
Performance-linked remuneration exceeds a certain limit, theexcess amount will be paid in the form of by restricted stock.

< Restricted Stock Compensation Plan >The Company introduced the Restricted Stock Compensation Plan to increase incentives for the Company and its subsidiaries’63Sustainability report 2023
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OthersDirectors, Corporate Executive Officers (Shikkoyaku), and Executive Officers (Shikkoyakuin), etc., to enhance performance in themedium and long term and strengthen values shared among the Eligible Officers, etc. and shareholders.
Under a Restricted Stock Compensation Plan, the Company has introduced the malus provisions. If Eligible Officers commit a serious
criminal offense, a breach of duty of care, or any other misconduct that damages the Group's reliability during the restriction period,
the Company will automatically acquire subject stocks without compensation.
It is intended to provide restricted stock for amount which equals to fixed ratio of the Base
Stock Remuneration I

remuneration, and to function effectively as an incentive for long-term performance(Stock-linked remuneration)

improvement, restriction will be released when he/she resigns he/her position as director,
officers etc., of the Company and its subsidiaries and affiliates.
Fixed limit is set for Performance-linked remuneration, which is provided by cash based on the

Stock Remuneration II

performance, and if the amount exceeds the limit, part of the remuneration will be replaced by(Performance-linked

restricted stock. Restriction period is 3 years, it will function as substantial fee defer when

remuneration)

Performance-linked remuneration exceeds a certain limit.

< Consolidated Compensation, etc. by officer for FY2022 >Unit: millions of yen
Value of consolidated compensation, etc. by type

Total
Name

consolidated

Type ofCompany

compensation,

officername

etc.
Takashi Hibino

190

Corporate

Daiwa

Executive

Securities

Officer

Group

Base

Restricted

remuneration

stocksPerformancelinked
remuneration

Retirement
benefits

69

23

50

-

46

-

-

-

69

23

73

-

46

-

-

-

Inc.
Daiwa
Securities
Co. Ltd.
Seiji Nakata

213

Corporate

Daiwa

Executive

Securities

Officer

Group
Inc.
Daiwa
Securities
Co. Ltd.

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Toshihiro

Our strategy for
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149

Matsui

Sustainability in
Our BusinessGovernanceCorporate

Daiwa

Executive

Securities

OfficerGroup

SocialSocial Contribution
Activities

Environment

Others

61

17

45

-

25

-

-

-

46

13

31

-

20

-

-

-

46

13

31

-

20

-

-

-

19

13

-

-

46

-

30

-

Inc.
Daiwa
Securities
Co. Ltd.
Keiko Tashiro

111

Corporate

Daiwa

Executive

Securities

Officer

Group
Inc.
Daiwa
Securities
Co. Ltd.

Akihiko Ogino

111

Corporate

Daiwa

Executive

Securities

Officer

Group
Inc.
Daiwa
Securities
Co. Ltd.

ShinsukeNiizuma110

Corporate

Daiwa

Executive

Securities

Officer

Group
Inc.
Daiwa
Securities
Co. Ltd.

(Notes)1.

The persons, each of whose total remuneration, etc., paid is equal to or more than 100 million yen, are listed above.

2.

Type of officer refers to the officer categories used by Daiwa Securities Group Inc.

3.

Officers serving as both Directors and Corporate Executive Officers are listed as Corporate Executive Officers in the type of officer column.

4.

Performance-linked remuneration does not include the amount granted as Restricted Stock.

< Procedures on decision of remuneration for Directors >The Articles of Incorporation stipulate that the remuneration, etc., of the Directors and Corporate Executive Officers (Shikkoyaku) is
determined by the resolution of Compensation Committee.
In determining the amount of remuneration, it is calculated based on the indicators determined by Compensation Committee, majorityof which is held by Outside Director to secure the transparency.

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Others*In addition to above, Compensation Committee is held from time to time.

Internal Control System and Internal Audit
The Company group has created management structure centered on the Company with regard to the group’s various main risks, andseeks to ensure the effectiveness and efficiency of operations, the reliability of the finance report, compliance with the laws andregulations concerning business operations, and the preservation of assets, etc. This is based on the recognition that the maintenanceof the internal control system to accomplish the sound and appropriate operation is the responsibility of the manager.
Based on the recognition that the establishment of a sound and efficient internal audit system enhances the value of the Group, andhaving concluded that the internal audit plays an important role in such a system, the Company has positioned a full-time Internal
Audit Corporate Executive Officer (Shikkoyaku) in charge, and has an Internal Audit Department, which is independent from othersections, verify the internal control system.
By conducting risk-based audits, the Department strives to enhance the Group’s corporate value.

Focus items in the internal audits of the Group’s
The state of internal control at Daiwa Securities and overseas locations as a global financial instruments business operator
The state of businesses at Group companies, and the state of control from the Company

Diagram of Daiwa Securities Group's Internal Auditing System

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OthersAuthorization of Plans and Reporting of Results
Internal audit plans are subject to approval by and results of the audits are presented to the Group Internal Audit Committee.
Furthermore, internal audit plans shall be consented to by the Audit Committee or the Selected Audit Committee Members who has
been given certain authority from the Audit Committee, and the results of the audits are also reported directly 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. They also include highly important findings made during audits conducted on companies in Japan and overseas.

Collaboration with Parties Inside and Outside the Group and Improvement of System
The Company’s Internal Audit Department collaborates with the internal auditing divisions of Group companies in Japan and overseas
through regular meetings, monitoring, and audit activities.
The Company’s Internal Audit Department is in close liaison with the Audit Committee and Accounting Auditors and make adjustmentswith them in order to carry out auditing efficiently. The Department may also be delegated investigative duties from the Audit
Committee. The degree to which these internal auditing activities satisfy the Institute of Internal Auditors’ “International Standards for
the Professional Practice of 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.

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Daiwa Securities Group has four Corporate Principles. They are “Building trust,” “Placing importance on personnel,” “Contributing tosociety,” and “Maintaining healthy earnings results.” The Group believes that compliance is a significant element for achieving theseprinciples. The goal of the Group's compliance activities is not merely to “comply with laws and regulations,” but to earn the trust ofcustomers, markets, society, and stakeholders.

Compliance System

Information Security

Compliance System
The Group Compliance Committee deliberates and decides general policies and specific measures on matters involving compliancewith laws and regulations, establishment of corporate ethics, and internal control for the Group.
The Group is engaged in compliance risk management regarding three priority items that are common to all Group companies, namely
securing market fairness and transparency, eliminating anti-social forces (including measures for combatting money laundering andterrorism financing), and information security.
At Daiwa Securities Group Inc., consist of the Compliance Control Department, which is responsible for overall compliance planningand formulation, and which serves as a market gatekeeper, and the Compliance Department, which is tasked with providing direction
and support to the sales branches and headquarters departments and divisions, collaborate in improving and strengthening Groupwide compliance systems.
In addition to those at domestic Group companies, the Group also works closely with the compliance departments at overseas Group
companies in order to build a global compliance system.
At Daiwa Securities, the Compliance Department monitors transactions and solicitation by sales branches, identifies challenges andissues, and visits sales branches to check their business status and provide instructions. The Department also regularly conducts onsite inspections. Moreover, it visits the work sites of headquarters departments and divisions directly, identifying issues and providing
training support. The Customer Counseling Center, established within the Compliance Department, comprehensively handles
customer feedback and complaints and reflects them in the business to improve customer satisfaction.
One of Daiwa Securities' strengths lies in its stationing of full-time internal administrators at all sales branches. These internal
administrators serve as Compliance Managers and work to improve the effectiveness of the PDCA cycle (plan, do, check, act) at eachsales branch. They also cooperate closely with the Compliance Department in an effort to build a solid compliance system.

68Sustainability report 2023

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OthersFull Implementation of “Customer-First”
Daiwa Securities is taking measures in line with the compliance program to ensure the effective operation of our internal control
system and strict compliance of our sales activities with laws and regulations. For FY2023, we set up the pillars outlined below,
maintaining "Customer-First" as the keyword, as in the previous fiscal year.
1. Full implementation of “Customer-First Operations”-pursuit of the greatest benefit to customers
2. Reinforcement of systems to prevent financial crimes
3. Ensuring of market fairness and transparency
4. Further upgrading of information management systems
5. Strengthening of compliance systems of overseas worksites
Daiwa Securities deals with various financial products, including stocks and investment trusts. When soliciting investment from
customers, we ensure compliance with the principles of integrity and fairness, suitability, and self-responsibility, from the perspectiveof investor protection. We have adopted the practice of systematically providing continuous and thorough after-sale follow-ups, rather
than leaving it to individual sales staff, especially when the market is trending downward. We believe that providing thorough, face-toface explanations to customers and maintaining customer trust and a sense of security at times of market fluctuations are part of thepractice of Customer-First for Daiwa Securities as a marketer of financial products. We will continue stepping up such initiatives going
forward.

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OthersAnti-Money Laundering and Combating the Financing of Terrorism (AML/CFT)The importance of anti-money laundering and combating the financing of terrorism (AML/CFT) has grown worldwide. Daiwa Securities
Group complies with laws and regulations related to AML/CFT, and works on reinforcement of the effective preventive system based ona risk-based approach as an important management issue to ensure that Daiwa Securities Group is not used for money laundering or
funding terrorism.
At Daiwa Securities Group Inc., we have appointed a person in charge of supervising AML/CFT for the entire group, and have set up a
supervising department to promote countermeasures. The "AML/CFT Domestic Group Policy" and "AML/CFT Global Policy," whichconstitute policies and operational guidelines for the AML/CFT management system, have been established, and domestic andoverseas group companies have established each system in line with the policies.

<Overview of the AML/CFT Domestic Group Policy and the AML/CFT Global Policy>
Periodic confirmation of customer information at the time of opening an account and after opening an account
Identification and evaluation of risks related to ML/FT in the products and services provided by the company
Implement risk mitigation measures such as continuous customer management, transaction monitoring, and suspicious transaction
reporting
Implementation of training for executives and employees regarding AML/CFT
Auditing the adequacy of AML/CFT management system by internal audit<Specific policies and procedures for AML/CFT>
Daiwa Securities conducts customer due diligence on all new customers before they can open an account with us. We confirm identity
information, such as name, place of residence and date of birth, for individual customers and name and place of business for corporate
customers (including identity information of the beneficial owners) in addition to confirming financial assets and the purpose oftransactions. The identity information so obtained is then screened using our own database, public institutions' databases andoverseas information provided by information vendors. As to existing customers, we regularly check for any matters of concern and70Sustainability report 2023

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Othersconduct investigations if considered necessary. If a problem is detected, we may immediately suspend or terminate transactions. As away to reduce risks, we conduct additional identification checks for customers who apply to open an account online or via other nonface-to-face means.
The abovementioned screening includes cross-checking the applicant against sanction lists furnished by Japanese and foreign
government bodies as a measure to counter financing of terrorism. As for foreign politically exposed persons (PEPs), we confirm
whether or not a person opening an account is regarded as a foreign PEP, and regularly verify that existing customers are not foreign
PEPs using lists of foreign PEPs. If a person is determined to be a foreign PEP, we perform enhanced customer due diligence, such asconfirming the person's asset and income status before each transaction, in addition to regular identity confirmation. We require thatan approval be given by the AML/CFT manager for any transaction with a foreign PEP or with a customer residing in a high-risk country.
Documents related to AML/CFT such as evidence of identity are properly retained in accordance with laws and regulations of relevant
countries and operational manuals of each business site. (Such documents are retained for seven years at offices in Japan pursuant to
the laws of Japan.)
The Internal Audit Department conducts risk-based audits and evaluates the appropriateness and effectiveness of the management
system for AML/CFT measures. The department has conducted such audits annually for the past three years.

Securing the Fairness and Transparency of the Market-Prevention of unfair
transactions such as insider trading
Daiwa Securities Group thoroughly complies with related laws and regulations, including insider trading regulations, to ensure market
fairness and transparency. In accordance with the procedures stipulated by laws and regulations, we will properly conduct transactions
with customers and our own transactions with a high awareness of compliance.
Daiwa Securities Group is working to secure the fairness and transparency of the market by means of preventing illicit transactions bycustomers and by Daiwa Securities itself.
To prevent illegal transactions by customers, Daiwa Securities identifies inappropriate deals that may have an excessive impact on themarket, conducts screening procedures for such deals according to certain criteria, and issues an alert if necessary. Moreover, in orderto prevent insider trading from occurring, we ask about customers' place of employment and positions within their companies before
opening an account for them. This practice allows us to check transactions as soon as trading orders are placed by customers who arein a position to acquire insider information. We also check the past transactions retroactively when timely disclosure is made ofimportant information.
To prevent illicit transactions by Daiwa Securities itself, we may impose restrictions on or require reviews of both proprietary trading
and trading by executives and employees that do not meet prescribed criteria. We also strictly manage corporate-related information,
including material facts of listed companies, to prevent insider trading. In addition, all executives and employees make an annual
pledge to comply with relevant laws and regulations.

Fostering Compliance Awareness
Daiwa Securities Group rigorously observes regulations and exercises self-discipline so that it can contribute to the sustainable growthof society while maintaining high ethical standards. We conduct training programs for new graduates when they join the Group, andcontinue through regularly scheduled training sessions throughout their careers, thus ensuring that every employee is aware of, andthoroughly understands, compliance issues.

71Sustainability report 2023

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OthersThe Group trains its employees so that even when the Group pursues new business ventures in areas where the regulatory structure isincomplete, they can return to the basic approach of laws and regulations, act sincerely in light of socially accepted ideas and common
sense, and maintain strong self-discipline and legal awareness.
As the basic standards in areas that should be fulfilled at a bare minimum, the Group has formulated Group Minimum Standards,andbased on these standers, the Group aims to achieve a level of compliance awareness that exceeds the boundaries of business lines.

Group Minimum Standards
Prevention of insider trading
Elimination of anti-social forces
Information security

The Group considers it extremely important for each employee to always maintain a high level of compliance awareness. We havetherefore adopted a compliance-related program in training for new employees and a number of other internal training courses. We
also give tests on compliance regularly through e-learning. At Daiwa Securities, we post a "Personal Information Check Test" every
Monday on our intranet and also feature a monthly compliance-related topic on our internal TV program which is aired every morning.
Moreover, at Daiwa Securities' sales branches, the branch chief and the internal administrator lead an initiative to provide training andinstructions suited to each workplace on a daily basis. The branch chief also chairs a monthly compliance meeting in which all branchmembers participate. We have thus implemented various systems to keep the compliance awareness of all employees at a high level,
and continue to foster awareness among employees.

Structure and Achievements of Whistleblowing System (Corporate Ethics Hotline)
In January 2003, the Group introduced a Corporate Ethics Hotline enabling reports to be made directly to Daiwa Securities Group Inc.
corporate ethics officers or to outside lawyers. The hotline's primarily goal is the early detection and prevention of behavior that risks
damaging the Group's corporate value. This includes violations of the Financial Instruments and Exchange Act and other laws, rules,
and regulations. The whistleblowing system is available not only to executives and employees, including those working at affiliatedcompanies and temporary workers, but also to anyone who works at the Group's offices.
In operating the system, the Group strives to protect whistleblowers and ensure their anonymity. The Group has a strict "no retaliation"
policy that prohibits disadvantage of any kind (dismissal, demotion, pay cuts, cancellation of worker dispatch contracts, replacement,etc.) from being caused to the whistleblower for making the report. Group regulations also provide for the protection ofwhistleblowers, prohibiting people who have information on whistleblowers from being asked to disclose such information, andprohibiting inquiries into the identify of whistleblowers.
In terms of reporting methods, in addition to telephone and in-person reports, information can also be reported via the incident
reporting page on the intranet and via email, allowing for reports to be made 24 hours a day, 365 days a year.
When the hotline is contacted, the corporate ethics officer, in cooperation with the officer responsible for whistleblower response
operations at each Group company, carries out a factfinding investigation, while taking steps to protect the caller. In FY2022, 64 reports
were received through the whistleblowing system.
Overseas worksites have similar whistleblowing systems as in Japan, including the establishment of internal and external contact
points with English-speaking personnel and the protection of whistleblowers.

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Matters to be reported; and number and breakdown of reports to Corporate Ethics Hotline (FY
FY

Othersto)
FY2020

FY2021

FY2022

No. of reports

No. of reports

No. of reports

Matters to be reported

23

Sexual harassment

2

5

3

Maternity harassment

0

1

0

Violation of laws and

6

1

3

Information management

0

1

0

Violation of internal rules

9

2

7

9

15

14

2

2

0

2

regulations

0

19

2

Compliance violations*27

0

rights violations

Workplace bullying

2

Harassment and other humanWorkplace environment

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FY2020

FY2021

FY2022

No. of reports

No. of reports

No. of reports

Matters to be reported

Etiquette and civility

3

0

1

Expenses and costs

1

1

3

Labor management (time management)

0

0

2

Personnel and conditions

0

1

0

Other

0

2

8

Total

57

48

64

* internal rule violations, information management violations, corruption and bribery including excessive rewards or entertainments, violation of the
Financial Instruments and Exchange Act and other laws, rules, and regulations

The Group seeks to ensure that anyone can use the Corporate Ethics Hotline without hesitation. To this end, it is working to raiseawareness of the hotline via the Group newsletter and intranet, and making efforts to respond quickly when reports are received.
The Group is also taking steps to improve the hotline so that it operates not just as a measure to solve problems, but also as aneffective deterrent to prevent problems before they occur.

Information Security
We at Daiwa Securities Group have established basic standards (the Group Minimum Standards) for information security measures toprotect personal information entrusted to us by customers in a safe and precise manner. In line with the Standards, each of the Group
companies has formulated rules on the protection and handling of personal information and has established its own privacy policy.
To protect customers' information including their Individual Numbers, Daiwa Securities take appropriate security measures such as
isolating such information physically, controlling access and applying encryption technology, depending on the type of information.
We also in principle bans employees from taking personal information out of the company. When it is absolutely necessary to takeinformation out of the workplace for business purposes, we require employees to obtain the prior approval of an internal administrator
or other superior and to keep records of removal and return, thereby ensuring the strict management of such information. Similarly, we
strictly manage the removal of personal information via email and external storage media while also monitoring for any unauthorizeduse. We also take information security measures for contractors. At the time of and after signing an outsourcing contract with a third
party, we thoroughly check the information management structure of the contractor and conduct on-site visits to examine its practices,
depending on the situation.
No matter how much information is systematized, however, a human element always remains. We therefore focus on providing
training on information management to executives and employees to eliminate human error.
We have developed and implemented a reporting flow in the event that an information leakage incident occurs. Based on this flow, thedepartment where the incident occurred immediately shares the incident with the information security administrator and reports tothe department with responsibility for information management. The incident is then reported to the management, including the74Sustainability report 2023

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Othersofficer who takes charge of overseeing information security. We deal resolutely with employees who have been involved in divulging
information, such as by taking disciplinary action as determined by the Company, depending on the magnitude and maliciousness of
the incident.

Policy on Personal Information Protection and Security
Daiwa Securities Group considers that personal information is an important asset of individuals. We recognize that we have a heavy
responsibility of appropriately protecting such information. Based on the Act on the Protection of Personal Information and otherrules, we have established Privacy Policy, and comply with the Group's other rules, along with relevant laws and regulations.
Recognizing the importance of personal information, we strive to appropriately protect and use customers' personal information.
Under the idea that the variety of information that we handle in business is an important asset, we have also established a policy toprotect important information assets from various threats and maintain information security, as well as an emergency response policy.
We implement appropriate risk management to reduce and avoid various risks, including confidentiality risk, integrity risk, andavailability risk associated with information assets.
Daiwa Securities Group's Privacy Policy

Implementation of Risk Assessments and Audits Concerning Personal Information
Protection
Daiwa Securities Group implements risk control self-assessments (RCSAs) as a framework for controlling operational risks. The RCSA isa process in which those who perform work identify, understand, and assess operational risks on their own, analyze those risks basedon frequency of occurrence and impact, and evaluate and verify the efficacy of risk mitigation efforts. We implement RCSAs regularly atmajor Group companies and also conduct a risk assessment on the protection of personal information as part of the RCSAs. The
assessment results are reported to the Group Risk Management Committee. In response to the assessment results, each company
carries out self-inspections to reduce the risks identified during the RCSAs. For example, Daiwa Securities conducts a self-inspection75

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Othersevery month in an effort to build a structure in which self-cleansing action operates at work sites.
The organization responsible for internal auditing at each company (the Internal Audit Department of Daiwa Securities Group Inc. forsome Group companies) conducts audits periodically from the standpoint of the third line of defense to check whether such RCSA
initiatives function properly. Checks on the information security system of Daiwa Securities' sales branches are conducted by theCompliance Department, which is the second line of defense, during inspections at sales branches.

Creation of Governance System Concerning Protection of Personal Information
Daiwa Securities Group has established operation standards for information security measures (Group Minimum Standards) for the
purpose of appropriately controlling various risks pertaining to information assets, including personal information. Based on these
operation standards, Group companies have developed rules on the protection and handling of personal information.
In addition, we have appointed the executive officer overseeing the Compliance Control Department as Group Information Security
Manager to maintain and control the information security of the entire Group. We also place an Information Security Manager at eachGroup company to maintain and control the information security of their own company.
The Information Security Managers at Group companies report to the Group Information Security Manager as appropriate regarding
the information management structure of their companies. The compliance division provides support to Group companies tostrengthen the Group's information management structure. The status of information management structures at Group companies andsupport provided to them are reported to the Group Compliance Committee. In this way, Daiwa Securities Group is working tostrengthen the information management structure of the entire Group.

Training on Protection of Personal Information
Daiwa Securities Group provides a variety of training for all executives and employees to enable them to appropriately understand thehandling of personal information and perform daily work based on relevant laws and regulations including the Act on the Protection of
Personal Information, Group Minimum Standards for information security, and other related rules.
We provide training programs according to the position and years of employment of individuals, in addition to training for all
employees. For example, we have programs for sales managers, internal administrators, and employees in their first to fifth year at theGroup.
We handle a broad range of topics in training. Major topics include "Daiwa Securities Group's Information Security System,""Occurrence Trends of Information Leakage Incidents," "Disciplinary Action against Unauthorized Removal of Information," "Prohibited
Matters in Use of Information Devices for Business Purposes," "Important Points When Using Emails," "Use of Social Media," and"Developing Awareness of Information Security." Through such training, we appropriately inform and raise the awareness of all
executives and employees about the importance of building an information management structure and implementing initiatives forthe protection of personal information.

Policy on Incident Investigations and Responses
At Daiwa Securities Group, if an information leakage incident occurs or may occur, the department where the incident occurred or may
occur immediately shares the incident with the information security administrator and reports to the department with responsibility
for overseeing information security (the “Managing Department”). The incident is then shared with the Information Security Manager.
Prioritizing the protection of customer information, the department where the incident occurred works to recover leaked information76

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Othersand informs the affected customers of the facts of the leakage under the instructions of the Managing Department. At the same time,the department also immediately conducts an investigation into the incident and implements other measures necessary to ascertain
the cause of the incident and prevent it from recurring. The details of the investigation are reported to the Managing Department,
which then informs all departments of the incident and issues a warning. In this way, we make Group-wide efforts to prevent
recurrence. We deal resolutely with employees who have been involved in divulging information, such as by taking disciplinary action
as determined by the Company, depending on the magnitude and maliciousness of the incident.

77Sustainability report 2023

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OthersTax Policy
In order to enhance tax corporate governance, Daiwa Securities Group has established "Daiwa Securities Group Tax Policy" which
serves as a code of conduct and decision-making standards for taxation, and all Daiwa Securities Group companies in Japan andoverseas shall comply with it.

Daiwa Securities Group Tax Policy
1. Compliance
Daiwa Securities Group fulfils its social responsibility by complying with laws and regulations (including their intent or spirit) of
every country and region, and through appropriate tax payments with high ethical standards.
2. Tax Planning
Daiwa Securities Group eliminates tax risks by eliminating double taxation through tax treaties and other means, optimizing tax
expenses through appropriate use of preferential tax treatment, and conducting appropriate tax treatment in light of the tax
regulations of each country and region.
In addition, Daiwa Securities Group does not engage in any inappropriate transactions without commercial substance for the
purpose of tax avoidance. We do not transfer profits to low-tax countries or regions, or use tax havens for the purpose of tax
avoidance.
3. Transfer Pricing Taxation
For cross-border intragroup transactions, Daiwa Securities Group sets appropriate prices which comply with arm's lengthprinciples in accordance with the OECD Transfer Pricing Guidelines as well as tax laws and ordinances in each country and region.
4. Appropriate Disclosure
Daiwa Securities Group provides transparent and appropriate disclosure of its tax policy and other tax-related information.
5. Responsibility
Daiwa Securities Group regards tax risks as key management issues and its Chief Financial Officer (CFO) is responsible for all tax
issues of the group. In addition, the CFO, executive officer in charge of Finance, 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 group as
necessary, so that corporate governance over tax matters is shared and implemented throughout Daiwa Securities Group.
6. Relationship to Tax Authority
Daiwa Securities Group maintains a relationship of trust with tax authorities by responding to them in a cooperative and honest
manner.

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Taxes Paid by Country (FYGovernanceSocial Contribution
Activities

Environment

Others)Pro t (Loss) before Income
Tax (* )(100 million

(%)

yen)
Japan

SocialIncome Tax Accrued (* )Income Tax Paid (* , )(100 million(100 million

yen)

(%)

yen)

(%)

2,223.8

94.0%

381.4

95.3%

589.8

97.4%

United States

58.0

2.5%

11.0

2.7%

3.7

0.6%

United Kingdom

39.4

1.7%

0.3

0.1%

1.5

0.3%

Singapore

13.3

0.6%

2.6

0.6%

3.9

0.6%

Others

30.7

1.3%

4.9

1.2%

6.7

1.1%

2,365.2

100.0%

400.1

100.0%

605.6

100.0%

Total

Income Tax Paid

1

fi

1

2

Income Tax Accrued02

Pro t (Loss) before
Income Tax(*1)

Profit (loss) before income tax, Income tax accrued and Income tax Paid are based on the Country-by-Country Report submitted to tax authorities
in each country.
The amount of income tax paid is the actually paid (on a cash basis) during FY2021.
fi

(*2)

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OthersPrevention of corruption
In line with the principles of the United Nations Global Compact, Daiwa Securities Group works to prevent corruption.
The Code of Ethics and Conduct, which guides the actions of officers and employees, stipulates that if corporate ethics and interests
conflict with each other, corporate ethics should be prioritized and acts contrary to corporate ethics should never be performed. In
addition, payment of any money or provision of convenience that is against the law is prohibited. Moreover, we prohibit the provisionand receipt of economic benefits that may not be valid in the light of common wisdom, such as cash rewards and excessive
entertainment. For entertainment, we apply and manage in accordance with management rules on entertainment, and we have set
special precautions especially for entertainment with government officials including those from foreign governments. The use status ofentertainment expenses is appropriately monitored by voluntary self-inspection of each department and office and inspection by theCompliance Department. For officers, the corporate auditor checks at the annual interview with them the status of undertakings
regarding the prevention of corruption.
Moreover, we do not provide financial contributions relating to political activities to those other than political parties or politicalinvestment groups. In providing support for activities of a political organization, we do so appropriately in compliance with the
Political Funds Control Act, the Public Offices Election Act, and other relating laws and regulations. The total value of politicalcontributions provided by Daiwa Securities Group Inc. were 32 million yen in FY2020, 32 million yen in FY2021 and 32 million yen in FY
2022.
In order to thoroughly prevent corruption, we carry out annual ethics training for all employees based on the Code of Ethics andConduct. Each department and office emphasizes risk management by periodically implementing annual risk control self-assessment(RCSA) including the viewpoints of bribery and corruption.
We have also built a structure that prevents the fraudulent granting of benefits at overseas offices by establishing internal rules thatsuit local laws and regulations. Employees who conducted corruptions or violated the Code of Ethics and Conduct are subject todisciplinary action stipulated by Daiwa Securities Group Inc. depending on the scale and maliciousness of such act.
In FY2022, Daiwa Securities Group did not have any serious matters of note such as violations of laws and regulations related to theprevention of corruption.

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OthersDaiwa Securities Group Anti-Corruption Policy
Daiwa Securities Group Anti-Corruption Policy
The Daiwa Securities Group (the "Group") has established the following Anti-Corruption Policy based on its corporate
philosophy. With high ethical standards, we strive to prevent corruption and ensure fair and sound relationships with all
stakeholders including our customers with high ethical standards.
1. Prevention of corruption
The Group prohibits receiving and giving of any form of bribery. Also, the Group prohibits the receiving and giving of
inappropriate entertainment, gift, facility, and other benefits that exceed acceptable limits under normal social
conventions.
2. Management involvement
The management of the Group recognizes the importance of corporate ethics, sets a good model through its daily
activities, and is responsible for preventing corruption.
3. Compliance with laws and regulations
The Group complies with anti-corruption laws and regulations and international treaties that apply in the jurisdictions
where it does business. Relevant laws and regulations include the Unfair Competition Prevention Law (Japan), theForeign Corrupt Practices Act (US), the Bribery Prevention Law (UK), the Commercial Bribery Regulations (China), andothers.
4. Internal control
The Group appropriately prepares internal rules and other regulations regarding anti-corruption based on relevant laws
and regulations. The Group regularly checks the operation and effectiveness of these internal rules to take necessary
actions such as reviewing them.
5. Education / training
The Group provides all officers and employees with regular education and training on anti-corruption, such as theprohibition of bribery and raising awareness about the whistleblowing system.
6. Reporting / whistleblowing
The Group establishes a system for receiving reports or whistleblowing from officers and employees regarding activities
that breach or might breach anti-corruption laws and regulations and internal rules and other regulations. The Groupwill thoroughly protect whistleblowers so that any officer or employee who reports will not be disadvantaged.
7. Dealing with breaches
If any officer or employee of the Group breaches relevant anti-corruption laws and regulations or internal rules, theGroup will strictly apply the applicable sanction procedures based on internal rules.
8. Understanding and embedding the policy
All management and employees of the Group fully understand this policy and make annual attestation.

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OthersRisk Management
Daiwa Securities Group recognize the importance of identifying and evaluating the various risks associated with our business
operations accurately, and controlling them effectively, while we pursue profitability and growth. We aim to maintain a sound financialbase and profit structure by properly balancing risks and returns and appropriately control not only short-term risks but also risks thatare likely to appear in the medium- to long-term, such as climate change risk. By doing so, we seek to achieve sustainableimprovement in corporate value.

Risk management system

To manage risks for the entire Group based on the Risk Appetite Framework (RAF), the Board of Directors of Daiwa Securities Group Inc.
has approved the Risk Appetite Statement (RAS), which expresses the RAF in writing, and the Rules for Risk Management. The rules
mainly define basic policies related to risk management, the types of risks that need to be managed, and the responsible executives
and departments for each major risk. Based on the RAS and the Rules for Risk Management, the Board of Directors and the Audit
Committee oversee risk management for the entire Group. In order to establish an effective risk governance system, we have created a
Guideline for Three Lines of Defense and maintain a comprehensive structure for risk management.

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OthersBasic policies as de ned by the Rules for Risk Management Daiwa Securities Group
1. Management's proactive involvement in risk management
2. The structure of a risk management system that responds to features of the risks held by the Group
3. Understand overall risk based on integrated risk management, and secure strong capital and the soundness of liquidity
4. Clarify the risk management process

Each of the Group companies conducts risk management suited to the risk profile and size of each business in accordance with thebasic policies related to risk management. The Risk Management Department and responsible departments for each risk within Daiwa
Securities Group Inc. monitor the risk management systems and risk status of Group companies. The risk status of Group companies
grasped through such monitoring, as well as their risk management issues, is reported as necessary to the CRO, who is appointed fromamong the executive officers. The CRO gives directions to address the risk management system, risk status, and other risk issues foreach company, verifies the effectiveness of risk management systems, and conducts reviews as necessary according to the businessscale and characteristics and risk status of each company.
The CRO is in charge of reporting risk to the CEO and does not concurrently serve as the person responsible for internal audits or as amember of the Audit Committee.
The risk status and other risk issues of Group companies are reported to the Group Risk Management Committee, which is a subcommittee of the Executive Management Committee of Daiwa Securities Group Inc. The committee deliberates and decides on policies
on risk management and specific measures. Risk management processes are also discussed and reviewed by the Group Risk
Management Committee. The Group Risk Management Committee is structured separate from the Audit Committee, but the content of
its meetings is also reported to the Audit Committee. The Board of Directors also verifies the effectiveness of risk management systems
and processes through deliberation and decisions on matters related to the RAF, top risks, and so on. The risk management process isalso discussed by the Group Risk Management Committee, and is reviewed based on suggestions and directions from executive
systems.

fi

officers. In addition, major Group companies regularly hold risk management meetings in order to strengthen their risk management

Environmental and Social Policy Framework
Daiwa Securities Group Inc. formulated the "Environmental and Social Policy Framework" in June 2021 in order to strengthen its
management and governance infrastructure for environmental and social risks on business. By recognizing and appropriately
addressing risks associated with business that could have a significant negative impact on environment and society through initiatives
such as the engagements with our stakeholders including investees and/or lenders, Daiwa Securities Group strengthens our supply
chain management and strives to create a better society along with its stakeholders.
* Daiwa Asset Management Co. Ltd. has established a policy as an "ESG Investment Policy," and Daiwa Real Estate Asset Management Co. Ltd. hasestablished a policy as a "Policy Regarding ESG" separately from this framework.

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OthersDaiwa Securities Group "Environmental and Social Policy Framework"
1. Introduction
As awareness of environmental and social issues such as climate change and human rights violations continues to growin Japan and overseas, the Daiwa Securities Group (the "Group") is committed to playing its role, as a comprehensive
securities group, in supporting the realization of a sustainable and prosperous society in order to meet theenvironmental and social goals of all stakeholders.
The Group established its "Environmental Vision" in 2012 and, based on the "Environmental Principles" and the "Basic
Environmental Policies" announced at the same time, it has been working to help solve environmental issues andcontinuously reduce the environmental footprint that results from its business activities. Furthermore, in May 2021, it
established its management vision "Vision 2030", putting the realization of the UN's SDGs at the center of the Daiwa
Group's strategy, proactively working towards the promotion of the transition to a carbon-neutral society and therealization of a resilient society.
In addition, the Group has formulated the "Environmental and Social Policy Framework" (the "Framework") in order tostrengthen its management and governance infrastructure for environmental and social risks, such as the conservationof the global environment / biodiversity and the protection of human rights. We want to create a better society inpartnership with our stakeholders by acknowledging the risks for businesses that may have negative impacts on theenvironment and society, and taking appropriate measures through engagement.
The Group will actively support innovation and technological initiatives that will lead to the realization of carbon
neutrality, and will focus on providing a variety of financial solutions, including transition finance, to support these.
2. Governance on this Framework
The Group discusses SDG and ESG issues related to the environment and society at the SDGs Promotion Committee,
chaired by the President and CEO. The results of these discussions are reported to the Board of Directors as appropriate,
and important matters are passed through the Board of Directors as resolutions, which strengthens the system forsupervision by the Board of Directors. This Framework was approved by the Board of Directors following discussion with
the SDGs Promotion Committee.
This Framework will be assessed regularly, with the aim of strengthening it, based on the experience of its
implementation and changes in the external environment.
3. Applicable products and services
This Framework covers new investments and loans, and the underwriting of bonds and stocks issuance (hereinafter,
financing) made by Daiwa Securities Group Inc. and its major group companies.
4. Applicable business(1) Prohibited businessBusinesses that negatively impact UNESCO-designated World Heritage Sites
Businesses that negatively impact wetlands designated under the Ramsar Convention
Businesses violating the Washington Convention
Businesses involving human rights violations such as child labor and forced labor(2) Restricted business
1) Businesses affecting indigenous communities
When providing financing to a business, we will carry out ESG due diligence including environmental and social risk
assessments ("ESG due diligence"), carefully assessing whether they will cause serious cultural, social and economic

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Othersdamage to indigenous communities, and whether appropriate measures are taken to mitigate them. We will utilize
these risk assessments in making decisions.
2) Business involving land expropriation that leads to involuntary relocation of residents
When providing financing to a business, we will carry out ESG due diligence, carefully assessing whether they result inland expropriation that forces residents to relocate against their wishes and whether appropriate measures are taken toprevent them, and utilize these results in making decisions.
3) New construction of coal-fired power generation
We prohibit any financing where the use of proceeds are directed toward this type of business.
Regarding the underwriting of bonds and stocks issuance, however, issuers that announce a target for net zero
greenhouse gas (GHG) emissions by 2050, or businesses adopting new technology aligned with the goals of the Paris
Agreement, may be considered on a case-by-case basis.
4) Weapons of mass destruction / inhumane weapons manufacturing
We prohibit any financing where the use of proceeds are directed toward this type of business. Weapons of mass
destruction include nuclear weapons, chemical weapons, biological weapons, and inhumane weapons include cluster
munitions and antipersonnel land mines.
5) Palm oil plantation development
When providing financing to a business, we will carry out ESG due diligence, carefully assessing whether the loss ofwildlife habitat due to overdevelopment may lead to a loss of biodiversity, or land conflicts with indigenous residents,
or human rights violations such as child labor/ forced labor, or whether appropriate measures are taken to prevent
them. We will utilize these results in making decisions.
In addition, when providing financing to a business, we will confirm if RSPO (Roundtable on Sustainable Palm Oil), aninternational certification system for palm oil, has been acquired. Where this is not in place, we will encourage clients toobtain certification. We will encourage clients to make environmental and human rights policies such as NDPE (NoDeforestation, No Peat and No Exploitation) or other compatible policies.
6) Business involving deforestation
When providing financing to a business, we will carry out ESG due diligence, carefully assessing whether appropriate
measures will be taken to prevent a negative impact on the environment caused by the destruction of ecosystems, andwhether illegal logging is carried out. We will utilize these results in making decisions.
When providing financing to a business, we will encourage clients to obtain FSC (Forest Stewardship Council), aninternational forest certification system or other compatible certifications or to make environmental and human rights
policies such as NDPE or other compatible policies.
7) Coal mining
We prohibit any financing where the use of proceeds are directed toward businesses using the mountaintop removal(MTR) method and new thermal coal mining businesses.
When providing financing to a business, we will carry out ESG due diligence, carefully assessing whether appropriate
measures are taken to ensure occupational safety and a sanitary environment to prevent cave-in accidents, flood
accidents, gas explosions, and human rights violations such as illegal labor. We will utilize these results in making
decisions.
8) Large-scale hydroelectric power generation construction
When providing financing to a business, we will carry out ESG due diligence, carefully assessing whether appropriate
measures will be taken against the destruction of the environment and ecosystems and negative impacts on local
residents due to the construction of a dam. We will utilize these results in making decisions.

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Others9) Oil and gas development
When providing financing to a business, we will carry out ESG due diligence, carefully assessing whether appropriate
measures are taken against their impact on the environment, ecosystems and local communities. We will utilize theseresults in making decisions. In particular, we will make careful decisions when providing financing to development
businesses in the Arctic, oil sands and shale oil and gas development businesses, pipeline businesses which may havesignificant negative impacts on the environment and society.
5. Assessment process
When providing financing to the above businesses, we will carry out initial ESG due diligence. If it is determined that
additional confirmation is necessary as a result of the assessment, we will apply enhanced ESG due diligence todetermine whether or not to provide financing. If the implementation of the business may have a serious impact on thecorporate value of the Group, the executive management will discuss further and make a final decision on whether or
not to provide financing.
December 26, 2022

Please also refer to the following.
Stakeholder Engagement
Supply Chain Management

Types of Risks to Be Managed / Managing Major Risks
Daiwa Securities Group faces various risks in the course of its business activities. The
Group therefore believes that it is important to identify these based on businesscharacteristics and risk profiles, and appropriately evaluate and manage those risks inorder to maintain a sound financial base and earnings structure.
The Group utilizes its own accounts to temporarily hold product positions for sales
purposes and to provide products to customers. Accordingly, the Group is subject tovarious risks, such as market risk due to market fluctuations and ineffective hedging,foreign currency and other liquidity risk, credit risk related to counterparties andissuers, operational risk that naturally occurs through the execution of business, andmodel risk resulting from using models for decision making. In addition, following theimplementation of growth investment based on hybrid strategies, investment risk

Market Risk

Credit Risk

Accounting
and Tax Risk

Liquidity
Risk

Reputational
Risk

Operational
Risk

Risks That
Daiwa Securities
Group Has Determined
Should Be Managed

Investment
Risk

Model Risk

occurs as a result of deterioration in the business performance and credit status ofinvestee companies, and changes in the market environment. Therefore, the Grouputilizes stress tests*1 and top risk management to manage risk on an integrated basis,including measuring the impact on capital and liquidity within the Group from aforward-looking perspective.
*1.

Stress tests are used for the integrated evaluation of impacts on capital, liquidity, and business systems based on probable stress scenarios that may
have a major impact on the Group86

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The risk events that require particular attention in light of the Group's business characteristics are selected and managed as top risks.
The management of Company "visualize" the risk events that are identified and sorted out by relevant departments based on risk
events collected from both inside and outside the Company as candidates for top risks to enabling the management to understand anddiscuss extensive risks when selecting the top risks. Moreover, the Group's Directors and Corporate Executive Officers identify andextract such candidates for top risks by making a forward-looking evaluation of the level of impact on the Group's performance and thepossibility that such risk events will occur.
In particular, the Group positions climate-related risks as one of the top risks and reports to the management of the Group anddiscloses results after conducting a scenario analysis utilizing a stress test.

Managing Climate Change Risks
Response to Climate Change (Disclosure Based on the TCFD Recommendations)

List of top risks
Risk events
Intensifying international disputes

Specific examples
Russia-Ukraine war, U.S.-China conflict (Taiwan emergency), etc.

and conflicts
Recurrence of the financial crises-

Downgrading of JGBs and crash of-

yen assets caused by instability ofJapan's financial situation
U.S. stagflation-

China's economic recession-

Inadequate response to DX (digital

Decline in competitiveness due to inadequate response to DX
3

2

0

2

transformation)
Inadequate response toIf we are unable to provide the appropriate service to customers due to inadequate

operational resilience

resilience to natural disasters, cyberattacks and system failure, etc. the Company's
reputation will be damaged.

Climate change

Decline in the value of held assets and decrease in selling opportunities as a result ofclimate change

Large-scale earthquake, flood

Increase in costs associated with natural disasterdamageDeterioration of business-performance of investees

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Cyberattack-

System failure-

Compliance risk

Inappropriate action by staff including money laundering, insider trading, etc.

Information leakage that has a

Serious information leaks, etc.

significant impact( ) Market risk management
Market risk refers to the risk of incurring losses due to market fluctuations, which affect the value of stock prices, interest rates, foreignexchange rates, and commodity prices. In terms of the Group's trading business, by providing market liquidity the Group acquires
compensation while at the same time taking on market risk through the holding of a certain amount of financial assets. The Group
implements suitable hedges to curtail fluctuations in profits and losses. However, as hedges may fail to function effectively in times ofstress, the Group sets limits on Value at Risk (VaR)*1 and loss estimates under various types of stress test*2 to ensure that they are within
the scope of equity capital, after taking into consideration financial conditions and such factors as the business plans and budgets ofsubject departments. The Group also sets limits on such facets as position and sensitivity.
The departments in charge of the Group's trading services calculate positions and sensitivity for the purpose of assessing their own
market risk, and monitor such. Meanwhile, risk management departments also monitor the status of market risk, confirm whether risk
falls within the established limits, and report on such to management on a daily basis.
*1.

Value at Risk (VaR) represents the maximum possible loss of a given trading portfolio with a given probability over a given time horizon.

*2.

Stress tests are used to calculate the Group's maximum losses based on scenarios of the most significant market fluctuations of the past and due toscenarios based on hypothetical risk events.

Daiwa Securities Group (Consolidated) Value at Risk
Range and Assumption of VaR
1

Scope: Trading accounts
Confidence level: 99% (one-side test), Holding period: 1 day
Adjusted for price correlation between products(Billions of yen)VaR (Month-end)

21/6

21/9

21/12

22/3

22/6

22/9

22/12

23/3

1.59

1.74

1.95

1.92

1.35

1.07

1.04

1.33

1.83

2.07

2.58

2.37

1.96

1.52

1.42

1.85

QuarterHigh88

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/

/

/

/

/

/

/

/

Low

0.82

1.35

1.43

1.55

0.99

0.94

0.83

1.04

Average

1.37

1.64

1.90

1.90

1.54

1.13

1.05

1.44

Equity

0.25

0.41

0.24

0.40

0.27

0.18

0.42

0.33

Interest

0.66

1.28

1.29

1.20

0.86

1.00

0.78

0.68

Currency

0.45

0.49

0.48

0.51

0.22

0.39

0.45

0.51

Commodities

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

By risk factor (Month-end)(2) Credit risk management
Credit risk refers to the risk of losses caused in cases where a counterparty of a trade or the issuer of a financial product held by theGroup suffers a default, or credibility deteriorates. The credit risks generated in the trading business of the Group consist of
counterparty risk and issuer risk.
Because the Group provides financial instruments, manages assets and invests, the Group is exposed to the risk that various
instrument and transaction exposures collect on a specific counterparty. If the counterparty's credit situation worsens, the Group may
incur significant losses. Therefore, the Group has established the upper limit on total exposure to any counterparty and periodically

The Group has established the upper limit on the credit-equivalent exposure that can be tolerated for each counterparty
and periodically monitors such credit-equivalent exposure.

Issuer risk
The Group monitors risk amount related to the issuer risk of financial instruments held for market making.

(3) Liquidity risk management
Liquidity risk refers to the risk of experiencing cash management difficulties or suffering losses due to having to finance at markedly
higher costs than usual as a result of a change in market conditions or a deterioration of Group companies' finance.

89

6

2

2

3

2

2

2

1

1

2

9

1

2

6

1

Counterparty risk

2monitors such limit.

Sustainability report 2023

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SocialEnvironment

OthersBasic Policy on Fundraising
The Group conducts the securities-related operations using a variety of assets and liabilities, and makes investments and loans that
contribute to providing new value as an integrated securities group with a hybrid business model. The Group, preparing for the casethat the environment vastly changes, endeavors even in ordinary times to secure a stable reserve to prevent the business from
suffering difficulties. Also, the Group tries to diversify the maturity and sources of funds in preparation for the event where it becomesdifficult to raise new funds and to roll over the existing funds due to a financial crisis.

Liquidity management system using Liquidity Management Indicators
Daiwa Securities Group Inc. has organized its liquidity management system that utilizes the regulatory consolidated liquidity coverage
ratio and the consolidated net stable funding ratio as well as its own liquidity management indicators.
Concerning unsecured fundraising, the repayment date of which arrives within a year and the prospective outflows in the case wheresome stress events occur in such period, we verify every day that enough liquidity is secured for such repayment and outflows even invarious stress scenarios. The Group undertakes to make it possible to continue business even if unsecured fundraising is not available
for one year.

Contingency Funding Plan
The Group recognizes the emergence of liquidity risks can have a direct impact that leads to the business failure of a financial
institution. Accordingly, Daiwa Securities Group has put in place a contingency funding plan that predefines the required response
methods, roles and authorities, and procedures, among others, in order to ensure that the Group responds appropriately as a unified
entity at the time of a liquidity crisis. This plan states the basic policy concerning the reporting lines depending upon the urgency ofstress internally originated, including a credit crunch, and externally originated including an abrupt change in the market environment,
and the method of raising capital. The contingency plan enables the Group to prepare a system for securing liquidity through a swift
response.

(4) Operational risk management
Operational risk is the risk of losses that occur when internal processes, people, and systems do not perform adequately or do not
function; it can also arise from external events.

Definitions of Principal Operational Risks
Type
Operations Risk

Definition
Risk of suffering losses because executives and employees neglect accurate office workor cause accidents or fraud, etc.

Systems Risk

Risk of suffering losses due to downtime or malfunction of computer systems, andsystem defects, etc. as well as the risk of suffering losses due to fraudulent use ofcomputers

Information Security Risk

Risk that information security (maintaining confidentiality, integrity and availability) has
not been ensured to detect threats to information assets

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Compliance Risk

Social Contribution
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OthersDefinition
Risk of suffering losses due to executives and employees not observing corporate ethics
and laws and regulations and the risk of suffering losses due to legal disputes withcustomers, etc.

Legal Risk

Risk of suffering losses due to the execution of inappropriate contracts or breach ofcontracts

Human Resources Risk

Risk of suffering losses due to problems arising in labor management practices and in
the safe workplace environment and risk of not securing the necessary human resources

Tangible Assets Risk

Risk of suffering losses due to damage to physical assets as a result of natural disasters,
external factors and negligence of executives and employees

The Group classifies operational risks into the seven categories listed in the above table and monitors them by assigning departments
responsible for individual risks. As the Group's business becomes more sophisticated, diversified, and systemized, the accompanying
risks become more varied. As a result, the importance of managing operational risk has grown each year.
Major Group companies strive to appropriately manage operational risk by measures including risk control self-assessments (RCSAs),
in accordance with rules on operational risk management set by Daiwa Securities Group Inc. Additionally, the Group has enacted thenecessary policies including the tightening of authority, the machine automation of office functions to reduce human errors, andcreating operational manuals, working to reduce operational risk in response to the business characteristics of each Group company.
* RCSA (Risk Control Self-Assessment) uses a predetermined assessment sheet to identify and assess operational risks, analyzes risks based on frequencyof occurrence and impact, and evaluates and verifies efficacy of risk mitigation efforts.

(5) Model risk management
Model risk refers to the risk of direct and indirect losses resulting from errors in the development and implementation of models, orfrom their misuse.
In order to effectively manage model risk, the Group has clarified the roles and responsibilities of those involved in the models, and has
established a system to manage models throughout their lifecycle. Specifically, the Group has model verification and approval
processes before use or significant change, and conducts monitoring and regular checks to manage model risk.

(6) Investment risk management
Investment risk refers to the risk that the value of an investment made by the Group will be damaged, or that additional funding will be
required, and to the risk that the return on investment will be lower than expected due to deterioration of the business performanceand credit status of the investee, and to changes in the market environment. This risk is managed at the portfolio level and at theindividual investment level.
In terms of portfolio level management, the Group has set Group-wide risk limits on a per industry basis in order to appropriately
manage the investment concentration condition, and regularly monitors this situation. In terms of individual investment level
management, along with verifying risk prior to making the investment based on a certain standard, the Group monitors the risk
condition following investment on an ongoing basis.

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Others(7) Reputational risk management
Reputational risk refers to the possibility of the Group sustaining unforeseen losses and the Group's counterparties being adversely
affected due to a deterioration of its reliability, reputation, and assessment caused by the spread of rumors or erroneous information.
There are no uniform procedures for managing reputational risk because it can emanate from a variety of sources.
The Group has established various regulations under its Disclosure Policy, with particular emphasis on the management and provisionof information. It has also set up the Disclosure Committee within Daiwa Securities Group Inc.
Each Group company is obligated to report information that could turn into reputational risk to the Disclosure Committee.
That way, Daiwa Securities Group Inc. can obtain and centrally manage information, and it disseminates accurate information in a
prompt manner according to the decisions of the Disclosure Committee.
The Group strives to keep abreast of problems and occurrences that may affect its reputation so that if and when such problems occur,
their impact on the Group can be minimized. It also acts to ensure that erroneous and inaccurate information is properly corrected,
and that it responds appropriately to libel and other issues. The Group has public relations and investor relations systems in place toprevent and minimize risks regarding its reputation.

(8) Accounting and tax risk management
Accounting and tax risk is the risk of not conducting appropriate accounting treatment and disclosure in accordance with accounting or
taxation standards, laws, and regulations, or of not filing or paying taxes appropriately, as well as the risk of losses arising as a result.
The Group strives to reduce accounting risk by operating in accordance with fundamental regulations related to internal controls on
financial reporting, and by establishing, putting into practice, and striving to improve its internal controls on financial reporting.
In addition, by notifying principal Group companies of necessary reporting items related to tax risk management and receiving suchitems in a timely manner, the Group endeavors to appropriately determine the tax risk management status and risk conditions for theGroup as a whole, thereby reducing its tax risk.
Daiwa Securities Group Tax Policy

Business Continuity Plan (BCP)
To be prepared for disruptions of social infrastructures, we have drawn up a business continuity plan (BCP). The BCP prioritizes
important operations to be restored or continued* in order to keep the financial markets open and protect customers' economic
activities. Disruptions of social infrastructure might make our head office functions, branches and data centers or other importantfacilities inoperative. They can be caused by events such as earthquakes, fires, storms, floods, other extraordinary weather conditions,terrorism, large-scale power failures, and serious outbreaks of infectious diseases. In accordance with the BCP, we will not only ensure
the safety of customers and our employees, and protect our assets, but will also strive to continue our vital operations in the financial
markets where our business serves the public interest. For example, we boast Japan's highest level backup center, and haveestablished a system which enables us to easily switch to the alternate system in case of an emergency at headquarters. We cantherefore continue vital operations through a substitute office location.

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1. Carrying out securities transactions traded in the markets and yet to be settled
2. Payment to our customers
3. New orders from customers to sell or cancel the following products 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 deposits

Measures to Address Disaster Risk by Region
Daiwa Securities has offices across Japan. As disaster risk differs amongst regions, it has formulated a disaster response plan for eachsales branch and is preparing disaster relief supplies that reflect the disaster risk for each branch. The hazard maps created by themunicipalities of respective regions are sent to branches and made available on our intranet.

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OthersIT Strategy and Management of Systems Risk
Daiwa Securities Group has raised pursuing the best mix of digital and real as one of its basic policies for the Medium-Term
Management Plan "Passion for the Best" 2023. Based on this basic policy, the Group is advancing a digital strategy intended to achievea higher top lines and more sophisticated, efficient business by fusing the respective strengths of its people and data/digitaltechnologies starting from those of data.

IT Organization and Structure
The Group IT Strategy Committee is established at Daiwa Securities Group Inc. as a sub-committee of the Executive Management
Committee, and the IT Strategy Committee is created at Daiwa Securities as a subcommittee of the Management Committee. These
subcommittees serve to deliberate and decide upon matters for accelerating decision-making involving the integration of management
and IT strategies, as well as involving IT investments, and for enhancing the efficiency of IT investments.
Amid a rapidly changing and difficult-to-predict business environment, the Group has established and is strengthening its digitaltransformation (DX) promotion system. Daiwa Securities is transforming to a "data-driven" business model that aims to increasebusiness efficiency and improve the top line by analyzing, researching, and utilizing data. An example of this is the establishment of theData-Driven Promotion Council which is chaired by the president and attended by each headquarters. The company is also putting
effort into improving digital literacy of all employees by introducing "Digital IT Master Certification System" for developing humanresources that can leverage advanced digital technologies to create business innovation as well as the "Daiwa Digital College," the aimof which is to acquire the basic skills for utilizing digital data and practical skills for actual business.

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The Group has been investing in IT in order to provide products and services responding to customer needs, realize digitaltransformation*1 through digitalization of business processes and analysis, research and utilization of data, develop infrastructure toensure business efficiency and safety, comply with laws and regulations, and enhance risk management. In FY2022, with the aim ofswiftly and efficiently entering into alliances with other financial institutions such as banks and Shinkin banks, we promoted efforts
toward constructing a platform on which the internal system of Daiwa Securities may be used by partner companies through thewebsite and API*2. In addition, as part of investments for advancing and improving efficiency in the businesses of Daiwa Securities, webuilt an infrastructure for storing and analyzing data so that all Daiwa Securities officers and employees can make data-driven
decisions. And as the next phase, we worked on the accumulation of data to be used for analysis, and the introduction of analysis tools.
Furthermore, we newly enhanced security systems for internal communication in FY2022 by constructing a zero trust*3 security
infrastructure in addition to the security for external communication enhanced in FY2021.
*1.

Digital transformation means a company's initiative to innovate products and services as well as business models based on the needs of customers
and society by utilizing data and digital technologies in response to drastic changes in business environment, and to establish competitive
advantage by transforming its businesses, organizations, processes, corporate culture and corporate climate.

*2.

A specification and mechanism that provides inter-system connection in a standard form.

*3.

A security concept of verifying the security of every access to data systems requiring protection, whether internal or external, without trusting them.

Systems risk management
Daiwa Securities Group has worked to maintain and enhance the management of systems risk in order to reliably provide high-quality
services to customers while protecting information assets from various threats and risks originating from inside or outside thecompany. Recognizing the importance of cyber security as a group management issue, we are working to strengthen systems for
detecting and monitoring cyberattacks. At the same time, we continue to work toward improving our defense and resilience tocyberattacks, collaborating with outside organizations in an effort led by a dedicated organization (Daiwa-CSIRT*) that works
throughout the Group.
In improving our cyber security management systems, we are considering specific measures in light of cyberattack trends, periodic
penetration tests and vulnerability assessments by external specialist firms, and risk assessments conducted within the Group basedon these results. During the current Medium-term Management Plan, we plan to enhance "technical measures," "operational
resilience," and "governance." Specifically, we are putting effort into continuously strengthening technological measures based on theconcept of zero trust security, enhancing education and training for officers and employees, implementing training of cyber security forthe management team, and strengthening the Group-wide cyber security systems through regular meetings with the major Group
companies in Japan and abroad.
* Computer Security Incident Response Team: The organization that manages cyber security across departments.

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OthersAI Governance Mission Statement＜Daiwa Securities Group AI Governance Mission Statement＞
Daiwa Securities Group is committed to social issues such as the environment, human rights, education, economic growth,and technological innovation, and contributing to the sustainable development of society and the economy. To achievethis, the use of cutting-edge technology, especially AI, has become essential. While the impact of AI on society and theeconomy is expected to expand further in the future, there are still developing aspects of AI technology.
Under careful consideration, Daiwa Securities Group has established the "Daiwa Securities Group AI Governance Mission
Statement," which we encourage all employees to abide by in understanding that we are a company that uses AI extensively
in research and development, prediction and analysis, together with providing services.
Daiwa Securities Group will continue to make every effort to become a trusted partner for all stakeholders and ensure that
our services are used with peace of mind.
1. Contribution to Society and Economy through AI
While using AI Daiwa Securities Group intends to contribute to a sustainable development of a society and economy bydeveloping full utilization of AI, as well as through dialogue with our diverse stakeholders. Additionally, we will aim toachieve public benefit for a rich society through the utilization of AI Including a sound and sustainable development offinance and capital markets.
2. Human-Centered AI
Daiwa Securities Group respects human rights and will ensure when using AI it does not violate this principle. We willintervene through our human judgement.
3. Transparency and Accountability of AI
Daiwa Securities Group values accountability and transparency and will make sure when utilizing AI this value isachieved including a base use that is easy to understand.
4. Appropriate Use and Learning of AI
Daiwa Securities Group uses AI in an appropriate range and manner and strives to ensure that AI is driven from highquality data sources that are pre checked and monitored.
5. Compliance with Laws and Privacy Protection
Daiwa Securities Group complies with regulatory requirements in the development and utilization of AI. This includes
privacy protection.
6. Security and Monitoring of AI
Daiwa Securities Group takes appropriate security measures and monitors AI systems to prevent malicious attacks suchas data breaches.
7. Governance and Literacy Improvement of AI
Daiwa Securities Group is establishing a governance and control system to check and manage AI appropriately, thisincludes affects by third parties. As a company that will use AI extensively, we strive to improve AI literacy and promotesound AI business throughout the organization.
Established June 23, 2023

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Our Approach and Policy
Human Rights Policy
Daiwa Securities Group states in its Corporate Principles that "the Group will strive to maintain a high sense of morality andduty, endeavoring to continue contributing to the sustainable growth of the societies in which we operate."
To further improve a corporate culture rooted in the basic principles of respect for human rights, and to promote efforts forthe respect of human rights in accordance with international standards, we have established this Human Rights Policy.
1. Respect for International Standards
Daiwa Securities Group supports and respects international standards on human rights, such as the International Bill of
Human Rights (consisting of the Universal Declaration of Human Rights and the International Covenants), the UN
Guiding Principles on Business and Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work,the OECD Guidelines for Multinational Enterprises, ISO 26000, and Children's Rights and Business Principles. We also
endorse the Ten Principles of the UN Global Compact as a signatory to the UN Global Compact.
2. Scope of Application
This Policy applies to all companies, officers, and employees within Daiwa Securities Group. We also expect all
stakeholders, such as customers and suppliers, to respect human rights.
3. Prohibition of Human Rights Violations
Daiwa Securities Group provides an equitable and safe working environment that values people, and is considerate of
the human rights of all stakeholders. We do not tolerate discrimination based on race, nationality, birthplace, creed,
religion, politics, biological sex, sexual orientation, gender identity, social status, physical characteristics, or disability,or human rights violations such as sexual harassment, power harassment, or other acts of harassment in any aspect of
our work. Furthermore, we do not tolerate unfair labor practices, such as child labor and forced labor.
4. Human Rights Due Diligence
Daiwa Securities Group conducts appropriate human rights due diligence and is committed to preventing andmitigating any negative impact its corporate activities may have on human rights.
5. Remedial Mechanisms
Daiwa Securities Group takes corrective and remedial actions through appropriate procedures in the event it becomes
clear that its corporate activities have caused or been involved in a negative impact on human rights.
6. Education and Training
Daiwa Securities Group educates and instructs all officers and employees with accurate information on human rights. At
the same time, we view human rights issues as our own problem, not somebody else's problem, and foster a sensitivity
that enables empathy with the suffering of others.

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7. Information Disclosure
Daiwa Securities Group is committed to disclosing information on its human rights initiatives and progress on its
website and through other media to ensure that they are understood by all stakeholders.
8. Stakeholder Engagement
Daiwa Securities Group implements this Policy with an emphasis on dialogue with stakeholders.
9. Governance System
Daiwa Securities Group has established a Human Rights Awareness Promotion Committee, chaired by the Human
Resources Officer, to promote human rights initiatives. This Policy is determined by the Board of Directors.
Established October 1, 2022

Human Rights Education and Awareness System
In 1984, Daiwa Securities Group set up the Human Rights Awareness Promotion
Committee. The committee aimed at promoting activities and training for raising
human rights awareness, thereby encouraging better understanding andappreciation of social integration and other human rights issues. We have beenworking to achieve its objectives. Besides the committee, all Group managers at
the head office or branch level act in a promotional role, engaging in education
and awareness activities to ensure that employees correctly understand andacknowledge human rights and social integration issues.
Daiwa Securities Group has been a member of the Industrial Federation for
Human Rights, Tokyo, since 1998. The Federation is composed of 122 companies
mostly headquartered in Tokyo with a combined total of 1.5 million employees(as of April 2023). Federation members work together to further improve theiremployees' awareness of human rights issues through research andcommunication.

Initiatives in FY2022
Human rights education
In FY2022, we provided human rights education as part of training for the Group's new employees conducted immediately after theirinduction ceremony. It is also included in training for those newly becoming general managers, managers, and associate managers.
The chief of the Human Rights Awareness Promotion Committee Secretariat has taken charge of all of these training courses.
We have also been providing training on LGBT issues since FY2015. It has been conducted for those in the Group's compliance andhuman resources divisions. 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. The cumulative
number of employees participating in training on LGBT issues is now 8,595.

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OthersThe Group held a Human Rights Awareness Workshop for all executives and employees to consider human rights from multiple
viewpoints.
Study sessions comprised of video training and discussion were held on the themes of "harassment," "gender diversity," and "persons
with disabilities" in the workplace. We used a material "Jinken no Susume (An encouragement of understanding human rights),"featuring short video dramas on each of the themes for participants to develop awareness and learn about human rights issues frommultiple perspectives.

Human rights education for employees for FY
Training participants

332 new employees

Objective

To acquire basic knowledge concerning human rights and to understand and raise awareness of theGroup's fundamental principles concerning respect for human rights

Training participants

1,004 promoted employees

Objective

To acquire knowledge and raise awareness concerning human rights required for their respective
positions

Training participants

All Group executives and employees

Objective

To watch a video for human rights awareness promotion and hold discussions at each workplace
regarding the content

Whistleblowing System (Corporate Ethics Hotline)
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The matters to be reported under the Group's whistleblowing system (Corporate Ethics Hotline) include harassment (bullying, power
harassment, sexual harassment, maternity harassment, etc.) and other human rights violations. We take an appropriate response
whenever a report is made.
Structure and Achievements of Whistleblowing System (Corporate Ethics Hotline)

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Responses to ESG Issues in the Supply Chain
Daiwa Securities Group has established a "Suppliers' Code of Conduct" so that our suppliers can understand and cooperate with our
ESG initiatives.

Daiwa Securities Group Suppliers' Code of Conduct(Established on May 1, 2023)

I. Introduction
Daiwa Securities Group aims to contribute to the sustainable development of society with high ethical standards, raising"contributing to society" as one of its Corporate Principles. Based on this, our group conducts procurement activities thattake into consideration social responsibilities such as human rights, labor standards, and the environment throughout the
supply chain in order to contribute to the realization of a sustainable society. We expect our suppliers to do the same for
ethical business and responsible procurement activities.
Daiwa Securities Group has recently established the Daiwa Securities Group Suppliers' Code of Conduct (hereinafterreferred to as the "Code of Conduct") in order to further strengthen our relationships with suppliers. The Code of Conduct
establishes basic guidelines with which all suppliers who provide products and services to our group must comply. Each
item has been established based on the 10 Principles of the United Nations Global Compact, the Guiding Principles on
Business and Human Rights, and the OECD Guidelines for Multinational Enterprises.
We would like to ask all of our suppliers for their understanding and cooperation regarding the items listed below. Note that
"supplier" refers to third parties (including subcontractors from third parties) and their employees who provide products,
services, and labor to our group.

II. Daiwa Securities Group Suppliers' Code of Conduct
1. Compliance1.1. Comply with the applicable laws and regulations in the countries and regions where business is conducted.
1.2. Comply with the laws and regulations related to fair trade, such as the Antimonopoly Act and the Subcontract Act.
1.3. Comply with anti-corruption laws and regulations, and do not accept or provide bribes, unjustifiable
entertainment, gifts, benefits, etc.
1.4. Do not engage in any transactions with anti-social forces.

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Others. . Never engage in money laundering or terrorist financing.
. . Do not engage in any acts that seek interests of yourself, business partners, or third parties against your company's
interests.
1.7. Establish a whistle-blowing system and thoroughly protect whistleblowers.
2. Information Security/Cyber Security
2.1. Strictly manage and protect confidential and important information (including personal information) entrusted by
our Group, as well as confidential and important information, including the personal information of your own
company, customers, and third parties.
2.2. Strictly manage confidential information and important information (including personal information) obtained
through business with our Group and other customers, and do not divulge the information to third parties without
permission.
2.3. Protect against and take measures against network risks and threats such as computer viruses and unauthorizedaccess.
3. Human rights
3.1. Respect human rights in all business activities, including the supply chain.
3.2. Do not engage in child labor, forced labor, or human trafficking.
3.3. Pay salaries to employees in compliance with the minimum wages and other laws and regulations regardingsalaries, etc.
3.4. Comply with applicable laws and regulations of each country governing employee working hours (including
overtime).
3.5. Provide employees with a healthy and safe working environment.
3.6. Respect employees' right to freely associate or not to associate in accordance with laws and regulations, and the5

1right to collective bargaining.
6

1

3.7. Do not discriminate on the grounds of race, nationality, origin, creed, religion, politics, gender, sexual orientation,
gender identity, social status, physical characteristics, disability, etc., in all aspects of work.
3.8. Do not engage in harassment such as sexual harassment or power harassment.
3.9. Promote diversity and inclusion to ensure diversity in the workplace.
4. Quality and safety of products and services
4.1. Supply products that meet safety standards stipulated by laws and regulations.
4.2. Establish and strictly operate a quality assurance system.
4.3. Provide accurate information about products and services.
5. Environment
5.1. Establish environmentally friendly policies and goals with the aim of reducing the environmental impact of all
business activities, including the supply chain.
5.2. Work to reduce greenhouse gas emissions.
5.3. Work on effective use of resources and energy.
5.4. Comply with the laws and regulations of each country and region regarding proper treatment and recycling ofwaste, and work to reduce waste.

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5.5. Comply with the relevant laws and regulations of each country and region and manage chemical substances.
6. Information disclosure
6.1. Disclose information such as financial status, performance, and details of business activities to stakeholders in atimely and appropriate manner.

We also disclose statements on the prevention of slavery and human trafficking based on the U.K. Modern Slavery Act 2015.
Response to the U.K. Modern Slavery Act
For our business operations we also formulated the Environmental and Social Policy Framework to strengthen our system for
managing environmental and social risks in new investments and loans, and the underwriting of bonds and stocks issuance(hereinafter, financing). We will carry out ESG due diligence for businesses that may have significant negative impacts on theenvironment and society to determine whether or not to provide financing according to the Framework.
Environmental and Social Policy Framework
When underwriting an initial public offering, we carry out due diligence in accordance with the items stipulated in the Rules
Concerning Underwriting, etc. of Securities by the Japan Securities Dealers Association. In such due diligence, we incorporate an ESG
perspective as well as the Environmental and Social Policy Framework and focus not only on business performance and financial
aspects but also on other items as key issues, such as the issuer's business model, social reputation, the status of compliance with laws
and regulations, the implementation of a compliance system and corporate governance, and the planned uses of the proceeds. We
conduct more thorough due diligence on these issues by undertaking field work, meetings and other initiatives, and sometimes makeproposals for improvement to the issuer. If major concerns remain even after taking such measures, we report them to the Chief Risk
Officer (CRO).
We also collect information provided by public institutions within and outside Japan and exchange information with external parties tobe aware of ESG issues existing in the countries and regions where the Group conducts business operations. We then consider taking
appropriate measures for important issues.

Partnership"Declaration of Partnership Building"Daiwa Securities Group Inc. ("the Company") declares that we will focus on the following items in order to build a newpartnership by promoting cooperation, coexistence and co-prosperity with business partners in the supply chain andbusinesses aiming to create value.
1. Coexistence and co-prosperity of the entire supply chain and new cooperation beyond scale and affiliate
By working with the other business partners through direct business partners (from "Tier N" to "Tier N + 1"), we will
work to increase the added value of the entire supply chain, and at the same time, we aim to build coexistence and coprosperity with our business partners through collaboration that goes beyond scale and existing business relationships.
At that time, from the perspective of business continuity in the event of a disaster and work style reform, we will also102

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Otherspromote support such as the introduction of telework for business partners and advice on BCP (Business ContinuityPlan) formulation.
(Individual item)a. Cooperation between companies
Our mission is to contribute to the development of society and the economy through financial and capital markets, andwe are focusing on solving social issues that are becoming more complex and diversified with the times. By providing allof our solutions, including support for industrial development and reorganization, discovery and development of new
industries, funding support for solving social issues, and business succession consulting, we aim to maximize value andutility to all stakeholders including business partners.
d. Greening efforts
It is also necessary to solve environmental problems in order to create a sustainable and prosperous society. We haveformulated the "The Daiwa Securities Group Net Zero Carbon Declaration", and we support a smooth transition to acarbon-free society through financial businesses, including support the realization of a decarbonized society throughfinance, support for new technologies that contribute to the realization of a decarbonized society, the provision of
investment opportunities for them, promoting solution businesses such as advisory businesses for customers in thefield of renewable energy. In addition, in order to reduce the environmental load of society as a whole, including the
supply chain, we have announced "Our Approach to Green Procurement" that stipulates environmental considerationsin procurement activities. Furthermore, in order to strengthen the management system for environmental and social
risks in our business, we have formulated the "Environmental and Social Policy Framework" and will work with our
suppliers and business partners to solve environmental problems throughout the supply chain.
e. Efforts on health management
We will work on practicing health management, public awareness, and health management support for business
partners.
2. Compliance with "Promotion Standards"
We will comply with desirable business practices between main subcontracting enterprise and subcontractors("Promotion Standards" based on the Act on the Promotion of Subcontracting Small and Medium-sized Enterprises),
and we will actively correct business practices that hinder the establishment of partnerships with business partners.
(1) Price determination method
We will not make unreasonable cost reduction requests. When deciding price, if there is a request for consultation fromthe subcontractor, we will respond to the consultation and fully discuss it so as to include the appropriate profit of thesubcontractor, such as considering the impact of the increase in labor costs. When making a contract, including thedetermination of price, the parent company will clearly indicate and deliver the contract conditions in writing, etc.
(2) Payment terms such as bills
The subcontract price will be paid in cash if possible. When paying by bill, we will try not to bear the discount fee etc. on
the subcontractor and make the payment terms within 60 days.
(3)Intellectual property and know-how
We will conduct the transaction based on the guidelines and contract templates for intellectual property transactions,and we will not request to make a one-sided nondisclosure agreement, disclose know-how using the transaction
position, and transfer intellectual property rights without compensation.
(4) Wrinkles due to work style reforms, etc.
In order for our business partners to harmonize to work style reforms, we will not place orders for short delivery times
or make sudden changes in specifications to subcontractors without appropriate cost burden. In the event of a disaster,103

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Otherswe will not impose a one-sided burden on subcontractors in terms of transactions, and when resuming business, we will
give consideration to the continuation of business relationships if possible.
3. Others (optional description)
We have "Contributing to society" as one of our Corporate Principles, and we believe that it is our mission to contributeto the development of society and economy through financial and capital markets. With a high sense of morality andduty, we aim to contribute to the sustainable development of the society. We will pursue both social and economic
value by emphasizing communication with all stakeholders, including our business partners, and solving social issues
that we have grasped through the active communication.
February 8, 2022
(Updated October 14, 2022)
Daiwa Securities Group Inc.
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Initiatives for Customer-First Services
Daiwa Securities Group understands that customer trust is the foundation of our business. Based on the idea of the Customer First
Principle, we always try to provide services that deliver genuine customer satisfaction.
We have also adopted the idea of hospitality to enhance our existing concept of customer service. We aim to provide customer service
that gives the most satisfaction to customers.

Building Deeper, Stronger Trust with Customers
Daiwa Securities aims to build customer satisfaction through quality services, built on understanding customer needs quickly andproposing the best solutions for each customer. We consider providing faithful and appropriate explanations to be paramount. A
principle of Japan's Financial Instruments and Exchange Act prohibits "solicitation that 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, when promoting our financial products we strive to provide explanations and post-sale follow-up that exceed the legal
requirements. We have also 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."
Moreover, to further improve our services and the quality of our response, we are continuing to conduct customer service surveys. We
survey customers regarding their degree of satisfaction with our services and response, and solicit their feedback and requests. Basedon the survey results, since FY2017 we have been strengthening our initiatives to improve the quality of post-sale follow-up andenhance the convenience of e-mail services.

Basic Policy on Customer-first Operations
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."
Daiwa Securities Group Inc.
Daiwa Securities Co. Ltd. (Japanese)
Daiwa Asset Management Co. Ltd. (Japanese)
Daiwa Next Bank, Ltd (Japanese)
Daiwa Corporate Investment Co., Ltd. (Japanese)
Daiwa Real Estate Asset Management Co. Ltd.
Daiwa Connect Securities Co., Ltd. (Japanese)105Sustainability report 2023
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OthersIntroduction of NPS®* (Net Promoter Score) Towards Realization of Quality No. 1
In FY2018, Daiwa Securities introduced NPS® (Net Promoter Score) as an in-house indicator for measuring customer satisfaction.
The score measures the degree of customer recommendation and is considered to correlate closely with business performance. We
position it as one of our most important management indicators.
When introducing NPS®, we implemented sales reforms successively at individual branches to ensure that the aim of the introduction
is well understood and established among employees, rather than them merely adopting the score. Thus, it took a year to complete theintroduction of the score at all branches. We will further step up our efforts to carry out sales activities from the customer perspective.
At the same time, we will build a scheme for implementing a PDCA cycle that incorporates customer feedback and makes
improvements, and continuously work to improve NPS®.
* NPS® is a registered trademark of Bain & Company, Fred Reichheld and Satmetrix Systems.

Improving In-Branch Customer Service Quality
Daiwa Securities strives to provide in-branch services that can satisfy any customer.
With the aim of creating sales branches enabling elderly customers and customers with disabilities to feel secure, we have placed
dementia supporters*1 and employees with service assistant*2 certifications, mostly comprising employees engaged in in-housecustomer service.
Moreover, in order to ensure that our sales branches are accessible to more customers, we implement a range of barrier-free measures,
including reduced variations in floor level, the installation of automatic doors and larger counters, and the placement of cane holders
at all counters.
We have also been stepping up our efforts to enhance safety and convenience for elderly customers and customers with disabilities
visiting our sales branches. As part of such efforts, we place and make ready for use writing communication boards, communication
sheets, cane holders, hearing assistance devices, and other equipment.
*1.

Dementia supporter
A dementia supporter is a person who properly understands dementia and pays warm attention to people with dementia and their families. The
Ministry of Health, Labour and Welfare has been stepping up the training of supporters across the country as part of its "Dementia Supporter
Caravan" project.

*2.

Service assistantA service assistant is a person certified as having acquired hospitality and safe assistant skills for providing tailored support for elderly customers andcustomers with disabilities.

Initiatives for Elderly Customers and Inheritance
Daiwa Securities has placed Anshin (peace of mind) Planners and Inheritance Consultants as an initiative to provide each one of ourelderly customers with optimum consulting and solutions.
Anshin Planners are mainly responsible for elderly customers, providing comprehensive consulting for customers in their later years.
The scope of the Planners' work is not limited to asset management but includes the provision of information on health, long-termcare, etc. and solutions in relation to gifts, inheritance, etc. to next generations.
Inheritance Consultants are professional staff members appointed from among employees with CFP® certifications who have highly
specialized knowledge of inheritance and gifts.
We work to provide optimum support to every customer we serve by subdividing our services according to the life stage of eachcustomer and making careful proposals.
In addition to these initiatives, we are focusing on an Inheritance Planner Certification® in order to further develop inheritance and106Sustainability report 2023
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Othersbusiness succession professionals. An Inheritance Planner Certification® is granted to candidates selected from among employees with
CFP® certifications after they undergo certification training designed to help them acquire a deeper knowledge of inheritance andbusiness succession. It is an in-house credential at Daiwa Securities.
* CFP® is a financial planner credential certified by the Japan Association for Financial Planners. A CFP® holder has specialized knowledge of asset
management, taxation, etc.

Working to Incorporate Customer Voices
At Daiwa Securities, the Contact Center and the Customer Support Center assume the function of utilizing customer feedback.

Contact Center Initiatives
Employees at the Contact Center, which serves as our comprehensive remote contact point, have direct contact with customers andplay an increasingly crucial role not only as a transaction channel but also in customer support and marketing. In order to maintainand improve contact center operations to meet the demand for high-quality service, we provide training and regular level checks for all
Telephone Service Representatives (TSR). We thus strive to appropriately respond to customers' true needs.

Contact Center Functions
The Contact Center has been a key channel for transactions, supporting the company's business model whose cornerstones are Daiwa
Consulting and Daiwa Direct transaction courses. The center now handles calls coming in to sales branches and some dialing support
work, thereby acting as Daiwa Securities' comprehensive remote contact center for customers.
To strengthen the functions of the center, we first expanded the scale of the service points in Tokyo and Osaka in 2014 and thenestablished a contact center function in Fukuoka in 2016 as our third service point. We also enlarged the floor area of our service point
in Osaka in 2017.
In addition, since 2020, we have also been expanding the functional aspects, including taking over some of the customer support
operations of our sales branches.
By further expanding our customer response capability, we aim to enhance our support functions for sales branches going forward toincrease customer convenience.

Customer Feedback Sent to Contact Center
The Contact Center receives numerous comments and requests on online trading and Daiwa Securities' other products and services.
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. 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 from various perspectives.

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Daiwa Securities' Customer Support Center is a department at the head office that handles customer feedback and complaints directly
by phone. It is set up within the Compliance Department of Daiwa Securities.
The Center promptly gives feedback and complaints from customers to relevant sales branches and departments and sections of thehead office. It also sorts and analyzes such feedback and complaints, shares them with officers, sales branches, and head office
departments and sections, and capitalizes on them as precious information in the aim of "customer-first operations" and "pursuit ofbest quality."
To respond to customers' calls thoroughly, accurately, and promptly, Customer Support Center members study the securities tax codeand Daiwa Securities' services together on a daily basis, and work to improve the quality of their customer services.

Inquiries and Complaints Received at the Customer Support Center in FY2022
Number of calls received: 4,852 calls (up 470 calls)
Inquiries: 93%
Complaints: 7%
Based on customer feedback, we have made a number of improvements. For example, we have simplified documents we ask
customers to fill in. We have also revised product information on our website to make such information easier to understand, whilechanging our online branch visit reservation system so that customers find it easier to enter information.

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Approaches and Policy
Daiwa Securities Group aims to achieve corporate growth by investing in its people and enhancing their value and views "hiring
people" as the first step toward this objective. As we want all our employees to work with a high level of loyalty and motivation, all newcollege graduates recruited by the Group are brought on as full and regular employees so that newly hired employees will be able tohave a sense of trust and pride in the Group, and a sense of solidarity with their colleagues.
Moreover, in order to flexibly accommodate job-seekers, we hire year-round, and new employees may join the company even after
April. We are actively recruiting people with diverse backgrounds, while strengthening our mid-career recruitment program, which
recruits people with work experience in the industry or other job experience.
We also focus on attracting people capable of excelling globally in order to develop a global network and strengthen alliance strategies.
Daiwa Securities Group offers internship programs for prospective new graduate applicants to provide opportunities for gaining
firsthand experience in the securities business through interaction with employees.

Fairness in Hiring
Daiwa Securities Group has formulated and announced its Guidelines for Fair Hiring, comprising three fundamental principles for
ensuring fair hiring practices.
We also provide training to employees involved in the hiring process to ensure that they are fully aware of the Guidelines for Fair Hiring.

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

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Approaches and Policy
One of the areas in which Daiwa Securities Group focuses its efforts is diversity & inclusion. We are working to develop personnel who
provide additional value and build an organization in which members thrive as they recognize and respect each other's diversity.
We have established the Diversity and Inclusion Promotion Committee and the Sustainability Promotion Committee (formerly SDGs
Promotion Committee), both of which are chaired by President and CEO Seiji Nakata and meet on a quarterly basis to engage indiscussions.
Discussions at the Sustainability Promotion Committee are reported to the Executive Committee for deliberation and decision-making
as appropriate. In order to monitor the degree of penetration and make improvements according to the progress of initiatives,
evaluation items related to the promotion of diversity, such as on the creation of an environment in which diverse human resources
can play an active role, are introduced into multifaceted manager evaluations. In addition, we are checking the numerical value for the"Diversity and Respect for Individuals" category, as a KPI, in engagement survey results.

Initiatives to promote the dissemination of systems and the understanding of theapproach
Use of Group newsletters and Group satellite broadcasting"Turn diversity into power! Diversity & Inclusion Lab" is a series of articles in our in-house newsletter, which introduces the Group's
systems and initiatives for diversity and inclusion, as well as role models that are active in various careers. In addition, the Groupfacilitates the sharing of best practices in each department via Group satellite broadcasting.

Awareness raising activities for managers
The top management continuously communicate the initiatives and objectives of diversity and inclusion, including women's success,at meetings attended by all executives and managers, while training for managers, including all line section managers, is conducted todeepen understanding and instill the concept of a support system for a better work-life balance. In addition, a "multifaceted
evaluation" is conducted for all management levels, including directors, department managers, and section managers, with the aim of
improving their management skills and the productivity of the entire group by having subordinates evaluate their superiors' daily work
activities and providing feedback to the managers. Efforts for diversity are also included as evaluation items, and the results areincorporated into manager evaluations.

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Daiwa Securities Group proactively appoints talented human resources regardless of gender. In particular, since the percentage offemale employees is 40.7% (as of the end of FY2022 at the submitting company and all domestic consolidated subsidiaries), we regard
the promotion of women's advancement as the most important issue in the promotion of diversity. In order to further incorporate
more diverse perspectives into group management, four female executives were simultaneously appointed in 2009. Currently, Daiwa
Securities Group Inc. has five female directors (35.7%), and the Group as a whole has 16 female executives as Directors, Corporate
Executive Officers (Shikkoyaku), Executive Officers (Shikkoyakuin), and Audit & Supervisory Board Members.
Although the business characteristics and personnel composition of each company differ, in order to promote initiatives groupwide, a"Women's Advancement Meeting" has been held every quarter since FY2014, where human resource officers from each company
gather to strengthen cooperation by sharing information on progress and best practices regarding the goals of each company, set inaccordance with their respective situations. The increase in the number of role models at each company has made it easier for female
employees to envision their career paths. In recent years, the number of female employees seeking career advancement by switching
to career-track, broad regional career-track, and regional career-track positions has increased significantly. We have also implemented
various systems and measures that are beyond the legal requirements to help women continue to work energetically even after going
through life events such as marriage and childbirth.

Women from our Group have been introduced by Nikkei Inc. in its Nikkei Womenomics Project and by Nikkei Inc. and Nikkei

Business Publications Inc. in their Nikkei Women's Empowerment Project. Please have a look. (Japanese only)

Commitment by Top Management
Daiwa Securities Group promotes diversity and inclusion initiatives within the company, while top management makes a commitment
by endorsing social organizations and activities.
2015: The Chairman of the Board of Daiwa Securities Group Inc. showed his support for the Declaration on Action by the Group of Male
Leaders Who Will Create "A Society in which Women Shine*" spearheaded by the Gender Equality Bureau of the Cabinet Office.
* This is an initiative in which male leaders of leading companies that are actively engaged in promoting women's advancement share the Declaration of
Action and expand the network of support in order for women to maximize their potential.

2019: Daiwa Securities Group Inc. supports activities of 30% Club Japan* and the Chairman of the Board and President and CEO started
to participate as members.
* An initiative aimed at increasing the proportion of women in the top management of Japanese companies, setting up the target of boosting thepercentage of female members in the Board of Directors of TOPIX 100 companies to 30% by 2030.

2021: We support the "Challenge Initiative for 30% of Executives to be Women by 2030 #HereWeGo203030" proposed by the Japan
Business Federation (Keidanren).

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Daiwa Securities Group has aimed to raise the ratio of women in director's positions to at least 30% by 2030, and we have set specifictargets for the years through FY2025. In this manner, positive steps are being taken to provide an environment in which employees withdiverse values can maximize their capabilities.

Targets for Years through FY2025 (Daiwa Securities)
Women account for at least 25% of people managerial positions by FY2025, reaching 30% by 2029
Continue hiring high quality employees, regardless of gender, and maintain a stable ratio of 50% of women among newly
recruited graduates every fiscal year
50% of women among participants in training, which aims to provide participants with various skills and improve theirexpertiseContinue to maintain a 100% rate of childcare leave use by male employees and a childcare leave duration of 14 days or
more

Support for Female Employees' Career Development
Since female employees are relatively more susceptible to the impact of life events on their careers, we provide various careerdevelopment support programs focused on female employees. First, we have encouraged female employees to apply for the career
track change system to assume broader job functions and responsibilities so that they can develop their careers more autonomously.
As a result, the number of female employees seeking career advancement has increased significantly, with a total of more than 1,680
employees switching to career-track, broad regional career-track, and regional career-track positions. The Professional Return Plan,
which rehires employees who left the company for reasons such as childcare or nursing care, has a certain number of users on acontinuous basis, while the number of female employees right before being promoted to managerial positions has increased
significantly.
We also launched a career support training initiative for female employees (Daiwa Woman's Forum) in FY2014, and from 2018, we have
expanded the scope of this training to include managers. These programs have helped female employees to autonomously envision
their career paths and contributed to building networks among them.

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Initiatives
Appointment of Female Executives and Women in Managerial Positions
Daiwa Securities Group has a total of 16 women in top managerial positions who work as directors, corporate executive officers,
executive officers, and auditors. They include five female executives serving as directors and corporate executive officers at Daiwa
Securities Group Inc. The number of women in managerial positions is increasing year by year, with the Group's total number standingat 817 as of the end of June 2023. The ratio of women in managerial positions has risen from 2.2% at the end of FY2004 to 16.9% on agroup-wide basis (up from 2.3% to 20.8% at Daiwa Securities).

Formulation of an action plan based on the Act on the Promotion of Women's Active Engagement inProfessional Life
Since each company in Daiwa Securities Group has its own business operations and personnel structure, each company formulates
and publishes its own action plan.
To promote the initiative, we hold a "Women's Advancement Meeting" on a quarterly basis, where human resource executives fromeach group company gather to engage in discussion. We are further accelerating our efforts to provide an environment in which
employees with diverse values can fulfill their full potential.
[A general business owner action plan was formulated and submitted on April 1, 2021]
Daiwa Securities Action Plan [PDF:139.5KB] ⟨ Japanese only ⟩Daiwa Asset Management Action Plan ⟨ Japanese only ⟩Daiwa Institute of Research Action Plan ⟨ Japanese only ⟩Daiwa Securities Business Center ⟨ Japanese only ⟩113

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Activities

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OthersSupport for the Success of Senior Employees
As the careers of employees grow even longer, we aim to provide our employees, who have a wealth of experience, with the new skills
they need to stay at the forefront of our times, and to create environments in which they can continue to thrive, thereby contributing to
the sustained growth of our company.
Daiwa Securities Group has in place a Senior Advisor System that enables employees with a wealth of experience to play an active rolein the workplace. Senior advisors are dispatched to locations of their choice and engage in community-based consulting and sales
from a long-term perspective. In FY2017, we eliminated employment age limits for senior advisors, enabling them to continue working
regardless of their age. For employees in other positions as well, we have raised the retirement age to 70, provided that certain
conditions are met.
In addition, we have created a Senior Fellow System and have established a personnel system for senior employees with outstanding
expertise and knowledge who have made remarkable achievements. We support both work and caregiving, and are creating anenvironment in which employees can thrive without worrying about their future lives.
We have also introduced long service leave for employees in their 20th year and 30th year at the Group. The leave is designed withgratitude to provide employees who have contributed greatly to the Group's development with an opportunity to refresh themselves
and spend time with their parents, spouse, and other people around them who always support them.

Employment of People with Disabilities
As of FY2023, Daiwa Securities Group had more than 200 employees with disabilities handling a wide range of responsibilities in ourhead office, sales branches and contact centers. We started recruiting new graduates with disabilities as regular employees (general
office staff) in FY2008, and in FY2011 broadened the scheme to career-track employees, regional career-track employees, and customer
service employees. Once people with disabilities are hired, we provide support for their career advancement by, for example, creating
opportunities for them to enter the career-track and regional career-track employment opportunities. To further strengthen our
support to employees, we also introduced the Daiwa LEAP Plan in 2018. This provides comprehensive support including a leave
program for outpatient treatment, subsidies for expenses incurred to start work, and the introduction of support tools according to thetype of disability. The Plan is a measure for bringing out employees' talents while taking their respective circumstances into
consideration, and developing a pleasant working environment.
We have vigorously increased recruitment opportunities by holding briefings about the company for new graduates, participating incareer expos, and implementing job placement support programs for university students with disabilities.
Moreover, Daiwa Securities Group participates in the Accessibility Consortium of Enterprises (ACE), a general incorporated association,
as a member. ACE was founded for the purpose of establishing a model for people with disabilities that contributes to corporate
growth, and communicating information to society concerning human resources sought by businesses. As of June 2023, ACE has 37
corporate members, mostly large companies. Through the holding of seminars and workshops for human resources personnel andemployees with disabilities, as well as issuance of educational brochures, ACE carries out awareness-raising activities for parties
concerned, creates role models, and makes proposals to management and society. Our Group's "Daiwa LEAP Plan" initiative received a"Special Award" in the "Environment Creation Category" of the 2020 ACE Awards.

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OthersEmployment Rate for Persons with Disabilities
FY2018FY20192.33%

FY20202.57%

FY2021
2.58%

FY2022
2.62%

2.59%

Promoting increased understanding toward the LGBT community andrelated issues
As an opportunity to deepen understanding of LGBT issues, LGBT themes are taken up in training for new and young employees, aswell as in training for those who have been promoted. A cumulative total of approximately 5,000 have participated in this training todate.
In addition, every year we hold a Human Rights Awareness Workshop for all employees in each department and office, which includes
video training and discussion to promote understanding of LGBT issues. In addition, the Group's Compliance and Human Resources
departments receive training from the NPO Nijiiro Diversity to deepen their understanding of the fundamentals and case studies ofother companies in order to create a comfortable work environment. Our Human Resources department supports employees who areundergoing gender transition by allowing them to take time off. Efforts are also made to promote increased understanding amongsurrounding employees.

Promoting Diverse Work Styles (Work-Life Balance)
Approaches and Policy
Daiwa Securities Group's management strategy states, "Daiwa Securities Group is working to create a working environment which
flexibly responds to change and in which all employees can continue to work energetically" and "We are creating a workplace in which
no one is left behind by achieving a high degree of work-life balance that enables diverse personnel to thrive". We are making efforts topromote diversity, inclusion and work-life balance, aiming to achieve work styles in which work and life are in harmony, and toenhance the work environment, in which both men and women can work using a variety of work styles.

Various systems
Childcare leave

Employees can take childcare leave until the day before their child's third birthday.

115Sustainability report 2023
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From 2022, wages of up to 4 weeks are guaranteed, in addition to childcare leave at birth andfor male employees

childcare support leave, and in principle, the taking of leave of at least two consecutive
weeks is being promoted as mandatory.
An environment enabling men to actively participate in child rearing has been developed.
The rate of childcare leave use has been at 100% for six years in a row since FY2017. The
number of average days of leave taken is 18.6 days The scope of aggregation: Consolidated(all consolidated subsidiaries in Japan)

Pre-childcare leave forCan be taken when the employee accompanies the spouse to a pregnancy checkup andmale employees

participates in a parents' class, as well as for preparations for hospitalization, etc. before thebirth. The leave is designed to nurture an awareness of participation in child rearing among
male employees before the birth of a child. This system has been used by a total of roughly
80 employees.

Short working hours

A system that allows employees to leave the company up to 90 minutes early (in 10-minutesystemunits) until their children graduate from elementary school

Exemption/restriction on

Exemption from overtime work is possible until the employee's children complete the third

overtime work

grade of elementary school. Overtime work can be limited until graduation from elementary
schoolSick/injured child care

Up to 5 days per child before elementary school, up to 10 days per year if the employee has 2

leaveor more children (The leave can be taken in a unit of hour).

Daycare subsidy

The Group subsidizes the cost of child care facilities or after-school care until the employee's
children reach the third grade of elementary school

Babysitter system

Employees can use a babysitting service contracted by the company at a special rate until
their children complete the third grade of elementary school. This system has been used by atotal of over 1,500 employees.

Support desk forOffers free-of-charge services that check information on nursery school facilities, the status

employees looking forof availability, and other such matters on behalf of employees, thereby assisting them to findnursery schools

nursery schools. This system has been used over 200 times in total.

Job location change

If an employee needs to relocate due to marriage, spouse job transfer, nursing care time care,systemetc., the Group will provide a work position at the new location. Since fiscal 2007,
approximately 400 people have used this system

Spouse work

Employees can take up to 5 years of leave if their spouse is transferred overseas. This systemreassignment leavehas been used by a total of over 70 employees.

systemBirth gift of 2 million yen

The Group pays 2 million yen as congratulations for the birth of the third and subsequentfrom the third child

childrenNursing care leave

Employees can take up to four periods of nursing care leave within 3 years (1095 days) for
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Nursing care time

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OthersEmployees can take up to 2 hours per day of family care time within 3 years from the start ofuse

Nursing care-support

Employees can take leave to take care of family members who need nursing care, toleaveaccompany them to a hospital, etc. or to carry out procedures on behalf of family members.
Up to 5 days per year can be taken (10 days for 2 or more family members, in a unit of hour).
A cumulative total of more than 2,000 people have made use of this benefit.

Nursing Care Travel

The Group subsidizes travel expenses incurred when employees return to their parents'

Home Expense

home to provide nursing care. A cumulative total of more than 230 people have made use of

Allowance

this benefit.

Life Support Paid Leave

Employees can take paid vacation when it is required for injury/illness, nursing care
preparation, fertility treatment, or nursing a child (up to 50 days)

Diversity and Inclusion

The Diversity and Inclusion phone line provides various types of advice to employees

phone line

regarding balancing work and child care/ nursing care, career planning, etc.

Professional Return Plan

A system to re-employ employees who have retired due to marriage, childbirth, or nursing(re-hiring of sales staff)care, etc. with the same treatment as when they retired.
A cumulative total of more than 80 people have made use of system.

Expanded leave system

The Group has defined marriage preparation vacation; kids' ceremony vacation (forchildren's entrance ceremonies, etc.); family day vacation (to deepen family friendships);
parents' longevity vacation (to coincide with longevity celebrations for own or spouse's
parents); and volunteer vacation, and encourages employees to take paid vacation

Telecommuting system

This has been instituted in every department, including Sales, as a means of promoting
employee autonomy and improving organizational productivity.

Flex time system

Depending on the nature of its operations, a unit can choose flextime (with a required coretime) or super flextime (no required core time) to improve organizational productivity.

Daiwa ELLE Plan

Regarding health issues for women who are active at various life stages, the Group provides
comprehensive support including measures for the menopause; ELLE vacations (for poor
physical condition during menstruation/menopause and fertility treatment); improvement ofawareness such as e-learning training for managers; subsidies for specific fertility
treatments; and a work-at-home system to balance work and fertility treatment

The Group believes that it is important not only to have a system in place, but also to create a supportive environment. We conduct
training on the work-life balance support system for balancing work with child care and nursing care responsibilities to deepen mutual
understanding between employees who use the system and those in the same workplace.
In addition, we conduct a survey for all employees about the various systems. We survey the recognition, degree of use, and issues ofour systems, while soliciting opinions and requests from employees, to promote further understanding and enhance penetration of thesystems. Based on employee feedback, we also review the design and operation of these systems.

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OthersVarious initiatives
Guidelines for balancing work and child care
The Group has established guidelines for balancing work and child care for all employees and department managers so that
employees can take child care leave and return to work smoothly. These guidelines encourage appropriate consideration to make iteasy for employees to use the system according to their physical condition and individual circumstances. They also promote
understanding among other employees, and describe how to distribute work according to the situation and how to provide training as
a role model. They go on to describe how to give fair and impartial evaluations and feedback to employees with various circumstances,such as those who will use the system and those who have returned to work. Through training and other measures managers canremain informed and educated.
In addition, the Group has distributed a list of the various work-life balance systems to managers as "Work-life balance systems forbalancing work and child care/nursing care that managers need to know about."

Expanded support for balancing work and nursing care
The Group is helping employees balance their work and nursing care in various ways. To further improve the environment in which
employees with abundant experience and a high degree of specialization can continue to work actively without feeling anxious about
future nursing care, the Group established a nursing care leave system that exceeds the legal requirements (up to 1095 days, can beacquired in four periods) and introduced a work-from-home system for all departments including sales departments. Further, following
consultations with employees who are providing nursing care and their families, the Group introduced a Nursing Care Concierge
Service that can provide various solutions. Moreover, in conjunction with "Nursing Care Day" on November 11th, the Group held study
sessions at all branches entitled "Responding to an Aging Society and Balancing Work and Family Care," to raise employee awarenessand foster a corporate culture that makes it easy to use the systems.

Enforcement of leaving the office before 7 p.m.
Since 2007, led by our policy of creating an environment in which employees can work efficiently within time constraints, the Grouphas encouraged employees to leave the office before 7 p.m. and has set the goal of achieving a 100% implementation rate in alldivisions. Furthermore, the Group has developed guidelines for work and meetings where multiple departments collaborate. The
Human Resources Division regularly confirms if employees are leaving the company by 7:00 p.m., and the Diversity and Inclusion
Promotion Committee has established a system for verifying the implementation status of this initiative.
Since 2015, the Group has been expanding investment in human resource development by capitalizing on the results of productivity
improvements. In addition, in 2017 and 2018, the Group provided a "special allowance for work-life balance and work style reform,"and in 2019 provided a "special allowance for productivity improvement." Lump sum payments, funded by the results of productivity
improvement, were paid to employees separately from their bonuses.
Further, the Group operates an "hourly leave system" that allows employees to take annual leave in units of one hour, which enables
flexible work styles. The Group has also set up the "flextime system" according to the business situation of each department.

Promotion of taking annual leave
The Group promotes "taking planned annual leave" for the purpose of improving productivity and work efficiency by refreshing themind and body and bringing out new vitality. As part of its efforts, the Group introduced a System Usage Calendar and various
initiatives, such as Kids' Ceremony Leave, Family Day Leave, Parents' Longevity Celebration Leave, Long Service Gratitude Leave,
Expecting Mother Escort Leave, Volunteer Leave, and Marriage Preparations Leave. Employees are made aware of the objectives andimportance of the different kinds of leave through training, in-house broadcast, and the like.

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Activities

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OthersThe Group introduced a "System Usage Calendar" that allows all employees in a department to share their plans for using annual
leave, continuous leave, and the systems for balancing work with child care (short working hours system, etc.). It is extremely effective
in promoting the use of annual leave for all employees, and has become a system that allows each workplace to use the leave systems
smoothly.

Daiwa WLB* Station
A work-life balance promotion site exclusively for employees, which introduces the child care and nursing care systems and featurescontent on the subjects of self-improvement and health. It can be viewed from home while on leave, and the bulletin board is used as acommunication tool for employees.
* WLB: the abbreviation for Work-Life Balance

Work-life balance promotion site
"Daiwa WLB Station"

Legal Compliance
To protect and preserve each employee's rights, the Group regularly monitors the status of compliance with the Minimum Wage Act,
the Labor Standards Act "36 Agreement", and other relevant laws and regulations.

"Daiwakko" Daiwa Child Care ClubIn 2021, we created "Daiwakko," the Daiwa child care club, to provide both work and child care support to expecting mothers andmothers taking care of children, assisting them to improve their skills and shape their careers so that they can feel secure andmotivated as they continue to work while expecting children and providing child care. It is hosted on a dedicated site within Daiwa WLB
Station and offers ways for colleagues to connect and introduces various ways of using Daiwa's systems.

External Ratings for Initiatives
Various recognition programs
Since April 2005, Daiwa Securities Group Inc. has formulated an action plan based on the Act on Advancement of Measures to Support
Raising Next-Generation Children, and has been working to create a workplace environment where employees can work comfortably
while balancing their work and family life.
In recognition of this initiative, as of June 9, 2008, the Daiwa Securities Group Inc. received the "Child Care Support Authorized119Sustainability report 2023
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OthersCompany Mark" (known as "Kurumin") from the Ministry of Health, Labour and Welfare as a "company actively working on support forthe development of the next generation" based on the Act for Measures to Support the Development of the Next Generation.
Furthermore, on March 11, 2016, Daiwa Securities received the "Platinum Kurumin Certification" as an excellent "parenting support
company" that is working at a higher standard than companies that acquired "Kurumin."Selected for "Nadeshiko Brand" jointly sponsored by the Ministry of Economy, Tradeand Industry and the Tokyo Stock Exchange!
Daiwa Securities Group Inc. has been selected as a "Nadeshiko Brand" by the Ministry of Economy, Trade and Industry and the Tokyo
Stock Exchange for eight consecutive years from fiscal 2014 as a listed company that excels in promoting women's advancement.
The Group was commended for setting clear goals regarding the promotion of women's advancement and work-life balance andpromoting an environment where personnel with diverse values can maximize their abilities.

Received the symbol mark (known as "Tomonin") from the Ministry of Health, Labourand Welfare for promoting the development of a "work environment that ensures abalance of work and nursing care"!
The Group is continuously working to create a workplace environment that makes it easy to use the work-life balance support systems
so that employees can continue to work while balancing work and nursing care.
The Group received the symbol mark (known as "Tomonin") from the Ministry of Health, Labour and Welfare for promoting thedevelopment of a "work environment that ensures a balance of work and nursing care"120

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OthersHuman Resource Development and Skill Enhancement

Approaches and Policy
The source of Daiwa Securities Group's competitiveness lies in the capabilities of its employees. In order for Daiwa Securities Group tocontinue to transform itself and grow sustainably, the human resources (human capital) that make this happen are indispensable. By
investing in human resources, we aim to increase their value and leverage the capabilities of our human capital for corporate growth.
With the rapid changes in the business environment, the definition of human resources requirements has also widened. In order toexpand the pool of human resources with diverse skills and experience, it is important for all employees to have career ownership,consider what is required of them, and acquire the necessary skills. Therefore, we offer a variety of training programs to help
employees autonomously improve their skills.

Education and Training System
Daiwa Securities Group offers both mandatory and elective
programs to encourage each employee to realize his or her
autonomous career development. Defined as part of duties,
the mandatory programs are designed to help employees
acquire the skills and knowledge necessary for their current
work, while the elective programs aim to help them acquireelements required for their future careers. Frontline
departments and the relevant human resources division
work together to provide training programs tailored to theneeds of each division, enabling employees to acquire morepractical skills.

Daiwa Securities Group's Education System

We are also working on developing digital IT personnel byintroducing the "Digital IT Master Certification System," fordeveloping human resources that can leverage digitaltechnologies to create innovation within our business, andsetting up Daiwa Digital College to improve the IT skills of all
employees.

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OthersTraining Record in FY
Number of times skills training was held in FY2020:

9 training courses held 18 times

Number of participants

7,758 people

Average hours of mandatory and career development

37.3 hours

education per employee
Cost for the Group's educational investment:¥2.18 billion

Cost per employee¥173,000

Training for Young Employees (Daiwa Basic Program for employees in the first andsecond year of employment; Q-Road for those in the third to fifth year of
employment)
Each headquarters defines the image of the employee to be achieved after five years of employment, and the skill set and standards
required to achieve that image, based on which each headquarters implements a five-year training program that includes both inputand output-type training. When revision is necessary in line with business strategies, relevant divisions cooperate each other to review
the content of the programs. Daiwa Securities Group believes that training new employees receive immediately after joining thecompany is the most critical and therefore the Group offers a wide range of training programs to new employees. We offer a full rangeof programs, from education for fostering the high ethical standards and professional mindset required of employees of our group, to
specialized training that will enable them to quickly become a competent resource at their respective workplaces.

2

2

0

2

Skills Training
We provide all employees with optional skills training aimed at enhancing the skills that employees themselves want to improve. We
offer e-learning, which employees can take when it is most convenient for them, and two-way online instructor-led training. We havethus developed a training system that can better satisfy employees' motivation for self-development. For example, in the "Inheritanceand Business Succession Master" course, which is led by a practicing tax accountant, employees learn basic knowledge of laws andsystems and then acquire practical skills by generating output through case studies. The course helps the participants to acquire theskills and specialized knowledge necessary for conducting high-quality solutions business, and many of participants have stated thatthe course helped them better understand customers' issues and needs and provide solutions to address them.

Development of Next-Generation Leaders
The Daiwa Leadership Program is a two-and-a-half-month training program for developing next-generation leaders. Developed incooperation with an external educational institution, the program is offered in an MBA-course format, taught by leading lecturers fromoutside the company. Participants systematically learn management theory through discussions with the lecturers and peers, andacquire practical knowledge and know-how. At the end of the training, participants make a presentation to our management team to
output what they have learned. The program also serves as a good opportunity for group-wide networking among participants
selected from each company in the Group.

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OthersSupporting Employees Trying to Earn Credentials
Daiwa Securities encourages the acquisition by its employees of Financial Planner ( CFP®) and Certified Member Analyst (CMA)
qualifications as they are closely related to securities business. The Company set as a sustainability KPI a target of a combined total of
3,000 CFP®s and CMAs by FY2023, and achieved the target at the end of FY2022. In particular, the number of employees with CFP®,
which is highly compatible with our "asset management-type business" and is a globally recognized hallmark of professional FP, has
surpassed 1,000 for the first time among Japanese companies and organizations, making us the organization with the largest numberof CFP®s among financial institutions. In addition, we support our employees in acquiring over 100 different certifications in IT,
language, professional services, and other fields so that they can develop a high level of expertise and apply it to their respective jobs.

Number of Persons Earning Major Credentials (as of March
Number of persons earning CFP®

,)

1,469 people

certifications:
Number of Certified Member Analyst of the

1,550 people

Securities Analysts Association of Japan(CMA)®:

Initiatives for Autonomous Career Development
In order to nurture employees with a mindset that allows them to grow and develop themselves toward their next goals while working
diligently on the tasks at hand, the Group encourages autonomous career development and creates an environment that maximizes
employee performance.
Career Design Book

3

2

0

2

1

3

To support the career design of each and every employee, the Group posts "Career Design Book" on the internal portal site, making it
available to all employees. The Book showcases a variety of career paths and career tracks, and describes various personnel systems,
and education/training programs, as well as benefit programs.
Daiwa Securities Group Introduction Website
This site introduces the businesses and culture of Daiwa Securities Group companies and their departments, and visually presents theemployee image and skill requirements.
Self-Assessment System
We have established a self-assessment system as a twice-yearly opportunity for employees to talk about their careers with theirsuperiors and convey to the Human Resources Department their needs. This system enables employees to share their career vision,
strengths, and challenges with their supervisors at one-on-one meetings and communicate to the human resources department theirdegree of satisfaction with their jobs and also their opinions on the personnel and training systems, the workplace environment, andother matters.

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OthersIntra-Group Job Posting System
We have instituted a system of intragroup job postings to help employees with skills and the desire to realize their potential to open
new career paths.

Evaluation System
To ensure that all employees can continue working with a high level of motivation, it is important to have a fair and convincing
evaluation system. For this reason, Daiwa Securities Group has implemented a multifaceted 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 their challenges and improve their
managerial skills through training programs and other means, thereby improving our overall productivity. The multifaceted evaluation
system covers all managers, including executives, the heads of departments, offices, and sales branches, and section chiefs.
Regarding the evaluation of employees, we conduct comprehensive evaluations that take their compliance-related performance into
account. In addition, we endeavor to create a personnel evaluation system that motivates all employees, regardless of years they arewith us, whether they are young, middle of career, or experienced veterans, to take on the challenges of the next stage of their careers
and to work in positions with greater responsibilities. In evaluating employees, we focus mainly on whether, in light of their respective
abilities, roles, and responsibilities, they are always changing and continuing to grow in their performance, contribution, and theachievement of the Medium-term Management Plan. Even while on childcare leave, employees are still eligible for promotions as we
properly evaluate their contributions to date.

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Declaration on Health Management (Approaches and Policy)
Included in the Group's Corporate Principles is "placing importance on personnel." Based on the idea that the source of theGroup's competitiveness lies in the capabilities of its employees, we seek to raise productivity by enhancing employees'
well-being* and to maintain high performance as an organization in the future. To this end, we are undertaking strategic
measures to promote heath management.
* Well-being: good physical, mental, and social condition

Promotion System
The Group appointed the executive in charge of human resources as Chief Health Officer (CHO) to promote health management.
Executives from each Group company are also actively involved in the promotion. The Group issues a "White Book on Health" annuallythat analyzes the health status of all Group executives and employees. We also identify issues, and evaluate and improve our initiatives
at a Group-wide "Promote Health Management Meeting*" chaired by the CHO which is held every quarter, thereby implementing the
PDCA cycle for health management.
We have been selected as a "Health & Productivity Stock," which is jointly organized by the Ministry of Economy, Trade and Industry
and the Tokyo Stock Exchange, for eight consecutive years since 2015 and selected as "Certified Health & Productivity Management
Outstanding Organization (White 500)" by the Nippon Kenko Kaigi seven times.
* Held with the participation of executives in charge of human resources at Group companies as well as the employee unions and the Health InsuranceSociety125

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Also, the Human Resources Department, General Health Development Centers (infirmaries), andHealth Insurance Society closely cooperate and work together. The three parties collaborate witheach other, planning and disseminating health measures, and have increased the effectiveness ofsuch measures by exchanging opinions on a daily basis.

History so far
Main achievements
FY2008External Evaluations

Started specific counseling guidance (metabolic
syndrome guidance)
The Human Resources Department, General
Health Development Center, and Human
Resources Department started working together
to promote health

FY2009Introduced a system for checking past healthcheckup results and various health information
onlineStarted following-up with persons with possible
medical issues with the "yellow paper" system

FY2010Started walking and quit smoking challenges

FY2011

Started "Eating to 80% full" (Harahachi) campaign

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FY2012

Environment

OthersExternal Evaluations

Started Red Case Support Program (for severely ill
persons)

FY2013

Received the Minister of Health, Labour andWelfare "Extending Healthy Life Expectancy
Award"FY2014

Our Group's efforts were published in the "Ministry of Health, Labour and Welfare White
Paper"
Press Release [PDF:85KB]

FY2015

Started point incentive ** Points are given to self-help efforts for employee
health promotion.
When the points reach a certain level, it is reflected in
the employee's salary after age 55

Press Release [PDF: 114 KB]⟨Japanese only⟩

Appointed Human Resources Officer of Daiwa
Securities Group Inc. to "Chief Health Officer(CHO)"
Implementation of "Promote HealthManagement Meetings"
Established "Health Management Promotion
Section" in the Human Resources Department of
Daiwa Securities Group Inc.
Issued "Daiwa Securities Group White Book on
Health"FY2016

KA-RA-DA iki-iki Project Introduction
Press Release [PDF: 91 KB]⟨Japanese only⟩

Press Release [PDF: 99KB] ⟨Japanese only⟩
Ministry of Health, Labour and Welfarecommissioned project "Cancer Measures
Promotion Company Action"
Received the Minister of Health, Labour andWelfare Award for companies promoting cancer
controlPress Release [PDF: 80KB]⟨Japanese only⟩127

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FY2017

Environment

OthersExternal Evaluations

Introduced Employment Support Plan for
Employees with Cancer

Press Release [PDF: 121KB]⟨Japanese only⟩
Press Release [PDF: 141KB]⟨Japanese only⟩
Received the Tokyo Metropolitan Government"Company Award for Excellent Initiatives for
Balancing Treatment of Cancer Patients andWork"
Press Release [PDF: 78KB]⟨Japanese only⟩

FY2018Introduced Daiwa ELLE Plan

Press Release [PDF: 191KB]⟨Japanese only⟩

Press Release [PDF: 98KB]⟨Japanese only⟩

FY2019Introduced a new health checkup plan (a systemthat allows people to have a cancer checkup
together with their regular health checkup,
specific counseling guidance using ICT, online
health consultation by a doctor)

Press Release [PDF: 113KB]⟨Japanese only⟩

Started health promotion measures for young
customers (fitness app, counseling guidance forpeople in their 20s and 30s)
FY2020Introduced Daiwa Online Care

Press Release[PDF:84KB] ⟨Japanese only⟩

Press Release [PDF: 113KB] ⟨Japanese only⟩

FY2021

Mindfulness Training for New Employees in
Cooperation with Keio University
Introduced smoking cessation during working
hours

Selected as "Health & Productivity Stock Selection
2021" and "Certified Health and Productivity
Management Outstanding Organization (White
500)"

Press Release [PDF:165KB] ⟨Japanese only⟩128

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Main achievements
FY2022

Environment

OthersExternal Evaluations

Launched Good Sleep Daiwa to improve sleep
literacy and skills
Started subsidizing the cost of dental checkups
Selected as "Certified Health and Productivity
Management Outstanding Organization (White
500)"

Targets
To measure the improvement of productivity through health management, we use presenteeism*1 and absenteeism*2 as indicators.

*1.

Indicator

Target (FY2030)

Percentage of loss from presenteeism

Less than 10.0%

Average of absenteeism

3.0 days or less

The state of the employee's work execution ability and productivity declining as a result of coming to work while suffering from some disease or
symptom. Calculated by conducting a survey in which employees evaluate their own work in the past four weeks with the work they can perform
when having no illness or injury set at 100%. The smaller the value, the higher their productivity.

*2.

The state of being absent or on leave due to illness. Calculated by conducting a survey that asks how many days employees were absent due toillness in the past one year. The fewer the days, the higher their productivity.

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Various Health Measures, Their E ects, and Connections withManagement Goals Pursued in Health Management (Strategy Map)

Health issues
As the obesity rate tends to increase with age, it is necessary to increase health awareness when people are still young. The younger
generation, in particular, has lifestyle issues, such as a high smoking rate in men and upward trends in the rate of skipping breakfast
observed in both men and women. This suggests that measures to maintain a proper lifestyle are important, along with obesity
measures.
As for the risk of lifestyle-related disease, the number of people with the level of risk requiring specific counseling guidance is trending
upward gradually both in men and women.
Key area

Health issue

Lifestyle

Decreasing employees with health risk (obesity and high blood pressure, in particular)
and establishing a healthy lifestyle (smoking, exercise, eating habits, better quality ofsleep, etc.)

130Sustainability report 2023
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Key area
Younger generation
Women

SocialSocial Contribution
Activities

Environment

OthersHealth issue
Improving the health awareness and health literacy of the younger generation
Addressing health issues specific to women, increasing opportunities for women's
advancement

Cancer

Early detection and early treatment of cancer, support for balancing work and cancer
treatment

Mental health

Acquiring stress handling skills, early detection of mental health problems

Examples of Major Initiatives and Results of Initiatives
Increased Use of Daiwa Online Care
We offer "Daiwa Online Care," an online healthcare service that is available nationwide, and the use of the service is expanding. The
number of online consultations provided exceeded 1,000 in FY2022, the number increasing every year.
Daiwa Online Care provides consultation on health checkup results and mental health, and smoking cessation outpatient care, in
addition to ordinary healthcare. (Costs to be borne are healthcare service fees and medication costs only.) Gynecological care
commenced in April 2023 (total of 45 consultations in July, including online).

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Women have various health issues depending on their life stage, and the national government encourages men and women to deepen
their understanding of each other's health issues associated with gender differences, while promoting health support that takes genderdifferences into account. Against this background, we have provided women's menopause support, established ELLE leave (leave for
menstrual/menopausal conditions or infertility treatment), improved employee health literacy, and enhanced support for balancing
work and infertility treatment. As a result, various effects have been shown, such as improved productivity, reduction in the rate of
employee turnover due to infertility treatment, and increase in women in managerial positions.

* The symbol ◎ in the table indicates systems and measures that can be used regardless of gender.
* The number of days off taken under the ELLE leave system totaled 4,895 in FY2022.

Continuous Improvement in Female Cancer Screening Rate
Since FY2019, cancer screenings have been integrated into the regular health checkup items, resulting in a substantial improvement in
the screening rate. The proportion of female employees receiving the most recent cervical cancer screening and breast cancer
screening exceeds 80% for both types of screening.

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Trends in female cancer screening rate (younger than age

Environment

Others)(Source) Daiwa Institute of Research
Note:

The survey was conducted on all female workers affiliated with the Group.

Upward Trend in Younger Generation with Exercise Habits
The proportion of young employees (in their 20s and 30s) with exercise habits is consistently increasing, for both men and women. The
upward trend continued even during the COVID-19 pandemic in 2020, and we consider this to be due to Beatfit, a fitness app
introduced in 2019, helping to attract employees were not in the habit of exercising.
We also urge employees to participate in KA-RA-DA iki-iki Project* and continue to enhance their awareness of healthy lifestyles.
* The amount of investment in KA-RA-DA iki-iki Project is approximately ¥2.30 million. In a survey of participants, 27% of the respondents answered that5

3

they were "very satisfied" and 55% "satisfied."

Proportion of employees with exercise habits
Men

Women

(Source) Daiwa Institute of Research
Note:

Subjects were employees then registered. The percentage of respondents who answered in the interview sheet that they "walk or engage inequivalent physical activity in daily life for at least one hour a day"133

Sustainability report 2023
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OthersExpansion of Mental Health Support (Mindfulness Training)
Generally, employees in their first and second years are more likely to feel stress under a new environment. We have therefore
introduced Mindfulness Training for new employees as an initiative for mental health. The training is provided in collaboration with theCenter for Stress Research, Keio University and customized to the Group.

* MBCT program: Mindfulness-based cognitive therapy

Initiatives to Support Health Management at Other Companies
Within our Daiwa Group, Daiwa Institute of Research provides mission-critical business systems and data analysis services to healthinsurance associations nationwide, and holds the largest market share in the industry. In the "Third Data Health Plan" starting in
FY2024, we will provide packaged data analysis services covering not only specific health checkups and specific health guidance, butalso women's health issues, cancer, mental health, and other conditions. In addition, we have independently developed an "Employee
Well-Being" tool that assesses the health and well-being of employees and provides reports to our corporate clients. By using thisservice, our clients can understand issues in their health and productivity management and human capital management. Throughthese health data analyses, we contribute to the enrichment of employees' lives and sustainable corporate activities.

134Sustainability report 2023
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OthersExternal Evaluations* We explain the Group's health management initiatives to business partners who have made inquiries.

Other related data
FY2020

FY2021

FY2022

Men

27.5%

25.5%

25.7%

Women

10.0%

9.3%

9.9%

Men

29.5%

28.7%

27.1%

Women

7.1%

6.6%

6.2%

Men

27.0%

27.8%

28.5%

Women

15.2%

16.2%

16.9%

Men

21.9%

23.1%

23.8%

Women

11.7%

12.0%

13.7%

Obesity rate (30s)*1

Smoking rate

(20s)
Exercise habits
rate
(30s)

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FY

FY

FY

69.2%

69.2%

67.9%

Average percentage of loss from presenteeism*2

17.0%

15.2%

12.6%

Average of absenteeism*2

3.4 days

3.4 days

3.1 days

Engagement survey*3

-

81%

79%

Work

3.3

3.3

-

Organization

3.2

3.3

-

Colleagues

3.2

3.3

-

3.2

3.3

-

Compensation

3.0

3.1

-

(consolidated)

13.7%

15.1%

16.6%

16.3%

18.3%

19.7%

Stress check rate

90.8%

91.8%

91.3%

Ratio of employees with high stress

11.4%

10.2%

11.2%

Regular health checkup rate

100%

100%

100%

80.5%

82.2%

82.9%

Proportion of employees taking enough rest throughsleepWork Motivation Survey*4

Growth / Careeradvancement

Medical institution attendance rate for employees withproblematic results in regular health checkups
*1.

0

2

alone)*5

2(Daiwa Securities

positions0

Female ratio in managerial

Target: Reduce the obesity rate for employees in their 30s by 30% from FY2018 by 2024 (men 20%, women 8%). From FY2021, the target was changed
from the obesity rate at age 35 to the obesity rate for employees in their 30s.

*2.

A total of 12,717 employees responded to the survey (with the response rate reaching 98%).

*3.

Sustainable engagement implies employees' great commitment to making contributions to the achievement of the organizational targets and strong
sense of belonging to their organizations, which can be maintained in a productive working environment and on the precondition that theemployees are healthy both physically and mentally. According to Towers Watson, companies with high scores in terms of sustainable engagement
tend to exceed the industry's average growth rate in their business. The awareness survey started to be conducted for Daiwa Securities alone in
FY2021 and has been conducted on a group-wide basis since FY2022. (The figures are for the surveys conducted in the latter half of the fiscal year,
respectively). To the survey conducted in the latter half of FY2022, 11,313 employees replied, and the response rate reached 90%. The figures were
provided by the survey partner Towers Watson.

*4.

Ended in FY2021.

*5.

Target: At least 25% by 2025.

* We hold safety and health committee meetings with the participation of the employee unions. For FY2022, we had a total of 41 occupational andcommuting incidents (such as minor injuries).

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Approaches and Policy
Daiwa Securities Group has established various opportunities to receive feedback from employees under the belief that goodcommunication with employees is vital for a better workplace environment.
We will continue to identify areas for improvement in our systems and initiatives and utilize inputs from employees for creating an evenbetter workplace environment.

Systems to Receive Feedback from Employees
Self-assessment system
We have established a self-assessment system as a twice-yearly opportunity for employees to talk about their careers with theirsuperiors and the Human Resources Department. This system enables employees to communicate to the Human Resources
Department their career visions and also their degree of satisfaction with their jobs and their opinions on the personnel and training
systems, the workplace environment, and other matters. Daiwa Securities Group uses such feedback to develop an environment thatenables employees to work with a high level of motivation.

Engagement Survey
In August 2018, we started Work Motivation Survey as a monitoring indicator to increase employees' motivation to work and realize avirtuous cycle of higher employee satisfaction and higher customer satisfaction. We also introduced an Engagement Survey in
February 2022 to ensure that the motivation to work leads to the further growth of employees and further improvement in productivity
and business performance. We will develop a climate and system that enable employees to play more active roles by continually
increasing engagement through a productive workplace environment and employees' physical and mental health.

Implementation of Survey on Human Resources Measures
We regularly conduct surveys on human resources measures for all employees. We incorporate employees' feedback, and haveupgraded various support systems for D&I in general, and for child rearing and nursing care for family members. We conduct interviews
with employees returning from childcare leave after a certain time has passed in an effort to resolve any worries they may have andprovide a support system that employees can use until their children finish elementary school.

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OthersWe regularly conduct a survey on work-life balance and balancing work and childcare/nursing care for all employees. In 2020, morethan 7,000 employees responded to the survey. In addition to grasping the status of use of and requests for the systems, we revise thedesign and operation of the systems based on the feedback from employees.

Interviews with Superiors (Assessment and 1-on-1)
To give feedback on assessment results, we conduct interviews with department and sales branch heads twice a year, thereby sharing
future goals and career development with them and providing appropriate guidance and advice to each employee. In addition, oneon-one meetings are held at least twice a year for each employee as opportunities for supervisors to understand their subordinates'
problems, challenges, and aspirations, to share how to overcome them and how to achieve their goals, with the aim of guiding them
toward fulfilling the expected functions in line with corporate strategies.

Communication among Employees
In October 2007, Daiwa Securities introduced a program for supporting club activities. This program was created to help employees
enjoy their time off and deepen their friendships with colleagues, building more opportunities for sharing a sense of camaraderie andsolidarity. It is also intended to support work-life balance and facilitate a fuller social life for employees. Under this program, employee
groups that meet certain conditions are recognized as Daiwa Clubs or Daiwa Circles, which receive subsidies to cover some of theiractivity costs.
As of August 2022, there are 21 Daiwa Clubs and four Daiwa Circles.

Internal online social network: ANSWERS
In 2021, we introduced ANSWERS, an internal online social network through which employees can feel at ease consulting with eachother, help each other with difficulties, and build networks. The network provides employees with opportunities to meet role models,broadening their perspectives regarding future career advancement, as well as to communicate with the management.

Relationship with Employee Unions
The Group supports the Ten Principles of the UN Global Compact, which include Principle 3, "Businesses should uphold the freedom of
association and the effective recognition of the right to collective bargaining," and respects freedom of association and the right tocollective bargaining.
Based on labor agreements signed with employee unions, we regularly hold labor-management negotiations on bonuses and othercompensation and the working environment, thereby building a sound labor-management relationship.
We also increase opportunities for learning the opinions of our employees and improve communication through surveys conducted by
employee unions, direct dialogue between management and union members, and other activities.
As of the end of FY2022, 6,280 employees belong to employee unions, and the union membership ratio is 54.8%.

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Initiatives with Families
We work to ensure that members of employees' families share their pride in being part of the Group. Since FY2008, we welcome
employees' families to the workplace on Family Visit Day to give family members a better understanding of our company and theemployees' jobs. Other initiatives for supporting our employees' families include the new creation of Kid's Ceremony Leave, Family Day
Leave, and Parents' Longevity Celebration Leave, as well as the extension of mental health support to employees' families.

Family Visit Day
Since 2008, the Group has been carrying out "Family Visit Day" events in which we thank the families who support our employees every
day and invite them to the workplace.
Held at the head office and branches nationwide, these events are popular with employees and their families. In 2020, these eventswere held online for the first time, and roughly 5,800 family members participated.

Active Use of In-House Magazine
Daiwa Securities Group issues an in-house magazine, "Fuji," whose history dates back to 1925, when one of the company's
predecessors, Fujimoto Bill Broker Bank, commenced its publication. The content covers a broad scope, including the basic
management policy, a message from top management, specific sustainability initiatives (includes ESG and improvement ofenvironmental awareness), information from Group companies, profiles of winners of awards presented by Daiwa, overview of Family
Visit Day events, explanations of our welfare and human resources systems, human rights issues, and our internal whistle-blowing
system (how it works and its usage status). By including information that traverses the Group, our intention in producing the magazine
is not only to engender communication among company employees but also to further the Group culture, the sense of connectedness
and exchange of knowledge. In addition, the magazine is also posted on the work-life balance promotion website for employees,
making it viewable to company employees who are currently involved in child rearing, nursing family members or are on leave fromwork.

Financial Wellness
If the financial condition (household finances) of employees deteriorates, not only will their stress and psychological burden increase,leading to decreased productivity and motivation, but also misconduct by employees will be more likely to occur, which may have a139

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Othersnegative impact on the credibility of the Group. The Group strives to maintain and improve individual financial health by encouraging
employees to manage their money appropriately. To this end, we support the financial independence of our employees by providing"scholarship repayment support loan" to reduce the burden of scholarship payments, and by granting incentives for the employee
stock ownership association and Tsumitate (installment-type) NISA. In addition, we offer a property accumulation savings plan, a stock
option plan, and a loan plan for home acquisition, as well as a defined contribution pension plan (401K) for post-retirement asset
building, with the aim of raising the level of employee happiness and satisfaction and boosting productivity.

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Daiwa Securities Group has formulated the Basic Policy for Social Contribution Activities to strengthen its governance structure tooversee and promote the implementation of social contribution activities.

1. Objective
Daiwa Securities Group proactively engages in group-wide social contribution activities to gain the trust of
stakeholders, including our customers, shareholders, investors, local community, and NPO. The Group recognizes that
contributing to society, one of the core values portrayed in the Corporate Principles and the Daiwa Spirit, will lead to
improving corporate value. By solving social issues through its business activities and pursuing both corporate social
values and economic values at the same time, the Group works actively on creating a sustainable and prosperous
society.
Under such circumstances, the Group has formulated the Basic Policy for Social Contribution Activities. The purpose of
the policy is to strengthen its governance structure to oversee and promote the implementation of social contribution
activities. While working closely with stakeholders, the Group publicly discloses its activities and outputs.
The policy was approved by the Head of Sustainability and will be revised regularly for the purpose of building a better
society in partnership with our stakeholders.

2. Priority Areas
The Group considers it important to work together with both internal and external stakeholders as a good corporate
citizen engaging in consistent collaboration with the both local and global communities to foster sustainable
development. The Group's focus areas for social contribution activities are:Financial Education and research
Capitalizing on economic and financial expertise accumulated through its securities business, the Group provides
education programs and supports for various generations in order to help develop the capacity to build their own
lives and the asset management skill.
Contribution through foundations and NPOs
To realize a prosperous society, the Group provides support where needed by delivering funds and grants to
NPO/NGO.
Support for culture and the arts
The Group provides support for a wide range of cultural and artistic activities. These include exhibitions, classicalconcerts, and sports.
Corporate citizenship initiatives
The Group believes that employee volunteering helps broaden their perspectives and familiarize them with different
values. This, in turn, has a good influence on both their work and lives. For this purpose, the Group provides its
employees with information on volunteer projects planned by ourselves and NPO/NGO as well as events that help
raise their awareness. The Group also makes participating in volunteering easy by setting up a recognition programand introducing volunteer leave.

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Donations or grants provided to organizations are determined based on their credibility, continuity, and effectivenessin accordance with internal regulations. Upon receipt of progress reports by grantees, the Group monitors andevaluates their grant utilization and reporting framework.

4. Related SDGs

Please refer to the following for the details of our social contribution activities.
Financial Education and ResearchContribution through foundations and NPOs
Support for culture and the arts

3

Corporate citizenship initiatives

142Sustainability report 2023
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Capitalizing on financial and economic expertise accumulated through its securities business, Daiwa Securities Group provides
education programs and supports for various generations in order to help people develop the capacity to build their own lives and theasset management skill.

On-site Classes, Seminars, and Workplace Tours

Initiatives to Enhance People's Financial Literacy

Message from the Head of Financial Education

Our Concept & Promotion Structure

On-site Classes, Seminars, and Workplace Tours
Our group provides on-site classes, seminars, and workplace tours for local
schools, the general public, and corporations, etc.

Initiatives to Enhance People's Financial Literacy
Daiwa Securities Group promotes various initiatives to enhance people's financial literacy.

Provision of Web Contents
Official Daiwa Securities Group Channel (YouTube)
Click here for the official Daiwa Securities Group Channel (YouTube) ⟨Japanese only⟩143

Sustainability report 2023
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OthersIn 2000, Daiwa Securities Group began "Daiwa Securities Information TV," Japan's only TV channel dedicated to securities information,on the multichannel pay TV broadcast service "SKY Perfect TV!" Since April 2011, "Daiwa Internet TV," an owned media that can beviewed by anyone online, has been produced and distributed from our own studio, and since April 2022, financial and investment
programs have been similarly produced and distributed on the "Official Daiwa Securities Group Channel" on YouTube, a free video
distribution platform. We distribute information on the Tokyo market five times a day in a timely manner, while providing local market
information from Hong Kong and New York every day.
In addition to these daily programs, we distribute corporate information as well as video reports where analysts and economists at
Daiwa Securities and DIR provide commentaries on current issues in an easy-to-understand way.
On a new program called "Take Note! SDGs/ESG Investment will Change the World" that was launched in July 2020, Daiwa Securities
strategists provide straightforward explanations of SDGs/ESG investment.
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's timely andfree of charge provision of a variety of financial 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 toinvestment, and that can support the journey from savings to asset building.

Production of Financial Educational Materials on Stocks
Financial Educational Material: "Let's Study Stocks"
Following the move to digitize schools under the government's GIGA School Program, we created a new PowerPoint educational
material for learning about stocks. With teaching plans and example descriptions included in the PowerPoint notes, the material isdesigned for immediate use in school classes.
(Published by DAN Advertising, Inc.)

Support to Oshigoto Museum
Since FY2016, the Group has been supporting the Oshigoto Museum, a career education support project for elementary and junior highschool students (organized by The Asahi Shimbun Company). The project provides information on working and various jobs via the"Oshigoto Almanac" (book) and the Oshigoto Museum (website) to help children visualize their future careers.

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OthersOshigoto Museum (website)
In addition to information contained on the pages of the "Oshigoto Almanac" (book), this website gets children to learn throughquizzes and other game-like activities.
Click here for details [Japanese]"Oshigoto Almanac" (book)
Our Group's pages include explanations about stocks, bonds, and the work of securities firms. In
addition to being donated to elementary schools, junior high schools, and Kodomo Shokudo(children's cafeterias) nationwide, excerpts from the "Oshigoto Almanac" are also distributed free ofcharge via EduMall (an educational content distribution service provided by Uchida Yoko).

Number of copies published to date
FY
64,000 copies

FY

FY

67,000 copies

FY

75,000 copies

70,000 copies

FY
75,000 copies

Group publications page
"Oshigoto Almanac" Tips and tricks on dealing with money [Japanese]"Oshigoto Almanac 2021" What are SDG Bonds? [Japanese]"Oshigoto Almanac 2020" What does a securities analyst do? [Japanese]"Oshigoto Almanac 2019" What happens in a trading room? [Japanese]"Oshigoto Almanac 2018" What jobs do people do at a securities company?
[Japanese]"Oshigoto Almanac 2017" How can money be raised to expand a company?
[Japanese]

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0

2

0

2

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1

0

2

8

1

0
2

2

0

2

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Sponsoring the Kidzania
We exhibit the "Securities Company" pavilions at "Kidzania Tokyo" and "Kidzania
Koshien." Children aged 3 to 15 can experience various professions in society there. At
our pavilions, as consultants for the securities company, they conduct research on
investees (pavilions) that meet the investors' needs and compile the results into areport.
They will be able to understand about investments and learn that customer trust isimportant.
Kidzania Tokyo

Finance Park (Experienced-Based Program of Financial Decisions for Life)
Daiwa Securities Group cooperates with Finance Parks operated by Junior Achievement
Japan, a public interest incorporated foundation. This program provides opportunities
for junior high school students to learn economic and financial mechanisms that will benecessary for them in their adult life. Finance Parks have been operating in Shinagawa,Iwaki, and Sendai.

Number of participants in Finance Parks for FY2022
Finance Park

Shinagawa

Iwaki

SendaiTotal

1,663 peoples

2,690 peoples

7,931 peoples

12,284 peoples

Educational Initiatives and research
As a Starting Member of the Platform for Promoting STEAM Education
Daiwa Securities Group took part in the Platform for Learning Innovation Japan (PLIJ), a collaboration of industry, university,
government, public, and schools to promote STEAM education*1 in Japan.
In the 6th Science, Technology, and Innovation Basic Plan (Cabinet decision in March 2021), the promotion of STEAM education is listed
as one of the measures for realizing Society 5.0*2. The platform established by the Council on Competitiveness-Nippon (COCN) is
expected to include a library of STEAM education materials and a network of human resources to support STEAM education.
We will contribute to the platform by providing educational content in the fields of economics and finance which we have accumulated
through our securities business.
*1.

Cross-disciplinary education to utilize learning in each subject such as Science, Technology, Engineering, Arts, Mathematics, etc. for finding andsolving problems in the real world*2.

A human-centered society that balances economic advancement with the resolution of social problems by a system that highly integrates
cyberspace and physical space146

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OthersExample of Business-Academia Collaborations: University of Tokyo Hongo Tech Garage (Donation Project by
Daiwa Securities Group)
Daiwa Securities Group supports the University of Tokyo Hongo Tech Garage, which was established by the University of Tokyo in 2016as a site to advance entrepreneurship education (a donation project by Daiwa Securities Group). To date, more than 500 students haveparticipated in the project, leading to the launch of several companies each year. Among such companies, teTra aviation corp., hasachieved success. Established in 2018, the company became the sole prize-winning team in the world competition for personal flying
devices sponsored by Boeing in February 2020.

Message from the Head of Financial Education
Due to the lowering of the adulthood age in Japan, people will start living as adults from the day theyturn 18. Therefore, it is important to receive financial education from an early age, such as inelementary school. Financial education is also essential for working adults to have fulfilling 100-year
lives.
Daiwa Securities Group will work as a group to improve the financial literacy of a wide range of people
through its own activities and cooperation with various organizations and companies.
Daiwa Securities Group Inc.
Senior Managing Director
Head of Financial Education
Toyo Abe147

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SocialSocial Contribution
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OthersFor Your Dreams - Daiwa Securities Group Children’s Smile Project

Outline of the Project
Since 2017, the Daiwa Securities Group has been working on the "For Your Dreams- Daiwa Securities Group Children’s Smile Project" to help solve the problem ofchild poverty.

Why do we support the future of children?
"The financial and capital markets are a symbol of capitalism, and its benefit securities companies have been receiving. 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 we have gained from our core businesses.
Progressively declining birthrates and an aging population resulting in a decreased number of children shouldering Japan’s future will
significantly affect the sustainable growth of the country.
Child poverty generates many side effects, such as inadequate education, possibly leading to a situation where the children
shouldering the future of Japan cannot acquire enough qualities as members of society."
Eradicating child poverty is an extremely challenging goal that cannot be achieved overnight. However, we must now work to improvethe environment surrounding children and break the chains of poverty.

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Disparity in Children’s Environment at Present
The following report from Daiwa Institute of Research shows the degree of severity of child poverty issues in Japan at present.

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Daiwa Securities Group Future Support Bonds Child Support Group
Sustainable Fund
The Daiwa Securities Group decided to donate \102.5 million of the total amount raised through the issuance of bonds (nicknamed“Daiwa Securities Group Future Support Bonds”) in June 2020 to the “Daiwa Securities Group Future Support Bonds Child Support
Group Sustainable Fund,” which was established in collaboration with the Public Resources Foundation.

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Daiwa Securities Group Child Support Fund for Bright Future
The Daiwa Securities Group has created “Daiwa Securities Group Child Support Fund for a Bright Future” in collaboration with Public
Resources Foundation, a public interest incorporated foundation. The Fund is designed to improve the environment for children andbreak the chains of poverty. It assists groups supporting children’s future.

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Santa Charity Program150

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The financial and capital markets are a symbol of capitalism, and securities companies have benefited from them.
On the other hand, capitalism can cause disparities and contribute to the poverty of children, which is also a strain on society.
That is why we believe that we should use the sound profits we earn from our core business to help solve the problem of poverty.

The declining birthrate and aging population are advancing in Japan, and the reduced number of children who will carry the future of
the country will also have a major impact on Japan's sustainable growth.

The problem of child poverty has many side effects, such as the inability to receive necessary education, and it also leads to thesituation in which the children who will carry the future of Japan cannot gain the qualifications they will require as adults.

Eliminating child poverty is an extremely high goal that cannot be achieved overnight.
However, it is now necessary to improve the environment surrounding children and stop the chain of poverty.

MessageOur desire to support children
In the past, I have personally donated items such as toys to children's homes. That was because
there was a facility next to the kindergarten where my daughter used to go.

I am deeply concerned by the growing problem of child poverty in recent years.
The future of children is connected to the future of Japan, so if the problem of child poverty is left
unresolved, it will have a great adverse effect on the economy. As beneficiaries of the market
economy, securities companies should face up to this problem.

In the first open call for participants to the "Daiwa Securities Group Child Support Fund for Bright Futures", more than 100
organizations from all over Japan applied. Going forward, we would like to continue to support organizations that are engaged in
activities in their respective regions that help solve the problem of child poverty.

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OthersIn addition to the company's support activities, we started the "Santa Charity Program" last year, in which Group officers andemployees and ex-employees can participate voluntarily, and we received more donations than expected. It is important that these
efforts have the support of each and every person involved and are continuously carried out. In the future, I hope that they will become
part of voluntary efforts to tackle various social issues.

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Disparity in children’s environments

Child poverty in Japan: hidden from view
Japan is a rich nation—is child poverty really such a serious problem? The difference today is thatpoverty is hidden from view; for this reason, it is vital we use data to visualize the reality of childpoverty.

Mikio Mizobata
Senior Researcher
Economic Research Department
Daiwa Institute of Research Ltd.

1. Child poverty close to home
When measuring poverty, using absolute income levels is appropriate if it is a question of the minimum income required to survive—as
in developing countries, for example, or post-war Japan.
On the other hand, in developed countries and in general use, poverty is defined as having an income level below which there is a riskthat a person lacks the resources necessary to lead a dignified life—this can take various forms, but includes becoming more socially
isolated, or suffering deteriorating health.
This is known as the “relative poverty rate,” and is defined as the percentage of people who do not earn half or more of the median perperson household income in that country. It is known as the “relative” poverty rate, since it defines poverty as a relative income.

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SocialSocial Contribution
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OthersPoverty rates among working households withchildren, by household type (2018)

Note:“Child poverty rate” is defined as the percentage of children aged
17 or below, whose equivalent disposable income is below theNote:poverty line

“Poverty rates by household type” is defined as the percentage ofthe total population living in working households—whose head is

Source: Compiled by the Daiwa Institute of Research, based on theaged between 18 and 64—whose equivalent disposable income

Ministry of Health, Labour and Welfare’s “Comprehensive Survey

falls below the poverty line.

of Living Conditions”

Source: Compiled by the Daiwa Institute of Research, based on the
Ministry of Health, Labour and Welfare’s “Comprehensive Surveyof Living Conditions”

Released in December 2020, the latest government data for 2018 shows that child poverty rates have improved a little to 13.5%.
Following its 2012 peak, one of the reasons behind this improvement is the influence of Abenomics, which has raised incomes among
low-income households.
However, COVID-19 has led to decreased incomes among low-income households in particular; for this reason, there is a possibility
that child poverty rates could be on the rise again.
The Luxembourg Income Study Database enables us to compare poverty rates in Japan with those in other countries. Data shows thatJapan’s poverty rates are lower than the U.S. and Spain and other countries in southern Europe, similar to Australia and France, buthigher than Finland and other countries in northern Europe.
Japan’s child poverty rates are distinctive for the fact that poverty is most prevalent among single-adult households. Poverty rates are
particularly severe among mother-child single-parent households.
One cause is that many women hold non-regular forms of employment, and are therefore more likely to work low-paid jobs.
In father-child single-parent households, too, child poverty rates are particularly high when fathers hold non-regular forms of
employment.
The traditional Japanese employment and social system—in which the husband is a regular, permanent employee and in which thewife is a full-time housewife—is no longer appropriate for the present age; and this unsuitability is manifesting itself in the form of childpoverty.

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Activities

Environment

Others)“Regular” refers to regular workers and employees with either permanent employment contracts or employment contracts of one year or more;“Non-regular” refers to part-time workers, temporary workers, contract workers, commissioned workers, and others; with regard to people on
one-day contracts or contracts of less than one month, the sample size was too small to include in poverty rates.

Source: Compiled by the Daiwa Institute of Research, based on “Trends in Relative Poverty Rates: 2006, 2009, and 2012,” by Aya Abe (2014), published on
the HinkonStats (“Poverty Statistics”) website

Note:

)

2

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0

2

Child poverty rates, by parent age (Ages refer to ages of parents in 2012

Source: Compiled by the Daiwa Institute of Research, based on “Trends in Relative Poverty Rates: 2006, 2009, and 2012,” by Aya Abe (2014), published on
the HinkonStats (“Poverty Statistics”) website

However, the reality of child poverty does not always align with a conventional image of what poverty looks like.
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The reason for this is twofold: first, poverty is defined in relative terms; second, all children today tend to own similar possessions,
whether they live in poverty or not.
For example, there is little difference in the percentage of general households and the percentage of poor households that have video
game machines, bicycles, mobile phones, or smartphones.
This is no doubt due in part to the fact that products in general cost less nowadays, and that most Japanese households earn sufficient
incomes to purchase such products.
However, children of poor households are disadvantaged in terms of the experiences they enjoy—they may be unable to attend
extracurricular activities, for example, or go on family holidays.
Parents of low-income households also tend to work longer hours, and for this reason they cannot spare the time to provide theirchildren with experiences. It may well be they try and make up for this shortfall by at least providing their children with possessions.
The fact that poverty manifests itself in consumption of services is one of the reasons why child poverty remains hidden from view.

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Di erences in child possessions and experiences, by household type (Osaka Prefecture,)

The graphs show results from all local governments in Osaka Prefecture; “General households” are defined as households with equivalent
6

10

disposable incomes at or above the median line; “Poor households” are defined as households with equivalent disposable incomes of less than
2

ff

Note:

Others50% of the median line
Source: Compiled by the Daiwa Institute of Research, based on “Factual survey into the lives of children in Osaka Prefecture,” by Osaka Prefecture
University (March 2017)

2. Economic and social impacts
Child poverty is a serious issue because, in addition to the impact it has on children throughout their childhoods, it has a tendency tolead to adult poverty and to disparities in adult income.
The most significant way in which poverty creates chains of poverty and income disparity is education.
Japan’s compulsory education system entitles all children to receive education, regardless of the income of their parents. However, thereality is that there is a link between parent income and child academic ability.
Since households with higher incomes tend to spend more on cram schools and extracurricular lessons, parent incomes can have asignificant impact on the academic and cognitive ability of their children.

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OthersSpending on extracurricular education, by household income (for third-grade junior high school students)

Note:“Household incomes” show pre-tax incomes; “Spending on extracurricular education” is defined as average monthly spending per child on cramschools and other lessons outside of school

Source: Compiled by the Daiwa Institute of Research, based on “Analysis of impacts on academic ability, based on the FY2013 National Assessments of
Academic Ability,” by Ochanomizu University (March 28, 2014)

Percentage of children who have poor “Ability to overcome adversity,” by household type (FY2016)
Note 1: “Households facing financial difficulties” are defined ashouseholds that fulfill at least one of the three following criteria:
a household income of 3 million yen or less; a household with alack of daily necessities; a household that has had difficulties
meeting payments in the past
Note 2: Numbers refer to the percentage of children classified among theworst-performing groups when it comes to “Ability to overcome
adversity”
Source: Compiled by the Daiwa Institute of Research, based on “Second
Child health and lifestyle factual survey, FY2016 report,” byAdachi Ward Education Committee, Adachi Ward; the Center for
Clinical Research and Development, National Center for Child
Health and Development; Department of Global Health
Promotion, Tokyo Medical and Dental University (April 2017)

While study and other forms of cognitive ability are important, so too are non-cognitive abilities required to become members ofsociety, such as patience, motivation, cooperation, and communication.
But here, too, poor households are disadvantaged. A survey looking at households in Tokyo’s Adachi Ward reveals that children frompoor households have a lower “ability to overcome adversity” than children from normal households.
Non-cognitive abilities also impact on whether a child has a positive attitude to study, and it is easy for children of poor households tofall into a vicious circle when it comes to skills formation.
If a child suffers from poor health, then it can be difficult to maintain continued employment as an adult, with an associated risk oflower lifetime earnings.
In poor households, children tend to have unbalanced diets and are more susceptible to obesity; this, too, leads to greater future
health risks.
It is likely that parents who work long hours, or who work late at night or early in the morning, do not have the time or capacity toensure their children are eating and living healthily on an everyday basis.

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Percentage of obese children, by household type (FYSocialSocial Contribution
Activities

Environment

Others)
Note 1: “Households facing financial difficulties” are defined ashouseholds that fulfill at least one of the three following criteria:
a household income of 3 million yen or less; a household with alack of daily necessities; a household that has had difficulties
meeting payments in the past
Note 2: Numbers for “Obese” refer to the percentage of childrenclassified as “Having a propensity for obesity”
Source: Compiled by the Daiwa Institute of Research, based on “Second
Child health and lifestyle factual survey, FY2016 report,” byAdachi Ward Education Committee, Adachi Ward; the Center for
Clinical Research and Development, National Center for Child
Health and Development; Department of Global Health
Promotion, Tokyo Medical and Dental University (April 2017)

Through skills and health disadvantages, child poverty increases the likelihood of a future deterioration of human capital.
In Japan, innovation ought to be used to increase per person productivity; going forward, the quality of its human capital will become
more important than ever before.
Since child poverty results in the continued deterioration of human capital, it will also lead directly to long-term falls in Japan’s
capabilities as a nation.
Child poverty, which is frequently hidden from view, is thus a significant risk for Japan.

The following video, recorded in June 2018, provides a commentary on this report ＜Japanese only＞

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OthersDaiwa Securities Group Future Support Bonds Child Support Group
Sustainable Fund
Daiwa Securities Group started the “For Your Dreams–Daiwa Securities Group Smiles to Children Project” in 2017. Part of our efforts torealize a sustainable society, the project aims both to improve environments for children living in poverty and to break the chains ofpoverty.

As part of our “Smiles to Children Project,” and in the face of the recent state of emergency occasioned by COVID-19, we created a new“Daiwa Securities Group Future Support Bonds Child Support Group Sustainable Fund” in collaboration with Public Resources
Foundation.
Some of the proceeds from the Daiwa Securities Group Future Support Bonds corporate bonds we issued in June 2020 will be allocatedto this fund.

The purpose of the Child Support Group Sustainable Fund
It can be difficult for organizations seeking to improve environments and break the chains of poverty for children living in difficult
financial circumstances to continue their support activities during natural disasters or pandemics; for this reason, Daiwa Securities
Group aims to enhance both the business continuity and the resilience of such organizations.
By providing subsidies worth up to 3.5 million yen per year, we hope to encourage recipient organizations to establish business andorganizational models capable of providing continued support to children living in financial difficulties.
We intend to share the results of our fund’s activities with private non-profit sectors and government sectors through PR campaigns.

Organizations and initiatives eligible for funding
Non-profit organizations, including incorporated non-profit organizations, general incorporated associations, social welfare
corporations, and public interest corporations
Subsidies are to be used for establishing structures that enable recipient organizations to continue their activities even in times of
emergency, such as during the coronavirus pandemic or natural disasters; this includes enabling teleworking, enabling work
processes to be carried out online, enabling online fundraising, and formulating business continuity plans. Only initiatives aimed atenabling business continuity are eligible for funding.
As COVID-19 continues to have a significant impact on society, in its first fiscal year the fund will also support measures to ensureorganizations can conduct business during the pandemic.

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OthersHowever, similar conditions also apply to COVID-19; that is, only initiatives aimed at establishing structures to continue activities
during the pandemic are eligible.
The fund will focus on providing subsidies to organizations that work with children up to the age of 18; however, this is not a
condition of eligibility.

Subsidy details
Subsidies will be provided up to a maximum of 3.5 million yen per initiative
Requested subsidy values may be screened depending on the content of the application
Subsidies will be provided for a single fiscal year only
Number of organizations: about eight organizations per year

Selection criteria
Reliability of the applicant organization (meeting application requirements, etc.)
Whether the applicant carries out organizational management appropriately
Whether the applicant carries out information disclosure appropriately etc.
Whether the applicant has clearly identified issues with and drawn up logic models for its existing business
Whether the content and goals of the applicant’s business accords with the aims of the fund
Whether the applicant proposes initiatives that are reasonable and achievable
Whether the applicant can be expected to be an example to and generate ripple effects for other organizations

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OthersSelection results for FY2022 (Third year)
In FY2022, we received applications from a total of 88 organizations. Following a primary screening based on written documents, and asecondary screening based on interviews, the Screening Committee chose the six organizations listed below.

Organizations Selected for FY2022, Third year
Organization nameLocation

Project nameATOPICCO Network for Children of theMinato-ku,

Volunteer training and network construction

Earth (Certified NPO)Tokyo

to prepare for emergencies

Kirin Children's Cheering Squad (NPO)

Izumisano-shi,

Project to install public refrigerators to saveOsaka

the lives of poor families with children

Ichikawa City,

Project to strengthen base-type outreachChiba

leaders to connect children with difficulties in

Prefecture

the community to social resources

Yokohama-city

Fundraising enhancement project to activate

Kanagawa

communication with donors and strengthen

Prefecture

the foundation for supporting children andDiversity Kobo (NPO)

Panorama (NPO)Amount of
grant (yen)3,499,500

3,500,000

3,500,000

3,500,000

young people
Bridge for Smile (Certified NPO)

Minato-ku,

Development of a work experienceTokyoapplication system for children who cannot

3,500,000

rely on their parents
Pocket support (Certified NPO)

Okayama City,

Strengthen fundraising using digital

Okayamaadvertising and expand web outreach3,500,000

Prefecture

Total subsidies provided in FY2022 (Third year)
20,999,500 yen

Selection results for FY2021 (Second year)
In FY2021, we received applications from a total of 70 organizations. Following a primary screening based on written documents, and asecondary screening based on interviews, the Screening Committee chose the seven organizations listed below.

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Organization nameeboard (NPO)

Weeds (NPO)

Location

Project nameNishinomiya

Strengthening fundraising by creating a

City, Hyogo

donation site for individuals and managing

Prefecture

advertisements

Funabashi City,

Sharing business know-how and building a

Chiba

network of supporters to stay close toPrefecturechildren suffering from the family

Amount of
grant (yen)3,500,000

3,500,000

environment nationwide
ACE (certified NPO)

Toshima-ku,

Development of workshops and programs toTokyo

improve the abilities of child supporters

SOS Children’s Villages Japan (Certified

Fukuoka City,

Strengthening fundraising by introducing aNPO)

Fukuokamechanism to completely revise the website

Prefecture

and verify the effects of the business

3,500,000

3,500,000

expansion phase
CPAO (Certified NPO)

Osaka-shi,

Strengthening outreach for parents andOsakachildren with poor living and strengthening

3,500,000

fundraising for supporters using online
Chance For ALL (NPO)Adachi-ku,

Strengthening online recruitment of personalTokyo

donations that will be the source of

3,500,000

scholarships
Yamaguchi Sawayaki Network (NPO)

Yamaguchi City,

Construction of a support system for

Yamaguchi

donations and receipt of supplies forPrefecturechildren's cafeterias, etc.

3,500,000

Total subsidies provided in FY2021 (Second year)
24,500,000 yen

Selection results for FY2020 (the fund’s inaugural year)
In FY2020, we received applications from a total of 60 organizations. Following a primary screening based on written documents, and asecondary screening based on interviews, the Screening Committee chose the eight organizations listed below.

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OthersOrganizations Selected for FY2020, the fund’s inaugural year
Organization name
ASK-NET (NPO)

Location

Project name

Nagoya City,

Amount of
grant (yen)Project to establish an online youth center

3,500,000

Toshima Ward,

Reviewing business plans, and formulating

3,500,000Tokyo

manuals for preventing infection when

Aichi Prefecture
SANKAKUSHA (NPO)providing face-to-face emergency support, inthe light of COVID-19
3keys (certified NPO)

Shinjuku Ward,

Creating structures for child support, forTokyo

which administrative budgets are limited

3,500,000(strengthening fundraising)DxP (certified NPO)

Osaka City,

Strengthening fundraising through website

Osaka

improvements and advertising operations

3,500,000

Prefecture
TOYBOX (NPO)

Osaka City,

Project to establish emergency ICT training

Osaka

environments

2,540,000

Prefecture
Toshima Kodomo Wakuwaku Network

Toshima Ward,

Establishing foundations for the promotion of

(NPO)

Tokyo

public-private collaborations, and1,782,400

establishing soft infrastructure for providing
food aid
PIECES (Certified NPO)

Fair Start Support (NPO)

Bunkyo Ward,

Project to strengthen fundraising structures,Tokyoin order to support business expansion

Yokohama City,

Creating models for providing online support

Kanagawa

to job seekers

Prefecture

Total subsidies provided in FY2020 (the fund’s inaugural year)
24,735,400 yen

For further details, please see the Public Resources Foundation

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website3,413,000

3,000,000

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OthersDaiwa Securities Group Child Support Fund for Bright Future
The Daiwa Securities Group has created “Daiwa Securities Group Child Support Fund for a Bright Future” in collaboration with Public
Resources Foundation, a public interest incorporated foundation. The fund is designed to improve the environment for children andbreak the chains of poverty. It assists groups working on child poverty issues.

Objectives of the FundThe fund supports unique and pioneering businesses that seek to improve the living environments of children living under difficult
economic conditions and to break the chain of poverty as well as business development.

Grantees
Nonprofit corporations, general incorporated foundations, social welfare corporations, public service corporations, and othernonprofit organizations
Subsidies cover business development activities.
Projects deemed to be similar to numerous other businesses are not eligible.
The fund emphasizes the development of businesses that target children under the age of 15 years (particularly elementary schoolage children) (however, this is not a limitation).

Details of Grants
Grants are limited to ¥3.35 million (fourth series of grants for FY 2020)
Grants are provided for a maximum of three consecutive years (continuation is not automatic, and screening is conducted each year).
Number of grantees: Two to three organizations each year
Use of the grant funds is limited to business development activities.

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Evaluation items
Is there a clear logic model for initiatives designed to reduce the risk of future child poverty?
Are the initiatives pioneering?
Does the business development plan set clear targets to ensure the effectiveness and continuity of the initiatives?
Has an appropriate business development plan been established?
Is the organization as a whole managed appropriately?

FY2021 (Fifth Series) Screening Results
Applications for continuing grants were received from all two organizations, and following a screening process (interviews), thescreening committee deliberated and selected both organizations for continuing grants.

Organizations Selected for Continuing Grants (third year) in FY2021 (Fifth Series)

Organization nameLocation

Panorama

(NPO)

Theme

Yokohama City,

Business development to foster human

Kanagawa

resources of in-school cafe operators andPrefecture

implementers

Yokohama City,

Fair Start Support(NPO)

based employment programs for children’s

Prefecture

homes(Fifth Series)¥ . million

Fifth Presentation Ceremony

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7

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The fifth presentation ceremony and activity report session were held online on January 25, 2022.

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(yen)

3,350,000

Business development to support community-

Kanagawa

Total Amount of Grants Awarded in FY

Amount of grant165

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Others(Fourth Series) Screening Results

Starting in FY2020, only continuing programs will be granted subsidies. Applications for continuing grants were received from all fourorganizations, and following a screening process (interviews), the screening committee deliberated and selected all four organizations
for continuing grants.

Organizations Selected for Continuing Grants (second year) in FY2020 (Fourth Series)

Organization name

Panorama(NPO)

Fair Start Support(NPO)

Location

Theme

Yokohama City,

Business development to foster human

Kanagawa

resources of in-school cafe operators andPrefecture

implementers

Yokohama City,

3,350,000

Kanagawa

based employment programs for children’s

Prefecture

homes

3,350,000(Fourth Series)0

DxP(certified NPO)

Fukuoka
Prefecture
Osaka City,
Osaka

Theme

Business development of the learning complex“Study Place”

Prefecture

Amount of grant(yen)

3,350,000

Business development to provide “places where
one belongs” by effectively using classes and0(Certified NPO)

Fukuoka City,

2

Education A3

Location0

Organization name

2

2

0

(yen)

Business development to support community-

Organizations Selected for Continuing Grants (third year) in FY
2Amount of grantclassrooms in collaboration with schools

166

3,350,000

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Sustainability in
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GovernanceSocialSocial Contribution
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Others(Fourth Series). million

FY(Third Series) Screening Results

In FY2019, applications were received from 38 organizations. Following an initial screening (document based) and a secondary
screening (interviews), the screening committee deliberates and selected the seven organizations set forth below, of which tworeceived new grants and five received continuing grants.

Organizations Selected for New Grants for FY2019 (Third Series)

Organization nameLocation

Panorama(NPO)

Yokohama City,

Business development to foster human

Kanagawa

resources of in-school cafe operators andPrefecture

implementers

Yokohama City,

Fair Start Support
(NPO)

Theme

Kanagawa

based employment programs for children’s

Prefecture

homes

0

2

0

2

2,620,000

3,000,000(Third Series)

4

Location

Theme

Amount of grant
(yen)

9

DxP
(certified NPO)

Fukuoka
Prefecture
Osaka City,
Osaka

Business development of the learning complex“Study Place”

one belongs” by effectively using classes andPrefecture

3,120,000

Business development to provide “places whereclassrooms in collaboration with schools

9(Certified NPO)

Fukuoka City,

1

Education A3

0

1

0

2

Organization name

2

3

(yen)

Business development to support community-

Organizations Selected for Continuing Grants (second year) in FY
1Amount of grant167

3,120,000

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Organizations Selected for Continuing Grants (third year) in FY

Organization nameLocation

Fukuoka(Certified NPO)

(Certified NPO)Tokyo

Learning for All

Shinjuku Ward,Tokyo

Total Amount of Grants Awarded in FY

families’ future:human resource development programs for

Business development for learning support andknowledge development(Third Series)

9

1

0

3,120,000

isolated children

9

1

0

2

3,120,000

Business development for local outreach

2

2

1

(yen)

Business development for support projects formillion

2

.

2

¥

Amount of grant

trialsBunkyo Ward,(NPO)

Others(Third Series)

Outreach and network-oriented family support

Prefecture

PIECES

Environment

Theme

Fukuoka City,SOS Children’s Villages Japan

Social Contribution
Activities

Social168

3,120,000

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FY

Our strategy for
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Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

Others(Second Series) Screening Results

In FY2018, applications were received from 43 organizations. Following an initial screening (document based) and a secondary
screening (interviews), the screening committee deliberates and selected the five organizations set forth below, of which two received
new grants and three received continuing grants.

Organizations Selected for New Grants for FY2018

Organization nameLocation

DxP(certified NPO)

Theme

Osaka City,

Development of a business providing “places

Osaka

where one belongs” by effectively using classes

Prefectureand dining halls in collaboration with schools

Fukuoka City,

Education A3

Fukuoka(Certified NPO)

Business development of the learning complex“Study Place”

Prefecture

Amount of grant(yen)

3,200,000

3,150,000

Organizations Selected for Continuing Grants for FY

Organization nameLocation

Fukuoka City,SOS Children’s Villages Japan

Fukuoka

PIECES(Certified NPO)Tokyo

Learning for All

Shinjuku Ward,

Families’ Future”

Human Resources Development Program for

Business development of “Transmission of
Knowledge in Learning Support”* PIECES was approved as a certified NPO in 2018.

(Second Series)

8

1
5

9

5

0

million

2

.

1

¥

3,200,000

Isolated Children”* The maximum amount of grant for FY2018 (Second Series) was ¥3.2 million.

Total Amount of Grants Awarded in FY

3,200,000

Business development of “Regional Outreach

8

1

0

2

Tokyo

(yen)

through outreach and foster families

Bunkyo Ward,(NPO)

Amount of grantBusiness development of “Support Project for(Subtitle) Network-oriented family support

Prefecture

8

1

0

(Certified NPO)
2

Theme

169

3,200,000

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FY2017 (First Series) Screening Results
Organizations Selected for New Grants for FY

Organization name(First Series)

Location

Fukuoka City,SOS Children’s Villages Japan

Fukuoka(Certified NPO)

Bunkyo Ward,(Certified NPO)Tokyo

Learning for All

Shinjuku Ward,

(NPO)

Tokyo

(yen)

Business development of “Support Project for
Families’ Future”

Prefecture

PIECES

Amount of grant

Theme

Business development of “Regional Outreach
Human Resources Development Program for

Business development of “Transmission of
Knowledge in Learning Support”(First Series)¥ million

7

1

0
7

1
9

0

2

For further details, please see the Public Resources Foundation2

3,000,000

Isolated Children”* The maximum amount of grant for FY2017 (First Series) was ¥3.0 million.

Total Amount of Grants Awarded in FY

3,000,000

170

website3,000,000

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OthersSupport for culture and the arts

DOCS for SDGs
Daiwa Securities Group supports Yahoo! JAPAN Corporation’s DOCS for SDGs

action plan for achieving the SDGs. Yahoo! JAPAN has

posted documentary films on a special website, so be sure to watch them.

Documentary film
KIMONO Renaissance

TOKKATSU: Character Building(Japanese)(Japanese)

Other Support Programs
Daiwa Securities Group continues to provide support to promote sports, culture, and the arts.
Media Gallery (support programs) (Japanese)

Charity project held with Kashima Antlers F.C.
Daiwa Securities, in cooperation with official partner Kashima Antlers F.C., carried out a charity project on June 12-16, 2023, using the
KASSAI tipping service of Fintertech Co., Ltd. In this project, fans and supporters purchase their favorite gifts and the money is donatedto the SmileSmilePROJECT of Japan Heart, an NPO that supports childhood cancer patients.
This time, the third time, approximately 3.42 million yen of support funds were collected from 301 participants.

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OthersMany of the charity participants agree with the purpose of the event and have continued to support it since the first time. In addition,
the recipients expressed their joy at being able to participate in a place that they had given up on because they were fighting an illness,and expressed their gratitude to the supporters.
At a match sponsored by the Group on June 11, a ceremony was held to hand over the list of donations to Japan Heart.

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By donating through its foundations and funds and subsidizing NPOs, Daiwa Securities Group continually strives to support vulnerable
populations to realize a sustainable society.

Daiwa Securities Health Foundation
In April 2023, the Daiwa Securities Foundation was created through the merger of the Daiwa Securities Foundation and the Daiwa
Securities Health Foundation.
Merged to commemorate the 30th anniversary of the Daiwa Securities Welfare Foundation (established in 1994 to provide support forvolunteer activities) and the 50th anniversary of the Daiwa Securities Health Foundation (established in 1972 to provide research
assistance).

Research Grant
Grant results (as of March 31, 2023)
1,408 cases
Total amount: 1,381 million yen

Support for Volunteer Activities
Grant results (as of March 31, 2023)
Number of projects receiving grants

Total amount of grants

Volunteer Activities Grants

4,244 projects

995.61 million yen

Grants to activities supporting children

36 projects

17.41 million yen

Daiwa Anglo-Japanese Foundation
As a UK charity for fostering closer ties between the United Kingdom and Japan, the Daiwa Anglo-Japanese Foundation wasestablished in 1988 with contributions from Daiwa Securities Co Ltd.
The Foundation's Tokyo office provides local assistance to Daiwa Scholars (students from the United Kingdom) staying in Japan for173

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Othersabout 20 months, administers grant applications from Japan and collaborates with other institutions promoting Anglo-Japaneserelation.
Activities
1. Awarding grants to projects in a variety of fields by individuals, institutions, and organizations working to promote ties
between the United Kingdom and Japan
2. Awarding Daiwa Scholarships to British university graduates(including for one-year Japanese language study, four-week home-stays, and six-month on-the-job training in specialized
fields)3. Awarding the Daiwa Scholarships in Japanese Studies, which are supported by Daiwa Securities, for students from the United
Kingdom who are advancing to graduate school in the U.K. or Japan to conduct research on Japan
4. Organizing events regulatory, at Daiwa Japan House in London, which is the Foundation's headquarters, to improveunderstanding of Japan in the United Kingdom
Seminars are also being held online (as webinars).
5. Organizing events in Japan in collaboration with the British Embassy and others

Daiwa Securities Phoenix Japan Program
In May 2012, we established the Daiwa Securities Phoenix Japan Program as a measure to support reconstruction after the Great East
Japan Earthquake that occurred on March 11, 2011. Under this program, we donate part of the trust fees from the investment trust"Daiwa Nippon Support Fund Vol. 3 - Phoenix Japan -."(Collaboration: Authorized NPO Japan NPO Center)

Kopernik Program
Since fiscal 2010, the Group has provided support to the American NPO Kopernik, which was established to improve quality of life andreduce poverty in developing countries. This program is operated by donations related to the investment trusts "Daiwa Eco Fund" and"Russell Investment Global Environmental Technology Fund".

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OthersOther disaster recovery support
Contribution to Areas Damaged by the 2023 centered in the southeastern

About 4.15 million yen

part of Turkey Earthquake(donation activities by officers and employees)

Torrential Rain Disaster in July 2020

5 million yen

Donation in response to damage caused by Typhoon Hagibis in 201910 million yen

175Sustainability report 2023
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Providing Appropriate Technologies to Developing Countries in Order to
Improve Lives and Break the Chain of Poverty
Daiwa Securities Group supports the program of Kopernik, a non-profit organization that wasestablished on February 19, 2010 to improve lives and break the chain of poverty in developing
countries.
Kopernikuses the Internet provides a mechanism that enables donors to select projects insupport regions and products that are locally needed (such as solar lamps and simple water
purifiers) for donation to recipients. Since the use of donations can be clarified and support can beprovided to local partners that take direct action locally, the organization is able to efficiently
provide support that accurately meets local needs.
Donations sourced from our revenue from the Russell Investment Global Environmental Technology
Fund are allocated as set forth below and to operational expenses of Kopernik.
（1） Projects to directly provide products and technologies that will be useful for raising the living standards of
impoverished persons in developing countries（2） Trials of products and technologies taking into account local issues and surveys of local needs

FY

– FY

Recipients

The following project was selected for grants.
Country ofProject

Implementation

Alternative wastewater treatment in floating settlements and waterside

3

2

0

2

2

communities

2

0

2

Indonesia

176

Grant Amount
(US$)
2,555

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OthersRecipients

The following project was selected for grants.
Country ofProject

Implementation
Indonesia

Improving livelihoods in the fisheries sector in coastal areas

FY

– FY

Grant Amount
(US$)
6,473

Recipients

The following three projects were selected for grants.
Country ofProject

Implementation

Indonesia

FY

– FY

Grant Amount(US$)

Increasing the added value of seaweed

19,337

Improving sorting of waste

13,696

Seawater desalination project

2,610

Recipients

2

2

2

1

2

0

2

Country of

0

The following three projects were selected for grants.

Project

Implementation

1

2

0

2

0

2

0

2

Reducing crop damage through pest control in paddy fields
Indonesia

Cultivating and conducting dietary education on highly-nutritious moringa to
improve children’s nutrition

0

2

0

2

9

1

0

2

Preserving water quality for sustainable batik industry

177

Grant Amount(US$)
10,3069,043
5,295

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OthersRecipients

The following three projects were selected for grants.
Country ofProject

Implementation

Indonesia

FY

– FY

Grant Amount(US$)

Increasing rice production yields by improving rodent countermeasures

9,900

Extraction of honey using tubular filters

8,900

Emergency support for the Sunda Strait tsunami

10,100

Recipients

The following six projects in two regions were selected for grants.
Country ofProject

Implementation

Improvement of irrigation systems: drip type irrigation systems using plastic
bottlesGrain storage method that contributes to farmers securing food and increasing
their incomes

9

1

0

2

8

1

0

2

Indonesia

(US$)
4,800

3,600

Solar systems providing access to electricity

6,300

Palm leaf cutting machines that improve farmers’ processing skills

3,900

Provision of clean energy technology to schools and students in remote areas

7,700

Support to Rohingya refugees: solar power generation systems for health care

4,200

8

1

0

2

7

1

0

2

Bangladesh

Grant Amount178

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SocialEnvironment

OthersRecipients

The following 11 experimentation projects in Indonesia were selected for grants.
Country of
Implementation

FY

(US$)

Storage method that improves the quality of agricultural products

1,500

Testing of low-cost seawater desalination technology

2,000Extraction of honey using tubular filters

3,000

Study on recyclable sanitary napkins and girls' school attendance

3,000

Testing of effects of handmade solar drying machine

2,000

Improvement of solar-based cacao processing method

5,800

Homemade solar lantern

2,400

Solar drying machine

5,500

Gas detector for keeping watch on forest fires

2,500

Testing of water quality sensor

2,000

Plastic waste recycling equipment

3,000

7

1

0

2

6

1

0

2

Indonesia

Grant Amount

Project– FY

Recipients

The following four projects in three regions were selected for grants.
Country ofProject

Implementation

Technology Distribution

Provision of technology to female refugees

Turkeyfleeing war in Syria

Hygiene supply kit

Grant Amount(US$)
20,000

Solar lamps
Provision of technology to the people of Kratie

6

1

0

2

5

1

0

2

5,333

Cooking stoves

Cambodia

Myanmar

Water purifiers

Provision of technology to the people of Siem

Solar lamps

Reap

Cooking stoves

Research on needs to improve the living
standards of impoverished farmers

179

-

6,676

11,222

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– FY

Our strategy for
Sustainability

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Activities

Environment

OthersRecipients

The following three projects in two regions were selected for grants.
Country ofProject

Implementation

Technology Distribution

Promoting the use of solar lamps, water
purifiers, and cooking stoves to local womenwith the aim of improving the living standardsof people living in Pulau Flores
Indonesia

Grant Amount(US$)

Solar lamps
Water purifiers

14,663

Cooking stoves

Provision of high combustion efficiency cooking
stoves to replace cooking methods thatgenerate a lot of smoke for people living in

Cooking stoves

5,856

farming villages in Soppeng Regency, South
Sulawasi Province
Technology fair held to determine what kinds ofCambodiatechnologies will lead to solutions to the issues
that the Cambodian people are facing

FY

– FY

Solar lamps
Water purifiers
Cooking stoves

17,862

Mosquito nets

Recipients

5

1

2

4

1

0

2

Country of

0

The following six projects in four regions were selected for grants.

Implementation

Project

Technology Distribution

Grant Amount(US$)

Using high combustion efficiency cooking
stoves to reduce firewood consumption andIntroducing water purifiers to support theprovision of clean drinking water
Provision of cooking stoves and solar lamps to
4

1

0

2

3

1

India
0

8,336

Water purifiers

6,072

Solar lamps

3,718

improve cooking environments

Myanmar2

Cooking stoves

semi-nomadic communities in India
Provision of technology to families living in the
Poso region after conflict

Water purifiers
Cooking stoves

6,412

Solar lamps

Indonesia
Provision of solar lamps to families living inYahukimo Regency, Papua Province

180

Solar lamps

7,334

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Implementation

Social Contribution
Activities

Environment

Technology Distribution

OthersGrant Amount(US$)

Provision of solar lamps to East Timor to reduce
East Timor

the dumping of batteries from fishing boats andSolar lamps

14,050reduce deterioration of the environment

FY

Recipients

The following six projects in five regions were selected for grants under the FY2012 program.
Country ofProject

Implementation
BangladeshTechnology Distribution

Provision of solar lamps to river island residents
in northern Bangladesh
Provision of clean water in impoverishedregions Bali

Grant Amount(US$)

Solar lamps

8,775

Water purifiers

6,678

Cooking stoves

12,000Matenoble birth kits

9,345

Hearing aids

8,500

Solar lamps

4,883

Indonesia
Provision of commercial cooking stoves on
remote islands of Indonesia
Provision of safe birth kits to clinics in East

East Timor

Timor
Provision of hearing aids to schools for the deaf

Vietnamin Vietnam
Provision of solar lamps in mountain regions of
the Philippines

2

1

0

2

Philippines

FY

Recipients

The following six projects in five regions were selected for grants under the FY2011 program.
Country ofProject

Implementation

Technology Distribution

Provision of water purifiers to flood victims
India
1

1

0

2

Provision of high efficiency cooking stoves towomen in India

181

Grant Amount(US$)

Water purifiers

5,000

Biomass cooking stoves

1,623

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Implementation
Indonesia

Governance

Creation of jobs to spread technology by

Water purifiers, cooking

making use of women’s networks

stoveshighland regions of the Philippines
Provision of lights to fishermen on isolated

East Timorislands
Phase II: Provision of hearing aids and training

Vietnamto deaf children

FY

Environment

Technology Distribution

Provision of attractive and sustainable lights in

Philippines

Social Contribution
Activities

OthersGrant Amount(US$)
26,190

Solar lanterns

8,648

Solar lanterns

7,340

Solar hearing aids

10,417

Recipients

The following nine projects in four regions were selected for grants under the FY2010 program.
Country ofProject

Implementation

East Timor

Technology Distribution

Grant Amount(US$)

Provision of lights in East Timor

Solar lanterns

20,271

Provision of lights to midwives

Solar lanterns

1,845

Provision of clean water to agricultural villages

Solar water purificationin East Timorsystems

7,495High energy efficiency
Energy from biomass

cooking stoves and biomass

4,345

Indonesia

Provision of biomass cooking stoves inHigh energy efficiency

agricultural villages in Indonesia

cooking stoves

Provision of lights to forest communities

Solar lanterns

8,010

Biomass cooking stoves

9,397

Solar hearing aids

14,995

Solar lanterns

5,291

Provision of biomass cooking stoves forrecovery following the eruption of Mount Merapi
Vietnam
India

5,035

0

1

0

2

charcoal kits

Restoring the hearing of children
Improving living standards in communities in
India

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OthersCorporate Citizenship Initiatives
Daiwa Securities Group believes that participation in volunteer programs and other community activities by employees helps broaden
their perspectives and familiarize them with different values. We consider that this, in turn, has a good influence on both their workand their lives.
Through our intranet, we provide information on volunteer opportunities for projects planned by ourselves, other businesses andNPOs/ NGOs as well as events that help educate employees and raise their awareness. We also strive to create an environment thatmakes it easy for employees to volunteer by setting up a recognition program, the Volunteer Award, and other incentives.
In FY2019, we introduced Volunteer Leave to create an environment that facilitates participation in volunteer activities.

Initiatives to Promote Volunteer Activities
President's Awards program
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 to employees and groups involved involunteer initiatives and activities that provide ongoing support to communities.

Dissemination of Information through the Internal Network
The Daiwa Securities Group introduces the best practice in such volunteer work, through our inhouse magazine and internal TV programs.

In-house magazine "Fuji"

Donation activities by employees"Jeans Day"
For the purpose of charity, we hold an event "Jeans Day" on the 1st of a month where officers and employees come to work in casualclothes and raise funds.

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We create opportunities to participate in social contribution activities, and a different atmosphereand communication style are created, contributing to a well-ventilated work environment andimproving employee engagement.

Santa Charity Program
Since 2017, we have been implementing a Santa Charity Program—an initiative in which executives,
employees, and former members of Daiwa Securities Group donate Christmas presents to children.
Contributions collected under the Program are used to purchase assorted snacks and toys anddonated to children’s homes, livelihood support facilities for fatherless families, and NPOs
supporting children across Japan. The donations are made through the Public Resources
Foundation, a public interest incorporated foundation.

Employee donations record
unit
Number ofparticipants*
Total donations
Total number ofdonation recipient

FY

FY

FY

(persons)

3,030

20,946

19,288(million yen)

12.80

30.81

29.79

(groups)

99

129

157

* The number of transfers to the dedicated account is counted as the number of participants.

Collection Drive
0

2

0

2

The Daiwa Securities Group has been running the following collection drives as initiatives that are easy for employees to participate in.
Collected items are donated to various NPOs and sold by them to fund their activities, including support for education, medical
services and assistance to the disabled in developing countries.
ExamplesParticipation in "Used Book Sale Donation for Children's Future" (donation to Children's Future Support Fund )Donation of unusable postcards and used stamps (donations to Japan Committee "Vaccines for the World's Children" and Livewith Friends on the Earth)184

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OthersExamplesDonation of redundant calendars (donations to groups involved in disaster assistance or community support activities, which
are selected each fiscal year)

Participation in the TFT program
Since the spring of 2013, Daiwa Securities Group has contributed to the TFT Program, which isorganized by TABLE FOR TWO, an internationally designated NPO. This is an initiative aimed atcorrecting food imbalances between developing and developed countries by donating a portion ofrevenue from the purchase of food and drink by Group officers and employees to pay for school
lunches in developing countries.
We introduced the TFT menu at the cafeteria in the head office building and the staff cafeteria in
Daiwa Institute of Research and Daiwa Facilities Co., Ltd. started donating ¥1 per drink sold throughthe beverage vending machines installed within the Group. Moreover, points earned through the“KA-RA-DA iki-iki Project,” which is aimed at strengthening employees’ health, can now be
redeemed for contributions to the TFT Program. We have thus expanded the platforms forparticipating in the TFT activities.

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

Initiatives in Japan
Participated in the "Beautification Project of the Coast"

The coast cleaning project called "Beautification Project of the Coast" was carried out by multiple Rotary clubs in Kagoshima
prefecture. Eight people from the Daiwa Securities Kagoshima branch participated with the desire to collect even a small
amount of marine waste such as PET bottles and plastic bags that have become a problem in recent years.
On the day of the event, about 200 people participated despite light rain. Fortunately, the amount of garbage was small and the185

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Othersevent ended earlier than planned. After the closing ceremony, boxed lunches were distributed and participants were able toenjoy a fulfilling day by soaking in a hot spring afterwards.

Participants from Daiwa Securities Kagoshima Branch.

Recycling of unnecessary items generated from internal beautification activities
At the Daiwa Securities Business Center Co. Ltd., they collected and disposed of unnecessary items (such as plastic containers
and trays that are no longer in use, and desks, chairs, and cabinets that are damaged or outdated) that had accumulated in eachdepartment for the first time throughout the company, and implemented a large-scale decluttering as an internal beautification
activity.
During the collection and disposal of these unnecessary items, they thoroughly sorted them for recycling and improved therecycling rate. They were able to achieve internal environmental improvement while contributing to the formation of a circularsociety.

Results of the implementation

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OthersThorough sorting and collection of unnecessary items for bringing to recycling facilities

Sorted and collected unnecessary items

Contribution to Local Communities through Investment Activities of REITs
Daiwa Real Estate Asset Management contributes to local communities by addressing social issues through investment
corporations and funds that entrust it with asset management.

Efforts for the sustainable development of local communities
Daiwa Office Investment Corporation is making efforts to contribute to the sustainable development of local communities byparticipating in various councils related to urban development and cooperating in participation in local events.
In addition, using the site of the office building they own, they will install a share cycle / share car port and attract kitchen cars,
etc., and social life of tenant employees, residents, local residents, etc. They are trying to improve the above convenience. To
prepare for emergencies such as disasters, they also conduct disaster drills for residents of buildings we own.

Attracting kitchen cars (Daiwa Nakano Sakaue building)

Implementation of disaster drills

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Efforts at healthcare facilities
At Daiwa Securities Living Investment Corporation, employees of the management company visit healthcare facilities owned
nationwide several times a year for the purpose of deepening their understanding of the on-site work of operators in healthcare
facilities and services for facility residents. They participate in exchange events (family social gatherings, senior citizens'
associations, etc.), employee experience training, and help with daily work (cleaning, pruning of courtyard plants, etc.). They
will continue to actively make this effort as part of our contribution to the local community.

State of summer festival (Alpha Living Takamatsu station square)State of planting pruning (Alpha Living Takamatsu Hyakkenmachi)

Holding a demolition festival for a building scheduled for demolition
The Daiwa Onarimon Building, which is scheduled to be demolished, held a demolition festival with the aim of conveying their
final gratitude to the local residents. At the same event, you can draw pictures on the floors and walls of the building to be
demolished, create art works and make them into a gallery in the "participatory painting experience", and print photos of thesurroundings of the building from the past to the present using a printing method called risograph. The RISOGRAPH WORKSHOP
was held, where you can experience the process of turning demolition waste into new concrete.

State of the Daiwa Onarimon Building demolition festival

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Initiatives Taken by the Group's Overseas Offices
Daiwa Capital Markets America (DCMA) Initiatives

Initiatives to Support Climate Action: Gardening volunteer
In honor of Earth Day, DCMA partnered with The Friends of Governors Island to participate in a volunteer event. A team of 20
DCMA employees engaged in horticulture, including weeding and removing invasive species to prepare Governors Island forrestoration and spring planting. We are honored to have contributed to preserving the beautiful landscape and will continue towork towards environmental conservation by cultivating awareness among each employee via future volunteer events.

Initiatives to Support Gender equality, Women Empowerment
In FY22, DCMA launched the "Elevating Women in Leadership" program to promote women's career development andadvancement into leadership roles. The program allows women from various divisions to exchange ideas and enhance theirskills through numerous events. For example, DCMA hosted a networking luncheon for the women and senior managers tocelebrate International Women's Day. The event prompted attendees to share their experiences and discuss topics such as
career development and challenges women face in the workforce. Through networking, participants forged connections witheach other, fostering mutual motivation and support. DCMA will remain dedicated to women's active participation in
management and providing an encouraging working environment for all.

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Initiatives to Support Wellness
DCMA is committed to promoting employee health awareness through the "Just for the Health of It" wellness initiative. Thisinitiative incorporates various activities such as Bright Breaks, a virtual well-being platform offering over 300 live weekly "microwellness breaks" such as yoga, fitness, nutrition, and personal development. These programs are accessible anytime, anywhere,
allowing employees to take refreshing breaks during the workday, improving work performance. During Mental Health
Awareness Month, we provided educational resources and therapeutic massages to support employee self-care. DCMA willcontinue to encourage employees to reduce stress, achieve a healthy work-life balance, and enhance work productivity.

Daiwa Capital Markets Europe Limited (DCME) Initiatives

Initiatives for Environmental Load Reduction
The firm has continued in its efforts to reduce its carbon footprint, promoting energy efficiency, recycling and re-use. The
emissions from gas usage in their London office are now offset, two of our three data centres are now 100% renewable in the UKwith the third targeted to be renewable by 2025 and currently producing <0.1 MTCO2e.

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DCME has continued to support charitable activities with emphasis on initiatives that enhance the surrounding community.
Initiatives include support of food poverty, disadvantage mentoring, gender and health equality including support of local foodbanks.

DCME colleagues volunteering with Hackney Foodbank

Encouraging Women to Succeed
The firm is a signatory to the Women in Finance Charter demonstrating its commitment to increase the representation of
women in banking, particularly at senior levels - 50% of the Executive Committee and 44% of the Board are women. Positive
progress has also been demonstrated by the reduction of the DCME 2022 mean gender pay gap from 38.8% to 30.9%. The Board
and Executive Committee recognise the necessity of ensuring that we have an inclusive and diverse workforce and an
environment where everyone can thrive regardless of their background and personal characteristics.

International Women’s Day 2023 Event hosted in DCME London

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Blind Massage
On September 30, 2022, Daiwa Capital Markets Singapore collaborated with the Singapore Association of the VisuallyHandicapped (SAVH) to provide head and shoulder massages for their staff. The massages, performed by qualified, visually
impaired masseurs who are part of SAVH's Mobile Massage Team (MMT), helped to alleviate staff's fatigue from their desk work.
The goal in supporting this initiative was to contribute to a more inclusive society by expanding employment opportunities forvisually impaired individuals and promoting social inclusivity.

Food donation
Daiwa Capital Markets Singapore partnered the non-profit organization "Free Food For All" (FFFA) for a two-week food donation
drive from 23 September to 6 October 2022. The initiative aimed to provide nutritious food and groceries completely free ofcharge to underprivileged individuals in Singapore. The food donation drive, specifically targeting children from low-income
households, was able to fulfil the wish lists of 50 such children through generous contributions from the staff. The goal in
supporting this initiative was to end hunger, achieve food security and improved nutrition of the less privileged individuals.

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Daiwa Capital Markets Singapore collaborated with Greensquare to organize a textile donation drive from 24 October to 4
November 2022. Greensquare is an organization that offers textile recycling services to both households and organizations in
Singapore. They also promote education on the 3Rs (Reduce, Reuse, and Recycle) to increase awareness of environmental
sustainability. Daiwa Capital Markets Singapore staff made significant clothing donations, contributing to environmental
conservation efforts that utilize the 3Rs principles.

Daiwa Capital Markets Hong Kong Limited Initiatives

Daiwa Cup 2022
Daiwa Capital Markets Hong Kong is sponsoring the Japanese Junior Football Club (JFC) as part of its efforts to promoteinternational exchange and children's health. Last year, on October 8th, we collaborated with JFC to hold the "Daiwa Cup 2022"
event. Staff and their families from Daiwa CM Hong Kong also participated, and in addition to soccer matches with local teams,
we introduced Japanese traditional plays such as Origami and Kendama to the children, creating a fun cultural exchange event.

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Participation in "Love Handmade Soap Production"
Daiwa Securities Capital Markets Korea (Daiwa Korea) collaborated with the HANSUP Foundation on a non-face-to-face "LoveHandmade Soap Production" activity. There is an urgent need to improve the hygiene environment of socially excluded
children, and this was a good opportunity for participants to contribute to society by providing handmade soap made with love.
Daiwa Korea has been donating KRW 100,000 to the NGO "Korean Hunger Relief" every month to contribute to the realization ofa society where we can live together. In recent years, the Korean government has been strongly promoting the achievement ofappropriate "work-life balance" in society, and corporate activities on the ground are also making efforts to respond to these
movements. Daiwa Korea aim to achieve the following three goals through their efforts:
1. Actively encourage participation in social service activities (consideration and introduction of social contribution activity
programs, granting compensatory days off to staff who participate in weekend activities)
2. Create a workplace environment that is easy for women to work in (establishment of welfare measures at each stage ofpregnancy/childbirth/child-rearing: adjustment of working hours for pregnant women and granting of house call time at thediscretion of the department manager, establishment of nursing rooms and granting of nursing time, establishment of a systemfor childcare leave (3 months under the law) and childcare leave of absence (1 year under company regulations), introduction offlexible working hours for childcare leave of absence and commuting time adjustment for children from elementary school
enrollment to the lower grades (second grade), to support female employees to continue to lead fulfilling work lives)
3. Encourage regular working hours and annual leave for the realization of work-life balance (submit a plan for taking annual
leave until the end of the period to the management team), and to improve welfare measures (support for self-development
expenses such as language learning, support for expenses related to promoting and maintaining health, etc.).
During the prolonged COVID-19 pandemic, the company actively encourage all employees to work from home and make efforts
to ensure both business continuity and employee safety. Daiwa Korea will continue to make efforts to contribute more widely to
Korean society by continuing these CSR activities and proactively responding to the demands of Korean society.

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Contributing to the improvement of the global environment through pesticide-free and chemicalfertilizer-free rice farming
Daiwa Taipei sponsored a project organized by an agricultural cooperative in Wufeng Dist., Taichung City, Taiwan which
promotes environmental improvement through pesticide-free and chemical fertilizer-free rice farming from July to November
2022. To support farmers who practice this farming method, Daiwa Taipei sponsored approximately 1,940 square meters of ricepaddies. From planting to harvesting, we built a relationship of trust and cooperation with the farmers, and monitored thegrowth of the rice. Ultimately, the 240 bags (480kg per bag) of harvested rice were distributed to Daiwa Taipei's customers andemployees. Even customers who do not normally accept gifts were able to receive the rice because they supported the purposeof the project. Daiwa Taipei will continue to practice "SDGs Action" involving its customers in the future.

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Protecting the global environment, which is the basis of our livelihoods, is essential for a sustainable society. Through our businessactivities, Daiwa Securities Group contributes to the resolution of environmental issues by developing products that reduce theenvironmental burden, and also by assisting financing for the development of environmental technologies and infrastructure. At thesame time, we are working to establish a system that efficiently collects data on the Group's environmental load. We are also focusing
on raising employees' environmental awareness to empower them to reduce the environmental burden in daily business operations.
Through our Sustainability Promotion Structure, we respond to climate change and environmental management.
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 create a sustainable society for the 21st century. The
Group pledges to contribute to solving environmental issues through its business as a financial services company and, toconstantly 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 to improve environmental
activities. In addition, we shall support environmental education and publicity efforts, while promoting environmental
protection efforts by employees.
3. Take steps to save natural resources, reduce energy consumption, and promote biodiversity system
We shall continue to progress inour efforts to reduce the use of natural resources and energy, and seek ways to improvematerials and energy efficiency (including efforts to improve business efficiency). We shall also take steps to reducewater use and reduce, reuse, and recycle other materials to contribute to a more environmentally friendly society.
Furthermore, considering the importance 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 the environment to customers and society
at large.
5. Strictly observe environmental regulations
We shall always aim for environmental preservation, strictly observing environmental laws and regulations in addition
to the Group's environmental policies.
Daiwa Securities Group Inc. (May 22, 2012)196

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Initiatives for the reduction of GHG emissions
Continue to reduce CO2 emissions by at least 1% compared with the previous fiscal year.
* On a Domestic consolidated basis

Initiatives for the reduction of electricity consumption
Achieve a reduction of at least 51% in GHG emissions from electricity usage compared with the FY2013 level (as of FY2030)* On a per unit area basis

Improve the accumulation of environment-related data and hone analytical skills
Continue to introduce eco-cars
Purchase products certified under the Japan's Top Runner Program standards

The Daiwa Securities Group Net Zero Carbon Declaration
Towards the early achievement of a carbon-neutral society, the Group has formulated the "Daiwa Securities Group Net Zero Carbon
Declaration" that commits to achieving net zero greenhouse gas emissions within our own operations* by 2030 (Scope 1 and Scope 2),
and net zero greenhouse gas emissions across our investment and loan portfolios, etc. by 2050 (Scope 3).

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Initiatives for Environmental Load Reduction

Initiatives to Reduce the Environmental Impact of Business Activities
Daiwa Securities is promoting a wide range of initiatives to reduce environmental impact. Its head office is promoting paperless
operations, reducing excess equipment and introducing eco-cars and hybrid vehicles, thereby substantially reducing its CO2 emissions.
The head office of Daiwa Institute of Research endeavors to use environmentally friendly products, such as by introducing LED lighting
and promoting green purchasing. In addition, Daiwa Institute of Research has reduced CO2 emissions by switching power for use at its
data centers to electricity originating from renewable energy power plants owned by Daiwa Energy & Infrastructure. It also worked toraise environmental awareness among employees, encouraged them to print fewer documents, and promoted telecommuting to
reduce paper use.
Through these efforts, Daiwa Securities Group is striving to offer environmentally friendly services and reduce environmental load.
Investment in energy-saving air conditioning systems and introduction of LED lighting for FY2022: ¥440 million
Instances of soil and groundwater contamination at office sites in FY2022: Zero

Adaptation to Climate Change
In recent years, concerns have been raised about the risk of large-scale storm and flood damage in conjunction with the occurrence
and increase of sea level rise, torrential rains, and super typhoons caused by abnormally high temperatures. The Group anticipates thepossibility of physical damage to infrastructure, buildings, and so on at multiple sites as well as increased costs in conjunction withdisaster countermeasures. Accordingly, in our business activities, we are continuing efforts to minimize the impact of such damage on
operations by duplicating equipment and sites, moving equipment to upper stories of buildings, and so on. Moreover, in addition tohigher operational costs for investment real estate, we anticipate declines in the value of assets under management and reductions inbusiness. It is necessary that we review asset holdings and take measures such as ESG due diligence and fostering new industries andcompanies that contribute to the transition to a decarbonized economy. We will continue working to minimize the transitional risks
associated with climate change.
Refer also to "Response to Climate Change (Disclosure Based on the TCFD Recommendations 2023)."

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Initiatives in Real Estate Management (Daiwa Real Estate AssetManagement Co. Ltd.)Taking into account changes in various sustainability issues and the increasingly diverse needs of our stakeholders, Daiwa Real Estate
Asset Management is promoting sustainability initiatives systematically such as by establishing Sustainability Promotion Office in June
2021 and formulating the Sustainability Policy in March 2023 in a way to upgrade sustainability-related policies described in the Policy
Regarding ESG, with a view to addressing a variety of ESG related issues.

Initiatives to Obtain Environmental Certification
Listed REITs for which our company serves as an asset manager are actively working to acquire third-party environmental
certifications, including CASBEE for Real Estate certification, DBJ Green Building Certification and BELS Certification, to enhance thereliability and objectivity of their efforts to reduce their environmental loads and increase the medium-to long-term value of theirproperties. Moreover, private REITs for which we are an asset manager are planning to obtain environmental certifications anew.
Environmental certification acquisition ratio for properties owned by Daiwa Office Investment Corporation (As of May 31, 2023)
Number of properties with environmental certifications: 32 properties; Environmental certification acquisition ratio (On the basis of
total floor area of properties): 61.9%
Environmental certification acquisition ratio for properties owned by Daiwa Securities Living Investment Corporation (As of March 31,
2023)
Number of properties with environmental certifications: 21 properties; Environmental certification acquisition ratio (on the basis of
total floor area of properties): 15.8%

Initiatives for Environmental Consideration through Real Estate Investment
Listed REITs for which our company serves as an asset manager have introduced or improved LED lighting, high-efficiency airconditioners and water-saving facilities, and promoted greening in consideration of the preservation of biodiversity. The J-REITs are
distributing sustainability guides to tenants and residents, and collaborate with these stakeholders to promote efforts to protect theenvironment and solve social issues. Daiwa Securities Living Investment Corporation is also promoting the installation of delivery
boxes and the introduction of unattended delivery services for their properties, as the availability of these options will not only
improve the convenience of tenants but also lead to reductions in CO2 emissions associated with redelivery.
Delivery box installation ratio in rental residences owned by Daiwa Securities Living Investment Corporation (as of the end of March
2023)
Delivery box installation ratio (based on the number of buildings): Approx. 86%

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Installation of delivery boxes (Gran Casa Omorikaigan)

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Introduction

Governance

Strategy

Risk Management

Metrics and Targets

Response as an AssetManager

Future Outlook

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Daiwa Securities Group is advancing disclosure of information related to "Governance", "Strategy", "Risk Management" and "Metrics
and Targets" in accordance with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) in order torealize a carbon-neutral society.

Executive Summary (FY

)

Item

Summary

Progress in Promoting Sustainability
Introduction

Approach to Climate Change(Management Vision and Materiality, Environmental Basic Policy and Net Zero Carbon Declaration)
Board’s Oversight(Reporting process, conducts main deliberations on the composition and attendance status of thethree committees)
Executive Framework

Governance(Reporting process, conducts main deliberations on the areas of expertise of external experts andthe working group)
Executive Remuneration System Linked to Sustainability KPIs
Qualitative Analysis Based on Climate Change Scenarios (Impact on Business)(Qualitative analyses based on climate change scenarios to identify specific risks and their relation

Strategy

3

2

0

2

to the categories of integrated risk management, and opportunities, corresponding measures andengagement examples for each business division)
Transition Plan to Realize Carbon Neutrality(Roadmap and progress toward Scope 1, 2, and 3 net zero emissions)
Quantitative Analysis Based on Climate Change Scenarios (Estimated Loss)(NGFS scenario analysis)
Process for Managing Climate Change Risks
Risk Management(Risk Appetite Framework, Top Risks)
Response to Climate Change Risks in investment and loan Activities(Environmental and Social Policy Framework)203

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Greenhouse Gas (GHG) emissions within Our Own Operations
Metrics and Targets

GHG Emissions within Our Investment and Loan Portfolios
Investment Balance in SDGs-Related Businesses
Carbon-Related Assets

Response as an Asset

Status of Response in the Asset Management Division

Manager
Appendix

Measurement Method for GHG Emissions within Investment and Loan Portfolios(Note) Underlined items are additions or updates from FY2022.

Progress in Promoting Sustainability
The group is committed to various climate change initiatives and is advancing efforts to address climate change. In 2018, we became
the first domestic securities company to express support for the TCFD recommendations, and have since disclosed annually based on
the TCFD recommendations.

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In May 2021, the Group formulated and announced its management vision, "Vision 2030", which outlines the Group's goals forachieving the SDGs by the deadline of 2030. Based on communication with stakeholders, social demands, and the impact the Grouphas on society, we have positioned "Green & Social: Promoting the transition to a carbon-neutral society and realizing a resilient
society" as one of our priority areas of focus (materiality) and are advancing our efforts in this area.
In our medium-term management plan, "Passion for the Best" 2023, positioned as the strategy for the first three years towards
achieving "Vision 2030", we have set sustainability KPIs to manage the progress (Figure 2-6). A sustainability officer in each organization
manages the progress of these KPIs, and the system reports to the Sustainability Promotion Committee and the Board of Directors.

Environmental Vision, Environmental Principles and Basic Environmental Policies
The Group has established an "Environmental Vision", "Environmental Principles" and "Basic Environmental Policies" in May 2012, inorder to contribute to the resolution of environmental issues, including responding to the risks posed by climate change.

Figure 1-2 Environmental Vision, Environmental Principles and Basic Environmental Policies
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 create a sustainable society for the 21st century. The
Group pledges to contribute to solving environmental issues through its business as a financial services company and, toconstantly 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 to improve environmental
activities. In addition, we shall support environmental education and publicity efforts, while promoting environmental
protection efforts by employees.
3. Take steps to save natural resources, reduce energy consumption, and promote biodiversity system
We shall continue to progress in our efforts to reduce the use of natural resources and energy, and seek ways to improvematerials and energy efficiency (including efforts to improve business efficiency). We shall also take steps to reduce206

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Otherswater use and reduce, reuse, and recycle other materials to contribute to a more environmentally friendly society.
Furthermore, considering the importance 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 the environment to customers and society
at large.
5. Strictly observe environmental regulations
We shall always endeavor in environmental preservation, observing environmental laws and regulations in addition to
the Group's environmental policies.

The Daiwa Securities Group Net Zero Carbon Declaration
The Group recognizes the importance and urgency of addressing climate change, one of the most serious issues facing the world, inorder to realize a carbon-neutral society as soon as possible. To that end, we have formulated and implemented the "Daiwa Securities

Group Net Zero Carbon Declaration" (see Figure 1-3) to make a medium- to long-term contribution to the fight against climate change.
Based on this declaration, we aim to achieve Scope 1 and 2 net zero GHG emissions by 2030 and Scope 3 net zero GHG emissions by
2050 for our investment and loan portfolios etc. In addition, we will continue to support our customers' efforts to decarbonize theirbusinesses and new technologies that contribute to the realization of a decarbonized society in order to support a smooth transition toa decarbonized society through our financial business.

Figure1-3 The Daiwa Securities Group Net Zero Carbon Declaration, The Daiwa Securities Group’s
main priority areas(1) Achieve net zero greenhouse gas emissions within our own operations* by 2030 (Scope 1 and Scope 2)(2) Achieve net zero greenhouse gas emissions within our investment and loan portfolios, etc. by 2050 (Scope 3)(3) Support the smooth transition to a carbon-neutral society through our business activities* The company's emissions will be calculated on a consolidated basis

Sustainable finance for the delivery of a carbon-neutral society
Promote green finance / transition finance
Expand business investment in the renewable energy sector
Strengthen engagement with investee firms

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society
Promote innovation (hydrogen, CCUS, etc.) and provide support for new technologies
Expand our advisory business within the renewable energy sector

Provide investment opportunities that contribute to the delivery of a carbon-neutral society
Expand our lineup of related products and services- Expand investment trusts with an environmental theme- Arrange SDGs bonds including green bonds- Promote SDGs-IPO in the environmental sector

Reduce the environmental footprint of the company
Shift to 100% renewable energy
Continue efficient use of energy
Consider carbon offsetting

Set targets to align with the Paris Agreement goals and expand transparent information disclosure
Analyze greenhouse gas emissions management methods for investment and loan portfolios
Set intermediate targets for Scope 3 to align with the Paris Agreement goals by utilizing SBT, etc. (in FY2023)
Ensure appropriate disclosures related to our climate change response (TCFD, etc.)

Strengthen our management system to achieve net zero carbon
Revise and embed the Daiwa Securities Group "Environmental and Social Policy Framework"
Embed sustainability elements into Corporate Executive Officers’ compensation

Introduction

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Risk Management

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Future Outlook

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Overview of Governance for Climate Change
In the Group, the Sustainability Promotion Committee discusses business related to sustainability, including climate change, as well as
the Group policies. The Group Risk Management Committee, a subcommittee of the Executive Management Committee, analyzes
climate-related risks and holds regular discussions. The content of these discussions is reported to the Executive Management
Committee as appropriate, where deliberation and decision-making take place. If necessary, the Board of Directors receives reports on
climate-related issues and responses that have been deliberated by the executive side. Matters that are deemed core to management
or important by the Board of Directors, as well as matters specified as resolution items in the Board of Directors regulations, aredecided by the Board of Directors. Thus, the response to sustainability issues, including climate change, is overseen by the Board of
Directors through a system of deliberation and decision-making by the executive side, as shown in Figures 2-1 and 2-2.

Figure 2-1 Governance structure for climate change (As of April 1, 2023)

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Meeting Body

Composition

Role Related toMain Deliberation Topics

Climate Change
Formulation of Vision

Chairman:2030

appropriate

Formulation of Net Zeroreports from

Carbon Declaration

the executive

Chairman of theBoard of

ReceiveBoard

regardingclimate-related

Directors

issues andOversight

7 Outside Directors

responses

7 Internal Directors(including

Status of response to
TCFD
Revision ofenvironmental andsocial policy framework

responses to

Status of response to

TCFD) andESG evaluation agencies

supervise

Risk appetite frameworkand top risk items

Chairman: Outside
Compensation

Considerationof policies

Director

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5 Outside Directors

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2 Internal Directors

compensation

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2

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Executive
Management
Committee

Chairman:
Representative
Executive Officer,
President, and CEO

Carbon Declaration

business andStatus of response topolicies related

TCFD

to climate
issuesMonitoring ofChairman:climate change

Representativerisk response

Executive Officer,

Reporting to the

President, and CEO

Executive
Committee

Execution

2030

important

Directors

Committee

Formulation of Vision

Formulation of Net Zero

Board ofGroup Risk

Othersmaking on

Reporting to theManagement

Environment

Revision ofenvironmental andsocial policy framework
Risk appetite frameworkand top risk items

Management status ofclimate change risk(quantitative analysis
results based on
scenarios)

Formulation of Vision
2030
Actions toward achieving
Vision 2030

Chairman:

Progress toward

Representative

Sustainability
Promotion
Committee

achieving carbon

Executive Officer,

Discussion andPresident, and CEO

consideration ofneutrality

important

Status of response to

Internal members

matters related

TCFD(including those in

to climate

charge ofchangeParticipation in TNFD

sustainability)
External experts

forum
Revision ofenvironmental andsocial policy framework
Status of response to
ESG evaluation agencies

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The Board of Directors
The Board of Directors includes both internal and outside directors with deep knowledge of sustainability, enabling effective oversightof efforts to address sustainability issues. The Board has made decisions regarding initiatives such as "Vision 2030", the "Environmental
and Social Policy Framework" and the "Daiwa Securities Group Net Zero Carbon Declaration". In addition, the Board has decided to
add climate change to the top risks listed in the Risk Appetite Statement. The Board also receives reports and discusses topics such as
information disclosure in line with TCFD recommendations (including climate change scenarios) and non-financial information
disclosure to improve ESG evaluations by external organizations. The Board confirms the progress of sustainability KPIs (as shown in
Figure 2-6) when making decisions on financial statements and reviewing the medium-term management plan (as shown in Figure 22).

Compensation Committee
The Compensation Committee, one of the three committees, deliberates on policies related to executive compensation. For example,
in FY2021, it resolved to incorporate sustainability KPIs into the evaluation system for executive performance-based compensation (seeFigures 2-2 and 2-6).

Figure 2-3 The composition of the three committees and attendance status at the board of
directors' meetings (results for FY2022)
Nominating

Audit

Compensation

Committee

Committee

Committee

Takashi Hibino

Chairman of the Board

5/5

4/4

Seiji Nakata

Director/President and CEO

5/5

4/4

Sachiko Hanaoka

Internal Director

13/13

Hiromasa

Internal Director

13/13

Kawashima
MichiakiOutside Director

5/5

Hirotaka Takeuchi

Outside Director

5/5

Ikuo Nishikawa

Outside Director

Eriko Kawai

Outside Director

13/13

Ogasawara
4/4
13/13
5/5

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Outside Director

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Execution Framework
Sustainability Promotion Committee
The Sustainability Promotion Committee, chaired by the President and CEO, holds regular discussions (four times a year in FY2022) topromote sustainability. The committee includes the Head of Sustainability (established in FY2020) who oversees sustainability
promotion, several executive officers including one outside director who is not involved in day-to-day operations, and external experts
with specialized knowledge in sustainability themes including climate change (Figure 2-4). The committee has provided advice andconducted studies on various topics such as the formulation and revision of the "Environment and Social Policy Framework" and theformulation of the "Daiwa Securities Group Net Zero Carbon Declaration" (Figure 2-2).

Figure 2-4 Expertise and experience of external experts in climate-related matters
Name

A liation/Title

Main areas of expertise in climate-related
issuesToshihide Arimura

Professor, School of Political Science andEnvironment Economics

Economics, Waseda University

Energy Policy

Faculty Fellow,The Research Institute ofCarbon Pricing

Economy, Trade and Industry
Arisa Kishigami

Independent consultant, En-CycleS

Trustee, Japan Sustainable Investment(Engagement Cycle for Sustainability)

Forum (JSIF)
Business and human rights

Attoney at Law, Shinwa Law

Environmental law compliance
Global complianceffi

Daisuke Takahashi

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Regarding policies and measures related to risk management, including climate change, they are discussed at the subcommittee of theexecutive committee, and the Chief Risk Officer (CRO), who is responsible for risk management, attends the Group Risk Management
Committee. The committee reports annually on quantitative analysis results based on climate-related scenarios. The contents of thereport are also discussed in the Sustainability Promotion Committee as part of the information disclosure proposal in line with the
TCFD recommendations.

Group-Wide System
As a system to promote sustainability across the Group, sustainability managers are appointed in each major group company anddepartment of Daiwa Securities to promote business that contributes to sustainability and manage the progress of sustainability KPIs.
In addition, these contents are regularly reported to the Sustainability Promotion Committee and the executive committee.
Furthermore, several group-wide working groups (WGs) have been established (see Figure 2-5). The contents discussed in these WGs
are coordinated with the Sustainability Promotion Committee as appropriate.

Figure 2-5 Overview of the main working groups related to climate change risk
Name

Description
Expands and strengthens ESG response based on external evaluations of ESG for

ESG Response Working Groupour group (investors and rating agencies). The main members are practicalpersonnel in the head office department.
Under the Sustainability Officer, monitors KPIs, understands the progress of

Sustainable Business Working
Group

SDGs/ESG-related businesses, identifies issues, and plans and implements
measures to address them. The main members are practical personnel at eachheadquarters, group company, and major overseas base.

Sustainability Advisory Group(Internal Experts Working
Group)
Sustainability Disclosure
Working Group

Experts in sustainability gather to exchange opinions on our group's issues andfuture responses. The main members are practical personnel in thesustainability field at each headquarters and group company.
A cross-departmental organization aiming to expand sustainability information
disclosure from the perspective of integrated reporting. The main members arepractical personnel in the disclosure-related departments of sustainability.
Performs measurement and goal setting of emissions related to investment

Scope 3 Emissions MonitoringTeam

portfolios. The main members are practical personnel including asset
management departments, investment departments, think tanks, and otherbanks.

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We have incorporated a performance-linked remuneration that provides financial rewards based on sustainability KPIs to strengthen
the efforts of executives in addressing climate-related issues since FY2022 (as resolved by the Compensation Committee in FY2021, see
Figure 2-6). Specifically, climate-related KPIs include investment balance in SDGs-related businesses and SDGs bond league tables(refer to "Metrics and Targets").

Figure 2-6 Performance-linked remuneration (as of the end of March 2023)

Note 1: The reference value is determined by the Compensation Committee in consideration of the targets set in the Medium-termManagement Plan.
Note 2: The consolidated total capital adequacy ratio indicates the value as of December 31, 2022.

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Future Outlook

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In the "Strategy", the TCFD recommends disclosure on the actual and potential impacts of climate-related risks and opportunities on
the organization's business, strategy, and financial planning. The Group is proceeding with information disclosure in line with this.

Recognition of Climate-Related Risks
The Group conducts qualitative analysis based on climate change scenarios and categorizes examples of risks that could have anegative impact on the Group's businesses, financial performance and position (refer to Figure 3-1). After discussions in the
Sustainability Promotion Committee, reports and deliberations are conducted in the Executive Committee and Board of Directors.
Please see "Recognition of climate-related opportunities" (Figure 3-2) for examples of opportunities that could have a positive impact,

and please see "Resilience assessment of our strategy based on climate-related risks" for the envisioned scenarios used in the analysis.
Climate-related risks can be broadly divided into risks accompanying the transition to a carbon-neutral society (transition risk) andrisks stemming from physical damage (physical risk). The former includes the introduction of and changes to laws and regulations suchas carbon pricing and energy policy (policy and legal), changes in society and industry due to rapid technological innovation(technology), changes in the corporate business environments and price fluctuations of products and assets, etc. (market), anddeterioration in reputation of companies and organizations related to measures to address climate change (reputation). The latterincludes health damage caused by abnormally high temperatures (chronic) and natural disasters such as heavy rains and large
typhoons (acute).

Transition Risks
Examples of the Group's major transition risks include a decrease in various earning opportunities from the deterioration in theeconomy and corporate performance associated with measures such as increased carbon pricing to climate change measures (policy
and legal), decrease in the value of held assets due to the decline in the performance of invested companies resulting from energyrelated technological innovation (technology), a decline in underwriting business from various industry sectors as significantly affectedduring the transition period, a decline in the value of assets held by the Group due to delays in response to structural change inindustries (market), deterioration in the Group’s reputation associated with a lack of initiatives to deal with climate change andinvestment and underwriting related to businesses with a heavy environmental load and a decrease in extensive business
opportunities (reputation).

Physical Risks
Examples of the Group's main physical risks include constraints on employment and business execution of employees subject to healthhazards due to abnormally high temperatures (chronic) and deterioration in power generation efficiency of solar and wind generation
facilities due to an increase in torrential rain and powerful typhoons as well as each office being struck by disaster (acute).

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Note that the time frames for risks and opportunities is defined with consideration to the alignment with the Group's management
plan. Specifically, the short-term refers to the fact that the medium-term management plan is three years, the medium-term refers to2030, which is the target year for "Vision 2030" and aims for the company's net zero GHG emissions, and the long-term considers
aiming for net zero GHG emissions in the investment and loan portfolio by 2050, taking into account that the short-term is assumed tobe 3-5 years, the medium-term is 5-10 years, and the long-term is 10-30 years.

Figure - Examples of climate-related risks
Climate-related risks

Increased carbon
pricing related toclimate change
Policy andmeasureslegal risks
Consideration ofclimate change inTechnology
risk

Transition
risks

Decrease in business opportunities due tochanges in corporate funding needs
caused by increased uncertainty in

Decrease in the value of our group's
owned assets and decrease in businessas energy-related

opportunities due to delayed responses orinnovations andbusiness performance deterioration of ourtransitions

investment companies

Changes in

Decline in underwriting business from

Asset pricefluctuations

Market risk
Credit risk

our group and investee companies

Medium tolong term

Credit risk

various industry sectors significantly
affected during the transition period
Decline in the value and balance of assets

Short toMarket risk

held by the Grouplong term

Credit risk

Decrease in value of our group's owned
3transitions

Short tolong terminterest rate fluctuations

technology such

structurerisk categories

and corporate performance

Changes inindustrial

Expected mainfrom the detorioration in the economy

Increase in costs due to carbon pricing of

economic and

Time
frame

Decrease in various earning opportunities

financial policies

markets such as

Market risk

Main impacts on the Group

1

Type

assets and properties and decrease inopportunities for sales
Deterioration in the Group's reputation
associated with a lack of initiatives to deal

Corporatewith climate change and investment and

Reputation

evaluation ofunderwriting related to businesses with a

Short torisk

climate change

heavy environmental load

long term

mitigation efforts

This reputation damage has led to adecrease in business opportunities and anincrease in funding costs

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Main impacts on the Group

Environment

OthersTime

Expected mainframe

risk categories

Increase in health hazards to customers(Continuous)
Temperature rise,heavy rain,

Physicalrisks

Chronic

and employees of the Group due to heatwaves, restrictions on work, and adecrease in business opportunities

increased

Decreased efficiency of solar/wind power

disasters, etc.

generation facilities due to the increase inheavy rain and massive typhoons

risk/
Acute risk

(Temporary,

Damage to investment destinations andlocalized) Heavy

equipment deterioration due to floods

rain, massive

and an increase in recovery costs

typhoons, floods,
abnormally hightemperatures, etc

Medium tolong

Operational

term/Shortrisk

to long

Credit risk

term

Increased costs for repairing and restoring
important bases such as businesslocations and data centers of the company
group that have been affected by disasters

Recognition of Climate-Related Opportunities
The government's "Basic Policy for the Realization of GX" refers to realization of more than 150 trillion yen in green transformation(GX*1) investment, including public-private blended finance*2, over the next ten years to realize a carbon-neutral society. For the Group,
we believe there are business opportunities as a financial institution to undertake GX investment-related product design, structuring,and operational support. From this perspective, the Group conducts qualitative analysis based on climate change scenarios and lists
the following examples by business division of opportunities that could have a positive impact on the Group's business andmanagement (see Figure 3-2).
*1.

Transformation of the entire socio-economic system to reduce GHG emissions and increase industrial competitiveness*2.

A financial method that combines public and private sector funds

Figure 3-2 Examples of climate-related opportunities by business division
Examples of

Climate-related opportunities

business division

Increase in opportunities to provide new financial products related to
SDGs/ESG driven by customers' increasing interest in sustainability
Increased underwriting for the fundraising required for green projects andthe transition to a carbon-neutral society
Increased M&A in the carbon-neutral field including renewable energy

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Retail Division

Wholesale Division

Wholesale Division

Time frames
Short tolong-term
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Examples of

Climate-related opportunities

business division

OthersTime frames

Inflow of funds into investment trusts that consider the impact of climate

Assetchange and into investment trusts that include companies proactively

management

investing in their climate change response

Division

Structuring and managing investment corporations and private funds with

Asset

underlying assets that are real estate and real assets with highmanagement

environmental performance

Division

Greater investment opportunities into new industries and companies that

Investment

Medium tocontribute to the transition to a carbon-neutral society

Divisionlong-term

Investment into renewable energy such as solar power generation
facilities and greater investment opportunities through the introduction of
external capital
Greater opportunities for solution businesses that support the transition
to a carbon-neutral society
Expansion in business opportunities resulting from improvement in
reputation through net-zero initiatives

Short tolong-term

Short tolong-term

Investment

Short toDivisionlong-term

Other (Think Tank)

Group-wide

Short tolong-term
Short tolong-term

Retail Division
In the retail division, due to the growing interest in customer sustainability, there is recognition of certain business opportunities in thefield of SDGs/ESG-related new financial products, which can be expected to increase.

Wholesale Division
The market for green finance, which raises funds for green projects both domestically and internationally, is rapidly expanding. In
addition, there is an increasing number of companies that are actively working on decarbonization and technological innovation, evenin sectors with high GHG emissions, leading to an increase in the need for transition finance. Although there is a limit to the demand forfunds for green finance, the potential need for transition finance, which is used to fund decarbonization efforts by issuers, is considered
to be very large.
Therefore, the wholesale division recognizes business opportunities for underwriting such as raising funds for green projects and forthe greenification of core businesses aimed at transitioning to a low-carbon society. In addition, as companies that prioritize
decarbonization are expected to rebuild their business portfolios, there is a growing need for organizational restructuring and businessintegration, including M&A in the sustainability field such as renewable energy, which is recognized as a business opportunity in the
renewable energy sector.

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In the Asset Management Division (Securities Asset Management), since there is exposure to a wide range of sectors, the entire
portfolio may be affected positively or negatively by various risks. On the other hand, when viewed individually, there is a growing
social awareness of climate change issues, and investor interest in investment trusts that consider the impact of climate change is also
increasing, and we recognize the business opportunity to offer such investment trusts.
In the Asset Management Division (Real Estate Asset Management), as there is a growing investor demand for financial products thatconsider sustainability, we recognize the business opportunity to create and manage investment trusts and private funds with realestate and tangible assets with high environmental performance as underlying assets.

Investment Department
In the investment department, there are business opportunities for fund formation and management aimed at investors withinvestment needs in related assets, as well as investments in new industries and companies that contribute to the transition to acarbon-neutral society, particularly in the field of renewable energy, such as solar power plants (both domestically and overseas).

Other (Think Tank, etc.)
At Daiwa Institute of Research, we recognize that there is an increasing opportunity in the solution business that supports thetransition towards a carbon-neutral society in our research and consulting services.
In addition, we recognize that improving our reputation through our efforts towards net-zero will lead to an expansion of business
opportunities throughout the Group (refer to "Transition plan towards carbon neutrality").

Strategic Climate Change Initiatives
As a countermeasure to the climate-related risks (particularly the transition risk) and opportunities identified in each business division,
we will advance the following initiatives (see Figure 3-3). Furthermore, in terms of our response to physical risks, we have formulated abusiness continuity plan (BCP), to prioritize the resumption and continuation of important operations from the perspective of
maintaining the functioning of the securities market and our customers' economic activities in the event that our headquarters,
branches, or data centers are halted due to a shutdown in social infrastructure caused by abnormal weather or natural disasters. This
allows us to build a system that can continue important operations even if our headquarters functions are disrupted. In response totransition risks, there are various initiatives depending on the characteristics, and the relevant departments will change accordingly.
However, executing these initiatives steadily is expected to enhance our reputation as a company that is proactive in addressing
climate change and have positive effects on a wide range of businesses

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Strategic initiatives for climate-related responses

Examples of business divisions

Developing and providing products and services that contribute to

Retail Division

the realization of a carbon-neutral society

Asset management Division

Promoting and enhancing sustainable finance

Wholesale Division

Enhancing M&A advisory in the sustainability field

Wholesale Division

Sourcing and investment promotion focused on sustainability

Investment Division

Providing sustainability-related solutions

Other (Think tank)

Realizing carbon-neutrality

Group-wide

Strengthening engagement with stakeholders

Group-wide

Developing and Providing Products and Services that Contribute to the Realization of
a Carbon-Neutral Society
Based on opportunities presented in the retail and asset management divisions, such as climate-conscious investment trusts, theGroup will further strengthen our development and provision of products and services that contribute to the realization of a carbon3

3

neutral society. Furthermore, as part of such strategy, we will focus on expanding funds and ETFs related to solving social issues,
including funds that invest into companies that provide solutions to realize a carbon-neutral society. These initiatives are consistent
with the key issue of "development and provision of new financial products and services that contribute to the realization of asustainable society" in the "Green & Social" priority area of "Vision 2030".

Daiwa Asset Management, a division of the asset management department, selects and invests in solution companies that
contribute to realizing a carbon-neutral society, and has developed and offered a fund called "Carbon Neutral Equity Fund(nickname: Carbon ZERO)" with the aim of achieving carbon neutrality as a fund. This initiative was recognized andawarded the "Governor's Special Prize for Green Finance in the ESG Investment Category " of "Tokyo Financial Award 2021"
hosted by the Tokyo Metropolitan Government.
* As a fund, it aims to achieve carbon neutrality by calculating the CO2 emissions of the invested companies and contributing funds to green
projects that can absorb the emitted CO2.

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Based on opportunities in the wholesale division such as underwriting for green projects and transition, the Group will continue topromote and enhance sustainable finance. This initiative is in line with the key issue "Promotion of green finance to support therealization of a carbon-Neutral Society" in the priority area "Green & Social" of "Vision 2030," as well as the "the Daiwa Securities GroupNet Zero Carbon Declaration" in the transition plan, which aims to support the smooth transition to a carbon-neutral society throughfinancial businesses ("Transition Plan for Achieving Carbon Neutrality"). Additionally, at ESG Research, Equity Research Department,

we conduct ESG-related surveys and analyses for institutional investors and will continue to focus on providing a broad scope of
information.

Daiwa Securities has been an early adopter of sustainable finance and in 2008, it sold the first impact investment bond forindividuals in Japan, called the "Vaccine Bond". It has also been working on developing standards both domestically andinternationally, and in 2017 and 2020, it served as a member of the Ministry of Environment's Green Bond Guidelines
Review Committee. In 2020, it was the only Asian underwriter selected as an advisory council member by the International
Capital Markets Association (ICMA).
In October 2020, Daiwa Securities established a dedicated sustainable finance team (currently Sustainability Solutions
Department) to provide sustainability-related solutions in line with the needs of investors and issuers, going beyond the
product categories such as debt and equity.
As an example of its achievements, it served as the structuring agent for the underwriter and issuer support of the world's
first transition bond in the aviation industry by Japan Airlines in February 2022. In foreign bonds, it also served as the leadmanager for Hungary's green bond in FY2021, supporting the establishment of frameworks and obtaining second-party
opinions. It is also the lead underwriter for Fuluhashi EPO's SDGs-IPO, which provides environmental solutions.
In addition, it strengthens its research support system by providing ESG information for investors (institutional andindividual investors) and works to create brokerage opportunities by providing information on companies that are working
to decarbonize.

In addition, DC Advisory, which provides M&A advisory services in the Group, conducts engagements such as those listed below.

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Implementation

Overview
The company designs and constructs multi-utility networks that provide gas andCompany A (Utility)

electricity to residential and commercial buildings. DC Advisory provides
support for finance related to sustainability-linked loan packages.
The company operates leasing businesses for railway vehicles and tankCompany B (Leasing)containers. DC Advisory supported a consortium of infrastructure investors that
acquired the company. The company worked with the management andsustainability experts to introduce a green finance framework.
The company operates procurement and leasing businesses for railway vehicles.

Company C (Leasing)

DC Advisory supported the introduction of an ESG information commitment(annual report created by borrowers).
The company is a provider of intermediate storage for liquid bulk

Company D (Storage)(gasoline/diesel/biofuels) at major strategic hubs. DC Advisory supports
fundraising through sustainability-linked loans from banks in Europe and North
America.
The company handles storage of energy and chemical products and focuses onproviding sustainable storage solutions. The company continues to invest in

Company E (Storage)

developing energy efficiency and renewable technologies. DC Advisory advises
the company on fundraising through bank loans, including sustainability-linked

43loans.

Enhancing M&A Advisory in the Sustainability Field
The Group is further enhancing our M&A advisory in the sustainability field, particularly in opportunities such as M&A in the renewableenergy sector within our wholesale division.

In October 2019, the Group took a 50% investment stake in Green Giraffe Advisory B.V., the Dutch renewable energy
business advisory. In February 2021, the Group also established the joint venture DC Advisory (Thailand) Co., Ltd., throughjoint venture with 9 Basil Co., Ltd. and others in Thailand to strengthen our global M&A network (see figure 3-5). Goingforward, we will contribute to the realization of a carbon-neutral society by providing M&A support to our clients in thisfield.

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Sourcing and Investment Promotion Focused on Sustainability
Taking into account risks (such as market downturn due to macroeconomic deterioration and decreased opportunities for sales) andopportunities (such as investment in renewable energy) primarily in the investment sector, the Group will further promote investment
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in the sustainability field, particularly in the renewable energy field.

The Group established Daiwa Energy & Infrastructure Co., Ltd. in July 2018 to expand and are expanding investment in the
renewable energy and infrastructure field not only in Japan, but globally. In December 2019, we entered into a strategic
partnership with Aquila Capital Holding GmbH of German (shifted to an affiliate applying the equity method in 2020), whichdevelops and operates renewable energy businesses, and we are also accelerating investment in pgotovoltaic power plants
and infrastructure assets in European as well. In September 2021, we utilized the lending function of Daiwa Energy &Infrastructure and the infrastructure asset management function of Daiwa Real Estate Asset Management to form the solar
private core fund "DSREF Core Amaterasu Investment Business Limited Liability Partnership". Moving forward, we will
promote the expansion of our assets under management by converting portfolios into funds and providing opportunities
for external investors to address climate change issues, not only for ourselves but also for external investors.

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OthersProviding Sustainability-Related Solutions
We are further strengthening sustainability-related solutions in the research and consulting services provided by Daiwa Institute of
Research, building on the opportunities available in the department (expansion of transition support solution business). Specifically,
we will issue information and provide policy proposals on the impact of climate change on the economy and society and strengthen
our consulting to establish management strategies and support projects to address climate-related risks, staring with responding to
TCFD, as we connect our efforts to enhancing our customers' corporate value.

Realizing Carbon-Neutrality
Considering the reputational risk of the Group, we are promoting the realization of net zero GHG emissions. For details, please refer to"Transition Plan to Realize Carbon-Neutrality".

Strengthening Engagement with Stakeholders
At the Group, to provide financing support for our customers' transition to carbon-neutrality, we are strengthening engagement(constructive dialogue) with all of our stakeholders starting with issuers and investors. For example, based on our "Environmental andSocial Policy Framework", in recognition of risks relating to our businesses that could have a significant negative impact on theenvironment or society, we are advancing the appropriate policies through engagement with the recipients of our investments andloans.

Transition Plan to Realize Carbon Neutrality
Parallel with our "Daiwa Securities Group Net Zero Carbon Declaration", we released a roadmap to realize the declaration and are
advancing initiatives to realize carbon-neutrality (Figure 3-6).

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and )

2

1

6
7

3

3

Figure - Trends in the company's GHG emissions (Scope

The company's GHG emissions (domestic and overseas) are calculated for approximately 95% of the locations based on the numberof employees.

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OthersNet Zero GHG Emissions within Our Own Operations by 2030 (Scope 1 and 2)
Regarding net zero GHG emissions from Scope 1 and Scope 2, we are promoting reductions based on our priority area "Reduce theenvironmental footprint of the Group" (Figure 1-3). In terms of our specific initiatives, we will promote continuing our energy-saving
activities as well as introducing renewable energy (Figure 3-8).

Figure - Examples of measures to promote our net zero GHG emissions (Scope
Item

Examples of initiatives until FY2022

and )Examples of future initiatives

Efficient use of energy
Energy-saving

Continuously implementing measures to- Replacement of equipment (air conditioning,lighting to LED)

activities

improve energy efficiency- Optimization of operations, etc.

Encouraging owners to switch to
Introduction of renewable energy

renewable energy for other companies'

Introduction ofthrough the use of tracking non-fossil fuelcontracted electricity in domestic rental

renewable energy

certificates for domestic in-houseproperties and overseas bases

contract electricity

Utilization of carbon offset- Emissions trading, etc.

In terms of our energy saving activities, we will introduce energy-saving technologies and systems at our facilities and streamline ourenergy use. We will continue to do so in the future. In addition, in regard to introduction of renewable energy, we have been using
tracking non-fossil fuel certificates to shift to renewable energy at the Group's bases occupying the head office building (GranTokyo
North Tower) since April 2021, and switched the tracking destination of the same certificate to renewable energy power generation
facilities owned by Daiwa Energy & Infrastructure, a subsidiary of the Group, from July 2021 (Figure 3-9). Furthermore, we have also
2

1

8

3

introduced renewable energy at some branches of Daiwa Securities and the Daiwa Institute of Research's main data center since
October 2022. By the end of FY2023, we plan to switch all domestic properties to renewable energy. In the future, we will consider
switching to renewable energy for leased properties and overseas locations that require coordination among stakeholders, as well as
utilizing carbon offsets, in order to achieve net-zero GHG emissions (Scope 1 and 2) by 2030.

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In selecting the renewable energy menu to be introduced into our offices and other locations, we use not only the reduction effect of
GHG emissions but also the Internal Carbon Pricing (ICP) as a material for judgment. Specifically, we compare the cost of future ICP
implementation, calculated based on J-Credit prices, with the additional cost of introducing renewable energy. In the calculation, we
use data on the expected reduction of GHG emissions due to the introduction of renewable energy obtained from the powercompanies, and by utilizing ICP in this way, we make a reasonable judgment on the additional cost of introducing renewable energy. In
addition, in 2021, we established a department specializing in emissions trading at Daiwa Securities, and are advancing market
research and system development in anticipation of the expansion of Japan's emissions trading market. Furthermore, in April 2023, we
will participate in the GX League, led by the Ministry of Economy, Trade and Industry. In the league, participating companies are
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expected to lead the market design for achieving a carbon-neutral society, not only with their own efforts to reduce emissions, but also
by collaborating with a wide range of stakeholders, including supply chains and civil society. The Group will set reduction targets forour own GHG emissions (Scope 1 and 2) at domestic locations required by the league, report achievements, conduct emissions trading
based on reduction achievements, and disclose these activities. In addition, we will accumulate knowledge in preparation for the
introduction of full-fledged emissions trading in Japan, through participation in the rule-making in the same field through the Carbon
Credit WG, capturing business opportunities through dialogue and exchange between participating companies.

Net Zero GHG Emissions within Our Investment and Loan portfolios etc. by 2050
(Scope 3)
Financed Emissions
To realize a carbon-neutral society, we must manage and reduce emissions not only at the Group but also throughout the entire supply
chain. Particularly for financial institutions, it is important to manage GHG emissions (Scope 3 Category 15, Financed Emissions) ininvestment and loan portfolios. Based on our priority area "Set targets to align with the Paris Agreement goals and expand transparent
information disclosure", the Group will promote setting targets and disclosing information (Figure 1-3).
To reduce Financed Emissions, we will start by (1) identifying priority asset classes and sectors, (2) analyzing sector characteristics andcollecting analysis data, (3) measuring emissions and considering management methods within the Group, (4) setting and disclosing

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Othersintermediate targets using SBT (Science Based Targets) and other methods, and (5) promoting and strengthening strategy formulation,
engagement, and implementation to achieve our goals (Figure 3-10).

Figure -Image of monitoring for reducing Financed Emissions

In the measurement of Financed Emissions for the FY2021, the target asset classes were listed stocks, corporate bonds, corporateloans, unlisted stocks, commercial real estate, and project finance. The target sectors were power generation, steel, oil and gas,
automobile manufacturing, coal mining, and transportation. For the measurement in the FY2022, sovereign bonds were added to thetarget asset classes, and agriculture, aluminum, cement, and real estate were added to the target sectors. We have established aGroup-wide monitoring system for the management of Financed Emissions (Figure 3-11).

0

1

3

Figure 3-11 Group-wide monitoring system for Financed Emissions

In December 2021, we joined the Partnership for Carbon Accounting Financials (PCAF) and the PCAF Japan Coalition, initiatives related
to GHG emissions measurement and disclosure. Under this system, we will continue to explore while utilizing PCAF's knowledge anddatabase. As for the interim target, we plan to set and disclose goals that are in line with the Paris Agreement by using SBT or othermeans by the end of FY2023. Additionally, we will engage in decarbonization support for our investment and lending partners andparticipate in rule-making for measurement and disclosure in collaboration with international initiatives and authorities. For moredetails, please refer to "Appendix: Approach for measuring GHG Emissions within our Investment and Loan Portfolios".

Facilitated Emissions
Furthermore, regarding facilitated emissions, which include GHG emissions from our capital market businesses such as underwriting,there is an ongoing international discussion, and we are monitoring the situation closely. Specifically, PCAF plans to publish guidanceon measurement methods in 2023. It is recommended that financed emissions and facilitated emissions be disclosed separately.
However, the IFRS Sustainability Disclosure Standards, published by the International Sustainability Standards Board (ISSB) in June230

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Others2023, currently excludes facilitated emissions from disclosure as the methodology is not yet sufficiently mature. As the Group, we
consider measuring facilitated emissions important from the perspective of understanding our capital market portfolio and managing
related business risks. We are currently consulting with relevant departments on measures to be taken for measurement. At Daiwa
Securities, we are committed to contributing to a carbon-neutral society through initiatives such as supporting funding for startups
with decarbonization technologies and promoting transition finance through our capital market business.

Supporting a Smooth Transition to a Carbon-Neutral Society through the Financial
Business
As an integrated securities group, through our financial business, we will continue to support our customers' efforts toward
decarbonization. (Please refer to "Strategic Climate Change Initiatives" for more details.)

Resilience Assessment of Our Strategy Based on Climate-Related Risks
The flow of scenario analysis conducted by the Group is based on multiple climate change scenarios (envisioning diverse climatechange phenomomena and other extensive changes) and (a) qualitatively assesses the impact on business activities and (b) calculates
the impairment losses of assets classified as carbon-related industries. Based on these assessment and calculations, we are evaluating
the Company’s strategies and response policies.

Figure 3-12 Scenario Analysis Image

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Based on the scientific relationship of the positive correlation between the cumulative CO2 emissions and the rise in global
temperatures, we believe that the path of CO2 emissions reductions holds a major key in future climate change. In addition to the rateof progress and effectiveness of reducing emissions, there are a wide range of factors to consider including natural phenomena such as
natural disasters, climate events and their social changes, and other wide-ranging economic conditions, meaning the future will not be
decided by a single factor. In the current scenario analysis, we performed various paths based on the scenarios of NGFS, which is afinancial system impact assessment scenario formulated by NGFS (Network for Greening the Financial System) consisting of central
banks, financial supervisory authorities, and others. Please refer to Figure 3-13 for an overview of the envisioned scenario.
* NGFS is a network of financial authorities involved in the assessment of climate change risk etc.

Figure 3-13 Envisioned Scenario
Scenario

Basic Elements

Reference(1) Orderly Transition(Proactive Response)

Temperature

Scenario

Rise(NGFS)(2050)CO
EmissionsPhysicalTransition

Risk

Risk

(natural(Climate-

disasters,

relatedetc.)

specificities)

Small

Large

Large

Small

Reduction

Net Zero
2050

Assumed Risks

Approximately(smooth)1.5℃(2) Disorderly Transition

Delayed(Disrupted Response)

Transition(3) Hot House World

Current

Over 3℃(Passive Response)

Policies(continuation)(suppression)

Reduction(headwinds)
Reduction
Pace
Continues

2

Source: Created from NGFS

Analysis Results
Qualitative Analysis of the Impact on Business Activities
Shutdowns or slowdowns in the economy or industry, volatility in the financial markets (falling stock prices, increased credit risk, etc.),
damage from heavy rains or flooding and health problems caused by abnormally high temperatures were all listed as factors of relative
concern. To apply these analysis results to scenarios, there is a relative risk of economic shutdowns or market volatility appearing incases where CO2 emission reductions lead to economic or social turmoil (disorderly transition) and of damage from heavy rains or
flooding or of abnormally high temperature occurring in cases where CO2 emission reductions are delayed (Hot House World).

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OthersOn the other hand, regarding the impact of the energy transition on business, there is a negative impact on existing businesses fromthe reduction of fossil fuel resources and a positive impact on new business opportunities with the increase in new forms of energy
such as renewable energy, meaning that overall, the energy transition is positioned as a near neutral factor. Furthermore, there is thepossibility of climate change initiatives such as CO2 emission reductions affecting corporate evaluations (reputation), and we expect anindirect impact on the Group’s business.
Thus, it is considered that the Group has a certain degree of adaptability to social and economic elements strongly related to climate
events, such as energy transition. By preparing for disaster reduction measures and BCPs against direct risks such as heavy rain andfloods, and steadily implementing climate measures to maintain reputation, it is possible to mitigate the negative impact even in casesof macroeconomic stagnation.

Evaluation Losses of Assets Classified as Carbon-Related Industries among the Held Assets
In the process of reducing CO2 emissions, a scenario of "disorderly transition" accompanied by confusion resulted in losses ofapproximately 55 billion yen (cumulative from 2023 to 2050), compared to a scenario assuming no impact from climate change andwith significant economic headwinds. It is believed that the key to progress in reduction lies not only in the progress itself, but also in
the overall response of society.

Future Response
In the current scenario analysis, we have formulated hypotheses based on the information and data presently available and performed
our evaluation after narrowing down the targets of analysis.
There are a wide range of topics for consideration regarding climate-related risks, and we envision a wide range of patterns in terms ofthe time of occurrence and scale of these risks. While conservatively interpreting the interpretation and results obtained from thisround of scenario analysis, the Group plans to acquire a broader range of information and related data and improve our analysis
methods in the future. We will also refine the identification of risks through our scenario analysis and work to appropriately reflect
these risks in the Group's disclosure.

Introduction

Governance

Strategy

Risk Management

Metrics and Targets

Response as an AssetManager

Future Outlook

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In the "Risk Management", the TCFD recommends disclosure on how the organizations identifies, assesses and manages climaterelated risks. The Group is proceeding with disclosure of information in line with this.

Management of Climate Change Risks
Overview of Risk Management
he Group recognizes the importance of identifying, assessing, and effectively managing various risks, including those related to climatechange. By appropriately managing risks that may manifest in the short and medium to long term, such as climate change risks, we
aim to sustainably improve our corporate value while maintaining sound financial and revenue structures.
Each company within the Group monitors risks through the Risk Management Department and risk allocation departments based on
the basic policy of risk management at the Group headquarters. The basic policy of risk management is deliberated and decided by the
Board of Directors as the "Risk Management Regulations." In addition, risk issues, including climate-related issues, are reported to anddeliberated and decided by the Group Risk Management Committee, a subcommittee of the Executive Committee.

Climate Change Risk in the Risk Appetite Framework
The Group has introduced a Risk Appetite Framework (RAF) to establish a policy of risk-taking that is consistent with our businessstrategy, and to strengthen risk governance as a global financial institution (see Figure 4-1). The RAF defines the types and amounts ofrisks that should be proactively accepted for the achievement of revenue goals and business strategies as the risk appetite, and it is amanagement framework that is used as a common language within the company for overall risk-taking policies. The RAF is
documented as a "Risk Appetite Statement," which is reviewed and decided upon by the Board of Directors and revised twice a year.
The "Risk Appetite Statement" covers climate change risks from the FY2021. As a result, we will appropriately identify, evaluate, andeffectively manage climate-related risks according to their risk profiles.

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Climate Change Risk in Top Risk Management
The risk events that require special attention in light of the Group's business characteristics are selected and managed as top risks. The
management of the Group "visualize" the risk events that are identified and sorted by relevant departments based on risk events
collected from both inside and outside the Group as candidates for top risks, to enable the management to understand and discuss1

4extensive risks when selecting the top risks. Moreover, the Group's Directors and Corporate Executive Officers identify and extract suchcandidates for top risks by making a forward-looking evaluation of the level of impact on the Group's performance and the possibility
that such risk events will occur. The Group has selected climate change risk as a "top risk" considering the increasing importance of its
impact on the stability of financial institution management and financial systems (Figure 4-2).

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Risk events
Intensifying international disputes andconflicts
Recurrence of the financial crises

Specific examples
Russia-Ukraine war, U.S.-China conflict (Taiwan emergency), etc.
-

Downgrading of JGBs and crash of yen
assets caused by instability of Japan's-

financial situation
U.S. stagflation-

China's economic recession-

transformation)
Inadequate response to operational
resilience

Climate change

If we are unable to provide the appropriate service to customers due
to inadequate resilience to natural disasters, cyberattacks andsystem failure, etc. the Company's reputation will be damaged.
Decline in the value of held assets and decrease in selling
opportunities as a result of climate change
Increase in costs associated with natural disaster4

Large-scale earthquake, flood damage

Decline in competitiveness due to inadequate response to DX

Deterioration of business performance ofinvestees-

Cyberattack-

System failure-

Compliance risk
Information leakage that has a significant
impact2

Inadequate response to DX (digital

Inappropriate action by staff including money laundering, insider
trading, etc.
Serious information leaks, etc.

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Framework
In our business, there are various types of risks. The Group utilizes proprietary trading to temporarily hold positions for sales purposes
and provide products to our customers, which includes liquidity risks, market risks due to price fluctuations, credit risks tocounterparties and issuers, operational risks that inevitably arise in executing business operations, model risks resulting from using
models for decision-making, and risks that hedging does not function. Additionally, investment risks arise from executing growthinvestments through hybrid strategies, such as deteriorating performance or credit status of investment targets, changes in market
environment, etc. Therefore, we conduct integrated risk management that measures the impact on capital and liquidity within theGroup from a forward-looking perspective.
In our Risk Appetite Statement, climate change risks are defined in addition to market risks, credit risks and liquidity risks. Climatechange risks are related to many factors, including not only climate phenomena but also political and social responses and economic
structures, and they affect each other. For example, the impact on stocks and interest rates due to changes in the overall economy(market risk), the impact on corporate business and financial conditions due to climate change measures such as decarbonization(credit risk), and the impact on funding environment due to delays in the Group's response to climate change (liquidity risk). Therefore,climate change risks can cause existing risks to occur or amplify them. For this reason, we will continue to develop a system to consider
the impact of climate change risks within the existing risk management framework.

Figure 4-3 Risk Management System

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The Group has demonstrated our approach to considering environmental and human rights concerns in our "Corporate Principles,""Basic Environmental Policies" and "Human Rights Policy" (Figure 4-4).
Further, as part of our efforts to enhance management of climate change risks related to financing*, we established and released the"Environmental and Social-related Policy Framework" in June 2021. This framework specifies the prohibited and restricted business,targeting new investments and lones. Additionally, in December of the same year, we expanded the scope of the framework to include
the underwriting of bonds and stocks issuance, which is a major business of the Group, in order to further strengthen our risk
management system for the same risks in addition to new investment and loans.
* New investments and loans and the underwriting of bonds and stocks issuance.

This framework serves as a guideline for recognizing and managing risks associated with businesses that have the potential to causesignificant negative impacts on the environment and society, such as the destruction of natural habitats and ecosystems. The
framework prohibits four types of businesses, including those violating the Washington Convention, and identifies nine businesses
that require careful consideration, such as new coal-fired power generation and businesses involving deforestation (see Figure 4-4).
For financing related to these businesses, an initial ESG due diligence is conducted on the relevant projects. If additional confirmationis necessary based on the results of the assessment, an enhanced ESG due diligence is conducted through an in-depth investigation todetermine the appropriateness of financing. If there is a possibility that the implementation of the project may have a serious impact
on the corporate value of the Group, additional discussions will be held among the executive management to make a final decision on
financing.
In the most recent revision conducted in December 2022, a review was conducted, including the strict policy on coal mining. Goingforward, we will regularly review the framework in light of global trends.

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Figure - Environmental and Social Policy Framework

4

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OthersFigure - Overview of the Environmental and Social Policy Framework(Climate Change-related only)
Applicable businessNew construction ofcoal-fired power
generation

Target business Policy (underline part revised in December 2022)
We prohibit any financing where the use of proceeds are directed toward this type of business.
Regarding the underwriting of bonds and stocks issuance, however, issuers that announce a target for net zero
greenhouse gas (GHG) emissions by 2050, or businesses adopting new technology aligned with the goals of theParis Agreement, may be considered on a case-by-case basis.
When providing financing to a business, we will carry out ESG due diligence, carefully assessing whether the loss ofwildlife habitat due to overdevelopment may lead to a loss of biodiversity, or land conflicts with indigenous
residents, or human rights violations such as child labor/ forced labor, or whether appropriate measures are taken

Palm oil plantation

to prevent them. We will utilize these results in making decisions.

development

In addition, when providing financing to a business, we will confirm if RSPO (Roundtable on Sustainable Palm Oil),an international certification system for palm oil, has been acquired. Where this is not in place, we will encourage
clients to obtain certification. We will encourage clients to make environmental and human rights policies such as

NDPE (No Deforestation, No Peat and No Exploitation) or other compatible policies.
When providing financing to a business, we will carry out ESG due diligence, carefully assessing whether
appropriate measures will be taken to prevent a negative impact on the environment caused by the destruction ofBusiness involving

ecosystems, and whether illegal logging is carried out. We will utilize these results in making decisions.

deforestation

When providing financing to a business, we will encourage clients to obtain FSC (Forest Stewardship Council), aninternational forest certification system or other compatible certifications or to make environmental and humanrights policies such as NDPE or other compatible policies.
We prohibit any financing where the use of proceeds are directed toward businesses using the mountaintop
removal (MTR) method and new thermal coal mining businesses.

Coal mining

When providing financing to a business, we will carry out ESG due diligence, carefully assessing whether
appropriate measures are taken to ensure occupational safety and a sanitary environment to prevent cave-in
accidents, flood accidents, gas explosions, and human rights violations such as illegal labor. We will utilize these5

4

results in making decisions.
When providing financing to a business, we will carry out ESG due diligence, carefully assessing whether
Oil and gas
development

appropriate measures are taken against their impact on the environment, ecosystems and local communities. We
will utilize these results in making decisions. In particular, we will make careful decisions when providing financing
to development businesses in the Arctic, oil sands and shale oil and gas development businesses, pipeline
businesses which may have significant negative impacts on the environment and society.

Source: Our company website (URL: https://www.daiwa-grp.jp/english/sustainability/governance/espolicy.html)

Introduction

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Risk Management

Metrics and Targets

Response as an AssetManager

Future Outlook

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In the "Metrics and Targets", the TCFD recommends disclosure of the metrics and targets used to assess and manage relevant climaterelated risks and opportunities. Based on the strategy and risk management process described above, the Group has established anddisclosed the following metrics and targets towards realizing a net-zero society. The progress of these metrics and targets is regularly
reported and monitored by the Sustainability Promotion Committee, Executive Board and Board of Directors.

Figure 5-1 Metrics and Targets Related to Climate Change

Item

Metrics

TargetRecent Performance(FY2022)net zero greenhouse gas
emissions within our

Scope1・2 emissions*net zero (2030)

17,104 tCO2

Scope3 emissions

net zero (2050)-

own operations
net zero greenhouse gas
emissions within ourinvestment and loan
portfolios, etc
Promotion of
decarbonization throughfinanceEnhancement of climaterelated risk management

Investment balance inOver 150 billion yen

SDGs-related businesses(FY2023)

Carbon-related assets-

130.5 billion yen

Approximately 390
billion yen* The company's emissions will be calculated on a consolidated basis

GHG Emissions within Our Own Operations
Towards the achievement of a carbon-neutral society, we are required to reduce our GHG emissions. Under the Daiwa Securities GroupNet Zero Carbon Declaration, the Group aims to achieve net zero GHG emissions within our own operations (consolidated basis) by
2030 (Scope 1 and Scope 2). We are monitoring GHG emissions every year towards achieving these targets (see Figure 5-2). Please referto section 3, Strategy, "Transition Plan to realize Carbon Neutrality" concerning the future transition plan for net zero carbon
emissions.

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OthersFigure - Trends in GHG Emissions(Unit: t-CO2)
FY2018FY2019FY2020

FY2021

FY2022

Scope1

944

868

842

954

840

Scope230,732

29,87824,73918,79016,265

Scope of aggregation for actual values and calculation methods(Japan)Two companies, Daiwa Securities Co. Ltd. and Daiwa Institute of Research Ltd., which are required by law to report on the amount of energy
consumption and the volume of CO2 emissions. The data on GHG emissions from the GranTokyo North Tower, which the Group rents as an
office, and the Daiwa Yaesu Building, which is owned by the Group, includes data for Group companies other than those mentioned above.
(Overseas)
London, New York, Hong Kong, Taipei, Singapore, Seoul, Washington D.C., Mumbai and Manila offices.
(Calculation methods)
Calculations have been made for the CO2 released from the use of electricity, utility gas, heavy oil, diesel fuel, kerosene, steam and cold waterin accordance with the methods stipulated in the Act on the Rationalizing Energy Us and the Act on Promotion of Global WarmingCountermeasures. Disclosed figures have been rounded off to the nearest whole number.

GHG Emissions within Investment and Loan Portfolios etc.
For financial institutions, GHG emissions from investment and loan portfolios (Financed Emissions) are said to account for a large
2

5

proportion, and reducing them is an important challenge. The Group aims to achieve net-zero GHG emissions from our investment andloan portfolios (Scope 3) by 2050, as stated in the "Daiwa Securities Group Net Zero Carbon Declaration".
As described in the "Strategy", the Group is conducting experimental measurements of GHG emissions from investment and loan
portfolios based on "The Global GHG Accounting & Reporting Standard Part A (Second edition, December 2022)" established by PCAF.
Based on the results of these measurements, we will set and disclose intermediate targets by the end of the FY 2023.
For more details, please refer to "Strategy, Transition plan to realize carbon neutrality" and "Approach for measuring GHG emissions
within our investment and loan portfolios".

Investment Balance in SDGs-Related Businesses
As stated in the "Strategy," the Group regards investing in new industries and companies that contribute to the transition to a carbonneutral society as a business opportunity and is making progress in this area. Based on this, we have set a target for the investment
balance in SDGs-related businesses (see Figure 5-1).

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OthersIn addition, we have separately set goals for SDGs bond league tables (top three) to monitor the status of SDGs-related businesses, inconjunction with the above.
These KPIs will be reflected in executive compensation.

Carbon-Related Assets
As we transition to a carbon-neutral society, there is a risk that the value of carbon-related assets with high GHG emissions will
significantly decrease in the future, and continuing to hold them may also result in reputational risks. As an indicator of vulnerable
assets, we disclose the status of carbon-related assets based on the definition of carbon-related assets in the TCFD supplementary
guidance. The total amount as of the end of FY2022 is approximately 390 billion yen (see Figures 5-3 and 5-4).
The Group has announced the "Daiwa Securities Group Net Zero Carbon Declaration" and is working towards net-zero. We plan to
examine the level of risk associated with carbon-related assets and consider measures for the medium to long-term reduction ofparticularly high-risk carbon-related assets.

Figure 5-3 Total amount of carbon-related assets
Metrics
Performance

Carbon-related assets*
Approximately 390 billion yen* Total amount of carbon-related assets, which includes CLOs (Collateralized Loan Obligations), investments, and LMS (Loan Management
System). The targeted industries are 22 out of the 33 industries listed on the Tokyo Stock Exchange, including energy, transportation,materials and construction, and agriculture, food and forestry.

Figure - Breakdown of Carbon-Related Assets
Investment andDaiwa Next Bank

Daiwa Securities

Capital Contribution

CLO

LMS

Total

6%

0%

17%

Transportation

2%

7%

2%

12%

Materials and Construction

26%

30%

6%

62%

Agriculture, Food, and Forestry

0%

8%

0%

9%

Total

40%

52%

8%

100%

(Note)

4

11%

5

EnergyThe composition ratio is rounded to the first decimal place, so the total of individual values may not necessarily match the total.

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Our asset management division includes Daiwa Asset Management, which is responsible for securities asset management, and Daiwa
Real Estate Asset Management, which is responsible for real estate asset management (including Daiwa Office Investment Corporation,
which it operates). The former expressed its support for TCFD recommendations in December 2020, and the latter did so in December
2021. Both companies aim to achieve a carbon-neutral society through their asset management operations.

Daiwa Asset Management
Daiwa Asset Management (hereinafter referred to as the Company) uses the total GHG emissions, carbon footprint*1 and carbon
intensity*2 of its portfolios as GHG emission related indicators for individual funds and asset classes, and performs monitoring andanalysis of them. Based on this data and its own original research, the Company undertakes engagement activities with companies toencourage them to decarbonize, and aims to achieve net zero CO2 emissions by 2050.
*1.

Carbon footprint is an indicator that measures the emissions per investment amount in millions of USD for the portfolio size.

*2.

Carbon intensity is an indicator that measures the emissions per revenue amount in millions of USD for the investee company.

Carbon footprint and weighted average carbon intensity of japanese corporate bonds were found to exceed the benchmark values.
This was, however, attributable to the inclusion in the portfolio of corporate bonds of electric power companies, at a weight higher
than the benchmark.
In addition, as recommended by the TCFD, these were categorized as upstream or downstream, as illustrated in the below table for
Scope 3, with the relevant emissions for each calculated and listed here for the first time. The Company intends to actively promote thedecarbonization of its entire supply chain, by establishing a detailed understanding of total carbon emissions of our investee
companies in Scope 1, Scope 2, and Scope 3, and with a particular emphasis on Scope 3. The Company will subsequently deploy thisdata in engagement activities with these companies, including our investee electric power companies. Please refer to the company's"Sustainability Report 2022" for more details.

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Total greenhouse gas emissions (Total of Scope , , and )Scope1、2
Daiwa AM
Domestic
stocksOverseasstocksBenchmarkDisparity

5,494,325

6,367,039-14%355,353

360,370-1%

441,007

182,496

142%

70,686

186,784-62%

6,361,371

7,096,689-10%

Domestic
corporatebonds
Overseas
corporatebonds(tons of CO2 equivalent)(tons of CO2 equivalent)OverseasstocksBenchmarkDisparity

16,535,670

17,761,710-7%

499,761

537,468-7%

421,074

334,030

26%

Domestic
stocksOverseas

1

stocksDaiwa AM

6

Domestic

Scope3 Downstream

stocksDomestic
corporate

corporate

Disparity

28,869,507

33,262,327-13%

1,487,004

1,608,504-8%

479,146

560,670-15%

421,495

732,747-42%

31,257,152

36,164,248

-14%

bonds

Overseas

Overseas
131,768

294,762

corporate

-55%

bonds
Total

BenchmarkDomestic

bonds

corporate

Daiwa AM

1

Scope3 Upstream

bonds
17,588,273

18,927,970

-7%

Total

Note: Benchmarks:
Domestic stocks: TOPIX (with dividends included)
Overseas stocks: MSCI ACWI ex Japan Index
Domestic corporate bonds: Bloomberg Asian-Pacific Japan Corporate TR Index Value Unhedged JPY
Overseas corporate bonds: Bloomberg Global Aggregate ex-JPY-Corporate TR Index Unhedged USD
Source: Some information is derived from ©2023 MSCI ESG Research LLC. Reproduced by permission.
Source：Daiwa Asset Management, "Sustainability Report 2022

"

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OthersFigure - Carbon footprint of portfolio (Scope , Scope )Note:

The benchmarks used were the same as those used in the previous section for portfolio’s total carbon dioxide emissions. Source:
Some information is derived from ©2023 MSCI ESG Research LLC. Reproduced by permission.

Source：Daiwa Asset Management, "Sustainability Report 2022

"

Note:

2

1

2

6

Figure 6-3 Weighted average carbon intensity of portfolio (Scope 1, Scope 2)

The benchmarks used were the same as those used in the previous section for portfolio’s total carbon dioxide emissions. Source:
Some information is derived from ©2023 MSCI ESG Research LLC. Reproduced by permission.

Source：Daiwa Asset Management, "Sustainability Report 2022"

Product Offering
The company offers various investment funds aimed at achieving a carbon-neutral society. For example, in the "Carbon Neutral Equity
Fund", which aims for carbon neutrality as a fund, we donate a portion of the trust fee to the Certified NPO Environmental Relations
Research Institute and plant trees through the "Present Tree" project.

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The company has been disclosing key ESG issues that we seek from investee companies, including climate change. Specific points forclimate change include GHG emissions, responding to climate change risk, and energy transition. We have also announced our policy
for constructive dialogue with companies and the ideal management practices that we require from investee companies.
As part of our engagement activities with investee companies, we hold discussions on solutions such as sharing of issues, promotion ofenvironmental management, and improvement of information disclosure for companies that face the challenge of reducing theirenvironmental impact, aiming to reduce risks. We utilize the analysis of major indicators such as GHG emissions and scenario analysis
of investee companies to understand climate-related risks and opportunities and use them in our engagement activities. In 2022, we
conducted engagement with 1,138 companies, and about 35% of them were related to ESG.

Figure 6-4 The Company’s Vision for Investee Company Best Practice (excerpt)
Critical issue

Best Practices

Climate change

By assuming and analyzing various climate change scenarios along the framework of TCFD,
transition risks, physical risks, and business opportunities are identified.
Quantitatively grasp the reality of GHG emissions and the original unit, as well as theassumed risks and opportunities.
Establish a specific roadmap and milestones for achieving carbon neutrality by 2050, andexplain the progress status annually. It is desirable to aim for a reduction of 50% or morethat is consistent with our NZAMI interim goals as a target for 2030.
Develop and execute a business strategy that incorporates both risks and opportunities,
and conduct an overview and evaluation of activities.

Figure - Examples of Engagement Case Study by the Company
Engagement case study

The amount of CO2 emissions generated when producing aluminum ingots using recycled
aluminum is only around 3% of the amount generating when producing aluminum fromvirgin ore; this represents a dramatic improvement in emissions performance. Due to thespecial characteristics of recycling, there is a need to maximize the effective utilization of
scrap aluminum through collaboration with various different partners within the supply
5

chain. The company in question had announced that it would be strengthening its initiatives
6

Issue

Climate change (Company A)

in this area, with FY2030 as the target year, but the company had not disclosed its current
recycling rate or set a specific target for the future.

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Engagement case study
Background

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersClimate change (Company A)

A significant point was that, when supplying aluminum ingots (mainly for use in can
manufacturing), the company was using a distinctive business model whereby, within Japan,
it was contractually required to use material supplied by the can manufacturers, making it
difficult for the company to make progress in this area on its own. Recycling was difficult
because different alloys were used for the body of the can and for the lid, and there werelimits on how much scrap material could be procured.

Measures required

The company needed to transition from contracts whereby material was supplied by the canto address the

manufacturers, to a new type of contract that would allow the company to purchase its own

issue

raw materials. In addition, in order to strengthen procurement of recycled aluminum, there
was a need for the company to strengthen its relationships with producers of secondary
aluminum alloys, and to proceed with related R&D.

Situation after

After changing the type of contract used, the company would be able to secure enhanced

resolution

valueadded in relation to raw materials procurement, and the profitability of its domestic
business would improve. Besides increasing the recycling ratio, the environmental
performance of the company's products would also improve relative to other materials. With
the shift away from PET bottles toward the use of aluminum containers, it can be anticipatedthat a "virtuous circle" would develop in which the company's production volume and sales
volume would continue to grow.

Response from the

Our policy is to disclose our current recycling rate, and to set and disclose our target for thecompany infuture at the earliest possible date. Moving away from contracts that involved the use ofquestionmaterials supplied by the customer offers great benefits in terms of revenue, and we will beproceeding with negotiations with our customers in this regard.

Source：Daiwa Asset Management, "Sustainability Report 2022"

Daiwa Real Estate Asset Management
Daiwa Real Estate Asset Management engages in real estate operations for listed REITs, including Daiwa Office Investment Corporation(DOI), Daiwa Living Investment Corporation (DLI), and private REITs. The following is an excerpt from the company's "Sustainability
Report 2023

" (July 2023).

Governance
The Asset Manager has established the Climate Change and Resilience Policy, the policy for responding to risks and opportunities
related to climate change and working to make business and strategy resilient to climate-related issues.
In accordance with the policy, Chief Climate-Related Issues Officers (general managers of departments engaged in sustainability
promotion) make regular reports to the Chief Executive Officer for Climate-Related Issues (President and Representative Director) at

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Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersSustainability Promotion Committee meetings. The reports cover matters related to responses to climate change, including
identification and evaluation of impacts of climate change, management of risks and opportunities, progress of initiatives foradaptation and mitigation, and indicator and target setting. The Sustainability Promotion Committee deliberates and discusses issues
related to climate change, after which the Chief Executive Officer for Climate-Related Issues makes final decisions. Under this system,
climate-related issues are supervised by the President and Representative Director.

Strategy
To factor climate-related risks and opportunities into the Investment Corporation's real estate management business, the AssetManager conducted a scenario analysis of the Investment Corporation's portfolio. The Asset Manager referred to climate outlooks
published by international organizations and other entities, in order to identify risks and opportunities of climate change brought tothe Investment Corporation and assess financial impacts on the Investment Corporation's business. Using a 1.5℃/2℃ scenario and a
4℃ scenario, a qualitative analysis was conducted.
For each scenario, the Asset Manager classified the financial impacts of identified risks and opportunities into short-term, mediumterm and long-term impacts and examined relative scales of impacts on the Investment Corporation. Shown below are medium-termand long-term risks from climate change that have a certain degree of financial impacts.

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Sustainability in
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Activities

Environment

OthersFigure - Financial Impacts in the Scenario Analysis (DOI)
Financial Impacts
C calassition

Risk and Opportunity Factors
in Real Estate Management

Stricter regulations against
GHGemissions due to an
introduction of carbon tax

Potential Financial Impacts

4℃

Category

1.5℃/2℃

Mid

Long

Mid

Long

Term

Term

Term

Term

Small

Small

MediumLargeCountermeasures

Increased tax burden due tothe introduction of carbon tax,
depending on the volume of

Risk

Introduction of energy
management systems and

GHGemissions from properties

renewable energy

Increased renovation costs due

Planned reduction of energy

Policy and Legal

Stricter energy-saving

to raised energy-saving

standards, obligation to

standards

report emissions

Increased business expenses

Improvement in GHGemissions

related to emissions reporting

through strategic

consumption/GHGemissions at
Risk

Small

Small

Large

Large

replacement/renovation of

Increased rent income from
Enhanced competitiveness of

portfolio properties with highproperties that comply withenvironmental performancelegal regulations

Decreased utility bills thanks toportfolio properties

properties
Opportunity

Small

Small

MediumMedium

Risk

Small

Small

Large

Large

Increase in environmental
certification acquisition rates

improved energy efficiency
Increased renovation costs due
Technology

Advancement and spread ofenergy-saving and renewableenergy technologies

to the introduction of newtechnologies

technologies
Planned renovation works

Decreased utility bills thanks toOpportunity

better energy-saving

Introduction of cutting-edge

Small

Small

MediumMediumperformance

Promotion of transition to power
derivedfrom renewable energy

Transition Risks and Opportunities

Fluctuations in portfolio
properties' asset value
depending on environmental

Increase in environmental

certification acquisition rates

environmental performance

Risk

Small

Small

Large

Large

depending on the proportion
high environmental

Promotion of transition to power

Sufficient information disclosure
about portfolio properties'

performancefienvironmental performanceMarketDecreased utility bills thanks tobetter energy-saving

certification acquisition rates

derived from renewable energyof portfolio properties with6

asset value depending on

Fluctuations in rent income

6

Fluctuations in properties'

Opportunity

Small

Small

MediumMediumperformance
Fluctuations in reputation from
ESG-conscious investors andlenders
Changes in the stances ofFluctuations in ESG-conscious

investors/lenders/tenants on

tenants' demand for moving ininvestment and lending

and out
Better/Worse terms andconditions in financing fromAppropriate disclosure of ESGRisk

Small

Small

Large

Large

related information, including thaton climate change
Higher ratings in ESGassessments
by external institution

Opportunity

Small

Small

MediumMediumReduction of financing costs
through the use of sustainability
financefinancial institutions, etc.

Appropriate disclosure of ESGrelated information, including that

Decreased investment unit

on climate change

Reputation

prices/Lower ESG ratings
Decline in reputation from

Decreased profitability ofinvestors and customers

properties with low

Stronger stakeholder engagement
Risk

Small

Small

MediumLargein the ESGarea
Continuous improvement ofenvironmental

environmental performance/

performance/resilience

Continuous acquisition ofenvironmental certifications251

Sustainability report 2023
Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersFinancial Impacts
C calassition

Risk and Opportunity Factors
in Real Estate Management

Potential Financial Impacts

4℃

Category

1.5℃/2℃

Mid

Long

Mid

Long

Term

Term

Term

Term

Countermeasures

Risk comprehension using hazard

Acute

Increased loss due tointensifying storm and flood
damagemaps, etc.

Increased repair costs andinsurance premiums

Portfolio of highly resilient
Risk

Small

Medium

Small

Small

Decreased rent income due toUpgrading of facilities to install

Physical Risks

lower occupancy rates

high-efficiency air conditioning

Loss of businesssystems, introduction of energy

opportunities/Increased

management systems

business continuity risks

Chronic

Increased damage from risein average temperature/sea
level

Implement energy saving

Increased renovation costs toprotect portfolio properties
from water intrusion, damage,properties

initiatives in corporation with
Risk

Small

Small

Small

Small

tenants, including green leases
Enhancement of BCPmeasuresdestruction, etc.

Promotion of greening at portfolio

fiproperties

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Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersFigure - Financial Impacts in the Scenario Analysis (DLI)
Financial Impacts
C calassition

Risk and Opportunity Factors
in Real Estate Management

Stricter regulations against
GHGemissions due to an
introduction of carbon tax

Potential Financial Impacts

4℃

Category

1.5℃/2℃

Mid

Long

Mid

Long

Term

Term

Term

Term

Small

Small

MediumMediumCountermeasures

Increased tax burden due tothe introduction of carbon tax,
depending on the volume of

Risk

Introduction of energy
management systems and

GHGemissions from properties

renewable energy

Increased renovation costs

Planned reduction of energy

Policy and Legal

Stricter energy-saving

due to raised energy-saving

standards, obligation to

standards

report emissions

Increased business expenses

Improvement in GHGemissions

related to emissions reporting

through strategic

consumption/GHGemissions at
Risk

Small

Small

MediumMediumreplacement/renovation of

Increased rent income from
Enhanced competitiveness of

portfolio properties with highproperties that comply withenvironmental performancelegal regulations

Decreased utility bills thanks

portfolio properties

properties
Opportunity

Small

Small

Small

Medium

Risk

Small

Small

MediumMediumIncrease in environmental
certification acquisition rates

to improved energy efficiency
Increased renovation costs
Technology

Advancement and spread ofenergy-saving and renewableenergy technologies

due to the introduction of newtechnologies

technologies
Planned renovation works

Decreased utility bills thanks
to better energy-saving

Introduction of cutting-edge

Opportunity

Small

Small

MediumMediumperformance

Promotion of transition to power
derivedfrom renewable energy

Transition Risks and Opportunities

Fluctuations in portfolio
properties' asset value
depending on environmental

Increase in environmental

certification acquisition rates

environmental performance

Risk

Small

Small

MediumMediumdepending on the proportion
high environmental

Promotion of transition to power

Sufficient information disclosure
about portfolio properties'

performancefienvironmental performanceMarketDecreased utility bills thanks
to better energy-saving

certification acquisition rates

derivedfrom renewable energyof portfolio properties with7

asset value depending on

Fluctuations in rent income

6

Fluctuations in properties'

Opportunity

Small

Small

Small

Mediumperformance
Fluctuations in reputationfrom ESGconscious investors
and lenders
Changes in the stances ofFluctuations in ESGconscious

investors/lenders/tenants on

tenants' demand for moving

investmentand lendingin and out
Better/Worse terms andconditions in financing fromAppropriate disclosure of
Risk

Small

Small

MediumMediumESGrelated information, includingthat on climate change
Higher ratings in ESG assessments
by external institution

Opportunity

Small

Small

Small

MediumReduction of financing costs
through the use of sustainability
financefinancial institutions, etc.

Appropriate disclosure of
ESGrelated information, including

Decreased investment unitthat on climate change

Reputation

prices/Lower ESG ratings
Decline in reputation from

Decreased profitability ofinvestors and customers

properties with low

Stronger stakeholder engagement
Risk

Small

Small

MediumMediumin the ESG area
Continuous improvement ofenvironmental

environmental performance/

performance/resilience

Continuous acquisition ofenvironmental certifications

253

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Our strategy for
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Activities

Environment

OthersFinancial Impacts
C calassition

Risk and Opportunity Factors
in Real Estate Management

Potential Financial Impacts

4℃

Category

1.5℃/2℃

Mid

Long

Mid

Long

Term

Term

Term

Term

Countermeasures

Risk comprehension using hazard

Acute

Increased loss due
tointensifying storm andflood damage

maps, etc.

Increased repair costs andinsurance premiums

Portfolio of highly resilient
Risk

MediumMedium

Small

Small

Decreased rent income due toUpgrading of facilities to install

Physical Risks

lower occupancy rates

high-efficiency air conditioning

Loss of businesssystems, introduction of energy

opportunities/Increased

management systems

business continuity risks

Chronic

Increased damage from risein average temperature/sea
level

Implement energy saving

Increased renovation costs toprotect portfolio properties
from water intrusion, damage,properties

initiatives in corporation with
Risk

Small

Small

Small

Small

tenants, including green leases
Enhancement of BCP measuresdestruction, etc.

Promotion of greening at portfolio
properties

Risk Management
The Investment Corporation's Climate Change and Resilience Policy sets out processes to identify, assess, and manage the impacts ofclimate change risks and opportunities on the corporation's management activities, strategies, financial plans, etc.
Chief Climate-Related Issues Officers summarize climate-related risks and opportunities and report the progress to the Sustainability
Promotion Committee, in principle, once a year.
The Sustainability Promotion Committee continuously identifies, assesses, and manages climate change risks and opportunities thatare important to the business and financial plans and affect the asset management operations of the Investment Corporation. Basedfi

on the above reports, the committee prioritizes issues of strategic importance to the business.
The Chief Executive Officer for Climate-Related Issues instructs to factor important climate-related risks with high priority, which havebeen deliberated by the Sustainability Promotion Committee, into the existing company-wide risk management program. The risk
identification, assessment, and management processes are thus integrated.

Metrics and Targets
Each Investment Corporations sees the transition to a carbon-neutral society as an opportunity. The following target KPIs (Key
Performance Indicators) have been established as key monitoring indicators in the process of managing climate change risks andopportunities.

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OthersFigure - Metrics and Targets (DOI)
KPI
Mid-term target (FY2030) :Reduction of 46% in CO2 emissions on an intensity basis across the portfolio by FY2030
Reductionof CO
emissions(compared with FY2013)
Long-term target (FY2050) :Achieved carbon neutrality in CO2 emissions on an intensity basis across the portfolio by FY
2050.

Figure - Metrics and Targets (DLI)
KPI
Percentage ofenvironmental

Mid-term target

certifications

Achieve an environmental certification ratio of at least 20.0% for the entire portfolio

Risk Management

Response as an AssetManager

Future Outlook

Appendix255

9Strategy

6

Metrics and Targets

Governance2

Introduction

8

6

acquiredSustainability report 2023
Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersFuture Outlook
The Group positions responding to sustainability, including climate change, as one of our important management challenges, and weare advancing various initiatives. Moving forward, we will continue to steadily promote strategic initiatives related to climate change,
including efforts towards net-zero based on the "Daiwa Securities Group Carbon Neutral Declaration", and aim to achieve the "Vision2030". Additionally, we will strive to enhance communication with stakeholders and further improve information disclosure based on
the TCFD recommendations.

Figure 7-1 Future Actions/Response
Next action
Governance
StrategyStrengthening the supervision of the board of directors (including the three committees) in
relation to climate-related issues.
Continuously examining the financial impact of climate-related risks.
Continuously examining the integration of climate-related risks into the existing risk

Risk Management

management system.
Continuously reviewing the environmental and social policy framework.
Setting intermediate targets for Scope 3 Category 15 and Financed Emissions that are

Target and Metrics

consistent with the Paris Agreement, utilizing SBT and other methods.
Examining the calculation method for Facilitated Emissions.

Introduction

Governance

Strategy

Risk Management

Metrics and Targets

Response as an AssetManager

Future Outlook

Appendix256

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OthersApproach for Measuring GHG Emissions within Investment and
Loan portfolios
The basic formula for calculating the emissions in investment and loan portfolios (Financed Emissions) is as follows. The Groupcalculates this based on the basic formula of PCAF as the calculation method for our own Group.

Figure Basic formula for calculating emissions in investment and loan portfolios in PCAF
Financed Emissions = ∑ ①Attribution factor i × ②Emissions ii

The generalapproach to
calculate financed
emissions in PCAF

① Attribution factor =Outstanding amount of the Group's loans and investments
Value (Total equity + debt) of borrowers or investees② Emissions = Use disclosed Scope 1, 2 and 3 values of borrower or investee. If notavailable, use the estimated values provided by PCAF.
(with i = borrower or investee)

Attribution factor
Asset classEmissions(numerator)

Outstanding(1) Listed equity

amount in listed
equity(market value)(denominator)

Company value
EVIC*(borrower or investee company)

Company
Emissions

Outstanding

Company value(2) Corporate

amount in(Listed company): EVIC*

Company

bonds

corporate bonds(Unlisted company): Total equity +debt

Emissions(book value)(borrower or investee company)
Company value(Listed company): EVIC*(3) Business loans

Outstanding(Unlisted company): Bonds (book value) +Company

loan amount

Borrowings (book value) + Shareholders'Emissions

equity (book value)(borrower or investee company)

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Activities

Environment

OthersAttribution factor
Asset classEmissions(numerator)(denominator)

Outstanding
amount ofunlisted equity(4) Unlisted equity(Shares offinancial
institute ÷ Total
shares × Total

Company value
Bonds (book value) + Borrowings (bookvalue) + Shareholders' equity (bookvalue)

Company
Emissions(borrower or investee company)

equity)Building(5) Commercial
real estate

Outstanding
amount of loans

emissions
Property value at originationand investments(energyconsumption ×
emission factor)(6) Project finance

Outstanding

Shareholder's equity + interest-bearing

Project

amountdebt (bonds + loans)

Emissionsamount ofPurchasing Power Parity (PPP) - adjusted

Sovereign

sovereign debt

GDPemissions

Outstanding(7) Sovereign debt

(book value)* EVIC (Enterprise Value Including Cash) is the sum of the market capitalization of ordinary and preferred shares at fiscal year-end, the bookvalues of interest-bearing liabilities (bonds + borrowings), and non-controlling interests, without deducting cash or cash equivalents.
Source: Created from PCAF “Financed Emissions The Global GHG Accounting & Reporting/PartA” and the Ministry of the Environment “Reporton the Utilization and Advancement of Portfolio Carbon Analysis”.

Introduction

Governance

Strategy

Risk Management

Metrics and Targets

Response as an AssetManager

Future Outlook

Appendix258

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Sustainability in
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OthersIssuance of Green Bonds
Until now, Daiwa Securities Group has sold various kinds of SDG bonds in Japan (including conventional Impact Investment bonds),
thereby supporting the solving of social issues from the standpoint of a financial institution. In November 2018, Daiwa Securities Group
Inc. issued its first Green Bonds, expanding its initiatives aimed at invigorating markets. As part of such initiatives, the proceeds fromthe Green Bonds have been used as investment and loan funds for renewable energy generation projects worked on by the Group, as
well as facility funds for Green Buildings. The Group will continue to contribute to the realization of a sustainable society and provide
investors with new investment opportunities.

Information on Green Bonds Issued by Daiwa Securities Group Inc.
(as of the end of June 2023)
1. Allocation of proceeds
The proceeds from the Green Bonds issued by Daiwa Securities Group Inc. in November 2018 (issuance amount: ¥10 billion) were fully
appropriated for eligible Green Projects.
See the table below for the balance of investment and loans for eligible Green Projects by category.

List of Eligible Green Projects (as of the end of June)
Commencement of

Finance/Refinance

Balance

Category

Sub-category

Renewable energy

Photovoltaic power generation

June 2021

Finance

1.8

Renewable energy

Photovoltaic power generation

June 2023

Refinance

0.7

Renewable energy

Photovoltaic power generation

June 2023

Refinance

5.5

Green Building-

November 2018

Refinance

2.0

Finance/Refinance

3

2

0

2

total

259

(units of ¥ billion)

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Environment

Others2. Environmental Impact
Report on Environmental Impact (as of the end of June 2023)
Renewable energy
Sub-category

Photovoltaic power
generation

Energy output/

Estimated CO emissions

assumed energy output (MWh)reduction effect (t-CO )90,816

41,503* Calculation of environmental impact when no results have been obtained or the period of operation is less than one year, the assumed energy output iscalculated based on a report on energy output projections submitted by a third-party institution. For projects under development, the assumed output
for the first year of operation is used. All power plants are scheduled to be brought into operation by FY2023.

Green Building
Level of certifications
Awarded Five Stars for the DBJ Green Building Certification Program
Energy consumption（GJ/kl）

CO2 emission（t）

38.764

8,110

Energy consumption by use（%）

Water consumption（m ）Electricity

74.45

35,756

Heavy oil

0.141

Waste generated（t）

Cold water

16.914324.9

Steam water

8.482

Recycle rate（%）

Gas

0.013

60

* The figures are for the period from April 2022 to March 2023.

3. Annual Review by Independent provider of ESG research and analysis
A review by an independent provider of ESG research and analysis confirmed that the use of proceeds criteria and the reporting criteria
were met.
Annual Review by Sustainalytics

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Others. Initiatives by Group Companies
Daiwa Securities Co. Ltd.
Disclosure of criteria and specific procedures for judging suitability for eligible investments and loans related to the Funds-Supplying
Operations to Support Financing for Climate Change Responses by BANK OF JAPAN < Japanese only >Daiwa Next Bank, Ltd.
Disclosure of criteria and specific procedures for judging suitability for eligible investments and loans related to the Funds-Supplying
Operations to Support Financing for Climate Change Responses by BANK OF JAPAN < Japanese only >Daiwa Energy & Infrastructure Co. Ltd.
Notice on Sales, etc. of Daiwa Green Finance Program Trust Beneficiary Interests and Trust ABL (Iwamizawa and Kushiro Solar Power
Plants) < Japanese only >Notice on Sales, etc. of Daiwa Green Finance Program Trust Beneficiary Interests and Trust ABL (Shiraoi Town Takeura Solar Power
Plant) < Japanese only >Completion of Shiraoi Town Takeura Solar Power Plant < Japanese only >Reporting on Green Project Bonds < Japanese only >Daiwa Office Investment Corporation（managed by Daiwa Real Estate Asset Management）
Notice Concerning Establishment of Green Finance Framework, etc.

4

Notice Concerning Issuance of Investment Corporation Bonds (Green Bonds)

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Sustainability Data Edition
Numerical data related to the sustainability promotion of the Group is compiled and published as a Data Edition.
Sustainability Data Edition
2023

SDGs Data Edition
2022

2020

2021

3

2

0

2

Sustainability Data Edition

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SDGs Report* These reports are PDF versions of the information posted on the Sustainability website as of September 30 in each year for greater convenience.
The latest information is timely disclosed on the website.

2022

2021

2020

2021

2020

SDGs Booklet
2022

SDGs Data Book

CSR Report

2017

2018

2016

2015

2014

2013

2012

2006

2005

2004

2003

2002

2011

2009

Sustainability Report

2007

Full Edition [PDF:22.2MB]

Full Edition [PDF:57,786KB]

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2

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2

2

0

Full Edition [PDF:55,148KB]

2

SDGs Report

SDGs Report

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1

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2

SDGs Report

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2008

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SDGs Booklet

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2

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4

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0

2

1

0

2

5

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CSR Report

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CSR Report

CSR Report

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2

1

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2
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Sustainability Report
2005

Sustainability Report
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Sustainability Report
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Social Contribution
Activities

Environment

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Sustainability in
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OthersESG Information Index
Information on the Daiwa Securities Group is organized from the perspective of ESG surveys and other research.

General Management
Message from Management

Message from CEO

Corporate Philosophy andCorporate Principles

Code of Conduct[Japanese] Daiwa Spirit [PDF:80KB]
Management Policy
Basic Policy on Stakeholder Engagement

Sustainability as aManagement Strategy

Daiwa Securities Group's Management Vision "Vision 2030" and Materiality
Daiwa Securities Group SDGs Declaration
Sustainability Promotion Structure
Message from the Head of Sustainability

Participation in Initiatives

Participation in Initiatives

External Evaluations

Third-Party Evaluations

Independent Assurance

Independent Assurance Report (Sustainability Data Edition 2023) [PDF:880KB]

Initiatives through Business Activities(To achieve Sustainability)
Thinking in the Securities
BusinessRole and Social Responsibilities of the Securities BusinessSupporting Sound Financial and Capital Markets -Six Roles of the Daiwa Securities Group-270

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How to think about
investing

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersEnvironmental and Social Policy Framework[Daiwa Securities Co.Ltd.] Acceptance of the Japanese version of the Stewardship Code(Japanese)[Daiwa Asset Management Co.Ltd.] Our Stewardship Activities (Japanese)[Daiwa Asset Management Co.Ltd.] ESG Investment Policy (Japanese)[Daiwa Asset Management Co.Ltd.] Investment in cluster bomb manufacturing companies
and other treatment
Responsible Action as an Institutional Investor[Daiwa Real Estate Asset Management Co. Ltd.] Sustainability Initiatives

Responsibility to customers
and customer satisfaction

Basic Policy on Customer-first Operations
Introduction of NPS® (Net Promoter Score) Towards Realization of Quality No. 1
Improving In-Branch Customer Service Quality
Working to Incorporate Customer Voices

Develop and Provide
Products

Initiatives through Business Activities Such as the Underwriting and Sale of SDG Bonds
Sustainable Finance
ESG Funds
Initiatives in Funds for Decarbonization (Daiwa Asset Management)

Inclusion (Financial
Inclusion, etc.)

Improving In-Branch Customer Service Quality
Expansion of Services for Asset-Building Customers through Smartphone-only Securities
Company, "Daiwa Connect Securities"

Analysis andInitiatives to Provide Information on ESG (Daiwa Securities)

Recommendations for
Economic, Social andInvestment Information
Investing in Businesses that
Solve Social Problems

Comprehensive Provision of Information and Policy Proposal Activities

Creation of Next Generation Financial Services
Promotion of Investment and Financing in Energy
Daiwa ACA Business Succession
Promotion of Sustainable Agricultural Production Business
Daiwa ACA HealthCare Inc.

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Our BusinessGovernanceSocialSocial Contribution
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OthersProvision of High-Quality Nursing Care Services
Creation of Next Generation Industries and Services
Investing in Ventures That Solve Social Issues
Investment in Drug Development Ventures and Other Businesses by DCI Partners
Initiatives Using REITs, Funds and Other Structures to Solve Social Issues
Issuance of Green Bonds

Environment
Environmental
Management

The Daiwa Securities Group Net Zero Carbon Declaration
Environmental Vision / Environmental Principles / Basic Environmental Policies
Environmental Management
Targets for FY2023
Response to Climate Change (Disclosure Based on the TCFD Recommendations 2023)

Efforts and Achievements in

Initiatives to Reduce the Environmental Impact of Business Activities

Reducing Environmental
ImpactEnvironment (Sustainability Data Edition 2023) [PDF: 880KB]

Society
Employment and Working
Environment

Hiring Approaches and Policy
Guidelines for Fair Hiring
Initiatives for Autonomous Career Development
Evaluation System
Employees at Daiwa Securities Group (Sustainability Data Edition 2023 Social Report) [PDF:
880KB]

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Environment

OthersGender pay gap (Sustainability Data Edition 2023 Social Report) [PDF: 880KB]

Average Number of Years of Service (Sustainability Data Edition 2023 Social Report) [PDF:
880KB]
Employee Turnover Rate (Sustainability Data Edition 2023 Social Report) [PDF: 880KB]
Working Hours and Paid Vacation Usage Rate (Sustainability Data Edition 2023 Social Report)[PDF: 880KB]
Diversity & Inclusion

Human Rights Policy
Support for the Success of Senior Employees
Number of Employees Re-hired after Retirement Age (Sustainability Data Edition 2023 Social
Report) [PDF: 880KB]
Employment of People with Disabilities
Percentage of Employees with Disabilities (Sustainability Data Edition 2023 Social Report)[PDF: 880KB]
Promoting Diverse Work Styles (Work-Life Balance)
Encouraging Women to Succeed[Daiwa Capital Markets America Inc.] WORK FOR US > Culture[Daiwa Capital Markets Europe Limited.] Equity, Diversity & Inclusion
Promoting increased understanding toward the LGBT community and related issues
Welfare Program Usage (Sustainability Data Edition 2023 Social Report) [PDF: 880KB]
Percentage of Employees Taking Childcare Leave and Other Related Data (Sustainability Data
Edition 2023 Social Report) [PDF: 880KB]
Various systems

Employee Satisfaction

Communication with Employees
Engagement Survey (Sustainability Data Edition 2023 Social Report) [PDF: 880KB]

Internal Communication

Active Use of In-House Magazine
Communication among Employees
Initiatives with Families

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Labor-Management
Dialogue

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersRelationship with Employee Unions
Number of Employee Union Members (Sustainability Data Edition 2023 Social Report) [PDF:
880KB]

Human Resource
Development andCapability Development

Approaches and Policy
Education and Training System
Supporting Employees Trying to Earn Credentials

Human Rights

Human Rights Policy
Human Rights Education and Awareness System
Initiatives in FY2022
Supply Chain Management[Daiwa Capital Markets Europe Limited.] Modern Slavery Act 2015

Health Management and

Health Management

Occupational Safety and
HealthFinancial Education

Financial Education and Research
Daiwa Internet TV (Japanese)

Social Contribution
Activities and Corporate
Citizenship Activities

Stakeholder Engagement
Contribution through Foundations and NPOs
For Your Dreams - Daiwa Securities Group Children's Smile Project
Support for culture and the arts
Corporate Citizenship Initiatives[Daiwa Capital Markets America Inc.] Corporate Social Responsibility[Daiwa Capital Markets Europe Limited.] Corporate Social Responsibility
Philanthropic Contributions (Sustainability Data Edition 2023 Social Report) [PDF: 880KB]

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Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersGovernanceCorporate Governance

Basic Views on Corporate GovernanceCorporate Governance Guidelines
Corporate Governance System
Board of Directors and Committees: Roles, Duties, Composition and Activities
Preventing Conflict-of-Interest Transactions between Group Companies
Performance -linked remuneration system for Directors and Corporate Executive Officers(Shikkoyaku)
Indicators for Performance-linked remuneration, reasons for choosing the indicators, how todetermine Performance-linked remuneration, and targets and results (Japanese)
Internal Control System and Internal Audit
Corporate Governance Report[PDF:1,697KB]Tax Corporate Governance

Daiwa Securities Group Tax Policy

Whistleblowing

Structure and Achievements of Whistleblowing System (Corporate Ethics Hotline)

Risk Management

Risk management system
Types of Risks to Be Managed / Managing Major Risks
Environmental and Social Policy Framework
Business Continuity Plan (BCP)

Supply Chain Management

Supply Chain Management[Daiwa Capital Markets Europe Limited.] Modern Slavery Act 2015

Compliance

Compliance System
Full Implementation of “Customer-First”
Summary of the Management Policy for Conflict of Interest

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Prevention of Money
Laundering, etc.

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT)Securing the Fairness and Transparency of the Market-Prevention of unfair transactions suchas insider trading
Basic Policy on Avoiding Involvement with Anti-Social Forces

Anticorruption

Prevention of corruption / Anti-Corruption Policy
Political contributions (Sustainability Data Edition 2023 Social Report) [PDF: 880KB]

IT Governance Structure

IT Organization and Structure

Information Security

Systems risk management
IT investment
Privacy Policy
Information Security
Policy on Personal Information Protection and Security / Implementation of Risk
Assessments and Audits Concerning Personal Information Protection
Creation of Governance System Concerning Protection of Personal Information
Training on Protection of Personal Information
Policy on Incident Investigations and Responses

Information Disclosure

OthersDisclosure Policy

External Evaluation
Third-Party Evaluations

Third-Party Evaluations

Independent Assurance

Independent Assurance Report (Sustainability Data Edition 2023) [PDF: 880KB]

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OthersParticipation in Initiatives
Daiwa Securities Group has participated in, signed, and supports the initiatives described below to contribute to developing asustainable society.

Major Initiatives
The United Nations Global Compact (UNGC)
Daiwa Securities Group Inc. signed the UNGC in January 2010. We support the 10 principles in the areas ofhuman rights, labour, environment and anti-corruption, and work to contribute to sustainable development in
the international community.
The Ten Principles of the UN Global Compact

The United Nations-supported Principles for Responsible Investment (PRI)
Daiwa Asset Management became a signatory in May 2006. PRI is a set of six principles launched by the United
Nations Environment Programme - Finance Initiative and the UN Global Compact. This initiative asks
institutional investors to incorporate ESG into their investment decision making practices. Daiwa Securities
Group will continue promoting responsible investment.

Japan Sustainable Investment Forum (JSIF)
Daiwa Securities Group Inc. has been a member of the JSIF since its establishment in 2003 as Sustainable
Investment Forum-Japan (SIF-Japan), and Daiwa Asset Management has been a member since August 2022.
The Forum works to promote and advance ESG investment and other sustainable investment throughout
Japan. We also support these activities in our capacity as a financial institution.

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Principles for Financial Action for theGovernanceSocialSocial Contribution
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Environment

st Century

Based on the recommendations of the Central Environment Council of the Ministry of the Environment, this isan action guideline for financial institutions that was established with the aim of expanding the circle ofenvironmental finance efforts.
The Principle was revised in June 2022. It asks the signatories' collaboration to address to various issues
regarding environment, society, and economy. The Group has been actively involved since the drafting stage ofthis principle, Daiwa Securities Group Inc. and Daiwa Asset Management signed the principles in 2011, when
they were established.

Japan Impact-driven Financing Initiative
Daiwa Securities Group Inc. signed the "Japan Impact-driven Financing Initiative" as a comprehensive
securities group for the first time in June 2023. This declaration is an initiative led by Japan Social Innovation
and Investment Foundation to encourage domestic financial institutions that are committed to creating impact
to work together and advance impact-oriented investments.

Japan Stewardship Initiative (JSI)The JSI was established in 2019 with the aim of helping to deepen and advance stewardship activities.
In March 2022, Daiwa Asset Management endorsed and became a participant in JSI's activities.

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The OECD Guidelines for Multinational Enterprises
ISO26000
The Charter of Corporate Behavior of Keidanren (Japan Business Federation)
Japan's Stewardship Code ("Principles for Responsible Institutional Investors")

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Environmental initiatives
United Nations Environment Programme - Finance Initiative (UNEP-FI)
Daiwa Securities Group Inc. became a signatory in May 2018. In collaboration with financial institutions,policymakers, and regulatory authorities, UNEP-FI works to advance a shift to a financial system that takes
economic development and ESG into consideration. As a financial institution, Daiwa Securities Group will
promote collaboration in the international community to address environmental issues.

CDP
CDP is an initiative in which institutional investors interested in climate change, water, and forest related issues
collaborate and require global companies to disclose information on their attitudes and approaches toenvironmental issues.
Daiwa Securities Group Inc. announced its support for the initiative in 2004.

Climate Change
Task Force on Climate-related Financial Disclosures (TCFD)
This is a task force established by the Financial Stability Board (FSB) in 2015. TCFD asks companies to grasp anddisclose information on the impact of climate change on finances during the course of a shift to a low-carbon
economy. Daiwa Securities Group Inc. (April 2018), Daiwa Asset Management (December 2020), and Daiwa Real
Estate Asset Management (December 2021) announced their support for TCFD. They also participate in the
TCFD Consortium, which was established in May 2019 in Japan.
Response to Climate Change (Disclosure Based on the TCFD Recommendations 2023)

Partnership for Carbon Accounting Financials (PCAF)
PCAF was launched mainly by European financial institutions in 2015 with the aspiration to standardize themeasurement and disclosure of financed emissions.
In December 2021, Daiwa Securities Group Inc. joined PCAF. Also, the Group joined the newly established PCAF
Japan coalition launched by the Japanese financial institutions participating in the global, industry-led PCAF
initiative.

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Net Zero Asset Managers initiative (NZAMi)
Launched in December 2020, NZAMi is a global initiative by asset management companies that aims to achieve
net zero greenhouse gas emissions from investee companies by 2050. In December 2021, Daiwa AssetManagement became a signatory in support of this aim.

Green Transformation (GX) League Basic Concept
In March 2022, Daiwa Securities Group Inc. endorsed the GX League Basic Concept announced by the Ministry of
Economy, Trade and Industry. The aims of the GX League are to enhance industrial competitiveness byrecognizing the goal of carbon neutrality by 2050 as an opportunity for growth, and to achieve a virtuous cycle
for the economy, environment, and society by getting groups of companies actively working on GX tocollaborate with each other.

Statement on Fiduciary Duty and Climate Change DisclosureThis statement on the disclosure of fiduciary duty and climate change information was jointly formulated by
the Climate Disclosure Standards Board (CDSB) and the UNEP FI (United Nations Environment Programme
Financial Initiative).
Its aim is to prompt companies to disclose climate change information in a comprehensive and comparable
form in their annual reports and other disclosure materials. Daiwa Asset Management became a signatory inAugust 2014.

Climate Action 100+
This international engagement initiative was established by investors in 2017 with the aim of encouraging
greenhouse gas emissions reductions through collaborative engagement with companies with high emissions
levels.
In August 2021, Daiwa Asset Management became a signatory in support of this initiative as an approach forreaching the targets of the Paris Agreement.

Investor Agenda
This agenda was established in 2018 by a group of institutional investors. It has issued recommendations on
how to accelerate climate change initiatives by institutional investors and national governments.
Daiwa Asset Management became a signatory in August 2021.

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Natural Capital and Biodiversity
Taskforce on Nature-related Financial Disclosures (TNFD) Forum
TNFD is an international initiative launched in June 2021 to develop and provide a framework for disclosing
nature-related financial information. The TNFD Forum is a stakeholder organization that supports discussions
on TNFD. In September 2022, Daiwa Securities Group Inc. and Daiwa Asset Management joined the TNFD Forumin support of TNFD's objectives.

Keidanren Initiative for Biodiversity Conservation
In order to increase the depth of actions on biodiversity taken by the Japanese business community, Keidanren(Japan Business Federation) has declared its aim to "realize a sustainable society by building a society inharmony with nature" through "the Keidanren Declaration on Biodiversity and Action Guidelines(revised
version)." Daiwa Securities Group Inc. supports this Declaration.

Green FinanceRegistration System of Green Bond, etc. Issuance Supporters
The Financial Support Programme for Green Bond Issuance, etc. implemented by the Ministry of theEnvironment subsidizes the external costs incurred other than the cost for the ordinary bond issuanceprocedure. It grants a subsidy to those who provide issuance support to green bond, etc. issuers (issuance
supporters) for their issuance support costs. The Ministry has established a system for announcing the issuance
supporters on the "Green Bond Platform."
The Group has been a registered supporter since the initiation of the system in 2018.
Please refer to the Sustainable Finance page for further details.

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Climate Bonds Partners ProgrammeThis is a program operated by Climate Bonds Initiative.* The program is joined by Climate Bonds Partners, who
support the development of green bonds that contribute to climate change responses and low-carbon
investment.
The Group joined the program in March 2020.
* Climate Bonds Initiative (CBI):CBI is an international NGO that promotes large-scale investment in a low-carbon economy. Aiming to use the $100 trillion
bond market to combat climate change, CBI has created the Climate Bond Standard (CBS) as a screening tool for investors
and governments when they make low-carbon investments. It also provides periodic reports on the green bond market,
policy models, and advice.

Please refer to the Sustainable Finance page for further details.

Human Capital
Women's Empowerment Principles (WEPs)
The Women's Empowerment Principles (WEPs) are principles of action for actively promoting theempowerment of women, established by UNGC and UN Women in 2010.
Daiwa Asset Management became a signatory in October 2022.

30% Club JapanIn May 2019, the Chairman of the Board and President and CEO of Daiwa Securities Group Inc. started toparticipate in the 30% Club Japan as members in support of its activities.
In May 2020, Daiwa Asset Management became a member of the 30% Club Japan Investor Group, and is
promoting gender diversity and gender equality in every level of its organization through stewardship activities
such as constructive dialogue with the companies in which it invests.
The 30% Club, established in the U.K. in 2010, is a worldwide campaign aimed at increasing the ratio of womenin executive positions to promote the sustainable development of companies. It has been rolled out in 14
countries and regions including Japan, greatly contributing to a rise in the ratio of female executives.

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Human Capital Management Consortium
Increasing attention is being paid to human capital management, which views human resources as "capital"
and maximizes their value to improve corporate value over the medium to long term. In August 2022, Daiwa
Securities Group Inc. and Daiwa Asset Management joined the Human Capital Management Consortium insupport of its objectives. Recognizing that the source of the Group's competitiveness is its human resources, wewill continue to actively promote initiatives related to human capital.

Advance
Advance is a collaborative stewardship initiative where institutional investors work together to take action onhuman rights and social issues. The Initiative has been coordinated by the PRI.
In December 2022, Daiwa Asset Management endorsed and became a “Participant”.

Universal Declaration of Human Rights
United Nations Guiding Principles on Business and Human Rights
Children's Rights and Business Principles
The eight fundamental conventions of the International Labour Organization

Governance initiatives
International Corporate Governance Network (ICGN)
Daiwa Asset Management joined the ICGN in April 2021. Established in 1995, ICGN's mission is to establish
effective corporate governance and foster investor stewardship with the aim of promoting an efficient global
market and sustainable economic activity.

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OthersThird-Party Evaluations

Inclusion in ESG Indices (As of September,
MSCI Japan ESG Select Leaders Index)

MSCI Japan ESG Select Leaders Index is a global ESG stock index comprisedof Japanese companies selected by MSCI from different sectors on thebasis of excellent ESG performance. It is adopted by GPIF as a core ESG
benchmark for its passive investments. Daiwa Securities Group Inc. has
been selected for two consecutive years since 2022.

MSCI Japan Empowering Women Index (WIN)Developed by MSCI, MSCI Japan Empowering Women Index selects
Japanese companies that promote and maintain gender diversity among
the workforce. It is adopted by GPIF as a core ESG benchmark for its
passive investments.
Daiwa Securities Group Inc. has been selected for seven consecutive years
since 2017.

MSCI ESG Leaders Indexes

The constituents of the world-class indexes are companies selected fromvarious industries by MSCI as those excellent in ESG.

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FTSE Blossom Japan Index is a socially responsible investment index
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FTSE Blossom Japan Index Series

developed by FTSE. It is comprised of Japanese enterprises that
demonstrate strong ESG practices.
It is adopted by Japan's Government Pension Investment Fund (GPIF) as acore ESG benchmark for its passive investments. Daiwa Securities Group
Inc. has been included for seven consecutive years since 2017.
Daiwa Securities Group Inc. has also been included in FTSE Blossom Japan
Sector Relative Index, which has been newly added to GPIF's ESG
benchmarks for its passive investments.

FTSE4Good Index

FTSE4Good Index is a socially responsible investment index developed by
FTSE, a subsidiary of the London Stock Exchange.
Daiwa Securities Group Inc. has been included for 18 consecutive years
since 2006.

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S&P/JPX Carbon Efficient Index

This index was developed by S&P Dow Jones Indices LLC and is composedof companies that are evaluated to be excellent in terms of the disclosureof environmental information and carbon efficiency (carbon emissions perunit of sales) among the companies that constitute the Tokyo Stock Price
Index (TOPIX). It is adopted by the Government Pension Investment Fund(GPIF) as a core ESG benchmark for its passive investments, and Daiwa
Securities Group Inc. has been included in the Index for five consecutive
years since 2018, when the Index was launched.

Morningstar Japan ex-REIT Gender Diversity Tilt

This index was developed by Morningstar by using the gender equality

Index (GenDi J)

scores provided by Equileap and is composed of companies excellent interms of gender diversity. It was newly adopted by the Government
Pension Investment Fund (GPIF) as a core ESG benchmark for its passive
investments.

Dow Jones Sustainability Indices

Dow Jones Sustainability Indices are sustainability equity indices selectedby S&P Global. Daiwa Securities Group Inc. has been included in DJSI World
Index and/or DJSI Asia Pacific Index since it launched in 1999.
In 2023, we were selected as a component of DJSI Asia Pacific Index.

Bloomberg Gender-Equality Index

Bloomberg Gender-Equality Index is an index that consists of companies
that actively disclose their efforts towards gender equality through policy
development, disclosure, and transparency.

*THE INCLUSION OF Daiwa Securities Group Inc. IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTEA SPONSORSHIP, ENDORSEMENT OR PROMOTION OF Daiwa Securities Group Inc. BY MSCI OR ANY OF ITS AFFILIATES. THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI.
MSCI AND THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.
*Morningstar, Inc., and/or one of its affiliated companies (individually and collectively, "Morningstar") has authorized Daiwa Securities Group Inc. to use of the Morningstar Japan
ex-REIT Gender Diversity Tilt Logo ("Logo") to reflect the fact that, for the designated ranking year, Daiwa Securities Group Inc. ranks in the top quintile of companies comprising theMorningstar® Japan ex-REIT Gender Diversity Tilt IndexSM ("Index") on the issue of gender diversity in the workplace. Morningstar is making the Logo available for use by Daiwa
Securities Group Inc. solely for informational purposes. Daiwa Securities Group Inc. use of the Logo should not be construed as an endorsement by Morningstar of Daiwa Securities
Group Inc. or as a recommendation, offer or solicitation to purchase, sell or underwrite any security associated with Daiwa Securities Group Inc. The Index is designed to reflect
gender diversity in the workplace in Japan, but Morningstar does not guarantee the accuracy, completeness or timeliness of the Index or any data included in it. Morningstar makes
no express or implied warranties regarding the Index or the Logo, and expressly disclaim all warranties of merchantability or fitness for a particular purpose or use with respect tothe Index, any data included in it or the Logo. Without limiting any of the foregoing, in no event shall Morningstar or any of its third party content providers have any liability for any
damages (whether direct or indirect), arising from any party's use or reliance on the Index or the Logo, even if Morningstar is notified of the possibility of such damages. The
Morningstar name, Index name and the Logo are the trademarks or services marks of Morningstar, Inc. Past performance is no guarantee of future results.

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ESG Ratings (As of December,
MSCI ESG Ratings

GovernanceSocialSocial Contribution
Activities

Environment

Others)MSCI ESG Ratings assess companies' resilience to ESG risks.
Daiwa Securities Group Inc. received the highest rating "AAA" for the firsttime (seven levels from AAA to CCC).

CDP

CDP is an international non-profit organization that requests world’s
companies to disclose information on climate change and evaluate theirperformance.
In 2022, Daiwa Securities Group Inc. has been named to CDP’s highest
rating “A List”, recognizing the company as a global leader on climatechange initiatives for the first time (eight levels from A to D-).

*THE USE BY Daiwa Securities Group Inc. OF ANY MSCI ESG RESEARCH LLC OR ITS AFFILIATES (“MSCI”) DATA, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR
INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT, RECOMMENDATION, OR PROMOTION OF Daiwa Securities Group Inc. BY MSCI. MSCI SERVICES ANDDATA ARE THE PROPERTY OF MSCI OR ITS INFORMATION PROVIDERS, AND ARE PROVIDED ‘AS-IS’ AND WITHOUT WARRANTY. MSCI NAMES AND LOGOS ARE TRADEMARKS OR SERVICE

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MARKS OF MSCI.

Awards and Recognition (As of April,
CDP 2022 Supplier Engagement Leader)

Daiwa Securities Group was recognized as a 2021 Supplier Engagement
Leader, the highest rating in the Supplier Engagement Rating by CDP. The
Supplier Engagement Rating is designed to evaluate companies' supply

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chain engagement practices on climate issues.

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ESG Finance Awards Japan, sponsored by the Ministry of the Environment,

Environmentally Sustainable Company

recognizes financial institutions, companies, and other organizations that

Category of the 4th ESG Finance Awards Japan

have made an impact by actively engaging in ESG finance, or
environmental / social projects.
Daiwa Securities Group Inc. was selected for the second year in a row as an
Environmentally Sustainable Company that meets certain criteria fordisclosure of material environmental issues, based on evaluation criteriasuch as risks, business opportunities, strategies, KPIs, and governance.

Governor's Special Prize for Green Finance inTokyo Financial Award, sponsored by the Tokyo Metropolitan Government,

the ESG Investment Category of Tokyo Financial

recognizes financial companies that develop and provide innovative

Award 2021

financial products and services that meet the needs of citizens in Tokyoand contribute to solving issues, or that work to spread ESG investment.
Daiwa Asset Management's efforts toward the spread of new investment
aimed at carbon neutrality through its CANDRIAM Decarbonization
Technology Fund (nickname: Carbon ZERO) received an award in the ESG
investment category. Daiwa Asset Management also won the Governor's
Special Prize for Green Finance as an excellent company from theperspective of green finance.

“Weekly Toyo Keizai”

Daiwa Securities Group Inc. was ranked 3rd in the overall ranking in the

SDG Corporate Ranking ranked 3rd

SDG rankings of 500 companies announced in Weekly Toyo Keizai (July 30
issue) based on the evaluations of human resource usage, environmental
activities, social contributions, and corporate governance.

Nadeshiko Brand

Daiwa Securities Group Inc. has been selected as a Nadeshiko Brand foreight consecutive years from 2015 to 2022. The Nadeshiko Brand is an
initiative jointly organized by the Ministry of Economy, Trade and Industry
and the Tokyo Stock Exchange to recognize listed companies that excel inpromoting women's advancement.
We established a broad regional career-track system that allows employees
to be relocated within a certain area. In addition, ANSWERS, an internal
online channel through which employees share their difficulties and get
support, was also introduced. By supporting career advancement andoffering a wide range of career options for female employees, we areworking to build a workplace where all employees can continue to work
energetically.
Nadeshiko Brand (Ministry of Economy, Trade and Industry website)287

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OthersCertified Health & Productivity Management

The Ministry of Economy, Trade and Industry chooses outstanding

Outstanding Organizations（White 500）

enterprises engaging in advanced health and productivity management as
White 500 companies.
Daiwa Securities Group Inc. has been certified for seven consecutive years
since 2017.

Certified Health & Productivity Management Outstanding Organizations(Ministry of Economy, Trade and Industry website)

Noteworthy DX Companies

In May 2023, Daiwa Securities Group Inc. was selected as one of the“Noteworthy DX Companies 2023” as part of the DX Stock Selection
program operated jointly by the Ministry of Economy, Trade and Industry,
the Tokyo Stock Exchange and the Information technology Promotion
Agency (IPA). The “DX Stocks" selects companies listed on the Tokyo Stock
Exchange that have established an internal system to promote DX that
leads to improving corporate value, and have demonstrated excellent
digital utilization.
In the collaboration with partners, Daiwa Securities Group has
platformized its system and enabled access from partners through APIs,
achieving paperless processing of administrative work that had beenpreviously required in partnerships. The Group's use of blockchain
technology to securitize assets and offer alternative products such as realestate to individual customers was also recognized.

DX Stocks 2023 (Ministry of Economy, Trade and Industry website)⟨Japanese only⟩
Family-Friendly Employer Certification Logo

Kurumin is a certification logo provided by the Ministry of Health, Labour(Known as “Kurumin” and “Platinum Kurumin”)

and Welfare under the Act on Advancement of Measures to Support Raising
Next-Generation Children.
Daiwa Securities Group Inc. has been certified since June 9, 2008.
Daiwa Securities, Daiwa Asset Management, Daiwa Institute of Research,and Daiwa Securities Business Center have also been certified.
Moreover, Daiwa Securities, Daiwa Securities Business Center, and Daiwa
Institute of Research received Platinum Kurumin. It was given to especially
excellent companies that implement higher level of parenting supports.

Kurumin and Platinum Kurumin (Ministry of Health, Labour and Welfare
website)288

Sustainability report 2023
Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersLogo for Promoting Work Environment for

Daiwa Securities Group has obtained Tomonin from the Ministry of Health,Balancing Work and Long-Term Care (Known as

Labour and Welfare for our efforts in establishing a work environment“Tomonin”)

where employees can pursue their careers while balancing work andnursing care.

Tomonin (Ministry of Health, Labour and Welfare website) ⟨Japanese
only⟩

Analyst Rankings of "Nikkei Veritas" and“Nikkei Veritas” Analyst Ranking"Institutional Investor"

Nikkei Veritas Analyst Ranking is one of Japan’s most recognized rankings
with a history of over 30 years. It is determined based on the votes of
institutional investors in Japan.
In 2023, Daiwa Securities earned 1st in the Nikkei Veritas Analyst Ranking
by company for the fifth year in a row.
“Institutional Investor” All-Japan Research Team Survey
Institutional Investor All-Japan Research Team Survey is one of the world's
most well-known surveys. It is determined based on the votes of primarily
foreign institutional investors. In 2023, Daiwa Securities earned 1st in
Institutional Investor All-Japan Research Team Survey for the fourth year ina row.
Click here for details

289

Sustainability report 2023
Message from CEO

Our strategy for
Sustainability

Sustainability in
Our Business

GRESB Real Estate Assessment

GovernanceSocialSocial Contribution
Activities

Environment

OthersDaiwa Office Investment Corporation and Daiwa Securities Living
Investment Corporation continuously participate in the GRESB Real Estate
Assessment, a global ESG assessment of real estate companies and funds.
In the 2022 Assessment, each investment corporation obtained a "GreenStar" rating recognizing outstanding achievement in both the Management
Component, which evaluates policies, organizational systems, etc. forpromoting ESG, and the Performance Component, which evaluatesenvironmental performance, initiatives with tenants, etc., at buildings in
the portfolio.
Daiwa Office Investment Corporation
Daiwa Office Investment Corporation earned the top rating of "5 Stars" in
the GRESB Rating for the first time, which assigns a rating out of five stars
based on where the participant's overall score ranks globally.
Moreover, in the GRESB Public Disclosure Assessment, which measures thecomprehensiveness of ESG information disclosure, the company received
the top rating of "A" on the five-tiered evaluation scale for the second year
in a row.
Daiwa Securities Living Investment Corporation
Daiwa Securities Living Investment Corporation received a rating of "2Stars" in the GRESB Real Estate, as well as a rating of "A" in the GRESB
Public Disclosure Assessment for the first time for the investment
corporation.

Daiwa Office Investment Corporation "Participation in External
Assessments"
Daiwa Securities Living Investment Corporation "Acquisition of External
Assessments/Certifications"
HDI-Japan's 2022 HDI Rating Benchmarks

Received the highest Three Star rating in both the "Customer Service" and(Securities Industry)"Support Portal" categories of HDI-Japan's Rating Benchmark 2022
(Securities Industry).

290

Sustainability report 2023
Message from CEO

Our strategy for
Sustainability

Sustainability in
Our Business

ISO Certi cation (As of May,
ISO14001

GovernanceSocialSocial Contribution
Activities

Environment

Others)Daiwa Institute of Research has received ISO 14001 certification, aninternational standard for environmental management systems. Throughits business activities, the firm endeavors to realize a harmonious
relationship with the global environment, and actively works to reduce theenvironmental load.
Business site: Daiwa Eitai Building Office
Scope: All business activities involved in system consulting and system
integration by Daiwa Institute of Research

ISO/IEC20000

Daiwa Institute of Research (Systems Management Division) has received
ISO 20000 certification, an international standard for IT service
management systems. To provide customers with a high-quality IT service
in a stable manner, the firm engages in enhancement of IT services quality,
cost management, business optimization, and continual improvements.

ISO/IEC27001

Daiwa Institute of Research (Systems Management Division) has received
ISO 27001 certification, an international standard for information security
management systems. To maintain and manage the confidentiality,
integrity, and availability of its information assets, the firm is working on
improvement of the information security.

ISO/IEC27017

Daiwa Institute of Research (Systems Management Division) has received
ISO 27017 certification, an international standard for information security
3

2

0

2

fi

in relation to cloud services. As an add-on certification to ISO 27001, ISO
27017 deals with information security specific to cloud services.
ISO9001

Daiwa Institute of Research (Enterprise System Department (1)) has
received ISO 9001 certification, an international standard for quality
management systems.
(Scope: Design and development of application software based on
customer requirements)

ISO

291

Sustainability report 2023
Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocial Contribution
Activities

SocialEnvironment

Others

GRI content index
Daiwa Securities Group Inc. has reported in reference to the GRI Standards for the period

Statement of use

from 1 April 2022 to 31 March 2023.

GRI 1 used

GRI 1: Foundation 2021

GRI : General DisclosuresDISCLOSURE

2-1

Applicable web page

Corporate Profile

Organizational details

2-2

2-3

About Daiwa Securities Group > Global Network

Entities included in the organization's

Securities Reports ⟨Japanese only⟩

sustainability reporting

About Daiwa Securities Group > Global Network

Reporting period, frequency andSustainability > Editorial Policy

contact point

2-4

Restatements of information

2-5

External assurance

Not Applicable

Sustainability Data Edition
Securities Reports ⟨Japanese only⟩

2-6

Sustainability > Social > Supply Chain Management1business relationships

2

Group Management Policy FY2023 - Passion for the Best -0

Activities, value chain and other2

2

About Daiwa Securities Group > Management Policy > Daiwa Securities

Sustainability > Sustainability in Our Business > Role and Social
Responsibilities of the Securities Business
2-7

Employees

2-8Workers who are not employees

2-9

Governance structure andSecurities Reports ⟨Japanese only⟩-

Sustainability > Governance > Corporate Governancecomposition292

Sustainability report 2023
Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernance

DISCLOSURE
2-

Nomination and selection of the10highest governance body

211

Social Contribution
Activities

SocialEnvironment

OthersApplicable web page

Sustainability > Governance > Corporate Governance

Sustainability > Governance > Corporate Governance

Chair of the highest governance body

Sustainability > Our strategy for Sustainability > Stakeholder
Engagement
212

Role of the highest governance body in

Sustainability > Our strategy for Sustainability > Sustainability

overseeing the management ofManagement > Materiality

impacts

Sustainability > Our strategy for Sustainability > Sustainability
Management > Sustainability Promotion Structure
Sustainability > Governance > Risk Management

2-

Delegation of responsibility for

Sustainability > Our strategy for Sustainability > Sustainability

13

managing impacts

Management > Sustainability Promotion Structure

2-

Role of the highest governance body in

Sustainability > Our strategy for Sustainability > Sustainability

14

sustainability reporting

Management > Sustainability Promotion Structure

215

216

Sustainability > Governance > Corporate Governance

Summary of the Management Policy for Conflict of Interest
Sustainability > Governance > Compliance > Compliance System >Hotline)Collective knowledge of the highest

17

governance body

2-

Evaluation of the performance of the18highest governance body

19
220
221

Structure and Achievements of Whistleblowing System (Corporate Ethics

Communication of critical concerns

2-2-

About Daiwa Securities Group > Group Management System

Conflicts of interest

Sustainability > Our strategy for Sustainability
About Daiwa Securities Group > Management Policy > Daiwa Securities
Group Management Policy FY2023 - Passion for the Best Sustainability > Governance > Corporate Governance

Sustainability > Governance > Corporate Governance

Remuneration policies

Sustainability > Governance > Corporate Governance

Process to determine remuneration

Annual total compensation ratio-

293

Sustainability report 2023
Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocial Contribution
Activities

SocialDISCLOSURE

Environment

OthersApplicable web page2-

Statement on sustainable

Message from CEO

22

development strategy

Why Daiwa Securities Group is Working to Support Children
Message from CEO

223

Policy commitments

About Daiwa Securities Group > Management Policy
Sustainability > Our strategy for Sustainability > Statements
Sustainability > Social > Respect for Human Rights

224

Sustainability > Our strategy for Sustainability > Sustainability
Embedding policy commitments

Management
Sustainability > Social > Respect for Human Rights
Sustainability > Governance > Compliance > Compliance System >2-

Processes to remediate negative

Structure and Achievements of Whistleblowing System (Corporate Ethics

25

impacts

Hotline)Sustainability > Governance > Risk Management

2-

Mechanisms for seeking advice and26

raising concerns

227
228
229

230

Compliance with laws and regulations

Membership associations

Approach to stakeholder engagement

Sustainability > Governance > Compliance > Compliance System >Structure and Achievements of Whistleblowing System (Corporate Ethics
Hotline)Sustainability > Environment > Environmental Management
Sustainability > Governance > Compliance
Sustainability > Participation in Initiatives

Sustainability > Our strategy for Sustainability > Stakeholder
Engagement
Sustainability > Social > Initiatives for Human Capital > Communication

Collective bargaining agreementswith Employees
Sustainability Data Edition294

Sustainability report 2023
Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocial Contribution
Activities

SocialEnvironment

Others

GRI : Material Topics
DISCLOSURE
3-1

Process to determine material topics

3-2

List of material topics

3-3Management of material topics

Applicable web page

Sustainability > Our strategy for Sustainability > Sustainability
Management > Materiality
Sustainability > Our strategy for Sustainability > Sustainability
Management > Materiality
Sustainability > Our strategy for Sustainability > Sustainability
Management > Materiality

EconomyGRI 201: Economic Performance 2016
DISCLOSURE
201-

Direct economic value generated and

2013
2014

1

2

0

2

3

2

Disclosure Report 2023 ⟨Japanese only⟩

distributed

1

201-

Applicable web page

Financial implications and other risks
and opportunities due to climatechangeDefined benefit plan obligations andSustainability > Environment > Initiatives for Environmental Load
Reduction
Sustainability > Environment > Response to Climate Change (Disclosure
Based on the TCFD Recommendations 2023)
Disclosure Report 2023 ⟨Japanese only⟩

other retirement plans
Financial assistance received from

Impact is insignificant

government

295

Sustainability report 2023
Message from CEO

GRI

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocial1

Environment

Others: Market Presence
DISCLOSURE

202-

Social Contribution
Activities

Applicable web page

Ratios of standard entry level wage by

Impact is insignificant, due to the nature of our businessgender compared to local minimum
wage

202-

Proportion of senior management2

hired from the local community

GRI-: Indirect Economic Impacts
DISCLOSURE

Applicable web page

Sustainability > Sustainability in Our Business > Support for Asset
Building
Sustainability > Sustainability in Our Business > Sustainability-Fueled
2031

Infrastructure investments andservices supported

Business Expansion
Sustainability > Social Contribution Activities > Contribution throughFoundations and NPOs
Sustainability > Sustainability in Our Business > Sustainable Finance
Sustainability > Social Contribution Activities > Corporate Citizenship

6

1

0

2

2

0

Significant indirect economic impacts

Not Applicable

6

1

0

0

: Procurement Practices
2

GRI

2

2

3

203-

2

Initiatives

DISCLOSURE
Proportion of spending on local

Impact is insignificant, due to the nature of our business

6

1

0

2

4

suppliers

0

1

2

204-

Applicable web page296

Sustainability report 2023
Our strategy for
Sustainability

Message from CEO

GRI

Sustainability in
Our BusinessGovernance

1

2052
2053

Applicable web page

Sustainability > Governance > Prevention of corruption

to corruption

Sustainability > Governance > Risk Management

Communication and training about

Sustainability > Governance > Prevention of corruption

anti-corruption policies andprocedures
Confirmed incidents of corruption and

Not Applicableactions taken: Anti-competitive Behavior
DISCLOSURE

practices

4

6

1

0

2

5

6

1

0

2

6

Sustainability > Governance > Risk Management

management of concerns related to

Sustainability > Our strategy for Sustainability > Stakeholder

tax

Engagement
9

Sustainability > Governance > Tax Policy

1

Stakeholder engagement and

0

207-

Sustainability > Governance > Risk Management

management

2

3

Sustainability > Governance > Tax Policy

Sustainability > Governance > Tax Policy

2

207-

Applicable web page

Tax governance, control, and risk

2

2

DISCLOSURE

Approach to tax

0

207-

0

2

: Tax

0

1

Not Applicablebehavior, anti-trust, and monopoly

GRI

207-

Applicable web page

Legal actions for anti-competitive

7

1

Environment

Operations assessed for risks related

GRI

206-

Social Contribution
Activities: Anti-corruption
DISCLOSURE

205-

SocialCountry-by-country reporting

Sustainability > Governance > Tax Policy

297

OthersSustainability report 2023
Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocial Contribution
Activities

SocialEnvironment

Environment
GRI 301: Materials 2016
DISCLOSURE
3011
3012
3013

Applicable web page

Materials used by weight or volume

Recycled input materials used
Reclaimed products and their

Not Applicable

Not Applicable

Not Applicable

packaging materials

GRI 302: Energy 2016
DISCLOSURE
3021
3022
3023
3024
3025

Applicable web page

Energy consumption within the

Sustainability Data Edition

organization
Energy consumption outside of the

Sustainability Data Edition

organization

Sustainability Data Edition

Energy intensity

Reduction of energy consumption
Reductions in energy requirements of

Sustainability Data Edition

Sustainability Data Edition

products and services

GRI: Water and E uentsDISCLOSURE

Impact is insignificant, due to the nature of our business

8

1

0

2

ffl

3

resource
0

1

Interactions with water as a shared

3

303-

Applicable web page298

OthersSustainability report 2023
Our strategy for
Sustainability

Message from CEO

Sustainability in
Our BusinessGovernance

DISCLOSURE
3032
3033
3034
3035

Management of water discharge-

Social Contribution
Activities

SocialApplicable web page
Impact is insignificant, due to the nature of our business

related impacts

Sustainability Data Edition

Water withdrawal-

Water discharge

Water consumption

GRI-: Biodiversity
DISCLOSURE
Operational sites owned, leased,

304-

managed in, or adjacent to, protected1

areas and areas of high biodiversity

Applicable web page
Not Applicablevalue outside protected areas

Not Applicable

Not Applicableconservation list species with habitats

GRI

6

in areas affected by operations

3

4

IUCN Red List species and national

1

304-

Habitats protected or restored

0

3

2

304-

Not Applicableproducts and services on biodiversity

42

Significant impacts of activities,

0

304-

: Emissions
DISCLOSURE

Applicable web page

Sustainability Data Edition

Sustainability Data Edition

6

1

0

emissions22

Energy indirect (Scope 2) GHG
5305-

Direct (Scope 1) GHG emissions

0

1

3

305-

Environment

299

OthersSustainability report 2023
Our strategy for
Sustainability

Message from CEO

Sustainability in
Our BusinessGovernance

DISCLOSURE
3053
3054
3055
3056
3057

Sustainability Data Edition

emissionsSustainability Data Edition

GHG emissions intensity

Sustainability Data Edition

Reduction of GHG emissions
Emissions of ozone-depleting

Impact is insignificant, due to the nature of our businesssubstances (ODS)
Nitrogen oxides (NOx), sulfur oxides

Impact is insignificant, due to the nature of our business(SOx), and other significant air
emissions: WasteDISCLOSURE

4306-

Not Applicable

Waste directed to disposal
3

5

Not Applicable

Waste diverted from disposal

GRI

0

306-

Sustainability Data Edition

Waste generated

2

3

Not Applicable

related impacts

0

306-

Management of significant waste-22

Impact is insignificant, due to the nature of our businesswaste-related impacts

6

306-

Applicable web page

Waste generation and significant

0

1: Supplier Environmental Assessment
DISCLOSURE
Not Applicable

6

1

0

2

8

using environmental criteria
01Applicable web page

New suppliers that were screened

3

308-

Environment

Applicable web page

Other indirect (Scope 3) GHG

GRI

306-

Social Contribution
Activities

Social300

OthersSustainability report 2023
Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernance

DISCLOSURE
3082

Social Contribution
Activities

SocialEnvironment

OthersApplicable web page

Negative environmental impacts in the

Not Applicablesupply chain and actions taken

SocialGRI: Employment
DISCLOSURE

4011
4012
4013

Applicable web page

Sustainability Data Edition

New employee hires and employee
turnoverBenefits provided to full-time

Sustainability > Social > Initiatives for Human Capital > Diversity andemployees that are not provided toInclusion

temporary or part-time employees

Sustainability Data Edition

Parental leave

GRI: Labor/Management Relations
DISCLOSURE
Minimum notice periods regarding

-

GRI

6

1

0

2

1

operational changes
4

1

0

402-

Applicable web page

: Occupational Health and Safety

6

1

0

2

2

Sustainability > Social > Initiatives for Human Capital > Diversity andInclusion

management system

Sustainability > Social > Initiatives for Human Capital > Health
8

1

0

2

3

Management
01Applicable web pageOccupational health and safety

4

403-

0

4

DISCLOSURE

301

Sustainability report 2023
Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernance

DISCLOSURE
4032

Hazard identification, riskSocialSocial Contribution
Activities

Environment

OthersApplicable web page-

assessment, and incident
investigation

Sustainability > Social > Initiatives for Human Capital > Diversity and4033

Inclusion

Occupational health services

Sustainability > Social > Initiatives for Human Capital > HealthManagement
Sustainability > Social > Initiatives for Human Capital > Diversity and4034

Inclusion

Worker participation, consultation,

Sustainability > Social > Initiatives for Human Capital > Healthand communication on occupational

Management

health and safety

Sustainability > Social > Initiatives for Human Capital > Communication
with Employees

4035

Worker training on occupational

Sustainability > Social > Initiatives for Human Capital > Healthhealth and safety

Management
Sustainability > Social > Initiatives for Human Capital > Diversity and4036

Inclusion

Promotion of worker health

Sustainability > Social > Initiatives for Human Capital > HealthManagement

Prevention and mitigation of4037-

occupational health and safety
impacts directly linked by business
relationships

4038
4039
40310

Workers covered by an occupational-

health and safety management
systemWork-related injuries

Work-related ill health

-

-

302

Sustainability report 2023
Message from CEO

GRI

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernance

1
4042

4043

Applicable web page

Sustainability > Social > Initiatives for Human Capital > Human Resource

employee

Development and Skill Enhancement

Programs for upgrading employee

Sustainability > Social > Initiatives for Human Capital > Human Resource

skills and transition assistance

Development and Skill Enhancement

programs
Percentage of employees receiving-

regular performance and careerdevelopment reviews: Diversity and Equal Opportunity
DISCLOSURE

of women to men

6

1

0

: Non-discrimination
2

GRI

Sustainability Data Edition

Ratio of basic salary and remuneration

4

2

Sustainability Data Edition

employees

0405-Applicable web page

Diversity of governance bodies and

4

1

DISCLOSURE

GRI

6

1

0

Sustainability > Governance > Risk Management2

corrective actions taken

5

Sustainability > Social > Respect for Human Rights

41Applicable web page

Incidents of discrimination and

0

406-

: Freedom of Association and Collective Bargaining
DISCLOSURE
6

1

0

2

6

0

4

Not Applicable, due to the nature of our businessright to freedom of association and

6

1

0

2

7

collective bargaining may be at risk
0

1

Applicable web page

Operations and suppliers in which the

4

407-

OthersAverage hours of training per year per

GRI

405-

Environment: Training and Education
DISCLOSURE

404-

Social Contribution
Activities

Social303

Sustainability report 2023
Message from CEO

GRI

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernance1

Not Applicable, due to the nature of our businessrisk for incidents of child labor: Forced or Compulsory LaborDISCLOSURE

1

Applicable web page

Operations and suppliers at significant

Not Applicable, due to the nature of our businessrisk for incidents of forced orcompulsory labor

GRI: Security Practices
DISCLOSURE

Impact is insignificant, due to the nature of our businessrights policies or procedures

6

1

0

0

: Rights of Indigenous Peoples
4

GRI

2

1

Applicable web page

Security personnel trained in human

8

410-

DISCLOSURE

6

1

0

2

9

6

1

0

2

0

4

Not Applicable, due to the nature of our business: Local Communities
0

GRI

of indigenous peoples

1

1

Applicable web page

Incidents of violations involving rights

4

411-

DISCLOSURE

2

6

1

0

2

1

1

4

and development programs
Operations with significant actual andImpact is insignificant, due to the nature of our business

6

1

0

2

potential negative impacts on local
3413-

Impact is insignificant, due to the nature of our businessengagement, impact assessments,

1

1

Applicable web page

Operations with local community

4

413-

Environment

Applicable web page

Operations and suppliers at significant

GRI

409-

Social Contribution
Activities: Child LaborDISCLOSURE

408-

Socialcommunities

304

OthersSustainability report 2023
Message from CEO

GRI

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernance1414-

Applicable web page

New suppliers that were screened

Not Applicableusing social criteria
Negative social impacts in the supply

2

chain and actions taken

GRI: Public Policy

Not Applicable

DISCLOSURE
4151

Applicable web page

Sustainability Data Edition

Political contributions

GRI: Customer Health and Safety
DISCLOSURE

6

0

2

4

Not Applicable, due to the nature of our businessconcerning the health and safety

GRI

6

1

0

2

impacts of products and services

4

2

1

Incidents of non-compliance1

categories
4416-

Not Applicable, due to the nature of our business

impacts of product and service

5

1

Applicable web page

Assessment of the health and safety

1

416-

: Marketing and Labeling

6

1

0

2

6

Incidents of non-compliance

Not Applicableconcerning product and service
6

1

0

2

information and labeling72

Sustainability > Social > Initiatives for Customer-First Services

information and labeling

1

417-

Applicable web page

Requirements for product and service

4

1

1

4

DISCLOSURE
417-

Environment: Supplier Social Assessment
DISCLOSURE

414-

Social Contribution
Activities

Social305

OthersSustainability report 2023
Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernance

DISCLOSURE
4173

Not Applicableconcerning marketing
communications: Customer Privacy
DISCLOSURE

Applicable web page

Substantiated complaints concerning

Not Applicablebreaches of customer privacy and

6

1

0

2

8

1

losses of customer data

4

1Social Contribution
Activities

Applicable web page

Incidents of non-compliance

GRI

418-

Social306

Environment

OthersSustainability report 2023
Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersSASB Index

Sustainability Disclosure Topics & Metrics
Employee Diversity & Inclusion
METRICCATEGORY

Percentage of gender andQuantitative

UNIT OFMEASURE
Percentage (%)

racial/ethnic group

CODE

Applicable web page

FN-IB-

Sustainability Data Edition P.10

330a.1

representation for (1)executive management, (2)non-executive
management, (3)professionals, and (4) allother employees*1*1.

The entity shall describe its policies and programs for fostering equitable employee representation across its global operations.

Incorporation of Environmental, Social, and Governance Factors in Investment
Banking & Brokerage Activities
METRICCATEGORY

Revenue from (1)Quantitative

underwriting, (2) advisory

UNIT OFCODE

Applicable web page

Presentation

FN-IB-

Sustainability Data Edition P.19-20

currency

410a.1MEASUREand (3) securitisation

Sustainability > Sustainability in Ourtransactions incorporating

Business > Support for Asset

integration of

Building > Products offered toenvironmental, social andpursue shared value

governance (ESG) factors,
by industry

307Sustainability report 2023
Message from CEO

Our strategy for
Sustainability

METRIC

Sustainability in
Our BusinessGovernance

UNIT OFSocial Contribution
Activities

Environment

OthersCODE

Applicable web page

Number,FN-IB-

Sustainability Data Edition P.19-20

value of investments andPresentation

410a.2loans incorporating

currency(1) Number and (2) total

CATEGORY

SocialQuantitative

MEASURE

Sustainability > Sustainability in Our

integration ofBusiness > Support for Assetenvironmental, social andBuilding > Products offered togovernance (ESG) factors,

pursue shared value

by industry
Description of approach to

Discussion

incorporation ofand Analysisn/a

FN-IB-

Sustainability > Sustainability in Our

410a.3Business > Role and Social

environmental, social andResponsibilities of the Securities

governance (ESG) factors

Business > Responsible Action as anin investment banking andInstitutional Investor

brokerage activities

Business Ethics
METRICCATEGORY

Total amount of monetary

Quantitative

losses as a result of legal

UNIT OFMEASURE

CODE

Applicable web page

Presentation

FN-IB-

currency

510a.1n/a

FN-IB-

Sustainability > Governance >510a.2Compliance > Compliance System >proceedings associatedwith fraud, insider trading,anti-trust, anti-competitive
behaviour, market
manipulation, malpractice,or other related financial
industry laws or
regulations*2
Description of

Discussion

whistleblower policies andand Analysis

Structure and Achievements ofprocedures

Whistleblowing System (Corporate
Ethics Hotline)*2.

The entity shall briefly describe the nature, context, and any corrective actions taken as a result of the monetary losses.

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Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersProfessional Integrity
METRICCATEGORY(1) Number and (2)Quantitative

percentage of covered

UNIT OFMEASURE

CODE

Number,FN-IB-

Percentage (%)

510b.1

NumberFN-IB-

Applicable web page

employees with a record ofinvestment-related
investigations, consumerinitiated complaints,
private civil litigations, orother regulatory
proceedings*3
Number of mediation and

Quantitative

arbitration cases

510b.2

associated withprofessional integrity,
including duty of care, by
party
Total amount of monetary

Quantitative

losses as a result of legal

Presentation

FN-IB-

currency

510b.3n/a

FN-IB-

Sustainability > Governance >510b.4Compliance > Compliance Systemproceedings associatedwith professional integrity,
including duty of care*4
Description of approach to

Discussion

ensuring professionaland Analysis

integrity, including duty of
care
*3.

The entity shall describe how it ensures that covered employees file and update FINRA and SEC forms in a timely manner.

*4.

The entity shall briefly describe the nature, context, and any corrective actions taken as a result of the monetary losses.

Systemic Risk Management
METRIC
Global Systemically
Important Bank (G-SIB)

CATEGORY
Quantitative

UNIT OFCODE

Applicable web page

Basis points

FN-IB-

Annual Report > Situation of(bps)

550a.1

Soundness in Management > Key

MEASURE

Indicators ⟨Japanese only⟩

score, by category*5309

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Sustainability

METRIC

Sustainability in
Our Business

UNIT OFCATEGORY

Description of approach to

Discussion

incorporation of results ofand Analysis

Governance

MEASUREn/a

SocialSocial Contribution
Activities

Environment

OthersCODE

Applicable web page

FN-IB-

Sustainability > Governance > Risk

550a.2

Management

mandatory and voluntarystress tests into capital
adequacy planning, longterm corporate strategy,
and other businessactivities*5.

The entity shall describe whether the Global Systemically Important Bank (G-SIB) score is calculated by the entity or obtained from regulatory
authorities and whether the entity is required to report the underlying data to the regulators.

Employee Incentives & Risk Taking
METRICCATEGORY

Percentage of total

Quantitative

UNIT OFMEASURE
Percentage (%)

CODE
FN-IB550b.1

remuneration that isvariable for Material Risk
Takers (MRTs)*6
Percentage of variable

Quantitative

Percentage (%)

FN-IB550b.2

remuneration of Material
Risk Takers (MRTs) towhich malus or clawback
provisions were applied*7
Discussion of policies

Discussion

around supervision,and Analysisn/a

FN-IB550b.3

control, and validation of
traders' pricing of Level 3
assets and liabilities*6.

The entity shall discuss its remuneration policies for Material Risk Takers (MRTs).

*7.

The entity shall discuss whether its initial ex-ante adjustments were sufficient in risk mitigation.

310

Applicable web page

Sustainability report 2023
Message from CEO

Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersActivity Metrics
ACTIVITY METRICCATEGORY(1) Number and (2) value of

Quantitative

UNIT OFCODE

Applicable web page

Number,FN-IB-

Sustainability Data Edition P.25-26(a) underwriting, (b)Presentation

000.A

advisory, and (c)currency

MEASURE

securitisationtransactions*8(1) Number and (2) value of

Quantitative

Number,FN-IB-

proprietary investments

Presentation

000.B

and loans by sector*9currency
Number,FN-IB-

market making

Presentation

000.C

transactions in (a) fixedcurrency(1) Number and (2) value of

Quantitative

income, (b) equity, (c)currency, (d) derivatives,and € commodity products*8.

For syndicate transactions, the entity shall include only the value for which it was accountable.

*9.

The entity shall use the Global Industry Classification Standard (GICS) for classifying investees and borrowers.

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Our strategy for
Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

Others

Editorial Policy
Daiwa Securities Group discloses sustainability information related to its business and other activities on the Sustainability pages of
the company's website, and posts updated information as required.
We also release the Sustainability Data Edition (formerly SDGs Data Edition) (a compilation of quantitative data), the Sustainability
Report (formerly SDGs Report) (a PDF version of the information posted as of September 30 each year, for printing and archival
purposes), and the Sustainability Booklet (formerly SDGs Booklet) (a digest version of the report). These documents and their backnumbers can be found on Sustainability Library.
Intended ReadershipThis report is intended for the broad range of Daiwa Securities Group stakeholders definedby ISO 26000, including customers, shareholders and investors, employees, business
partners, and local communities.

Reporting Boundary

This report generally discusses the principal companies of 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. Eachset of data specifies the scope of coverage. The term "Daiwa Securities Group" refers to ourentire group, while the terms "Daiwa Securities Group Inc." and "Daiwa Securities" refer to
Daiwa Securities Group Inc. and Daiwa Securities Co. Ltd., respectively.

Period Covered by Report

FY2022 (April 1, 2022, to March 31, 2023) The report, however, also includes some
information on events and activities carried out prior to the beginning of or after the end of
FY2020, or scheduled to take place during FY2022.

Inquiries

Sustainability Promotion Office, Corporate Planning Department, Daiwa Securities Group
Inc.

Tel

+81-3-5555-1111(Main)

E-maildaiwa_sustainability@daiwa.co.jp

URL

https://www.daiwa-grp.jp/english/sustainability/

Reference Guidelines

GRI Standards 2021
ISO 26000: Guidance on social responsibility
SASB Standards (SASB: Sustainability Accounting Standards Board)
Environmental Reporting Guidelines 2018 and Environmental Accounting Guidelines 2005,
Ministry of the Environment, JapanFor Deeper Understanding of Corporate Activities of Daiwa Securities GroupAt Daiwa Securities Group, we issue an Integrated Report, referring to the International Integrated Reporting Framework published by
the IFRS Foundation and the Guidance for Collaborative Value Creation of the Ministry of Economy, Trade and Industry. The Integrated

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Sustainability

Sustainability in
Our BusinessGovernanceSocialSocial Contribution
Activities

Environment

OthersReport is aimed at communicating the Group’s history and current and future value creation activities to our stakeholders in an easyto-understand way, and we select important matters and initiatives taken mainly in the past one year as information to be posted.
Please look at the Report along with this website.
Integrated Report

Overview of information disclosure313