SDGs Data Book2 0 1 9﻿

Daiwa Securities Group SDGs Data Book 2019

Contents
Editorial Policy
Overview of Company and Businesses

3

Communication with Stakeholders

5

SDGs of Daiwa Securities Group

6

4

Daiwa Securities Group’s Materiality and SDGs

8

• Message from the Chairman of the SDGs Promotion Committee

10• Introducing the SDGs Promotion Committee Members

10

Initiatives through Business Activities

11

Role and Social Responsibilities of the Securities Business

12

Provision of Quality Service to Customers

15

Initiatives through Product Development and Provision20■ Close-up/Issuing Green Bonds

21

Maintenance and Development of Financial and Capital Market Functions

26

Dissemination of Analysis and Proposals on the Economy, Society, and Investment Information29

Support for the Creation of Our Future Society

33■ Close-up/Establishment of New Companies Contributing to SDGs

38

Initiatives for Supporting Business Activities

39

Corporate Governance

40

Compliance44

Human Rights Initiatives

48

Risk Management49■ Close-up/Response to the TCFD

52

Environmental Initiatives

53

IT Strategy and the Management of Systemic Risk

56

Engagement with Shareholders and Other Investors

57

Engagement with Employees

59

Engagement with Society

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

75

Participation in Initiatives

77

Third-Party Evaluations

78

SDGs Related Data80

GRI Content Index

91

Glossary98

Independent Assurance Report

99

2

﻿
Editorial
PolicyDaiwa Securities Group SDGs Data Book 2019

Editorial Policy
At Daiwa Securities Group, we have been reporting our CSR activities annually since FY2002 for the following two objectives: to disclose our
CSR activities in an easy-to-understand way and to evaluate the current state of affairs and the challenges we face. From the second half of
FY2018, our CSR activities were expanded as part of our initiatives for achieving SDGs. In conjunction with this change, we sorted out ourbusiness activities and the content of the Group’s CSR activities anew, and redesigned our previous CSR Report into the SDGs Data Book.
This SDGs Data Book was published with a greater focus on unity with the Integrated Report, in addition to providing comprehensive
coverage and detailed information as in the past, based on the following various guidelines. Also, as previously, we aimed to make thereport more accessible by utilizing the concept of Color Universal Design in selecting the colors of the document.
The meanings of underlined words are provided in the glossary (page 98).

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

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

Period Covered by Report
FY2018 (April 1, 2018, to March 31, 2019)
The report, however, also includes some information on events and activities carried out prior to the beginning of or after the end of
FY2018, or scheduled to take place during FY2019.

Date of Publication
November 2019
(The previous report was published in November 2018. Publication of the English edition of the next report is planned for October 2020.)

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

Reference Guidelines
GRI Sustainability Reporting Standards 2016
ISO 26000: Guidance on social responsibility
Sustainability accounting standards for the Financials sector, Sustainability Accounting Standards Board (SASB)
Environmental Accounting Guidelines 2005, Ministry of the Environment, JapanThe United Nations Sustainable Development Goals
Sustainable Development Goals (SDGs) are 17 goals
common to all humankind that were created bymember states of the United Nations and a varietyof organizations and people and adopted by the
UN in 2015. Each country has promised to actively
work toward the achievement of these goals. Daiwa
Securities Group views the SDGs as critical goals
that will lead the future direction of the world.
We will address the 17 social issues of the SDGs
by positioning them as a common language for
deploying business within and outside Japan.

3﻿Overview of Company and Businesses

Daiwa Securities Group SDGs Data Book 20194

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

Role of Securities Companies
Fund procurement by

Support for initial publiccompanies, etc.

offerings

Assistance intrading of securities

Assistance in asset
building

Analysis and provision of
information

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

Daiwa Securities Group Inc.
Retail Division

Wholesale Division

Daiwa Securities Co. Ltd.

Asset Management
Division

Investment Division

Daiwa AssetManagement Co. Ltd.

Daiwa Corporate
Investment
Co., Ltd.

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

Daiwa Capital Markets Europe Limited

Daiwa Capital Markets Hong Kong Limited

Daiwa Next Bank,Ltd.
Daiwa Real Estate
Asset Management
Co. Ltd.

Daiwa PI Partners
Co. Ltd.

Daiwa Securities BusinessCenter Co. Ltd.
Daiwa Property
Co., Ltd.

Daiwa Capital Markets Singapore Limited
Daiwa Office
Investment
Corporation

Daiwa Capital Markets America Inc.

Daiwa Energy &Infrastructure
Co. Ltd.

Fintertech Co. Ltd.
Daiwa Food & Agriculture
Co. Ltd.
(As of June 30, 2019)

Net Operating Revenues
472.7

Ordinary Income

505.3

155.6
441.2

135.6

83.1

Retail Division
Wholesale Division
Asset Management Division
Investment Division
Other

FY2016FY2017FY2018FY2016FY2017FY2018(billion yen)

Corporate Data
● NameDaiwa Securities Group Inc.

● Tel+81-3-5555-1111 (Main)● Capital¥247.3 billion● Head OfficeGran Tokyo North Tower
9-1, Marunouchi 1-chome,
Chiyoda-ku,
Tokyo 100-6751, Japan● Established
December 27, 1943 (Founded 1902)● Number of employees(consolidated)
15,196● President and CEO
Seiji Nakata● Number of consolidated
subsidiaries
60● Number of equitymethod affiliates
10● Shares of common stock(issued and outstanding)
1,699,378,772 shares(As of March 31, 2019)﻿Communication with Stakeholders

Daiwa Securities Group SDGs Data Book 20195

Communication with Stakeholders
Daiwa Securities Group will seek to improve its corporate value through resolution of social issues identified by communicating withstakeholders.

● Investors● Issuers

We aim to improvecustomer satisfaction by
providing products andservices that meet the needsof individual investors,
institutional investors, andpotential investors who are
considering investing.

We propose optimal financing
methods from among a wide rangeof methods to corporations, public
institutions and others seeking to raise

Customers

funds through the issuance of stocks
and bonds, and provide total support
for their financing from formulation ofIssuers

plans to execution.

Investors

Shareholders
and others

Shareholders
and others

Em

As an institutional investor, we work
to maintain active communication,
including engagement, with investee
companies.

● Business partners
Government

yees’ fam
plo

s
ilie

We endeavor to provide
highly transparent
information disclosure andmeet the expectations ofshareholders, etc.
through sustainablevalue creation.

● Investees

Business
partners

Daiwa
SecuritiesGroup● Shareholders
and others*

Investees

Society

We maintain fair relationships with all
our business partners and collaborate
with them in order to create asustainable society.

Employees

Employees

Local
communities

NPOs
NGOs

● Government
We fulfill our tax obligations andengage in policy proposal activities inorder to create a better society.

* Including investors in bonds
issued by Daiwa SecuritiesGroup● Employees● Local communities● NPOs/NGOs

We work to create an environment in which
employees, who provide added value for all
stakeholders, are able to feel motivated to workand demonstrate their abilities and enthusiasm.
Families of employees are also our important
stakeholders.

As a member of the local
communities where Daiwa
Securities Group’s head andbranch offices and overseas
subsidiaries are located, we
engage in community-based
activities.

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

● Policy on Communication with Stakeholders
Communication with stakeholders plays an important role in identifying social demands, which change over time. Accordingly, we have adopted thefollowing basic policy.

Basic Policy (1)Basic Policy (2)Basic Policy (3)Daiwa Securities Group will strive to maintaintwo-way communication with a broad rangeof stakeholders based on ISO 26000 and theCharter of Corporate Behavior of Keidanren(Japan Business Federation).

The Group will strive to deepen communication
with stakeholders already known to us,
including customers, shareholders and otherinvestors, business partners, employees andlocal communities.

The Group will strive to communicate actively
with third-party institutions, organizations, andindividuals, etc. with whom we have previously
had no contact in order to identify otherstakeholders.

﻿SDGs of Daiwa Securities Group

Daiwa Securities Group SDGs Data Book 20196

SDGs of Daiwa Securities GroupThe most important objective of companies is no longer to maximize shareholder profits, and the current age demands business activities
that can socially win the sympathy of all stakeholders. The adoption of SDGs indicates that there is a global trend toward requiring
companies to serve as the driving force for resolving social issues.
Daiwa Securities Group has implemented initiatives to resolve social issues until now, including promotion of impact investments and SRI
funds. However, they are merely a small portion of the initiatives for the grand goals of SDGs.
The Group implements various measures, including promoting dissemination of SDGs internally and externally, in order to make a greater
contribution to achieving SDGs.

●●Formulation of “Daiwa Securities Group’s SDGs Declaration (Passion for SDGs)"
Daiwa Securities Group announced its SDGs Declaration in May 2018. Based on this Declaration, we will work to strengthen our initiatives
toward achieving SDGs.

Passion for SDGs 2018
—Daiwa Securities Group’s SDGs Declaration (Passion for SDGs)—
Daiwa Securities Group recognizes Sustainable Development Goals adopted by the United Nations in 2015 as overarching goals tolead the 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

styles.

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 humanresources
With measures like promotion of better work-life balance and success of female andveteran employees to create working environment in which our employees, regardlessof 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

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

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

●●SDGs Promotion Committee and SDGs Promotion System
Daiwa Securities Group has been discussing Group-wide cross-sectional responses to SDGs at the SDGs Promotion Committee. Detailsof the discussions are regularly reported to the Board of Directors and the Executive Management Committee and are deliberated on by
these bodies where appropriate.
In FY2019, Hiroko Kuniya, Touko Shirakawa and Naohiro Nishiguchi are participating in the SDGs Promotion Committee as new outsidecommittee members. The committee considers various matters, utilizing the experience and insights of these experts.
Through the SDGs Promotion Committee and the Corporate Planning Department’s SDGs Promotion Office, we are working to roll out
SDGs promotion initiatives to the entire Group, as well as strengthen collaboration and raise awareness of SDGs within the Group.
*Refer to page 10 for details of the SDGs Promotion Committee members.

Foundations

Daiwa Securities Group

Stakeholders

Board of Directors

Daiwa Securities HealthFoundation
Daiwa Securities Foundation

Executive Management Committee

Investors

SDGs Promotion Committee

Investees

Issuers
Dialogue

指揮・命令
報告 Securities Group Inc.
*Chair: President
and CEO Seiji Nakata, Daiwa

Daiwa Anglo-JapaneseFoundation (UK)

Direction and approval

Daiwa Myanmar-JapanFoundation (Myanmar)

Secretariat: SDGs Promotion Office,Corporate Planning Department, Daiwa Securities Group Inc.
Communication of
information, awarenessraising, collaboration

Proposals and reports

Consultation, proposals,
reports

DialogueShareholders and others
Business partners
Governments
NPOs/NGOs
Local communities
Employees

Group companies, departments, overseas sites(As of April 1, 2019)﻿SDGs of Daiwa Securities Group

Daiwa Securities Group SDGs Data Book 20197●●Passion for SDGs 2019 –Action Plan Being Pursued by Daiwa Securities Group–
Building a Daiwa version of an SDG value chain that will create a sustainable capital cycle
In FY2018, Daiwa Securities Group announced Daiwa Securities Group’s SDGs Declaration(Passion for SDGs) and mainly worked to raiseawareness of SDGs within and outside the Group. In FY2019, we will actively work to create shared value by capitalizing on the strengths ofa comprehensive securities group and building a Daiwa version of an SDG value chain that will create a sustainable capital cycle.

Develop & support an industrial base that
contributes to achievement of SDGs
Sustainable provision of capitalfor achievement of SDGs

Promote the transition fromsavings to asset building
and expand assets undermanagement with theopportunities provided by SDGs

・ Maintain the industrial base through M&A andbusiness succession and provide succession support.
・ Develop & support start-up firms and social
innovators.
・ Support stimulation of local economies/support
economic development in other countries.

Expanding SDG-based
finance products that
contribute to solvingsocial challenges
・ Expand the line-up of
SDG-related products(SDG-related funds, SDG
bonds, etc.).
・ Expand social financing
through Daiwa Next Bank
deposits, crowdfunding,etc.

Promotingmarketing of SDGs
aimed at market
expansion・ Use advanced technology to provide new value.
・ Invest in SDG-related businesses.
・ Partner with and support NPOs, etc.

Entitieswith capital
Consulting
needs

Daiwa Securities Group

Composition

Screening/
Evaluation

Sales

Capitalmanaging
Information
entities
provision・ Explore ways to evaluate the impact on SDGs.

・ Provide investment
opportunities in unlistedcompanies involved in
SDG-related businesses.

・ Improve financial literacy
by educating people
about investment via
SDGs.
・ Create branches andprovide marketing toolsthat take people and theearth's environment into
consideration.

Strengthening engagement that
accelerates the investment cycle・ Create new financial
products linked to SDG
marketing.

・S trengthen promotion
aimed at education andproliferation of SDGs.

・ Establish an internal screening system.

・ Pursue services that areeasy for all customers
to use.

・ Actively communicate information on SDGs/ESG toencourage dialog.
・ Provide consultation aimed at expanding disclosureof non-financial information.

Daiwa Securities Group "Make it your own" plan
Company

Employees

・ Environmentally conscious initiatives ・ Create a workplace that leaves no one behind ・ Develop SDG-literate human resources
・ Pursue reforms that improve job satisfaction.
・ Communicate examples of initiatives internally & externally.

・ Recognize social challenges around you.
・ Take action aimed at solving problems.

﻿SDGs of Daiwa Securities Group

Daiwa Securities Group SDGs Data Book 20198

Daiwa Securities Group’s Materiality and SDGs
Corporate Principles
Building trust

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

Placing
importance on
personnel

The source of the Group's competitiveness lies in the capabilities of its employees. The Groupwill promote the creativity of employees by offering them a challenging and self-directedworking environment that encourages their abilities and appropriately rewards theircontributions.

Contributing
to society

The Daiwa Securities Group will seek to benefit the economy and society through thedevelopment of healthy financial markets. In addition to scrupulously observing both
regulations and internal policies, the Group will strive to maintain a high sense of moralityand duty, endeavoring to continue contributing to the sustainable growth of the societies inwhich we operate.

Maintaining
healthyearnings
results

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

Materiality

FinanceTechnology
Business
Areas

Daiwa Spirit

Local
Community

Our corporate culture has been nurtured since the foundation of our business. After
analyzing it using our corporate principle as a compass, we sorted out the basic
philosophy and mindset inherent in our group and articulated them as the Daiwa Spirit,
our behavioral guidelines.

1.

Exercises self-discipline and complies fully with the law, recognizing that sustainable growth
hinges on winning the trust of customers, financial and capital markets, and society at large.

2.

Secures sound profits by contributing to societal and economic development through its actions
in financial and capital markets.

3.

Exerts unflagging efforts to build strong, sustainable, trust-based customer relations.

4.

Continues to pioneer products and services in financial and capital markets, with each employee
fulfilling his/her mission with confidence and pride.

5.

Cultivates unbeatable competitiveness to overcome challenges, underpinned by strong
company-employee trust and solidarity between colleagues.

6.

Aims to be the securities group with the highest ambitions, a positive attitude that turns hardships
into opportunity, and unmatched speed.

Life

Fundamental
Areas

Corporate
governanceCompliance
Risk management

Process of Identifying Materiality
Based on its corporate principles, Daiwa Securities Group has previously placed “Key CSR Issues”
and “CSR Materiality” as the foundation of its CSR activities.
In 2018, the Group established the SDGs Promotion Committee, chaired by the President and
CEO Seiji Nakata. In addition, we set out our commitment to actively promoting initiatives that
contribute to SDGs through the Group’s businesses in “Passion for SDGs –Daiwa Securities Group’s
SDGs Declaration—.”Based on this declaration, we collected broad examples of initiatives related to SDGs. Afterlaunching a Working Group, on SDGs comprised of employee volunteers, we considered theGroup’s vision and extracted initiatives to be strengthened and newly undertaken by the Group
from among the collected examples.
We sorted out the issues extracted through this bottom-up process by comparing them withsocial demands grasped through communication with stakeholders and knowledge of external
experts. We then determined Daiwa Securities Group’s Materiality after deliberations at the SDGs
Promotion Committee.

・Passion for SDGs
—Daiwa Securities Group’s SDGs Declaration—
・Corporate principles
・Daiwa Spirit
・Key CSR Issues
・CSR Materiality

Step 1
Sort out existing
principles

﻿SDGs of Daiwa Securities Group

Daiwa Securities Group SDGs Data Book 2019

Daiwa Securities Group’s Materiality
Contribution to SDGs

SDGs Action Plan for FY2019
・Strengthen promotion aimed at education and proliferation of SDGs.
・Expand the line-up of SDGs-related products (SDG-related funds, SDG
bonds, etc.).
・Create new financial products linked to SDG marketing.
・Expand Daiwa Next Bank deposits
・Explore ways to evaluate the impact on SDGs.
・Establish an internal screening system.
・Actively communicate information on SDGs/ESG to encourage dialog.
・Provide consultation aimed at expanding disclosure of non-financial
information.

・Leveraging financial capabilities to contribute to a sustainable society
・Developing sound financial and capital markets for the next generation

・Contributing to the creation of future society by utilizing advanced technologies

・Use advanced technology to provide new value.
・Provide investment opportunities in unlisted companies involved in
SDG-related businesses.
・Expand social financing through Daiwa Next Bank deposits,
crowdfunding, etc.

・Contributing to local communities by utilizing the Group’s network of sales offices inJapan and overseas

・Responding to the diversified needs of customers and stakeholders
・Creating a pleasant working environment ・Initiatives for reducing environmental impact

・Invest in SDG-related businesses.
・Maintain the industrial base through M&A and business succession
and provide succession support.
・Develop & support start-up firms and social innovators.
・Support stimulation of local economies/support economic
development in other countries.

・Improve financial literacy by educating people about investment
via SDGs.
・Create branches and provide marketing tools that take people
and the earth's environment into consideration.
・Pursue services that are easy for all customers to use.
・Partner with and support NPOs, etc.

・Constructing and developing an appropriate corporate governance system・Creating a corporate culture that complies with laws, regulations and standards inJapan and overseas, based on self-discipline
・Appropriate anti-corruption and human rights measures
・Appropriate risk management
・Construction and maintenance of a strong IT system

・Communication with Stakeholders by the Corporate
Planning Department’s SDGs Promotion Office・Extraction and sorting out of issues

Step 2

Step 3

Step 4Compile internal
proposals

Extract and sort out
issuesDialogue withexternal experts

・SDGs Promotion Liaison Meeting ・SDGs Working Group・Collect examples of initiatives and proposals

Step 5
Identify materiality

・Discussion at the SDGs Promotion Committee that includes
external experts as members

9﻿SDGs of Daiwa Securities Group

Daiwa Securities Group SDGs Data Book 2019

Message from the Chairman of the SDGs Promotion Committee
We at Daiwa Securities Group incorporated the perspective of SDGs into the rootof our business strategies, and established the SDGs Promotion Committee as avehicle for discussing sustainable society and the Group’s vision. The Committee,
with myself serving as the chairman, has undertaken initiatives to promote SDGs
through exchange of opinions with experts. In “Passion for SDGs 2019” –Action
Plan Being Pursued by Daiwa Securities Group– announced in May 2019, theGroup incorporated proposals by employee volunteers based on more than
4,000 ideas brought up from worksites. In this manner, employees’ mindset of
approaching SDGs as their own matters and the bottom-up working process aretaking root.
By engaging in active communication with various stakeholders using SDGs as
a common language, we were able to grasp expectations placed on the Group bysociety as well as various social issues. Based on these, we reviewed our previous
CSR materiality and revamped it as Daiwa Securities Group’s Materiality in order
to communicate our ideas more clearly. The Group will continue to work on the
Chairmancreation of economic value and pursue social values through its business activities.
Seiji Nakata
A fundamental principle of SDGs is “No one will be left behind” in the course
President and CEOof implementation. This approach is consistent with the concept of diversity andinclusion, which Daiwa Securities Group is actively taking measures to promote.
These include creating a workplace that allows diverse human resources to play an active part and providing
opportunities for everyone to access financial services. We will continue our efforts to raise awareness of SDGs
within and outside the Group.
The Reiwa imperial era has started in Japan, and the pace of social transformation is accelerating. It is difficult toforecast global conditions in 2030. However, Daiwa Securities Group wants the world to remain a place where all
people on the earth live with hope, and to that end it will continue pursuing the roles it should fulfill.

Introducing the SDGs Promotion Committee Members

MemberMemberMemberMemberMemberToshihiro Matsui

Keiko Tashiro

Shinsuke Niizuma

Akihiko Ogino

Junichi Arihara

Deputy President and COO(Head of Wholesale)

Deputy President(Head of Overseas)

Senior Executive Managing Director Senior Executive Managing Director Executive Managing Director(Deputy Head of Retail)(Head of Planning and Legal and(CRO and CDO)
Executive Head of Human Resources)

MemberMemberMemberMemberMemberKana Shirakawa

Eiji Sato

Yukiko Takeuchi

Atsushi Itaya

Mariko Kawaguchi

MemberOutside member

Outside member

Outside member

Kotaro Yoshida

Hiroko Kuniya

Touko Shirakawa

Naohiro Nishiguchi

Executive Managing Director(Head of Human Resources
and CHO)Managing Director,
Corporate Planning Department

Senior Managing Director(CFO, Deputy Head of Planningand Deputy Head of Overseas)

Project Professor, Graduate
School of Media andGovernance, Keio University

Senior Managing Director(Head of Corporate
Communication)

Visiting Professor,
Sagami Women’s University

Senior Managing Director(Deputy Head of Human
Resources and Planning)

CEO, Japan Innovation Network

Senior Principal, Research Division
Daiwa Institute of Research Ltd.

10﻿

Daiwa Securities Group SDGs Data Book 2019

Initiatives throughBusiness Activities
Approach and Basic Stance
Daiwa Securities Group's mission is to contribute to thedevelopment of society and the economy through business
operations, including wealth management for investors andsupport for the development of financial strategies and otheraspects of corporations and public institutions.
Deepening the bond of trust we share with our stakeholders isessential to the sustainable accomplishment of our mission andachievement of growth.

Contents●R ole and Social Responsibilities of the Securities
Business● P rovision of Quality Service to Customers● Initiatives through Product Development andProvision●C lose-up:
Issuing Green Bonds●M aintenance and Development of Financial andCapital Market Functions●D issemination of Analysis and Proposals on the
Economy, Society, and Investment Information● S upport for the Creation of Our Future Society●C lose-up:
Establishment of New Companies Contributing to
SDGs

11

Role and Social Responsibilities of the Securities Business

Daiwa Securities Group SDGs Data Book 2019

Role and Social Responsibilities of the Securities Business
RelatedSustainable
Development
Goals (SDGs)

The securities business, the core business of Daiwa
Securities Group, plays a key role in society by buildinga bridge between the needs of investors to manage
assets and those of the private and public sectors
to raise funds. On the fund-raising side, throughunderwriting equities and bonds, and composing
other securities products, the Group provides advice
and helps raise funds in response to funding needs
for capital investment or R&D among businesses, andfor public works projects among national and local
governments, international institutions, and public
corporations.
On the asset management side, the Group
comprehensively provides appropriate investment
information and advice, as well as a diverse lineup offinancial products and services to meet the various
needs of individuals, companies, institutional investors,
and pension funds. In these ways, the securities
business facilitates the smooth flow of money bymatching demand and supply through financial andcapital markets while channeling funds into newtechnologies and businesses that solve social issues. By
doing so, it fulfills the role and social responsibility ofcontributing to sustainable development.
On investing in securities, Daiwa Securities Group
promotes methods of investment that take ESG(environment, society, and governance) factors, suchas environmental and social initiatives into accounttogether with financial information. In recent years,
the Group has also put emphasis on the promotionof financial products based on the concept of Impact
Investment, a type of Socially Responsible Investment(SRI), which refers to making more direct, quick-acting
investments to resolve social issues. In addition to
pursuing economic gains, Daiwa Securities Group is
endeavoring to contribute to society from its position
as a financial institution by composing and marketingthese products, which aim to resolve social issues.

Mission of Financial Institutions toward
Solving Social Issues
The business sector's role in endeavoring to create asustainable society has become more important thanever. For financial institutions, materialization of sucha society through finance, their core capability, is asocial mission. At Daiwa Securities Group, we believethat our role is not only to maintain and develop fairand dynamic financial and capital markets, but also
to incorporate a social perspective in finance, thereby
contributing to building a sustainable society.

Securities Companies’ Roles in Society as Viewed by Daiwa Securities Group
Primary Market

Financial & Capital markets

Issuers

Fund procurement

Companies

Secondary Market

Investment

Investors

Issuance

Securities

ReturnProceeds

Equities
Bonds
Securitized
products

Investment

National
governments

Institutional
investors
Individual
investors

Roles of Securities Companies
Role

1

Role

2

Role

Fund procurement

Support for initialby companies, etc.

public offerings

Role

6

3

Role

Assistance in tradingof securities

4

Role

Assistance in asset
building

5

Analysis andprovision of
information

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

Daiwa Securities Group's Businesses
Retail Division

Wholesale Division

Asset
Management
Division

Investment Division

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

12Role and Social Responsibilities of the Securities Business

Daiwa Securities Group SDGs Data Book 2019

Responsible Action as an Institutional
Investor●System at Daiwa Asset Management
Daiwa Asset Management announced its adoptionof Japan's Stewardship Code in May 2014 andhas been actively working to fulfill its stewardship
responsibilities. It has been striving to improve its
initiatives, renewing the announcement of its adoption
in November 2017 following the revision of the Codein May 2017.
In January 2017, Daiwa Asset Management set
up the “Stewardship Supervisory Committee”which
is designed to manage conflicts of interest facedin fulfilling its stewardship responsibilities. The
Committee supervises the company's overall
stewardship activities and is responsible for making
reports to the Board of Directors and issuingrecommendations to improve stewardship activities
as necessary. The Committee is composed of outside
directors and the compliance officer, who takes chargeof overseeing the management of conflicts of interest.
In that way, independence in the stewardship activities
from management and business execution is secured.
Daiwa Asset Management also established the
Stewardship & ESG Section within the Investment
Planning Department in October 2018 to help show
the company’s specific ESG initiatives and approach toparties within and outside the company*.
Regarding dialogues with investee companies,
based on the Policy to Hold Constructive Dialogues
with Investee Companies announced in June 2014,
Daiwa Asset Management has conducted engagement
activities aimed at accurately understanding theconditions of investees and sharing such assessments.
As issues to be discussed with investee companies

are changing, it reviewed the Policy in November
2018, reflecting the findings gained through dialogue
and the revision of Japan's Stewardship Code andCorporate Governance Code.
Specifically, dialogues are led by the following threeparties.
* In October 2019, the section was transferred to the Research
Department.

• Analysts in the Research Department:
Constructive Dialogues
The analysts in the Research Department engage
in stewardship activities to contribute to enhancing
corporate value and sustainable growth as part oftheir usual research activities. They held engagementswith approximately 610 companies in FY2018 (fromJuly 2017 to June 2018; hereinafter the same).
As fundamental tools for dialogues, Daiwa AssetManagement has prepared and utilizes (a) the Analyst
Handbook, which summarizes the fundamental stanceand knowledge that serves as a basis for the analyst
activities; (b) the Business Strategy Reference Book
that analyzes companies’ management strategies; (c)the Qualitative Evaluation that evaluates companies
from a medium- to long-term standpoint; and (d) theLong-term Corporate Value Model that determines themedium- to long-term fair value of companies.
• Personnel in Charge of Corporate Governancein the Stewardship & ESG Section of theInvestment Planning Department (currently
transferred to the Research Department):
Governance Meetings
Personnel in charge of corporate governancecollect information on investee companies required
for exercising voting rights. In dialogues with

Stewardship Activity Structure (Daiwa Asset Management Co. Ltd.)Board of Directors

Stewardship Committee

ReportStewardshipSupervisory Committee

Supervision,
advice・ Chairperson: Chief Investment Officer (CIO)
Members: relevant personnel in the Fund Management Division who engage in
stewardship activities
・ Resolutions on overall stewardship activities
Policy for Holding Constructive Dialogues with Investee Companies
Policy on Exercising of Voting Rights

Members: o utside directors,
compliance officer

・ Reporting on engagement activities
Details of engagement activities, etc.

Reporting on
resolutions
and activities,
seeking advice

・ Resolutions and reporting on exercising of voting rights
Resolutions on individual matters to be considered in exercising voting rights
Report on results of exercise of voting rights, etc.

Stewardship Committee
Corporate
research analysts

Fundmanagers

Personnel in charge ofcorporate governance・Constructive dialogue (engagement) with investee companies
・Exercising of voting rights

Daiwa Asset Management
Co. Ltd.
Japan's Stewardship CodeInvestee companies

Company Information > Policy
on Exercising of Voting Rights(Japanese)13Role and Social Responsibilities of the Securities Business

investee companies, they explain their policies on
exercising voting rights and what they expect fromcompanies with respect to corporate governance,
thereby sharing their knowledge with the investee
companies. They conducted engagements withapproximately 140 companies in FY2018. They also
disclose how they exercised their voting rights forindividual proposals from shareholder meetings heldfrom April 2017 onwards.
• Engagement Team Comprising Analysts in the
Research Department and Fund Managers in the
Equity Management Department (currently theStrategic Investment Department): Engagement
Meetings
The engagement team held engagement withapproximately 30 companies in FY2018, focusing on
small- to medium-cap issues mainly incorporated in
active investment funds for medium- to long-term
investment. It continued to engage in constructive
dialogue, delivering the “Long-term Vision andMedium-term Management Plan,” which summarizes
points on information disclosure from a long-term
perspective, and “Introduction of Daiwa AssetManagement’s Engagement Policy,” which mainly
describes what Daiwa Asset Management expects
from investee companies and the issues that it wants
to discuss through constructive dialogue. The teamalso held dialogue specifically on the environment andsocial aspects.
Daiwa Asset Management has released a Reporton the Status of Stewardship Activities on its website(only available in Japanese). The report includes thestatus of engagements, such as policy, structure, andthe number of engagement times by theme, as well
as ESG investment, the status of exercising of voting
rights, and measures to improve stewardship activities.
* In October 2019, the Equity Management Department changed to
the Strategic Investment Department.

Daiwa Securities Group SDGs Data Book 2019

●Initiatives by Daiwa SB Investments(Currently Sumitomo Mitsui DS AssetManagement)
Daiwa SB Investments is also stepping up dialogues
with investees, steadily promoting initiatives to fulfill its
stewardship responsibilities, and further strengthening
such initiatives.
In April 2016, Daiwa SB Investments established the
Responsible Investment Section as a section dedicatedto ESG activities. It has been thus strengthening
its efforts to hold constructive dialogues with the
management of companies, such as representative
directors and CFOs, from a medium- to long-term
perspective, urging them to boost their profitability,
appropriately control ESG risks, and also increase theircorporate value by addressing SDGs and other social
issues. It has long focused on engagements withcompanies and by actively holding dialogue, has urged
investee companies to turn their potential into actual
business results.
Daiwa SB Investments believes that, as an
institutional investor, it has a responsibility to provide
investees with advice on how to demonstrate theirpotential and respond, and prevent recurrence when
there are problems. The company considers thattaking various opportunities to raise issues and urge
improvement is its responsibility as an institutional
investor. At the same time, helping to raise corporate
value in the medium- to long-term through suchactivities is also its mission for the customers entrusting
their assets.
To receive feedback on its activities from an external
viewpoint, Daiwa SB Investments invited two highly
independent outside directors in FY2016 while also
setting up the Responsible Investment Committee, amajority of whose members are independent outside
directors. It is thus aiming to further enhance its
customer-oriented business operation.
* Daiwa SB Investments Ltd. merged with Sumitomo Mitsui
Asset Management Company, Limited on April 1, 2019 to form
Sumitomo Mitsui DS Asset Management Company, Limited.

Constructive
Dialogues Heldby Research
Department

Governance
Meetings

Engagement
Meetings

Daiwa Asset Management
Co. Ltd.
Investment Principles against
Cluster Munitions Producers

14

Provision of Quality Service to Customers

Daiwa Securities Group SDGs Data Book 2019

Provision of Quality Service to Customers
Approach andBasic Stance

Daiwa Securities Group understands that customer trust is the foundation of our business. Basedon 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.

RelatedSustainable
Development
Goals (SDGs)

Building Deeper, Stronger Trust with
Customers
Daiwa Securities aims to build customer satisfaction
through quality services, built on understanding
customer needs quickly and proposing the bestsolutions for each customer. We consider providing
faithful and appropriate explanations to be paramount.
A principle of Japan's Financial Instruments andExchange Act prohibits “solicitation that is improper inlight of a customer's knowledge, experience, financial
situation and objectives.” Daiwa Securities' approachis rooted in this principle. As a part of our hospitalitybased service, when promoting our financial products
we strive to provide explanations and post-salefollow-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 thequality of our response, we are continuing to conductcustomer service surveys. We survey customers
regarding their degree of satisfaction with ourservices and response, and solicit their feedback andrequests. Based on the survey results, since FY2017
we have been strengthening our initiatives to improve
the quality of post-sale follow-up and enhance theconvenience of e-mail services.

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

●Thorough Post-Sale Follow-Up andAppropriate Provision of Information
A customer’s purchase of a product is only the
beginning of a securities company’s relationship withthe customer. Follow-up is the key to maintaining
and solidifying the relationship of trust built withthe customer. To alleviate customer dissatisfaction orconcerns arising after transaction, we offer thoroughexplanations, appropriate proposals, and information
regarding market conditions, products, and services asa part of initiatives to further reinforce our relationshipof trust with customers.

●Introduction 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 closelywith business performance. We position it as one ofour most important management indicators.
When introducing NPS®, we implemented sales
reforms successively at individual branches to ensurethat the aim of the introduction is well understoodand established among employees, rather than themmerely adopting the score. Thus, it took a year tocomplete the introduction of the score at all branches.
We will further step up our efforts to carry out sales
activities from the customer perspective. At the sametime, 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.

Major Group companies
implementing initiatives
based on the Basic Policy on
Customer-first Operations•Daiwa Securities Group
Inc. > Home > Corporate
Information > Management
Policy > Basic Policy on
Customer-first Operations•Daiwa Securities > Policy on
Customer-first Operations(Japanese)•Daiwa Asset Management> Policy on Customer-first
Operations (Japanese)•Daiwa Next Bank >Initiatives Based on Daiwa
Securities Group's “Basic
Policy on Customer-first
Operations” (Japanese)15

Provision of Quality Service to Customers

Daiwa Securities Group SDGs Data Book 2019

●Improving In-Branch Customer Service
Quality●Promotion of Accessible Services for
Diverse Customers

At Daiwa Securities, we have announced ourcommitment to serve customers sincerely, and strive toprovide service that can satisfy any customer. With theaim of creating sales branches enabling elderly customers
and customers with disabilities to feel secure, we haveplaced dementia supporters*1, mostly comprising
employees engaged in in-house customer service, atall branches. In FY2016, we also completed placing
employees with service assistant*2 certifications at all
branches. Further to these initiatives, we have been
implementing an in-house customer service survey once
every half year since FY2017 to maintain and further
enhance the quality of customer service. The survey uses
external institutions, which evaluate customer service
skills at all sales branches. Thanks to education andtraining given following the results of the survey, as thesales branches undergo evaluations, the survey scores
have been steadily improving. The improvement in thequality of customer services has thus been reflected in
the results of the survey. Moreover, in pursuit of services
that deliver satisfaction to all customers using Daiwa
Securities, staff at our head office check services provided
by telephone representatives whenever necessary.

When renovating existing sales branches or planning
new branches, Daiwa Securities works to ensure thatthey are accessible to more customers. We implementa range of barrier-free measures, including reduced
variations in floor level, the installation of automatic
doors and larger counters, and the placement of caneholders at all counters. We have strived to enhance ourbarrier-free system, introducing a slope to the entrance of
53 branches to eliminate steps by FY2018.
We have also been stepping up our efforts to enhancesafety and convenience for elderly customers andcustomers 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 otherequipment.

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

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

Ear Mark symbol

Communication sheet for people with hearing impairments●Starting Pilot Rollout of Anshin Planners
and Financial Consultants
Since October 2017, Daiwa Securities has been
introducing Anshin (peace of mind) Planners—a new
type of sales agent—and Financial Consultants as an
initiative to provide each one of our customers with
optimum consulting and solutions. Anshin Planners andFinancial Consultants have so far been stationed at 70
and 72 branches, respectively. The initiative is scheduled
to be implemented at all branches.
Anshin Planners are mainly responsible for elderly
customers, providing comprehensive consulting forcustomers 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-term care,etc. and solutions in relation to gifts, inheritance, etc. tonext generations. With the introduction of the Anshin
Planner, we have also launched “Daiwa's Anshin Plus,”
a new service enabling the use of a seniors monitoring
service operated by a security company and telephonehealth consulting, etc. provided on a preferential basis.
Financial Consultants are responsible for customers
whom our conventional sales personnel have been
unable to fully support, including those in the asset
building stage. They propose a wide range of products
and solutions that meet customers' needs. We work toprovide optimum support to every customer we serveby subdividing our sales personnel and making careful
proposals according to the life stage of each customer.

16

Overall score ofsatisfaction with Daiwa
Securities*

4.90(up 0.04 points year-on-year)* Average score of evaluation
on a scale of 1 to 7 (1: very
dissatisfied, 7: very satisfied)Provision of Quality Service to Customers

Daiwa's Point Program
Daiwa's Point Program rewards customers
based on their transactions. Points earned
can be exchanged for goods or used tomake charitable donations to various
groups using a conversion rate of one point
for one yen.
Organizations to which donations canbe made• Japan Committee for UNICEF• Medecins Sans Frontieres Japan
Association• WWF Japan• United Nations World Food Programme• Save the Children Japan• Japan Platform• New Japan Philharmonic• Arts Support Kansai• The Kidney Foundation, Japan(As of April 2019)●Receipt of Letter of Appreciationfrom WFPIn September 2018, we received a letter ofappreciation from the World Food Programme
for our donations through Daiwa Securities. The
association is an organization that carries out
activities in pursuit of a world without hunger
as a United Nations organization delivering foodassistance.
Daiwa Securities has made donations throughits Social Contribution Wrap since May 2016, inaddition to donations through its Point Program
since April 2011. As part of the Daiwa Securities
Group’s SDG initiatives, we will continue to makecontributions going forward.

Daiwa Securities Group SDGs Data Book 201917

●Continuing to Hold a Wide Variety of
SeminarsDaiwa's Point Program

Each branch of Daiwa Securities holds a variety ofseminars to provide information on topics including
Japanese and overseas markets and inheritance. For
example, targeting customers in the asset building
stage, the company holds seminars with the theme of
installment-type Nippon Individual Savings Account(NISA), a program launched in 2018, as well as iDeCo,a defined contribution pension plan for individuals.
We have held approximately 10,000 seminars at oursales branches. As well as seminars held at branches,
there are large-scale seminar events. We held
“Daiwa New Year's Lectures for 2019” at five venues
nationwide, as well as seminar events with the themeof overseas investment and asset building seminars
targeting novice investors.

eligible organizations●Asset Building through Installment-TypeNISA Including Workplace NISA
Daiwa Securities has been accepting applications for
NISA accounts since the initiation of the program.
In particular, we actively introduce the program tocustomers, especially those in the asset building stage,in order to encourage more customers to start making
investment in installments. We are also stepping
up our initiative to propose the introduction of theworkplace installment-type NISA. The program enables
individuals to build assets systematically by setting
aside a fixed amount each month for investment
through their workplaces.

•Amount of donations to122.00 million¥(Cumulative amount from April 2003 to
March 2019)•Donations made throughJapan Platform to workthat assists victims of
the Great East Japan
Earthquake

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

Donations made as
disaster relief assistancefunds

3.10 million¥(Cumulative amount from
November 2016 to March 2019)

Seminars held at
branches of Daiwa
Securities•Approximately

10,000 times(Results for FY2018)

Provision of Quality Service to Customers●Information Website for Child Rearing
and Money “SODATTE”
Daiwa Securities opened “SODATTE,” aninformation website for child rearing and money, in
April 2016 for the child-rearing generations. With
three years having passed since its opening, it has
grown to be a website visited by many fans, withmore than 200 columns and more than 600,000
page view per month.
The website sets up five categories, including“Money Lessons,” “Family Finances” and“Education Funds,” and disseminates columns thatprovide tips to child-rearing generations. To makethe website easier to read on smartphones, werevamped it in January 2019, changing the designof “List of Articles,” “Popular Article Rankings,” andother features while adding a search function.
We will continue to update columns monthly as
an information site that provides practical support
on child rearing for parents and enables them tolearn in an enjoyable way.

“SODATTE,” an information website for child rearing and money

Daiwa Securities Group SDGs Data Book 201918

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

●Initiative to Get Closer to Customers
Since FY2016, we have been showing pictures ofour operators on the website page for telephoneinquiries to give customers a sense of security andfamiliarity with our remote Contact Center.

Telephone inquiry screen (Daiwa Securities website)

Taking calls“SODATTE”
An information website forchild rearing and money(Japanese)

Scale of Contact Center

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

Provision of Quality Service to Customers

Daiwa Securities Group SDGs Data Book 2019

Working to Incorporate Customer
VoicesAt Daiwa Securities, the Contact Center and theCustomer Support Center assume the function ofutilizing customer feedback.

●Contact Center Initiatives
Employees at the Contact Center, which serves
as our comprehensive remote contact point,
have direct contact with customers and play anincreasingly crucial role not only as a transaction
channel but also in customer support andmarketing. In order to maintain and improve contact
center operations to meet the demand for highquality service, we provide training and regular level
checks for all Telephone Service Representatives(TSR). We thus strive to appropriately respond to
customers’ true needs.

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

Customer Feedback Sent toContact Center
The Contact Center receives numerous
comments and requests on online tradingand Daiwa Securities' other products andservices.
We share such customer feedback
information and requests with management
and relevant departments and sections of
the head office and utilize them to enhance
our services and customer interaction. (Thenumber of major improvements implemented
in FY2018 was 85.)
We also show some of the inquiries
received from customers on our website as“frequently asked questions,” while sharing
them with sales branches in some cases
to speed up our responses. We are thus
working to raise customer satisfaction fromvarious perspectives.

Daiwa Securities’ Systems for
Utilizing Customer Feedback
Customers

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

Telephone/e-mailCustomer Support Center
Contact Center

Sales
branches

Management

Departmentsin charge

Improvement

Improvement

Improvement

Calls Received at the Customer
Support Center
FY

2014

83%

2015

82%

5,393

17%

18% 5,958

5,196

2016

73%

27%

2017

82%

18% 4,990
19% 4,436

81%

2018
0

1,000

2,000

3,000

4,000

5,000

6,000

7,000
(calls)Inquiries

Complaints

19

Calls received at theCustomer Support Center
in FY2018•Number of calls received:

4,436 calls(down 554 calls)

81%•Complaints: 19%•Inquiries:

Initiatives through Product Development and Provision

Daiwa Securities Group SDGs Data Book 201920

Initiatives through Product Development and Provision
RelatedSustainable
Development
Goals (SDGs)

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

Green Bonds for Retail Investors Sold by
Daiwa Securities
Issuers●Impact Investment
Impact Investment is a type of investment that not
only pursues economic benefits, but also uses funds
raised solely to solve social issues, such as poverty andenvironmental problems. Daiwa Securities Group sells
SDG bonds,* which are issued by public organizations,financial institutions, and other issuers for the purposeof solving social issues, to customers in Japan as apioneer for Impact Investment bonds in the country.
* A generic term for bonds the proceeds of which are used for
projects that contribute to SDGs (including conventional Impact

Mitsui O.S.K.
Lines (MOL)*(MOL Blue
Ocean
Environmental
Bonds)

Appropriated forprevention of air andmarine pollution andfor environmental
conservation (Green
Projects) such as marine
biodiversity conservation

The Tokyo
Metropolitan
Government*

Appropriated fordevelopment ofsmart energy cities,
conservation of thenatural environment,
adaptation to climatechange, etc.

FY2018Investment bonds)• Initiatives in FY2018
Among the various issues faced by the world today,
climate change has become a serious threat to all
countries. Developing countries are being impacted
first and with the gravest results. Climate change may
destroy the social initiatives for poverty issues that havebeen steadily carried out over the last several decades.
It is no longer possible to separate poverty issues fromclimate change issues.
In the last few years, the concept of SDGs has
penetrated worldwide, and along with the expansionof the market for related bonds, customers’ interest
has been growing. With this as a background, Daiwa
Securities, as a pioneer for Impact Investment bonds
in Japan, provides customers with opportunities toinvest in bonds issued by public organizations, financial
institutions, and other issuers for the purpose ofsolving social issues.
In September 2018, we sold MOL Blue Ocean
Environmental Bonds, the first green bonds issued by
an operating company in Japan (sold by two securities
companies—Daiwa Securities and Nomura Securities).
Through the underwriting and sale of green bonds
issued in Japan, following the Tokyo Green Bonds(foreign currency-denominated) issued in FY2017 by
the Tokyo Metropolitan Government, we helped to
expand trends towards utilizing precious funds fromretail investors for environmental measures.
Daiwa Securities Group will continue to contributeto solving social issues through its business activities,
including the underwriting and sale of Green Bonds
and other SDG bonds (Impact Investment bonds).

Use of funds

Salesamount(estimate)

Results of SDGs bonds(Impact Investment
bonds) for retailinvestors•Daiwa Securities

cumulative sales

697.4 billion*¥¥3.0 billion

Independent
Assurance•Daiwa Securities' sharein the Japanese market

50%¥2.0 billion

Total ¥1,407.7 billion* Figures have been rounded off* Source: Daiwa Securities(From March 2008 to March 2019)

OdakyuElectric
Railway*

Appropriated for projects
that have positive effects ¥1.1 billion
on the environment

Export-Import
Bank of
Korea (twocurrencies)

Commitment to low
carbon emission andclimate resilient growthacross the globe¥5.1 billion* Sold by multiple companies including Daiwa Securities (thesales amounts shown above are those underwritten by Daiwa
Securities).

●SRI Investment Trusts
SRI investment trusts are a mixture of stocks andbonds that take into account factors other thanfinancial performance, such as ethics and social andenvironmental objectives, in addition to assessments ofthe sales and profits of the investment candidates. We
offer eco funds that limit non-financial assessments
to environmental performance, and investment trusts
that focus on Impact Investment and select issues
from an SDG perspective. By investing in these trusts,
through the financial markets, investors can indirectly
support countries and corporations that are proactively
involved in ESG and SDG initiatives.

•Environment-relatedbonds for retail investors
sold by Daiwa
Securities
in FY2018

Four issues
totaling

11.2 billion¥

Independent
Assurance* Figures have been rounded off

SDGs related to Impact
Investment bonds soldin the past

Initiatives through Product Development and Provision

Daiwa Securities Group SDGs Data Book 2019

C lose-up
Issuing Green Bonds
Until now, Daiwa Securities Group has sold various kinds of Impact Investment bonds, thereby supporting the solvingof 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 proceedsfrom the 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 toachievement of SDGs and provide investors with new investment opportunities.

Information on Green Bonds Issued by Daiwa Securities Group Inc. (as of the end of June 2019)
1. Appropriation of Proceeds from Issuance
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 2019)
Category

Commencement of Finance/
Refinance

Sub-category

Finance/Refinance

Balance (unitsof ¥ billion)

Renewable energy

Photovoltaic power generation November 2018

Refinance

1.7

Renewable energy

Photovoltaic power generation November 2018

Refinance

1.7

Renewable energy

Photovoltaic power generation February 2019

Finance

0.9

Renewable energy

Photovoltaic power generation March 2019

Finance

0.4

Renewable energy

Photovoltaic power generation June 2019

Finance

3.3

Green Building－

Refinance

2.0

November 2018
Total

10

2. Environmental Impact
As of the end of June 2019, the eligible Green Projects for which the proceeds from Green Bonds were appropriated have anenergy output/assumed energy output of 96,264 MWh. They have the effect of reducing carbon dioxide (CO2) emissions by
45,725 t-CO2 annually.

Report on Environmental Impact (as of the end of June 2019)
Category

Sub-category

Energy output/assumed
energy output (MWh)Estimated CO2 emissions
reduction effect (t-CO2)

Renewable energy

Photovoltaic power generation

96,26445,725

Category
Green Building

Progress of application for certification
Awarded Five Stars in preliminary certification for the DBJ Green Building Certification Program*Primary certification scheduled after the completion of the building* Calculation of environmental impact
When no results have been obtained or the period of operation is less than one year, the assumed energy output is calculated based on a report on energy output
projections submitted by a third-party institution. For projects under development that are not scheduled to be brought into operation during FY2019, the assumed
output for the first year of operation is used. All power plants are scheduled to be brought into operation by FY2021.

Issuance of Green Bonds

21

Initiatives through Product Development and Provision

Daiwa Securities Group’s Historyof SRI Funds and SDG Bonds(Impact Investment Bonds)* By sale year

SRI funds
Impact Investment bonds● Daiwa ETF FTSE Blossom Japan Index●D aiwa ETF MSCI Japan ESG Select Leaders Index●D aiwa ETF MSCI Japan Empowering Women
Index (WIN)Results of SRI investment
trusts

●2018● Green Bonds (2 times)● World Impact Investment Fund●D
 aiwa ETF MSCI Japan Human &Physical Investment Index●2017•Balance in Daiwa

Securities Group*1¥

228.6 billion¥

122.7 billion

Independent
Assurance† Including Daiwa SB Investments† Not including Daiwa SB Investments●2015● JICA Bonds● Microfinance Bonds● Green Bonds● Agri Bonds● Water Bonds●2014● Water Bonds● Green Bonds (2 times)●2016● Women Supporter Fund

•Daiwa Securities' share in

the Japanese market

38%● Water Bonds● Inclusive Business Bonds● Green Bonds (2 times)† Including Daiwa
SB Investments● Water Bonds● Green Bonds

●2013
●2012

22

Daiwa Securities Group SDGs Data Book 2019

● JICA Bonds● Ecology Bonds● Banking on Women Bonds● Agri Bonds (2 times)● Water Bonds (KEXIM)● Microfinance Bonds● Vaccine Bonds

26%† Not including
Daiwa SB
Investments● Green Bonds (2 times)● Water Bonds (2 times)● Agri Bonds● Banking on Women Bonds● Inclusive Business Bonds● JICA Bonds

Total ¥524.1 billion*2*1 Source: Daiwa Securities*2 Source: Daiwa Fund Consulting (Asof March 31, 2019)

Major “Fund Wrap”
services newly introduced
or improved in FY2018•Balance of domestic

Wrap accounts*¥

8,827.2 billion(As of March 31, 2019)

Development and Provision of Superior
Financial and Investment Products
While the importance of asset management in the“100-year life era” is increasingly gaining attention,
Daiwa Securities considers the development andprovision of superior products to be one of ourmajor missions in society, and strives to develop new
products and improve their quality.

●Initiatives of Fund Wrap Services
Daiwa Fund Wrap is a service enabling even those whoare busy or have no investment experience to easily
start medium- to long-term diversified investment.
Under a discretionary investment contract, Daiwa
Securities invests and manages assets on behalf of ourcustomers. We offer plans that enable each customer
to make diversified global investments according totheir investment policy, as do professional institutional
investors such as those managing public pension assets.
It has become more important than ever for a large
number of investors to manage their assets efficiently
and stably through diversified global investment, inparticular as a measure to address prolonged low
interest rates, which have made it difficult to findattractive investment options. Daiwa Fund Wrap is aservice offered to customers over the medium to longterm. We provide thorough explanations before theconclusion of a contract, report investment performance
regularly every three months, and hold follow-up
seminars whenever necessary. We thus ensure close

communication with customers and seek to build a
relationship of trust with them.
In addition, Daiwa Fund Wrap Premium, launchedin October 2016, now offers a more detailed service,
enabling customers to have multiple investment
portfolios and design them in a highly customized
manner. In particular, the inheritance recipient
designation service and the gift service taking
advantage of the calendar year taxation system, whichbecame available in July 2018, are services that cansatisfy customers with a strong interest in inheritancetax measures.
Moreover, Daiwa Fund Wrap Online, launched in
January 2017, proposes the most suitable investment
style from a minimum investment amount of ¥10,000
by utilizing Robo-Advisor technology. We thus provide
a service enabling customers who prefer long-term
asset management to easily engage in globally
diversified investments online.
To keep attracting customers over the longterm, we will continue our initiatives to implement
better structures and systems so as to improve our
performance and the quality of our services.
Daiwa Fund Wrap Premium

Daiwa Fund Wrap Online•Balance of Wrapaccounts at Daiwa
Securities*¥

2,145.7 billion(As of March 31, 2019)* Source: Data released by the Japan
Investment Advisers Association•Minimum investment

amount for Fund Wrap
Premium lowered to¥10,000 in June 2018
•Gift service taking

advantage of the calendar
year taxation system for
Fund Wrap Premium
launched in July 2018
•Inheritance Set Plan

launched in January 2019
Daiwa Social
Contribution Wrap
— Daiwa Fund Wrapwith a donation service•Amount donated in

FY2018¥7.82 million* Total donated amount from
customers and from Daiwa Securities•Donated to United

Nations World Food
Programme, Medecins
Sans Frontieres Japan,
WWF Japan, Japan
Committee for UNICEF,
Japan Platform

Initiatives through Product Development and Provision

Daiwa Securities Group SDGs Data Book 2019

●Initiatives by the Asset Management
Divisioncompanies with good prospects to make this a major
source for strong investment performance.
We focus especially on ESG information from along-term perspective. Daiwa Asset Management has
placed personnel in charge of ESG within the FundManagement Division to promote ESG investment inan organized manner as a signatory to both the United
Nations' Principles for Responsible Investment (PRI) and
the Principles for Financial Action for the 21st Century.
Since adopting the Japanese version of the StewardshipCode, we have been working to deepen our dialogue
with investee companies by means such as holding
dialogue with the theme of integrated reports. In
October 2018, we established the Stewardship & ESG
Section within the Investment Planning Department tofurther incorporate an ESG perspective and strengthen
monitoring*.

The asset management division of Daiwa Securities
Group strives to reinforce the asset management
system for promoting ESG investment and continues
working on a variety of initiatives to offer better
returns to beneficiaries over the medium to long term.
• Initiatives by Daiwa Asset Management
For Daiwa Asset Management, one of the pillars ofbuilding a stable, superior asset management capability
is to take appropriate risks in managing active funds.
We have therefore built a support system by collecting
information from the research division and otherrelevant specialist teams. This system enables fundmanagers to take risks after thorough examination. In
particular, we are striving to improve our ability to select

Women Supporter Fund (nicknamed “Tsubaki”)
Daiwa Asset Management launched the Women
Supporter Fund (nicknamed “Tsubaki”) at the endof March 2015. The fund focuses on companies thatcan be expected to grow with women’s success andaims for growth of trust assets. The main featureof this product is that it evaluates women's successfrom four perspectives. The fund selects companies
considered to help women to play an active rolefrom an ESG perspective, companies supporting
women's active participation in society, companies
providing products and services that target womenor are popular among women, and companies
benefiting from increases in women's incomes.
Continuing on from 2018, with its product concept
and good performance being highly evaluated, thefund won various prizes from evaluation institutions.
We recognize that having a social perspective

centered on women's success— such as identifying
companies that are expected to achieve growthby resolving the social structural issue of labor
shortages, and companies that can identify global
trends generated by women— provides us with anopportunity to find new growth companies.

Tsubaki's Four Perspectives
Companies helping women
to play an active role●

Put in place a pleasant working
environment and system for
women, etc.

Companies providing products
and services that target womenor are popular with women●

Services, products, etc. that are
mainly used by women・

Promote活躍を推進
women’s
success

Supportactive社会進出をparticipation
サポート
in society

Companies supporting women’s
active participation in society●

Businesses that assist women instarting work, services that support
working women, etc.

Focus on
women’s success

Provideproducts
女性向け
targeting
women
商品提供

Benefit from
所得増加のincreased
恩恵
incomesCompanies benefiting fromincreases in women’s incomes●

Products and services with highadded value, etc.

Social Challenges Fund (nicknamed “Egao-no-kakehashi”)
Daiwa Asset Management established the Social
Challenges Fund (nicknamed “Egao-no-kakehashi”)
at the end of December 2018.
The phrase “social issues” immediately reminds
many people of SDGs. While SDGs are aimed at theresolution on a global scale of social issues that havebecome apparent, this fund focuses on potentialsocial issues that have yet to receive attention fromsociety, in addition to the resolution of social issues
that have already occurred. In this sense, the fundcovers a broader scope than SDGs.
Now that information technology is advancing
rapidly and the awareness of individuals andcompanies is steadily changing, social issues arecoming to surface much faster than before.
The Social Challenges Fund regards social
issues—the challenges that must be addressed byindividuals, companies, countries and regions—asbusiness opportunities. It invests in companies
expected to increase profits through the resolutionof such issues and achieve sustainable growth.

Various issues faced by society

Selection of promising
investment themes

from among issues faced by society
etc.

23

Initiatives through Product Development and Provision

It is especially important to always grasp current
trends and customer needs for the development of
products. We are therefore striving to maintain close
communication by holding seminars for customers
and through operation of our unique call center. We
are also building a structure that assists companies
marketing our products to support the transition fromsavings to asset building.
* In October 2019, the Stewardship & ESG Section was transferredfrom the Investment Planning Department to the Research
Department.

• Initiatives by Daiwa SB Investments (currently
Sumitomo Mitsui DS Asset Management)
As a variety of medium- to long-term management
factors are expected to affect companies' share prices,
there is a growing need for multifaceted corporate
analysis. This includes the ability to analyze andpredict non-financial information over the medium
and long term that covers companies' researchand development abilities and overseas project
management abilities. In light of these perspectives,
Daiwa SB Investments established the Stewardship
Promotion Section in April 2016, with the aim ofstrengthening the company's analytical skills bydeepening collaboration with corporate analysts
attached to the Corporate Research Departments. We
have also stepped up our initiatives to help companies
to increase their profitability through constructive
dialogue with them.
Since corporate analysis and research require
human resources, we at Daiwa SB Investments place

Daiwa Securities Group SDGs Data Book 2019

importance on nurturing and promoting professionals
who have acquired the ability to think on their own
through training and other means. We have also
overhauled our organizational systems as a company,
including the adoption of a performance-linked
evaluation system. Moreover, we strive to foster our
corporate culture as a professional managementcompany and to diversify our workforce by hiring
overseas and female staff, with the aim of responding
to diversifying needs and providing quality services. We
also focus on the education of sales staff at companies
handling our products, who communicate directly withcustomers. We conduct workshops for those sales staff
to enhance their marketing skills and knowledge ofinvestment trusts while creating booklets containing
the information necessary for them to explain tocustomers. We are thus working to help those staff
improve their communication abilities.
Following the signing of the PRI in 2012, weestablished the ESG committee and rules to enhance
our capacity to evaluate and analyze ESG issues ofcompanies. These initiatives reflect our efforts to fulfill
our responsibility to pursue maximum profits with ourutmost efforts from a long-term standpoint on behalfof beneficiaries. We will continue our initiatives toprovide good returns over the medium to long term in
our multifaceted corporate analysis, including analysis
focusing on ESG.
* Daiwa SB Investments Ltd. merged with Sumitomo Mitsui AssetManagement Co. Ltd. on April 1, 2019 to form Sumitomo Mitsui
DS Asset Management Co. Ltd.

World Impact Investment Fund
On August 26, 2016, Daiwa SB Investments(currently Sumitomo Mitsui DS Asset Management)
established and started managing the World Impact
Investment Fund (nicknamed “Better World”).
“Impact Investment” is the idea of capitalizing on
the power of private-sector companies to resolve
various social issues that cannot be resolved solely
by governments or charitable organizations, whilepursuing economic benefits at the same time.
At Daiwa SB Investments, in order tocommunicate the new idea of Impact Investment toa wider range of customers, we work on customeroriented provision of information. To increase thepopularity and awareness of Impact Investment, wehave drawn up the materials “Impact Investment,”
which gives the details of the investment approach,and “ESG Investment—Impact Investment Existing
Beyond It,” which describes the idea of ESG
investment. Both materials incorporate the idea of
universal communication design and have obtained
an “Easy-to-read Design” certification from the
Universal Communication Design Association(UCDA). To deepen customers' understanding of
the features of our funds, we have also created a
special page on our website and have supplemented
information with visual content.

World Impact Investment Fund

24

Initiatives through Product Development and Provision●Initiatives Using Investment
Corporations and Other Structures toSolve Social Issues
Daiwa Real Estate Asset Management Co. Ltd. makes
investments and manages infrastructure assets
through investment corporations and fund structures
to solve social issues.
Nippon Healthcare Investment Corporation, which
was listed on the Tokyo Stock Exchange in November
2014, invests in healthcare facilities that are likely tosee stronger demand from society over the longer
term as the number of senior citizens increases. With
regard to infrastructure assets, the company has
been managing photovoltaic power stations since
FY2014, and was entrusted in FY2017 with thework operating a biomass power generation plantinvested in by Daiwa PI Partners. Daiwa Real Estate
Asset Management has been continuously expanding
the balance of its assets under management while
striving to accumulate knowledge of investment
and management in the renewable energy field. The
company will fulfil its role of providing funds not
only to the renewable energy field but also to thedevelopment of a broad range of social infrastructure,including logistics facilities, and the privatization of
publicly-operated businesses.
* Refer to page 35 for initiatives of Nippon Healthcare
Investment Corporation●Response to FinTech and artificial
intelligence (AI)
Since starting Daiwa Online Trade, Japan's first
Internet-based securities brokerage service, in 1996,
Daiwa Securities has provided various products
and services successively over a period of morethan 20 years. Due to the widespread use of
portable information devices and the developmentof information communications technology, theimportance of Internet channels has increased evenmore in recent years, with the number of accounts
held under contract for Daiwa Online Trade topping
3.3 million as of the end of March 2019. Of Daiwa
Securities' total stock transactions, approximately
80% are carried out via the online trading service,
underscoring the fact that Daiwa Online Trade has
become an indispensable channel for Daiwa Securities.
We lowered the minimum contract amount of
Daiwa Fund Wrap Online, which was launchedin 2017, to ¥10,000 in June 2018. This enables

A facility in which Nippon Healthcare Investment Corporation invests

Daiwa Securities Group SDGs Data Book 2019

more customers to realize the appeal of full-scaleinternational diversified global investments utilizing the
Robo-Advisor function. We also created an animatedvideo to promote the service on the Internet, including
on our website.
Daiwa Securities has also been providing the Daiwa
Securities Market Information Skill for Amazon Alexa,
a cloud-based voice service, since February 2018, andhas made it newly available for Amazon Echo Spot. In
addition, we started providing Kabu Talk, a tool for thelatest market information, as an Alexa Skill. We havealso been providing Daiwa Securities Stock News for
Google Home since December 2018.
Furthermore, in February 2019, we introduced
a login function using a biometric authentication
system to Kabu Walk, a smartphone application
with a domestic stocks trading function provided
on iPhones and Android devices. We believe that byactively using such new technologies, including AI and
FinTech—an amalgamation of finance and information
technology—we will stimulate interest in securities
investment among individuals, especially younger
generations, who have not previously been familiar
with securities investment, and thereby support a shift
from savings to asset building. In that way, we cancontribute to Japan’s sound economic development.
As the use of various AI-based services is currently
spreading and the development of FinTech isaccelerating, new financial services leveraging thesetechnologies are becoming easily available. We willkeep track of such trends and endeavor to continueenhancing convenience and providing quality services
as a channel chosen by next-generation affluent
customers and young customers with particular focus
on inbound marketing.

25

Nippon Healthcare
Investment Corporation
Total amount of assets
acquired
Approximately¥

19.7 billion(As of March 31, 2019)

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

14(Hokkaido, Tohoku, Hokuriku,
Kanto, Chubu, Kansai, Chugoku,
and Shikoku regions)•Output:

Approximately

81 MW•Balance of assets undermanagement:
Approximately¥

29.2 billion

Logistics facilities•Balance of assets undermanagement:
Approximately

24.6 billion¥(As of March 31, 2019)

Daiwa Online Trade•Number of contract

accounts

3,310,201 accounts(As of the end of March 2019)

Fund Wrap Online promotion video

Fund Wrap Online
promotion video(Japanese)

Maintenance and Development of Financial and Capital Market Functions

Daiwa Securities Group SDGs Data Book 201926

Maintenance and Development of Financial and CapitalMarket Functions
RelatedSustainable
Development
Goals (SDGs)

The securities business, the core business of Daiwa
Securities Group, serves as an important social andeconomic infrastructure. It facilitates the smooth flowof money by matching fundraising needs through theissuance of securities and investment needs of investors
via financial and capital markets. Maintaining anddeveloping this infrastructure is about developing soundfinancial and capital markets for the next generation,
which we identify in the Group’s materiality in Finance.
We consider this to be a major mission for the Group
toward the realization of SDG Goal 9 “Build resilient
infrastructure, promote inclusive and sustainableindustrialization and foster innovation.”

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 andseller of a securities transaction. Settlement functions
also serve as a social infrastructure, and therefore
security, reliability, and convenience are important. In
secure and trusted markets, financial instruments can bereliably converted into cash when necessary. This is thevery reason why such markets attract investment moneyfrom all over the world and enable companies andothers with funding demand to procure funds.

●Responsibility as a Securities Company
Daiwa Securities was the first major securities company
to announce its policy to accept foreign stock sell orders
during the 10 consecutive holidays associated with thechange of the imperial era in the spring of 2019. Thismeasure was implemented from the perspective ofcustomer protection in case stock prices fluctuated inoverseas markets. If anything that could stall securities
settlement should occur, it would not only affect us
but also damage trust in markets as a whole. It could
even have a significant impact on the global economy.
We consider it vital to settle transactions accurately andpromptly as required in order to ensure that markets
function as a social infrastructure and become a driverfor economic development. We are therefore striving
to build a structure enabling the smooth execution of
settlement operations.
Amid the emergence of investors engaged infrequent trading utilizing computers, we have
implemented a reliable system that has high processing
capability and can reliably settle a massive number oftransactions. We believe, however, that no matter how
well operations are systematized, the most important
thing for the securities settlement operation is still
human resources. Staff members must have a wide
range of knowledge to grasp the situation quickly
when an irregular event occurs and then respond to it
appropriately. For that reason, we are making efforts tovisualize and accumulate the experience and expertise
acquired through our daily operations, as well as
expanding the business knowledge of each individual
and the scope of operations they can cover by providing
cross-business training and continually rotating tasks.
Meanwhile, the securities industry recognizes that,to boost the competitiveness of Japan's financial andcapital markets, it is necessary to further increase
convenience and strengthen risk management. With
this awareness, the entire industry is currently working
on reducing settlement time. Daiwa Securities has
played a central role in a working group launched by
the Japan Securities Dealers Association, identifying
and examining a variety of issues towards the
reduction of settlement time. The T+1 (trade dateplus one day) settlement cycle already started forgovernment bond trading in May 2018, and the T+2
settlement cycle for stock trading started in July 2019.
Moreover, cross-border foreign exchange transactions
entail settlement risk associated with time differences
in settlement for the currencies involved (for example,
the risk of being unable to receive dollars in U.S. timeeven when paying yen in Japan time). Daiwa Securities
is the only Japanese securities company that participates
directly in Continuous Linked Settlement (CLS) as asettlement member. We will fulfill greater responsibility
for the stability of financial markets by reducing theInvestment

Retail investors
Institutional
investors

Purchase of securities

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

Securities company

Suppliers offunds

Securities company

Securities Companies' Role in Financial and Capital Markets
Fundraising

Users of funds
Companies

Issue of stocks or bonds

Governments &municipalities

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

Approximately

2.8 million transactions(mainly by institutional investors
within and outside Japan)

Maintenance and Development of Financial and Capital Market Functions

settlement risk of foreign exchange transactions.
We are determined to continue settlement
operations no matter what happens. In accordancewith such determination, we have drawn up abusiness continuity plan (BCP) and regularly conduct
training in preparation for unforeseen circumstances,such as natural disasters and terrorism.
The reliability of settlement is extremely importantfor maintaining customer trust. We will continue tomeet increasingly sophisticated customer needs andquickly provide solutions by taking advantage of ourreliable settlement infrastructure and human resources.

Considering Application of Blockchain/
Distributed Ledger Technology to
Securities Business
Daiwa Securities and Daiwa Institute of
Research (DIR) played central roles in carryingout the second phase of a project to consider
the application of blockchain/ distributed
ledger technology (DLT) to the securities
trade matching operations*. The project
was conducted jointly with 26 companies,
including institutional investors, financial
institutions, and computer system companies.
This is a project using an industrial
collaborative framework led by Japan
Exchange Group. The first phase of the
project was conducted in 2017, confirming
the usefulness of the application of DLT to
the trade matching operations. Following
such confirmation, the second phase of the
project was conducted from September
2018 through January 2019. In that phase,
discussions were held on data items in
the operations, the standardization of theoperational process, policy on operating
the DLT infrastructure, and other issues. The
project participants then drew up a more
concrete plan toward the construction ofa system. The results of the project werereleased as a working paper in February 2019.
Daiwa Securities Group expects that theinitiatives of this project will lead to the
reduction of costs in the entire domestic
securities industry and the enhancement of
convenience, which will ultimately contributeto the benefit of investors. We will continue
working to realize the plan in order toprovide useful services to customers.
* Operations in which a securities company and an
institutional investor confirm the trading volume, fee, etc.
with each other after the execution of securities trading

Daiwa Securities Group SDGs Data Book 2019

Initiatives for Development of Market
Functions●Private Equity Investment in Myanmar
In 2016, Daiwa PI Partners started considering
private equity investment in Myanmar in earnest
following the country's move to revise its laws andregulations, including corporate laws and investment
laws, alongside its opening up of the economy andderegulation. The company has so far invested infive deals. Among the investee companies, Frontiir
Pte. Ltd., a major Internet service provider, offers
people in Myanmar stable access to the Internet atreasonable prices. Oway Pte. Ltd., which engages in
the online travel agency and taxi hailing application
businesses, and Rent 2 Own Holdings Pte. Ltd.,
which provides motorcycle rental and other services
to individuals, contribute to enhancing living
standards of people in Myanmar by providing meansof transportation indispensable for their lives. Royal
Golden Owls Co., Ltd., which operates an online
e-commerce marketplace focusing on fashion andapparel products, provides a variety of products toa wide range of consumers in Myanmar, thereby
helping to improve people’s convenience and living
standards.
In Myanmar, in which economic development
has just begun, there are a large number of start-up
companies with growth potential. We believe that, bycontinuing to provide capital to these companies, wewill be able to promote their growth and contribute toenhancing the social infrastructure and living standardsof people in Myanmar.

●Myanmar SME/ Two-Step Loan Projectfor Agriculture and Rural Development
DIR has long been participating in the Republicof the Union of Myanmar Two-Step Loan Projectfor Agriculture and Rural Development (known as“Agriculture-TSL”) and the Project for the Developmentof Finance for Small and Medium-sized Enterprises(known as “SME-TSL”) together with Japan Economic
Research Institute Inc. and Sanyu Consultants Inc.
The participation is part of our efforts to contribute tofinancial inclusion, which is listed as an SDG target, andhas continued for eight years since 2012.
Agriculture-TSL is aimed at promoting agricultural
mechanization in Myanmar and designed to assist
Myanmar Agricultural Development Bank (MADB) in
enhancing its capacity to extend long-term low-interest
loans suited to the purchase of large agricultural
machines. The project team provides practical training
directly to more than 200 MADB branches across thecountry through on-site visits, while making proposals
aimed at improving the business efficiency of MADB
and advancing the modernization of its facilities.
SME-TSL sets up low-collateral credit lines and credit
lines for companies doing business with Japanesecompanies with the aim of improving small- andmedium-sized companies’ access to funds for capital
investment. Technical assistance has been provided tothe overall banking operations of Myanma Economic

27

Maintenance and Development of Financial and Capital Market Functions

Bank (MEB), which manages loans extended throughseven private-sector banks.
By playing central roles in these two projects, DIR
has gained deep trust from the Myanmar government
and private companies and progressively increased
its presence in the country. Both projects contributeto the economic development of Myanmar, and DIR
remains committed to working on projects similar tothese that will contribute to the realization of SDGs.

●Support for Stock Market Developmentin Vietnam
In March 2019, DIR started providing technicalsupport aimed at development of the stock market
in Vietnam as entrusted by the Japan International
Cooperation Agency (JICA). The company will
implement a variety of support measures including
the provision of training in both Vietnam and Japanto the State Securities Commission of Vietnam (SSC),
the supervisory authorities of the capital market, as
well as the HoChiMinh Stock Exchange (HOSE) and theHanoi Stock Exchange (HNX), over a period of three
years until February 2022. Specifically, the support
is centered on the following four themes, aiming toenhance the transparency and fairness of the stock
market in the country:(1) Reinforcement of the stock market’s capacity formonitoring against unfair trading(2) Tightening of regulations on and supervision
over securities companies(3) Improvement of listing management andscreening procedures(4) Penetration of investor-oriented management
approach
If this project helps improve the transparency andfairness of the Vietnamese stock market, it is expected
to contribute to the Daiwa Securities Group’s business
related to Vietnamese stocks in the medium to longterm. That is because if Vietnamese companies start
incorporating a more investor-oriented perspective into
their management, investor trust in the stock market
will increase, leading to market invigoration.
Support for the development of a stock market is
aimed at contributing to the economic development of
the relevant country, and DIR will continue to actively
provide support to other emerging countries as well.

Daiwa Securities Group SDGs Data Book 201928

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

Daiwa Securities Group SDGs Data Book 201929

Dissemination of Analysis and Proposals on the Economy,
Society, and Investment Information
RelatedSustainable
Development
Goals (SDGs)

Daiwa Securities Group as an integrated securities
group provides, in addition to investment information,a wide range of information on the economy andsociety. We hope that the measures we propose froma long-term perspective will be helpful to customers,
investors and a variety of stakeholders.

Easy-to-Understand Communication ofInformation
Daiwa Securities publishes information for a wide
range of people from institutional and retail investors
to those who are about to start investing. The central
role in the provision of information is played by highly
specialized analysts and strategists from the Investment
Strategy, Equity Research, and Fixed Income, Currency
and Commodities（FICC）
Research Departments. They
provide information mainly through reports basedon their unique analysis. Our information is basedon close collection and analysis of data. Even if thesame person is providing that information, we tailor
the presentation, depending on whether it is for retailinvestors or institutional investors, who are investment
professionals. For example, if information is targeted
at retail investors, we implement various measures
to make it more visually understandable. To remove
the general perception that securities investment or
securities companies are complicated, we believe it is
one of our missions to work toward communicating
our analysis using easy-to-understand language.

Initiatives to Provide Information on
ESG
Daiwa Securities’ Equity Research Department isa group of analysts and strategists. They analyze
and evaluate information released by companies,
and provide investment information and ideas toinstitutional investors.
The department has designated multiple staff
members as responsible for ESG information. This ispart of its efforts to put an organizational structure
in place to respond to increased demand for
information on ESG investment following the signingof the United Nations’ Principles for Responsible
Investment (PRI) by the Government Pension
Investment Fund (GPIF) in 2015. Specifically, thedepartment provides investment information usefulfor ESG integration to institutional investors, set up
ESG meetings between investors and companies,
and host seminars for experts by subject area. For
example, with regard to the environment, in FY2017
we held a meeting on biodiversity and natural capital,

inviting chemical, food, and housing manufacturers.
We also held seminars introducing research on theenvironmental load caused by companies and thecapital cost of stocks to university researchers.
Institutional investors have diverse needs, reflecting
their respective investment policies. We will further
enhance our ESG information by boosting theanalytical skills and communication capabilities of ouranalysts and strategists.

Reports and seminars
on ESG

Initiatives by Daiwa Institute of
Research

Provision of
information by DIR
through diverse media●Comprehensive Provision of Information
and Policy Proposal Activities
Daiwa Institute of Research (DIR), which assumes thethink-tank role of Daiwa Securities Group, provides
wide-ranging analysis and information to the public.
At DIR, we consider it our mission to engage incomprehensive provision of information and policy
proposal activities concerning the financial and capital
markets and the real economy. We have always sought
to provide up-to-date and in-depth information anda unique viewpoint that has not been presented byothers. In order to provide information that satisfies
the needs of the public, we also exchange informationand hold discussions with businesses, investors, public
institutions including governments and municipalities,
and various economic groups, as well as overseas
think-tanks and media. In this way, we are able
to analyze the currents and trends of society anddisseminate information.
We are also stepping up the release of ESG
information, communicating wide-ranging information
via our website and “DIR Research Quarterly
Review” (our quarterly journal) regarding community
vitalization, environmental problems, women's active
participation in society, workstyle reform, corporate
governance and other issues.

●Strengthening the Provision ofInformation
The Research Division of DIR launched the Policy
Research Department in FY2017. In addition toproviding information on the macro economy andfinancial and capital markets within and outside
Japan, the company is now focusing on making policy
proposals based on multifaceted analysis of issues
such as measures for maintaining the sustainability of
government finances and the social security system,and the directions that society and businesses are
required to pursue from an ESG perspective. Moreover,
Office of SDGs Research & Consulting was established•Release of ESG reports andcommentary articles on
ESG keywords (DIR)

22 reports and articles(2018)•Number of reports

posted on the website

531 reports(Results for FY2018)•Full texts of reports

available on thewebsite•Number of recent

hits on the researchdivision’s page

3.93 million hits
(Results for FY2018)

Dissemination of Analysis and Proposals on the Economy, Society, and Investment Informationin April 2019 to contribute to society throughdissemination of information aimed at solving various
issues. Office of AI Analytic Research, which waslaunched at the same time, works on new methods forpredicting and analyzing the economy.

●Economic Analysis Initiatives Using AI
DIR has been releasing the Daiwa Regional AI(Regional Love) Index, which calculates economic
sentiment by region, since July 2017 to contribute to
the development of regional society.
Japan is faced with the important issue of breaking
the vicious cycle of population decline and contractionof regional economies to realize regional revitalization.
To promote such regional revitalization, it is necessary
to properly understand the current state of regional
economies, in addition to executing the policies thatsuit regional characteristics
The Daiwa Regional AI (Regional Love) Index utilizes
a state-of-the-art artificial intelligence (AI) model andalso incorporates economists' knowledge to calculate
overall economic sentiment by region. It has thefollowing advantages:(1) demonstrating overall economic sentimentquantitatively and promptly by region;(2) grasping regional economic sentiment in ahistorical manner; and(3) enabling analysis of which fields (such as“consumption” and “exports”) provide impact andcause changes in overall economic sentiment.
We calculate the index every quarter using the AI
model developed by DIR, and release it on our website.
The Research Division of DIR has also developed
an economic indicator forecast model using AI, andstarted releasing forecast figures on the company’s
website in January 2019. Multiple economists had
previously taken charge of forecast work by indicator
covered by the company’s monthly forecasts. Replacing
this previous method with the AI-based economic
indicator forecast model has enabled us to enhancethe efficiency of our forecasting work and standardize
our analytical methods. The monthly economic
indicators published in our forecasts are as follows:• Machinery orders from private sector (excludingorders for ships and those from electric powercompanies)• Unemployment rate
• Employment referrals for general workers (active job
openings-to-applicants ratio)• Corporate Goods Price Index (producer price index)• Indices of Tertiary Industry Activity

Provision of Information throughDiverse Media●Lectures and Media Appearances
The Research Division of DIR adopts a variety ofmethods for providing information. These include
the writing of reports; contribution to DIR Research
Quarterly Review, newspapers and economic
magazines; media interviews; TV appearances;
lectures, seminars, and presentations at workshops;
the publication of books, and participation in

Daiwa Securities Group SDGs Data Book 2019

government councils as members. We strive to explain
in an easy to understand way complex issues related
to the economy, society, and policy issues within
and outside Japan, while emphasizing the quality ofreports. We ensure the reliability of our reports byrequiring them to undergo review by a specialized
section. As a result, the information we provide has
improved in both quality and quantity, and we arecommunicating with customers on a continuously
increasing number of occasions.

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

Mitsumaru Kumagai
Executive Managing Director, Deputy
Head of Research Division, Chief
Economist, DIR
Pictured: Speaking at the symposium
entitled “The Japan-EU EPA: Partners
Working Towards a Rules-based, Free
Trading World that Creates Economic
Opportunities for Businesses”
sponsored by the Japanese government
Hitoshi Suzuki
Managing Director, Policy Research
Department, DIR
Pictured: Live Internet coverageof deliberations of the House ofRepresentatives

Toshiro Mutoh
Honorary Chairman of DIR
Pictured: Conference jointly held by
DIR and the UK Royal Institute ofInternational Affairs (Chatham House)

Daiwa Investment Monthly

30

Daiwa Institute of ResearchGroup > Daiwa Regional AI(Regional Love) Index (Japanese)

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

Internet-based Initiatives●Live Web Seminars
Daiwa Securities Group regularly holds live web
seminars where popular strategists and analysts of theGroup appear as lecturers. Customers can view themover the Internet in real-time and are also allowed to
ask lecturers questions directly either in advance or inreal-time by typing into the bulletin board function.
These strategists and analysts sometimes serve aslecturers at seminars held at Daiwa Securities branches
as well, enabling many customers to receive market
information and commentaries on individual stocks inlive seminars.
We will continue our efforts to communicate market
conditions and outlook and other information toeven more people in a way that is easy to understandthrough our live web seminars.

Daiwa Securities Group SDGs Data Book 2019

●High Popularity of Nico Nico Live
Since FY2017, Daiwa Securities Group has been
providing a Nico Nico Live program jointly with
DWANGO Co., Ltd. The program explains the latest
trends of foreign exchange and stocks at the timeof the announcement of U.S. employment statistics
on the first Friday of each month. It adopts a varietystyle format in providing investment information,
sometimes incorporating humor, and enables viewers
to acquire knowledge of investment naturally. It always
attracts many viewers and receives a good response.
We will continue to work on various initiatives going
forward to help investors build their assets and toraise interest in asset building among inexperienced
investors.

●Daiwa Internet TV
In 2000, Daiwa Securities Group began “Daiwa
Securities Information TV,” Japan’s only channel
dedicated to securities information, on themultichannel pay TV broadcast service “SKY Perfect
TV!” Since April 2011, we have been producing“Daiwa Internet TV” at our own studio anddistributing it online in an effort to target a wider
range of viewers. We distribute information on theTokyo 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 distributecorporate information as well as video reports where
analysts and economists at Daiwa Securities and DIR
provide commentaries on current issues in an easy-tounderstand way.
Our Daiwa Internet TV initiative was introduced by
the SDG Industry Matrix for Financial Services (issued
jointly by the United Nations Global Compact and
KPMG International in 2015) as a case for Goal 4“Quality Education.” The report highlighted Daiwa'stimely and free of charge provision of a variety offinancial and investment information.
We will continue to make efforts to produce
programs that can be viewed by not only investors but
also those who are new to investment, and that can
support the journey from savings to asset building.

Holding “Life Plan & Asset Building Seminar”
for Local Public Bodies, Sponsored by Japan
Securities Dealers Association—38 Times for
31 Bodies in 26 Prefectures
Daiwa Securities sent lecturers to the“Life Plan & Asset Building Seminar”
for local public bodies (1st part: life
plan in preparation for future; 2ndpart: installment-type NISA and iDeCo)sponsored by the Japan Securities Dealers
Association. Through the seminar, we
implemented an initiative for helping
people in various generations to deepen
their monetary education.
Seminars Held (Sept. 2018 to March 2019)38 times for 31 bodies in 26 prefectures(Prefectures where bodies receiving a seminar resideare shown in color)

Daiwa Securities also expanded the productlineup of Daiwa’s iDeCo in October 2018,
newly adding six products. We will further
advance our initiatives, aiming for iDeCo tobe chosen by customers.

31

Live web seminars(Results for FY2018)•Total of

25 seminars held

•Annual number ofparticipants

186,868 participants

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

Original Content by Group Companies●Daiwa Asset Management
In December 2018, Daiwa Asset Management
shifted to a new website using a revamped content
management system (CMS).
The shift has made the website pages easier tosee on any devices, including personal computers,
tablets, and smartphones. A page for information
disseminated by the Fund Management Division
has also been established, enabling the company tocommunicate the latest information.
Moreover, new standardized visual designs havebeen adopted for Market Letters and Fund Lettersposted on the website, and materials that are visuallyappealing to customers are provided.

Daiwa Securities Group SDGs Data Book 2019

New website of Daiwa Asset Management

32

Support for the Creation of Our Future Society

Daiwa Securities Group SDGs Data Book 201933

Support for the Creation of Our Future Society
RelatedSustainable
Development
Goals (SDGs)

SDGs × “Technology”●Creation of Next Generation Financial
Services (Establishment of Fintertech
Co. Ltd.)
In recent years, smartphones and other digital devices
have rapidly come into widespread use in our daily
lives. Meanwhile, we have also ushered in an era inwhich the use of artificial intelligence (AI), big data,and other state-of-the-art ICT technology has made it
possible to provide services that satisfy the individual
needs of users. In that context, in April 2018 Daiwa
Securities Group established Fintertech Co. Ltd.,a new company aimed at providing generations
familiar with digital devices with a variety of services
and products that suit such customers’ each andevery needs.
Going forward, Fintertech will develop new financial
services, including those using cloud funding andblockchain technology, to satisfy diverse needs ofcustomers.

●Promotion of Investment and Financing
for Energy (Establishment of Daiwa
Energy & Infrastructure Co. Ltd.)
Daiwa Energy & Infrastructure Co. Ltd. (DEI) was
launched as the successor to the energy investment
division of Daiwa PI Partners, and started operation
on October 1, 2018. The company aims to provide
new value as a member of an integrated securities
group with a hybrid business model, and contribute to
SDGs through investment and financing for renewableenergy, infrastructure, and resource fields.
• Renewable Energy Power Generation Projects
DEI has been actively working on development of andbusiness investment in renewable energy generation
projects, taking advantage of the Daiwa Securities
Group’s network. Of the 10 solar photovoltaic power
plants developed and invested in by the company asof the end of March 2019, the eight plants on whichconstruction was completed have all been operating
stably. The solar photovoltaic power plants currently
under construction in Isesaki City, Gunma Prefecture(4.6 MW) and Mizuhashi, Toyama City, Toyama
Prefecture (5.2 MW) will be completed by the end of2019 and the beginning of 2020, respectively.
In the biomass power generation field, DEI has
been steadily promoting the development of woodbiomass power generation plants that use tree
trimmings in Japan as their primary source of fuel.
The development is underway with Green Thermal
Co. Ltd., with which DEI has formed a capital andbusiness alliance. The commercial operation of aplant in Yonezawa City, Yamagata Prefecture began
in January 2018 as the first alliance project, whilea plant has been under construction in Kamitonda,
Wakayama Prefecture as the second project with aneye toward completion in 2020.

Stations developed/
invested in by DEI
Photovoltaic power
stations•Output: Approximately

103

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

Initiatives for the Woody Biomass Power
Generation Field

93.2 MW(total for eight stations)•Stations under

DEI has formed a capital and businessalliance with Green Thermal, a leading
company for the development and operationof woody biomass power generation plants,
and Biomass Fuel Co., Ltd., a biomass fuelsupplier. It has been actively promoting not
only the construction of power plants but
also the expansion of its value chain in thebiomass field.
In collaboration with Biomass Fuel,
DEI has been working to expand the
procurement of palm kernel shell (PKS) —fuel for biomass power generation—anddevelop wood pellet manufacturing plants
mainly in Southeast Asia. Constructionof a pellet plant is currently underway in
Vietnam.
Furthermore, in December 2018, DEI
invested in Bioendev AB, a Sweden-based
torrefaction* technology company, aiming
for technological evolution and global
expansion of the biomass fuel-related
business.
The woody biomass power generation
business uses carbon-neutral power
generation facilities that do not affectthe amount of carbon dioxide. Moreover,since it adds new value as fuel to wood
trimmings from forests and PKS that havebeen left and discarded, it is expected togenerate new industries and employment
and contribute to local economies in Japan
as well as the promotion of industry indeveloping countries.
* Technology that increases the energy density of woodpellets, etc. through the formation of carbide fromwoody biomass and other substances, thereby enhancing
the efficiency of transportation and storage.

construction:
Approximately

9.8 MW(two stations)•Projected amount ofelectricity generated
annually:
Equivalent to the amountfor approximately

24,000 households
Biomass power
generation plant•Output: Approximately

13

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

6.3 MW(one station)•Stations underconstruction:
Approximately

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

20,000 households

Support for the Creation of Our Future Society

Daiwa Securities Group SDGs Data Book 2019

SDGs× Local Community

SDGs×Life●Expansion of Solutions Provided in theBusiness Succession Field (Establishmentof Daiwa ACA Business Succession Fund)●Full-Scale Entry into the Healthcare Field(Daiwa ACA HealthCare Inc.)

About half of the small and medium-sized companies inJapan do not have successors. If this situation continues,
Japan may lose approximately 6.5 million jobs in totaland ¥22 trillion worth of GDP in the next 10 years.
Business succession is thus a major social issue.
Daiwa ACA Business Succession Fund, establishedin October 2018, helps small- and medium-sizedcompanies to pass on their excellent technologies
and services to the next generations. By supporting
business succession, the fund also encourages theinnovation of technology and services with continuity.
Through this fund, Daiwa Securities Group will
promote Japan’s sustainable economic development.

●Promotion of Industrialization ofAgriculture (Establishment of Daiwa
Food & Agriculture Co. Ltd)A new type of agricultural business using ICT andother technologies is attracting attention as a solution
to the aging of people engaged in farming andshortages of successors—problems faced by Japan’s
agricultural sector.
In November 2018, Daiwa Securities Groupestablished Daiwa Food & Agriculture Co. Ltd (DFA).
The new company is aimed at assisting expansion of
the scale of business related to agriculture and foodand enhancing efficiency by providing risk money
to help actively introduce new technologies. In April
2019, DFA acquired 14 plastic greenhouses (witha planting area of approximately 7,000 m2) for thegrowing of baby leaves in Kikuchi district, Kumamoto
Prefecture. This marks DFA’ s new entry into theagricultural production business in collaboration with
Kajitsudo Co., Ltd. and SenSprout Inc.. Kajitsudo
boasts expertise in cutting-edge baby leaf planting
and a proven track record in sales. SenSprout visualizes
high-level planting expertise using agricultural sensors
and provides solutions that comprehensively support
new entries into agriculture, including planning of andassistance with the planning of entries into agriculture,and operational guidance.
Through DFA, Daiwa Securities Group willcontinue striving to play a role in solving social issues
surrounding the agricultural sector, including theinvigoration of business related to agriculture and foodand the restoration of abandoned farmland. In thisway, it aims to realize sustainable agriculture and food.

Social challenges are piling up in the healthcare field,
including the rapid expansion of demand for medical
and nursing care and the necessity of reducing
medical costs. Accordingly, Daiwa Securities Groupmade ACA HealthCare Inc., which has investment
expertise in the medical and nursing care business,
into a subsidiary in October 2018. The company,
renamed Daiwa ACA HealthCare, will undertake
full-scale expansion into the healthcare field in both
Japan and overseas, especially in Asia.
Through these investments, Daiwa ACA
HealthCare will support medical and nursing careservices and contribute to the enhancement of
medical care and welfare.

●Provision of High-Quality Nursing Care
Services (Acquisition of ORIX Living)
In Japan, aging is an important social issue to beaddressed, with the population aged 75 years or older
expected to exceed 20 million in the first half of the2020s. A variety of measures are being implemented
to provide the elderly with high-quality medical andnursing care services.
With this as a background, Daiwa Securities Groupdecided to turn ORIX Living Corporation (now GoodTime Living Co. Ltd.) into a subsidiary. It is a company
operating and developing facilities and homes forthe elderly. As of the end of March 2019, ORIX Living
operated a total of 32 private nursing homes andrental residences for the elderly (consisting of 29
facilities under the name of “Good Time Living” andthree facilities under the name of “Platesia”) with a
total of 2,726 rooms, mainly in the Tokyo metropolitan
area and the Kansai region.
ORIX Living works on improving the daily living
functions of each resident, thereby helping them tolive independently. By incorporating the company
into Daiwa Securities Group, we put into practice
initiatives that contribute to “the achievement ofhealthy longevity,” which is positioned by the Japanese
government as a priority issue, as well as SDG Goal 3“Good Health and Well-being.” Making ORIX Livinga Group company is also expected to favorably affect
the Group’s business through the provision of new
solutions to and strengthened relationships withelderly customers and their families.
Moreover, ORIX Living proactively uses IT, developing
nursing care robots and introducing ICT instruments(see (1), (2), and (3) for specific examples). In March
2017, the company received an award for excellent
work in “Next-Generation Nursing Care,” a program
sponsored by the Ministry of Health, Labour andWelfare and the Association for Technical Aids torecognize successful cases of introducing nursing carerobots. By enhancing the added value of nursing careservices and advancing the development of work
environments in the nursing care industry, we will
implement initiatives that contribute to SDG Goal 8“Decent Work and Economic Growth.”34

Support for the Creation of Our Future Society

Specific Example of IT Use (1)A drop-down in-wall nursing care lift for inroom transfers
Swing Lift CoCoRo
Developed jointly with the manufacturer. The instrument supporting
in-room transfers helps reduce lower back pain and protect the safety andhealth of care staff.

Specific Example of IT Use (2)A smart nursing care recording system
Care-wing (institutional version)Developed jointly with the manufacturer. Information on guests is sharedand checked at all times using tablet devices.

Daiwa Securities Group SDGs Data Book 2019

●Contribution to Local Communities
through Investment Activities ofInvestment Corporation
In November 2014, Daiwa Real Estate AssetManagement Co. Ltd. started managing Nippon
Healthcare Investment Corporation (listed on the Tokyo
Stock Exchange), which is Japan's first REIT focusing
on healthcare facilities. The investment corporation
mainly invests in healthcare facilities such as private
nursing homes, which are likely to see stronger
demand from society over the medium to long term as
the population continues to age.
Employees of the investment company visit thefacilities of their investees nationwide several times
each year. They participate in hands-on events, suchas family get-together meetings and meetings toshow respect to the elderly, while assisting daily work,
including cleaning the periphery of the facilities,
pruning plants in the courtyards, and pulling out
weeds. They also participate in hands-on training toexperience work as facility employees in an effort todeepen their understanding of frontline work.
As the owner of its investees' facilities, theinvestment company started these initiatives to deepen
its understanding of the daily work of facility operatorsand the services provided to residents. The initiatives
are now becoming local community contribution
activities through the core business, and we willcontinue to work actively on these initiatives.

●Investment in Drug Development
Ventures and Other Businesses by DCI
Partners

Specific Case of IT Use (3)Artificial intelligence (AI)-based robot
Aeolus Robot
Investigation is underway on the possible use in nursing care practice. It isaimed at boosting the expertise of care staff by having the robot assume
simple work.

We at DCI Partners have been investing in the biotech
field for more than 20 years, including the period
of NIF Ventures (now Daiwa Corporate Investment).
We currently manage one of Japan’s largest funds,
making biotech venture capital investment focusing
on the drug development field in Japan and Taiwan.
The drug development business is faced with fivechallenges: securing human resources, R&D, businessdevelopment, intellectual property strategy, andfinancing. Biotech start-ups predominately lack the
managerial resources—people, goods, and money—toovercome these management challenges. Throughthe fund, DCI Partners strives to help advancedevelopment and enhance corporate value by
providing managerial resources and hands-on support
from strategy planning to implementation. If there
are no human resources or money, we establish a
new company and even carry out the development of
medical products.
Anexa PEP Inc., established in October 2018,has entered into a license agreement with the
National Institute of Advanced Industrial Science andTechnology (AIST), one of Japan’s largest research
institutions, and is currently developing a cancer
therapeutic agent. Anexa PEP has been authorized
by the AIST as an “AIST start-up” in recognition of its
attempt to commercialize the seeds of revolutionary
technology. Open Innovation Partners, an existing
company, has developed a cancer therapeutic agent
after acquiring development rights from Mitsubishi

35

Support for the Creation of Our Future Society

Tanabe Pharma Corporation. In December 2018, it
became the first Japanese company set up under theleadership of an investment fund to receive approval
for the initiation of a clinical trial. Through investment
activities, we engage in activities to expand thepossibility of promising seeds of biotech start-ups,
academic institutions, and pharmaceutical companies,
promote development in the biotech field, and provide
patients with more treatment options. DCI Partners
will continue striving to contribute to the health of all
people and society.

Support for Reconstruction Following
the Great East Japan Earthquake●The Great East Japan Earthquake SME
Reconstruction Support Fund
Daiwa Corporate Investment Co., Ltd. operates theGreat East Japan Earthquake SME Reconstruction
Support Fund, receiving investment from theOrganization for Small & Medium Enterprises andRegional Innovation, JAPAN (SME Support, Japan),
The Aomori Bank, Ltd., The Bank of Iwate, Ltd.,The 77 Bank, Ltd., The Toho Bank, Ltd., and otherinstitutions. Targeting unlisted private companies in thedisaster-affected areas, the fund aims to expeditiously
provide risk finance. The goal is to actively support
companies in their efforts to secure renewed growthand development by supplying finance for a variety of
purposes. These include restoration and reconstruction
following the 2011 earthquake disaster, new businessdevelopment, the shift to a new industry or line ofbusiness, business reorganization and succession,and business incubation. The fund thereby aims tocontribute to the early restoration and sustainable
development of the disaster-affected areas.

Daiwa Securities Group SDGs Data Book 2019for 2018, owns a technology that keeps fish freshfrom unloading to delivery in collaboration withfishermen in Ofunato City, Iwate Prefecture. As thetechnology allows the lifespan of sashimi and otherfish products to be greatly extended, the company
not only sells products within Japan but also exports
to Asian countries. The award was given to support
an initiative started in the Sanriku area, which is richin marine resources, to comprehensively revise theconventional form of the fishing industry and generatea business that utilizes the latest technology.
We will continue to actively carry out these activities
so as to be able to contribute to the reconstruction of
the Tohoku region.

Support for Developing Human
Resources Responsible for the Next
Generation●Support for Developing Human
Resources Responsible for Next
Generation Innovation through “Sido
Next Innovator 2018”

To further deepen the activities carried out by theGreat East Japan Earthquake SME Reconstruction
Support Fund, Daiwa Corporate Investment supports
the “New Tohoku” Restoration Business Contest incollaboration with Daiwa Securities Group Inc.. This
contest is organized by the Reconstruction Agency
every autumn. We grant the “Daiwa Securities Group
Phoenix Award” to an outstanding plan.
Sanriku Toretate Ichiba Co., Ltd., an award recipient

Daiwa Institute of Research (DIR) was entrusted by
the Ministry of Economy, Trade and Industry withsecretariat work for “Sido Next Innovator 2018”
jointly with World Innovation Lab (WiL, LLC) . Under
the theme “Thinker to Doer,” the program solicits
and selects a wide range of people, including thosetaking up the challenge of generating innovationand those working on challenging new business atmajor companies. It aims to develop global humanresources who will play a major role in next-generation
innovation by providing selected applicants withlectures, seminars, workshops, mentoring andinteraction with investors and entrepreneurs in Silicon
Valley. The program was initiated in FY2015, andFY2018 marks its fourth year.
The program runs for a total of 10 months—twomonths of open application and selection and eightmonths of program implementation. In FY2018,
applications were solicited from May to June 2018,
and 126 successful candidates (program recipients)
were selected from among 345 applicants based on
rigorous evaluation.
In the domestic program, which kicked off inJuly, participants went through lectures, workshops,
mentoring (in which skilled workers with a wealth ofCommemorative photo of the Reconstruction Agency, sponsor companies,

President Yanagihara (left), who served as presenter, and an award

and award recipients (“New Tohoku” Restoration Business Contest 2018)

recipient (“New Tohoku” Restoration Business Contest 2018)●Support for the “New Tohoku”
Restoration Business Contest 201836

Support for the Creation of Our Future Society

experience called mentors engage in dialogue withand provide advice to unskilled workers to encourage
growth and the brushing up of business plans), pitch
contests, and other training to brush up their businessplans and enhance presentation skills. Alongside
the domestic program, the small-class program“Sido Café” was provided for those who wished toparticipate. In the program, participants deepened
their knowledge of specific topics.
In a pitch contest carried out on December 15,
2018, 20 participants were selected as delegates to
Silicon Valley based on the overall results of screening
by application forms and pitch. The 20 participants
took part in a two-week Silicon Valley programin which they visited entrepreneurs playing majorroles at local start-ups, personnel in charge of new
business development at large companies, and venture
capitalists. They enhanced the quality of their own
business plans through small meetings and mentoring.
Moreover, among those who were not selected asdelegates to Silicon Valley, 31 applicants participated ina domestic follow-up program in which they continued
to brush up their business plans.
A final results reporting event (“Demo Day”) was
held on February 15, 2019. Demo Day featured pitches
made by a total of 40 participants—20 delegatesto Silicon Valley and 20 participants in the domestic
follow-up program, along with speeches by guest
speakers, exhibition booths set up by alumni and apanel discussion. DIR will continue to participate inprograms such as this which will lead to innovation.

Daiwa Securities Group SDGs Data Book 201937

Support for the Creation of Our Future Society

Daiwa Securities Group SDGs Data Book 2019

C lose-up
Establishment of New Companies Contributing to SDGs
Daiwa Securities Group has cherished the securities business since our foundation. While focusing on it as our corebusiness, as investment in growth that also provides solutions to social issues, we have launched businesses invarious fields including FinTech, healthcare, energy and infrastructure, and agriculture. These businesses capitalizeon the wide range of expertise the Group has nurtured in the securities and financial businesses.

SDGs ×“Technology”

SDGs ×“Technology”

Creation of Next Generation Financial Services

Promotion of Investment and Financing for Energy

See 〉
〉
〉

See 〉
〉
〉

Fintertech Co. Ltd.

SDGs ×P. 33“Local Community”

Daiwa Energy & Infrastructure Co. Ltd.

SDGs ×P. 33“Local Community”

Expansion of Solutions Provided in the Business Succession Field

Promotion of Industrialization in Agriculture

See 〉
〉
〉

See 〉
〉
〉

Daiwa ACA Business Succession Fund
P. 34

SDGs ×“Life”

Full-Scale Entry into the Healthcare Field

Daiwa ACA HealthCare Inc.
See 〉
〉
〉

P. 34

Daiwa Food & Agriculture Co. Ltd.
P. 34

SDGs ×“Life”

Provision of High-Quality Nursing Care Services

Good Time Living Co. Ltd.

(Former company name : ORIX Living)
See 〉
〉
〉

P. 34

38

﻿

Daiwa Securities Group SDGs Data Book 2019

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

Contents● Corporate Governance● Compliance● Human Rights Initiatives● Risk Management● Close up:
Response to the TCFD
● Environmental Initiatives● IT Strategy and the Management of Systemic Risk
● Engagement with Shareholders and Other Investors● Engagement with Employees● Engagement with Society● Close up:
Initiatives for Child Poverty Issues

39Corporate Governance

Daiwa Securities Group SDGs Data Book 2019

Corporate GovernanceApproach andBasic Stance

Daiwa Securities Group clearly separates the supervisory and executive functions of its management
to create a highly transparent and objective corporate governance system. We have adopted astructure in which Corporate Executive Officers of Daiwa Securities Group Inc., as well as employees
responsible for head office functions, concurrently serve in the securities subsidiary. This reflects
our pursuit of a management structure that improves the efficiency of head office operations andmaximizes synergy of each group company.

Basic Views on Corporate Governance
Daiwa Securities Group is a group management
holding company which aims to meet a highly
transparent and objective governance system thatis in line with international standards. Furthermore,
the Company aims to achieve highly efficient andspecialized supervision of group companies, and isbuilding a unified group management system which
demonstrates the synergy of each group company.
Daiwa Securities Group Inc. has adopted theorganizational form of a company with Three
Committees with a view to(a) improving the mobility of decision-making bysignificant delegation of authority from the Boardof Directors to the Corporate Executive Officers(Shikkoyaku) and clarifying the division of theduties among the Corporate Executive Officers(Shikkoyaku);(b) e nhancing the transparency of the management
by establishing Three Committees (Nominating
Committee, Audit Committee and Compensation
Committee) of which Outside Directors hold the
majority and making the supervisory function of
the Board of the Directors more efficient by inviting
highly specialized Outside Directors; and(c) exerting management oversight function by theadvice, etc. given from the third point of view,which is based on each insight and experience ofhighly independent and ethical Outside Directors, inthe Board of Directors and the Three Committees.
Furthermore, the Group positively addresses
corporate social responsibility activities in order to earntrust from all of the stakeholders. There are indeed
various aspects to corporate social responsibility, suchas providing superior products, services, and sincere
responses to customers; returning profits appropriately
and disclosing information to shareholders;measures for labor environment and evaluation of
the employees; establishing legal compliance andcorporate ethics; environmental management; as well
as social contribution.
The Group believes that these approaches, together
with a strengthened corporate governance system whichemphasizes transparency, mobility and efficiency will leadto the sustainable improvement of the corporate value.
The corporate governance system consists of theBoard of Directors and the aforesaid Three Committees(Nominating Committee, Audit Committee,
and Compensation Committee) as a supervisingbody, Executive Management Committee and its
subcommittees (Group Risk Management Committee,

Number of times
each committee met(FY2018)•Nominating Committee:

5 times•Audit Committee:

12 times•Compensation Committee:

5 times•Board of Directors:

10 times
Rate of attendanceat Board of Directors
meetings by outside
directors

94.8%

Corporate Governance System at Daiwa Securities Group
Shareholders’ Meeting

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

Determination of the BasicManagement Policy andother matters

Nominating Committee,
7 members(including 5 outside directors)

Audit Committee, 5 members(including 4 outside directors)

Compensation Committee,
5 members(including 3 outside directors)

Nominates directors for selection,or recommends dismissal

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

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

Outside Director's Committee,
6 members(including all 6 outside directors)
Shares information among outside directors

Executive Management
Committee, 15 members
Group-wide business strategy
and management issues,
important financial matters
Representative
Executive Officer

Group Risk Management
Committee

Disclosure Committee

Group IT Strategy Committee

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

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

Deliberates and decides matters regarding GroupIT investment budget, Medium to Long- term IT
investment policy and plan

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

Overseas
Management
Committee
Makes decisions on issues
related to the managementof overseas offices and otheroperations abroad40

Corporate Governance

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.
To incorporate more diverse perspectives into
group management, we have appointed four female
directors and corporate executive officers. On a groupwide basis, nine female officers serve as directors,
corporate executive officers, and executive officers.

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

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

April 1999

Established the Advisory Board
Established the Group Management
Committee

June 2000

Established the Compensation Committee
Elected outside directors

June 2002

Shortened directors’ terms of office fromtwo years to one year

July 2003

Established the Internal Control Committee

June 2004

Shifted to a Committee system (currently, aCompany with Three Committees system)

October 2015

April 2017

Complied with the Corporate Governance
Code
Established the Outside Director'sCommittee
Appointed outside directors as chairpersonsof all three committees

Point• Published the Corporate Governance Report detailing

our response to the Corporate Governance Code• Decided that more than two members and morethan one third of the Board of Directors should be
independent outside directors• Established the Outside Director's Committee in
FY2015 for the purpose of increasing communication
amongst outside directors• Have elected one additional outside director andsix out of 14 Board of Directors as outside directors
since FY2016• Strengthened management transparency andoversight functions by increasing the ratio of outside
directors on the Nominating Committee and the
Audit Committee• Determined that all of the chairpersons of the threecommittees would be outside directors from FY2017
while taking steps to further improve the governancesystemSupervisory Function
The Board of Directors consists of 14*1 directors,
including 6 outside directors*2 and 3 female directors.

Daiwa Securities Group SDGs Data Book 201941

The Board of Directors determines key management
policy, in addition to overseeing executive duties. In
order to perform this supervisory role from multiple
viewpoints in accordance with the demands of society,the policy for selecting new board members statesthat candidates must have a strong sense of ethics anddemonstrate initiative and leadership.
Additionally, outside directors are experts inmanagement and other fields. In addition, thesupervisory function of Daiwa Securities Group Inc. isreinforced by the Audit Committee and the Office of
the Audit Committee. The Audit Committee, which
consists of a majority of outside directors, plays apivotal role in the supervision of executive duties. The
Audit Committee is assisted by the Office of the Audit
Committee, which is a department independent ofexecution of business.
*1 A
 s of June 30, 2019*2 O utside directors as defined by Article 2-15 of Japan’s Companies Act●Audit Committee’s Activities
Daiwa Securities Group Inc.’s Audit Committee isengaged in auditing activities for duties executedby directors and corporate executive officers as partof corporate governance. In particular, it focuses onverifying the construction and operational status of theinternal control system.
For example, in FY2018, the Audit Committee
conducted hearings with employee unions and various
divisions, including the sales, product, and humanresources divisions. These hearings were designed toconfirm the Group’s initiative for improving customer
satisfaction through the provision of “Quality No. 1”
added value—an important issue in its audit policy.
In July 2018, all Audit Committee members,
including four outside directors, visited Daiwa
Securities’ Global Markets Division. They received
explanations from executives and employees of thedivision regarding the duties of each department andoffice, the structure of transactions with institutional
investors, securities exchanges, and industry peers,
as well as position management. The members
asked various questions, including about systems
for preventing illicit transactions like those thathave occurred at other companies. They thus took
advantage of the visit as a valuable opportunity
to deepen their understanding of the division’s
operations. The Audit Committee will continue todeepen its understanding of the Group’s operations
and proceed with initiatives to strengthen the Group’s
corporate governance system.
Audit Committee members receiving explanations at the Global Markets Division

Refer to page 62 of our
FY2018 securities reportfor the details of thefollowing:>Policies for selection ofcandidates to serve as
the Directors> Composition of theBoard of Directors(only Japanese)Corporate Governance

Daiwa Securities Group SDGs Data Book 2019

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-Group transactions. Daiwa Securities Groupapplies rules regarding conflicts of interest stipulated by
Japan’s Companies Act to the Executive Management
Committee as well as the Board of Directors. Conflicts ofinterest between Daiwa Securities Group Inc. and Group
companies are appropriately prevented through a ruleprohibiting an executive officer from voting when heor she concurrently serves as an officer of an interested
Group company and thus has a special interest in amatter to be decided.

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

Basic Policy

The details of each component are as follows:• Basic Compensation

Basic compensation is compensation fixed according
to post, duties, and role.
• Performance-Based Compensation
Performance-based compensation is determinedaccording to the degree of contribution by theindividual. In assessing individual contribution,
the results of management targets as outlinedin the Medium-Term Management Plan arecomprehensively taken into account, along withother factors, based on consolidated ROE andordinary income—key performance indicators usedin the Plan. Directors who do not concurrently serveas corporate executive officers are not entitled toreceive performance-based compensation.
• Share Price-linked Compensation
To increase correlation with shareholder value,
restricted stock compensation and others that areworth a certain percentage of basic compensation
are granted as share price-linked compensation.
Outside directors are not entitled to receive shareprice-linked compensation.

Refer to page 79 of our
FY2018 securities reportfor the details of thefollowing:> Compensation of
executives(only Japanese)• Compensation should contribute to increasing

shareholder value through sound businessdevelopment. It should also function effectively as anincentive that leads to the improvement of businessperformance in both the short term and the medium
to long term.
• Compensation should be at a level that iscompetitive not just in Japan but internationally as asecurities group that carries out global business.
• Compensation should help business execution andsupervision to function effectively, as a company withThree Committees system.
Compensation for directors and corporate
executive officers is determined by the Compensation
Committee. Executive compensation has threecomponents: basic compensation; performance-based
compensation; and share price-linked compensation.

Internal Control System and Internal
Audit
In recognition that management is responsible formaintaining an internal control system to ensure thesound and appropriate execution of business, the Group,
under the main initiative of Daiwa Securities Group Inc.,
has established a system for managing the Group’s major
business risks. Through this system, the Group endeavors
to ensure business effectiveness and efficiency, reliablefinancial reporting, compliance with laws related tobusiness activities, and asset preservation.
We also recognize that Group value can beincreased through the creation of a sound and efficientinternal control system. Based on such recognition,
we position internal control as an especially importantInternal Auditing System Diagram of Daiwa Securities Group
Daiwa Securities Group Inc.
Audit Committee

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

Reporting

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

ReportingInternal Audit Department
Direct audit/Monitoring/
Collaboration

Daiwa Securities Co. Ltd.

Global/Internal Audit lines

Internal Audit Department

Overseas securities subsidiaries

Internal Audit Department staff holdconcurrent positions at Daiwa Securities
Group Inc.’s Internal Audit Department

Europe/Middle East region
Asia/Oceania region
Americas region

Communication/
Adjustments
Direct audit/Monitoring/
Collaboration

Domestic Group companies

Accounting
auditors

Board of Directors

42Corporate Governancefunction, and appoint a dedicated corporate executive
to whom the Internal Audit Department reports.
The Department sits independently from all otherdepartments, and verifies the internal control system.
By conducting effective audits, the Department
strives to enhance the Group’s corporate value. The
Internal Audit Department pays special attention tocertain aspects of the Group’s business activities. They
include the internal control systems at Daiwa Securities
Co. Ltd. and overseas offices as a foreign business
operator, the internal control systems at Daiwa Next
Bank, Ltd. as a bank, the status of businesses thatinvolve the collaboration between Group companies,
and the status of control over Group companies by theholding company. The authorization of internal audit
plans and reporting of audit results are undertaken by
the Group Internal Audit Committee. Internal audit
plans are authorized by the Audit Committee or adesignated member of the Audit Committee who
has received the prerequisite authority from the Audit
Committee. The results of audits are also reported to
the Audit Committee.
Reports to the Group Internal Audit Committee are
not limited to the audit results conducted at Daiwa
Securities Group Inc. and Daiwa Securities Co. Ltd.
They also include highly important findings madeduring audits conducted on companies in Japan andoverseas. The Internal Audit Department collaborates
with the internal auditing divisions of Group
companies through periodic meetings, monitoring,
and audits.
The Internal Audit Department maintains
communications with the Audit Committee andaccounting auditor, making any necessary adjustments
to ensure that audits are performed efficiently. The
Department also sometimes receives audit requests
from the Audit Committee.
The degree to which these internal auditing
activities satisfy the Institute of Internal Auditors’“International Standards for the Professional Practiceof Internal Auditing,” the global standard for internal
auditing, is routinely evaluated by independent outside
third parties. The Group thus strives to constantly
improve its system.

Structure and Achievements ofWhistleblowing System (Corporate
Ethics Hotline)
Since January 2003, Daiwa Securities Group has been
operating a Corporate Ethics Hotline, through which
employees can report problems in the workplace
directly to a corporate ethics officer of Daiwa Securities
Group Inc. or outside lawyers. The system mainly
aims to detect corporate misconduct—which includes
violations of the Financial Instruments and Exchange
Act and other laws, regulations and rules that include
bribery and corruption—in its early stages and prevent
such misconduct from occurring.
When the hotline is contacted, the corporate ethics
officer, in cooperation with the internal control officers
at each Group company, carries out a factfinding

Daiwa Securities Group SDGs Data Book 2019

investigation, while taking steps to protect the caller.
In FY2018, 41 reports were received through thewhistleblowing system.
The Group is working to ensure that all employees
are familiar with the Corporate Ethics Hotline,
including staff at affiliated companies and temporary
workers, in order to ensure that anyone can use it
without hesitation. We are also making efforts to
respond quickly when calls are received. The Group is
taking steps to improve the hotline so that it can work
effectively as a deterrent to prevent problems before
they occur, not just as a measure to solve problems.

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

Daiwa Securities Group Tax Policy
1. Daiwa Securities Group complies withlaws and ordinances, and contributes tothe sustainable development of society
through appropriate tax payments withhigh ethical standards.
2. Daiwa Securities Group rewards ourshareholders by achieving sound profits
based on proper and fair tax planning.
3. For cross border intra group transactions,
Daiwa Securities Group sets an appropriate
price, which achieves adequate
accountability under transfer pricing tax
regulations.
4. The Chief Financial Officer (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 tosubsidiaries and other departments within
the group as necessary, so that corporate
governance over tax matters is sharedand implemented throughout the Daiwa
Securities Group.

Use of the intranet to increase employee awareness43

Number of reports
received throughwhistleblowing system
for FY2018

41 reports(down 12 from the previous fiscal year)* No reports indicating violation ofhuman rights, environmental pollution
by Daiwa Securities Group, or othermatters raising particularly serious
concerns in general social norms

Compliance

Daiwa Securities Group SDGs Data Book 2019

ComplianceApproach andBasic Stance

Daiwa Securities Group has four corporate principles. They are “building trust,” “placing importanceon personnel,” “contributing to society,” and “maintaining healthy earnings results.” The Group
believes that compliance is a significant element for achieving these principles. The goal of theGroup’s compliance activities is not merely to “comply with laws and regulations,” but to earn thetrust of customers, markets, society, and stakeholders.

RelatedSustainable
Development
Goals (SDGs)

Compliance System
The compliance division of Daiwa Securities Groupconsists of the Compliance Control Department andthe Compliance Department. The former is mainly
responsible for overall compliance planning andformulation and also plays a role as a gatekeeper tothe market. The latter is tasked with providing support
to sales branches and headquarters departments anddivisions. The two collaborate to build a compliancesystem, working concurrently for Daiwa Securities
Group Inc. and its subsidiary Daiwa Securities.
At Daiwa Securities Group, the compliance system
focuses on three key issues: securing the fairness andtransparency of the market, eliminating any relations
with anti-social forces (including countermeasuresagainst money laundering and funding of terrorism),and maintaining information security. With these issues
in mind, it supports Daiwa Securities and other Group
companies.
At Daiwa Securities, the Compliance Department
monitors transactions and solicitation by sales branches,
identifies challenges and issues, and visits sales
branches to check their business status and provide

Daiwa Securities
Group’s Compliance
Framework

Daiwa Securities Group Inc.
Group Internal Audit Committee

Group Risk Management Committee

Reporting

Reports andconsultations

Reporting ofcompliancerelated meetings

instructions. The department also regularly conducts
on-site inspections. Moreover, it visits the work sitesof 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 inthe business to improve customer satisfaction.
One of Daiwa Securities’ strengths lies in its
stationing of full-time internal administrators belonging
to the Compliance Department at all sales branches.
The internal administrators work on improving theeffectiveness of the PDCA cycle (plan, do, check, act)
at each sales branch. They also closely cooperate with
the Compliance Department in an effort to build a solid
compliance system.
As of April 1, 2019, the compliance division consistsof approximately 250 staff, composed of 42 staff at theCompliance Control Department, 65 at the ComplianceDepartment, and approximately 140 working as internal
administrators at sales branches. The staff members
are striving to strengthen Daiwa Securities Group’s
compliance system.

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

Instructions andmonitoring

Overseas subsidiaries
Compliance Division

Reports andconsultations

SupportReporting ofcompliancerelated meetings

Daiwa Securities

Other Group companies

Compliance Control Department and Compliance Department

Compliance Division

Instructions andmonitoring

Reporting andconsultations

Sales branches and headquarters
departments and offices

Addressing complaints
and disputes
Anti-social forces
checksOpinions,
comments,
and requests

Customers

44ComplianceFull Implementation of “Customer-First”
Daiwa Securities is taking measures in line with thecompliance program to ensure the effective operationof our internal control system and strict complianceof our sales activities with laws and regulations.
For FY2019, we set up the pillars outlined below,
maintaining “Customer-First” as the keyword, as in
the previous fiscal year.
1. Realization and evolution of “Customer-First
Operations”
2. Reinforcement of countermeasures againstmoney laundering/funding of terrorism
3. Exercising of proper functions as a gatekeeper
to the market
Daiwa Securities markets various financial products,
including investment trusts. When soliciting investment
from customers, we ensure compliance with theprinciples of integrity and fairness, suitability, andself-responsibility, from the perspective of investor
protection. We have adopted the practice ofsystematically providing continuous and thoroughafter-sale follow-ups, rather than leaving it toindividual sales staff, especially when the market
is trending downward. We believe that providing
thorough, face-to-face explanations to customers andmaintaining customer trust and a sense of security attimes of market fluctuations are part of the practice ofCustomer-First for Daiwa Securities as a marketer offinancial products. We will continue stepping up suchinitiatives going forward.

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

Daiwa Securities Group SDGs Data Book 2019

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

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

45

Compliance

Daiwa Securities Group SDGs Data Book 2019

Eliminating Any Relations with AntiSocial Forces

Initiatives against Bribery andCorruption

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

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

Basic Policy on Avoiding Involvementwith Anti-Social Forces
To ensure fairness and the sounddevelopment of the securities market andprotect our customers and employees,
the Daiwa Securities Group has created aframework to eliminate the influence oforganized anti-social forces, their associates,
corporate extortionists, and other criminal
elements and takes systematic measures toavoid all ties with such elements.
1. The Daiwa Securities Group will notcarry out any transactions whatsoever
with anti-social forces.
2. If it is determined that parties alreadyhaving transactions with the Daiwa
Securities Group are anti-social forces,
we will swiftly take appropriate
measures to terminate dealings withthem.
3. The Daiwa Securities Group will
provide no funds to anti-social forces.
4. The Daiwa Securities Group will
accept no unfair demands fromantisocial forces. If it is determinedthat an unfair demand has been
made by anti-social forces, we willtake legal action in civil or criminal
court against the party making thedemand.
5. The Daiwa Securities Groupestablishes close cooperative
relationships with outside parties
such as the police force, the National
Center for the Elimination of
Boryokudan (anti-social forces), legal
experts, and others.

Information Security
We at Daiwa Securities Group have implemented
numerous information security measures to protect
personal information entrusted to us by customers in asafe and precise manner.
In many personal information leakage incidents
arising in recent years, leakage has occurred at third
parties to which operations have been entrusted.
Accordingly, at the time of and after signing an
outsourcing contract with a third party, we thoroughly
check the information management structure of theparty. We also conduct on-site visits before outsourcing
to examine the business practices of the potential
outsourcing contractor.
Following the enforcement of the My Number
Act (the Act on the Use of Numbers to Identify aSpecific Individual in Administrative Procedures) in
October 2015, we now ask customers to provide us
with their Individual Numbers. We have controlled
access to information entrusted to us by customers,
including Individual Numbers, by isolating suchinformation physically and managing it with extra care.
No matter how much information is systematized,
there always remains a human element. To ensurethat a mistake does not occur, we focus on training
for sales personnel to recognize the importance46

Complianceof information management, while keeping thenumber of employees authorized to access personal
information at the minimum level necessary. Daiwa
Securities also in principle bans employees from taking
personal information out of the company. When it
is absolutely necessary to take information out forbusiness purposes, we require employees to obtainprior approval from an internal administrator or othersuperior and to keep records, thereby strictly managing
such information. We also strictly manage the printingof personal information and output to external storage
media, while constantly monitoring whether there is
any unauthorized use. Moreover, since some of the
documents received from customers are paper-based,
we prepare special storage files to avoid the risk oflosing documents within the company.

Fostering Compliance Awareness
Daiwa Securities Group considers it extremely
important for each employee to always maintain ahigh level of compliance awareness. We have therefore
adopted a compliance-related program in training
for new employees and a number of other internal
training courses. We also give tests on complianceregularly through e-learning. At Daiwa Securities,
we post a “Personal Information Check Test” and“Compliance Digest” every Monday on our intranet
and also broadcast compliance-related content about
10 times a year in our internal TV program which isaired 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 compliance meeting inwhich all branch members participate. We have thus
implemented various systems to keep the complianceawareness of all employees at a high level, andcontinue to foster awareness among employees.

Important Issues for FY2019 andBeyondWe will continue with our initiatives toward therealization and evolution of “Customer-First
Operations.” At the same time, we will continue
to reinforce our countermeasures against money
laundering and funding of terrorism as a challenge
for particular focus in FY2019. It is imperative that wecomply with set rules, but we consider that the goalof our initiatives should not only be to achieve such
adherence. Compliance is a common theme that must
be addressed by the entire securities industry and it
is also a matter of trust in the industry as a whole.
We will therefore exchange information with industry
peers and proceed with measures while sharing goodpractices with each other. Daiwa Securities Group will
strive to strengthen compliance as a leading companyof the industry going forward, and will make efforts
to contribute to enhancing trust in the entire securities
industry.

Daiwa Securities Group SDGs Data Book 201947

Human Rights Initiatives

Daiwa Securities Group SDGs Data Book 201948

Human Rights Initiatives
Approach andBasic Stance

Daiwa Securities Group states in its corporate principles that “the Group will strive to maintain a high sense of
morality and duty, endeavoring to continue contributing to the sustainable growth of the societies in which we
operate.” To improve a corporate culture rooted in the basic principles of respect for human rights, we are further
strengthening our efforts to educate and enlighten our employees about human rights. We therefore respect
the Universal Declaration of Human Rights, the OECD Guidelines for Multinational Enterprises, ISO 26000, the UN
Guiding Principles on Business and Human Rights, and the Act on the Promotion of Human Rights Education and
Human Rights Awareness-Raising. We have also joined the UN Global Compact.

RelatedSustainable
Development
Goals (SDGs)

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

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

Human Rights Education and AwarenessIn 1984, 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 and appreciation of social integration andother human rights issues. We have been working toachieve its objectives. Besides the committee, all Groupmanagers at the head office or branch level act in apromotional role, engaging in education and awarenessactivities to ensure that employees correctly understandand acknowledge human rights and social integration

issues. Daiwa Securities Group has been a member of
the Industrial Federation for Human Rights, Tokyo, since1998. The Federation is composed of 123 companies
mostly headquartered in Tokyo with a combined totalof 1.5 million employees (as of April 2019). Federation
members work together to further improve theiremployees’ awareness of human rights issues throughresearch and communication.
Composition of Human Rights Awareness Promotion Committee
Chair: Human Resources Officer at Daiwa Securities Group Inc.
Vice Chair: Head of the Human Resources Department
Committee Members: F ive department heads including the head of the
Corporate Planning Department, General Affairs
Department, and Compliance Control Department

Initiatives in FY2018
In FY2018, we provided human rights education as partof training for the Group’s new employees conducted
immediately after their induction ceremony. It is also
included in training for young employees (annex
education) and for those newly becoming generalmanagers, managers, and associate managers. The chiefof 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 thosein the Group’s compliance and human 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 theirunderstanding. The cumulative number of employees
participating in training on LGBT issues is now 3,089.
The Group also held a Human Rights AwarenessWorkshop for all executives and employees to consider
human rights from multiple viewpoints. Discussions
between participants were held after watchingan educational video entitled “Communication
Not Generating Harassment” as an opportunity toconsider what should be kept in mind to ensure thatharassment does not occur.
We also called for human rights awarenessslogans between October and November 2018 in acontest designed to promote a broader and deeper
understanding of human rights issues. Contest
participation was open not just to employees but also
to their families. The winning entries were presented
in our in-house magazine.

Human rights educationfor employees for
FY2018•Training participants

475 new employees•Objective

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

337 promoted employees•Objective

To acquire knowledge
and raise awarenessconcerning humanrights required for theirrespective positions

Risk Management

Daiwa Securities Group SDGs Data Book 201949

Risk Management
Approach andBasic Stance

While Daiwa Securities Group pursues profitability and growth, we also recognize the importance ofidentifying and evaluating the various risks associated with our business operations accurately, andcontrolling them effectively. We aim to maintain a sound financial base and profit structure by properly
balancing risks and returns and implement effective risk control and management, thereby achieving
sustainable improvement in corporate value.

RelatedSustainable
Development
Goals (SDGs)

Risk Types and Degree of Importance
Risks that are particularly important for Daiwa
Securities Group are those related to our key securities
business. Using our own accounts, we temporarily
hold positions on products we intend to sell, and offer
these products to customers. For this reason, we alsoneed to control risks such as liquidity risk, including
for foreign currencies, the market risk resulting frommarket fluctuations, credit risk for business partners
and issuers, and the risk of hedges not functioning,as well as the operational risk that inevitably arisesin the execution of business. Moreover, we manage
the integration risk by measuring the impact on theGroup’s capital and liquidity from a forward-looking
perspective.
For major risks and their management, refer to ourIntegrated Report.

Risk Appetite Framework
Concept Chart

Risk Management and Risk Appetite
Framework*
As one of Japan’s Domestic Systemically Important
Banks (D-SIBs), Daiwa Securities Group Inc. complies
with the Basel rules, which are international banking
regulations. It has also drawn up the “Risk Appetite
Statement,” which has been deliberated on anddecided by the Board of Directors. The Statement isdesigned to clarify the policy on risk-taking and risk
management frameworks that are consistent withthe overall business strategy of Daiwa Securities
Group. In line with its business profile as a securities
group, the Statement defines risk categories andsets out risk appetite indicators as quantitative
indicators to be managed, the risk culture based on
the corporate principles, and the governance structure
supporting these matters. Based on this risk appetite
framework, at Daiwa Securities Group Inc. we control

Corporate Principles

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

Refer to page 88
onwards of ourIntegrated Report forrisk management.
* Risk Appetite
Framework
This risk appetite
framework sets out, asrisk appetite, the type
and total amount of riskthat should be assumed
in order to achievebusiness strategies. It is
a common phrase usedinternally to discuss
risk-taking policies within
the context of business
management.

Social Role Required
Realizing a fair and transparent market

Risk Culture

Not undertaking risks that go against corporate principles

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

Business Strategy

Capital Buffer

Preparation for management environment risk

Risk Appetite

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

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

Inspection
by Internal
AuditRisk Management

Daiwa Securities Group SDGs Data Book 2019risk according to the profile and the size of risk ateach business, and monitor the risk management
systems and risk exposures of our subsidiaries. Risk
exposures and issues are discussed at the Group
Risk Management Committee, which is a sectional
committee of the Executive Management Committee.
The Risk Management Department plays a central rolein these risk controls.

50

management, compliance, and other divisions tasked
with controlling risk in a cross-organizational andcomprehensive manner. The third is the Internal Audit
division. We endeavor to control risk by utilizing thesethree defense lines.

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

Risk Management System

Daiwa Securities Group Inc.

Group companies•D aiwa Securities

Nominating Committee

Board of Directors

Audit Committee
Compensation Committee

Executive Management Committee

ReportingOutside Director's Committee

Reporting

Representative Executive Officer

Discussion
andreporting

ReportingCRO*•D aiwa Asset Management•D aiwa Corporate Investment•D aiwa Energy & Infrastructure

Comprehensive Risk Management Structure•D aiwa Next Bank

Risk Management Department
Liquidity
Operations System
risk
risk
risk

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

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

Group Internal Audit Committee

Group Risk Management Committee

Marketrisk

Policyformulation
andinstruction•O ther Group companies

Operational risks
Information Compliance
Security risk
risk

Legal
risk

Human
resource
risk

Physicalassetsrisk(As of June 30, 2019)

Risk Management

Daiwa Securities Group SDGs Data Book 2019

●Measures to Address Disaster Risk by
RegionBusiness 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 berestored or continued* in order to keep the financial
markets open and protect customers’ economic
activities. Disruptions of social infrastructure mightmake our head office functions, branches and data
centers or other important facilities inoperative.
They can be caused by events such as earthquakes,
fires, storms, floods, other extraordinary weather
conditions, terrorism, large-scale power failures, andserious outbreaks of infectious diseases. In accordancewith the BCP, we will not only ensure the safety ofcustomers 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 highestlevel backup center, and have established a system
which enables us to easily switch to the alternate
system in case of an emergency at headquarters. We
can therefore continue vital operations through a
substitute office location.

Daiwa Securities has offices across Japan. As disasterrisk differs amongst regions, it has formulated adisaster response plan for each sales branch andis preparing disaster relief supplies that reflect thedisaster risk for each branch. The hazard maps createdby the municipalities of respective regions are sent tobranches and made available on our intranet.

Supply Chain Management and ESG Due
Diligence including Human Rights
Daiwa Securities Group regularly checks documents
disclosed by major business partners, including
providers of IT equipment and services, as well as
news reports about these companies and theirreputation on the Internet in order to address issues
in the Group’s supply chain, including those related tothe environment, society, human rights, informationand cyber security. If any issues are found, we takesteps such as urging the business partners to make
improvements.
We also collect information provided by public
institutions within and outside Japan and exchange
information with external parties to be awareof human rights issues existing in the countries
and regions where the Group conducts business
operations. We then consider taking appropriate
measures for important issues.
We carry out due diligence in deals underwritten,
considering not only business performance andfinancial aspects, but also ESG issues. When we findissues regarding the business model of an issuer or its
planned use of proceeds, we conduct more thoroughdue diligence through such means as field workand meetings, and sometimes make proposals for
improvement to the issuer. If major concerns remain
even after taking such measures, we report them toChief Risk Officer (CRO).
Similarly, we also carry out due diligence in selfinvestment deals.

*Prioritized operations to berestored or continued
1. Carrying out securities transactions tradedin the markets and yet to be settled
2. Payment to our customers
3. New orders from customers to sell orcancel 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

Daiwa Securities Group’s Response to Issues in its Supply Chain
Subject
Major business partners includingSpecific initiatives

Frequency

Check documents disclosed by partnercompanies and external information

Regularly

Collect information on human rights issues

As needed

Deals underwritten

Due diligence in consideration of ESG

As needed

Self-investment deals

Due diligence

As needed

providers of IT equipment and services
Countries where the Group conducts
business operations

Response to the UK Modern Slavery
Act 2015

51

Risk Management

Daiwa Securities Group SDGs Data Book 2019

C lose-up
Response to the TCFD
In June 2017, the Financial Stability Board announced Recommendations of the Task Force on Climate-related
Financial Disclosures (TCFD) (Final Report). The announcement was made in response to concerns over adverse
effects on the financial system that could be caused by physical and transition risks in the course of a shift to a lowercarbon society. Daiwa Securities Group Inc. expressed its support to the TCFD in April 2018.

Impact on Daiwa Securities Group in the Course of a Transition to a Lower-Carbon Economy
The table below describes what Daiwa Securities Group currently recognizes, based on the TCFD recommendations, as major events that
may adversely affect the Group’s businesses in the course of transition to a lower-carbon economy, measures that are expected to reducesuch effects, and developments and opportunities anticipated to occur in the future, as well as effects that could remain, according to thefour thematic areas below.
Daiwa Securities Group will continuously conduct verification going forward, based on scientific knowledge and expectations aboutclimate change, and respond appropriately as an important management issue.

Disclosures in Accordance with the TCFD Recommendations
Items

Recommended disclosures

Initiatives

Governance

The organization’s governance around climaterelated risks and opportunitiesa) Oversight by the Board of Directorsb) Management’s role(1) Formulation of Environmental Vision, Environmental Principles, and Basic
Environmental Policies(2) Establishment of the SDGs Promotion Committee, chaired by the president and CEO,to discuss the Group’s response to various social issues, including climate change

Strategy

Impacts of climate-related risks and opportunities
on the organization’s businesses, strategy, andfinancial planninga) Climate-related risks and opportunitiesb) Impacts of climate-related risks andopportunitiesc) Potential impacts under different climaterelated scenarios<Opportunities>(1) Increase in demand for funds to prepare for a lower-carbon society (financing forthe renewable energy business, issuance of Green Bonds, etc.)(2) Increase in deals underwritten in association with (1)(3) Increase in opportunities for investing in new industries and companies that
contribute to the transition to a lower-carbon society(4) Increase in business opportunities for providing solutions to assist in the transition toa lower-carbon society(5) Improvement of evaluations from stakeholders through appropriate implementationof aforementioned initiatives.
<Risks>(1) Decrease in business from companies and others significantly affected in the courseof the transition(2) Increase in reputational risk associated with investment and underwriting related tobusinesses with a heavy environmental load(3) Decrease in assets under management resulting from a decline in the value of assets
held by funds(4) Decline in the value of assets held by the Group and decrease in selling opportunities(5) Increase in costs associated with the tightening of environmental regulations andcountermeasures against disaster risk

Risk
Management

Methods for identifying, assessing, andmanaging climate-related risksa) Processes for identifying and assessing climaterelated risksb) Processes for managing climate-related risksc) Integration of processes for identifying,assessing, and managing climate-related risks
into overall risk management(1) Consideration of analysis of the impact of climate change risks on financial andcapital markets(2) Consideration of execution of due diligence from the perspective of ESG and othernon-financial information for deals underwritten(3) The holding of dialogue on the environment and society by the asset management
division with investee companies. Discussion on environmental management policy,
promotion systems, information disclosure, approach to external evaluations, etc.,
especially with companies with a large environmental load

Metrics andTargets

Metrics and targets used to assess and manage
climate-related risks and opportunitiesa) Metrics for assessing climate-related risks andopportunitiesb) Scope 1, Scope 2, and Scope 3 greenhousegas (GHG) emissionsc) Targets used to manage climate-related risks
and opportunities(1) Disclosure of the company’s GHG emissions (refer to page 87)(2) Establishment of the company’s environmental load reduction target (refer topage 54)

52

Environmental Initiatives

Daiwa Securities Group SDGs Data Book 2019

Environmental Initiatives
Approach andBasic StanceProtecting the global environment, which is the basis of our livelihoods, is essential for a sustainable
society. Through our business activities, Daiwa Securities Group contributes to the resolution ofenvironmental issues by developing products that reduce the environmental burden, and also by
assisting financing for the development of environmental technologies and infrastructure. At the sametime, 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.

RelatedSustainable
Development
Goals (SDGs)

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

Environmental Management
Every six months, Daiwa Securities Group holds a
meeting of our Environmental Management Council,
where representatives from major companies of theGroup share data and exchange information. In addition,
at Daiwa Securities, Daiwa Property, and Daiwa Instituteof Research, all of which have a significant impact on theGroup’s electricity consumption and CO2 emissions, therelevant departments hold a joint meeting appropriately.
They discuss measures to reduce their environmental
impact, check the progress of improvement measuresand share information.
Moreover, Group companies with offices in Gran
Tokyo North Tower attend a meeting of the CO2
Reduction Promotion Committee hosted by the
management company of the building every six
months, working together to reduce the overall CO2

53

Environmental Initiatives

emissions of the building. We strive to improve ourefforts, while reporting quantitative data on ourenvironmental impact over time, including energy andwater consumption, CO2 emissions, waste disposal
and recycling volume.

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

●Initiatives at Group Companies
When installing new equipment at head and branch
offices, Daiwa Securities requires that the equipment
be certified under Japan’s Top Runner Program
standards. For example, we replaced 14 multifunction
copiers at the head office in FY2018, thereby reducing
the power usage for these machines by approximately
35% (an estimate by the manufacturers). We have also
been replacing our company cars successively since
FY2014 with eco-cars and hybrid vehicles that havesignificantly improved fuel efficiency. The replacement,at the time of completion, will reduce CO2 emissions
by an amount equivalent to the CO2 absorption of
more than 40,000 Japanese cedar trees annually (anestimate by Daiwa Securities using fuel efficiency data
disclosed by automakers).
The introduction of LED lighting into the head officeof Daiwa Institute of Research was completed in thesummer of 2017. In addition, Daiwa Securities Group
strives to choose environmentally friendly products in
its central purchasing.

●Initiatives to Raise Environmental
Awareness
Daiwa Securities Group is striving to raise theenvironmental awareness of each employee throughvarious initiatives. For example, our in-house magazine,“Fuji,” has a column entitled “Eco-Initiatives in the
Office.” The column mainly shares the status of theGroup’s environmental initiatives and introduces
environmental measures that can be implemented by
employees, depending on their individual awareness.
We also participated in a campaign led by the Tokyo
Metropolitan Government’s Bureau of Environment
to promote efforts to reduce plastic shopping bags at
convenience stores within offices. The initiative is still
being implemented even after the end of the campaign.
When printing documents, we recommend using
aggregate printing and double-sided printing. We also
encourage the reduction of paper usage by showing
operational guidance and the rate of reduction in
paper usage for every three months in the areas within
offices where multifunction copiers are installed. We
reduced paper consumption by 3.4% year on year in
FY2018, within the same scope as FY2017.

Daiwa Securities Group SDGs Data Book 201954

●Offering Environmentally Friendly Services
Daiwa Securities provides an online service allowing
customers to receive various reports, including
prospectuses and reports on the details of transactions
and transaction balances, in electronic format on theInternet, instead of written notifications (hardcopy
reports and prospectuses). Reports and prospectusesreceived in electronic format can, in principle, be
accessed and checked online as and when required,saved to personal computers and other devices, andprinted for five years after initial receipt. The proportionof customers choosing the online service was 43.0% asof the end of March 2019, up 1.2% from the previous
fiscal year. We will continue recommending the service
to increase the number of customers using it.

●CO2 Emissions
In comparison with the previous fiscal year, CO2
emissions in FY2018 fell by approximately 6.0% forDaiwa Securities Group’s domestic offices, as a resultof a positive initiative to conserve energy (within thesame scope as FY2017).
➔ Refer to page 87 of “SDGs Related Data” for details.

●Initiative to Reduce CO2 Emissions
We have set up the goal of reducing CO2 emissions,while complying with the Act on the Rational Useof Energy and Tokyo’s environmental protection
ordinances in a continuous and systematic way. We
continue to take energy saving initiatives, including
implementing the “Cool Biz” program again in
FY2018, carrying out energy savings measures throughon- and off-peak periods.

●Targets for FY2019●●Initiative to reduce CO2 emissions
Sustained a reduction in CO2 emissions of more than
1% in comparison with the previous fiscal year.
*Domestic consolidated basis●●Initiatives for the reduction of electricity
consumption
Achieve a reduction of at least 10% from the
FY2009 level (as of FY2020)
Achieve a reduction of at least 20% from the
FY2009 level (as of FY2030)* On a per unit area basis for both targets●●Improve the accumulation of environment-related
data and refine skills for analyzing the data
●●Continue to introduce eco-cars●●Purchase products certified under the Japan’s Top
Runner Program standards

Initiatives in Real Estate Management(Daiwa Real Estate Asset Management Co. Ltd.)●Operation of the Sustainability
Committee
Daiwa Real Estate Asset Management Co. Ltd.
launched a Sustainability Committee in FY2013 aspart of its efforts to systematically address a varietyof ESG related challenges. The company formulated

Company cars in Japan(Daiwa Securities)

1,073 vehicles
including

845 eco-cars
160 hybrid cars
(As of March 31, 2019)•Introduction results for

FY2018156 eco-cars
22 hybrid cars
•Introduction plan for

FY2019410 eco-cars
10 hybrid cars
Cases of soil andgroundwater pollution
found within officesites•FY2018

0
Investment in energysaving air conditioning
systems for FY2018¥

91 million(including installation costs)

Environmental Initiatives

Daiwa Securities Group SDGs Data Book 2019

the Rules on the Sustainability Promotion System in
FY2018. These rules set forth the development ofspecific measures related to the sustainability activitiesof each investment corporation, an internal system forpromoting sustainability (including the compositionof the committee and education for executives andemployees), and policy on disclosure of information
concerning sustainability. The rules clarify the internal
system and other necessary matters for promotion of
ESG initiatives by each investment corporation which is
entrusted with asset management operations.

●Initiatives at Shinjuku Maynds Tower
The following initiatives have been implemented since 2012at the Shinjuku Maynds Tower building, which is owned
by Daiwa Office Investment Corporation and operated by
Daiwa Real Estate Asset Management Co. Ltd.:• Adoption of LED Lighting (2012–present)
Since 2012, we have continued to install LED lighting
systems in common-use space, such as the undergroundparking lot, first basement level, and entrance on thefirst floor. As a result, we have installed LED lighting inapproximately 80% of common-use space.
We have also adopted the green lease scheme*1
since 2014 to promote the use of LED lighting in
tenant-owned spaces. The installation has proceeded
gradually under the scheme, with both tenants andlandlords enjoying its benefits. We expect LED lighting
to be introduced into approximately 85% of thearea of tenant-occupied spaces by the period ending
November 2019. In some cases, the electricity usageof lights has been halved compared with the preadoption level. We plan to also gradually introduce
LED systems in other tenant-occupied spaces after
holding discussions with tenants.

The proportion of the area into which
LED lighting has been introduced in
the tenant-occupied space of Shinjuku
Maynds Tower
100%
79.0% 80.7%

80%

85.2%

60%

40%

20%
3.4%
0%

PeriodPeriodPeriodPeriod Period Period Period Period Period
Period Period
ended
ended ended
ended ended ended ended ended ended ended ended
Nov. 2014 May 2015 Nov. 2015 May 2016 Nov. 2016 May 2017 Nov. 2017 May 2018 Nov. 2018 May 2019 Nov. 2019

* The proportion of the area for the period ended May 2019 and for the period
ended November 2019 is an estimate that was made as of November 2018.

●Maintaining DBJ Green Building
Certification*2
We are engaged in environmentally conscious officebuilding management at Shinjuku Maynds Tower.

For example, we continually upgrade its facilities toreduce its environmental load and conserve energy andalso conduct awareness-raising activities for building
tenants. In addition to these operations, the building’s
environmentally and socially friendly aspects have beenhighly rated. Shinjuku Maynds Tower therefore continued
to be certified by the Development Bank of Japan (DBJ)
as a “building with exceptionally high environmental andsocial awareness (Four Stars)” in February 2019.

●Initiatives at Daiwa River Gate
The following initiatives were implemented in 2018 at
Daiwa River Gate—a property owned by Daiwa Office
Investment Corporation, which is operated by Daiwa
Real Estate Asset Management Co. Ltd.:• Installation of Solar Wind Powered Street Lights
Solar wind powered street lights were installed, taking
advantage of the property’s environment of strong
winds and abundant sunlight, as it adjoins a river. The
installation has enabled the use of renewable energy
and helped to increase the intensity of illumination.
The street lights allow people to clearly see the steps
in the stairs area, while contributing to improving theenvironment surrounding the building from crime
prevention and other perspectives. We plan to consider
the introduction of such facilities into other properties
as well, depending on the situation, and install themsuccessively going forward.

Toward Achieving a Hydrogen Society: Entrustedwith Global Trends Survey by NEDO
Daiwa Institute of Research (DIR) has
been commissioned to undertake survey
and research work by the New Energy
and Industrial Technology Development
Organization (NEDO) toward the realizationof a hydrogen society. The commissioned
work encompasses the collection and analysis
of information on the latest trends acrossthe world (the United States, Canada, EU
countries, China, and South Korea) concerninghydrogen fuel cells, as well as identification ofissues for development strategies in hydrogenfuel cell technology in Japan.
The survey and research work is aimed
at timely collecting and analyzing of a wide
range of the latest information on hydrogenfuel cells, and sharing it with relevant parties
in Japan, toward the realization of a hydrogensociety, taking safety and the environment
into consideration. The information includes
policies and markets for hydrogen fuel cells
and research and development trends acrossthe world. The commissioned work also
involves visits to international institutions andattendance at international conferences related
to the development and use of hydrogen fuelcells. The work is also aimed at identifying
issues for Japan’s strategy for developinghydrogen fuel cell technology going forward
by accurately understanding, assessing, andanalyzing the policies, markets and industrial
trends of other countries.
In this way, DIR will be proactively engaged inbusiness related to development of new energy
sources that are environmentally friendly.

55*1 Green lease scheme
A method enabling the landlord
and the tenant of a rentalbuilding or other type of rental
property to cooperate andreduce the environmental loadin a scheme benefiting bothsides. Such methods include
an arrangement where part of
the tenant’s savings attributable
to the landlord’s investment inenergy-saving facilities, such asa decrease in electricity charges,
is returned to the landlord as agreen lease payment.

*2 Scoring model of
DBJ Green Building
Certification
A comprehensive scoringmodel uniquely developedby the Development Bankof Japan Inc. (DBJ). The DBJ
grants certification to realestate properties that are highly
environmentally and sociallyfriendly (“Green Building”),
based on a five-level ranking
system.

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

606.5 t-CO a year
2

(Shinjuku Maynds Tower in 2018)

IT Strategy and the Management of Systemic Risk

Daiwa Securities Group SDGs Data Book 2019

IT Strategy and the Management of Systemic Risk
Approach andBasic Stance

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

RelatedSustainable
Development
Goals (SDGs)

IT Governance Structureand strengthening our response to global financial
regulations and cybersecurity countermeasures.

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

*1 Application Programming Interface: A mechanism that enables
connections between systems via a standard protocol.

Systemic Risk Management
Daiwa Securities Group works to maintain andenhance the management of systemic risk in orderto reliably provide high-quality services to customers
while protecting information assets from various
threats and risks arising from factors within andoutside the Group. In particular, given the growing
threat of cyberattacks in recent years, we position
cybersecurity as an important management issue of
the Group, and have implemented a cybersecurity
management system centered on the Daiwa-CSIRT*2,
a Group-wide cross-sectional specialist organization.
We collect and analyze the latest information on
cyberattack methods and vulnerability in collaboration
with external institutions and companies, whileworking on defenses against and the enhancement ofresilience to cyberattacks.
*2 Computer Security Incident Response Team, a cybersecurity

Status of IT Investment

Initiative toward Realization of Management Strategy:
Digital Transformation▶Enhancement of corporate value▶Strengthening of competitiveness・Promotion of BPR・Use of AI, RPA, and othertechnologies
・Expansion of API connection
・Renovation of branch infrastructure
・Development of data infrastructure

Various digitalization-based measures…

▶Increasing
productivity▶Providing new value

・Reallocation of management
resources
・Three-pillars retail strategy
・Expand the Daiwa Ecosystem…

Daiwa Securities Group has been making IT investments
for a number of purposes. These include establishing acustomer-oriented sales structure; providing products
and services that meet customer needs; promoting a
digital transformation with the aim of improving theefficiency of existing businesses, business innovation,
and work process innovation to engage in businesses
with higher added value; addressing the infrastructure
platforms and responding to legal systems that are
essential for business continuity; and strengthening therisk management framework.
In FY2018, we expanded our products and services,
including the provision of a gift service taking advantageof the calendar year taxation system and the offeringof a login function based on biometric authentication
to smartphone app users. We also worked on
improving business efficiency using voice recognition
technology and AI, developing an API*1 infrastructure
to provide financial services with high added value,

management organization.

56

Engagement with Shareholders and Other Investors

Daiwa Securities Group SDGs Data Book 201957

Engagement with Shareholders and Other Investors
Approach andBasic Stance

Daiwa Securities Group works hard to promote communication with shareholders and otherinvestors. We will strive to provide shareholders and investors with improved communications andinformation that are easy to understand.

Breakdown of Shareholders

Questionnaire for Shareholders

Breakdown by Investor Type (As of March 31, 2019)
Total number of issued shares: 1,699,378,772 shares

Other
corporations in Japan
5.8%

distribution of rewards under our shareholder rewards program at
the end of September, to gather and incorporate their views into
management and IR activities. The findings of these questionnaires

Other
12.4%

Foreigninvestors
24.9%

We distribute a questionnaire to shareholders coinciding with theare utilized to enhance satisfaction with the shareholder rewards
Individuals
in Japan
27.2%

Financial
institutionsin Japan
29.7%

program and to improve our business operations.

Shareholder Rewards Questionnaire Contents atthe End of September 2018•

When did you first purchase our shares?

•

Why did you choose to buy Daiwa Securities stock?
(multiple answers allowed)•

What types of disclosure and corporate communications activities
would you like to see enhanced in the future? (multiple answers
allowed)•

Are there any products you would like to have included in theshareholder rewards program? (multiple answers allowed)

Dividend Policy
Daiwa Securities Group Inc. strives to continuously
enhance shareholder value, including profit
distribution. In principle, dividends are paid
semiannually (interim and year-end dividends) at apayout ratio of 50% or more based on consolidated
financial performance. However, after taking stability
into account, when we can secure a sufficient amountof internal reserves required for future businessdevelopment, we intend to increase returns to ourshareholders, including share buybacks.

Communication with Shareholders andOther Investors
Every year, many shareholders attend our general
meeting of shareholders, which is an opportunity
for us to interact directly with everyone. To increase
communication opportunities, we also carry out various
IR activities. These include telephone conferences on thedays of earnings announcements, briefings about thecompany for individual investors, management strategy
briefing sessions, one-on-one meetings with institutional
investors and analysts in Japan and overseas, andparticipation in Daiwa Investment Conferences held
within and outside Japan.
In addition, we are further developing information
disclosure on our IR websites and publishing integrated
reports and business reports for shareholders. We willcontinue working to make our communications evenmore precise and easy to understand for shareholders.
Feedback and questions received from shareholders
are reported to the CEO and other management
personnel on a weekly basis, as well as at Board of
Directors meetings.

Breakdown ofshareholders(As of March 31, 2019)•Individuals in Japan

27.2%(Up 3.2 points from the end of theprevious fiscal year)•Foreign investors

24.9%(Down 4.9 points from the end of theprevious fiscal year)

Shareholder Rewards Program
Daiwa Securities Group Inc. has been implementing
a shareholder rewards program for over 10 years to
express our continuing gratitude to shareholders. We
also introduced a catalog system for rewards at theend of March 2008 and significantly expanded our
lineup of products posted in the catalogue from 24 to
50 items at the end of March 2016. Reward products
are provided semiannually, at the end of March and
September. Shareholders have multiple reward options
to choose from such as regional specialties, charitable
donations, and “Kaisha Shikiho,” a quarterly journal
on investment.
Starting with the shareholder rewards offered toshareholders of record on September 30, 2017, if
shareholders request reward items on our website,
we donate ¥20 per case to “Daiwa Securities
Group Children Support Fund for a Bright Future,”established in the Public Resources Foundation. We
thus support activities for improving the environment
surrounding children and breaking the cycle of poverty
through NPOs engaged in fighting child poverty.
It also became possible to select Single Mothers
Forum, a certified NPO, as a donation recipient in theshareholder rewards offered to shareholders of record
on March 31, 2019.
The contributions made will be used for initiatives togive congratulatory money to children in single-parent
households who enter elementary, junior and seniorhigh schools and colleges.

Investor Relations

For Shareholders

Engagement with Shareholders and Other Investors

Daiwa Securities Group SDGs Data Book 2019

●Increasing Shareholder Returns

Initiatives in FY2018●Dialogue with Various Stakeholders
With the expectation of a shift from savings toasset building, Daiwa Securities Group continued toactively disseminate information contributing to theimprovement of the Group’s corporate value. We
communicated the progress of our Medium-Term
Management Plan, an overview of our management
policy, and other information efficiently and effectively
in earnings announcements and management strategy
briefing sessions, as well as in integrated reports andbusiness reports. For institutional investors in Japanand abroad, we implemented effective activities suited
to each investor base, and held an IR roadshow by top
management for overseas institutional investors. In
FY2018, we continued to nurture relationships of trustwith staff responsible for exercising voting rights, inaddition to analysts, portfolio managers, and others,
through periodic communications. In December 2018,
we held an ESG meeting for institutional investors
and analysts. At the meeting, the Chairman of Audit
Committee, an outside director, and the officer incharge of planning explained, respectively, the Group’s
corporate governance and SDG initiatives, and thiswas followed by a question and answer session.
Moreover, following the increase in the ratio of
individual investors, we significantly increased thenumber of briefings for individual investors, with the
CEO and CFO participating. We also held seminarstyle company briefings for individual investors on
the Internet, in addition to briefings at sales branchesof Daiwa Securities, attracting the participation ofmany investors and large audiences. Furthermore, we
participated in briefings organized by Daiwa Investor
Relations Co. Ltd. (Daiwa IR), a Group company, withthe aim of increasing contact points with individual
investors. At these briefings, we provide a question andanswer session and conduct a survey, thereby obtaining
diverse feedback to use for the improvement ofcommunication with individual investors in the future.
ESG meeting held in December 2018

Daiwa Securities Group, aiming to achieve sustainablegrowth by earning healthy profits, will implementa capital policy that takes all stakeholders into
consideration by striving to balance investment
in growth, improve capital efficiency, maintaining
financial health, and enhancing shareholder returns.
We raised the target payout ratio to at least 50%
from FY2018. When we can secure a sufficientamount of the internal reserves required for futurebusiness development, we intend to increase returns
to our shareholders, including share buybacks. The fullyear dividend payout ratio was 52.6% in FY2018, withthe total return ratio standing at 106.9%.

Fair Disclosure
Daiwa Securities Group has formulated its Disclosure
Policy, which outlines the Group’s basic approach to
information disclosure and strives to provide informationthat is fair, prompt, and appropriate.
As a company engaged in the securities business,
we are committed to fair information disclosure inaccordance with the Fair Disclosure Rules so that wewill be a role model for other listed companies. We will
strengthen disclosure not only of financial information,
but also nonfinancial information with social andenvironmental aspects that are not apparent in thefinancial figures in the short term.

Senior Executive Managing Director Ogino

August 2018
Seminar-style company briefing for individual investors on the Internet●We will observe fair and timely disclosure ofimportant financial, social and environmental
information ("Management-RelatedInformation") regarding the Daiwa Securities
Group so that our stakeholders, (including
shareholders, investors and the communities we
operate in) may understand and maintain realistic
expectations of the Daiwa Securities Group.
●We will comply with the Financial Instruments
and Exchange Law and other laws andordinances related to securities transactions andthe various rules of the financial Instruments
exchanges where on which our stock is listed.

●We will utilize various communication channels
including presentations, telephone conferences,the Internet and printed materials to disclose
information in an easy to comprehend manner
for investors.
●We will consciously act as a leader of the
securities markets in terms of disclosure and set
the standards for other listed corporations.
●To realize the above policies we will establish
Disclosure Regulations* and set up a Disclosure
Committee to lay down procedures fordisclosing information.

President and CEO Nakata

Number of overseas
IR activities held in
FY2018•North America

2 IR events(28 meetings)•Europe2 IR events(30 meetings)•Asia

2 IR events(23 meetings)
Company briefings for
Individual Investors held
in FY2018•Number of briefings at

sales branches of Daiwa
Securities

36•Number of briefings

organized by Daiwa IR

9•Number of seminar-style

Internet briefings

2•Total number of participants

Approximately

6,500 people
Disclosure Policy●We will endeavor to achieve fair disclosure bothin terms of content and timing.
Director Tadaki (at the time)

58

Share buyback•Buyback period

From August 22, 2018
to February 22, 2019
•Total number of shares

repurchased

55
million shares(Percentage of total number of issued
shares excluding treasury stock:
3.40%)•Total amount of shares

repurchased

34,811 million¥

Engagement with Employees

Daiwa Securities Group SDGs Data Book 201959

Engagement with Employees
Approach andBasic Stance

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

RelatedSustainable
Development
Goals (SDGs)

Hiring Initiatives●Hiring Approaches and Trends
Daiwa Securities Group wants all our employees towork with a high level of loyalty and motivation.
All new college graduates recruited by the Group,
including those with disabilities, are brought on as fulland regular employees so that newly hired employees
will be able to have a sense of trust and pride in theGroup, and a sense of solidarity with their colleagues.
We are making efforts to provide an environment
where a diverse range of people can perform to theirfull potential.
We also focus on attracting people capable ofexcelling globally in order to develop a global networkand strengthen alliance strategies.
Daiwa Securities Group offers internship programs
to provide opportunities for gaining firsthandexperience in the securities business throughinteraction with employees.

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

Guidelines for Fair Hiring
1. Utmost respect for the rights of theapplicants
2. Eligibility for all individuals who meet thehiring criteria
3. Making all hiring decisions based on a fairand objective evaluation of the applicants’ability, aptitude and motivation●Recruitment of University Graduates
In FY2011, we began hiring recent university
graduates who had obtained their diploma within
the preceding three years with or without any work
experience during the period as part of our efforts tobuild a diverse workforce. These recruits receive thesame training as new graduates.

Support for the Success of Veteran
Employees

Refer to page 8 for the
Daiwa Spirit.

Number of new
employees for FY2019

677 people(7 group companies*)

Daiwa Securities Group has in place a Senior Advisor
System that enables veteran employees with a wealthof experience to play an active role in the workplace.
Senior advisors are dispatched to locations of theirchoice and engage in community-based consulting
and sales from a long-term perspective.
Highly-motivated and talented employees cancontinue working after retirement under our Daiwa
Master System. In FY2017, we started allowing senioradvisors to continue working regardless of their age.
In accordance with the effectuation of revisions
to the Act on Stabilization of Employment of Elderly
Persons in 2013, and as the careers of employees
are lengthening, we associate our sustainablegrowth as a company with the employment of older
people who wish to keep learning and working in ameaningful way as a part of the organization. Daiwa
Securities is greatly expanding its training programsfor employees aged 45 and older, and has introduceda License Certification System that provides incentives
to employees who have improved their skills andpolished their acumen as professionals. In addition,
we introduced a Superior Managing Director System
as the highest employee position and enhanced
the personnel system for veteran employees withoutstanding expertise and knowledge who have maderemarkable achievements. We support both work andcaregiving, and are creating an environment in which
employees can move forward enthusiastically without
concerns over their future lifestyle.

* Refer to page 81 of “SDGs Related
Data” for companies covered by data.

Engagement with Employees

We have also introduced long service leave for
employees in their 20th year and 30th year at theGroup. The leave is designed with gratitude 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 otherpeople around them who always support them.

Employment of People with Disabilities
As of FY2018, Daiwa Securities Group had more than
190 employees with disabilities handling a wide rangeof responsibilities in our head office, sales branches andcontact centers. We started recruiting new graduateswith 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. Oncepeople with disabilities are hired, we provide support
for their career advancement by, for example, creating
opportunities for them to enter the career-track andregional 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 the type of disability. The Plan is a measurefor bringing out employees’ talents while taking theirrespective circumstances into consideration, anddeveloping a pleasant working environment.
We have vigorously increased recruitment
opportunities by holding briefings about the company
for new graduates, participating in career expos, andimplementing job placement support programs foruniversity students with disabilities.
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 amodel for people with disabilities that contributes tocorporate growth, and communicating information
to society concerning human resources sought bybusinesses. As of September 2018, ACE has 33
corporate members, mostly large companies. Throughthe holding of seminars and workshops for humanresources personnel and employees 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.

Human Resource Development and Skill
Enhancement●Employee Training Approaches andTrends
The source of Daiwa Securities Group’s
competitiveness lies in the capabilities of its
employees. Accordingly, we focus on the developmentof human resources based on the basic policy ofproviding high value-added solutions through the useof "Quality No. 1" consulting capabilities. In particular,
we offer extensive training programs to newly hired

Daiwa Securities Group SDGs Data Book 201960

employees, as we believe that this is a critical period
for their training. Seeking to achieve the “Quality
No.1” in the industry, we adopt a system that allows
employees to refine their knowledge, techniques,
and mindsets through a variety of programs in the
curriculum. It enables us to nurture human resources
with professional skills at an early stage.
We believe that our employees must have a firm
understanding of corporate ethics and compliance toensure the development of sound financial and capital
markets. Accordingly, we offer regular training on
information security and compliance.

●Education and Training System
Daiwa Securities Group seeks to be a group of true
professionals who love their jobs and keep aiming high.
Our employees not only acquire skills necessary for theircurrent work assignments but also make consistentefforts toward achieving their career visions. We haveadopted an educational system comprising mandatory
programs clearly positioned as duties that must be
worked on, and a variety of optional programs that canbe chosen according to the needs of each employee for
their career advancement. In this way, we support theautonomous career formation of each employee. We
also aim to foster a sense of solidarity among Group
employees across divisions while offering training
opportunities at group meetings.
• Training for Young Employees

Daiwa Securities Group views the first two years of an
employee's career as a period for their basic training forbecoming a professional. Accordingly, we implement
the Daiwa Basic Program that covers this period of
training. The program sets the items and levels thatshould be acquired, and organically combines grouptraining, OJT, e-learning, and support for the acquisitionof qualifications. Moreover, since FY2017, we have been
providing an educational program called “Q-Road” foremployees in their third to fifth year of employment.
This program helps to improve their knowledge,
techniques, and mindsets to achieve “Quality No.1”
in the industry. It presents high-level goals to further
promote employees’ growth.
• Skill Training

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

We have been providing the Advanced Skill-building
Program, a training program for employees aged 45
and older that is designed to continuously improve skills.
We have also introduced a license certification systemthat provides incentives to employees who continue
to work to improve their skills. Since its introduction,
approximately 1,700 employees, accounting for morethan 60% of personnel aged 45 and older, haveundertaken over 18,000 training programs.

Number of times skill
training was held in
FY201827 training courses
held 64 times
Cumulative number ofparticipants:

13,488 people

Cost for the Group’s
educational investment¥

2.2 billion

Engagement with Employees●Supporting Employees Trying to Earn
Credentials
Daiwa Securities Group focuses on the developmentof human resources who can provide high valueadded solutions through the use of our "Quality
No. 1" consulting capabilities. Daiwa Securities sees
Financial Planner (AFP and CFP®) and Securities Analyst
qualifications as core requirements, and encourages
employees to acquire these certifications. As a result,Daiwa Securities has 796 employees with CFP®
certifications, the highest level in the industry. CFP® isa high-level credential certifying knowledge and skillsin the tax system, inheritance, and real estate fields
needed to provide financial planning services. Moreover,as a result of the introduction of the Daiwa Basic
Program, an educational training program covering thefirst two years of employment, nearly all employees intheir second year of employment acquire AFP, while
70% have passed the Certified Member Analyst of
the Securities Analysts Association of Japan (CMA)
examination (Level 1).
We have also introduced an Inheritance Planner
Certification® as an in-house qualification system.
Certification candidates undergo practical in-housetraining based on an extensive knowledge obtained
through the acquisition of CFP® certification andacquire skills for providing services targeting highnet worth individuals. In addition, the company
provides generous support by, for example, subsidizing
certification costs so that employees can enhance their
specialized skills and become professionals.

●Intra-Group Job Postings and the Career
Track Change System
We have instituted a Career Track Change Systemthat enables non-career-track employees to transfer tocareer-track and regional career-track positions. Under thesystem, more than 1,300 employees have moved to otherpositions. We have also instituted a system of intragroupjob 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 afair 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.
We also evaluate employees comprehensively by taking
their compliance-related performance into account. In
addition, we endeavor to create a personnel evaluation
system that motivates all employees, regardless of years
they are with us, whether they are young, middle ofcareer, or experienced veterans, to take on the challengesof the next stage of their careers and to work in positions

Daiwa Securities Group SDGs Data Book 2019with greater responsibilities. Even while on childcare leave,
employees are still eligible for promotions as we properly
evaluate their contributions to date.

Striving to Create a Pleasant Working
Environment

61

Number of persons
earning CFP®
certifications

796 people(As of the end of March 2019)●Initiatives for Work Motivation Reform
Daiwa Securities Group has a proven track record of
implementing initiatives for work style reform ahead oftimes to help all employees to work efficiently within set
working hours and live a fulfilling life. Such initiatives
include the female employee support plan (since 2005),
encouraging employees to leave the workplace before
7 p.m. (since 2007), and promoting work-life balance(since 2008). In April 2017, Daiwa Securities Groupannounced the "Joint Declaration of Promotion of Work
Style Reform" by Chairman of the Board and President
and CEO. In addition, we established the “Business
Reform and Productivity Improvement Committee”
chaired by the President and CEO.
We aim to further accelerate our work style reform,
and promote our work motivation reform throughendeavors for higher value-added operations andcontributing to customers and society. To maximize
employees’ productivity, active participation, and work
motivation, we are working on developing an optimum
environment in which each employee feels motivatedand satisfied with their work and can take on challenges
while exercising their maximum potential.

●Encouraging Work-Life Balance (WLB)
One of Daiwa Securities Group’s targets is to promote
an advanced level of WLB. The Group is committed
to pursuing working styles that enable employees
to achieve a balance between their private andprofessional lives, and makes efforts to create anenvironment in which all employees, from young
to veteran, can work in a variety of ways. Not only
do we seek to establish systems that enable diverse
work styles, but we also work to change employee
awareness by ensuring employees leave work before 7
p.m. and establishing family days at the workplace.
We set up the Work-Life Balance Hotline in April
2018 to create an environment for employees to
consult casually on various concerns and worries, suchas balancing work and child care/nursing care andtheir future career.
• Strong Leadership by Top Management

We hold Work-Life Balance Committee meetings,
which are co-chaired by the Chairman of the Board
and President and CEO, on a quarterly basis. Executives
and employees from various posts and divisions,
ranging from executives and managers at the head
office and branches to young employees, participate
in the meetings, and conduct active discussions on
various measures under strong leadership. Daiwa
Securities Group has adopted systems aimed at
supporting its employees in the areas of both childrearing and nursing care that exceed statutory
requirements. Surveys concerning the Group’s efforts
to support both the career and child-rearing needsof its employees have been conducted to solicit input

Number of Certified
Member Analyst of
the Securities Analysts
Association of Japan(CMA)®

1,644 people(As of the end of March 2019)Engagement with Employees

from all Group employees. These surveys are designed
to ascertain the degree to which employees are using
the Group’s systems and to collect feedback focusing
particularly on employee needs.

●Encouraging Women to Succeed
Daiwa Securities Group proactively appoints talented
human resources regardless of gender. We are trying
to appeal more to women’s individual interests byintroducing thriving female employees as role models
in internal publications in order to increase thenumber of women in managerial positions. A career
consultation service has been set up on the Group’s
internal WLB promotion website. Female executives aswell as heads of each department, office, and branch
give advice on the concerns and inquiries of female
employees.
In 2015, the current Chairman of the Board of
Daiwa Securities Group Inc. showed his support for the“Declaration on Action” by a group of male leaders
who will create “A Society in which Women Shine”
spearheaded by Japan’s Gender Equality Bureau
Cabinet Office.
• Targets Related to Initiatives for Empowering

Women
Daiwa Securities Group has a proven track record of
implementing a wide range of initiatives that help
female employees reach their full potential. At Daiwa
Securities, we have set specific targets for the years
through FY2020. In this manner, positive steps arebeing taken to provide an environment in which
employees with diverse values can maximize theircapabilities.

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

At least 15%, a more than fivefold
increase from the FY2005 level• Ratio of women in new graduates
recruited: 50% (stable)• Ratio of women among participants intraining: 50%• Rate of taking annual leave: At least 70%• Rate of taking childcare leave for male
employees: 100%

Daiwa Securities Group SDGs Data Book 2019

• Support for Employees’ Career Advancement

By increasing the number of role models, we aremaking it easier for the Group’s female staff toenvision their career path. In this context, there has
been a sharp increase in female employees aspiring
to advance their careers by switching to career-track
and regional career-track positions in recent years.
To date, more than 1,300 female employees have
converted to career-track positions. An increasing
number of employees have also taken advantage of
our Professional Return Plan, a system for re-hiring
employees who left work to raise children or care forfamily members, starting them at the same level ofcompensation as when they left. The scope of thissystem was expanded in FY2015. This has helped us
to secure talented personnel who support business
operations. The number of female employees rightbefore being promoted to managerial positions is2,339 at the end of June 2019, substantially increasingfrom 1,093 in 2005.
We also launched a career support training initiativefor female employees (Daiwa Woman’s Forum) in
FY2014, and a program for women in managerial
positions (Daiwa Woman’s Management Forum) in
2018. These programs have contributed to building
networks among women.
• Appointment of Female Executives

Daiwa Securities Group has a total of nine womenin top managerial positions who work as directors,
corporate executive officers, and executive officers.
They include three 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 standing at 565 as of theend of June 2019. The ratio of women in managerial
positions has risen from 2.2% at the end of FY2004
to 11.5% on a group-wide basis (up from 2.3% to14.0% at Daiwa Securities).
• Becoming a Member of 30% Club JapanThe Chairman of the Board and President and CEO
of Daiwa Securities Group Inc. participate in the 30%
Club Japan as members in support of its activities. The
organization, launched in Japan in May 2019, aims
to increase the ratio of women in top managementof Japanese companies. It has set the goal of raising
the ratio of females in the Boards of the TOPIX 100
companies to 30% by 2030. We will accelerate ourinitiatives to produce female leaders who will leadJapan’s financial industry.
➔ Refer to page 77 of “Participation in Initiatives” and page78 of “Third-Party Evaluations” for details.

62

Trends in Female
Employees Right
Before Being Promoted
to Managerial
Positions
2,339 women

Nearly doubled
1,093 women2005

2019.6

Number of female
executives•Female executives in the

Board of Directors

14 Directors
Including

3 women(21.4%)•The entire Group

9 women(directors, corporate executive
officers, and executive officers)

IncludingDaiwa Securities Group Inc.

4 women(directors and corporate executive
officers)

Number of women in
managerial positions•The entire Group565 women(As of March 31, 2019)

Ratio of women in
managerial positions•Daiwa Securities

2.3%(At the end of March 2005)→14.0%(At the end of March 2019)•The entire Group

2.2%(At the end of March 2005)→11.5%(At the end of March 2019)* Refer to page 85 of “SDGs Related
Data” for Female Employee Support.

Engagement with Employees* Refer to page 65 for the Daiwa ELLE Plan.

In order to promote the use of annual paid vacation,
we introduced Kid’s Ceremony Leave and Parent’sLongevity Celebration Leave in 2016, long service leavein 2017, and Volunteer Leave and Medical Checkup
Leave in 2019. These programs reflect our efforts tofurther promote the systematic taking of paid leave byclarifying the purposes of leave.

• Rate of taking➔ Refer to page 78 of “Third-Party Evaluations” for details.

Health-related Data*• Issuance of Daiwa Securities Group White Book

on HealthWe also published the "Daiwa Securities Group WhiteBook on Health" to help employees to understandthe results, issues, and policy of each measure and use
our system efficiently. In light of the White Book, we
implement various measures so that our employees have agood understanding of their health, a high level of healthawareness, and can maintain or improve their health.

Structure to Promote
Health Management
Executive office

Health Management
Promotion Meetings at
Daiwa Securities GroupInc.

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

childcare leave for male
employees
100%

Achieved
100%

2%
2013

2017 & 2018

• Rate of participation in

regular health checkups
Close to100%

• Rate of participationin thorough medical
examinations, which
are voluntary screenings(mainly cancer screenings
for employees aged 35
years or older)87%
FY2018 90%•Percentage of overweight

employees

29.3%•Percentage of employees

Daiwa Securities Group•D aiwa Securities Group Inc.
•D
 aiwa Securities Co. Ltd.
•D
 aiwa Asset Management Co. Ltd.
•D
 aiwa Institute of Research Group•D aiwa Securities Business Center
Co. Ltd.
including other Group companies

who smoke

23.3%•Percentage of employees

who regularly exercise

20%•Percentage of employees

who took the stress check

Trinity Structure

92.5%•Proportion of those seeing

Human
Resources
Department

GeneralHealthDevelopment
Centers●Initiatives to Improve Employee Health
At Daiwa Securities Group, we set “Placing importanceon personnel" as one of our Corporate Principles,and believe the source of our competitiveness liesin the capabilities of our employees. Based on thisview, we are working strategically on promoting
health management with the objectives of achieving
a balance between employee happiness andimprovement in company productivity and creating anenvironment where employees can continue working
actively and enthusiastically over a long period.
• Appointment of Chief Health Officer (CHO)
Daiwa Securities Group started initiatives to improve
employees’ health in earnest in 2008, when specifichealth checkups and specific counseling guidancewere initiated at worksites, through close collaboration
between the Human Resources Department, the63

FY2017

Health InsuranceSociety

We set up a Childrearing Support Leave system in
FY2014, which resulted in the rate of taking childcare
leave for male employees significantly increasing from
2% (FY2013) to 100% (FY2017 and FY2018).
In recent years, we have also focused on support for
employees’ efforts to balance work and nursing care,and have expanded a variety of support programs.
For example, we have allowed employees to divide
their nursing care leave into up to four periods while
extending the total length of such leave to three years.
We have also introduced a Nursing Care Concierge
Service, a work-from-home system, life support paid
leave, an e-learning course on supporting initiatives forwork-life balance, and an allowance program for those
who return to their parents’ home to provide nursing
care. Moreover, all departments, offices, and sales
branches of Daiwa Securities hold a study meeting on
how to respond to the aging society and balance workand nursing care. We are thus working to increase
employees’ awareness and foster an environment thatfacilitates the utilization of these support programs.
We also introduced a scholarship support programin 2018. It is designed to remove the economic andpsychological burdens of employees repaying theirscholarships, thereby developing an environment inwhich employees can work with a sense of security
and devote themselves to work.
Moreover, in order to help women to continue
working enthusiastically and in good health, wehave implemented the Daiwa ELLE Plan. The plan
encompasses matters including medical checkups,
pregnancy and childbirth, leave, improvement ofhealth literacy, consultation systems, and the balancing
of work and infertility treatment.

Health Insurance Society, and occupational health staff.
In 2015, to further reinforce the Group’s structure
for promoting health management, we appointed a
Chief Health Officer (CHO) and established a HealthManagement Promotion Section within the Human
Resources Department. In addition, we hold HealthManagement Promotion Meetings, organized by the
CHO and attended by executives of group companies,
on a quarterly basis. Health Management Promotion
Meetings are participated in by occupational healthstaff, the Health Insurance Society, the Employee
Union, and external experts and examine and share
our initiatives for health management.

General Health
Development Centers●Various Work-Life Balance Support
Programs

Daiwa Securities Group SDGs Data Book 2019

doctors after regular
employee health checkups
with problematic results insuch checkups

88.3%
HealthInsurance
Society

Health Management Promotion Meetings* Excerpted mainly from “Daiwa
Securities Group White Book on
Health 2018”

Engagement with Employees

Daiwa Securities Group SDGs Data Book 2019

Initiatives for Better Health

KA-RA-DA iki-iki Project<Health Management>●Regular●health checkup●Comprehensive●
medical examination(cancer screening) (to supplement
standard tests) + options for employeesof specific ages
●Breast●cancer and cervical cancer
examinations●Helicobacter●
pylori test and hepatitis
virus testing (for the prevention of gastriccancer and liver cancer)●System●that uses a follow-up
confirmation form (known as a “yellow
paper”*)●Measures●for those with severe diseases●Smoking●
cessation support●Influenza●
vaccination<Health Literacy Improvement>●Communication●of health-related
information to all Group employees●Mental●and Physical Beauty Campaign(awareness-raising for female-specifichealth problems)●Lectures●on health literacy●Issuance●of Daiwa Securities Group WhiteBook on Health<Health Promotion>●Daiwa●Clubs (12 sports activity groups
and 8 cultural activity groups)●In-house●
events support system

In 2016, we introduced the “KA-RA-DA iki-iki
Project—Healthy Lifestyle” in collaboration
with the Human Resources Department, theHealth Insurance Society, and the General
Health Development Centers. The Programaims to raise health awareness among all
employees, including young employees who
previously had little interest in health.
Employees participating in health promotion
events are granted “SDGs points” and “KARA iki points.” SDGs points are redeemed formoney, which is donated by Daiwa Securities
Group Inc. to TABLE FOR TWO. KA-RA iki
points can be used to make donations to social
contribution activities or exchanged for healthrelated goods. We have thus established asystem in which employees’ health initiatives
can lead to social contribution activities.

* System to urge employees to see doctors after their regular healthcheckups. Employees receiving this form are required to obtain a doctor’scomment within two weeks and submit it to us. This has contributed to ahigher rate of visits to medical institutions after checkups.

* Also refer to “TABLE FOR TWO (TFT) Program” on page 72.

Events● 10 minutes per day of physical activity (Plus 10)● No alcohol challenge program● Breakfast Everyday ● Diet recording● Stop eating between meals ● KA-RA-DA iki-iki seminars● Harahachi program to promote moderate meal portions● Walking challenge
program● Smoking cessation
challenge program

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

Medical examination/ Health checkups
Comprehensive medical examination (cancer
screening) (employees aged 35 years or older)• Breast cancer and cervical cancer exams(Female employees aged younger than 35
years)• Options for employees of specific ages
(Employees aged 50, 55, and 60 years)• Recommendation for receiving further testing
after Comprehensive medical examination• Gastric cancer risk screening/Hepatitis virus
screening•

Annual leave
Life support paid leave• Unpaid leave

Return to work—Balancing work andcancer treatment
Short working hours system
Restricted overtime work
Exemption from overtime work
• Treatment support time
• Annual leave by the hour
• Work-from-home system• Appearance support (subsidizing the cost of
wigs and artificial breasts, etc.)

•

•

•

•
•

Consultation service••

Telephone consultation service for mental health
Consultation for support in balancing work and cancer treatment (Health Consultation Services at General Health Development Centers)
Financial support••

Medical expenses loans
Loans for advanced medical care expenses
Fostering supportive environments••

Declaration and dissemination of our basic policy regarding support for cancer patients
Raising awareness among employees, through training, on coping with both work and cancer treatment

64

Engagement with Employees

Daiwa Securities Group SDGs Data Book 201965

Daiwa ELLE Plan
Since October 2018, we have introduced the Daiwa ELLE Plan to provide
comprehensive support for addressing health issues specific to women. Under
the Plan, we have established support measures for female menopause
and ELLE leave, which is available when employees are feeling unwell due
to menstruation or menopause, or receiving infertility treatment. We havealso expanded our efforts to increase employees’ health literacy and support
measures for balancing work and infertility treatment. With regard to thelatter, we have launched a program to subsidize the cost of specific infertility
treatment, in addition to ensuring that employees have time for treatment.
Employees intheir 20s

Checkups

Employees intheir 30s

Subsidies for breast cancer and cervicalcancer examinations(Employees aged younger than 35 years)

Pregnancy andchildbirth

Employees intheir 40s

Employees intheir 50s

Employees intheir 60s

Thorough medical examination (cancer screening) (employees aged 35 years or older)* Options for employees of specific ages (50, 55, and 60 years)

Maternal health management, childcare leave
ELLE leave

Leave

Annual paid vacation, Annual leave by the hour,
Life support paid leave (to be available in half-day increments), Unpaid leave
Dissemination of information on women’s health
Implementation of training on health by doctors and health nurses (carried out in training for new employees

Improvement ofhealth literacy

and on other occasions)“Strengthen Team Power—What Supervisors Should Know about Subordinates’ Health” (for all employees inmanagerial positions)
KA-RA-DA iki-iki Project “Kokokara Beauty—Health Lecture for Working Women”

Consultation
service

Gynecological consultation by General Health Development Centers
Telephone consultation services for mental healthSupport for balancing work and infertility treatment• ELLE leave• Work-from-home system• Life support paid leave• Specific infertility treatment subsidy program• Medical expense loans from the Mutual Aid Society• Training for employees in managerial positions and lectures on healthliteracy for women• Consultation service

Support forbalancing workand treatment

Employment support plan for employees with cancer, a support system for balancing work and cancer
treatment●Initiatives for Mental HealthIn recent years, there has been an increase in people
suffering from mental health problems in Japan, andmental illness has come to be recognized as one of thefive major diseases in Japan and a disease prevalentin Japanese people, along with other lifestyle-relateddiseases. Many people feel some stress in theirworkplace, in particular. A survey by the Ministry of
Health, Labour and Welfare shows that the proportion ofworking people with severe anxiety, concerns, or stressabout their jobs or working lives exceeds 60%. With
this as a background, Daiwa Securities group has set up
the Mental Health Support Office, carrying out initiatives
aimed at improving the management of employees’
mental health to ensure that employees can performtheir duties in a healthy and productive manner.
The Mental Health Support Office has a certified
public psychologist (certified clinical psychologist) on
its staff to deal with the concerns or worries of people
seeking consultations.

Training on mental
health•Training at sales offices[Training during Visits to Departments, Offices,and Sales Branches]• Self-care training and mental toughness training
The first step for mental healthcare is to manage ourown mental health. We conduct self-care training andmental toughness training for the purpose of helping
employees to acquire an accurate knowledge ofmental health and raising employees’ awareness of it.
We believe that such training is helpful for preventing
mental health problems. By learning the basics ofmental health, employees will be able to recognize
their own conditions and adopt mental healthmeasures in their daily lives.
Employees who have just joined the Group may
feel a sense of disconnect between their previous
lives and their lives as working adults as they have somany new experiences. Some of them may feel a lotof stress, do not talk about their worries, or get into apoor condition mentally and physically. When visiting
departments, offices, and sales branches, the Mental
Health Support Office conducts individual interviews
with young sales personnel from the perspective ofmental illness prevention.

and branches

91 branches(including 24 sales offices)•Group company training

6 times
Individual Interviews
during Visits to
Departments, Offices,and Sales Branches

708 people(FY2018)

Engagement with Employees• Training in line care

Managers play an important role as they have daily
contact with their subordinates. Line care is defined as
managers’ involvement in mental health managementin the workplace by providing care to their subordinates.
The Mental Health Support Office provides training
in line care to managers during visits to departments,
offices, and sales branches. Such training includes how tocommunicate effectively with subordinates, notice change
in their physical conditions or guide them to counselingservices. The training is aimed at promoting adequate
functioning of line care from the viewpoints of both
improvement of the working environment by managers
and consideration for safety.
Meanwhile, there are times when managers themselves
feel stressed. Accordingly, the Mental Health Support
Office has expanded the target of individual interviews to
include not only young sales personnel but also managers
responsible for line care to try to prevent mental healthproblems.
[Return-to-Work Support Plan]
Employees feel very uneasy about going on leave due
to a mental health problem. In addition to feelinguneasiness about their illnesses, those on leave have
many realistic worries about their return to work,
including whether they will be able to work again as
they did previously. To remove such uneasiness, it isextremely important for those around them to provide
support. While focusing on prevention of mental
health problems, the Mental Health Support Officeprovides support so that those on leave can have asmooth return to work with a sense of confidence andsecurity.

Daiwa Securities Group SDGs Data Book 2019

Communication●Communication with Employees
We believe that good communication with employees
is vital for a better workplace environment. We havethus implemented a semiannual self-assessment
system whereby employees can communicate theircareer plans to their superiors and the Human
Resources Department. Under the system, employees
can also communicate to the Human Resources
Department not only their career visions but also
their thoughts on the duties they assume, personnel
and training systems, the workplace environment,
and other matters. Daiwa Securities Group uses such
feedback to develop an environment that enables
employees to work with a high level of motivation.
To give feedback on assessment results, we conduct
interviews with department and sales branch heads
twice a year, thereby sharing future goals and careerdevelopment with them and providing appropriate
guidance and advice to each employee.
We also regularly conduct surveys on work-lifebalance for all employees. We incorporate employees’
feedback, and have introduced the Nursing Care
Concierge Service to remove employees’ concerns about
nursing care. We have also introduced a support deskfor employees looking for nursery schools to ensurethat those on leave can have a smooth return to work,
while expanding a program for subsidizing expenses for
day care and after-school child care for employees withchildren up to the third grade in elementary school.
Moreover, 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.
These inputs from employees help us to identify
areas for improvement in our systems and initiatives
and to create a better workplace environment.
• New Initiatives in FY2018

In August 2018, we established a Work Motivation
Survey as a monitoring indicator. It is designed to raise
employees’ motivation to work through challenges
for higher value-added operations and contribute tocustomers and society, thereby achieving a virtuous
cycle of improved employee and customer satisfaction.
Based on assessed results, we identify factors leading
to increases in employees’ motivation and use suchfactors for various measures.

●Communication among Employees
Employee receiving counseling in the Mental Health Support Office

In October 2007, Daiwa Securities introduced aprogram 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
and solidarity. It is also intended to support work-lifebalance and facilitate a fuller social life for employees.
The program was expanded and enhanced in FY2009.
Under this program, employee groups that meetcertain conditions are recognized as Daiwa Clubs or
Daiwa Circles, which receive subsidies to cover someof their activity costs. As of March 2019, 20 clubs andfour circles were active across the Group.

66

Engagement with Employees

Daiwa Securities Group SDGs Data Book 2019

●Relationship with Employee Unions
We regularly hold labor-management negotiations on
bonuses and other compensation and the working
environment. We also increase opportunities forlearning the opinions of our employees and improve
communication through surveys conducted by
employee unions among their members.

●Initiatives for 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 tothe workplace on Family Visit Day to give family
members a better understanding of our company andthe employees’ jobs. Other initiatives for supporting
our employees’ families include the new creation of
Kid’s Ceremony Leave, Family Day Leave, and Parents’Longevity Celebration Leave, as well as the extensionof mental health support to employees’ families.

●Active Use of In-House Magazine
Daiwa Securities Group issues an in-house magazine,"Fuji," whose history dates back to 1925, when oneof the company's predecessors, Fujimoto Bill Broker
Bank, commenced its publication. The content covers
a broad scope from the basic management policy,
a message from top management, SDGs initiatives(includes ESG and improvement of environmental
awareness), information from Group companies,
introduction of awardees through our awards system,
introduction of family day, explanation of our welfare
and human resources system, human rights issues,
to our internal whistle-blowing system (frameworkand status of usage). By including information thattraverses the Group, our intention in producing themagazine is not only to engender communication
among company employees but also to further theGroup culture, the sense of connectedness andexchange of knowledge. At present, 20,000 copiesof the bi-monthly magazine are distributed among
Group executives, employees and retirees. In addition,
the magazine is also posted on the internal work-lifebalance promotion website making it viewable tocompany employees who are currently involved inchild rearing, nursing family members or are on leavefrom work.

Development of SDGs Human Resources
Initiatives taken by employees in a bottom-up manner are important for generating a sense ofownership of SDGs and promoting them across the Group. Each employee needs to raise theirown awareness and develop skills. Therefore, we introduce here the initiatives we took in FY2018
to prepare for development of SDGs human resources—one of Daiwa Securities Group’s plan togenerate a sense of ownership of SDGs.

●Proposals by SDGs Working Group for SDGs Promotion Action Plan
The SDGs Working Group was created in the second
half of FY2018 under the framework developed
for formulating action plans for promoting SDGs.
It comprises approximately 120 voluntary members
who responded to a Group-wide internal solicitation.
Based on the ideal image of Daiwa Securities Group
in 2030, they drew up proposals for an action plan
toward realization of that ideal image.

SDGs Working Group members

Each team held enthusiastic discussions and proposed the ideal image of Daiwa Securities Group in 2030
and various ideas for actions to be taken to achieve that image.

Daiwa Securities Group in 2030 Sought by Voluntary Members
Contribute to eradicating
poverty and starvation

Contribute to solving
environmental issues

At an SDGs Promotion Committee meeting, therepresentative team of the Working Group members
made proposals to management, which werereflected in the actual SDGs promotion action plan.
➔ Refer to page 7 for SDGs promotion action plan “Passion
for SDGs” 2019.

Provide opportunities
for fair and high-quality
education

Create a cycle of SDGs
funds

etc.

Proposals made at the SDGs Promotion Committee

67

Number of Employee
Union Members

7,202 people(As of March 31, 2019)* Refer to page 85 of “SDGs Related
Data” for companies covered bydata.

Number of Family Visit
Day participants

6,547 people(FY2018)

Engagement with Society

Daiwa Securities Group SDGs Data Book 201968

Engagement with Society
Approach andBasic Stance

Daiwa Securities Group considers it important to work together with NPOs and NGOs as a good
corporate citizen engaging in consistent collaboration with the local community to foster sustainable
development. Our activities can be categorized into the following four key fields.
1. Education and Research Activities in Economics and Finance
2. Assistance to Communities Inside and Outside of Japan through Foundations and NPOs
3. Support for Culture, the Arts, and Sports Activities
4. Corporate Citizenship Initiatives

RelatedSustainable
Development
Goals (SDGs)

Education and Research Activities in
Economics and FinanceCapitalizing on financial and economic expertise
accumulated through its securities business, Daiwa
Securities Group engages in business-academia
collaborations and supports programs for junior andsenior high school students as well as teachers. We
believe that economic and financial education isimportant in helping young people develop the capacity
to build their own lives and shape the future world.
* Refer to page 85 of “SDGs Related Data” for “Results in Economic
and Financial Education Program.”

Economic and Financial Education
Sustainable Development of theJapanese Economy
Research
institutions

Schools

students. Group employees participated in the programas lecturers, teaching the mechanism of stocks and jobs
at a securities company to participating students.

●Finance Park
Daiwa Securities Group cooperates with Finance Parks
operated by Junior Achievement Japan. This programprovides opportunities for junior high school students
to learn economic and financial mechanisms that will
be necessary for them in their adult life. Finance Parks
have been operating in Shinagawa (Tokyo), Kyoto,
Iwaki (Fukushima Prefecture), and Sendai (Miyagi
Prefecture). We have set up pseudo-branches of Daiwa
Securities in these parks. To date, a total of 134,902
students have participated.

●Initiatives for Junior and Senior HighSchool and College Students• For Elementary, Junior High and High School

Understandingof social andeconomicprinciples

Improveeconomic
and financial
knowledge

Developfinancial
specialists

Discloseresearch results
Create practicalapplications

Commercial
and businessapplication ofresearch results

Elementary/junior/high school
students

Undergraduate
students

Graduatestudents

ResearchersIntellectual
property (IP)/patents

Support forteachers
Participate inclasses

Provide or
support classes
Dispatch
instructors

Provide or
support classes
Dispatch
instructors

Joint
researchResearchsupportSupport foruniversity
launched
ventures and IP
headquarters

Group Employee Cooperation●●Support for KidZania
Daiwa Securities Group is a supporter of KidZania,
a theme park designed to offer work experiences tochildren, and has been providing support to the facilities
in Tokyo and Koshien (Hyogo Prefecture) since they
opened. KidZania provides children from the age ofthree to 15 with programs that enable them to learn
the mechanisms of society in a fun way. In the Daiwa
Securities pavilions, children act as consultants at asecurities company, giving advice to clients, going to
nearby pavilions, and checking their levels of traffic andpopular products. Based on the results of those checks,
they then make investment recommendations for theirclients. In December 2018, KidZania Tokyo held “Junior
Challenge Japan,” a program for junior high schoolStudents
In July 2018, Daiwa Securities Akabane Branch
participated in a collaboration class at a nearby elementary
school. The branch provided fourth graders with a gameenabling them to experience stock investment. It also
introduced the details and rewarding elements of work at
a securities company to help the students to deepen theirunderstanding of securities firms.
In August 2018, Daiwa Securities Shinjuku Branchand departments at the head office collaborated toparticipate in “Job Museum,” an event held in Shinjuku.
They hosted a quiz about securities firms and a workshop
for elementary and junior high school students entitled“Join a Stock Price Game and Be an Investor.”
Daiwa Securities Group also accepts requests
for corporate training at head offices and sales
branches. At such training, we mainly explain theroles of securities firms and the details of the securities
business to help participants to determine their future
course and occupation.
• For College Students and Others

In August 2016, Daiwa Securities Group Inc.
established the University of Tokyo Hongo Tech Garage
as a site to advance entrepreneurship education in
the University of Tokyo (a donation project by Daiwa
Securities Group). The project aims to create anenvironment that enables students at the University

Refer to page 85
of “SDGs Related
Data” for “Corporate
Citizenship Initiatives
and Expenditures.”
Number of participantsin Finance Parks for
FY201820,926 people
Shinagawa: 1,902
Kyoto: 7,376
Iwaki: 3,218
Sendai: 8,430(on an application basis; surveyed by
Junior Achievement Japan)

Engagement with Society

Daiwa Securities Group SDGs Data Book 2019of Tokyo to voluntarily promote their projects while
expanding educational programs. Under the project,
we are engaging in initiatives leading to the creationof start-ups that will play a major role in the next
generation, as well as the development of humanresources for innovation.
Daiwa Securities Group also plans to provide
corporate customers with a health management
evaluation service that contributes to initiatives for
SDGs. The service will be offered from FY2020,
capitalizing on the knowledge of AI technology anddata science, advanced analytical technology, andother strengths of Daiwa Institute of Research Business
Innovation. Ahead of the initiation of the service,
we set up a study group on health management
promotion together with the National Institute ofAdvanced Industrial Science and Technology in May
2019, inviting technical advisors from graduate schoolsof the University of Tokyo. We believe that the study
group and the service to be rolled out in the future
will contribute to ensuring healthy lives and promoting
well-being for all at all ages—Goal 3 of SDGs. Daiwa
Securities Group will promote health management andfocus on the achievement of SDGs.
Further to the initiatives above, in December 2018,an employee from Daiwa Securities Mito Branch served
as a lecturer at a university in Mito City. In a lectureon the securities business, the lecturer explained
the characteristics of securities companies and the
securities business, and the surrounding environment.
Daiwa Securities Group also gives support to economic
and financial education in local universities.

●Support to “Job Museum” and “Job
Almanac”
Since FY2016, Daiwa Securities Group Inc. has been
providing support to “Job Museum,” career educationmaterials for elementary school children released by
The Asahi Shimbun Company. We explained branchwork of a securities firm and the role of a trading
room in articles entitled “What work does a securities
company perform?” in FY2018 and “What happens in
a trading room?” in FY2019. The material conforms togovernment guidelines for teaching and is available inboth book and website versions.
The book version, “Job Almanac,” has been donatedto elementary schools and junior high schools acrossJapan, as well as overseas Japanese schools and somechildren’s cafeterias. The web version, “Job Museum
Kids,” has a quiz and other features enabling visitors toenjoy the site like a game.

●Financial Education Textbook“Let's Learn about Stocks”
In FY2017, Daiwa Securities Group Inc. prepared “Let's
Learn about Stocks,” a financial education textbook
targeting upper-grade elementary school children
and above, with support from school teachers. The
textbook comes in two types, one for students andone for instructors. Readers can learn about companies
in the basic course and about stocks, which is amethod for companies to raise funds, in the advanced
course. The textbook was first used in schools in
FY2017, and about 2,200 children in 31 elementary
schools across Japan used the textbook in FY2018.

“Job Almanac 2018”
Donation of

64,000 copies(published on June 15, 2018)“Job Almanac 2019”
Donation of

63,500 copies(published on June 17, 2019)

Daiwa Securities
Health Foundation's
cumulative grants
awarded through Independent
Assurance
FY2018•Number of recipients

1,256 people•Total amount of grants

1,238.60 million¥

Assistance to Communities inside andoutside of Japan through Foundations
and NPOs“Job Almanac 2018”

Financial Education Textbook“Let's Learn about Stocks”“Job Almanac 2019”

Since the 1970s, Daiwa Securities Group has beenworking on solving social issues, such as those related towelfare and medical care, in the medium- to long-term bycreating foundations and awarding grants to individuals
and organizations. The cumulative amount of grants
awarded so far by Daiwa Securities Health Foundation
and Daiwa Securities Foundation is approximately ¥1.25
billion and ¥990 million, respectively.
We are also continuing to provide grants, incollaboration with NPOs and other organizations, foreffective activities that contribute to resolving social
issues inside and outside of Japan.

●Daiwa Securities Health Foundation
In commemoration of Daiwa Securities' 30th
anniversary, Daiwa Securities Health Foundation wasestablished in 1972 to improve Japanese people’s
health and prevent disease. Since FY1973, its firstyear of support, the Foundation has been targeting
research projects focusing on medicine and medicalcare for middle-aged and elderly people, soliciting
applications, and awarding grants mainly to doctors
and medical researchers. In FY2018, which marked its
45th year of support, the Foundation awarded a totalof ¥30.6 million to 33 recipients. With the importanceof collaboration between medical and nursing care69

Job Museum Kids (Japanese)

Daiwa Securities Health Foundation(Japanese)

Engagement with Society

attracting attention, the Foundation has recently
expanded the target of its grants to research projects
on home medical and nursing care—a field other than
medical science and medical treatment.

●Daiwa Securities Foundation
In 1994, Daiwa Securities Foundation was launchedas part of commemorative activities for the 50th
anniversary of Daiwa Securities' establishment in order
to contribute to society from our profits. Since the yearof its establishment, the Foundation has continued
providing volunteer work grants to organizations
engaged in support activities for the elderly, people
with disabilities, and children. In addition to thesegrant activities, in recent years, the Foundation has
awarded grants to organizations assisting disaster relief
efforts for victims of large-scale natural disasters, suchas the Great East Japan Earthquake, the Kumamoto
Earthquakes, and the torrential rain disaster in thewestern part of Japan. In FY2018, the Foundation
awarded grants approximately ¥44.11 million in total
to 173 organizations. It also launched a grant programfor activities supporting children in FY2018, providing
a total of ¥992,000 in grants to two organizations.

●Daiwa Anglo-Japanese Foundation(Chartered in the United Kingdom)
As a UK charity for fostering closer ties between the
United Kingdom and Japan, the Daiwa Anglo-JapaneseFoundation was established in 1988 with contributions
from Daiwa Securities Co Ltd.. The Foundation’s
activities are based on the following pillars:(1) A warding grants to individuals, institutions, andorganizations working to promote ties between the
United Kingdom and Japan(2) E nabling British and Japanese students andacademics to further their education by providing
Presentation ceremony at Daiwa Securities Health Foundation (Head Office)Daiwa Securities Group SDGs Data Book 2019

opportunities for joint research and supporting
exchanges and other bilateral initiatives(3) Awarding Daiwa Scholarships for British graduates
to study Japanese and undertake work assignments
in Japan(4) Organizing a year-round calendar of events toimprove understanding of Japan in the United
Kingdom (at the Headquarters in London)
The Foundation's Tokyo office provides local
assistance to Daiwa Scholars (students from the United
Kingdom), administers grant applications from Japanand collaborates with other institutions promoting
Anglo-Japanese relations.
The Foundation began the Daiwa/British Embassy
Ichiban Lectures in FY2015 in collaboration with the
British Embassy in Tokyo. On April 11, 2019, Eddie
Jones, the current head coach of the rugby Englandnational team and the former head coach of the Japannational team, gave a lecture entitled “Driving for
Excellence.”
Cumulative number of people completing the
Daiwa Scholar program by FY2018 is 176. Each of
those chosen as Daiwa Scholars 2017 had a four-weekhome-stay in Hirosaki City, Nagano City, Kanazawa
City, Kochi City, Momoshima in Onomichi City, orNaha City. They visited Daiwa Securities branches anddeepened interaction with branch staff.
Moreover, in Daiwa Scholarships in JapaneseStudies, established in FY2015 as a scholarshipprogram for studies on Japan and Japanese language
training, four persons were selected for FY2018,bringing the cumulative number of scholarship
recipients under the program to 12. This is a programin which Daiwa Securities Group funds tuition andliving expenses in Japan for individuals from the United
Kingdom.

70

Daiwa Securities
Foundation's cumulative
grants awarded
Independent
through FY2018 Assurance
Volunteer Activities Grants•Number of projects receiving grants

3,504 projects•Total amount of grants

813.64 million¥

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

251 projects•Total amount of grants

102.90 million¥

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

74 projects•Total amount of grants

21.14 million¥

Grants to activities
supporting children•Number of projects receiving grants

2 projects•Total amount of grants

0.99 million¥

Media reports
concerning grantactivities•Daiwa Securities Health Foundation

9

newspapers and TV stations•Daiwa Securities Foundation
The Daiwa Scholar 2017 completion ceremony

Grants to volunteer work for disaster recovery:

45

One

newspapers andTV station(Surveyed by Daiwa Securities HealthFoundation and Daiwa Securities Foundation)

Cumulative number ofpeople completing the
Daiwa Scholar
Independent
Assurance
program by
FY2018176 people
Presentation ceremony at Daiwa Securities Foundation (Chiba Branch)Daiwa/British Embassy Ichiban Lectures

Daiwa Securities Foundation(Japanese)

The Daiwa Anglo-JapaneseFoundation

Engagement with Society●Daiwa Myanmar-Japan Foundation
On April, 2013, Daiwa Securities Group established the
Daiwa Myanmar-Japan Foundation to improve people's
livelihoods in Myanmar and develop the human capitalnecessary for sustainable economic growth. Since its
establishment, the Foundation has implemented ascholarship student support program that provides
junior staff of the country's central government
with opportunities to study in Japan. To date, it has
supported a total of 26 scholarship students.
The Foundation has also provided training to 64
certified public accountants in Myanmar to date,based on the tripartite memorandum of understanding
signed with the Myanmar Institute of Certified Public
Accountants and the Japanese Institute of Certified
Public Accountants. In March 2018, the tripartite
memorandum of understanding was renewed. In
a commemorative ceremony held in August 2018,
the three parties announced that they have jointly
launched an accountant development program inorder to expand the number of new listings on the
Yangon Stock Exchange.
The Foundation’s initiatives are positioned as one of
the measures that Japan's public and private sectors
have worked on together to invigorate Myanmar's
capital market. They contribute to developing andcreating a network of the human resources that will
form the country’s future leaders.

Daiwa Securities Group SDGs Data Book 2019needed products such as simple water purifiers andsolar lamps. Kopernik shares details of recipient
NPO/ NGO activities supported by donations on its
website to ensure transparency. Donations sourced
from our revenue from the Daiwa Eco Fund andRussell Investment Global Environmental Technology
Fund are granted to this program with products andrecipients selected based on their consistency with theinvestment policies of these funds.

Contributions by
Daiwa Myanmar-JapanFoundation•Number of Myanmar citizens
receiving scholarships

26 people•Number of participants in public
accountant training

64 people(Cumulative contributions until
FY2018)●Daiwa Securities Phoenix Japan Program
In May 2012, Daiwa Securities Group established theGreat East Japan Earthquake Relief Assistance program.
The program donates a portion of management feesfrom the Daiwa Nippon Support Fund Vol. 3 (Phoenix
Japan) and continues providing assistance to local NPOs
through the Japan Earthquake Local NPO Support
Fund (Special Aid), which was set up by Japan NPO
Center, a certified NPO. The program supports thehuman resources development of local NPOs. The
activities of the NPOs include educational assistanceand reconstructing communities in the disaster-affectedareas. A presentation ceremony took place at Daiwa
Securities Sendai Branch in October 2018.

How Daiwa Securities Phoenix Japan
Program Works
Flow of funds
Flow of reports●Kopernik Program
Kopernik is a US-based NPO established in 2009 withthe goal of improving quality of life and reducing
poverty in developing countries. It began operationsin Japan in 2010. Kopernik has developed a program
to enable contributors in developed countries to
go online and donate to NPOs/NGOs in developing
countries or areas of their own choosing by selecting

71

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

Selection and advice
Donations

Daiwa
Securities“Special aid”
selectioncommittee

Reconstruction
assistanceNPO

Operation and grant
Civil Society Initiative FundJapan NPO Center

Daiwa Myanmar-Japan Foundation’s reception for FY2018 scholars

Donations made Independent
Assurance
to the Kopernik
program for FY2018

3,089,592¥

RegionIndonesia
Bangladesh

6 projects(demonstration experiments)(1) Improvement ofirrigation systems: driptype irrigation systems
using plastic bottles(2) Grain storage methodthat contributes tofarmers securing foodand increasing theirincomes(3) Solar systems providing
access to electricity(4) Palm leaf cutting
machines that improve
farmers’ processing
skills(5) The eastern part ofIndonesia: provision ofclean energy technology
to schools and students
in remote areas(6) Support to Rohingya
refugees: solar power
generation systems forhealth care

Support for Culture, the Arts, andSports Activities

Phoenix Japan Program presentation ceremony (Daiwa Securities Sendai Branch)Daiwa Securities Group provides support for a wide
range of cultural and artistic activities, including
exhibitions, classical concerts, and sports.
Since FY2015, we have been supporting “ClassicalMusic Concert For The First Time.” It is an event aimed
at increasing a sense of affinity for classical music andprovides junior and senior high school students with
an opportunity to be exposed to high-quality music
for a reasonable admission fee. In FY2018, we invited
guardians and children in single-parent households.
We have also been supporting the Tokyo Marathon
as an official partner since FY2015, while striving todevelop an environment in which all our employees cancontinue working in good health and enthusiastically. To
help promote sports, we join the Japanese Para-Sports
Association, a public interest incorporated foundation,and the Japanese Para-Swimming Federation, a generalincorporated association.

Amount of grants Independent
Assurance
selected to FY2018
seventh-term programfor Daiwa Securities
Phoenix Japan Program•Grant recipients

7 groups•Total amount of grants

25.09 million¥

Daiwa Securities Phoenix
Japan Program (Japanese)

Engagement with Society

72

Daiwa Securities Group SDGs Data Book 2019

●Holding a Children’s Art Exhibition
In FY2018, we held a children art exhibition for the
first time in the exhibition space on the first floor of
the head office building. In collaboration with theJapan National Council of Social Welfare and the Japan
National Council of Children's Homes, we exhibited
29 works that won prizes at the 38th children’s art
exhibition sponsored by the Japan National Councilof Children’s Homes. The exhibition provided
many people with an opportunity to deepen theirunderstanding of children living in children’s homes.

Corporate Citizenship Initiatives
Daiwa Securities Group believes that participation involunteer programs and other community activities
by employees helps broaden their perspectives andfamiliarize them with different values. We consider
that this, in turn, has a good influence on both theirwork and their lives. Through our intranet, we provide
information on volunteer opportunities for projects
planned by ourselves, other businesses and NPOs/
NGOs as well as events that help educate employees
and raise their awareness. We also strive to create
an environment that makes it easy for employees
to volunteer by setting up a recognition program,
the Volunteer Award, and other incentives. In ourefforts to encourage as many employees as possible
to participate in volunteer activities, we will seek
ongoing collaboration with external organizations,strengthen internal communications on volunteeringand volunteer opportunities and continue to pursue
increased opportunities for employees to engage.

●Volunteer Activities by Employees• International Cooperation through a Collection Drive

As an initiative that is easy for employees to takepart in, Daiwa Securities Group has been running acollection drive, collecting and donating pre-loved
books and unusable postcards. The proceeds from thesale of items collected are used to fund the activities ofdonation recipients, including support for education,
medical services, and agricultural development
assistance in developing countries.
We have also approved of the “Used Book Sale
Donation for Children’s Future,” an initiative of
the securities industry as a whole, and have been
participating in the initiative since October 2018.
• TABLE FOR TWO (TFT) Program
Since the spring of 2013, Daiwa Securities Group has
contributed to the TFT Program, which is organized by
TABLE FOR TWO, an internationally designated NPO.
Children’s Art Exhibition

This is an initiative aimed at correcting food imbalances
between developing and developed countries by
donating a portion of revenue from the purchase offood and drink by Group officers and employees topay for school lunches in developing countries.
In 2016, a donation to the TFT Program wasadopted as one of the gifts for which points granted
to participants in “KA-RA-DA iki-iki Project, ”* which
was designed to improve employees' health, can beexchanged. We also introduced the TFT menu at thecafeteria in the head office building and the staff
cafeteria in Daiwa Institute of Research in 2017, and in
2018 Daiwa Office Services Co., Ltd. started donating¥1 per drink sold through the vending machines
installed within the Group. We have thus expanded
the platform for participating in the TFT activities.
* Refer to page 64 of “Relationship with Employees” for “KARA-DA iki-iki Project.”• Participating in Koto Ward’s Clean-Up

Promotion Campaign
In May 2018, a total of 150 people, including
people from neighboring residents’ associations andcompanies, carried out a clean-up activity in the
Toyocho area of Tokyo, which was implemented as
the Koto Ward’s “Clean-Up Promotion Campaign.”
Twenty-eight employees of Daiwa Securities BusinessCenter Co. Ltd. participated in this clean-up work
jointly with local residents.

●Initiatives Taken by the Group's
Overseas Offices[Activities at the Group's London OperationalBase]
Daiwa Capital Markets Europe (“DCME”) has continued
to engage in various CSR activities, and to fully support
the SDGs set by the UN. For example, the power
supplied to the London Headquarters is now wholly
from renewable sources, and various measures havebeen taken to reduce our carbon footprint. During theyear, we achieved the international standard for energy
management, believed to be one of the first awarded toa financial institution in London.
Recycling has been promoted throughout thebuilding and, as part of this initiative, plastic bin bag
consumption is set to reduce by 50,000 a year.
• Go Green Roadshow
Earlier this year, a “Go Green Roadshow” event washeld to showcase the efforts our key providers aretaking in respect to their social responsibilities, andincluded our cleaning, recycling, energy management
and catering suppliers.
• Diversity & Inclusion
Diversity and inclusion remain top of the agenda, with
Daiwa London signing up to the “Women in Finance”
charter demonstrating our commitment to increase
the representative of women in Banking, particularly
at senior levels, and by joining the “Japan Diversity
and Inclusion Group.” A number of events have been
attended to attract more female graduates to Daiwa,
including a successful “Women in Science, Technology,
Engineering & Mathematics” careers fair.

Contribution madein FY2018 throughcollection drives(equivalent
Independent
monetary value) Assurance•First half of FY2018

JEN BOOK MAGIC¥

17,289•Second half of FY2018

Used Book Sale Donation
for Children’s Future¥

49,453•Japan Committee“Vaccines for theWorld's Children”¥

180,071•Live with Friendson the Earth¥

145,914

TFT Program

Independent
Assurance

Contributions madeJanuary–December, 2018

62,335Aroundschool lunches
in developing countries(Calculated on the assumption that one
meal costs ¥20)

Engagement with Society• Eradication of Poverty and Support for Efforts toCorrect Unfair Disparities
DCME has also been accredited this year as a “London
Living Wage Employer” as part of our support toeradicating poverty and reducing inequality. We
continue to work with inner city charities, andoffer a small number of apprenticeships each year
targeting disadvantaged young people. Through the
Daiwa Society we support two chosen charities eachyear, hold regular fund raising events, and support
individuals participating in sponsored charity events.
• Initiatives from a Business Perspective
From a business perspective, DCME has been
supporting “Green bonds” and other environmental,social, and governance initiatives since 2008 and hassince lead managed over 50 transactions that align tothe objectives of the SDGs.
DCME’s Debt Capital Market Department recently
won The Environmental Finance Magazine’s Lead
Manager of the Year - Social Bonds award, selectedby a panel of the world’s largest green, social andsustainability bond investors. In addition, EMEA
Finance magazine awarded the team “Best ESG
Bond House” recognizing 2 ground-breaking‘Social’ Samurai issues and a EUR ‘Education’ private
placement bond.
In the wider SRI arena, encompassing green andsustainability bonds also, we led 8 issues during 2018
in 5 different currencies.
There is increasing interest in the firm’s promotionof SDGs, and we seek to raise awareness and keep
staff members informed through regular articles in the
all staff newsletter “Daiwa in the City,” via the weekly
intranet news, and through “town hall” presentations
by members of DCME senior management.

Graduate Recruitment stand at the STEM Women Conference (DCME)CEO Meekins and COO Yonemoto presenting a charity fundraising cheque toRainbow Trust.

Daiwa Securities Group SDGs Data Book 2019

[Activities at the Group's New York Operational
Base]• Charity Friday
Daiwa Capital Markets America (“DCMA”) hosts a“Charity Friday” once a month in which employees
are allowed to wear jeans for their $5 donation to aselected charity. DCMA matches double the collection
amount each Charity Friday, increasing the impact of ourdonation and furthering our commitment to the various
causes we support. A few highlights of our 2018 Charity
Friday events include our participation in donating for
the Susan G. Komen for the Cure in support of Breast
Cancer Awareness Month during the month of October,
Answer the Call – New York Police & Fire Widows &Children’s Benefit Fund to honor the NYC Police Officers,
Firefighters, Port Authority Police, and EMS Personnel
who have been killed in the line of duty and Tuesday’sChildren which provides personalized support and a safe
“landing place” to traumatized, grief-stricken children,
families and communities left reeling from terrorism ortraumatic loss.
DCMA is also a proud corporate sponsor of JapanDay held at Central Park each May. DCMA will continue
to support both local and widely known charities that
benefit research and support education, finding curesfor disease, disasters and other important causes.
• Wellness/Women’s initiative2018 was another successful year for DCMA's
Wellness Initiative. Consistent programs and events
have been held throughout the year to promote healthand wellness. In an effort to help employees be moreaware of the DCMA benefits program, employees
are now able to enroll into their benefits throughthe new online portal. They can easily view theirbenefits that are available to them, so that they are
fully aware of the benefits that are provided by thefirm. Monthly newsletters, nutrition seminars, blood
drive, yoga classes, therapeutic massages and fresh
fruits and healthy snacks have also been held to createawareness and extend our knowledge on physicalhealth. Overall, it was a great year of consciousness
and awareness of health in every way possible.
DCMA's Women's Initiative group held quarterly
events to provide our female personnel avenue andforum to get to know each other better, exchange
ideas, and share strategies for success in the workplace(women empowering women). Networking events
such as the "Paint & Sip" and women's nutritionalseminars have been held this year.
[Activities at the Group's South Korea Operational Base]This year, Daiwa Securities Capital Markets Korea(“Daiwa Korea”) participated in the “Love BreadFair” event held by the Korean National Red Cross forunderprivileged children. It was the company’s second
time participating in the event, following on from 2017.
Under the supervision of bakers, participants madebread filled with preservative-free cheese and muffins,and provided them to support Korean children without
adequate food. The event became a good opportunity
for the company to contribute to the local community

73Engagement with Society

Daiwa Securities Group SDGs Data Book 2019

and again acknowledge the importance of sharing by
providing safe food, as well as the pleasure and joy ofeating, to children who are excluded from society.
Besides these activities, Daiwa Korea also makes adonation every month to Korea Food for the Hungry
International, an NGO providing support to starving
children within and outside South Korea, to further
contribute to society.
In South Korea, the central government has recently
been strongly promoting efforts for achieving work-lifebalance. With companies making efforts to conduct
corporate activities in line with the government's policy,
Daiwa Korea has set out the following as goals to
strive toward: (1) encouraging proactive participation insocial service activities (consideration and introductionof social contribution activity programs and provisionof compensatory leave based on leave regulations toemployees who participate in weekend social service
activities); (2) creating comfortable work environments
for women (improvement of welfare programs ateach stage of pregnancy, childbirth, and child rearing,allowing adjustment of working hours and providing
time to visit doctors for pregnant employees, setting up
a nursing room and providing time for nursing at thediscretion of the department head); and (3) encouraging
employees to leave the office on time and take theirannual paid leave (employees are required to submit
their annual paid leave plan through to the end of
period to management) to achieve work-life balance,and enhancing the welfare benefit system (supporting
employees' self-development expenses, such as forstudying languages, and expenses for promoting andmaintaining health).
The company will continue with these activities andproactively respond to the corporate image expected bysociety in an effort to contribute more extensively to society.

●Initiatives to Promote Volunteer
Activities• Volunteer Award

Daiwa Securities Group has implemented thePresident's Awards program to recognize outstandingachievements by employees. As part of the program,
we introduced the Volunteer Award in FY2007, which
is given twice a year to employees and groups involvedin volunteer initiatives and activities that provide
ongoing support to communities.
• Dissemination of Information through theInternal Network
Daiwa Securities Group believes that volunteer
activities help broaden the perspectives of employees“Love Bread Fair”

74

and provide benefits by making them aware of various
social issues. Based on this belief, we provide a wide
range of information on volunteer programs within
the Group through our intranet. We introduce goodpractices in such volunteer work through our in-housemagazine and other means in order to expand therange of volunteer activities.

●Donation of Shareholder Reward Items
Daiwa Securities Group Inc. implements a shareholder
reward program. Together with the operation of thisprogram, we donate reward items returned to us dueto the relocation of shareholders and other reasons, aswell as reward items received for our shareholdings inother companies, to organizations such as designatedNPOs and public interest incorporated foundations.

●Disaster Assistance• Donation for the Earthquake Centered in the

Northern Part of Osaka Prefecture
On June 18, 2018, there was an earthquake centeredin the northern part of Osaka Prefecture with amaximum seismic intensity of lower 6 (on the Japanesescale). Daiwa Securities Group Inc. made a donation
through the Central Community Chest of Japan, asocial welfare corporation, and the Osaka prefectural
government to support disaster victims and assist
reconstruction work in the disaster affected areas.
• Contribution to Areas Damaged by the
Torrential Rain in July 2018 (as a corporation)
The torrential rain that occurred in July 2018 caused
serious flood damage. Daiwa Securities Group madedonations as a corporation through the Japanese Red
Cross Society and the Central Community Chest ofJapan, a social welfare corporation. In addition, we
opened a dedicated account for Group officers andemployees with Daiwa Next Bank and carried out fundraising activities. As a result, more than ¥11 million wascollected from Group officers and employees.
• Contribution to Areas Damaged by the 2018
Hokkaido Eastern Iburi Earthquake
On September 6, 2018, an earthquake registering amaximum seismic intensity of 7 (on the Japanese scale)occurred, centered in the central and eastern Iburi regionsin Hokkaido. It caused serious damage throughout
Hokkaido. Daiwa Securities Group made donations via theJapanese Red Cross Society and the Central Community
Chest of Japan, a social welfare corporation.

“Love Bread Fair”

Contribution to areas
damaged by theearthquake centered in
the northernpart of Osaka
Independent
Assurance
Prefecture

5 million¥

Contribution to areas
damaged by thetorrential rain
Independent
Assurancein July 2018(as a corporation)

10 million¥

Contribution by officers
and employees¥

11.22 million

Contribution to areas
damaged by the 2018
Hokkaido
Independent
Eastern Iburi
Assurance
Earthquake(as a corporation)

10 million¥

Engagement with Society

Daiwa Securities Group SDGs Data Book 2019

C lose-up
Initiatives for Child Poverty Issues"The financial and capital markets are a symbol of capitalism, and its benefit securities
companies have been enjoying. Meanwhile, capitalism can generate a disparity, becoming
a cause for child poverty—which is a distortion of society. For this reason, we recognize theneed to contribute to solving the poverty issue by using sound profits that we have gained
from our business activities. Child poverty, in particular, generates many side effects, suchas inadequate education, possibly leading to a situation where the children shouldering thefuture of Japan cannot acquire enough qualities as members of society."
Daiwa Securities Group started the “For Your Dreams – Daiwa Securities Group Smiles toChildren Project” in FY2017. It is aimed at improving the environment for children in poverty
and breaking the chains of poverty. We will work on various activities so that all children will
be able to picture a bright future.

Representatives of grant recipient organizations
and Daiwa Securities Group Inc. President and CEO Nakata“Daiwa Securities Group Child Support Fund for Bright
Future”
As part of its “Smiles to Children Project,” Daiwa Securities Group has
created “Daiwa Securities Group Child Support Fund for a Bright Future” incollaboration 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.
Daiwa Securities Group intends to contribute a total of around ¥100 million in
the initial five years.
The second call for proposals in FY2018 attracted 43 applications nationwide.
As a result of strict assessment by the selection committee, the following fiveorganizations—two new and three ongoing recipients—were chosen as support
recipients.

Second Grant Selection in FY2018 (support period: January to December 2019)
New grant recipients
Organization name
DxP (certified NPO)
Education A3 (Certified NPO)

Location

Theme

Osaka City, Osaka

Development of a business providing “places where one belongs” byPrefecture

effectively using classes and dining halls in collaboration with schools

Fukuoka City, Fukuoka
Prefecture

Business development of the learning complex “Study Place”

Amount of grant¥3.2 million¥3.15 million

Ongoing Grant Recipients
Organization nameLocation

SOS Children’s Villages Japan

Fukuoka City, Fukuoka(Certified NPO)

Prefecture

PIECES (Certified NPO)

Bunkyo Ward, Tokyo

Learning for All (NPO)

Shinjuku Ward, Tokyo

Theme

Amount of grantBusiness development of “Support Project for Families’ Future”(Subtitle) Network-oriented family support through outreach and¥3.2 million

foster families
Business development of “Regional Outreach Human Resources
Development Program for Isolated Children”
Business development of “Transmission of Knowledge in Learning
Support”* The maximum amount of grant for FY2018 (the second call) was ¥3.2 million.
* PIECES was approved as a certified NPO in 2018.

¥3.2 million¥3.2 million

75

Engagement with Society

Daiwa Securities Group SDGs Data Book 2019

Daiwa Next Bank’s “Support Term Deposits”

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

Daiwa Next Bank donates an amount calculated by multiplying the balance of
its Support Term Deposits by a certain rate to 12 organizations according tofour themes. The balance stands at ¥10 billion as of March 31, 2019. Feedback
received from customers includes: “This was a good opportunity to learn aboutsocial issues” and “I hope similar initiatives will become more widespread.”

Twelve Supportable Organizations through Term Deposits
Deposit nameSupported organization

Environmental conservation
Coral preservation in Onna Village, Okinawa Prefecture

Onna Village, Okinawa Prefecture

Tokyo water conservation forests nurtured by everyone

Bureau of Waterworks, Tokyo Metropolitan Government

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

Tetsudou Kousaikai Prosthesis Support Center (public interest incorporated
foundation)

Horse therapy (horse riding for disabled people)

Japan Riding Association for the Disabled (general incorporated association)

Medical support to childrenChildren under home medical care

Osaka Women’s and Children’s Hospital, Osaka Prefectural Hospital
Organization (independent administrative agency)

Momiji House, a hospice care facilityChildren under long-term hospitalization

National Center for Child Health and Development (national research anddevelopment agency)

Children fighting childhood cancer

Japan Heart (Certified NPO)Children with medical complexity in Hokkaido

Toseikai (medical corporation)

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

Future dreams of children at a child welfare institution

Child Support Net Aichi (NPO)Children’s cafeterias (Ishikawa, Hokkaido, Kanagawa)Operators of children’s cafeterias in Ishikawa, Hokkaido, and Kanagawa Prefectures

For Your Dreams—Daiwa Securities Group Smiles to Children Project

Public Resources Foundation (public interest incorporated foundation)

Implementation of Santa Charity Program 2018

Messages received from children

We have been implementing a Santa Charity Program since FY2017.
Contributions of more than ¥8 million were collected in FY2018 fromexecutives, employees, and former members of Daiwa Securities Group. With
these contributions, we purchased 2,253 sets of assorted snacks, 78 setsof assorted toys and 110 Christmas cakes. The items were then donated toapproximately 110 sites nationwide. These included children’s homes andlivelihood support facilities for fatherless families, as well as organizations
working on countermeasures against child poverty such as learning support
providers and operators of children’s dining rooms. The donations were madethrough Second Harvest Japan, the largest food bank in Japan. Children
receiving presents later sent us many joyful messages.

Participation in “Used Book Sale Donation for Children’s Future”
Japan Securities Dealers Association proposed that the securities industry as a whole participate in the “Used Book Sale Donation forChildren’s Future,” a project run by the Japanese government as part of its initiatives to support children. Approving of the objective of the
project, Daiwa Securities Group has placed collection boxes for used books at all our sales branches since the second half of FY2018.
* Also refer to page 72 “Contribution made in FY2018 through collection drives” in the data column.

76Participation in Initiatives

Daiwa Securities Group SDGs Data Book 2019

Participation in Initiatives
Daiwa Securities Group has participated in, signed, and supports the initiatives described below to contribute todeveloping a sustainable society.

●Major Initiatives

Name

Outline

The United Nations Global Compact (UNGC)

Daiwa Securities Group Inc. signed the UNGC in January 2010. We support the following 10
principles and work to contribute to sustainable development in the international community.
·· 10 principles

The United Nations-supported Principles for
Responsible Investment (PRI)

United Nations Environment Programme – FinanceInitiative (UNEP-FI)

Task Force on Climate-related Financial Disclosures(TCFD)

30% Club Japan

HumanrightsPrinciple 1: Businesses should support and respect the protection ofinternationally proclaimed human rights; andPrinciple 2: make sure that they are not complicit in human rights abuses.

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

The
environment

Principle 7: Businesses should support a precautionary approach toenvironmental challenges;
Principle 8: undertake initiatives to promote greater environmental
responsibility; andPrinciple 9: encourage the development and diffusion of environmentallyfriendly technologies.

Anticorruption

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

Daiwa Asset Management became a signatory in May 2006. PRI is a set of six principles launchedby 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.

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 afinancial system that takes economic development and ESG into consideration. As a financial
institution, Daiwa Securities Group will promote collaboration in the international community toaddress environmental issues.

This is a task force established by the Financial Stability Board (FSB) in 2015. TCFD asks companies tograsp and disclose information on the impact of climate change on finances during the course of ashift to a low-carbon economy. Daiwa Securities Group Inc. announced its support for TCFD in April
2018 and also participates in the TCFD Consortium, established in May 2019 in Japan.

In May 2019, the Chairman of the Board and President and CEO of Daiwa Securities Group Inc.
started to participate in the 30% Club Japan as members in support of its activities. The 30% Club,
established in the U.K. in 2010, is a worldwide campaign aimed at increasing the ratio of women in
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.

●Other Initiatives
ISO 26000

The Charter of Corporate Behavior of Keidanren(Japan Business Federation)

The OECD Guidelines for Multinational
Enterprises

Principles for Financial Action
for the 21st Century

Japan's Stewardship Code (“Principles for Responsible
Institutional Investors”)

Japan's Corporate Governance Codeestablished by Tokyo Stock Exchange

CDP (formerly the Carbon
Disclosure Project)

The United Nations Guiding Principles on Businessand Human Rights

The eight fundamental conventions of
the International Labour Organization

77Third-Party Evaluations

Daiwa Securities Group SDGs Data Book 2019

Third-Party Evaluations

Name

Evaluation

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

FTSE Indices
FTSE is a subsidiary of the London Stock Exchange. It develops global indexes and provides data for investment.
Daiwa Securities Group Inc. has been included in the FTSE4Good, an index of socially responsible companies
compiled by FTSE, for 14 consecutive periods since September 2006.
Daiwa Securities Group Inc. has also been selected as a constituent of the FTSE Blossom Japan Index for threeconsecutive periods since July 2017. This index is used as an ESG passive management benchmark by theGovernment Pension Investment Fund.

MSCI Indices
MSCI measures and publishes various indices.
Daiwa Securities Group Inc. has been selected as a constituent of the MSCI Japan Empowering Women Index for
three consecutive periods since July 2017.
This index is used as an ESG passive management benchmark by the Government Pension Investment Fund.

Nadeshiko Brand

Health & Productivity Stock Selection

Competitive IT Strategy Companies

Daiwa Securities Group Inc. has been selected as a “Nadeshiko Brand” for five consecutive years since FY2014.
This title is awarded by the Ministry of Economy, Trade and Industry and the Tokyo Stock Exchange to listedcompanies for having excellent track records in empowering women in their companies. We have developed
programs that exceed legal requirements to support the balancing of work and child-rearing and we provide
career support. As a result of these continuous efforts to develop an environment enabling female employees
to work energetically for a long time even after going through life events, an increasing number of female
employees in various life stages are now playing active roles. The award has been given in recognition of this, aswell as for other initiatives including the introduction of the Daiwa ELLE Plan, which helps to comprehensively
address health issues according to employees’ stages of life.

Daiwa Securities Group Inc. has been selected as a "Health & Productivity Stock Selection" for five consecutive
years since FY2014. This title is awarded jointly by Japan's Ministry of Economy, Trade and Industry and theTokyo Stock Exchange to companies promoting the health of their employees. We appoint a Chief Health Officer(CHO) and hold Health Management Promotion Meetings once every quarter as part of our efforts to enhance
our health promotion system. We have also introduced the KA-RA-DA iki-iki Project and an employment support
plan for employees with cancer which supports the balancing of work and cancer treatment, as well as the
Daiwa ELLE Plan which provides comprehensive support for addressing health issues specific to women. Thesevarious initiatives have been highly evaluated.

In April 2019, Daiwa Securities Group Inc. was selected as a “Competitive IT Strategy Company”for the second
consecutive year. The title is awarded jointly by the Ministry of Economy, Trade and Industry and the Tokyo
Stock Exchange. It is awarded to companies for engaging in strategic and proactive IT investment that enhances
corporate value and competitiveness from the perspective of medium- to long-term corporate management.
We have worked to develop an API infrastructure to expand our customer base through flexible and timely
alliances with external companies and provide financial services with high added value. We have alsoenhanced business efficiency through voice recognition and artificial intelligence (AI), while promoting digitaltransformation aimed at business innovation and reform of operational processes. The award was given in lightof the high evaluation of our steady efforts.

78

Third-Party Evaluations

Daiwa Securities Group SDGs Data Book 2019

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

Evaluation

The certified family-friendly employer logo (nicknamed "Kurumin") is the certification symbol for family-friendly
employers provided by Japan's Ministry of Health, Labour and Welfare, based on the Act on Advancement of
Measures to Support Raising Next-Generation Children. Daiwa Securities Group Inc. obtained certification asa family-friendly employer on June 9, 2008, and Daiwa Securities, Daiwa Institute of Research Holdings, Daiwa
Institute of Research, Daiwa Institute of Research Business Innovation, and Daiwa Securities Business Center havealso been certified.
Moreover, as of March 11, 2016, Daiwa Securities and Daiwa Securities Business Center received a “Platinum
Kurumin” certification. That certification is given to especially excellent companies among the certified familyfriendly employers that have implemented higher levels of initiatives.

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

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

GRESB 2018 “Green Star”

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

ISO Certification● ISO 14001
Daiwa Institute of Research Business Innovation has received ISO 14001 certification, which is an international
standard for environmental management systems. Through its business activities, Daiwa Institute of ResearchBusiness Innovation has endeavored to realize a harmonious relationship with the global environment, andactively works to reduce the environmental load.
● ISO 27001
Daiwa Institute of Research (Systems Management Division) and Daiwa Institute of Research Business
Innovation (Systems Management Division and Systems Consulting Division, Social Insurance Customer Support
Department, and BPO Center) have received ISO 27001 certification, which is an international standard for
information security management systems. In order to maintain and manage the confidentiality, integrity, andavailability of their information assets, both companies are continuing to improve their information security.
● ISO 27017
Daiwa Institute of Research (Systems Management Division) and Daiwa Institute of Research Business Innovation(Systems Management Division) have received ISO 27017 certification, which is an international standard for
information security in relation to cloud services. As an add-on certification to ISO 27001, ISO 27017 deals withinformation security specific to cloud services.
● ISO 20000
Daiwa Institute of Research (Systems Management Division) and Daiwa Institute of Research Business Innovation(Systems Management Division) have received ISO 20000 certification, which is an international standard for IT
service management systems. In order to provide customers with a high-quality IT service in a stable manner,both companies are engaged in organizational enhancement of the quality of their IT services, including costmanagement, business process optimization, and continual improvements.

79

SDGs Related Data

Daiwa Securities Group SDGs Data Book 2019

SDGs Related DataManagement Report
Compensation Paid to Directors and Corporate Executive Officers of Daiwa Securities Group Inc. in FY2018(1) Compensation by Type of Officer, Remuneration, and Number of Eligible Officers

Type of officer
Directors
Corporate executive
officers
Outside directors

Value of compensation, etc., by type (millions of yen)

Total
compensation, etc.
(millions of yen)

Base remuneration

Restricted Stock

38

32

6

1,081

538

121

121

Retirement bonus

Recipients(persons)

−

−

2

180

363

−

15

−

−

−

7

Performance-linked
remuneration* Seven directors also served as corporate executive officers; their total compensation is included in the corporate executive officers category.
* Performance-linked remuneration does not include the amount granted as Restricted Stock.

(2) Total Consolidated Compensation, etc., by Officer

NameTotal consolidated
compensation,etc. (millions ofyen)

Takashi Hibino

197

Seiji Nakata

223

Toshihiro Matsui

155

Kazuo Takahashi

115

Koichi Matsushita

115

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

Value of consolidated compensation, etc., by type (millions of yen)Company nameBasic
remuneration

Restricted Stock

Performance-linked
remuneration

Retirement
bonus

Daiwa Securities Group Inc.

69

23

57

−

Daiwa Securities Co. Ltd.

46

−

−

−

Daiwa Securities Group Inc.

69

23

83

−

Daiwa Securities Co. Ltd.

46

−

−

−

Daiwa Securities Group Inc.

61

17

51

−

Daiwa Securities Co. Ltd.

25

−

−

−

Daiwa Securities Group Inc.

20

13

−

−

Daiwa Securities Co. Ltd.

46

−

34

−

Daiwa Securities Group Inc.

20

13

−

−

Daiwa Securities Co. Ltd.

46

−

34

−

* The persons, each of whose total remuneration, etc., paid is equal to or more than 100 million yen, are listed above.
* Type of Officer is the same as that for the company filing securities reports.
* Officers serving as both directors and corporate executive officers are listed as corporate executive officers in the type of officer column.
* Performance-linked remuneration does not include the amount granted as Restricted Stock.

80

SDGs Related Data

Daiwa Securities Group SDGs Data Book 201981

Social Report
Scope of data
Consolidated: E ntire Group (except for equity-method affiliates)
Ten Group companies: D aiwa Securities Group Inc., Daiwa Securities Co. Ltd., Daiwa Asset Management Co. Ltd., Daiwa Institute of Research Holdings Ltd., Daiwa Instituteof Research Ltd., Daiwa Institute of Research Business Innovation Ltd., Daiwa SB Investments Ltd., Daiwa Securities Business Center Co. Ltd.,
Daiwa Property Co., Ltd., and Daiwa Corporate Investment Co., Ltd.
Eight Group companies: D aiwa Securities Group Inc., Daiwa Securities Co. Ltd., Daiwa Asset Management Co. Ltd., Daiwa Institute of Research Ltd., Daiwa Institute of
Research Business Innovation Ltd., Daiwa SB Investments Ltd., Daiwa Securities Business Center Co. Ltd., and Daiwa Corporate Investment Co., Ltd
Two Group companies: D aiwa Securities Group Inc., Daiwa Securities Co. Ltd.
* Daiwa SB Investments Ltd. merged with Sumitomo Mitsui Asset Management Co. Ltd. on April 1, 2019 to form Sumitomo Mitsui DS Asset Management Co. Ltd.

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

As of March 31, 2018

As of March 31, 2019

Employees

FA*1

Temporaryemployees

Employees

FA*1

Male

8,077

49

−

8,092

47

(Career track*2)

7,642

−

−

7,638

(Managers)

4,081

−

−

4,158

Female

4,938

51

−

5,210

(Career track*2)

3,466

−

−

3,616

(Managers)

424

−

−

490

Japan total

13,015100

848

13,302(Career track*2)

11,108−−

11,254(Managers)

4,505

−

−

4,648

Male

1,110

1,186

(Managers)

579

589

Female566

618(Managers)

140

Overseas total

1,676(Managers)

719

Total

Temporaryemployees

43

90

806

159
−

98

1,804

109

748

14,691100

946

15,10690915* The number of employees stationed overseas has been included in the “Overseas” category.
*1 Financial advisors*2 Includes employees in regional career-track positions (without job transfers involving relocation) and specialists

Number of New Graduates Recruited by Daiwa Securities Group
Career-track employees/regional career-track
employees
Total(Unit: persons)April 2017

April 2018

April 2019

Male

345

289

337

Female

333

289

340

678

578

677

* The data until April 2018 covers eight Group companies. The data for April 2019 covers seven companies excluding the former Daiwa SB Investments Ltd.

Workforce Statistics
FY2016FY2017FY2018Average annual salary*1 (million yen)

10.72

10.45

10.57

Average age (years old)

42.1

41.9

41.9

Average number of years of service (years)

15.3

15.0

15.1

* This data covers Daiwa Securities Group Inc. (including those who simultaneously work for Daiwa Securities).
*1 Average annual salary includes bonuses and other. There is no wage gap based on gender or nationality.

Average Age(Unit: years old)

FY2016FY2017FY2018

Total

38.0

38.0

38.3

Male

39.6

39.6

39.8

Female

35.7

35.7

36.2

* This data covers Daiwa Securities.

SDGs Related Data

82

Daiwa Securities Group SDGs Data Book 2019

Average Number of Years of Service(Unit: years)

FY2016FY2017FY2018

Total

13.6

13.7

13.8

Male

15.2

15.3

15.4

Female

11.4

11.4

11.5

* This data covers Daiwa Securities.

Employee Turnover Statistics(Unit: %)FY2016FY2017FY20183

3

3

FY2016FY2017FY2018

96

112

133

End of FY2016

End of FY2017

End of FY2018

2.02

2.10

2.33

FY2017FY2018Total* This data covers Daiwa Securities.

Number of Employees Re-employed after Retirement Age
Number of employees re-employed after retirement age(Unit: persons)* This data covers Daiwa Securities.

Employment Rate for Persons with Disabilities(Unit: %)Employment rate for persons with disabilities* This data covers Daiwa Securities.

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

FY2016

Number of people who have completed training (cumulative)

Daiwa Leadership Program: Targeting Executive director and director
Number of people who have completed training (cumulative)

380

403

426

FY2016FY2017FY2018

862

929

1,036

FY2016FY2017FY2018

7,507

9,362

13,488* This data covers 10 Group companies.

Participants in Skill Training(Unit: persons)

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

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

As of March 31, 2017

As of March 31, 2018

As of March 31, 2019

Affiliated Financial Planner (AFP)

5,626

6,811

7,064

Certified Financial Planner (CFP®)*2

643

698

796

1,542

1,613

1,644

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

59

59

63

1,752

1,830

1,903

173

177

176

*1 This data covers 10 Group companies (according to filings by employees).
*2 These figures cover Daiwa Securities.

Successful Applicants in Intra-Group Job Posting System
Held

Cumulative from FY2000* This data covers 10 Group companies.

(Unit: persons)

Positions offered

No. ofapplicants

Successful
applicants

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

1,060

167

SDGs Related Data

Daiwa Securities Group SDGs Data Book 201983

Working Hours and Paid Vacation Usage Rate
Annual regular working hours (hours)
Average monthly overtime hours (hours)*1

FY2016FY2017FY20181837.51837.51837.5

23.5

23.2

22.8

66

68

68

Paid vacation usage rate (%) (including special summer vacation)*2* This data covers two Group companies.
*1 Figures indicate employees at the two companies that are members of Daiwa Securities Group Employees’ Union.
*2 In addition to annual paid vacation, Daiwa Securities Group offers three days of special summer vacation. These figures show usage rates for annual paid vacation when the special summer vacation is included.

Welfare Program Usage

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

FY2016FY2017FY2018

Female

671

695

696

Male

327

437

420

Female

0

2

5

Male

2

3

3

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

Employees Taking Childcare Leave and Other Related Plans
FY2016FY2017FY2018

Female

100

100

100

Male

97

100

100

Female

92

90

91

Male

100

100

100

Women working when their children turned one year (%)

100

100

100

Short working hours system usage (persons)

324

373

446

Daycare subsidy usage (persons)

625

702

759

Employees taking childcare leave (%)
Return to work rate for those taking childcare leave(%)* This data covers Daiwa Securities.

SDGs Related Data

Daiwa Securities Group SDGs Data Book 201984

Initiatives for Work-Life Balance and Supporting Diverse Work Styles
Program name

Systems to support balancing of work and childcare/nursing care and others
Program description

Expanded leave system

This system encourages employees to take paid vacation and has introduced Marriage Preparations Leave, Kid's Ceremony Leave to attend an entrance
ceremony, graduation ceremony or other such events, Family Day Leave to give employees a chance to spend quality time with their families, Parents'
Longevity Celebration Leave for employees to celebrate the longevity of their parents, Long Service Leave so employees can take up to 5 days off intheir 20th year and 30th year at the company, and Volunteer Leave. In addition, Medical Checkup Leave and ELLE Leave have been introduced.

Childcare leave

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

Childcare Support Leave

When an employee’s spouse gives birth or returns to work, leave may be taken (within the first two weeks of childcare leave, the pay of the weeks
is guaranteed)

Support after returning to work

Provides systematic support to employees returning to work after a period of childcare leave. Daiwa WLB Station, a work-life balance promotion
website that focuses on various support systems related to childrearing and nursing care, provides information for employees on childcare leave andhelps facilitate their smooth return to the workplace

Short working hours system

System by which employees can leave work earlier by up to 90 minutes per day until their child graduates from elementary school

Exemption from overtime work

Employees are exempt from work outside regular working hours (overtime work) until their children complete the third grade of elementary school(childrearing), and from the time that they start providing nursing care until the time that reasons for providing nursing care have disappeared (nursing care)

Restricted overtime work

Employees can restrict work outside regular working hours (overtime work) to not more than 24 hours per month and 150 hours per year until theirchildren graduate from elementary school (childrearing), and from the time that they start providing nursing care until the time that reasons forproviding nursing care have disappeared (nursing care)

Life Support Paid Leave

Employees can take up to 50 days’ leave due to injury, disease, nursing care preparation, infertility treatment or caring for a sick child who has yet
to complete the third grade of elementary school, except when other types of leave are available, by accumulating expired paid leave

Daycare subsidy

Subsidizes expenses for daycare and after-school childcare for employees with children up to the third grade in elementary school

Babysitter system

Employees can use the babysitter services of service providers with which the company has signed a corporate contract, at discount rates

Support desk for employees looking fornursery schools

Offers free-of-charge services that check information on nursery school facilities, the status of availability, and other such matters on behalf of
employees, thereby assisting them to find nursery schools

Expanded support for balancing work andnursing careInternal training and workshops in all departments, offices, and sales branches, continue to be implemented each year as opportunities for all
employees to deepen their understanding

Nursing Care Concierge Service

A consultation service has been established where employees can consult with external nursing care experts regarding worries and problems
related to nursing care and receive support such as proxy services for applying for nursing care insurance and referrals to nursing care facilities

Reduced work hours(securing time for nursing care)

Employees can shorten their work hours by up to two hours per day

Work-from-home system

Employees may work home for up to 5 days per month in cases where they provide nursing care to a family member certified for nursing care need(including support need), have developed cancer but are able to work if the burden of commuting is reduced, or to balance work and infertility
treatment

Nursing care leave

Employees can take leave up to 4 times for not more than 1,095 days per family member requiring care

Job location change system

Offers a position in a new location when an employee must relocate after marriage or spouse’s job transfer

Spouse work reassignment leave system

Employees may opt to take leave for a certain period (up to 5 years) in the event that their spouse is reassigned to work in a location from which itis untenable for them to commute to work

Professional Return Plan
(re-hiring of sales staff)

Offers opportunities for re-employment to former full-time employees who left their job for marriage or childcare.
(The scope of eligibility for the program has been expanded since November 2015 from those returning to work within 5 years of their retirement
to those within 10 years)

Daiwa ELLE Plan

Under this plan, the Group has established support measures for female menopause and ELLE leave, which is available when employees are feelingunwell due to menstruation or menopause, or receiving infertility treatment. The Group has also expanded initiatives to increase employees’ healthliteracy and support measures for balancing work and infertility treatment. With regard to the latter, employees are allowed to secure time fortreatment and also entitled to receive a newly-established subsidy for the cost of specific infertility treatment

Daiwa LEAP Plan

System by which employees with disabilities are provided with comprehensive support including a leave program for outpatient treatment, support
tools according to the type of disability, and subsidies for expenses incurred to start work. The Plan is aimed at bringing out employees’ talents
while taking their respective circumstances into consideration, and developing a pleasant working environment

Web

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

SDGs Related Data

Daiwa Securities Group SDGs Data Book 2019

Percentages of Female Employees and Managers in Daiwa Securities Group

85(Unit: %)End of FY2016

End of FY2017

End of FY2018

Percentage of employees who are female (Consolidated)

38.1

37.9

39.2

Percentage of employees who are female (Daiwa Securities only)

41.4

42.2

43.2

Percentage of managers who are female (Consolidated)

8.8

9.4

10.5

Percentage of managers who are female (Daiwa Securities only)

10.6

11.6

12.9

End of FY2018

Women Newly Appointed to Managerial Positions
End of FY2016

End of FY2017

Number of women newly appointed to managerial positions (persons)

62

40

61

Total number of those appointed to managerial positions (persons)

192

164

233

Percentage of managers who are female (%)

32.3

24.4

26.2

End of FY2016

End of FY2017

End of FY2018

6,943

7,134

7,202

64

64.4

63.9

* This data covers Daiwa Securities.

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

Work Motivation Survey
FY2018Work

3.2

Organization

3.2

Colleagues

3.2

Growth or career advancement opportunity

3.2

Compensation

3.1* Four-scale evaluation (maximum of four points)

Corporate Citizenship Initiatives and Expenditures

Independent
Assurance

Type of activity(Unit: thousand yen)

FY2016FY2017

1. Education and research in economics and finance

42,351130,12282,579

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

128,594

149,441

175,813

3. Support for culture and the arts

323,110437,458

751,961

4. Corporate citizenship initiatives

3,400

2,501

5,441

497,457

719,523

1,015,796

Total

FY2018

Political Contributions(Unit: million yen)Type of activity
Political contributions

FY2016FY2017FY20183030−

FY2016FY2017FY201820,261

19,183Results in Economic and Financial Education Program
Program
Support for Finance Park
Support for the Student Company Program(Unit: persons)

Cumulative participant numbers since initiation of support (in Sept. 2003)
N/A

N/A

Cumulative number since the opening (in June 2005)

20,926
134,902
N/A
221

SDGs Related Data

Daiwa Securities Group SDGs Data Book 201986

Environmental Report
Scope of data
Energy consumption, CO2 emissions, clean water consumption:
Domestic: We have incorporated figures on energy consumption and CO2 emissions for Daiwa Securities, Daiwa Property, and Daiwa Institute of Research, the threecompanies with a reporting obligation under laws and regulations. Daiwa Institute of Business Innovation has also been included in the calculation in light of
its significant impact on the Group’s environmental load. The data for Gran Tokyo North Tower and Daiwa Yaesu Building, where Daiwa Securities Group isbased, includes data for Group companies other than those mentioned above.
Overseas: London, New York, Hong Kong, Taipei, Singapore, Seoul, Baltimore/Washington D.C., Mumbai and Manila offices (The last five offices were added to the scope in FY2017.)
Waste: Gran Tokyo North Tower, Daiwa Yaesu Building, Toyocho Center Building, Daiwa Eitai Building, DIR Headquarters Building, and Osaka Branch Building of
Daiwa Securities
Paper consumption:
Domestic: Group overall (limited to companies handled by Daiwa Office Services.) (Until FY2016, Gran Tokyo North Tower only.)
Overseas: (from FY2017) London, New York, Hong Kong, Taipei, Singapore, Seoul, Baltimore/Washington D.C., Mumbai and Manila offices

Energy Consumption

Independent
Assurance

OfficeType

Unit

FY2016FY2017FY2018Japan

Electricity
Utility gas
Heavy oil
Diesel fuelKerosene
Steam and cold water*1
Total

thousand kWhthousand Nm3
kL
kL
kL
GJ
GJ*2

69,496
320
21.1
0.07
−
−
−

65,982
302
9.2
0.06
16.53
1,200
673,980

63,790
280
10.4
0.06
18.34
1,233
651,274*1 Steam and cold water consumption is calculated from FY2017.
*2 GJ: Gigajoule (109 joules). Calculated using coefficients from the Act on the Rational Use of Energy for each energy type. For utility gas, the coefficient from the Act on Promotion of Global Warming Countermeasures
is used.

OfficeType

Overseas

Electricity
Utility gas*1
Cold water*2
Total

Unit

FY2016FY2017FY2018thousand kWhthousand Nm3
GJ
GJ*3

6,387
101.9
−
−

7,378
111.4
825
79,671

7,202
103.7
765
77,489*1 Until FY2016, only utility gas in London was calculated. From FY2017, Seoul was added. From FY2018, Baltimore/Washington D.C. was also added.
*2 Cold water consumption in Taipei and Singapore is calculated from FY2017.
*3 GJ: Gigajoule (109 joules). Calculated using coefficients from the Act on the Rational Use of Energy for each energy type. For utility gas, the coefficient from the Act on Promotion of Global Warming Countermeasures
is used.

OfficeTotal (Japan and overseas)

TypeElectricity
Utility gas
Heavy oil
Diesel fuelKerosene
Steam/cold water
Total

Unit

FY2016FY2017FY2018thousand kWhthousand Nm3
kL
kL
kL
GJ
GJ*1

75,883
422
21.1
0.07
0.00
−
−

73,360
414
9.2
0.06
16.53
2,025
753,651

70,991
383
10.4
0.06
18.34
1,998
728,763*1 GJ: Gigajoule (109 joules). Calculated using coefficients from the Act on the Rational Use of Energy for each energy type. For utility gas, the coefficient from the Act on Promotion of Global Warming Countermeasures
is used.

SDGs Related Data

CO2 Emissions

Daiwa Securities Group SDGs Data Book 2019

Independent
Assurance(Unit: t-CO2)

Office

Japan

87

Type

FY2016FY2017FY2018

Electricity

31,70829,663

27,416

Utility gas

731

691

639

Heavy oil

56.9

24.9

28.0

Diesel fuel

0.16

0.14

0.15

Kerosene

−

41.11

45.59

Steam/cold water

−

68

70

Rental cars*1

2,079

1,942

1,928

Commuting (bus/railroad)*2

1,443

1,466

1,497

−

1,290

1,788

36,01835,18633,412Business travel*3
Total
Scope 1

788

757

713

Scope 2

31,70829,731

27,486

Scope 3

3,521

4,698

5,213

*1 Rental cars: Gasoline used by rental cars.
*2 CO2 emissions from commuting by Daiwa Securities’ officers and employees are calculated from FY2016.
*3 CO2 emissions from overseas business travel (airplane use) by Daiwa Securities Group Inc. and Daiwa Securities’ officers and employees are calculated from FY2017.
(Unit: t-CO2)

OfficeOverseasType

FY2016FY2017FY2018

Electricity

3,064

3,353

3,234

Utility gas

227.32

241

231

Steam/cold water

−

47

44

Business travel*

−

591

707

FY2016FY2017FY2018

Electricity

34,77233,01530,650Utility gas

958

932

870

Heavy oil

56.9

24.9

28.0

Diesel fuel

0.16

0.14

0.15

Kerosene

−

41.11

45.59

* CO2 emissions from overseas business travel (airplane use) by London and Hong Kong office officers and employees are calculated from FY2017.
(Unit: t-CO2)

OfficeTotal (Japan and overseas)Type

Steam/cold water

−

115

114

Rental cars

2,079

1,942

1,928

Commuting

1,443

1,466

1,497

−

1,880

2,495

Scope 1

1,015

998

944

Scope 2

34,77233,131

30,764

Scope 3

3,521

5,288

5,920

Business travel

Calculation methods
Scope 1 and scope 2C) Heavy oil, diesel fuel, kerosene
Calculated on a consumption basis.

Calculations have been made in accordance with methods stipulated in the Act
on the Rational Use of Energy and the Act on Promotion of Global WarmingCountermeasures. (Disclosed figures have been rounded off)

Scope 3A) Electricity
Domestic: We use the CO2 emission factor (basic emission factor) for eachelectricity supplier.
Overseas: Figures for CO2 are calculated using the latest figures published by
the local government or electricity provider. Figures for CO2 emission
factors in regions for which data is difficult to obtain are the latest
published for each country by the International Energy Agency (IEA).
B) Utility gas
Domestic: After consumption is calculated as the volume of gas under normal
conditions, each provider’s CO2 emission factor or calorific value and theemission factor specified by law are used to calculate CO2 emissions.
Overseas: Same calculation method as above “Japan” (calculated basedon the calorific value and emission factor defined in the Act ofPromotion of Global Warming Countermeasures).

Calculated using emission factors from the emission factor database forcorporate GHG emissions accounting over the supply chain (Ver.2.6). (Disclosed
figures have been rounded off)D) Rental cars
The fuel used in rental cars used as company cars. Categorized in accordancewith the Basic Guidelines on Accounting for Greenhouse Gas Emissions
Throughout the Supply Chain.
E) Commuting
Calculated by multiplying commuting costs paid by Daiwa Securities to
officers and employees by emission factors.
F) Business travel
Calculated by multiplying passenger-kilometers involved in overseas businesstravel (international flights) at Daiwa Securities Group Inc., Daiwa Securities
and London and Hong Kong offices by emission factors.

SDGs Related Data

Daiwa Securities Group SDGs Data Book 201988

CO2 Emissions per Employee (Japan)
Office
Japan

Type

Unit

Per employee

t-CO2

Number of employees in Japan

persons

FY2016FY20172.9

2.7

FY20182.5

12,323

13,115

13,392* Data is excluded from the scope of independent assurances. Calculated based on CO2 emissions in Japan and the consolidated number of employees in Japan.

Independent

Clean Water Consumption Assurance(Unit: thousand m3 )OfficeType

FY2016FY2017FY2018
125.3

Japan

Clean water

117.1

119.1

Overseas*

Clean water

−

11.6

12.2

Total (Japan and overseas)

Clean water

−

130.7

137.5

* Clean water consumption in London, Taipei, and Seoul is calculated from FY2017.

Waste
OfficePaper waste
Non-paper waste

FY2016FY2017FY2018Amount generated

Type
t

Unit

310.4

324.6

331.2

Recycling rate

%

92.4

94.6

92.5

Amount generated

t

211.5

237.1

271.3

Recycling rate

%

48.4

44.8

44.1

Paper Consumption(Unit: t)

OfficeFY2016FY2017FY2018Japan

Amount used

Type

175.6

565.2

512.0

Overseas

Amount used

−

24.1

22.9

Total (Japan and overseas)

Amount used

−

589.3

534.9

* FY2017 figures revised.
* Until FY2016, only calculated for Gran Tokyo North Tower. From FY2017, calculated for the Group overall.
* From FY2017, calculated for London, New York, Hong Kong, Taipei, Singapore, Seoul, Baltimore/Washington D.C., Mumbai, and Manila offices.

SDGs Related Data

89

Daiwa Securities Group SDGs Data Book 2019

Environmental Accounting
Scope of data
Sales branches of Daiwa Securities and Group companies located in Gran Tokyo North Tower

Environmental Conservation Cost (Categories Corresponding to Business Activities)*1
Category

Key activity and the outcome

Globalenvironmental
conservation
Business area cost
Resource
circulation

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

Social activity cost
Total

Investment(Unit: million yen)

FY2017
Cost

Investment

FY2018Cost

Investment

439.1

7.1

91.0

122.8

119.4

219.0

Cost

291.8

232.3

355.9

Waste disposal cost*2

20.9

21.6

21.6

Dissolution process cost*3

29.7

31.8

Total
Management of environmental
data, etc.
Environmental conservation, etc.

Administration cost

FY2016

561.9

342.4

561.9

126.4

285.7

2.0

2.0

1.0

1.0

345.4

126.4

288.7

32.1
310.0

409.7
2.0
1.0

310.0

412.7

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

Economic Benefits Associated with Environmental Conservation Activities (Actual Benefits)
Expense saving
Revenue (recycling, etc.)
Total(Unit: million yen)

FY2016FY2017FY2018

23.9

16.4

21.4

0

0

0

23.9

16.4

21.4

SDGs Related Data

Daiwa Securities Group SDGs Data Book 201990

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

(Unit: billion yen)

IPO

Fishery,
agriculture &forestry

Fishery, agriculture& forestry

MiningMiningConstruction

Construction

PO

CB

REIT
(equity)

Corporatebond

FILP agency
bond

Municipal
bondSamuraibond

Bonds within
and outsideJapan(benchmark
bonds)

Japan
Housing
Finance
Agency(RMBS)

1

1.4

3

Foods

22.5

Textiles & apparels

10

Pulp & paper3

Chemicals

30

Pharmaceutical8

Oil & coal products

2

Rubber products

Manufacturing

Glass & ceramics
products

8Iron & steel

12Nonferrous metals

4

Metal products
Machinery

0.4

3Electric appliances

29.2

19

Transportationequipment
Precision
instruments

16.2

Other productsElectric power& gas

Transportation,
information andcommunication

Trade

Finance &insurance

2

Electric power & gas

148.8

Land transportation

112

Marinetransportation

1

Air transportation

5

3

5

Warehousing& harbortransportation
services
Information &communication

254

0.3

65

Wholesale trade

0.1

0.4

8

Banks

0.5

109

Securities &commodity futures

3.3

5.2

Retail trade

Insurance

4

0.2

Real estate

Services

Services

Nonclassifiable

Real estate
investment
corporation

69.2

1.2

7

35

0.9

34.2
25.4

8.4

25.4

793

Public entity
Total

255.6

17.6

45.5

Other financing
business
Real estate

117.1

43.5

1

3.3

124.6

183.9

32.4

111.7

77.4

124.6

183.9

157.5

132.6

77.4

(Fiscal year-end dollar/yen rate: 110.99 yen to the dollar)

GRI Content Index

Daiwa Securities Group SDGs Data Book 2019

GRI Content Index
In compiling the Daiwa Securities Group SDGs Data Book 2019, reference was made to the GRI Standards 2016 of the Global Reporting Initiative (GRI).
Universal Standards
Number

Disclosures

Report Page Number

Organizational Profile
102-1

Name of the organization

SDGs Data Book 2019 P.4 “Overview of Company and Businesses”

102-2

Activities, brands, products, and services

SDGs Data Book 2019 P.4 “Overview of Company and Businesses”

102-3

Location of headquarters

SDGs Data Book 2019 P.4 “Overview of Company and Businesses”

102-4

Location of operations

SDGs Data Book 2019 P.4 “Overview of Company and Businesses”

102-5

Ownership and legal form

SDGs Data Book 2019 P.4 “Overview of Company and Businesses”

102-6

Markets served

SDGs Data Book 2019 P.4 “Overview of Company and Businesses”/
Integrated Report 2019 P.2 “Daiwa Securities Group’s Business Strategy”

102-7

Scale of the organization

SDGs Data Book 2019 P.4 “Overview of Company and Businesses”

102-8

Information on employees and other workers

SDGs Data Book 2019 P.4 “Overview of Company and Businesses”/
P.81 “SDGs Related Data”

102-9

Supply chain

SDGs Data Book 2019 P.4 “Overview of Company and Businesses”/
P.5 “Communication with Stakeholders”/P.6 “SDGs of Daiwa Securities
Group”/P.12 “Role and Social Responsibilities of the Securities
Business”/P.49 “Risk Management”

102-10Significant changes to the organization and its supply chain

SDGs Data Book 2019 P.4 “Overview of Company and Businesses”/
P.12 “Role and Social Responsibilities of the Securities Business”

102-11

Precautionary Principle or approach

SDGs Data Book 2019 P.40 “Corporate Governance”/
P.44 “Compliance”/P.49 “Risk Management”/P.56 “IT Strategy and theManagement of Systemic Risk”

102-12External initiatives

SDGs Data Book 2019 P.77 “Participation in Initiatives”

102-13

Membership of associations

SDGs Data Book 2019 P.77 “Participation in Initiatives”

102-14

Statement from senior decision-maker

SDGs Data Book 2019 P.10 “Message from the Chairman of the SDGs
Promotion Committee”/Integrated Report 2019 P.2 “Massage from theCEO”

102-15Key impacts, risks, and opportunities

SDGs Data Book 2019 P.8 “Daiwa Securities Group’s Materiality and
SDGs”

Strategy

Ethics and Integrity
102-16

Values, principles, standards, and norms of behavior

SDGs Data Book 2019 P.8 “Daiwa Securities Group’s Materiality andSDGs”

102-17

Mechanisms for advice and concerns about ethics

SDGs Data Book 2019 P.40 “Corporate Governance”

102-18Governance structure

SDGs Data Book 2019 P.40 “Corporate Governance”

102-19Delegating authority

SDGs Data Book 2019 P.6 “SDGs of Daiwa Securities Group”

102-20Executive-level responsibility for economic, environmental, and social topics

SDGs Data Book 2019 P.6 “SDGs of Daiwa Securities Group”

102-21

Consulting stakeholders on economic, environmental, and social topics

SDGs Data Book 2019 P.5 “Communication with Stakeholders”/
P.6 “SDGs of Daiwa Securities Group”/P.40 “Corporate Governance”

102-22Composition of the highest governance body and its committees

SDGs Data Book 2019 P.40 “Corporate Governance”

102-23Chair of the highest governance body

SDGs Data Book 2019 P.40 “Corporate Governance”

102-24

Nominating and selecting the highest governance body

SDGs Data Book 2019 P.40 “Corporate Governance”

102-25

Conflicts of interest

SDGs Data Book 2019 P.40 “Corporate Governance”

102-26

Role of highest governance body in setting purpose, values, and strategy

SDGs Data Book 2019 P.40 “Corporate Governance”

102-27

Collective knowledge of highest governance body

SDGs Data Book 2019 P.6 “SDGs of Daiwa Securities Group”/Integrated
Report 2019 P.2 “Daiwa Securities Group’s Business Strategy”

102-28

Evaluating the highest governance body’s performance-102-29Identifying and managing economic, environmental, and social impacts

SDGs Data Book 2019 P.6 “SDGs of Daiwa Securities Group”

102-30Effectiveness of risk management processes

SDGs Data Book 2019 P.6 “SDGs of Daiwa Securities Group”

Governance91

GRI Content Index

Daiwa Securities Group SDGs Data Book 2019

Number

Disclosures

Report Page Number

102-31

Review of economic, environmental, and social topics

SDGs Data Book 2019 P.6 “SDGs of Daiwa Securities Group”

102-32Highest governance body’s role in sustainability reporting

SDGs Data Book 2019 P.6 “SDGs of Daiwa Securities Group”

102-33

Communicating critical concerns

SDGs Data Book 2019 P.6 “SDGs of Daiwa Securities Group”/
P.40 “Corporate Governance”

102-34Nature and total number of critical concerns

SDGs Data Book 2019 P.40 “Corporate Governance”

102-35

Remuneration policies

SDGs Data Book 2019 P.40 “Corporate Governance”/
P.80 “SDGs Related Data”

102-36

Process for determining remuneration

SDGs Data Book 2019 P.40 “Corporate Governance”/
Corporate Governance Report102-37

Stakeholders’ involvement in remuneration

SDGs Data Book 2019 P.40 “Corporate Governance”

102-38Annual total compensation ratio-

102-39Percentage increase in annual total compensation ratio-

Stakeholder Engagement102-40

List of stakeholder groups

SDGs Data Book 2019 P.5 “Communication with Stakeholders”

102-41

Collective bargaining agreements

SDGs Data Book 2019 P.67 “Engagement with Employees”(Communication)/P.85 “SDGs Related Data”

102-42

Identifying and selecting stakeholders

SDGs Data Book 2019 P.5 “Communication with Stakeholders”

102-43

Approach to stakeholder engagement

SDGs Data Book 2019 P.5 “Communication with Stakeholders”

102-44

Key topics and concerns raised

SDGs Data Book 2019 P.5 “Communication with Stakeholders”/
P.15 “Provision of Quality Service to Customers”/P.53 “Environmental
Initiatives”/P.57 “Engagement with Shareholders and Other
Investors”/P.59 “Engagement with Employees”/P.68 “Engagement withSociety”

Reporting Practice102-45

Entities included in the consolidated financial statements

SDGs Data Book 2019 P.4 “Overview of Company and Businesses”

102-46

Defining report content and topic Boundaries

SDGs Data Book 2019 P.3 “Editorial Policy”

102-47

List of material topics

SDGs Data Book 2019 P.6 “SDGs of Daiwa Securities Group”

102-48

Restatements of information

Not Applicable

102-49Changes in reporting

SDGs Data Book 2019 P.6 “SDGs of Daiwa Securities Group”

102-50

Reporting period

SDGs Data Book 2019 P.3 “Editorial Policy”

102-51

Date of most recent report

SDGs Data Book 2019 P.3 “Editorial Policy”

102-52

Reporting cycle

SDGs Data Book 2019 P.3 “Editorial Policy”

102-53

Contact point for questions regarding the report

SDGs Data Book 2019 P.3 “Editorial Policy”

102-54Claims of reporting in accordance with the GRI Standards

SDGs Data Book 2019 P.3 “Editorial Policy”

102-55

Content index

This table

102-56External assurance

SDGs Data Book 2019 P.99 “Independent Assurance Report” andIndependent Assurance Marks shown on various pages

103 Management Approach
103-1

Explanation of the material topic and its Boundary

SDGs Data Book 2019 P.6 “SDGs of Daiwa Securities Group”

103-2

The management approach and its components

SDGs Data Book 2019 P.6 “SDGs of Daiwa Securities Group”

103-3

Evaluation of the management approach

SDGs Data Book 2019 P.6 “SDGs of Daiwa Securities Group”

92

GRI Content Index

Daiwa Securities Group SDGs Data Book 2019

Standards by Topic
Number

Disclosures

Report Page Number

Economic
201: Economic Performance
201-1

Direct economic value generated and distributed

Disclosure Report 2019 (only Japanese)

201-2

Financial implications and other risks and opportunities due to climate change

SDGs Data Book 2019 P.52 “Response to the TCFD”

201-3

Defined benefit plan obligations and other retirement plans

Disclosure Report 2019 (only Japanese)

201-4

Financial assistance received from government

Impact is insignificant

202: Market Presence
202-1

Ratios of standard entry level wage by gender compared to local minimum wage

Impact is insignificant, due to the nature of our business

202-2

Proportion of senior management hired from the local community-

203: Indirect Economic Impacts
203-1

Infrastructure investments and services supported

SDGs Data Book 2019 P.11 “Initiatives through Business Activities”/P.68 “Engagement with Society”

203-2

Significant indirect economic impacts

Not applicable

204: Procurement Practices
204-1

Proportion of spending on local suppliers

Impact is insignificant, due to the nature of our business

205: Anti-corruption
205-1

Operations assessed for risks related to corruption

SDGs Data Book 2019 P.44 “Compliance”/P.49 “Risk Management”

205-2

Communication and training about anti-corruption policies and procedures

SDGs Data Book 2019 P.44 “Compliance”

205-3

Confirmed incidents of corruption and actions taken

Not applicable

206: Anti-competitive Behavior
206-1

Legal actions for anti-competitive behavior, anti-trust, and monopoly practices

Not applicable

301-1

Materials used by weight or volume

Not applicable

301-2

Recycled input materials used

Not applicable

301-3

Reclaimed products and their packaging materials

Not applicable

302-1

Energy consumption within the organization

SDGs Data Book 2019 P.86 “SDGs Related Data”

302-2

Energy consumption outside of the organization

SDGs Data Book 2019 P.86 “SDGs Related Data”

302-3

Energy intensity

SDGs Data Book 2019 P.86 “SDGs Related Data”

302-4

Reduction of energy consumption

SDGs Data Book 2019 P.86 “SDGs Related Data”

302-5

Reductions in energy requirements of products and services

SDGs Data Book 2019 P.86 “SDGs Related Data”

Environmental
301: Materials

302: Energy

303: Water and Effluents (2018)
303-1

Interactions with water as a shared resource

Impact is insignificant, due to the nature of our business

303-2

Management of water discharge-related impacts

Impact is insignificant, due to the nature of our business

303-3

Water withdrawal

SDGs Data Book 2019 P.88 “SDGs Related Data”

303-4

Water discharge

-

303-5

Water consumption-

304: Biodiversity
304-1

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

Not applicable304-2

Significant impacts of activities, products, and services on biodiversity

Not applicable

304-3

Habitats protected or restored

Not applicable

304-4

IUCN Red List species and national conservation list species with habitats in areas affected by operations

Not applicable

93

GRI Content Index

Daiwa Securities Group SDGs Data Book 2019

Number

Disclosures

Report Page Number

305: Emissions
305-1

Direct GHG emissions

SDGs Data Book 2019 P.53 “Environmental Initiatives”/
P.87 “SDGs Related Data”

305-2

Energy indirect GHG emissions

SDGs Data Book 2019 P.53 “Environmental Initiatives”/
P.87 “SDGs Related Data”

305-3

Other indirect GHG emissions

SDGs Data Book 2019 P.53 “Environmental Initiatives”/
P.87 “SDGs Related Data”

305-4

GHG emissions intensity

SDGs Data Book 2019 P.53 “Environmental Initiatives”/
P.87 “SDGs Related Data”

305-5

Reduction of GHG emissions

SDGs Data Book 2019 P.53 “Environmental Initiatives”/
P.87 “SDGs Related Data”

305-6

Emissions of ozone-depleting substances (ODS)

Impact is insignificant, due to the nature of our business

305-7

Nitrogen oxides (NOX), sulfur oxides (SOX), and other significant air emissions

Impact is insignificant, due to the nature of our business

306: Effluents and Waste
306-1

Water discharge by quality and destination

Impact is insignificant, due to the nature of our business

306-2

Waste by type and disposal method

SDGs Data Book 2019 P.53 “Environmental Initiatives”/
P.88 “SDGs Related Data”

306-3

Significant spills

Not applicable

306-4

Transport of hazardous waste

Not applicable

306-5

Water bodies affected by water discharges and/or runoff

Not applicable

307: Environmental Compliance
307-1

Non-compliance with environmental laws and regulations

Not applicable

308: Supplier Environmental Assessment
308-1

New suppliers that were screened using environmental criteria

Not applicable308-2

Negative environmental impacts in the supply chain and actions taken

Not applicable

Society401: Employment
401-1

New employee hires and employee turnover

SDGs Data Book 2019 P.81 “SDGs Related Data”

401-2

Benefits provided to full-time employees that are not provided to temporary or part-time employees

SDGs Data Book 2019 P.61 “Engagement with Employees”(Striving to Create a Pleasant Working Environment)

401-3

Parental leave

SDGs Data Book 2019 P.61 “Engagement with Employees”(Striving to Create a Pleasant Working Environment)/
P.83 “SDGs Related Data”

402: Labor/Management Relations
402-1

Minimum notice periods regarding operational changes-

403: Occupational Health and Safety (2018)403-1

Occupational health and safety management system

SDGs Data Book 2019 P.61 “Engagement with Employees”

403-2

Hazard identification, risk assessment, and incident investigation(Striving to Create a Pleasant Working Environment)

403-3

Occupational health services

403-4

Worker participation, consultation, and communication on occupational health and safety

403-5

Worker training on occupational health and safety

403-6

Promotion of worker health403-7

Prevention and mitigation of occupational health and safety impacts directly linked by business
relationships

403-8

Workers covered by an occupational health and safety management system

403-9Work-related injuries

403-10Work-related ill health404: Training and Education
404-1

Average hours of training per year per employee

404-2

Programs for upgrading employee skills and transition assistance programs

404-3

Percentage of employees receiving regular performance and career development reviews

SDGs Data Book 2019 P.60 “Engagement with Employees”(Human Resource Development and Skill Enhancement)

94

GRI Content Index

Daiwa Securities Group SDGs Data Book 2019

Number

Disclosures

Report Page Number

405: Diversity and Equal Opportunity
405-1

Diversity of governance bodies and employees

SDGs Data Book 2019 P.81 “SDGs Related Data”

405-2

Ratio of basic salary and remuneration of women to men

SDGs Data Book 2019 P.81 “SDGs Related Data”

406: Non-discrimination
406-1

Incidents of discrimination and corrective actions taken

Not applicable due to the nature of our business

407: Freedom of Association and Collective Bargaining
407-1

Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk

Not applicable due to the nature of our business

408: Child Labor
408-1

Operations and suppliers at significant risk for incidents of child labor

Not applicable due to the nature of our business

409: Forced or Compulsory Labor
409-1

Operations and suppliers at significant risk for incidents of forced or compulsory labor

Not applicable due to the nature of our business

410: Security Practices
410-1

Security personnel trained in human rights policies or procedures

Impact is insignificant, due to the nature of our business

411: Rights of Indigenous Peoples
411-1

Incidents of violations involving rights of indigenous peoples

Not applicable due to the nature of our business

412: Human Rights Assessment
412-1

Operations that have been subject to human rights reviews or impact assessments

SDGs Data Book 2019 P.49 “Risk Management”

412-2

Employee training on human rights policies or procedures

SDGs Data Book 2019 P.48 “Human Rights Initiatives”

412-3

Significant investment agreements and contracts that include human rights clauses or that underwent
human rights screening

SDGs Data Book 2019 P.49 “Risk Management”

413: Local Communities
413-1

Operations with local community engagement, impact assessments, and development programs

Impact is insignificant, due to the nature of our business

413-2

Operations with significant actual and potential negative impacts on local communities

Impact is insignificant, due to the nature of our business

414: Supplier Social Assessment
414-1

New suppliers that were screened using social criteria

Not applicable

414-2

Negative social impacts in the supply chain and actions taken

Not applicable

415: Public Policy
415-1

Political contributions

SDGs Data Book 2019 P.85 “SDGs Related Data”

416: Customer Health and Safety
416-1

Assessment of the health and safety impacts of product and service categories

Not applicable due to the nature of our business

416-2

Incidents of non-compliance concerning the health and safety impacts of products and services

Not applicable due to the nature of our business

417: Marketing and Labeling
417-1

Requirements for product and service information and labeling

SDGs Data Book 2019 P.15 “Provision of Quality Service to Customers”

417-2

Incidents of non-compliance concerning product and service information and labeling

Not applicable

417-3

Incidents of non-compliance concerning marketing communication

Not applicable

418: Customer Privacy
418-1

Substantiated complaints concerning breaches of customer privacy and losses of customer data

Not applicable

419: Socioeconomic Compliance419-1

Non-compliance with laws and regulations in the social and economic area

Not applicable95Specific Standard Disclosures for Financial Services (GRI)

Daiwa Securities Group SDGs Data Book 201996

Specific Standard Disclosures for Financial Services (GRI)

Indicator

Report Page Number

FS1

Policies with specific environmental and social components applied to business lines

SDGs Data Book 2019 P.6 “SDGs of Daiwa Securities
Group”/P.12 “Role and Social Responsibilities of the Securities
Business”/P.15 “Provision of Quality Service to Customers”

FS2

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

FS3

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

FS4

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

SDGs Data Book 2019 P.6 “SDGs of Daiwa Securities
Group”/P.60 “Engagement with Employees” (Human
Resource Development and Skill Enhancement)

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

SDGs Data Book 2019 P.15 “Provision of Quality Service toCustomers”/P.57 “Engagement with Shareholders and Other
Investors”

Clauses
Products andServices

DMA

SDGs Data Book 2019 P.49 “Risk Management”
SDGs Data Book 2019 P.44 “Compliance”

Aspect: Product Portfolio
FS6

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

SDGs Data Book 2019 P.4 “Overview of Company andBusinesses”/Disclosure Report 2019 (only Japanese)/Integrated
Report 2019 P.2 “Daiwa Securities Group’s Business Strategy”

FS7

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

SDGs Data Book 2019 P.20 “Initiatives through ProductDevelopment and Provision”/P.33 “Support for the Creationof Our Future Society”

FS8

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

SDGs Data Book 2019 P.20 “Initiatives through ProductDevelopment and Provision”/P.33 “Support for the Creationof Our Future Society”

Aspect: Audit
DMA

FS9

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

SDGs Data Book 2019 P.40 “Corporate Governance”

Aspect: Active Ownership
FS10

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

SDGs Data Book 2019 P.12 “Role and Social Responsibilitiesof the Securities Business”

FS11

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

SDGs Data Book 2019 P.12 “Role and Social Responsibilitiesof the Securities Business”

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

SDGs Data Book 2019 P.12 “Role and Social Responsibilitiesof the Securities Business”

DMA
Society

FS12

Aspect: Local Communities
FS13

Access points in low-populated or economically disadvantaged areas by type

FS14

Initiatives to improve access to financial services for disadvantaged people

Not applicable
SDGs Data Book 2019 P.15 “Provision of Quality Service toCustomers”/P.68 “Engagement with Society”

Aspect: Product and Service Labeling

DMA

FS15

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

SDGs Data Book 2019 P.15 “Provision of Quality Service toCustomers”

FS16

Initiatives to enhance financial literacy by type of beneficiary

SDGs Data Book 2019 P.68 “Engagement with Society”

ISO 26000 Index

Daiwa Securities Group SDGs Data Book 2019ISO 26000 Index
In compiling the Daiwa Securities Group SDGs Data Book 2019, reference was made to the core subjects of ISO 26000.

Core Subjects and Issues
6.2
Organizational
governance
6.3
Human rights

6.4
Labor practices

6.5
The
environment

6.6
Fair operating
practices

6.7
Consumerissues

6.8
Community
involvement
anddevelopment

Report Page Number
SDGs Data Book 2019 P.4 “Overview of Company and Businesses”/P.6 “SDGs of Daiwa Securities
Group”/P.40 “Corporate Governance”/P.44 “Compliance”/P.49 “Risk Management”

Issue 1: Due diligence

SDGs Data Book 2019 P.49 “Risk Management”

Issue 2: Human rights risk situations

SDGs Data Book 2019 P.49 “Risk Management”

Issue 3: Avoidance of complicity

SDGs Data Book 2019 P.48 “Human Rights Initiatives”/P.49 “Risk Management”

Issue 4: Resolving grievances

SDGs Data Book 2019 P.40 “Corporate Governance”

Issue 5: Discrimination and vulnerable groups

SDGs Data Book 2019 P.48 “Human Rights Initiatives”/P.59 “Engagement with Employees”/
P.82 “SDGs Related Data”

Issue 6: Civil and political rights

SDGs Data Book 2019 P.59 “Engagement with Employees”

Issue 7: Economic, social and cultural rights

SDGs Data Book 2019 P.48 “Human Rights Initiatives”/P.59 “Engagement with Employees”

Issue 8: Fundamental principles and rights at work

SDGs Data Book 2019 P.59 “Engagement with Employees”

Issue 1: Employment and employment relationships

SDGs Data Book 2019 P.4 “Overview of Company and Businesses”/
P.59 “Engagement with Employees”/P.82 “SDGs Related Data”

Issue 2: Conditions of work and social protection

SDGs Data Book 2019 P.59 “Engagement with Employees”

Issue 3: Social dialogue

SDGs Data Book 2019 P.59 “Engagement with Employees”

Issue 4: Health and safety at work

Not applicable

Issue 5: Human development and training in the workplace

SDGs Data Book 2019 P.59 “Engagement with Employees”

Issue 1: Prevention of pollution

Not applicable

Issue 2: Sustainable resource use

SDGs Data Book 2019 P.53 “Environmental Initiatives”/P.86 “SDGs Related Data”

Issue 3: Climate change mitigation and adaptation

SDGs Data Book 2019 P.53 “Environmental Initiatives”/P.49 “Risk Management”/
P.87 “SDGs Related Data”

Issue 4: Protection of the environment, biodiversity and restorationof natural habitats

SDGs Data Book 2019 P.68 “Engagement with Society”/P.53 “Environmental Initiatives”

Issue 1: Anti-corruption

SDGs Data Book 2019 P.6 “SDGs of Daiwa Securities Group”/P.40 “Corporate Governance”/
P.44 “Compliance”/P.49 “Risk Management”

Issue 2: Responsible political involvement

SDGs Data Book 2019 P.6 “SDGs of Daiwa Securities Group”/P.40 “Corporate Governance”/
P.44 “Compliance”/P.49 “Risk Management”/P.85 “SDGs Related Data”

Issue 3: Fair competition

SDGs Data Book 2019 P.40 “Corporate Governance”/P.44 “Compliance”

Issue 4: Promoting social responsibility in the value chain

SDGs Data Book 2019 P.6 “SDGs of Daiwa Securities Group”/P.12 “Role and Social Responsibilities of
the Securities Business”/P.53 “Environmental Initiatives”

Issue 5: Respect for property rights

Not applicable due to the nature of our business

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

SDGs Data Book 2019 P.15 “Provision of Quality Service to Customers”

Issue 2: Protecting consumers’ health and safety

Not applicable due to the nature of our business

Issue 3: Sustainable consumption

SDGs Data Book 2019 P.11 “Initiatives through Business Activities”

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

SDGs Data Book 2019 P.15 “Provision of Quality Service to Customers”

Issue 5: Consumer data protection and privacy

SDGs Data Book 2019 P.56 “IT Strategy and the Management of Systemic Risk”

Issue 6: Access to essential services

Not applicable

Issue 7: Education and awareness

SDGs Data Book 2019 P.29 “Dissemination of Analysis and Proposals on the Economy, Society, andInvestment Information”/P.68 “Engagement with Society”

Issue 1: Community involvement

SDGs Data Book 2019 P.33 “Support for the Creation of Our Future Society”/P.68 “Engagement withSociety”

Issue 2: Education and culture

SDGs Data Book 2019 P.68 “Engagement with Society”

Issue 3: Employment creation and skills development

SDGs Data Book 2019 P.33 “Support for the Creation of Our Future Society”

Issue 4: Technology development and access

SDGs Data Book 2019 P.33 “Support for the Creation of Our Future Society”

Issue 5: Wealth and income creation

SDGs Data Book 2019 P.20 “Initiatives through Product Development and Provision”/P.68“Engagement with Society”

Issue 6: Health

SDGs Data Book 2019 P.20 “Initiatives through Product Development and Provision”/P.68“Engagement with Society”

Issue 7: Social investment

SDGs Data Book 2019 P.11 “Initiatives through Business Activities”/P.85 “SDGs Related Data”

97Glossary

Daiwa Securities Group SDGs Data Book 2019

Glossary●AFP/CFP ®
Certifications for financial planners. AFP is a certification in Japan, while CFP isa globally recognized credential.
●Biomass Power Generation Plant
A method of generating power by combusting and fermenting biologicalorganic resources such as wood chips or food waste. Garnering attention as aform of renewable energy that can be stably generated.
●Blockchain
A system of distributed ledger recording/managing transaction history acrossmultiple computers on the network. Participants share all the data, whichmakes it difficult to falsify data. Blockchain is used in transactions using virtual
currency, such as Bitcoin. The use of blockchain is being expanded to otherareas of application.
●CDP (Carbon Disclosure Project)This project is an affiliation of institutional investors concerned about climatechange who demand that companies disclose information about their stanceon environmental problems and initiatives addressing such problems.
●Color Universal Design
A method of design that takes into consideration the use of color so that
information can be conveyed to more people, keeping in mind people withvaried color perception.
●Corporate Governance Code
Guidelines established by the Tokyo Stock Exchange with the aim ofenhancing corporate governance, which is a framework for companies tocarry out transparent, fair, prompt and decisive decision making from theperspectives of stakeholders. Securities Listing Regulations of the Tokyo Stock
Exchange set out provisions requiring listed companies to comply with the
Corporate Governance Code.
●Distributed Ledger Technology (DLT)Technology that prevents data manipulation or external attack by having thesame information shared by multiple participants. Blockchain is an exampleof DLT.
●Engagement
Dialogue and exchange of opinions between businesses and stakeholders.
●Environmental Accounting
To quantify necessary investment in corporate activities and its effect in aneffort to reduce the environmental load of those activities.
●ESG Due Diligence
A verification process performed to minimize adverse effects on ESG issues
including issues related to human rights.
●EquityFunds procured through issuance of shares, etc. that do not entail an
obligation to repay the funds.

●Impact Investment
A method of investment that, in addition to producing economic benefit,
invests in assets with the intention of addressing social issues such as poverty
and environmental problems.
●ISO 26000
A worldwide standard that provides guidance on social responsibility oforganizations.
●Issuers
Entities that issues stocks/bonds to raise funds.
●LGBT
An initialism that stands for lesbian, gay, bisexual, and transgender.
●Materiality
The themes and aspects companies focus on in particular over the long termin a wide range of corporate activities. It is recommended that companies
issuing sustainability reports should select and announce those themes andaspects according to the type of business and risk.
●Nippon Individual Savings Account (NISA)Dividends and capital gains from stocks, investment trusts, and otherinvestments are subject to ordinary income tax and local taxes, but thisprogram exempts dividends and capital gains from new purchases up to 1.20
million yen for a maximum of five years.
●Principles for Financial Action for the 21st Century
Principles for financial action toward a sustainable society. Aims to expand
investment and financing with the environment in mind, formulated asvoluntary efforts of financial institutions in Japan.
●Risk Control Self-Assessment (RCSA)
The process whereby staff assess potential risks and related controls in theworkplace. Typically, this method exposes potential risks through workshops
and surveys.
●SRI
Socially responsible investment. An investment strategy where both financial
return and social good are sought.
●Stewardship CodeThe code of conduct established for institutional investors concerning theirfiduciary duties. The Japanese version was formulated by the Financial Services
Agency in February 2014.
●Supply Chain Management
To investigate problems involving a company’s suppliers of raw materials andservices, including their environmental and social issues, to select suppliers
based on the results of such investigations, and urge them to resolve theissues.

●Green Bonds
Bonds issued by companies, municipalities, and other entities to raise funds
required for green projects within and outside Japan●Sustainability Accounting Standards Board (SASB)
A nonprofit organization established in 2011 in the United States. This
organization aims for increased disclosure of non-financial informationof companies traded on U.S. exchanges, and proposes industry-basedsustainability standards.

●GRI
Global Reporting Initiative. An organization dedicated to proposing andpromoting common international guidelines for sustainability reports.

●UnbundlingTo break down (investment) risk or multiple financial functions conventionallyassumed by financial institutions.

●iDeCo (Individual-Type Defined Contribution)
Corporate-type and individual-type defined contribution pension plans
have been in place, and iDeCo is a nickname for the individual-type defined
contribution pension plan with a broadened scope of eligibility. iDeCo is a
private pension plan in which participants make contributions and decide
which investment products to invest in and receive benefits based on the
total of their contributions and investment returns. Special tax breaks apply tocontributions.

●Work-Life Balance
Balance between an individual's work and personal life.

98Independent Assurance Report

Independent Assurance Report

Daiwa Securities Group SDGs Data Book 201999

http://www.daiwa-grp.jp

Printed in Japan