DBJ Group Integrated Report 2023

Financial ExpertiseContinue to expand financial frontiers;
Provide the best solutions for customers and society;Responsibility to future generations

Pursue sustainable development for Japan and the world.
As industry and infrastructure professionals skilled in handling
all types of risk, we will play a unique role in the economy andsociety of 2030—leading new business and market creation while

The customer’s perspective
Outstanding service
Commitment and cooperation

A long-term perspective / Impartiality / Public-mindedness / Reliability

MissionDesign the Future withresponding to crises and other social needs.

Initiative & Integrity

Green
Resilience & Recovery
Innovation
Transition / Transformation

1

CONTENTS
Introduction

Strategy

Governance

1 Contents and Editorial Policy

Sustainability Strategy

Corporate Governance

2 Corporate Philosophy

22 Our Approach to Sustainability (Big Picture)

54 Message from the Chairman

4	Our History of Value Creation

23 Basic Approach to Carbon Neutrality

56 Corporate Governance System

6 Materiality

30	Response to Climate Change(Initiatives Based on TCFD Recommendations)57	Basic Position on
Corporate Governance

8 At a Glance

Value Creation Story

Business Strategy
Sector Strategy

Management
Foundation Strategy

58 Board of Directors
61 Executive Committee
61 Audits10	Non-Financial Capital That
Supports Value Creation

32 Energy Sector

46 Financial Capital

33	Transportation Sector

47 Human Capital

11 Value Creation Process

34	Urban Development Sector

51 Intellectual Capital62	Members of the Board of Directors,
Audit & Supervisory Board Members,
and Executive Officers

12 Message from the President

35 Industrial Sectors

52 Relationship Capital64 Compliance16	Fifth Medium-Term
Management Plan
20	Stakeholder Communications

Area Strategy

53 Social Capital

Risk Management

36 Regions

66 Risk Management System

37 Overseas

66 Comprehensive Risk Management
70 Stress Tests

Function Strategy

71 Business Continuity Initiatives

38 Syndicated Loans
39 M&A Advisory
40 Consulting Services

Data

41 Asset Management

72 Consolidated Financial Summary

42	Special Investment Operations

73 Organizational Structure

44	Crisis Response Operations

74 Corporate Information
75 Group Company Information

Editorial Policy

Period Covered and Scope

Environmental Report for a Sustainable Society, published in fiscal 2003, was the DBJ Group’s firstreport dedicated to increasing communication of non-financial information to its stakeholders.
Its Policy on Sustainability, created in fiscal 2017, states its aim of “consistently improving
the process of value creation through communication with stakeholders.” The Group has
published its integrated report every year since then. The integrated report is intended toprovide financial and non-financial information to explain the Group’s business activities andinitiatives in sustainable value creation to its broad spectrum of stakeholders.
Integrated Report 2023 includes an introduction explaining the overall picture of the DBJ
Group’s past, present, and future, and an update on material issues as key management issues.
With a focus on the Strengthening and Review of the Fifth Medium-Term Management Plan,
the report has been restructured to methodically communicate the Group’s business andfoundation strategies. The report also explains the Group’s most recent initiatives, including its
Transition Policy for addressing climate change and the setting of quantitative targets for
reducing greenhouse gas (GHG) emissions as a part of moving toward sustainable growthacross society.
The design is based on the concept of light leading the way into the future representing
DBJ Group’s efforts to pave the way into the future amidst the challenges faced by readers of
this report. The cover of report features a photograph of the Tokyo cityscape bathed in a soft
light, as seen from DBJ’s head office.
The content of the report is decided upon by the Executive Committee.

• Period: F iscal 2022 (April 1, 2022–March 31, 2023)(Some information from outside this period is also included.)• Scope: In principle, the report covers DBJ and its 12 main subsidiaries• Date of publication: October 2023
Guidelines and Entities Referenced• International Integrated Reporting Framework of the International Integrated
Reporting Council (IIRC), which is now part of the IFRS Foundation• Guidance for Integrated Corporate Disclosure and Company–Investor
Dialogue for Collaborative Value Creation
Disclaimer
Integrated Report 2023 contains forward-looking statements. Forward-looking
statements are based on information available at the time of writing andhypotheses or judgments regarding uncertain factors. Accordingly, actual
results may differ materially if conditions change.

2

Corporate Philosophy
The DBJ Group’s corporate philosophy consistsof a mission that it pursues relentlessly, regardlessof the times; core values that are shared by all of
its executives and employees; and Vision 2030,
a vision for 2030 that it follows as a guide into
the future.
By sharing and pursuing its corporate
philosophy, DBJ not only fosters a sense of unity
within the Group but also enhances each andevery employee’s awareness of social responsibility
and their motivation to grow intentionally andwith a sense of mission.
In connection with these elements of its
corporate philosophy, the DBJ Group has
identified four core corporate values—
a long-term perspective, impartiality,
public-mindedness, and reliability—that also
embody its strengths and long-term vision.

MISSION

VISION 2030
Leveraging the DBJ Group’s
unique strengths to pursue
its mission and realize its vision

BUSINESSSTRATEGY
Sector strategy
Function strategy
Area strategy

CAPITALSTRATEGY
Sustainability
management

Financial capital
Human capitalIntellectual capital
Relationship capitalSocial capital

DBJ Group’s Strengths
Execute strategy
based on values

Four core corporate values
A long-term
perspective

Impartiality

Publicmindedness

Values put into practicedefine our strengths

Reliability

ACTION GUIDELINESVALUES

Corporate Philosophy

3

Our unwavering purpose and our unceasing determination to shape the future

Design the Future with Financial ExpertiseContinue to expand financial frontiers; Provide the best solutions for customers
and society; Pursue sustainable development for Japan and the world.
Our vision for 2030, embodied in our mission and strategies

Vision 2030
As industry and infrastructure professionals skilled
in handling all types of risk, we will play a uniquerole in the economy and society of 2030 —leading new business and market creation while
responding to crises and other social needs.

Our guidelines for taking specific actions that express our values
Responsibility
to futuregenerations• We fulfill our responsibility to the future by
pursuing both economic and social value.

Outstanding
serviceThe
customer’s
perspective•W e devote unequaled thought to eachpossibility—from the customer’s point of view.

• We work tirelessly to broaden frontiers andCommitment
achieve best results.
andcooperation • We respect diversity and work together for greater
shared value.

• We review and enhance our services while
improving productivity.

Our unwavering values shared by management and employees (base component)

Initiative

Integrity

Vision2030

Vision 2030 was created as a guide for the DBJ Groupto achieve its goals for the year 2030, with due
consideration paid to the core values shared bymanagement and employees.
By accumulating experience and maintaining an
upstanding reputation in Japan and abroad, the DBJ
Group aims for its industrial and infrastructure
professionals to be highly regarded by its customers andmarkets. While maintaining the ability to appropriately
assess and address a variety of risks, the DBJ Group willtake a leading role in creating markets and businesses
for customers through a range of services. We will also
meet the expectations of society through Crisis
Response Operations and other means. The DBJ Group
is keen to play a key role in the rapidly changing futureof society.
The DBJ Group and its executives and employees areable to advance swiftly toward these goals by sharing
in depth with stakeholders the Group’s strategies forachieving its vision for the future.

4

Our History of Value Creation
Our predecessors the Japan Development Bank andHokkaido-Tohoku Development Finance Public
Corporation were established to rebuild Japan’s
economy and society after World War II.
Japan’s economic environment and social issues
have evolved significantly since then, but the DBJ
Group, evolving itself, has continued to contribute to
the sustainable development of society by providing
solutions in step with the times, while always taking
pride in its values of initiative and integrity.

1950s

In light of long-term changes in the external environment,
financial professionals at the DBJ Group have contributed to
the realization of a sustainable society by providing creative
solutions for addressing issues directly faced by customers in

1970s

Nippon Yusen Kabushiki Kaisha:Liner Sanuki Maru

Rebuilding of economy to stage of advanced
economic growth1

Three Priority Areas for the DBJ GroupToyo Soda Manufacturing Co., Ltd.
(currently Tosoh Corporation):
Conversion of manufacturing method
for caustic soda (Yamaguchi Prefecture)

Qualitative improvement in Japanese lifestyles,
stable supply of energy ebuilding Japan’s merchant shipping fleet with financeR
under the government’s shipbuilding program2

 romotion of conversion to non-polluting manufacturingP
methods for chemical industry

The Japan Development Bank, our predecessor, was founded in 1951, six
years after the end of World War II. It began to supply financing for rationalizing, modernizing, and fostering key industries, such as coal, steel, andmarine transportation, as well as for developing power sources that became
the foundation for the development of Japan’s economy and industry.

Having experienced the oil shock, we provided investments and loans for
introducing alternative energy, promoting energy efficiency, and developing
large-scale industrial land. In addition to industrial development, we concentrated on measures to prevent pollution and develop regions and cities.

Enhancement of energy

Redevelopment of major cities

Reinforcement of transportation capacity

Modernization of distribution

the context of infrastructure, industry, and regions.

Infrastructure

Industry

Regions

Rebuilding of energy systems, development of
more-advanced transportation networks, andcreation of attractive communities

Commercialization of new technologies,
restructuring of businesses to improve productivity
and sharpen competitiveness, development ofbusiness in global markets

Stable supply of energy​
1

Rebuilding of vital industry
Nurturing of new industry

Industrialization of new technologies

Industrial revitalization based on regional
characteristics, overseas business development,
foreign tourism in Japan, business succession

Regional development
2

Regional equalization

1950
1951

Transformation of the DBJ Group

Support for capital investment

1960

1970

Establishment of the Japan Development Bank
1956

1957

Establishment of Hokkaido-Tohoku Development Finance Public Corporation

1960

Sustainability solutions provided by the DBJ Group

Prevention of pollution

Pollution prevention loan programs
Wastewater treatment loan program1963

 oot prevention
Sloan program1970

Flue gas desulfurizationloan program1975

 esource recycling and energyR
conservation loan programs

Our History of Value Creation

1980s

5

1990s

Sony Corporation:(now Sony Group Corporation)
Trinitron color television factory

Updates to foundations of society and lifestyles,transformation of industrial structure3

Creation of abundance in society,sustainable development

Promotion of homegrown technologies through thecommercial application of new technologies

4

We focused on expanding domestic demand, ensuring a smoothtransformation of the country’s industrial structure, and strengthening
international competitiveness, while concentrating on supporting updates
to social capital, development of creative technologies, and maintenance oflifestyle infrastructure.

 ecovery work on traffic infrastructure damaged
Rby the Great Hanshin-Awaji Earthquake

Support for locally developed technology​ Transformation of industrial structure

1980

Support for venture businesses​

Reconstruction after Great Hanshin-Awaji Earthquake

1999

Employees’ health management ratings​

BCM ratings

Sharpening of competitiveness​
Reconstruction after earthquakes
Special investments​

Advancing PPP and PFI projects

Regional revitalization

2010

Establishment of Development Bank of Japan

2004

1993

Strengthening of response to innovation

Environmental ratings

2000

 zone layer protection
Oloan program launched

M&A advisory services

Solutions for regional issues

1990

1988

Supply of risk capital

Renewable energy

Business revitalization financing

Maintenance of regional social infrastructure
4

5Project financing

Strengthening of international competitivenessRapid response to companies with deteriorating cash flow

5

In 2008, DBJ transitioned to a joint-stock company as a special public
corporation. DBJ worked to solve the issues of its customers through financial
functions and integrated investment and loan services, such as long-termloans and risk capital, as a neutral source of industrial finance.

Restoration of infrastructure

Updating of information and communications infrastructure

Wall Street,where the New York Stock Exchange
is locatedCrisis response

We concentrated on providing support for the priority domains of social
capital, environmental measures, and venture businesses. We also acted asa safety net, putting in places measures to stabilize the financial system andhelping with reconstruction after the Great Hanshin-Awaji Earthquake.

Upgrading of railway network

3

2000s

Hankyu Corporation:
Earthquake reconstruction work
(Hyogo Prefecture)

2008

2006

2015

2020

Revisions to
The Development Bank ofJapan Inc. Act

BCM Rated Loan Program launched
DBJ Green Building Certification Program launched2020

 BJ Sustainability Linked
D
Loans with Engagement
Dialogue createdEstablishment of Development Bank of Japan Inc.

 nvironmentally Rated Loan
E
Program launchedComprehensive loan programs for environmental measures launched
Establishment of Research Center on Global Warming

2020Enterprise Disaster Resilience
Loan Program launched

2011

2012

 mployees’ Health Management Rated
E
Loan Program launched6

Materiality
Materiality Identification Process
The DBJ Group has identified its material issues not only by drawing upon international guidelines but also by placing an emphasis on dialogue with its various
stakeholders. We have deepened our understanding of three priority areas of focus for the realization of a sustainable society while providing solutions in tune withthe times, and these three priority areas have been narrowed down and crystallized as material issues. Looking ahead, we plan to review our material issues periodically from the perspective of balancing economic and social value while maintaining dialogue with our stakeholders.
Deepening Our Understandingof the Three Priority Areas

Infrastructure

Industry
Commercialization of new technologies,
restructuring of businesses to improve
productivity and sharpen competitiveness,business development in global markets

Regions
Industrial revitalization based on regional
characteristics, overseas business development,
foreign tourism in Japan, business succession

In light of the roles and functions wehave performed to date, realizedsocial value, and future changes, wehave designated infrastructure, industry, and regions as our priority areas.
Despite changes in the external
environment, these priority areas
have remained consistent over time,
and we reaffirmed their importance inthe materiality identification process.

We referred to government
publications and other guidelines and documents to selectFrom the perspective of stakeholders andthe DBJ Group’s business, we narrowed down
this list to

37social issues.

13 social issues of the highest importance.

After selecting the 37 social issues with reference to the basic policiesof the Japanese government and internal DBJ Group discussions
about problems faced by customers, we analyzed each issue from two
perspectives—importance to stakeholders and importance to the DBJ
Group’s business—and narrowed the list down to 13 social issues.
Importance to Stakeholders
We conducted quantitative evaluations
through surveys of each department, branch,and Group company, held staff and executive
meetings on several occasions, and had
discussions with experts, while referring to
SASB* and other guidelines.

Decarbonization

New businesscreation

Population decline

Infrastructure

Decarbonization

Importance to the DBJ Group’s BusinessWe conducted quantitative evaluations of
the importance of the issues to the DBJ
Group’s business in the context of different
capital resources.

Three Main Issues

Priority Areas, Main Issues,
and Common Theme

IndustryNewbusinesscreation

Population
declineRegions

Financialmarkets
Risk capitalFoundation
Cultivation of talent to challenge
financial frontiers

Common Theme

Financial markets
Risk capital

We grouped the 13 social issues under three main issues—
Decarbonization, New business creation, and Population decline,
and a common theme comprising Financial markets and Risk capital.

Strengthening of the businessfoundation for
supplying risk capital

We are adding foundational initiatives
to support our activities in the three priority areas over the long term and toaddress the four main themes discovered in our dialogues with stakeholders.

* SASB: Sustainability Accounting Standards Board

Identification of material issues (key management issues)

Rebuilding of energy systems, development of
more advanced transportation networks,
and creation of attractive communities

Discovery of Material Issues throughDialogue with Stakeholders

Materiality

7

Materiality of the DBJ Group (Key Management Issues)
The DBJ Group has identified its material issues, the key management issues for realizing the future laid out in Vision 2030, with reference to the concept of balancing
economic and social value, which runs deep in the DBJ Group’s sustainability management, and the objective prescribed in The Development Bank of Japan Inc. Act,
which is to contribute to the smooth supply of funds to those needing long-term business funds, as well as to the sophistication of financial functions.

Materiality (Key Management Issues)Specific Measures

Formation of sustainableinfrastructure

Transition to decarbonization
Build infrastructure for future
generations• Investments and loans to effect transitions while maintaining stable supply in the energy sector• Social acceptance of next-generation mobility and proliferation of clean energy usinghydrogen and ammonia• Promotion of public-private partnerships in maintaining and upgrading public infrastructure• Initiatives focused on natural capital, biodiversity, and a circular economy that support
economic and social activities

Technical innovation andrestructuring of industry

Strengthen competitiveness ofJapanese industry throughinnovation

Reorganize supply chains• Support for new business, business restructuring, and digital transformation, provision of
guidance for entering global markets• Investments for startups in the climate and deep technology (deep tech) sectors, andgrowth-stage startups• Management support through investments in Society 5.0 and other areas• Supply chain reconstruction with eye on post-pandemic recovery, decarbonization,
circular economy, etc.

Regional revitalization
utilizing untapped potential

Just transition of regions
Response to population decline• Creation of visions for regions through collaboration and cooperation
with stakeholders• Recommendations and support for a just transition to a decarbonized society from bothindustry and regional perspectives• Support for increasing population flows, for example via tourism, especially foreign tourism• Supply of risk capital and knowledge for uncovering unique regional resources

Creation of markets andsafety nets in thefinance sector

Expand frontiers of financial markets

Exercise stabilizer function• Expansion of sustainable finance markets (investments and loans, asset management,
bond issuance)• Expansion of investments in venture capital and secondary funds• Provision of diverse investment and loan opportunities through cooperation with private
financial institutions• Deployment of safety net functions, such as Crisis Response Operations

Cultivation of talent tochallenge financial frontiers

Support the taking on ofchallenges and collaboration
Improve employees’ senseof self-fulfillment• Implementation of human resource systems that encourage employees and teams to take on
new challenges• Cultivation of human resources through practical on-the-job training (OJT) and ample
training opportunities• Creation of an environment that respects diversity and facilitates the independence andproactivity of employees

Strengthening of the businessfoundation for supplying
risk capital

Enhance risk
responsiveness
Reform ways of working• Preparation of systems in response to strengthening of investment operations and increased
sophistication of investment management with consideration to risks and returns• Continuous review of operations, advancement of operations through digitization• Strengthening of integrated Group management

SDGs

8

At a Glance
The DBJ Group specializes in offering a range of solutions that include advisory, knowledge, and asset management, and providing integrated investment and loan
services that flexibly meet the needs of its customers.

Loans
DBJ extends medium- and long-term loans to customers in linewith their various needs. In addition to senior loans, DBJ also utilizes other financing methods, such as structured financing, asset
financing, and syndicated loans, to satisfy its customers’ diverse
needs for fund procurement.

Investments
The DBJ Group supplies risk capital, including mezzanine andequity financing, in accordance with the businesses and stages ofeach customer by creating arrangements based on businessviability analysis and risk assessments. We help customers improvetheir corporate value by offering flexible and agile investmentsfrom medium- and long-term perspectives.

Advisory and Knowledge
The DBJ Group helps customers solve their problems throughthe provision of a range of services, such as consulting from an
impartial and long-term perspective and support for M&As tofurther strengthen the international competitiveness and advancethe growth strategies of Japanese corporations.

• Medium- and long-term loans• DBJ Sustainability Evaluation Certification Program• DBJ Sustainability Linked Loans with Engagement Dialogue• Transition loans• Asset financing• Debtor-in-possession (DIP) financing• Structured financing• Syndicated loans• Mezzanine financing
Subordinated loans/Subordinated bonds
Preferred stock/Classified shares
Hybrid financing• Leveraged buyout (LBO)/Management by objectives (MBO)• Equity financing• Collaborative funds• M&A advisory services• Sustainability management consulting services• Industrial and regional surveys• Support for female entrepreneurs• Innovation creation support• New business development support• Public asset management

Asset Management
The DBJ Group specializes in alternative investments in the threefields of real estate, private equity, and infrastructure, and it iscommitted to precisely addressing the diverse management
needs of its institutional investor customers.

• Asset management business (Real estate)• Global fund investment business(Real estate, Private equity, Infrastructure)At a Glance

9

Balance of Investments
and Loans (Non-Consolidated)

Gross Ordinary Income (Consolidated)

Past Five Years of Gross Ordinary Income (Consolidated)(Billions of yen)
250

Loan balance

15,559.4¥

billionLoans

Commission andfee income

Investment150

104.0 billion ¥123.3 billion ¥22.0 billion¥

50

1,735.1

¥

0

Loans

Manufacturing

Issuer Rating
R&I(Stable)(Stable)A(Stable)

AA+
JCR

AAA
(Stable)(As of June 30, 2023)

2020

104.0

2021

2022

2,136.3¥

Total amount of loans
World’s first environmentally rated loan program

2,758.0

101.4(Fiscalyear)

Total GRIT Investments
and Loans

2004
¥

123.3

Commission and fee income

Commencement

24.5%

20.9%
Real estate and leasing of goods 19.2%
Wholesale and retail 6.7%
Information and communications 1.2%
Other 8.5%
Transportation and postal

Investment

2019

DBJ Sustainability Evaluation
Certification Program

19.0%

Electrical, gas, heat supply, and water

Moody’s

2018

billionBalance of Investments and Loans (Consolidated)

S&P

101.4

100

Investment balance

A1

22.0
15.1

200

billion(As of March 31, 2023)

billion40

About% of total
investments and loans,
excluding Crisis
Response Operations(From April 1, 2021 to March 31, 2023)

Common Equity Tier 1
Risk-Weighted Capital Ratio

Establishment ofFormer Entities

Functions of Group Companies

No. of Employees(Consolidated)

Former Japan
Development Bank

• Overseas bases

Consolidated

16.34%

1951

Former Hokkaido-Tohoku
Development FinancePublic Corporation

1956• Investments, Securities,
Asset management

1,839• Surveys, Consulting

Non-consolidated• Real estate management,
IT services, Shared services



1,270

(As of the fiscal year ended March 31, 2023, unless otherwise indicated)

10

Non-Financial Capital That Supports Value Creation

Introduction

Value Creation Story

Strategy

Governance

Data

The DBJ Group has contributed to the sustained development of Japan and the world by coming up with solutions to social issues for more than 70 years since its
establishment as Japan Development Bank. This value creation has been supported by the Group’s non-financial capital, including human capital, intellectual capital, and relationship capital, and, through the ongoing interaction of different kinds of non-financial capital, it advances the Group’s ability to respond to growing
and changing business environments and social issues.

Four Core
Corporate Values• Based on our mission to “Design the future with financial expertise,” the source of our value creation is our four core corporate values—a long-term perspective, impartiality,
public-mindedness, and reliability. Originating from the pursuit of our corporate philosophy and values of initiative and integrity, these four values have been passed down
the generations.
• Embodying the strengths of the DBJ Group, these values support its unique business activities and are the basis for its non-financial capital.

Human
CapitalHuman Resource
Development to
Support Continued
GrowthLeading-Edge
Financial ExpertiseIntellectual
CapitalA Leader for
Sustainable Financeand Solutions in Japan• The DBJ Group has a vision for human resource development, which can be summarized as the “cultivation of generalists who can be specialists in many fields.” Our aim is
to have human resources who are agile and have broad perspectives while also possessing advanced specializations, and we encourage every employee to autonomously
and constantly grow without fearing change, in order to be able to discover and solve issues faced by our customers and society in tune with the constantly changing times.
• Through practical on-the-job training and abundant training opportunities, our employees obtain and advance their skills and gain a variety of experiences. The entire Group
works to train human resources who can work organically toward achieving a shared goal.

• Since the days of its predecessors, Japan Development Bank and Hokkaido-Tohoku Development Finance Public Corporation, the DBJ Group has provided long-term
financing for capital investments, while refining its ability to analyze and assess them.
• DBJ has gained extensive experience in leading-edge financing techniques, introducing Japan to such investment vehicles as project finance, debtor-in-possession (DIP)
finance, public–private partnerships/private finance initiatives (PPPs/PFIs), and asset finance, using commitment and cooperation as action guidelines. DBJ has supplied risk
capital via various methods, such as mezzanine financing and equity investments, taking a long-term perspective.
• After being the first financial institution in the world to develop an environmentally rated loan program (the DBJ Environmentally Rated Loan Program) in 2004, DBJ expanded
its menu of financing options that factor in the level of sustainability management at a corporation to include the DBJ BCM* Rated Loan Program and the DBJ Employees’
Health Management Rated Loan Program. DBJ emphasizes dialogue with customers in the provision of these loan programs, as well as in the DBJ Sustainability Linked Loans
with Engagement Dialogue and its consulting services, and it assists customers with sustainability management.
• In 2011, it created DBJ Green Building Certification, and it conducts sustainability assessments of real estate properties.

Customer Base
Centered on
Industry Leaders

Relationship
CapitalCollaboration andCooperation with
Diverse Stakeholders* BCM: Business continuity management• Since the reconstruction period after the end of World War II, DBJ has supported several customers, including leading companies in their respective industries, with the aim of
spurring growth in Japan through policy-based financing. The findings of DBJ's annual Survey on Planned Capital Spending, which has been conducted for more than 60 years,
informs corporations’ top management discussions, thereby strengthening DBJ’s relationship capital.
• Having grown alongside Japan for decades, the DBJ Group will continue to work closely with its customers from a long-term perspective while nurturing the relationshipcapital it has accumulated.
• Since the days of its predecessors, Japan Development Bank and Hokkaido-Tohoku Development Finance Public Corporation, the DBJ Group has built strong collaborativeand cooperative relationships with various stakeholders from the standpoint of public-mindedness and impartiality.
• DBJ forms funds with regional financial institutions to supply risk capital to address regional issues. In times of crisis, such as a major natural disaster or turmoil in financial
markets, DBJ, designated by the government as a financial institution to engage in Crisis Response Operations, does so expeditiously and appropriately. The DBJ Group willcontinue to deepen collaboration with diverse stakeholders.

Value Creation Process

Introduction

Value Creation Story

Strategy

Governance

11

Data

The DBJ Group engages in sustainability management with the intention of nurturing domestic and international development by helping to solve the issues faced
by its customers and society.
While aiming to refine its sustainability management, DBJ strives to continuously improve the value creation process through collaboration and dialogue with its
stakeholders, in order to further expand value creation.
Realization of

Acceleration of Initiatives in the Fifth Medium-Term Management Plan

Vision 2030

Pages 16 –19

External conditions and social issues

INPUT

D.A.I.S: Digital, Aging, International, Sustainability

BUSINESS MODEL

Financial Capital

OUTPUT / OUTCOME

Three Priority Areas

Page 46• Own credit-raising activities• Government credit-raising activities

Infrastructure

IndustryResultsofOperations

Pages 16–19

Fiscal 2025 Targets(consolidated)¥210 billion• Gross ordinary income Regions¥85 billion• Net income Human CapitalPages 32 – 34

Pages 47–50• ROA • ROE Pages 44–45

Pages 42–43¥21 trillion

Asset Management

Formation ofsustainableinfrastructure

Technical
innovation andrestructuringof industry

Corporate Governance• GRIT investments and loans(five-year total) ¥ 5.5 trillion

Pages 6–7
Creation ofmarkets andsafety nets in thefinance sector

Regional
revitalization
utilizing untapped
potential

Strengthening of thebusiness foundation for
supplying risk capital

Cultivation oftalent to challenge
financial frontiers

Page 53

estimates on a finalized Basel III basis.)Page 51

Materiality (Key Management Issues)

Page 52• Risk-weighted capital ratio Knowledge

Page 41

Pages 54–65 / Risk Management

Pages 66–71

Value Created• Building a sustainable society 

Stakeholder Communications• More-resilient infrastructure and supply chains  R• Support for creation of new technologies,
co-creation and innovation 

Communities

I• Improved engagement

Collaboration andcooperation

Pages 20–21
Customers

G T(including achieving carbon neutrality by 2050)

Collaboration and cooperation

Collaboration andcooperation

1%
3%
14%

 (Notes: Common equity Tier 1 capital ratio,

Backcasting from created value• Natural environment• Social infrastructure• System capital

Investments
Special Investment
Operations

Page 39• Customer base centered on industry leaders• Collaboration and cooperation withdiverse stakeholders• Combined strengths as a Group

Social Capital

Financing
Crisis Response
Operations

Advisory Services

Page 51• Leading-edge financial expertise• A leader for sustainable finance and solutions• Surveys and research

Relationship Capital

34%• Cost ratio • Total assets • Values: initiative and integrity• Four core corporate values:
a long-term perspective, impartiality,
public-mindedness, and reliability• Engagement

Intellectual CapitalPages 36 – 37

Page 35

Employees

Financial institutions

Investors

Shareholders

12

Message from the President

Introduction

Value Creation Story

Strategy

Governance

Data

Aiming for the sustainable growthof Japan, we continue to boldly
take on new challenges as afront-runner in sustainability
management.

Seiji Jiige
President and CEO
Development Bank of Japan Inc.

Message from the President

Introduction

Value Creation Story

Strategy

Governance

Data

Becoming an Institution That Can Meet
Evolving Needs Accurately

institution to more accurately meet changing

M&A, when it becomes clear if our intended

global and societal needs.

objectives have been achieved. In this sense, it

My name is Seiji Jige and I have been president of

Shifting from an “Entry-Focused” to an“Exit-Focused” Cultureis crucial that we transition our financial culture
DBJ since June 2022. Since taking on this role,from one that is “entry-focused” to one that is“exit-focused.” While having a long-term
perspective is crucial, in a world where economic

I have had the opportunity to meet with many
leaders in the business community and municipal

Since becoming a joint-stock company in 2008,

and social conditions are changing rapidly, it isgovernments. Two things have struck me during

DBJ has pursued a unique business model that

impossible to avoid short-term fluctuations.

these encounters. First, many executives haveintegrates loans and investment. I believe we have

I believe we need to strengthen our mechanisms

expressed their concerns about major global andlargely achieved success in this regard, as ourfor responding promptly to such changes.

societal changes. The intensifying conflict between

financial figures indicate. In fiscal 2022, gross ordi-

the United States and China and the war innary income was ¥249.4 billion, approximately half

Ukraine, among other events, have begun toof which was made up of profits on investment of

shake the foundations of the free trade system¥123.3 billion, while profits on loans amounted tocentered on the World Trade Organization (WTO).

¥104.0 billion. To continue meeting needs around

Lately, many companies have become advocates

This has disrupted global supply chains and madethe world, I believe we must also acknowledge

for sustainability management. At DBJ, the word

the optimal distribution of resources impractical.

that there are areas where we need to evolve.

sustainability has been in frequent use since the

Aiming for Sustainability Managementthat Balances Economic and Social Value

Second, it is painfully clear that population

For instance, consider our financial culture. We

era of our predecessor organization, the Japandecline is an increasingly severe problem in Japan.

originally started out as an institution that provides

Development Bank (JDB). Notably, in 1993, JDB

After the COVID-19 pandemic subsided, I had thelong-term loans, and then evolved into a businessestablished the Research Center on Global Warming

opportunity to visit regional areas where I noticed

model that integrates investments and loans forwithin its Research Institute of Capital Formation,

an increase in new apartment buildings, despite

the supply of risk capital. This culture of extending

initiating pioneering research on global

statistical data indicating a net outflow of popula-long-term loans remains firmly rooted today. As

environmental issues.

tion from the regions. This paradox suggests antheir name suggests, long-term loans involve very

One of the most memorable concepts from that

influx of people into regional cities from the sur-long repayment periods and inherent risks associ-era is the idea of “social common capital,” whichrounding areas, accelerating the overall popula-ated with future changes in economic and social

was conceived by Professor Hirofumi Uzawa, antion decline in outlying regional peripheries.

conditions. Essentially, decisions at the “entry

economist and advisor at the research institute.

point” (i.e., when extending a loan) are extremelyThis idea posits that finance has value as a social

important.

common capital. This was particularly true for JDB,

Moreover, in discussions about the rapid paceof digitalization and efforts to decarbonize—key
issues that I had identified for future generations—

On the other hand, with investments, we remain

a government-affiliated financial institution thatit has become evident that any missteps in these

actively involved after making an investment,

was expected to maintain long-term and impartial

areas could lead to rapid declines in industries andadding value to the investment itself. The successperspectives while sustainably balancing profitability

regions. These conversations have reinforced myor failure of an individual investment is determined

and the public interest. This idea resonates withbelief that the DBJ Group must evolve as an

at its “exit point,” which could be an IPO or antoday’s concept of sustainability management.

13

14

Message from the President

Introduction

Value Creation Story

Strategy

Governance

Data

When we formulated our long-term Vision 2030

by our customers and society by working cease-industry, and regions as the three priority areas ofPage 3), we rede-lessly to pioneer new financial frontiers, thereby

societal need that we intended to address.

fined “balancing profitability and public interest”

contributing to the sustainable development of

In our most recent update to the management

as “balancing economic and social value,” thereby

Japan and the world. To realize this mission, inplan, we determined our materiality by assessing

establishing this as the core of the DBJ Group’s

2017 we formulated Vision 2030, which defines

three issues that are important to our stakeholders

unique approach to sustainability management.

the role we should play until 2030.

and that we believe the DBJ Group should

for the DBJ Group in 2017 (As sustainability management becomes increas-

In fiscal 2021, we launched the Fifth Medium-

address—decarbonization, new business creation,

ingly mainstream, I believe we must burnish ourTerm Management Plan, aimed at realizing Visionand population decline—across our three existing

unique characteristics even further. For instance,

2030. In response to changes in the social environ-priority areas. We have also included a fourth pri-

one aspect of social value we consider is how toment since then, we reviewed and updated theority area, financial markets and risk capital mar-approach the resolution of external diseconomies.

plan in May 2023 while also reassessing our materi-kets. As a result of this process, we identified

When I joined the bank in 1986, our loans wereality. When we formulated Vision 2030, the con-material societal issues to be addressed in four

mostly utilized for pollution prevention and energy

cept of materiality was not clearly defined, so forbusinesses and two material issues in ourconservation projects. Pollution is a prime example

the time being, we first identified infrastructure,own management.

of an external diseconomy. Preventing it requires
spending, but there is a social need to address
pollution. While striving for a sustainable balance
between profitability and the public interest, JDB’srole was to support companies in their efforts toprevent pollution and ensure their economic
survival. There are many parallels between such
efforts then and today’s endeavors at decarbonization. Further expanding on our historic role,
I believe that balancing economic and social value
is what defines the DBJ Group's sustainability
management.

Transitioning from a “Plan-Driven” to a
“Results-Driven” Focus in Our MediumTerm Management Plan
The corporate mission of the DBJ Group is todesign the future with financial expertise. That is
to say, we aim to help solve the challenges faced

Message from the President

Introduction

Value Creation Story

Strategy

Governance

15

Data

Relentlessly Pursuing Challenges While
Passing Our Core Corporate Values onto the Next Generation

Why did we review the management plan at thisOn a personal note, I have felt, from the timejuncture? Our four previous management plans had

when I was young and in charge of customers,

been created once every three years. Before thethat the culture here values the taking on of new

Fourth Medium-Term Management Plan came to an

challenges. This is because even then the organi-end, we thought that the basic outline of ourzation aimed to balance profitability and public

During my term as president, I hope that our

integrated investments and loans business modelinterest, and there was an unspoken agreement

stakeholders will say that the DBJ Group has been

had taken shape, so we decided to transition toamong all executives and employees that the

instrumental in supporting their efforts. I also hope

five-year plans beginning with the Fifth Medium-answers could not be found without trial and error.

that they will seek out DBJ for a second opinion,

Term Management Plan. To respond to changes

In the wake of the Great East Japan Earthquake induring this period, however, we decided that it was

2011, DBJ was tasked with thinking about measures

have received, for example. Our core corporate

necessary to review the plan in its third year.

such as our perspective on a proposal they

to address severe power shortages. As the head ofvalues of a long-term perspective, impartiality,

Furthermore, we are at a stage where we need to

the Corporate Planning & Coordination Department

public-mindedness, and reliability are our uniquereconsider the way we approach our medium-term

and a special missions team, my responsibility at thatstrengths. While passing these core corporate

plans. I believe that it is our job to not only

time was to think about the future of DBJ three years

values on to the next generation, I am committed

achieve the plan but also consider how our stake-

into the future. Although energy problems were not

to taking an unwavering stance on pursuingholders will view the results we deliver. Therefore, I

within my purview, I personally felt that I had to try tochallenges and proud that DBJ is contributing towould like to gradually shift from a “plan-driven”

tackle the power shortage problem, and visited elec-

the sustainable growth of Japan as a front-runnerapproach to a “results-driven” one. Additionally,

tric power companies and the Agency for Naturalin sustainability management.

while materiality often involves setting key perfor-

Resources and Energy to share ideas with them.

mance indicators (KPIs), I believe we should focus

Not once was I discouraged by executives or

primarily on producing outcomes that contributecolleagues from taking such actions. The attitude

to solutions for the changing needs of society,was more like “if you want to do it, go ahead.”while constantly facing challenges head on.

Whenever there is a plan, people tend to stick
to it and avoid doing anything outside of it.

Further Strengthening a Culture That
Values a Head-on Approach to Challenges

Nevertheless, even if an idea has not been included

Seiji Jiige

in the plan, it is important to discuss what it might

President and CEO

require together, and if there is a rationale for it,

Development Bank of Japan Inc.

In reviewing the Medium-Term Management Plan,

then we should take on the challenge. I intend to

October 2023

we promoted the slogan “Connect, create andfurther strengthen our culture of valuing a positive

carve out new possibilities.” The DBJ Group is

attitude to challenges, and I would like to convey

fully equipped with the ability to connect, create

to everyone in the Group that management’s mainand carve out new possibilities, and it goes without

purpose is to encourage and support our employ-saying that I, as the president, must lead the DBJ

ees to take on new challenges and increase theirGroup forward with this challenge.

experience—so please take on more challenges!

Fifth Medium-Term Management Plan

Introduction

Value Creation Story

Strategy

Governance

Data

Background to Strengthening and Review of the Fifth Medium-Term Management Plan
Since becoming a joint-stock company in 2008, the DBJ Group has implemented four medium-term management plans with the objectives of increasing
the supply of risk capital for integrated investments and loans and of advancing risk management functions. In May 2021, we formulated our Fifth MediumTerm Management Plan as a five-year action plan. While collaborating andcooperating with private financial institutions, the DBJ Group utilizes risk
First
Medium-Term
Management Plan

1999

2008

SecondMedium-Term
Management Plan

2011

Third
Medium-Term
Management Plan

2017

2021

Creation of Policy
on Sustainability

Formulation of GRIT Strategy

2014

Conversion to joint-stock company

capital and its knowledge to help customers solve their issues and thereby
contribute to sustainable growth.
In May 2023, we unveiled Strengthening and Review of the Fifth MediumTerm Management Plan, and which highlights points to reinforce over the remaining
three years of the medium-term plan in light of the economic recovery from theimpact of the COVID-19 pandemic and major changes in the external environment.

Review in context of changes inexternal environment

Fourth Medium-Term
Management Plan

2023

2025
Strengthening and Review of theFifth Medium-Term Management Plan

Backcasting

Basic Concept of Fifth Medium-Term Management Plan Connect and Value Creation –Innovation for Sustainability–
DigitalAging

Business Strategy

Input ofmanagement
resources

SectorInfrastructure fields
Transportation

Industrial fields
Urban development

Connect industries

2

Connect generations Pass on a strong, resilient society to future generations

Draw out the potential of industries

Areas

Connect regions Support new regional development
Functions4

Create value Reinforce platforms for supplying risk capital

Collaboration andcooperation

Knowledge
5

Sustainability

Achievement of Goals with Customers
Changes for
the Future

Balance withSocial Value

Crisis
Preparation

New fields

13International

Create knowledge Monitor industries and regions and provide information

Sustainability management

Responding to changes in society brought about by:

Energy2050
Realizesustainability

Achieve
Vision 2030

Fifth Medium-Term Management Plan

Establishment of Development
Bank of JapanGRIT Strategy

16

Outcomes ofbusiness
activities

Management Foundation Strategy
Financial
capitalImprove the management of risks and returns
Increase sophistication of capital procurement methods
Human Capital
Train personnel for growth
Growth of employees supports growth oforganizations

Nonfinancial
capitalIntellectual Capital
Reform approaches to work
Shift to workstyles adapted to changes inbusiness environment
Relationship Capital
Deepen collaboration and cooperation
Public–private collaboration and partnerships

Sophistication ofsustainability management

GRIT Strategy
With the aim of contributing to the realization of a sustainable society in 2050, the DBJ
Group has set forth the GRIT Strategy as away for deploying its “connect” functionality
with an eye on 2030 and it is strengthening
these strategic initiatives.
G Green 

Initiatives to become carbon neutral with establishedtechnologies
R

Resilience & Recovery

Building of flexible yet strong industrial foundations aswell as safe and secure regions and society
I

Innovation 

Initiatives for innovations that are commercially feasible
from a long-term perspective
T

Transition / Transformation

Strategic initiatives to steadily lead transition toward
carbon neutrality and other goals, based on current
business foundation

Fifth Medium-Term Management Plan

Introduction

Value Creation Story

Strategy

Governance

17

Data

Review of First Two Years of Fifth Medium-Term Management Plan
The DBJ Group provided investments and loans under its GRIT Strategy at alevel equivalent to roughly 40% of total investments and loans (excludingcrisis countermeasure loans) in its aim to implement initiatives to “connect”
industries and generations, including investments and loans for next-generation energy such as hydrogen and ammonia, and the arrangement of transition loans. By participating in and supporting regional conferences, we havehelped regional initiatives work toward decarbonization by “connecting”
stakeholders with each other.

We supplied approximately ¥2.5 trillion in funds as a part of Crisis Response
Operations to support our customers during the prolonged COVID-19
pandemic.
In particular, we activated Special Investment Operations to support ourcustomers in sectors such as food and accommodation services that haveseverely impacted by the pandemic. We played the role of a safety net during
their recovery from the pandemic.

Business Strategy and GRIT Strategy (Connect and Value Creation)

Crisis Response Operations Related to the COVID-19 Pandemic

Main Initiatives in First Two Years

Supplied about ¥2.5 trillion in funds as of March 31, 2023,
while collaborating with other financial institutions

1

2

3

Connectindustries

Connectgenerations

Connectregions

Executed investments in innovation,such as hydrogen funds and ammonia-related startups

Results of crisis countermeasure loans related to the COVID-19 pandemic
20%

20%

Gained experience in sustainability financing,33%

such as transition loans

Participated in regional councils aimed at realizing a decarbonized society

Restaurants and hotels

Breakdownof amounts

18%Createvalue

Retail11%
15%

Percentage
of cases

Transportation equipment

Other manufacturing

Led discussions among the related parties andformulated decarbonization road map

4%
4

23%

Transportation

Other non-manufacturing

19%

6%

27%
6%

Grew assets under management (AUM) at DBJ Asset Management Co., Ltd.
from ¥1.6 trillion¥2.6 trillion

DBJ Food & Beverage/Hotel Support Fund Investment Limited Partnership
Total preferred share underwriting: ¥57.5 billion / 11 cases (As of March 31, 2023)

5Knowledge

Held dialogues with top management at companies, hydrogen, DX, tourism, etc.
Published reports from perspective of “industry × regions”(Billions of yen)

Balance of Crisis Countermeasure Loans

4,000

Purpose of Investments and Loans in
GRIT Strategy (Five-Year Total)

GRIT

5.5 trillion (¥13 trillion total investments and loans)¥

Total GRIT investments and loans ¥2,136.3 billion(About 40% of total investments and loans, excluding crisis countermeasure loans)

3,000

2,782.4
2,497.9

2,000
1,000
0

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 (Fiscal
year)Fifth Medium-Term Management Plan

Introduction

Value Creation Story

Strategy

Governance

Data

Strengthening and Review of the Fifth Medium-Term Management Plan
Amid increasing uncertainty in the business environment due to changes inmacroeconomic conditions, such as rising interest rates and inflation, and escalating geopolitical risks, the global trend towards a decarbonized society isaccelerating while the restructuring of supply chains and other movements areadvancing. Although the future is uncertain, with this business environment asa backdrop, DBJ disclosed the Strengthening and Review of the Fifth MediumTerm Management Plan in May 2023 to highlight the areas that the DBJ Group
is keen to strengthen over the remaining three years of the Fifth Medium-Term
Management Plan.

Through initiatives that are particularly
important in this strengthening and reviewof the management plan, we continue tochallenge ourselves to pioneer the future
together with our customers.

Changes in External Environment

Main Points of Strengthening and Review ofAfter Formulation of

the Fifth Medium-Term Management Plan

Fifth Medium-Term Management Plan
Point 1Heightened Risks

Need for
Change inmacroeconomic
conditions

Increase ingeopolitical risks

Increase in economic
uncertainty

Faster decline in
population

to carve out

New Trends

Acceleration in green
transformation (GX) toward
decarbonization

initiatives

Expectations forstartups

new
possibilities

Strengthening and Review of the Fifth
Medium-Term Management Plan

Fifth Medium-Term Management Plan

18

Supply Risk Capital

Meet customer needs for risk
capital for GX and supply chain
resilience

Point 2

Support New
Business Creation

Promote Japan’s economic growththrough support for innovation

Point 3

Regions × Transition

Connect industries, regions, andgenerations to create a bright
future for regional communities

Point 4

Human Resource
Development

Stronger investments
in human capital

Rebuilding of
global supply chains

Promote investment in humancapital to adapt to change andcreate future possibilities

We will strengthen our risk capital supply function
and increase the sophistication of investment
operations as an organization, with the aim of
meeting the needs of customers for risk capitalthat is likely to increase in the future for investments
related to green transformation and the rebuildingof supply chains.

In fields of innovation where we have been providing support, we recognize the importance ofinitiatives for new business creation, including
startups, as growth drivers in the Japanese economy. We will further strengthen these efforts.

To encourage a just transition while maintaining
and reinforcing Japan’s industrial competitiveness, we will strengthen region-focused initiatives because of the major impact they have oneach region.

The DBJ Group has always focused on humanresource development. However, in a businessenvironment where uncertainty is increasing andissues are becoming more complex, we will continue to develop human resources who can adapt
to change and provide added value to society.

Fifth Medium-Term Management Plan

Introduction

Value Creation Story

Strategy

Governance

Data

Example of Initiatives in Strengthening and Review of Fifth Medium-Term Management Plan
Point 1

Point 2

Point 3

Supply Risk Capital

Support New Business Creation

Regions × Transition

Meet customer needs for risk capitalfor GX and supply chain resilience

Promote Japan’s economic growth throughsupport for innovation

Connect industries, regions, and generations tocreate a bright future for regional communities

Stronger focus on individual sectors• Create dedicated investment teams
Help increase resilience of supply chains(As a designated financial institution,
DBJ performs Supply Security Operation separately.)Increase sophisticationof investment evaluation
capability• Create Investment
Evaluation Office teams

Increase investments in new businesses and startups(Special Investment Operations)• New businesses of customers• Deep tech, growth stage• Venture capital, secondary funds

Supply of risk capital (fiscal 2023–fiscal 2025)

Support for new business creation (fiscal 2023–fiscal 2025)

Loan target ¥1 trillion

Target ¥100 billion

Point 4

Human Resource Development

Support for just transition in each region while advancing GX• Initiatives capitalizing on regional strengths(Renewable energy, hydrogen, ammonia, carbon capture, usage, and storage (CCUS)• Published a proposal for “Regions × Transition” featuring several
case studies
Support for tourism to boost social interaction

Accelerate initiatives toward carbon neutrality in 2050

Develop a talented workforce to implement points 1 to 3
Invest in human capital needed to build a bright future while enhancing diversity and adapting to change

Diversity of experience (risk capital)

Joint programs with external entities (new business creation)

Diversity of experience (regions)• Strategic personnel rotations to investment divisions• Placement at external partners• New R&D program for practical implementation of innovations• Personnel rotations that prioritize regional experience• Placement with regional economic organizations and other groups

Frontier Initiative Program

Diversity of experience (global)

Building of fundamental knowledge• Support for employee initiative in carving out new possibilities• Granting of time to generate nonsequential growth for the organization• Expansion of opportunities for study abroad or placement withoverseas organizations• Human resource development programs with overseas universities• Expansion of training and practice in digital and sustainability fields• Strengthening of management and leadership abilities

Financial Targets (Consolidated)
Profitability
Gross ordinary income*1

Net income attributableto owners of the parent

Financial soundness
Capital adequacy ratio*3

Cost ratio*2

Total assets

ROA*2

ROE*2

1.0%

2.5%

(based on Basel III, finalized
and fully applied)

Average during Fourth Medium-Term
Management Plan (fiscal 2017–fiscal 2019)¥168.8 billion¥78.1 billion

31.9%2025 Targets in Fifth Medium-Term
Management Plan (before review)¥200.0 billion¥85.0 billion

32%¥21.0 trillion

1%

3%

14%

2025 Targets in Fifth Medium-Term
Management Plan (after review)¥210.0 billion¥85.0 billion

34%¥21.0 trillion

1%

3%

14%

¥17.6 trillion(end of fiscal 2019)*1 Gross operating income for business administration, excluding credit costs. *2 Cost ratio and ROA are vs gross operating income. ROE is vs current term net profit. *3 Tier 1 ratio for common shares, etc.

18.7%
(end of fiscal 2019)19

Stakeholder Communications

Introduction

Value Creation Story

Strategy

Governance

Data

Invigoration and Stabilization of Financial Markets through Partnerships and Collaboration
The DBJ Group provides unique solutions through optimal partnerships, emphasizing cooperation and collaboration with other financial institutions, customers, andinvestors. At the same time, it refines its ability to properly address risks, with the aim of contributing to sustained domestic and international development byinvigorating and stabilizing financial markets.

Major Stakeholders

D.A.I.S.

Recovery fromCOVID-19
pandemic,
growthCustomers’
point of view

Customers

Sweeping structural changes

nagOverseas business development

du

I nv
es

str

ia

li

C ri s

is R

es

po

n

(i n

Inv

tm

es

t

Financial
institutions

SharedservicesGroup
Companies

Investments

Collaboration

Investors

Securities

ser
vice
s

Cooperation
Surveys andconsulting
services

Overseas
bases

Real estate
management

Asset
management

ShareholdersA

Asset management

S Sustainability
Addressing sustainability

ia l

dv
iso
ry

International

Sp ec

IT services

e
dg
wle
Kno

I

Social issues same as management
issues faced by customers

Response to decline inworking-age populationnss

A Aging

se

O

p

tio
e ra

nv

Utilization and development for
digital transformation businessand S movements accelerated
during the COVID-19 pandemic

Fi

in
nc

on
ts
r ati
en
pe
m
t O nt)e n e s tm e

D DigitalD

20

Addressing
sustainability

Rising awarenessof social value

Employees

Stakeholder Communications

Introduction

Value Creation Story

Strategy

Governance

21

Data

Supply of Risk Capital by the DBJ GroupProcurement andManagement of Funds

DBJ helps customers sustain growth by providing
solutions for diverse needs with investments, loans, andknowledge, with an emphasis on dialogue that is always
from the customers’ perspective.

DBJ advocates for collaboration in knowledge-sharing andthe discovery of cooperative projects, such as mutually
cooperative engagements and the formation of joint fundswith financial institutions, including regional and international
financial institutions.

The DBJ Group proactively engages in investor relations(IR) activities, which include sharing case studies ofinvestments and loans, as it believes that it is importantfor investors to gain a shared understanding of theGroup’s corporate philosophy and scope of business.

We aim to contribute to domestic and internationalsustainable development by finding solutions to issues
faced by customers and society while engaging in deeper
constructive dialogues that include diverse perspectives.

All of our employees pursue continuous growth with a firm
grounding in our four core corporate values in order to try
to solve new issues that emerge from the constantly
changing contemporary needs.

DBJ receives funding in various
ways, including the procurement
and management of funds frominstitutional investors and financial institutions in Japan andabroad. We use these funds tosupply risk capital to domestic
and overseas customers in theindustrial and infrastructure fields.
Provision of Knowledge
Backed by its experience andknowhow in industrial and infrastructure fields as well as in risk
analysis and structuring, the DBJ
Group creates added value
through the provision of knowledge in the form of surveys andanalyses.
Crisis Response Operations andSpecial Investment Operations
Mandated by The Development
Bank of Japan Inc. Act, these
operations are undertaken properly and backed by the uniquestrengths of the DBJ Group, whichacts as a stabilizer during phasesof instability in economic andsocial markets.

DBJ’s financing operations address capital needs. Itsbalance of investments and loans (about ¥17.2 trillion)
includes loan and investment operations, such as crisis
response loans for emergencies ( Pages 44–45) andrisk-tailored project financing (¥14.4 trillion balance),
and Special Investment Operations ( Pages 42–43),
such as operations to supply risk capital, like investments and mezzanine financing (about ¥2.8 trillion).
DBJ Asset Management Co., Ltd. (DBJAM) has ¥2.6
trillion in capital entrusted by investors, regional financial institutions, and other clients desiring expert fundmanagement. DBJAM’s work in asset management
focuses on assets that allow the DBJ Group to
maximize its strengths. Combined with the entrusted
assets at DBJAM, the entire DBJ Group handles
approximately ¥5.4 trillion in risk capital. We willcontinue to enhance the supply of risk capital to better
meet the diverse needs of our customers.
Investments¥1.7 trillion
Mezzanine financing*2¥1.1 trillion

DBJAM(AUM)*3¥2.6 trillion

Loans*1¥14.4 trillion¥17.2 trillion¥2.8 trillion¥5.4 trillion*1 This includes crisis response projects, structured financing projects, and asset
financing projects.
*2 Overlapping portions for crisis response projects, structured financing projects,
and asset financing projects are eliminated from mezzanine financing.
*3 Assets entrusted by DBJ are excluded from DBJAM’s assets undermanagement (AUM).
(As of March 31, 2023)

22

Sustainability Strategy

Introduction

Value Creation Story

Strategy

Governance

Data

Our Approach to Sustainability (Big Picture) In May 2017, the DBJ Group established the Policy on Sustainability as a fundamental stance for contributing to the realization of a sustainable society whileaiming to strike a balance between economic and social value. Based on thispolicy, we recognize climate change, natural capital and biodiversity, circular
economy, and human rights as priority issues for achieving a sustainable society.
All of our business activities are premised on respect for human rights, alongwith the global issues of climate change and natural capital and biodiversity,

On planet earth, living organisms sustain their life activities
while influencing each other across various stages. This
complex and diverse ecosystem has been formed over along period of time. The health and stability of biodiversity
are understood to have a significant impact on the entiretyof natural capital.
Human society and economic activities have been built
upon the many benefits of this natural capital and biodiversity, making their preservation a common goal forthe planet.
Since Japan enacted the Basic Act on Biodiversity in2008 and hosted the 10th meeting of the Conference of
the Parties to the Convention on Biological Diversity (COP10) in Nagoya in 2010, the government has contributed tothe creation of global targets and has been actively working towards these goals.

which form the foundation of socio-economic activities. We also acknowledge
the importance of addressing the circular economy, where economic activities
are connected to natural capital. While actively promoting our initiatives onsustainability, we will contribute to the realization of a sustainable society
through solving regional and customer challenges in collaboration with our
stakeholders.

Climate Change

Natural Capital
Biodiversity

Circular
EconomyThe Intergovernmental Panel on Climate Change (IPCC)
has scientifically proven that human activity has without
a doubt been causing the warming of the atmosphere,
oceans, and land. In order to limit the average increase inglobal temperatures to 1.5ºC compared to pre-industrial
revolution levels, it is imperative to reduce greenhouse gas
emissions (GHG), like carbon dioxide (CO2) and methane,to net zero by around 2050.
In Japan, the government declared in 2020 its goal toachieve carbon neutrality by 2050. In 2021, the government
announced an ambitious goal to reduce GHG emissions by
46% by fiscal 2030 (compared to fiscal 2013), and to continue
efforts to further push this reduction towards 50%.

In contrast to a linear economy, which involves mass production, consumption, and disposal, a circular economy
seeks to reduce environmental impact by circulating
resources through recycling, reuse, regeneration, resource
conservation, and sharing.
Japan has long aimed for a circular society and economy
as a government policy that began with the Basic Act on
Establishing a Sound Material-Cycle Society, which came into
force in 2000.

Respect for Human Rights
Human rights issues, which are widely regarded as the state’s duty to protect, have been increasingly accepted globally as rights thatbusinesses should respect, especially after the United Nations approved the Guiding Principles on Business and Human Rights in 2011.
In Japan, the government formulated and published a National Action Plan on Business and Human Rights (2020–2025) in 2020,
and Guidelines on Respecting Human Rights in Responsible Supply Chains in 2022, setting the standards for corporate initiatives.

Sustainability Strategy

Introduction

Value Creation Story

Strategy

Governance

Data

Basic Approach to Carbon Neutrality 
Since the adoption of the Paris Agreement in 2015, various governments,
industry associations, and corporations have declared their intentions to work
towards a decarbonized society, and they have accelerated actions toward
mitigating and adapting to climate change. The Japanese government alsodeclared a goal of achieving Carbon Neutrality by 2050 in October 2020 and
it is promoting various policies in support of this goal.
Based on its Policy on Sustainability that aims for a balance between economic and social value, the DBJ Group positions climate change, a sharedchallenge for the world, as one of the most important priorities for the realization of a sustainable society. The DBJ Group will contribute to the realization ofa decarbonized society by solving regional and customer issues in collaboration with stakeholders, while striking a balance with ensuring a stable supplyof energy.
Under the Fifth Medium-Term Management Plan, which commenced in fiscal
2021 ( Page 16), we are advancing our GRIT Strategy to realize a sustainable
society and build flexible yet strong industrial foundations as well as safe andsecure regions and society. We support our customers’ efforts for a just transition
to a decarbonized society through dialogue (engagement) with our customers.
Taking the perspective of our customers, we support their efforts to decarbonize and help solve their management issues. By doing so, the DBJ Group aims
to achieve net zero GHG emissions in its investment and loan portfolio by 2050.
We have formulated our Transition Policy and 2030 Interim Reduction Targets as
key policies for supporting our customers’ transitions to decarbonization andenhancing engagement with our customers, as we believe in the importanceof both facilitating the transition to and achieving net zero GHG emissions.
The DBJ Group will continue to promote constructive dialogue (engagement) with its customers, maintain and strengthen the competitiveness ofJapanese companies, and contribute to the growth of its customers.

Transition Policy
We provide financial support for initiatives that lead to reductions in GHG
emissions based on the medium- to long-term transition plans of our customers
in high-emitting industries. We aim to achieve net zero GHG emissions by 2050
by promoting transitions to decarbonization, including within regions.
In an environment where uncertainties such as rising fuel prices andgeopolitical risks are increasing, the DBJ Group provides financial support tohigh-emitting industries for investments in both decarbonization and a sustainable society, and although this may temporarily increase the GHG emissions
allocated to DBJ, it is an essential step in the transition to a decarbonizedsociety. We therefore intend to proactively support investments that facilitatetransitions by our customers, keeping in mind our interim reduction target. In
order to address decarbonization across industries and regions, we will not
only solve problems through financing but also strengthen our support interms of proposals to stakeholders in industries and regions, as well as offeringknowledge. Moreover, we will actively support our customers in terms of providing capital to startups working on innovations, such as climate tech and newtechnologies like nuclear fusion.

Engagement Activities
In order to support its customers’ efforts to decarbonize, the DBJ Group offers
sustainable finance and advisory services ( Page 39), and the entire Group,
including DBJ Capital Co., Ltd., is working to supply risk capital for climate
tech and new technologies.
We will continue to enhance our understanding and shared awareness of
issues through constructive dialogue (engagement) with our customers, strive
to understand in depth each customer’s challenges and needs, and present
solutions. By doing so, we will encourage customers to make use of the DBJ
Group’s strengths in investments and loans and advisory services.

23

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Sustainability Strategy

Introduction

Value Creation Story

Strategy

Governance

Data

Greenhouse Gas Emissions 
Reduction Targets
The DBJ Group aims to achieve net zero emissions of greenhouse gases (GHG) by 2050, encompassing its own Scope 1 and Scope 2 emissions, as well as Scope 3
emissions of companies in its investment and loan portfolio.
Scope 1 and Scope 2

Scope 1: Direct GHG emissions from our own business activities
Scope 2: Indirect GHG emissions associated with electricity, heat, and steam procured from other companies

DBJ and eight major domestic Group companies ( Page 75) have set targets for achieving net zero
in-house emissions by fiscal 2030. GHG emissions are measured and tallied at these companies. DBJ has created an environmental management system overseen by the managing executive officer in charge of the
Corporate Planning & Coordination Department and it promotes ongoing initiatives based on plans and concrete measures to reduce emissions.
Scope 3



Scope 3: Indirect GHG emissions outside of Scope 1 and Scope 2 (classified into 15 categories depending on the activity)

Based on its target of achieving net zero GHG emissions for its portfolio of investments and loans by 2050,
the DBJ Group has decided to measure and tabulate the GHG emissions of the electric power sector, afterdue consideration of the characteristics of the sector and the amount of credit extended to it. The DBJ Groupis committed to measuring and disclosing its GHG emissions in the energy sector and elsewhere.
PCAF Methodology
The DBJ Group validates and estimates GHG emissions from companies in its
investment and loan portfolio using the Partnership for Carbon Accounting
Financials (PCAF) standard, a methodology for calculating emissions by asset class.

Scope 1 and Scope 2 Emissions(t-CO2)

4,000
3,000

3,248

3,028
2,337

2,000

1,584

1,000
0

Net
zero

2019

Electricity

2020

Gas

2021

2022

2030 (Fiscal

Other (fuel oil, kerosene, gasoline)

year)

Future Policies(1) We will also measure the emissions of the energy sector (oil and gas) as a sector that emits large quantities of GHGs.
(2) We will continue to examine the best indicators to disclose (emissions intensity, absolute emissions, etc.).
(3) We will aim to improve the quality of emissions data gathering by updating data gathering methods in stages, with reference to ongoing dialogue with customers.

Indicators for Electric Power Sector

2030 Interim Reduction Target for Electric Power Sector• Decarbonization in the electric power sector is crucial tothe decarbonization of entire industries. In light of theamount of credit DBJ has extended to the electric power
sector, the DBJ Group has set interim targets for thesector, based on the expectation that demand forelectricity will continue to increase during the processof decarbonization.
• For the transition to a decarbonized society and industry,the DBJ Group has established targets for emissions
intensity (GHG emissions per unit of electricity generated)with a focus on efficiency in reducing GHG emissions
through the spread of clean energy and support fortechnological innovation and implementation.

• DBJ has set a target of 138gCO2/kWh–265gCO2/kWh foremissions intensity as a 2030 interim reduction target for Scope 3
GHG emissions from companies in its investment and loan portfolio
in the electric power sector.
• Once it achieves the level (265gCO2/kWh, 40% reduction vs. fiscal
2021) that aligns with the Strategic Energy Plan’s Nationally
Determined Contribution (NDC) target for 2030 while assisting andengaging with customers and considering their plans in relation to
the achievement of NDC targets, the DBJ Group will pursue thelevel (138gCO2/kWh) in the Net Zero Emissions by 2050 Scenario(NZE) of the International Energy Agency (IEA) by supporting
customers with their transitions and technological innovations.

Scope 3 Emissions(Electric Power Sector)
444

– 40%

265

vs.
fiscal2021 actual

Fiscal2021 actual

NDC
target level2030 interim
reduction
target– 69%

138

1.5°C target(gCO2 /kWh)Sustainability Strategy

Introduction

Value Creation Story

Strategy

Governance

Data

Constructive Dialogue (Engagement) with Customers 
Based on our corporate philosophy and Policy on Sustainability, we are committed to realizing the sustainable development of Japan and the world by solving
issues faced by customers and society. Drawing on our expertise in engaging in dialogue and backed by our accumulated financial, survey, and knowledge capabilities, we use constructive dialogue (engagement) with our customers to share awareness of issues and build understanding of their management issues and needs.
While leveraging the overall strengths of the DBJ Group, we offer assistance through investments and loans and advisory services.

Case 1Case 3

JERA’s First Transition-Linked Loan

JERA Co., Inc. aims to create a foundation for supplying clean energy througha combination of renewable energy and low-carbon thermal power generationto achieve decarbonization over the medium to long term, while ensuring a
reliable supply of energy.
While supporting an updating of the existing transition bond framework, DBJ
provided JERA with a transition-linked loan to promote decarbonization and the
reduction of carbon emissions while incentivizing the implementation of its
transition strategy by linking the terms and conditions of the loan to Sustainability
Performance Targets (SPTs) that align with JERA’s transition strategy.

Case 2

Japanese Cement Industry’s First Transition Financing

The Taiheiyo Cement Group has drawn up and disclosed its Carbon Neutral
Strategy 2050 and a road map for technological development. It is undertaking
activities to become carbon neutral throughout its supply chain in Japan andoverseas by 2050.
Having assessed Taiheiyo Cement’s strategy positively, DBJ extended atransition-linked loan to the company—the first ever transition financing in theJapanese cement industry—to support its efforts to develop groundbreaking
technologies and fully leverage existing technologies. This loan was selectedby the Ministry of Economy, Trade and Industry (METI) as a Climate Innovation
Finance Promotion Project.

Supporting Japanese Companies with Developing
Renewable Energy-Related Businesses Overseas throughM&A Advisory Services

As the global movement toward carbon neutrality gains momentum, Japanesecompanies increasingly require investments and M&As in renewable energy
projects, including those overseas.
DBJ’s overseas subsidiary DBJ Singapore Limited has an investment banking
team, comprising international staff from Asia, that excels at gathering
information related to investments and M&A deals in the region. This teamcollaborates with DBJ’s Business Development Department, RelationshipManagement Department, and subsidiary Japan Economic Research InstituteInc. to constantly introduce potential projects to customers and understand thelatest needs of customers through multiple discussions. These efforts occasionallyresult in customer requests for advisory services.

Case 4

Investments to Support Commercialization of On-site
Ammonia Supply System

Tsubame BHB Co., Ltd. has developed catalysts that synthesize ammonia
under low temperature and low pressure conditions and commercialized theworld’s first compact on-site ammonia supply system.
If this system is widely adopted, it will be possible to locally produce ammonia,
which is used for energy and fertilizer, for local consumption, and help solve environmental and hunger problems around the world. For this reason, DBJ supports
this business by providing investments through its Green Investment Fund, afunding framework in Special Investment Operations.

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Sustainability Strategy

Introduction

Value Creation Story

Strategy

Governance

Data

Constructive Dialogue (Engagement) with Customers Case 5Investment in SPC for the Development ofWooden Office Building

To realize a sustainable society, expectations are mounting in the real estate
sector for companies to reduce CO2 emissions throughout the life cycle of abuilding, including construction, usage, and the manufacture and disposalof materials. Using wood for building construction has less impact on theenvironment than fabricated materials, and the carbon storage effect of wooditself is a promising way to reduce CO2 levels. The forestry industry, however,also needs support with improving its supply chain.
In conjunction with regional financial institutions, the DBJ Group invested ina special purpose company (SPC) created to develop an environmentallyfriendly office building with a mixed wood and steel structure in Sendai City.
The SPC was set up to advance innovative efforts by concentrating themanagement resources of project participants.In addition to sharpening
competitiveness, this project aims to strengthen supply chains by improving
systems for supplying wood materials and to help revitalize regional
economies. The DBJ Group assists this project through its Green Investment
Fund, a funding framework in the Special Investment Operations scheme.
Case 6

Investments in Environmentally Conscious AgriculturalFunds, Forest Funds, and Food and Agriculture Funds

Rising demand for food around the world and the limitations of resources amid
climate change have become issues for society. The pivot to corporate agriculture
and the spread of environmentally friendly farming has caught on mainly inEurope, the United States, and Australia. Environmentally friendly farming, which
has high production efficiency, enables the recycling and reuse of water resources
within the environment, and cultivation environments are not influenced by thelocation of the farm. Environmentally friendly farming looks likely to gain
traction in Japan, other parts of Asia, and other countries around the world.
DBJ invests in a variety of funds related to forestry, farmland, dairy farming,
livestock, and aquaculture. DBJ’s first investment of this kind was in a fund thatinvests in environmentally friendly greenhouses in North America, and DBJ was
the first investor from Asia in this fund. Through these investments, DBJ aims
to gain insights into global trends in the food sector, gain advanced knowledge
from overseas, and use these to help Japan’s food industry to grow.

Case 7

Syndicated DBJ Sustainability Linked Loans withEngagement Dialogue

Fuyo General Lease Co., Ltd. is keen to contribute to the realization of acircular economy as one of its main priorities (materiality), which it defined bybackcasting from its vision for 2030. It has positioned the circular economy as a
growth driver in its medium-term management plan.
A syndicated DBJ Sustainability Linked Loan with Engagement Dialogue
was extended to Fuyo General Lease. DBJ Sustainability Linked Loans withEngagement Dialogue are on DBJ’s menu of investments and loans aimed
at setting appropriate key performance indicators (KPIs) and Sustainability
Performance Targets (SPTs) to help customers advance their sustainability
management through dialogue with DBJ. For this loan, DBJ chose the materialand chemical recycling rate of waste plastic from returned properties as a KPI
for monitoring the company’s progress and set an SPT.

Case 8

Advocacy for Creating Sustainable Tourist Attractions

In Hokkaido, the tourism industry is positioned as a strategic growth field but
climate change threatens to diminish the attractiveness of its tourism resources
and tourism pollution negatively affects the region. There is a high risk of
tourism sites becoming unsustainable, so it is essential to make strides toward
the Sustainable Development Goals (SDGs) and carbon neutrality to sustain
growth and sharpen Hokkaido’s international competitiveness.
A research report published by DBJ titled Current State of Sustainable
Tourism and Future Direction of Hokkaido: Creating Sustainable Tourism Sites
discusses Hokkaido’s tourism strategy in the context of sustainable tourism as a
travel concept while reflecting on dialogues with ordinary companies, government agencies, destination management organizations (DMOs), and academic
research institutions.

Sustainability Strategy

Introduction

Value Creation Story

Strategy

Governance

Data

Constructive Dialogue (Engagement) with Customers 
Solution 1

DBJ Sustainability Evaluation Certification Program

DBJ offers a menu of financing options
Environmentally Rated
Loan Program
based on the non-financial informationof companies screened with DBJ’s proprietary systems. Having launched theworld’s first environmentally rated loan
Employees’ Health
BCM Rated
program in 2004, DBJ introduced theManagement Rated
Loan Program
Loan Program
BCM Rated Loan Program in 2006 andthe Employees’ Health Management
Rated Loan Program in 2012.
The most important feature of these
programs is the evaluation process,which emphasizes direct dialogue with customers. We engage in conversations
with clients about their initiatives to fill in gaps around publicly available information. Once the evaluations are complete, DBJ provides clients with feedback on the results, using this as an opportunity to point out issues that need
to be addressed and help management step up their practices.
Actual(As of March 31, 2023)

Amount ofInvestments and Loans

No. of Investments and Loans

Cumulative total

Cumulative total

Fiscal 2022

¥1,802.2 billion

786 cases

38 cases

BCM Rated Loan Program¥576.3 billion

440 cases

19 cases

Employees’ Health Management
Rated Loan Program¥379.5 billion

282 cases

30 cases¥2,758.0 billion

1,508 cases

87 cases

Environmentally Rated
Loan Program

Total

Solution 2

Sustainability Management Consulting Services

DBJ provides its customers with tailor-made consulting services in addition to adiagnosis of their overall sustainability management. Through these services,
we help our customers maintain and update the foundations of their sustainability management, from formulating long-term visions and identifying materiality, to adopting the recommendations of the Task Force on Climate-related
Financial Disclosures (TCFD), support for patent analysis, and a menu of otheraccompanying support options.

Solution 3

DBJ Green Building Certification

Established in 2011, DBJ Green Building Certification is acertification system designed to recognize real estate thatgives exceptional consideration to society and theenvironment. In addition to the environmental performanceof the properties, DBJ conducts a comprehensive evaluation of disaster
preparedness and community considerations that involve engagement withvarious stakeholders as the basis for assessing and certifying real estate asneeded by society and the economy.
In 2014, DBJ and Japan Real Estate Institute (JREI) deepened their relationship and created a system for jointly operating and promoting DBJ Green
Building Certification. Moreover, they are working to reflect real estate value
in the certification system.
Through the spread of DBJ Green Building Certification, the initiatives ofour customers can reach a broader audience, and at the same time, we aim toadvance cooperation and dialogue with companies, investors, and financial
institutions. Over the long term, we aim to design the future of cities andbuildings with the objective of upgrading and nurturing environments for investingin real estate that is of benefit to the economy and society, while reflecting inreal estate values any considerations given to the environment and society,which have not been adequately reflected in value in the past.
Solution 4

Transition Business Promotion Office

The DBJ Group established the Transition Business Promotion Office underthe Business Planning & Coordination Department as an organization tasked withpromoting investments and loans to help with the transition to carbon neutrality,
based on its belief in the importance of providing consistent support for a just transition to carbon neutrality while engaging in dialogue with customers (engagement).
We will encourage the use of hydrogen and ammonia, new sources ofenergy that will be important in this transition, along with storage batteries. We
will go beyond efforts to help individual companies as, while we believe that
it is important to collaborate and move forward with them, we must also factor
in the unique characteristics of regional areas and a diverse range of industry
structures and related parties. The Transition Business Promotion Office aims toadvance cross-regional and cross-sector efforts to transition to a decarbonizedsociety while consolidating knowledge of each sector.

27

28

Sustainability Strategy

Introduction

Value Creation Story

Strategy

Governance

Data

Sustainability Management 
The Sustainability Committee deliberates and reports on policy responses tovarious sustainability-related issues, such as climate change, and monitors
progress on related initiatives. The Sustainability Management Office has
been created as an administrative body within the Corporate Planning &Coordination Department to act as a hub for information inside and outside
the DBJ Group, report the outcome of deliberations to the Board of Directors,
and advance various measures based on these reports.
The Advisory Board, an advisory body to the Board of Directors consisting ofoutside experts and outside directors, reports on the progress of initiatives,
such as the GRIT Strategy ( Page 16) and other business plans, and thecontent of its deliberations is reflected in business plans and measures to enhancerisk management.

Organizational Chart

Policy on Sustainability

Policy on Human Rights

The DBJ Group, in accordance with its corporate philosophy, established the
Policy on Sustainability to conduct business in a manner that resolves theissues of its customers and broader society, while realizing its mission for thesustainable development of Japan and the world.
While balancing economic and social value, the DBJ Group contributes tothe realization of a sustainable society by striving for continuous improvement
and steady progress through the value creation process, and engaging moredeeply in dialogues with stakeholders.

DBJ admires the Guiding Principles on Business and Human Rights andunderstands that human rights are the most basic of rights as explained in theInternational Bill of Human Rights and the ILO Declaration on Fundamental
Principles and Rights at Work. The DBJ Group Policy on Human Rights wascreated out of respect for these principles. Moreover, DBJ encourages its
executives, employees, customers, and suppliers to pursue initiatives that
respect human rights.
This policy applies to all DBJ Group companies, and all executives andemployees refer to this policy while endeavoring to respect human rights.

Board of Directors

Advisory Board

Executive Committee
Sustainability Committee
Discusses and reports on policies and initiatives to address issues related to sustainability, such as climate change, and issues
related to engagement with stakeholders andbalancing economic and social value
ALM* & Risk Management Committee
Deliberates and reports on the state of initiatives related to risk management, including
climate change risks

Matters Deliberated by
the Sustainability Committee (Excerpts)• Policy on carbon neutrality(Net zero GHG emissions by 2050)(2030 interim reduction targets for
GHG emissions)• TCFD recommendation trends and policy
for response• Environmental and Social Management
Policy for Financing and Investment Activity* ALM: Asset liability management

Risk Management 
The DBJ Group recognizes that being underprepared for climate change is a risk that could have a significant impact on management. It therefore analyzes potential impacts based on a range of scenarios and formulates initiatives and policies to address this risk. The DBJ Group has determined business policies for investments and loans and specified sectors, and monitors progress.
Environmental and Social Management Policy

Operations Based on the Equator Principles

Operations Based on the Poseidon Principles

for Financing and Investment Activity

The DBJ Group adopted the Equator Principles in 2020 anduses them as the basis for identifying, assessing, and managing the environmental and social risks associated with largescale projects, with guidance from the Environmental & Social
Assessment Office.

The Poseidon Principles were created as a framework forfinancial institutions to deal with climate change risks in themarine transportation industry. The DBJ Group became asignatory in 2021, and every year discloses its contributions
to reducing GHG emissions in the context of ship financing.
We endeavor to provide investments and loans that takeclimate change risks into account.

In 2021, the DBJ Group set policies for investments and loans
for businesses likely to entail major risks or negative impacts
on the environment and society, and for finance for specificsectors. DBJ reviews these policies as necessary.

Sustainability Strategy

Introduction

Value Creation Story

Strategy

Governance

Data

Initiatives to Enhance the Sophistication of Sustainability Management 
The DBJ Group values collaboration and cooperation with various stakeholders by participating in initiatives in Japan and around the world to increase thesophistication of sustainability management. Additionally, we focus efforts on training human resources who will lead sustainability management, and we arestrengthening the foundation for advancing such initiatives.

ADFIAPfinancing sustainable development

Human Rights

United Nations Global Compact

Natural Capital

DBJ is a participant in the United Nations Global
Compact, a sustainability initiative influenced by theInternational Bill of Human Rights. The DBJ Groupendorses the 10 Principles of the compact related tohuman rights, labor, the environment, and preventing
corruption, and constantly strives to reflect theseprinciples in its business strategies, corporate culture,and daily work activities.
Human Capital

Human Capital Management Consortium
DBJ is a member of the Human Capital Management
Consortium, a framework for examining more effective
ways to disclose information and discuss companies’
efforts to manage human capital, with the aim ofenhancing related initiatives and disclosures. Whilereferring to pioneering case studies and exchanging
information with member companies, we proactively
advance practical initiatives to improve the value ofhuman capital.

Japan Business Initiative for Biodiversity
DBJ has joined the Japan Business Initiative for
Biodiversity (JBIB), which was established in 2008 tocontribute to the preservation of biodiversity in Japanand around the world and advance initiatives innature-positive businesses. Through informationexchanges with companies, this organization isenhancing nature-positive initiatives.

Human CapitalT raining Human Resources to Support
Sustainability Management

Marshalling knowledge from across the Group, the DBJ Group has created
textbooks about GRIT and sustainability as a compendium of its knowledge
about sustainability. The GRIT/Sustainability Portal on DBJ’s intranet features
the latest information about rapidly changing issues related to sustainability
and shares information about the DBJ Group’s initiatives in a timely manner.
Throughout the year, we hold a variety of training and briefing sessions andmake an effort to train personnel as sustainability experts for the entire Group.

29

30

Response to Climate Change(Initiatives Based on TCFD Recommendations)Introduction

Value Creation Story

Strategy

Governance

Data

Disclosure of Information Related to Climate Change Based on TCFD Recommendations 
In June 2018, DBJ endorsed the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), and in 2022, declared the goal toachieve net zero GHG emissions by 2050. Recognizing the risks and opportunities associated with climate change, it is formulating strategies basedon analysis while considering and promoting initiatives in appropriate information disclosure.

GovernanceRisk Management

At meetings of the Sustainability Committee, which reports to the
Executive Committee, management discusses policy aims and the status ofinitiatives to address various issues related to sustainability, including
efforts to achieve net zero GHG emissions by 2050. The committee also
promotes related measures ( Page 28). We are updating the DBJ Group’s
overall strategy, taking into account changes in risks and opportunities
related to social issues and climate change.
The Advisory Board, made up of external experts and external directors,
reports on initiatives in business plans and reflects the content of these discussions in business plans and efforts to improve risk management ( Page 60).

We recognize that inadequate preparation for climate change poses a
significant risk to management. We carry out an impact analysis oftransition risks and physical risks based on scenario analysis, formulate
policies based on these risks, and continuously manage risks, including
data management and advanced analysis methodologies ( Page 66).
We report and discuss these initiatives at meetings of the ALM & Risk
Management Committee, which is under the Executive Committee.
In investments and loans, we have established the Environmental andSocial Management Policy for Financing and Investment Activity forspecific sectors and businesses, and we continue to monitor progress.

Strategy (Scenario Analysis)

Indicators and Targets

Based on our Vision 2030 ( Page 3) and Policy on Sustainability ( Page 28),
we perceive climate change as a significant change in the external environmental that impacts our stakeholders and we understand that grasping
related risks and opportunities is crucial in executing our business strategy.
Aiming for net zero GHG emissions by 2050, we have been analyzing
scenarios where the average temperature increases by 2.0°C or more, while
focusing on scenarios for a decarbonized society, to identify risks andopportunities related to climate change.
Based on the results of these analyses, we have set our GRIT Strategy
Page 16) in motion with a budget of ¥5.5 trillion for investments and(loans over five years, strengthening support for our customers’ decarbonization efforts.

As a part of our Fifth Medium-Term Management Plan, we promote the
GRIT Strategy for realizing a sustainable society, including initiatives toaddress climate change, with the intention of extending ¥5.5 trillion in
investments and loans over five years.
In our aim to achieve net zero GHG emissions by 2050, we measure andtally Scope 1, Scope 2, and Scope 3 emissions, and continuously evaluate
ways to improve and expand disclosure methods ( Page 24).
DBJ has set and is working toward the interim reduction target of
138gCO2/kWh–265gCO2/kWh in 2030 for Scope 3 emissions in its portfolioof electric power sector investments and loans, while targeting net zero
Scope 1 and Scope 2 emissions by fiscal 2030.

Response to Climate Change(Initiatives Based on TCFD Recommendations)Introduction

Value Creation Story

Strategy

Governance

Data

Scenario Analysis Basic Approach to Climate-Related Risks and Opportunities

Analysis of Climate-Related Risks

When formulating its Vision 2030 ( Page 3), the DBJ Group identified climate change as an area of change in the external environment that is having amajor impact on its stakeholders. Properly understanding the risks and opportunities related to climate change is essential when establishing business strategies for the DBJ Group. We aim to achieve net zero GHG emissions by 2050.
Based on a scenario where the world moves toward decarbonized society (withan average rise in global temperatures below 2.0°C), we are advancing initiatives that take into account the results of our analysis of risks and opportunities
related to climate change, including those in scenarios where averagetemperatures increase more than 2.0°C. Based on these results, in order tosupport our customers’ efforts to decarbonize, we intend to extend ¥5.5 trillion
in investments and loans over a five-year period under our GRIT Strategy.

We are aware of climate-related financial risks in terms of transition risks andphysical risks. Transition risks could impact the business strategy of the DBJ
Group by increasing credit costs if the creditworthiness of the recipients of its
investments and loans declines due to lower sales and higher costs, mainly
from the introduction of a carbon tax and upgrades to low-carbon technologies. Physical costs might also impact our business strategy by increasing
credit costs if the creditworthiness of the recipients of our investments andloans declines due to damages to collateral value as a result of abnormal
weather or supply chain disruptions.
In fiscal 2022, DBJ analyzed scenarios for the energy sector (electricity, oil,and gas) for transition risks, and scenarios for direct damage (damage to collateral value) and indirect impacts (business suspensions) due to water disasters
for physical risks. DBJ expanded the scope of analysis for physical risks fromthe balance of loans to the total balance of investments and loans andchanged the period of time for analysis from 2050 to 2100. The results of theseanalyses indicate that even if DBJ’s current balance of investments and loans
were to stay the same, the financial impact would be limited to an acceptablelevel from a long-term perspective.
The DBJ Group is aware that the methodologies and data used to analyzefinancial risks related to climate change continue to evolve at a rapid pace.
While monitoring trends in this field, we will adopt more advanced methods ofanalysis if necessary.

Analysis of Climate-Related Opportunities
In light of future uncertainties associated with climate change, financial institutions must envision a variety of scenarios for the economy and society in the
future and consider changes in their portfolios and countermeasures based onthese scenarios. In fiscal 2019, DBJ began to analyze scenarios for 2030–2050
from medium- and long-term standpoints.
As an initial approach, we utilized Shared Socioeconomic Pathways (SSPs),
which are GHG emissions scenarios under various climate policies, to analyze
and assess the impacts on businesses. Our focus was on transition opportunities
in the context of government policies and regulations and technologicalinnovation for attaining a decarbonized society within the framework of four
visions for the world in the future.
Summary of Analysis 
Sectors covered

Energy, transportation, urban development

Scenario

Use SSP scenarios to analyze scenarios where the average temperature
increases by 1.5ºC, 2ºC, and 4ºC

Relevant
technologies

Carbon capture, utilization, and storage (CCUS), electric vehicles, biomass,hydrogen, renewable energy

Period covered

2030–2050

Summary of Analysis Transition Risk

Physical Risk

Risk event

Sudden change in policy
toward net zero GHG emissions

Water damage(flooding)

Scenario

NGFS*1 Delayed Transition scenario

IPCC*2 RCP*3 8.5 (4ºC scenario)

Scope of analysis

Energy sector

Damage to collateral value and business suspensions due to water disasters

Assets covered

Balance of investments and loans

Balance of investments and loans

Analysis period

By 2050

By 2100

Analysis results(level of increasein credit costs)

About ¥70.0 billion(cumulative)

About ¥30.0 billion(cumulative)*1 NGFS: Network for Greening the Financial System*2 IPCC: Intergovernmental Panel on Climate Change*3 RCP: Representative Concentration Pathways

31

32

Business Strategy

Sector Strategy

Introduction

Value Creation Story

Risks and Opportunities Governance

Data

Project Spotlight• Tighter energy supply/demand and higher prices due togeopolitical risks and various policy and legislativechanges

EnergySectorStrategy

Support through Transition Financing to Realize
Carbon Neutrality at Electric Power Companies• Changes in industrial and energy supply/demand

Since the Japanese government declared in Octoberstructures due to accelerated decarbonization

2020 its goal of achieving carbon neutrality by 2050,• Strengthen competitiveness of energy industry andelectric power companies have also been called upon tofoster innovation through responses to these issues

execute transition strategies to achieve carbon neutrality.
In fiscal 2022, soaring fuel prices threatened the stable

To achieve a balance between
the stable supply of energy
and the realization of adecarbonized society, we arecontributing financially tofields involving innovation andtransitions to decarbonization.

Strategy supply of electricity and it became evident that it will be

Since the Japanese government declared in Octobera challenge to balance transition strategies with stable2020 its goal of achieving carbon neutrality by 2050,

electricity supplies.

there has been increasing momentum for innovation and

To address these issues, we have provided not onlytransitions to decarbonization, as evident in the govern-business and capital funding to stabilize the supply ofment’s roadmap for promoting transition financing acrosselectricity but also assistance through various types ofindustries and revisions to related laws for realizing green

transition financing. This includes Japan’s first transition-transformation in 2022. On the other hand, it is essential

linked hybrid loan for The Chugoku Electric Power Co.,

to confront challenges, like maintaining stable energy

Inc., transition-linked loans for JERA Co., Inc., andsupply and dealing with rising fuel costs, while taking into

other financing for Kyushu Electric Power Co., Inc.,

account nuclear power plant restarts and the conflict inHokkaido Electric Power, and Tohoku Electric Power

Ukraine. Complex issues also exist in the decarbonization

Co., Inc.

pathways due to the involvement of many stakeholders.
The DBJ Group will collaborate with customers dealing

Looking ahead, demand for financing looks likely
to increase amid expanding adoption of renewablewith these challenges, through engagement and theenergy. The DBJ Group is fully committed to addressing

Main Business Field

sharing of knowledge, to help solve such issues together.

its customers’ challenges while making progress on

The DBJ Group provides financing andadvisory services to companies andprojects in the following sectors.
• Electricity
• Gas
• Oil

While valuing the relationships we have cultivated withstable electricity supplies, carbon neutrality, and growth

our customers, we will focus on the smooth provision ofstrategies.

Balance of Loans in the Electricity,
Gas, Oil Refinery, Heat,and Water Sectors

batteries, and hydrogen and ammonia, as well as strive to

As of March 31, 2023¥

3.9 trillion

Related Material Issues
Formation ofsustainableinfrastructure

Technical
innovation andrestructuring ofindustry

funding, including transition financing and risk capital.
Additionally, we will offer loans and investments forfields of innovation, such as renewable energy, storage
provide sustainable investment opportunities for institutional investors through asset management operations.

Business Strategy

Introduction

Sector Strategy

Value Creation Story

Risks and Opportunities • Sustained growth in overall markets, including

The DBJ Group aims to provide financial leadership forthe growth of the transportation sector and advancementof transportation networks.
DBJ will connect Japan’s
financial market to global
transportation financing.

Governance

Data

Project Spotlight• Advancement of transportation networks amid global
population growth and stronger logistics demand

Transportation
SectorStrategy

decarbonization initiatives

Evaluation Certification Programs for Fukuoka
Shipbuilding Based on Zero-Emission Accelerating
Ship FinanceFukuoka Shipbuilding Co., Ltd. is a shipbuilding com-

Strategy pany highly regarded for its technological capabilities,

In the transportation sector, including land, sea, and air,especially in the construction of chemical tankers. DBJ

while responding flexibly to changes in the external

has provided financing to Fukuoka Shipbuilding based

environment and society, we will supply risk capital toon Zero-Emission Accelerating Ship Finance, which it

Japanese companies for sharpening their international

jointly operates with Nippon Kaiji Kyokai (ClassNK).

competitiveness, and pursue optimal financing solutions

This program uses a comprehensive scoring model

for projects and assets while monitoring their medium-that supports shipping companies in their transition toand long-term value.

decarbonization from both an investor relations (IR) andWe will provide financing opportunities to Japanese

a financial perspective. Evaluations are conducted byregional banks and other financial institutions andClassNK based on criteria related to decarbonization,

investors in the global transportation financing market.

environmental performance, and advancement and DBJ

Additionally, the DBJ Group will focus on providing aprovides the loans and investments.

range of investment products based on transition
financing and investment.

Japan’s first LNG-fueled chemical tanker, the
FAIRCHEM PIONEER, was co-developed by Fukuoka

Proactively contributing to frameworks for decarbon-

Shipbuilding and Fairfield Chemical Carriers Group (FCC

ization will be essential to facilitating the borderless move-Group) and built by Fukuoka Shipbuilding. It is scheduled

ment of people and goods. In the marine transportation

to be chartered by Fairfield Japan Ltd., the Japanese

sector, for example, the DBJ Group became a signatory

entity of FCC Group. FAIRCHEM PIONEER has received

Main Business Field

to the Poseidon Principles to contribute financial

The DBJ Group provides financing tocompanies and projects in thetransportation sector.
• Land transportation• Marine transportation• Air transportation

an “A” score in this program, recognizing its significant

resources for addressing climate change, which will be

reduction in CO2 emissions due to LNG fueling and envi-

key to achieving the International Maritime Organization’sronmental considerations at the time of decommissioning,targets for reducing GHG emissions over the medium andwith plans to stay on the Ship Recycling Inventory* list.

long term. The DBJ Group will continue efforts toimprove sustainability in similar ways.

Balance of Loans in theTransportation Infrastructure(Transportation Industry) Sector
As of March 31, 2023¥

3.2 trillion

Related Material Issues
Formation ofsustainableinfrastructure

Regional
revitalization
utilizing
untapped
potential* This lists the estimated volume and location of hazardous materials
on a ship, which became mandatory with the Convention for the Safeand Environmentally Sound Recycling of Ships, which was adopted in
May 2009.

33

34

Business Strategy

Introduction

Sector Strategy

Value Creation Story

Risks and Opportunities Governance

Data

Project Spotlight• Respond to redefinitions of the purpose and value ofworld and workstyle reforms with the declining working

Formation of Office Inventory that Satisfies
Modern Needs

population and increased awareness ofWith social demand increasing to address the impact of

the environment and the well-being of tenants

the COVID-19 pandemic while taking the environment

real estate amid shifts in social values in a post-pandemic

Urban
Development
SectorStrategy• Contribute to sustainable urban development andand well-being into consideration, the needs andextend the lifespan of existing assets in light of rising

requirements for office buildings occupied by corporate

commodity prices and environmental considerations

tenants are likely to further evolve.

• Adapt to new businesses created as a result of

In collaboration with the Value Management Institute,accelerating decarbonization, environmental, social, andwe conducted a survey of office building needs, require-

governance (ESG), and digitalization initiatives in thements, and issues for tenants, real estate owners, andreal estate sector.

other stakeholders. Based on this survey, we contemplated the future direction of office buildings.

Identifying and taking social issues
into account, the DBJ Group
contributes to both the development of the real estate financemarket and the development ofsustainable urban functions.

Main Business Field
The DBJ Group provides financing for
urban development projects undertaken by developers, special-purpose
companies for owning real estate, andreal estate investment trusts (REITs),
operates certification systems andoffers research services.
• Urban development business• Real estate financing• DBJ Green Building Certification

Balance of Loans in the Real Estate Sector

Strategy 

office buildings in which the DBJ Group has invested,of risk capital, such as loans and investments for developers,

DBJ has been visualizing energy usage, promoting

REITs, and development projects. Currently, societyenergy-saving measures like LED light bulbs, and carry-at large—including urban development—is facing issues

ing out renovations and upgrades in common areas andsuch as declining birthrates, an aging population, aunderground rooms. Through such investments, we aim

shrinking workforce, and the changing climate. Our

to improve the level of contribution to and satisfaction

customers’ business models might also be forced towith environmental and well-being considerations, evenundergo rapid changes. Even in these uncertain conditions,in office buildings that were built many years ago.

we aim to preempt social issues and changes by enhancing
our research capabilities and acquiring knowledge
through loans and investments in leading projects overseas.
We strive to provide concrete solutions for our customers.
In the field of ESG, we created DBJ Green Building
Certification in 2011 as a system to certify real estate thathas been designed with environmental and social considerations. Moreover, in 2021, we founded Arc Japan toprovide services that visualize the environmental impact

As of March 31, 2023

of real estate and support decarbonization efforts. We are

2.9 trillion

undertaking initiatives like researching office needs in¥light of increased awareness of the environment andRelated Material Issues

well-being, participating in pilot projects for the environ-

Formation ofsustainableinfrastructure

mental renovation of older buildings, and moving to help

Creation of markets
and safety nets inthe finance sector

In response to changing needs for office buildings, at

DBJ will promote urban development through the supply

improve the sustainability of real estate and aid the transition to a decarbonized society.

Business Strategy

Introduction

Sector Strategy

Value Creation Story

Risks and Opportunities realize green transformation

In industrial fields withaccelerating initiatives acrossexisting sector boundaries,
the DBJ Group helps
strengthen Japan’s industrial
competitiveness as an
incubator that creates new
businesses and markets.

Support for Digital Transformation at Venture
Firms through Investments in AI-Related Funds
DBJ invested in PKSHA Algorithm No. 2 Fund, an investment limited partnership formed by PKSHA Technology Inc.
and Matsuo Institute, Inc. This fund targets venture

Strategy capital companies likely to grow by utilizing AI, andBacked by our deep specialist knowledge of the industrial

intends to create added value through technical guidance,

sectors we cover and of individual customers, we fully

including how to implement AI, for companies in whichleverage our unique network rooted in various financing

it invests. The DBJ Group has published a report on how

functions, knowledge, utility, and neutrality to support ourto promote digital transformation co-authored bycustomers and resolve issues in diverse fields. Our support

Matsuo Lab at the University of Tokyo, a leading authority

for customers encompasses assisting with growth,

in AI research. Our participation in this fund came to

sharpening competitiveness, rebuilding business portfolios,

fruition through collaboration with PKSHA Technology,

developing new businesses, generating business overseas,

which was founded by alumni from the same researchcollaborating with other companies and sectors, optimiz-lab. The fund’s initiatives aim to strengthen corporate

ing capital policies, and cooperating with government

competitiveness and invigorate the startup ecosystem inindustrial policy.

Japan, by encouraging venture companies in which it

In 2020, DBJ established the Chief Industry Strategy

has invested to adopt AI technologies and promoting

Office to oversee the Corporate Finance Department,

investments in scientific technologies and innovation. To

Division 1, and Corporate Finance Department, Division

this end, DBJ utilized the DBJ Startups and Innovation

2, with the aim of creating new industries across sector

Fund as part of Special Investment Operations.

boundaries. In 2023, DBJ created teams within the Chief

Going forward, DBJ will continue to support cus-

Industry Strategy Office to take charge of investments,

tomer initiatives through the provision of risk capitaland increased the supply of risk capital.

needed for the development and implementation ofadvance digital transformation, this office will tackle

The DBJ Group provides financing
and advisory services for companies
and projects in industrial sectors.
• Manufacturing• Retail and foods• Communications, broadcasting, media• Healthcare• Hotels, Japanese-style inns,
tourism

issues that are common among industries in order toRegional
revitalization
utilizing
untapped
potential

Project Spotlight

new industries and assistance for venture companies

Main Business Field

Technical
innovation andrestructuring ofindustryData• Support for spurring innovation aimed at establishingThrough initiatives to realize green transformation and

Related Material Issues

Governance• Support for growth investments to strengthen businessfoundations through industry restructuring, and to

Industrial
Sectors

Strategy

connect disparate industries across existing boundaries
related to innovation, sustainability, and transition.

AI technologies.

35

36

Business Strategy

Introduction

Area Strategy

Value Creation Story

Risks and Opportunities Governance

Data

Project Spotlight• Support for initiatives aimed at achieving a carbon-neutral

people and that have been adversely affected by long-Support for Stimulating Regional Tourism throughJoint Fund Formation with
Regional Financial Institutions

term population decline and the COVID-19 pandemic

DBJ invested in the Setouchi Tourism Sustainable Fund• Growth strategies, including overseas business develop-

along with regional financial institutions in the Setouchi

society in collaboration with regional financial institutions• Support for industries that rely on the movement ofRegions

Strategy

ment, of regional companies

area (The Awa Bank, Ltd., The Iyo Bank, Ltd.,The Chugoku Bank, Ltd., The Hyakujushi Bank, Ltd.,The DBJ Group provides
solutions for regional issues,connecting regions throughout
Japan to Tokyo, domestic
regions to those overseas,
and regions the world over toeach other.

Strategy 

The Hiroshima Bank, Ltd., The Minato Bank, Ltd.,

DBJ has established 10 branches and eight representative

The Yamaguchi Bank, Ltd., and others).

offices, mainly in government-designated cities, stretchingThis fund aims to financially support tourism-related

from Hokkaido to Kagoshima, to support local initiatives

businesses in the Setouchi region, coordinating with thewhile collaborating with regional financial institutions.

activities of Setouchi DMO, which was founded by theThrough the publication of reports tailored specifically to

Setouchi Tourism Authority and Setouchi Branda region, as well as loans and investments for local

Corporation to sustain the development of the tourism

companies, DBJ endeavors to provide solutions for local

industry in the Setouchi region. Following on from theissues in terms of both loans and investments and

Setouchi Tourism Stimulation Fund, this second fundknowledge. From the standpoint of forming connections

focuses on supplying risk capital for the formation of aamong customers between regions and Tokyo, regions

sustainable tourism industry.

and regions, and regions and the world, DBJ will forge

The fund’s initiatives promote a swift and robust

ahead while leveraging its DNA, i.e., the impartiality andrecovery from the COVID-19 pandemic and the growth

reliability that it has cultivated so far.

of tourism-related businesses, and contribute to the

In recent years, we have been advancing initiatives,autonomous development of regional economies. To

even at our branch offices, to realize a carbon-neutral

this end, DBJ utilized the Growth Fund for Coronavirus

The DBJ Group provides services
tailored to the characteristics of therespective regions in Japan from10 branches and eight representative
offices across the country.
• Investments and loans• Consulting services• Planning and research services

society. In June 2023, we advised regions on their transi-

Revival as a part of Special Investment Operations.

Total No. of Business Alliances withFinancial Institutions

specific and regional perspectives. We will continue toMain Business Field

As of March 31, 2023

111
Related Material Issues
Regional
revitalization
utilizing
untapped
potential

Creation of markets
and safety nets inthe finance sector

tions to realize green transformation (Page 51).

In order to contribute to solutions for issues faced by local
companies, branch managers collaborated closely witheach industry control department at headquarters to better
understand the issues of customers from both industryengage with customers and proactively propose ideas.

Business Strategy

Introduction

Area Strategy

Value Creation Story

Risks and Opportunities Governance

Data

Project Spotlight• Concerns over economic recession due to global
inflation and rising interest rates• Escalating geopolitical risks due to the Russia–Ukraine war,

Overseas

Strategy

DBJ Group’s Strategy in Southeast Asia
The DBJ Group collaborates closely with DBJ Singapore

need to restructure global supply chains as a result

Limited, which oversees the Asia-Pacific region, includ-• Expansion of demand for sustainable finance in fields

ing Southeast Asia. We are building strong relationships

such as energy, industry, and infrastructure towardwith leading local partners and providing loans andachieving carbon neutrality

investments as well as M&A advisory services to support
the business expansion of our Japanese customers in

Strategy 

The DBJ Group has positioned
overseas operations across its
Area, Sector, and Function
strategies, and it engages in
global operations with a focus
on sectors that provide highadded value.

In terms of loans and investments, DBJ is strengthen-interest rates, and geopolitical risks, the DBJ Group,

ing relations and expanding business through loans andincluding its overseas bases, will carry out overseas business

investments in collaboration with leading partners, suchand base strategies centered on sector strategies andas local conglomerates and government funds. In thefunctional strategies, in line with its GRIT Strategy set out

private equity investment field, we are gaining knowledge

in the Fifth Medium-Term Management Plan, and in lightand uncovering additional investment opportunities

of global trends in sustainable finance. We will transfer thethrough the launch of joint investment funds, among

insights we gain overseas back to Japan.

other initiatives. In the infrastructure field, DBJ gains

For loans and investments in industrial fields such as

ment of local infrastructure, and by allocating funds,

as agriculture, DBJ will coordinate efforts across sector-

including investments in funds aimed at strategicallyspecific departments, financial function departments,

meaningful fields.

seas locations.
To address the needs of customers expanding over-negotiations, thereby contributing to their businessexpansion in Southeast Asia.

Group companies will also advance the asset managecorporate fund investments.

Formation ofsustainableinfrastructure

Technical
innovation andrestructuring ofindustry

opportunities and provides them with advice on

investment capabilities, and overseas locations to support

ment business for investing in infrastructure assets andRelated Material Issues

Furthermore, our research and M&A advisory divisionoffers Japanese customers an introduction to M&A

seas, we will leverage our research and advisory functions,customers with problem-solving in their expansion efforts.

The DBJ Group’s subsidiaries in New
York, London, Singapore, and Beijing
coordinate with its domestic bases.

expertise while contributing to the sustainable develop-

energy, transportation, and other infrastructure, as wellsuch as investments and structured financing, and over-

Outlinethe region.

While assessing the impact of global inflation, rising

37

38

Business Strategy

Function Strategy

Introduction

Value Creation Story

Risks and Opportunities Governance

Data

Project Spotlight• Respond to changes in risk assessment and asset
management policies, including for non-financial risks,
at financial institutions (investors)

Syndicated
Loans

Strategy

Syndicated Loan Formation Aligned with
Our GRIT Strategy• Match supply to new demand by designing syndicatedAs an arranger of syndicated loans, DBJ has put together

loan products that fulfill the needs of both companies

several syndicated loans that align with its GRIT Strategy.

and financial institutions amid advances in sustainability
management

Specific examples include project finance-type syndicated loans to Hibiki Wind Energy Co., Ltd., one of thelargest offshore wind energy operators in Japan; DBJ

DBJ provides financial andnon-financial help to customers
working on solutions to theirissues, while seeking torevitalize financial markets
through collaboration andcooperation with stakeholders.

Strategy 

Sustainability Linked Loans with Engagement Dialogue

In recent years, the business environment for companies

in a syndication format for Fuyo General Lease Co., Ltd.;

has constantly changed amid international instability andsyndicated loans through regional financial institutions

the enactment of new international frameworks, laws, andfor Kobe Electric Railway Co., Ltd. utilizing the DBJ BCM

regulations. For this reason, companies’ needs for capital

Rated Loan Program; syndicated transition-linked hybrid

procurement have also diversified. Among participants inloans for Chugoku Electric Power Company, Inc.; andthe financial markets, investors are likely to reassess their

syndicated DBJ Sustainability Linked Loans withrisk management and asset management policies in light

Engagement Dialogue for Fukuoka REIT Corporation.

of changes in macroeconomic trends—such as shifts in

We are committed to addressing both the financial andmonetary policies at major central banks—and advances

non-financial needs of our customers through collabora-

in the field of sustainability, including decarbonization.

tion with private financial institutions on financing

In this environment, arrangers, who serve as the nexus
for market-based indirect financing, will probably be

how and network access to domestic and international

to customer issues while also maintaining close communi-

companies while focusing on solving customer issues

cation with financial institutions. We aim to facilitate theand revitalizing financial markets.

between both parties, striving to understand their needs
through dialogue with market participants. We also aim tosupport solutions to customer issues through the use of
unique financial products, such as the DBJ Sustainability
Evaluation Certification Program, as well as subordinatedWe provide syndicated loans,negotiations, and mediations as alead financial institution (arranger).

Related Material Issues
Creation of markets
and safety nets inthe finance sector

Going forward, DBJ will continue to provide know-

increasingly expected to design syndicated loans tailoredformation of syndicated loans by serving as a bridge

Outlinearrangements.

loans, structured financing, and sustainability-linked loans.

Business Strategy

Introduction

Function Strategy

Value Creation Story

Risks and Opportunities Governance

Data

Project Spotlight• Increasing complexity of social issues and accompany• Existence of corporate needs for bold business structureGroup Support for a Customer’s Expansion
in Asiatransformations and entry into new business fields in

For cross-border M&A deals, especially in Asia, DBJ’sorder to respond to changes in social issues andBusiness Development Department, our overseas

circumstances

subsidiary DBJ Singapore Limited (DBJS), and Grouping acceleration of changes in society

M&A Advisory

Strategy• M&As as a useful means to execute important management strategies, such as overseas expansion, management integration and alliances, and the strengthening ofcore businesses while divesting non-core operations

company Japan Economic Research Institute collaborate
to provide M&A advisory services to our customers.
DBJS boasts an investment banking team composedof staff with various Asian nationalities, and excels at
gathering information about investment and M&A projects

From an impartial position,
DBJ offers advisory services
that leverage its wideranging networks ofcompanies and private
equity funds inside andoutside Japan.

Strategy in the region. This team collaborates with DBJ’s BusinessJapanese companies have historically utilized M&As to

Development Department in Japan and Japan Economic

secure competitiveness both domestically and interna-

Research Institute to continuously propose and discuss

tionally, and as part of their selective concentration strate-

projects with customers, while always striving to under-

gies. Recent years have seen accelerated changes in thestand their latest needs. As a result, there are cases wherebusiness environment for companies, driven by the move-customers return to request our advisory services forment toward carbon neutrality and digital transformation

other projects they are considering in the region.

aimed at dramatically improving productivity. Accordingly,
companies need to enter into new business fields andswiftly transform their business structures. In this context,
M&As, sometimes undertaken in the interest of buying
time, are gaining importance as a strategy for companies
to address various challenges.
The DBJ Group’s M&A advisory services are unique

OutlineWe provide advisory services thatencompass overseas expansion,
management integration, and alliances.
These services strengthen corebusinesses while divesting non-core
operations, facilitate business succession,and advance capital policies.

in that they offer advice with a long-term perspective

Service Providers

market research, and M&A financing. By offering

DBJ, DBJ Singapore Limited, Japan
Economic Research InstituteRelated Material Issues
Technical
innovation andrestructuring ofindustry

Regional
revitalization
utilizing
untapped
potential

and focus on creating social value, an organizational
structure capable of promoting overseas projects,
particularly in Asia but also extending to Europe andthe United States, and access to the DBJ Group’s comprehensive financial services, including industry analysis,a range of M&A solutions that align with the businessstrategies of our customers, we help them solve theissues that they face.

DBJ will continue to support its customers’ expansion
in Asia through its M&A advisory services.

39

40

Business Strategy

Introduction

Function Strategy

Consulting
Services

Value Creation Story

Strategy

Risks and Opportunities Governance

Data

Project Spotlight• Dramatic changes in increasingly complex businessenvironments and social issues, leading to greater

Support for Sustainability Management

importance and expectations of problem-solving

DBJ offers consulting services to support customers• Significant shifts in economic and industrial structures,stronger focus on sustainability• Needs for more specialized expertise to overcome

in updating and advancing their foundations forsustainability management, with the aim of creating
sustainable value through support tailored to various

these challenges, shortage of personnel acquisition andneeds. It leverages its know-how in dialogue and evaluation

development

related to sustainability management built up since theearly 2000s.

Strategy 

DBJ helps its customers solve
their problems by accurately
grasping their issues andproviding its knowledge andexpertise based on a deep
understanding of economic
and industrial trends.

term visions, identify material issues (key management

ers, DBJ offers consulting services aimed at solving theirissues), set KPIs related to these priority issues, andissues by leveraging its intellectual capital, which includes

develop medium-term plans for sustainability. It also

an understanding of customers’ management challenges

offers business development consulting aimed atand in-depth analysis of economic and industrial trends

transitioning business portfolios in response to specificgained through surveys and research.

themes like climate change, as well as support for TCFD

In the field of sustainability, we are a front runner with
our offer of the DBJ Sustainability Evaluation Certificationthat utilize our extensive experience in and knowledge ofreports, and services to visualize their strengths andsupporting customers’ initiatives that aim for sustainableweaknesses, based on an analysis of customers’ initiatives

growth in harmony with society.

to disclose information about sustainability management.
service offerings to back our customers’ efforts to solve

and international fields. In the PPP/PFI fields, it has asocial issues and create sustainable value.

experience and know-how.
Value Management Institute, Inc., another comprehensive think tank, excels in analysis using proprietary
economic models and insight into cutting-edge technologies.
Its highly specialized knowledge encompasses a broad
range of policy fields, including the formulation of

DBJ, Japan Economic ResearchInstitute, Value Management Instituteintegrated strategies for local governments across Japan.

Formation ofsustainableinfrastructure

Regional
revitalization
utilizing
untapped
potential

We continuously strive to deepen and expand ourthink tank that conducts research in the public, solutions,

Service Providers

Related Material Issues

Additionally, DBJ provides services that help customers
enhance their information disclosures, such as in integrated

top-class track record in Japan backed by unparalleled

We provide consulting services basedon an understanding of customers’
management challenges and analysis of
economic and industrial trends.

recommendations.

Program. For example, we provide consulting services

Japan Economic Research Institute is a comprehensive

OutlineFor example, DBJ helps its customers formulate long-

In addition to providing financial support for its custom-Business Strategy

Introduction

Function Strategy

Value Creation Story

Risks and Opportunities • Creation of investment opportunities that contribute to

Asset
Management

Strategy

Governance

Data

Project Spotlightthe realization of a sustainable society through appro-

DPBR Obtains Validation of Science Based Targets

priate responses to climate change and sustainability,

DBJ Private Reit Co., Ltd. (DBPR), managed by DBJAM,

including the promotion of sustainable investments

is taking steps to reduce GHG emissions from its entire

and maintenance and updating of social infrastructure

portfolio with the aim of contributing to a decarbonized• Through the promotion of flexible and diverse workstyles,
secure professional staff and train themsociety. Compared with fiscal 2019 as the base year,
DBPR has set medium- and long-term targets for reducing
GHG emissions by 46% by fiscal 2023 and achieving net

In the field of alternative
investments, DBJ contributes
to the development offinancial and capital markets
by providing high-quality
investment opportunities andasset management services,primarily to institutional
investors.

Strategy zero emissions by fiscal 2050. DBPR has obtained validation

DBJ Asset Management Co., Ltd. (DBJAM) aims toof these targets from the Science Based Targets Initiative

expand long-term earnings on the assets it manages(SBTi), an international partnership.

while properly fulfilling its fiduciary duty and stewardship

DBPR has worked to reduce GHG emissions by

responsibility as an investment management firm. To thisintroducing energy-conserving technologies andend, DBJAM engages in and advances sustainability man-renewable energy in the buildings it owns, as part of its

agement principles and responsible investment. Morebasic policy of investing in properties recognized as

specifically, the Responsible Investment Committee,

sustainable facilities for their excellent consideration ofwhich is chaired by the president and consists of directors

the environment and society. DBPR will continue these

involved in business execution, decides policies and per-initiatives with the intention of building a high-quality

forms ESG integration, imbuing ESG elements into opera-

portfolio that is reliably competitive over the longer term

tional processes in the three fields of real estate, private

in a decarbonizedequity, and infrastructure.

society.

DBJAM is also stepping up engagement with investors
and relevant stakeholders through proactive dialogue andactivities. By further strengthening and improving these
initiatives, DBJAM aims to optimize risks and returns on
investments in a broader range of fields and over longer

Main Business Fields• Real estate• Private equity• Infrastructure

periods of time, while advancing its investment services
and securing the best returns for investors.

Service Providers
DBJ Asset Management Co., Ltd.
Assets Under Management
As of March 31, 2023¥

3.4 trillion

Related Material Issues
Formation ofsustainableinfrastructure

Creation of markets
and safety nets inthe finance sector

41

42

Business Strategy

Introduction

Function Strategy

SpecialInvestment
Operations

Value Creation Story

Strategy

Governance

Data

DBJ’s Initiatives to Supply Risk Capital Special Investment Operations, established in June 2015 as an

sectors, etc.) and the effective use of management resources,

intensive but temporary scheme to supply growth capital toto encourage companies in the private sector to supply

promote the competitiveness of Japanese enterprises along

growth capital on their own, sharpen the competitiveness ofwith regional revitalization, draws only a portion of the invest-

Japanese companies, and stimulate regional economies. Since

ment (industrial investment) from the Japanese government—

launching the aforementioned operations in June 2015, DBJ

enough to encourage the private sector to supply growth

has made ¥1,115.1 billion (as of March 31, 2023) in investments

capital. DBJ supplies risk capital to businesses that aim toand loans (177 projects in total), the first ¥1,075.6 billion of

improve their productivity and profitability through business

which has spurred ¥6,652.1 billion in private-sector investments

innovations (new business development, tie-ups with different

and loans.

Structure of Special Investment Operations

Capital increase(Budget for fiscal 2023:¥40.0 billion)

Japanesegovernment(industrial
investment)

DBJ

Other financial
institutions

Capital account(Megabanks, regionalbanks, private funds, etc.)

Addition(Budget for fiscal 2023:¥40 billion)

Special Investment
Operations
Managing investments andloans in special accountFiscal 2023: ¥80.0 billion

Target company initiatives
Loans,
etc.

Complement andencourage private-sector
enterprises(including pump-priming)

Capital funds(including preferred shares andsubordinated loans)

Evaluation /Verification

Special Investment
Operations Monitoring Board
Outline• Initiatives for effective use ofmanagement resources• Initiatives to promotemanagement innovation– Cultivation of new business–F ormation of alliancesamong various sectors andgroups, etc.

Political targets• Encouragement of self-reliant
development of regional
economies• Increase in competitivenessof Japan and domestic
enterprises• Development of markets for
growth capital

Enhance risk capital supporting growth

The DBJ Group will provide
optimal financing solutions
tailored to customer needs,
from loans to mezzanine
financing and investments,
while reinforcing its ability toadequately evaluate various
risks.

We supply growth capital to invigorate
regional economies and reinforce thecompetitiveness of Japanese companies
while encouraging the private sector
to supply growth capital.

Promotion of Expanding Growth Funding expects DBJ andBank of Japan Inc. Act (Act No. 29 of 2020), which was

Related Material Issues

other institutions to stimulate new money flows directed byapproved and enacted in May 2022, the investment decision

the private sector by nurturing new sources of financing,term and government financing term for Special Investment

markets, and investors, with DBJ acting as a primer forOperations was extended to March 31, 2026, and the dead-private-sector funds.

line for ending operations was extended to March 31, 2031.

Technical
innovation andrestructuring ofindustry

Creation of markets
and safety nets inthe finance sector

The Japanese government’s Study Panel Concerning theBased on the Act for Partial Amendment of the Development

Business Strategy

Introduction

Value Creation Story

Strategy

Overview of Special Investment Operations 

Governance

Data

Project Spotlight

The following three funding frameworks have been established to clarify the priority targets for support.

DBJ Startups and Innovation Fund

Investment in Startup that Contributes to a
Sustainable Environment in Space

In November 2022, the DBJ Innovation and Life Sciences Fund, which was created in March 2021, wasAstroscale Holdings Inc. is a startup company focused

renamed the DBJ Startups and Innovation Fund to help create and develop startups and promote open

on orbital services including the removal of space

innovation. This change intends to clarify the fund's mission to accelerate the creation and development ofdebris. Satellite data has already become an indispens-

startups in light of the Cabinet’s approval of Comprehensive Economic Measures for Overcoming Priceable part of global social infrastructure for services such

Increases and Revitalizing the Economy, on October 28, 2022.

as communication, positioning, and observation.
However, the absence of a value chain for inspection,
maintenance, and disposal of satellites after their opera-

Growth Fund for Coronavirus Revival
In May 2020, this fund was established to help businesses affected by the COVID-19 pandemic rapidly andtional lifespan ends has resulted in a rapid increase insteadily recover and grow, in reflection of the Cabinet’s approval of Emergency Economic Measures to Copespace debris. Measures are urgently needed to ensurewith COVID-19, on April 7, 2020.

that humanity can continue to safely access outer space.
Astroscale aims to establish a long-term, safe, and sustainable environment in space through technologicalGreen Investment FundThis fund was created in February 2021 to support businesses that aim to improve the sustainability of naturaldevelopment, business model formation, and collabora-

resources and the environment, such as renewable energy businesses, in consideration of the Cabinet’s approvaltions with multiple private-sector companies, organiza-of Comprehensive Economic Measures to Secure People’s Lives and Livelihoods toward Relief and Hope on

tions, and government agencies to draw up space

December 8, 2020.

policies and best practices. Considering that these innovative initiatives contribute to the development ofJapan’s space industry, DBJ has made an investment in
Astroscale through Special Investment Operations. The
DBJ Group will closely collaborate with the company

Special Investment Operations

Supports company initiatives to create new businesses andform cross-sector alliances to both revitalize regions andenhance the competitiveness of Japanese companies
DBJ Startups andInnovation Fund

Growth Fund forCoronavirus Revival

Green Investment
Fund

Initial funding framework (2019–)

Initial funding framework (2020–)

Initial funding framework (2020–)

200.0 billion¥

This fund supports initiatives topromote innovation in Japaneseindustry and create anddevelop startups.

400.0 billion¥

This fund helps companies
impacted by the COVID-19
pandemic recover and grow.

¥40.0 billion

This fund invests in renewableenergy projects toward therealization of carbon neutrality
by 2050.

and stakeholders to promote the construction of foundations and infrastructure that will enable the sustainable
use of outer space through the development of such
orbital services.

43

Business Strategy

Function Strategy

Crisis Response
Operations

Introduction

Value Creation Story

Strategy

Governance

Data

Initiatives as a Designated Financial Institution 
Based on the Finance Corporation Act (Act No. 57 of 2007,

financial institutions that supply necessary funds to address

including later revisions), DBJ’s Crisis Response Operations are

such damage.
In March 2020, the COVID-19 pandemic was designated aobligated to provide necessary funds during crises such as dis-

Page 45). As a designated financial institution, DBJ

ruptions in domestic or overseas financial markets or large-scale

crisis (disasters. In response to crisis-related damage, Japan Financecollaborated and coordinated with private-sector financial

Corporation provides two-step loans as a complementary risk

institutions to rapidly and effectively implement Crisis

measure, among other measures, to government-designatedResponse Operations.

Crisis Response Operations Scheme

As a financial institution designated by
the Japanese government, DBJ will
supply capital needed during crises
such as disruptions in domestic oroverseas financial markets, large-scale
natural disasters, and infectious
disease outbreaks.

Related Material Issues
Creation of markets
and safety nets inthe finance sector

The Shoko Chukin Bank,Ltd.

Private financial
institution

DBJ• Designated financial institutions conduct business inaccordance with the Crisis Response Operations
Rules (based on approval of the competent minister).
• Designated financial institutions conduct businesswith complete double checks of required compliancein their financing departments and their departments
responsible for crisis response operations.

• Two-step loans• Damage coverage• Interest subsidies

Japan FinanceCorporation(Crisis Response
Facilitation Account)• Capital
contribution• Lending of funds• Interest subsidies• Prepares and announces
crisis response facilitation
guidelines (approved by thecompetent minister)• Implements complementaryrisk and other measures on
the basis of agreements(approved by the competent
minister) with designatedfinancial institutions

Defines a new scope for DBJ’s responsibilities,
making Crisis Response Operations obligatory
for an indefinite period• Extends the scope of Japanese government
recapitalization securing DBJ’s financial structure, etc.
• Establishes a new crisis response reserve account,reflecting this obligation in the Articles ofIncorporation, and indicates mandatory Japanese
government ownership of more than one third of
shares and other measures
Note: Capital increases related to Crisis Response
Operations before the 2015 revisions to the DBJ Act
were transferred from capital to a crisis response
reserve (¥206.5 billion). Capital increases for Crisis
Response Operations after the revisions are to be
added directly to the crisis response reserve.

Loans, etc. of
special funds

Clients

OutlineDesignation

Private financial
institution

As a designated financial
institution, DBJ swiftly andreliably supplies risk capitalwhile collaborating andcoordinating with private
financial institutions.

Private financial
institution

Designated financial institutions

Government of Japan

44

Business Strategy

Introduction

Value Creation Story

Strategy

Governance

Data

Project Spotlight
Commenced Crisis Response
Operations as a designatedfinancial institution

2008/10

Financial Crisis Response Operations andEarthquake Disaster Crisis Response Operations

2008/122011/3 1

Great East Japan Earthquake in 20111

Earthquake Disaster Crisis Response Operations

2

In the fiscal 2011 supplementary budget passed in thewake of the Great East Japan Earthquake, ¥2.5 trillion
was earmarked for Japan Finance Corporation for Crisis
Response Operations targeting medium- and large-sizedenterprises. DBJ proactively provided assistance for clientsaffected both directly and indirectly by the disaster.
Along with designated financial institutions in thedisaster area, DBJ arranged the Great East Japan
Earthquake Reconstruction Fund.
In December 2014, in response to the shift of the stageof earthquake reconstruction from the restoration of
production facilities (the “restoration stage”) to efforts toopen up a new enterprise-based market that resumed
production, promoted collaboration among multiple
enterprises to boost industry competitiveness, built
infrastructure, and reinforced functions (the “reconstruction
and growth stage”), we established a reconstruction andgrowth support fund in collaboration with the Regional
Economy Vitalization Corporation of Japan.
In fiscal 2018, with demand for reconstruction seeming
to settle, we established a new fund for medium- to longterm capital funds and other forms of money with sharedrisk, aimed at supporting the economic development of theaffected areas.
Going forward, we will continue to work with local
financial institutions while promoting efforts to help stricken
areas according to their particular stage of recovery.

2016/4 2

Kumamoto Earthquake in 2016

To help in the aftermath of the 2016 Kumamoto Earthquake,
DBJ established the Kumamoto Earthquake Reconstruction
Support Office at its Kyushu Branch with the aim ofproviding useful insights and financial expertise forreconstruction efforts.
In July 2016, DBJ formed the Kumamoto Reconstruction
Support Fund in collaboration with The Higo Bank, Ltd. andKagoshima Bank, Ltd., both financial institutions in the area
affected by the earthquake. This fund supplied risk capitalto businesses affected by the earthquake in the form ofsenior loans (unsecured, unguaranteed loans with lump-sum
repayment at maturity) and subordinated loans.
We also provided valuable information for restoration
and reconstruction through our cross-organizational system,
and carried out survey and planning operations incoordination with local governments, national institutions
and economic groups, as well as regional financial institutions.

Crisis Response Operations (As of March 31, 2023)
Total funds raised by thegovernment in Crisis
Response Operations

206.529 billion¥

COVID-19 pandemic(through March 31, 2011)

Crisis countermeasure loans
Total loan amount

Total CP purchases

8,740.5 billion (1,684 projects)¥¥

361.0 billion (68 projects)

Total crisis countermeasure loans
extended in response to
the COVID-19 pandemic¥

2,521.0 billion (524 projects)

2020/3 3
3 Initiatives Related to the COVID-19 Pandemic
The DBJ Group opened consulting service counters at theend of January 2020 and moved forward with its unique
Regional Emergency Response Program from February2020 onwards. As a designated financial institution, DBJ
has concentrated on Crisis Response Operations since
March 2020, after the Japanese government declared the
COVID-19 pandemic a crisis.
Led by the Coronavirus Response Headquarters, which ischaired by the representative director and president, DBJ
has moved to rapidly and reliably implement Crisis Response
Operations. DBJ will continue to collaborate and coordinate
with private financial institutions to meet the needs of businesses that have been adversely affected by the pandemic.
DBJ will enhance collaboration with regional financial institutions and ready its unique capital supply systems, including
the Regional Emergency Response Program, while considering the efficacy of Crisis Response Operations in terms of
securing jobs and maintaining credit.
The business environment has become even more difficult
for companies operating restaurants and hotels, which havepreviously been major employers. At their request, thegovernment stepped in to provide further assistance to thesecompanies in March 2021. Under the direction of theCoronavirus Response Headquarters, DBJ set up the Crisis
Response Operations Special Response Office and theRestaurants and Hotels Team therein in order to speed up
the screening of companies operating restaurants and hotels.
Since March 29, 2021, DBJ has reduced the interest
rate burdens of subordinated capital loans provided tolarge enterprises in the restaurants and hotels sector andto mid-tier companies as an intensive but temporary
scheme. Other measures DBJ has taken include thecreation of a preferred stock underwriting fund targeting
mid-tier and large companies operating restaurants andhotels, the DBJ Food & Beverage/Hotel Support Fund
Investment Limited Partnership.

45

46

Management Foundation Strategy

Financial
CapitalIntroduction

Value Creation Story

Strategy

Governance

We target sustainable growth by constructing an optimal risk–
return portfolio while maintaining and strengthening a robust
financial base that supports our unique business activities,
including integrated investment and loan services.

Data

Related Material Issues
Strengthening of thebusiness foundation
for supplying risk
capital

Basic Policy
Financial capital is one element of our business foundation in the implementationof advanced business strategies centered on our Sector Strategy ( Pages 32–35),
Area Strategy ( Pages 36–37) and our Function Strategy ( Pages 38–45).
A robust financial foundation of funds and capital is necessary to execute our
sector strategy, supply risk capital, and engage in Crisis Response Operations.

We aim to maintain and strengthen our financial capital by managing it within
the context of a risk appetite framework based on sophisticated analysis ofrisks and returns, with due consideration paid to regulatory capital (management focused on shareholders’ equity ratios) and economic capital (management of capital using stress tests).

DBJ Sustainability Bonds
In fiscal 2014, DBJ became the first bond issuer in Japan to issue a green
bond. Furthermore, DBJ has issued a DBJ Sustainability Bond each year since2015. Since fiscal 2021, DBJ has issued domestic bonds in addition to foreign
bonds. As of fiscal 2022, DBJ is the only Japanese issuer to have issued
sustainability bonds for nine consecutive years.
The funds raised are allocated toward the creation of a sustainable society
via financing for real estate properties eligible for DBJ Green Building
Certification, the Environmentally Rated Loan Program, financing for renewableenergy projects, financing for green innovation and industries, the BCM Rated
Loan Program, and the Regional Emergency Response Program. Informationon the management and allocation of funds is evaluated by third parties toincrease transparency. In January 2017, DBJ became an issuer member of theGreen Bond Principles.* The first Japanese firm to attain such a status, it
participates on a committee created by the Ministry of the Environment torevise the Green Bond Guidelines, thereby contributing to the development ofa sustainable finance market around the world.

Sustainability Bond Issuance(Billions of yen)

200
150
100
50
0

2014

2015

2016

2017

2018

2019

2020

2021

2022

(Fiscal year)

U.S. dollar-denominated bonds
Euro-denominated bonds
Yen-denominated bonds
(U.S. dollar-denominated bonds and Euro-denominated bonds have been converted into yen)
* Green Bond Principles: The Green Bond Principles are compiled by theInternational Capital Market Association (ICMA), investors, issuers, and securities companies. These parties are responsible for updating annually the Green
Bond Principles, which are voluntary process guidelines that recommend
transparency and disclosure and promote integrity in the development of thegreen bond market by clarifying the approach for the issuance of a green
bond. These parties also constitute a platform for sharing the latest information
about green bonds and disclosing relevant information to the public.

Management Foundation Strategy

HumanCapitalIntroduction

Value Creation Story

Strategy

Generalists Who Can Be Specialists in Many Fields

Shingo Kobayashi

We aim to be an organization that helps its diverse
employees develop their skills and that increases
their motivation.

Executive Officer,
Head of Human Resources
Management Department

Governance

Data

Related Material Issues
Cultivation of talent tochallenge financial
frontiers

Basic Policy
Acquiring and training skilled employees is key to our unique business modeland the pursuit of the DBJ Group’s four core corporate values (a long-term
perspective, impartiality, public-mindedness, and reliability) ( Page 2), so that
we can execute the DBJ Group’s value creation process and balance andenhance economic and social value.
To this end, we believe it is important to create a framework that motivates
our experienced employees to work with enthusiasm. We are advancing

various measures to improve the value of our human capital, one of our foremost priorities.
Our employees are the wellspring of the value created by the DBJ Group.
We intend to improve our human resource and organizational capabilities withthe aim of implementing our constantly changing business model, and our
mission, Vision 2030, and values.

Our Values
Our value creation would not be possible without the executives andemployees who share our values of initiative and integrity and who display ourfour core corporate values handed down from DBJ’s earliest days: a long-term
perspective, impartiality, public-mindedness, and reliability.
Having provided long-term funding since the postwar reconstruction period,
the DBJ Group has carried on the tradition of serving its customers, industry,and society from a long-term perspective. The DBJ Group is also unique interms of impartiality by always working toward what is best for Japan’s
economy and society, without being affiliated with any specific corporategroup. Our public-mindedness is what motivates our employees to engage inwork for the creation of both economic and social value. The combination ofthese traits has earned us a reputation for reliability from customers and society.
With these four core values as a starting point, the DBJ Group tackles withintegrity the management issues faced by its customers and the issues facedby society as a whole, taking a long-term perspective and tirelessly pursuingmeasures to resolve these issues. This is our unique mission. It is what sets us
apart from other financial institutions, and it is why the DBJ Group exists.

Accordingly, DBJ Group’s people must always be willing to take on new issues
and boldly redefine themselves with an eye to the future.
Our values
Initiative

Integrity

Financial functions

DBJ’s human resources

Our four core corporate values

Loans

Financial expertise

A long-term
perspective

Investments

Impartiality

Advisory andconsulting services

Generalists who canbe specialists inmany fields

Public-mindedness

Asset management

Ability to co-create

Reliability

Balance of economic value and social value

47

Management Foundation Strategy

Introduction

Value Creation Story

Strategy

Governance

Data

Dispatch Outside DBJ
GlobalDomestic

Vision for Human Resource Development
Rank-Based Training

In-House Training (Required/Optional)

Self-Study• Financial products• Sustainability etc.

Training for new employees

Global humanresources training
program for young
employees

Short-term study on external programs• Financial modeling

Foreign languages, finance, law, financial skills, etc.

Career development program• Proposal and screening
capabilities

Global leadershipprogram for
managers

Secondments to external institutions(national ­government agencies,
Group companies, etc.)

Career development program

Financial ­skills-related training

Study at foreign
graduate schools

Pre-management training

Diversity training(Women’s empowerment, “iku-boss,”
understanding people with disabilities, etc.)

Newly appointed manager training

Compliance training/information security training

Coaching program

Short-term study at foreignbusiness schools

Life/career plan seminar

Strategic human resource development throughjob rotation and on-the-job training

Mid-level
employees

Managers

On-the-Job
Training

Mid-level
employees

The DBJ Group encourages autonomous and pioneering
behavior in its employees as financial professionals in
keeping with its vision for human resource development,
which can be summarized as “cultivation of generalists
who can be specialists in many fields.”
While it is important to acquire specialist knowledge,
responding to society’s constantly changing needs also
requires broad experience, deep knowledge, and theability to see the big picture.
The DBJ Group has created a variety of personnel
systems and human resource training programs with theintention of nurturing employees not only with advanced
specializations but also broad perspectives, who are able
to grow of their own accord without fearing change, andcontribute to the discovery and resolution of issues facedby customers and society.

New
employees

48

FinanceFinancialaccounting

Law

Improvement of Human Resource Training and Engagement
People are the source of the DBJ Group’s competitiveness. Every employee must continue to grow in order for the DBJ Group to constantly take on new challenges
and meet the changing needs of the times. Through practical on-the-job training and abundant opportunities for training, our employees grow while acquiring
various experiences and skills. The entire Group is committed to training employees who are able to work together organically on solving issues.
Making strategic
personnel rotations

Employees are rotated strategically so that they steadily develop highly specialized skills by gaining practical and diverse experience and broad
perspectives in multiple departments and outside institutions (national government agencies, Group companies around the world, companies that havereceived investments, and startups).

Developing global humanresources

Opportunities to study abroad at overseas universities and training systems have been established. DBJ also operates its own leadership training
program (entirely in English) for young employees and management-level employees in collaboration with top overseas universities.

Reinforcement ofmanagement capabilities

DBJ offers training and puts in place human resource programs that support employees in the acquisition and development of management and leadership skills at each stage of their careers, cultivating these essential skills in management candidates from the start.

Supporting the growth of
new employees

DBJ provides full support for the growth of new employees, offering a range of training programs throughout the year, including its own three-month accounting and financial analysis courses. DBJ has put in place a system that assigns employees in their first and second years to experienced veteran employees, who
guide them in their on-the-job training, and the entire team, led by these veteran employees, supports the training of younger employees.

Interviewing employees

All willing employees are interviewed by staff in the Human Resources Management Department about their future career paths.

Improving engagement

Every fiscal year, DBJ conducts engagement surveys of personnel, evaluates the results of these surveys, and creates action plans that enable eachdepartment to increase employee motivation through improvement activities.

Management Foundation Strategy

Introduction

Value Creation Story

Strategy

Governance

Data

Global Human Resource Training Program
Designed to foster a management mindset among DBJ’s young
management-track employees, this three- to four-month customizable training
program is based on Group projects and facilitated by a team of instructors
from an international business school, with one week of the program taking
place on-site at the school.
Purpose of Program• Train global management personnel to solve diverse management issues
faced by customers around the world• Imbue trainees with the ability to handle overseas assignments independently
by sharpening self-analysis with diverse, cutting-edge knowledge•E ncourage trainees to consider their own careers and the vision for DBJ byunderstanding their work and the organization from a top-down perspective•U se as an opportunity for young employees to advocate for management
policy so that the DBJ Group creates more value for society•E nglish classes for newcomers and assistance for learning English are offered
to encourage uptake of these programs.

IMD: Orchestrating Winning
Performance (OWP)

Oxford: Global Strategic Alignment
Leadership Programme (GSALP)

No. ofapplicants

Up to 30 people

Up to 30 people

Dates

End of May to end of August(Lausanne for one week in late June)

August to end of January(Oxford for one week in mid-October)PartnerInternational Institute for Management
Development (IMD), Lausanne,
SwitzerlandSaïd Business School, University of
Oxford, Oxford, United Kingdom

Instructors

Professor Salvatore Cantale and others

Professor Jonathan Trevor and others

Assistance for Office Career GrowthThis DBJ original two-month program for office positions aims to develop
human resources who can lead organizations. The program invites outside
lecturers from Waseda University’s Graduate School of Business and Financeand other universities to lead seminars on career development based onparticipants’ own strengths. Participants learn soft skills for leadership andmanagement positions, and gain an understanding global macro trends aswell as organizational and strategic theory.
Purpose of Program• Provide a space for participants to think about their future in light of changes
in the business environment and a staged analysis of the current situationin the context of society, DBJ, their affiliated departments and their roles• Provide a space for participants to think more about their career paths interms of personal development and contributions to the organization

Waseda Business School-Affiliated Program:
Leadership Education and Ability Development (LEAD)
No. of applicants

Dates

Partner

Instructors

About 15 people

November toDecember

Waseda Business
School and otherinstitutions

Professor Jusuke Ikegami,
Professor Masakazu
Sugiura, and others

49

50

Management Foundation Strategy

Introduction

Value Creation Story

Strategy

Governance

Data

Diversity, Equity, and Inclusion, and Productivity Enhancement
In order to create workplaces where employees feel motivated by their work,
DBJ takes steps to foster mutual understanding and improve the productivityof each employee.
• DBJ is improving productivity and resilience with systems that allow for flexible
workstyles, such as working from home, and flexible hours with core work times.
During the COVID-19 pandemic, employees worked flexibly from home andstaggered their office work hours as we prioritized the health and safety of our
executives and employees while ensuring that our work could be carried out.
• DBJ holds seminars with specialists as guest speakers on topics that include
finding daycare, childcare, and nursing care, with the aim of improving its
employment and vacation systems, such as maternity leave, shortened work
hours, time off for childcare, and other programs for raising children andcaring for elderly family members.
• DBJ encourages employees to build relationships based on mutual trust andcooperation through various seminars, including on building understanding ofpeople with disabilities, and through the creation and distribution of a guide
about balancing work with childcare and nursing care.
• DBJ continues to hold training and networking events on career development
aimed at empowering women in the workplace.
• In addition to periodic health checkups, DBJ supports the physical andmental health of all its executives and employees by providing them withpersonal resilience training and maintaining a counseling system staffed byexternal specialists.

Outline of Our Human Capital
No. of employees (consolidated)

1,839

No. of employees (non-consolidated)

1,270

Number of new hires (parent)(College graduate hires in April 2023)

62

Ratio of women in management positions

9.3%(Reference: 15% target by
March 31, 2026)

Ratio of employees taking childcare leave and childcarerelated time off by women/men(Employees with newborn children during fiscal 2022)

Women 96.4%
Men
48.6%
(97.1% when including
special time off for childcare)

Rehiring system registrants

31

Employees who use reduced working hours for childcare
and nursing care

53

Seminars for finding childcare facilities (Cumulative total)

251

Global human resource training program participants(Cumulative total)

70

Women’s empowerment and leadership program
participants (Cumulative total)

32(Timeframe: Unless indicated otherwise, figures are as of March 31, 2023.
Scope: Parent basis unless otherwise indicated)Management Foundation Strategy

Intellectual
CapitalIntroduction

Value Creation Story

Strategy

DBJ has positioned surveys and research on industries andregions as core operations essential to differentiating its
business model and it endeavors to increase the sophisticationof these operations.

Governance

Data

Related Material Issues
Regional revitalization utilizing
untapped
potential

Strengthening of thebusiness foundation for
supplying risk capital

Basic Policy
DBJ has established the Chief Research Office, under which the Regional
Research & Planning Department and the Economic & Industrial Research
Department support investment and loan activities while analyzing anddisseminating information on global economic and industrial trends. This
research covers macroeconomic trends, major industry trends, new technologies,
and intellectual property.
Our proprietary Survey on Planned Capital Spending, which has been
conducted every year for more than 60 years since 1956, examines trends incapital investments at domestic companies, overseas capital investments, R&D,

M&As, and investments in human resources. The findings of this research aresummarized and published in reports about the challenges and issues faced by
Japanese companies, drawing insights from dialogues with senior managers.
The Research Institute of Capital Formation (RICF) was established in 1964
with Dr. Osamu Shimomura as its first executive officer. The institute serves as avenue for creating intellectual capital through cooperation and collaboration
with external experts. Its research includes a focus on building a sustainableeconomy and society, from an academic and liberal standpoint.

Recommendation Report on Regional Transition
In sectors and regions where discussions about and investments indecarbonization have progressed, DBJ has been actively supporting thetransition through loans and investments, while emphasizing engagement withcustomers and collaboration with other financial institutions.
On the other hand, transitioning regions to a viable decarbonized society ischallenging to accomplish with only financing, such as loans and investments,
and the independent efforts of individual organizations. The DBJ Group
therefore plays the important role of “connecting” these various entities.
Accordingly, Regions x Transition has been positioned as one of the main points
in our Strengthening and Review of the Fifth Medium-Term Management Plan
( Page 18) as a practical guide for the transition while advancing these
initiatives. We also believe that knowledge-based support is vital.

In June 2023, DBJ published the recommendation report Regions x
Transition: Wide-Area Strategies Centered on Energy and Related Industries.
From the perspectives of renewable energy, hydrogen and ammonia, andCCUS*, which are key to realizing carbon neutrality, the report discusses threemodel areas (Kitakyushu, Tomakomai-Muroran, and Niigata). Leveraging the
DBJ Group’s insights and incorporating the opinions of external experts, thereport highlights the importance of initiatives in wide-area collaboration using
the strengths derived from each region’s unique characteristics and existing
industries, in a format that can be replicated by other regions.
* CCUS: Carbon capture, utilization, and storage

51

52

Management Foundation Strategy

Relationship
CapitalIntroduction

By leveraging the networks we have built throughcollaboration and cooperation with diverse
stakeholders, we aim to harness the collective
strengths of the Group.

Value Creation Story

Strategy

Governance

Data

Related Material Issues
Creation of markets
and safety nets inthe finance sector

Strengthening of thebusiness foundation for
supplying risk capital

Basic Policy
The DBJ Group has built diverse networks with customers, financial institutions,investors, and national and local government agencies for exchanging information and avoiding conflicts of interest. The DBJ Group utilizes its unique networks to identify issues affecting the economy and society and to conduct
investment and loan operations.
As part of its own credit-raising efforts, DBJ began borrowing from regional
financial institutions in fiscal 2007. Today, we are deepening and diversifying
our relationships and networks beyond capital procurement relationships byintroducing investment products (such as syndicated loans), generating M&A
opportunities, and establishing cooperative funds. These activities help
promote new money flows.
DBJ plans and operates public–private partnership/private finance initiative
universities and seminars for local governments and regional financial institutions, aswell as platforms for industry–government–academia–finance collaboration with thenational government. In the push towards decarbonization, we actively participate inregional councils, serving in unique roles, such as acting as the secretariat.
We have a broad academic network both domestically and internationally,
centered on the social sciences, which we leverage for research activities andhuman resource development. In addition to planning and operating
seminars and conferences, we have the DBJ Financial Academy for both DBJ
staff and external trainees as a part of our initiative to cultivate personnel
capable of undertaking advanced financial operations.
We organize unique events, such as hosting a business plan competition
for women to develop growth businesses from fresh perspectives that canbring transformative change to society and the economy, advancing iHub
(Innovation Hub) activities to support innovation using our impartial position
and broad networks, and DBJ Connect, which offers a collaboration platform
between startups and large and medium-sized enterprises.

New Initiatives for Embedding the Outcomes of Academic Research in Society
In 2022, in collaboration with the Okinawa Institute of Science and Technology(OIST), DBJ signed a business cooperation agreement aimed at embedding
the outcomes of OIST’s advanced technological research in society. DBJ also
invested in the OIST-Lifetime Ventures Seed Fund.
The DBJ Group recognizes that there is a lack of risk capital to connect
support for research expenditure in the public sector (subsidies) and theprovision of growth capital in the private sector, given challenges like theshortage of management talent and difficulties in determining timelines tocommercialization, for embedding the outcomes of academic research insociety. We have collaborated with various institutions on this front.

OIST is a leading-edge research institution with up-to-date research facilities
and multi-year research funding allocations for researchers. OIST has beenpromoting an environment geared towards industry–academia collaboration
since its establishment in 2011. By combining academic collaboration and fundinvestment and leveraging the commercialization expertise of Lifetime
Ventures, which acts as the GP, we believe we can contribute to comprehensive
solutions including the commercialization of research outcomes andsubsequent financial support. That is why DBJ supports these efforts.

Management Foundation Strategy

SocialCapitalIntroduction

Value Creation Story

StrategyContributing to the sustainable development ofsocial capital that is the foundation of society,including the DBJ Group

Governance

Data

Related Material Issues
Formation ofsustainableinfrastructure

Strengthening of thebusiness foundation
for supplying risk capital

Basic Policy
The DBJ Group defines social capital as a resource shared across society that
underpins the foundations of market economics. Increasing the value of social
capital is a basic tenet for realizing a sustainable society.
In addition to contributing to a sustainable society through loans and investments focused on infrastructure and industry ( Pages 32–35), as well as
legally mandated Special Investment Operations ( Pages 42–43) and Crisis
Response Operations ( Pages 44–45), we also advance unique initiatives suchas the DBJ Sustainability Evaluation Certification Program and DBJ Green
Building Certification ( Page 27), as well as Sustainability Bond issuance( Page 46).

Social Capital

Details

Examples of Initiatives(1) Natural environment

Forests, mountains, rivers, lakes,
soil, airEnvironmentally Rated Loan
Program, DBJ Green Building
Certification(2) Social infrastructure

Energy, transportation, urban
infrastructure, industrial value
chainsLoans and investments forinfrastructure and industrial projects,
BCM Rated Loan Program(3) System capital

Stabilization of the financial system, Crisis Response Operations, supply
development and invigoration ofof risk capital, sustainability bondfinancial markets
issuance

Launch of Financial Institution Alliance for Promoting and Supporting Transition to Nature Positivity
In addition to addressing climate change, there is a movement toward nature
positivity, which includes mitigating the impacts of excessive dependence onnature, and restoring ecosystems.
Interactions with nature in business activities vary by location and type ofoperation, so there is no one-size-fits-all solution. Additionally, there is adiverse range of techniques for analyzing, evaluating, and responding tonature-related risks.
Quickly grasping this global trend, DBJ launched the Finance Alliance for
Nature Positive Solutions (FANPS) in February 2023 in order to support initiatives focused on nature positivity and to build momentum within Japan. In
collaboration with Sumitomo Mitsui Financial Group, Inc., MS&AD InsuranceGroup Holdings, Inc., and The Norinchukin Bank, their respective research

institutions—Japan Economic Research Institute, Japan Research Institute,
MS&AD InterRisk Research & Consulting, and Norinchukin Research Institute—also became members of FANPS.
FANPS aims to create frameworks for providing assistance to corporations.
It examines financing methods for supporting and advancing transitions tobusiness activities that contribute to nature positivity. It also conducts research
centered on surveys and summaries of new technologies and services that help
solve issues. FANPS catalogs effective solutions for nature positivity that can beapplied to entire supply chains. It also conceives of business models that reduce
negative impacts on natural capital, as well as financing methods that support
the embedding of technologies that regenerate and restore natural capital.

53

54

Message from the Chairman

Introduction

Value Creation Story

Strategy

Governance

Data

Working tirelessly to strengthen governance inorder to carry out the unique role of the DBJ Group,
we strive to contribute to the realization of asustainable society.

Toward Unique Sustainability
Management and Business Model
Development
The DBJ Group practices sustainability
management and has a business model that
integrates loans and investments in accordance with
the Development Bank of Japan Inc. Act, balancing
economic and social value to build a sustainable
society. We supply risk capital to forward-looking
initiatives through our Special Investment
Operations program and collaborate andcooperate with private financial institutions tostimulate new flows of risk capital in Japan. DBJ’s
investments and loans in new fields help strengthen
Japan’s economic competitiveness. We also

Message from the Chairman

Introduction

address local issues through risk capital supplied

Value Creation Story

It is essential that DBJ collaborate and cooperate

through joint funds created with regional financial

with, rather than compete with, private financial

institutions.

institutions. We hold regular events for this purpose,

Strategy

Governance

55

Data

A Value Creation Process that Balances
Economic and Social Value

Furthermore, DBJ functions as an emergency

usually twice a year, involving discussions with

To realize a sustainable society while balancing

supplier of capital for responses to natural disas-

representatives of such institutions. We have also

economic and social value, the DBJ Group offers

ters and other crises. Following the Great East

created the Special Investment Operations

solutions to issues faced by society and by ourJapan Earthquake, the Kumamoto earthquakes,

Monitoring Board (and other events calling for rapid influxes of capi-

body to the Board of Directors. The board meets

innovative business models, centered on thetal, DBJ has been there to provide relief. In recent

twice a year to discuss and evaluate the status of

supply of risk capital, in an effort to advance

years, DBJ has also addressed the impacts of thethe Bank’s business performance, as well as its

sustainability management and maintain a balanced

COVID-19 pandemic.

complementing and encouraging of private businessvalue creation process. As the social significanceCentered on these operations, the DBJ Groupand maintenance of non-competitive relationships.

of balancing economic and social value increases,

will continue to originate investments and loans

The opinions we obtain through these discussions

we will continue making every effort to engage infrom customers’ perspectives based on the “con-are reported to and debated by the Advisorydialogue with our diverse stakeholders and ensure

Board, an advisory body to the Board of Directors

robust and effective corporate governance, basednect” aspect of its GRIT Strategy (Page 16),

which sets out the Group’s priorities for realizing asustainable society under the Fifth Medium-Term
Management Plan.

Page 60) as an advisorycustomers. The Group has continued to create

Page 60).

on the notion that nothing is more important than

In my view, a distinct aspect of corporate

embodying best practices that will continue togovernance at the DBJ Group is its continuous

earn us the trust of our customers and society.

(reassessment of its unique value creation process,Enhancing the Effectiveness ofGovernance Suited to Our Unique Role

informed by dialogue with its diverse stakeholders.
While improving its institutional framework, froma public standpoint, the DBJ Group must consider

To continue playing this unique role, DBJ must

its accountability to society as a whole. That means

have robust corporate governance, ensure trans-

according the same importance to all of society,

Seiji Jige

parency in management, and consider the opin-

beyond our existing stakeholders, as we do to

President and CEO

ions of outside experts. To realize this aim, weshareholders and investors. We therefore believe it

have created the Internal Audit Committee, theis important to always be aware of the ongoing

Compensation Committee, and the Personnel

expectation for us to provide thoughtful explana-

Evaluation Committee as advisory bodies to thetions and information disclosures to society.

Board of Directors. Listening to the views of our
stakeholders is imperative to strengthening
this framework.

October 2023

56

Corporate GovernanceIntroduction

Value Creation Story

Strategy

Governance

Data

Related Material Issues
Strengthening of thebusiness foundation for
supplying risk capital

The DBJ Group has special governance functions that support its unique business model.

Corporate Governance System

Matters requiring authorization of competent minister• Appointment and dismissal of representative members of the Boardof Directors and Audit & Supervisory Board members

General Meeting of
Shareholders
Audit & Supervisory Board members,
Audit & Supervisory Board• Concurrent positions as members of the Board of Directors

Reporting• Amendments to Articles of Incorporation• Disposition of surplus funds

Internal Audit Committee

Accounting auditor

Compensation Committee

Cooperation• Mergers, corporate splits, and dissolutions• Basic policy on business plans, redemption plans, and fund procurement

Board of Directors

Personnel Evaluation
Committee

ReportingInternal Audit
Department

Advisory Board

Executive Committee

Special Investment Operations Monitoring Board

Decision-making
bodiesAuditsDeliberative bodies

ALM & Risk
Management
Committee

Departments

Subsidiaries

AuditsGeneral Risk
Management
Committee

Committee on
Investment and
Loan Decisions

New Operation
Screening
Committee

Advisory Panelon Investments
and Loans

Sustainability
Committee

Investment
Management
Committee

Corporate GovernanceIntroduction

Value Creation Story

Strategy

Governance

Data

Basic Position on Corporate Governance
DBJ is governed by the Development Bank of Japan Inc. Act (the DBJ Act) in accordance with the following objective.

Article 1 of the DBJ Act

Development Bank of Japan Inc. (hereinafter referred to as the “Corporation”) shall be a joint-stock company(kabushiki-kaisha) whose objective is to contribute to the smooth supply of funds to those needing long-term businessfunds, as well as to the sophistication of financial functions.

DBJ is working to enhance its unique governance system in addition to its
usual management supervision as a Company with a Board of Directors andCompany Auditors (Audit & Supervisory Board), through a business model built
upon features such as integrated investments and loans and proper executionof the preceding objective, in order to raise the value of tangible and intangible
management resources to be invested and to realize sustainable managementthat aims for both economic and social value.
The 2015 revisions to the DBJ Act established Special Investment Operations
and obligatory measures to be considered, requiring that DBJ conduct its
operations in a manner that does not obstruct appropriate competitive
relations with other entities, in particular, applying these requirements to theAdvisory Board, made up of outside experts and outside members of theBoard of Directors, and the Special Investment Operations Monitoring Board,
composed of outside experts, which function as advisory bodies to the Boardof Directors. These bodies provide advice on DBJ’s overall management anddeliberate and evaluate business results, including consistency with the policy
objectives of Special Investment Operations, ensuring that appropriatecompetitive relations are maintained with private financial institutions.
In accordance with the corporate philosophy of the DBJ Group, we take aunified approach to Group business management, defining basic mattersrelated to Group business management in our affiliated company management
rules to ensure appropriate operations and sound management, while effectively
and efficiently engaging in business. At major subsidiaries, business management
is based in principle on basic policies and rules prepared by DBJ, which offers
any necessary guidance and advice for maintaining internal controls. DBJ
receives notifications about important matters related to business operations
through prior consultation or reports. The Board of Directors periodically andregularly receives reports about conditions at major subsidiaries, such as theircompliance with laws and regulations, risk management, and customer
protections, as well as the outcomes of internal audits of major subsidiaries
conducted DBJ’s internal audit department. Business management ofsubsidiaries and other entities is conducted in ways that do not infringe onlaws and regulations. Any conflicts of interest that arise within the DBJ Groupare properly addressed based on its rules for managing conflicts of interest sothat the interests of customers are not unfairly harmed.

DBJ’s Corporate Governance System
Institutional design configuration

A Company with a Board of Directors and­Company Auditors (Audit & Supervisory Board)

Number of members of the Boardof Directors

10

Of whom, outside members

2

Number of Board of Directors’
meetings in fiscal 2022

14

Number of Audit & Supervisory
Board members

5

Of whom, outside members

3

Number of Audit & Supervisory
Board meetings in fiscal 2022

16

Adoption of executive
officer system

Yes

Accounting auditor

Deloitte Touche Tohmatsu LLC

57

58

Corporate GovernanceIntroduction

Value Creation Story

Strategy

Governance

Data

Board of Directors
The Board of Directors consists of 10 members, including two outside directors
to ensure transparency in management.
The Board of Directors makes decisions on basic policies that relate to management plans and management strategies, such as business plans and budgets, corporate philosophy, sustainability, and investments and loans. The
Board also provides oversight of the state of business execution, receiving
reports on investments and loans and integrated risk conditions.
In fiscal 2022, the Board held meetings on 14 occasions to discuss andreport on the following items.

Matters to beresolved

44 items:• Strengthening and Review of the Fifth Medium-Term
Management Plan
• Decisions regarding fiscal 2023 business plans andoverall budgets• Revisions to important internal rules, etc.

Matters to bereported

44 items:• Investments and loans executed• Integrated risks• Investment policies for fiscal 2023, etc.

Advisory Bodies to the Board of Directors

The following advisory bodies to the Board of Directors have been establishedto maintain transparency and objectivity in management.
Internal Audit Committee
The Board of Directors has established the Internal Audit Committee, delegating
to this body the authority to deliberate important matters related to internal
audits. This committee met twice during the fiscal year ended March 31, 2023.
Compensation Committee
DBJ’s Compensation Committee is an advisory body to the Board of Directors.
It deliberates on the compensation structure for members of the Board of
Directors and evaluates the propriety of the compensation structure for theCompany. The majority of its members are outside executives.
DBJ takes the following basic approach to executive compensation.
• Compensation should reflect social trends in regard to executive pay.
• Compensation should provide motivation for initiatives aimed at realizing
economic and social value during each fiscal year and in the medium to long term.
In accordance with this approach, DBJ provides compensation to its
executives in three forms: fixed compensation, executive bonuses, andexecutive retirement benefits.
(1) Fixed compensation is paid monthly in an amount based on theexecutive’s position.
(2) Executive bonuses are distributed after taking into consideration theperformance of each member of the Board of Directors in carrying out theirduties during the fiscal year. Bonuses start with a standard amount basedon the position of the member of the Board of Directors. Bonuses also
include a quantitative assessment portion determined based on a preset
distribution percentage that reflects the achievement of the consolidated
net income target, as well as a qualitative assessment portion determinedbased on a preset distribution percentage that comprehensively considers
each executive’s achievement of performance targets in their businessdivision. Consolidated net income (¥59,098 million in the fiscal year
ended March 31, 2022) is used as the performance indicator because it
most accurately reflects DBJ’s performance.

Corporate Governance(3) Executive retirement benefits are paid out upon retirement in an amountreflecting successful service over the longer term. Below is a description of
the compensation structure for members of the Board of Directors.
Compensation for full-time members of the Board of Directors consists offixed compensation, executive bonuses, and executive retirement benefits. To
maintain their independence, part-time members of the Board of Directors
receive fixed compensation only.
Compensation for full-time Audit & Supervisory Board members comprises
fixed compensation and executive retirement benefits. Compensation for parttime Audit & Supervisory Board members consists solely of fixed compensation.
The amount of compensation paid to members of the Board of Directors isdetermined after deliberation by the Board, within the maximum amountapproved at the General Meeting of Shareholders following discussions by theCompensation Committee. Compensation amounts are based on the position andresponsibilities of each member of the Board of Directors, with due consideration
given to social trends, DBJ’s financial performance, and other standards balanced
against employee salaries. The General Meeting of Shareholders held on June 29,
2017, passed a resolution that sets ¥270.0 million as the maximum annual amountfor total compensation paid to members of the Board of Directors. The Articles ofIncorporation limit the number of directors to 13 or less. The Board of
Directors has entrusted decisions about the compensation of each director to
the representative directors (chairman, president, and deputy president)
pursuant to a resolution passed by the Board of Directors on June 29, 2022, andthe rules governing director compensation created on October 1, 2008, andsubsequently updated on June 29, 2010. These decisions are made based on theadvice of the Compensation Committee, which was established as an advisory
body to the Board of Directors in order to ensure transparency and impartiality,and guidance that decisions about the compensation of each director must be
based on multiple criteria, such as consolidated net income. Retirement bonuses
for directors are disbursed upon approval by resolution of the General Meeting of
Shareholders. The Company’s first General Meeting of Shareholders, held on
September 22, 2008, passed a resolution that sets ¥80 million as the maximum
annual amount for total compensation paid to Audit & Supervisory Board members.
The Articles of Incorporation set the number of Audit & Supervisory Board members
to five or fewer.
The Compensation Committee was established in 2008 to ensure transparency
and objectivity in the process for determining compensation and a majority of membersof the Compensation Committee comprises outside executives. This composition
allows independent outside executives to be involved and give relevant advice.

Introduction

Value Creation Story

Strategy

Number of meetings held in fiscal 2022

Governance

59

Data

2

Compensation Committee Members in Fiscal 2022
Yasushi Kinoshita

Representative Director

Hajime Watanabe*1

Representative Director

Akio Mimura

Outside member of the Board of Directors

Kazuo Ueda*2

Outside member of the Board of Directors

Toshio Yamasaki*3

Outside Audit & Supervisory Board member*1 Hajime Watanabe retired on June 29, 2022.
*2 Kazuo Ueda resigned on March 31, 2023.
*3 Toshio Yamasaki resigned on June 29, 2022.

Fiscal 2022 Director Compensation*1
Number of people

Compensation, etc.*2(Millions of yen)

Members of the Board of Directors(Excluding outside members of theBoard of Directors)

10

227

Audit & Supervisory Board members(Excluding outside Audit & Supervisory
Board members)

2

41

Category

Outside executives

6

63

Total

18

332

*1 Numbers of persons paid and compensation amounts include two members of the Board of Directors who
retired and one member of the Board of Directors who resigned, in addition to one member of the Audit& Supervisory Board who resigned during fiscal 2022.
*2 Compensation amounts include provisions to reserves for executive retirement benefits.

Personnel Evaluation Committee
The Personnel Evaluation Committee, composed of outside members of theBoard of Directors and other outside experts, evaluates personnel proposals
on the selection of members of the Board of Directors and Audit & Supervisory
Board members.
Number of meetings held in fiscal 2022

1

Personnel Evaluation Committee Members in Fiscal 2022
Reiko Akiike

Co-Chairperson, The Boston Consulting Group K.K.

Masayuki Oku*1

Honorary Advisor, Sumitomo Mitsui Financial Group, Inc.

Kazuaki Kama

Senior Advisor, IHI Corporation

Hidetoshi Sakuma

Chairman (Representative Director) The Chiba Bank, Ltd.

Yoshizumi Nezu

Chairman, Tobu Railway Co., Ltd.

Akio Mimura

Outside Director

Kazuo Ueda*2

Outside Director*1 Masayuki Oku retired on June 29, 2022.
*2 Kazuo Ueda resigned on March 31, 2023.

60

Corporate GovernanceIntroduction

Advisory Board
Since DBJ’s establishment as a joint-stock company in October 2008, theAdvisory Board has been in place as an advisory body to the Executive
Committee, providing advice on overall management. Revisions to the DBJ
Act in 2015 stipulate for an indefinite period obligatory measures to beconsidered—in particular, requiring that DBJ conduct its operations in amanner that would not obstruct appropriate competitive relations with otherentities. Accordingly, this board is positioned as an advisory body to the Boardof Directors. As one of its roles, even more than before, the Advisory Board istasked with deliberating and evaluating important matters related to ensuringthat appropriate competitive relations are maintained with private financial
institutions. The Advisory Board is composed of the following outside membersof the Board of Directors and outside experts in fields including manufacturing,
infrastructure, regional communities, and finance.
The Advisory Board convened twice during fiscal 2022, discussing the outcome of measures set in motion under the Fifth Medium-Term Management
Plan based on the business plan for fiscal 2022, as well as expectations forongoing efforts to expand the scope of recipients of risk capital.
With these discussions, we will continue to proactively offer know-how aboutproviding risk capital, in addition to cooperating further with private financial
institutions. While leveraging the functions of the DBJ Group, we will tackle theissues faced by customers. Through events to exchange opinions and propermonitoring, we are coordinating with private financial institutions andadvancing initiatives while heeding appropriate competitive relationships.
Outside Experts (As of June 30, 2023)
Reiko Akiike

Co-Chairperson, The Boston Consulting Group K.K.

Kazuaki Kama

Senior Advisor, IHI Corporation

Takeshi Kunibe

Chairman, Sumitomo Mitsui Financial Group, Inc.

Hidetoshi Sakuma

Chairman (Representative Director), The Chiba Bank, Ltd.

Yoshizumi Nezu

Chairman, Tobu Railway Co., Ltd.

Outside Members of the Board of Directors (As of June 30, 2023)
Naoko Saiki

Special Advisor to the Minister for Foreign Affairs

Kosei Shindo

Representative Director and Chairman of Nippon Steel Corporation

Special Investment Operations Monitoring Board
One of the measures of the 2015 revisions to the DBJ Act was in regard to Special
Investment Operations. The act stipulates the establishment of a Special

Value Creation Story

Strategy

Governance

Data

Investment Operations Monitoring Board as an advisory body to the Board of
Directors. This monitoring board is tasked with deliberating projects andevaluating their performance in terms of appropriateness against policy objectives
and with emboldening private sector enterprises and complementing theiroperations while maintaining appropriate competitive relations. This board’s
members include outside experts from private sector financial institutions andcapital markets.
Moreover, in order to examine whether appropriate competitive relations
with other entities are being maintained, roundtable discussions are held
regularly with the Japanese Bankers Association, the Regional Banks
Association of Japan, and the Second Association of Regional Banks, includingthese entities’ private financial institution members.
This board convened twice during fiscal 2022. Regarding Special Investment
Operations, smooth progress in operations included decisions for investments
and loans totaling more than ¥1.0 trillion, which have had a steady impact onpriming the private sector. The board also gave a positive assessment of DBJ’s
supply of risk capital during the COVID-19 pandemic and said it would like to
see private financial institutions put more effort into supplying risk capital,
citing case studies about collaboration with regional financial institutions, support
for startup companies, and progress toward achieving carbon neutrality.
In light of these findings, through projects supported through joint fundswith regional financial institutions, DBJ will continue to provide expertise about
the supply of risk capital, train personnel with specialized knowledge, andcross-develop model projects across regions. DBJ will work to expand the
supply of risk capital by cooperating with private financial institutions throughrisk sharing techniques and proper business viability assessments in industrial
fields where DBJ has knowledge.
DBJ is engaging in Special Investment Operations for initiatives in projects
to create and nurture startup companies, advance open innovation, and realize
a green society. While paying attention to collaboration with private financial
institutions, DBJ will reinforce the supply of risk capital.
Outside Experts (As of June 30, 2023)
Nobuhiro Endo

Special Advisor, NEC Corporation

Takeshi Kunibe

Chairman, Sumitomo Mitsui Financial Group, Inc.

Hidetoshi Sakuma

Chairman (Representative Director), The Chiba Bank, Ltd.

Keiko Tashiro

Deputy President, Member of the Board, Daiwa Securities Group, Inc.

Tsuji Matsuo

Vice Chairman & Senior Executive Director, Japanese Bankers Association

Sadatoshi Tsumagari

Representative Director and President, Nippon Gas Co., Ltd.

Corporate GovernanceIntroduction

Value Creation Story

Strategy

Governance

Data

Executive Committee

AuditsThe Board of Directors has vested in the Executive Committee decision-making
authority regarding the execution of business. Accordingly, the Executive
Committee makes important management decisions, and deliberates agenda
items prior to meetings of the Board of Directors in order to facilitate theBoard’s decision-making. The committee met 32 times during the fiscal year
ended March 31, 2023. Moreover, a number of subcommittees have been
established as advisory bodies to the Executive Committee, and they havebeen delegated the authority to make decisions on certain matters.

Audit & Supervisory Board, Audit & Supervisory Board Members
The Audit & Supervisory Board comprises five members. The Companies Act
prescribes that a majority of Audit & Supervisory Board members be outside
members. In DBJ's case, three of the five are outside members. DBJ offices
contribute three members (two members proper to DBJ and one an outside
member). The Audit & Supervisory Board and Audit & Supervisory Board
members audit the execution of duties by members of the Board of Directors,
based on their audit policy and audit plans.
Audit & Supervisory Board members attend Board of Directors’ and other important meetings and may query the execution of business by members of the Board of
Directors, peruse documents, and conduct audits at branches and subsidiaries.
Specialist staff have been assigned to the Audit & Supervisory Board Office,which was created under the supervision of the Audit & Supervisory Board, toassist the Audit & Supervisory Board members, including outside members, in
performing their duties.

Committees under the Executive Committee
Name

Role

ALM & Risk
Management
Committee

This committee deliberates and makes decisions pertaining toportfolio risk management and asset/liability management.

General Risk
Management
Committee

This committee deliberates and makes decisions on important
items related to operational risk management, system risk management, legal compliance, responses to antisocial forces, client
protection management, and other important items.

Committee on
Investment and Loan
DecisionsThis committee handles, deliberates, and makes decisions related
to investments and loans, overseas business strategy, andoperations and management conditions.

New Operation
Screening Committee

This committee deliberates and makes decisions on thecommencement of initiatives involving new businesses.

This panel handles the advance deliberation on and monitoring ofAdvisory Panel on
investments and loans as well as deliberations on overseas
Investments and Loansbusiness strategy and operations and management conditions.
Sustainability
Committee

This committee deliberates on items related to both economic andsocial value as well as dialogue with stakeholders.

Investment
Management
Committee

This committee monitors investment projects and enhances themonitoring system, as well as discussing planned proposals forinvestment policies.

Internal Audits
DBJ has established the Internal Audit Department under the direct supervision of the president and CEO of DBJ and independent of other operating
departments. The department conducts inspections to ensure the appropriateness and effectiveness of internal controls, including overall operational
compliance and risk management, and performs evaluations and recommends
improvements. The Internal Audit Committee deliberates and decides audit
plans, audit reports, and other important matters related to internal audits, andthis information is reported to the Board of Directors. As of June 28, 2023, 20
people belonged to the Internal Audit Department.
Accounting Audits
DBJ has in place an agreement whereby Deloitte Touche Tohmatsu LLC
conducts accounting audits as the Company’s accounting auditor in accordancewith Article 396, Paragraph 1 of the Companies Act and Article 193, Paragraph
2 (i) of the Financial Instruments and Exchange Act.
Three-Pronged Auditing Approach
DBJ’s Audit & Supervisory Board members, the Internal Audit Department, andthe accounting auditor periodically and as necessary exchange opinions and information, and communicate in an effort to ensure effective and appropriate audits.

61

62

Introduction
Members of the Board of Directors,
Audit & Supervisory Board Members, and Executive Officers

Value Creation Story

Strategy

Governance

Data(As of the end of June 2023)

Members of the Board of Directors

President and CEO

Deputy President

Deputy President

Seiji Jige

Mitsuru Ota

Norifumi Sugimoto

1986: Joined Japan Development Bank
2011: Executive Officer in charge of Special
Missions
2013: Executive Officer, Head of Corporate
Planning & Coordination Department
2015: Managing Executive Officer of DBJ
2018: Member of the Board of Directors,
Managing Executive Officer of DBJ
2020: Deputy President of DBJ
2022: President and CEO of DBJ

1983: Joined the Ministry of Finance
2020: Vice-Minister of Finance2023: Deputy President of DBJ

1988: Joined Japan Development Bank
2013: General Manager, Secretariat Office
2015: Executive Officer, Head of Corporate
Planning & Coordination Department
2018: Managing Executive Officer of DBJ
2020: Member of the Board of Directors,
Managing Executive Officer of DBJ
2022: Deputy President of DBJ

Member of the Board of Directors,
Managing Executive Officer

Member of the Board of Directors,
Managing Executive Officer

Member of the Board of Directors,
Managing Executive Officer

Tsutomu Murakami

Katsushi Kitajo

Hiroshi Shimizu

In charge of Corporate Planning & Coordination
Department, Information Resources Department,
General Affairs Department

In charge of Business Planning & Coordination
Department

In charge of Risk Management Department,
Accounting Department, Credit Analysis
Department, Legal Affairs & ComplianceDepartment

1988: Joined Japan Development Bank
2012: General Manager, Structured Finance Group
2015: General Manager, Secretariat Office2017: Executive Officer, Head of Human Resources
Management Department
2019: Managing Executive Officer of DBJ
2021: Member of the Board of Directors,
Managing Executive Officer of DBJ

1990: Joined Japan Development Bank
2017: Head of Business Development Department
of DBJ
2019: Executive Officer, Head of Human Resources
Management Department of DBJ
2021: Managing Executive Officer of DBJ
2022: Member of the Board of Directors,
Managing Executive Officer of DBJ

1988: Joined The Japan Development Bank
2013: General Manager, Syndication Group
2015: General Manager, Regional Planning
Department
2016: Executive Officer, Head of Business Planning& Coordination Department
2018: Managing Executive Officer(Head of Kansai Branch) of DBJ
2021: Managing Executive Officer of DBJ
2023: Member of the Board of Directors,
Managing Executive Officer of DBJ

Member of the Board of Directors,
Managing Executive Officer

Member of the Board of Directors,
Managing Executive Officer

Shoichiro Kubota

Takeshi Harada

In charge of Strategic Finance Department,
Growth & Cross Border Investment Department,
Regional Investment Department,
Business Development Department

In charge of Treasury Department, Syndication &Credit Trading Department, Financial Institutions
Department

1990: Joined Japan Development Bank
2014: Head of Real Estate Finance Department
2018: Executive Officer, Head of Growth & Cross
Border Investment Department
2020: Member of the Board of Directors,
Managing Executive Officer of DBJ

1988: Joined the Ministry of Finance2017: Councillor of the Cabinet Secretariat,
Deputy Director of the Office for the
Promotion of Privatization of Postal Services,
Cabinet Secretariat
2019: Director-General, Tohoku Local Finance
Bureau2021: Member of the Board of Directors,
Managing Executive Officer of DBJ

Outside Member of the Board of Directors

Outside Member of the Board of Directors

Kosei Shindo

Naoko Saiki

Representative Director and Chairman of
Nippon Steel Corporation

Special Advisor to the Minister for Foreign Affairs

1973: Joined Nippon Steel Corporation
2009: Representative Director, Vice President of
Nippon Steel Corporation
2014: Representative Director, President of
Nippon Steel & Sumitomo Metal
Corporation (now Nippon Steel Corporation)
2019: Representative Director and Chairman of
Nippon Steel Corporation (current position)
2023: Outside Member of the Board of Directorsof DBJ (current position)

1982: Joined Ministry of Foreign Affairs
2017: Director-General, Foreign Service Training
Institute, Ministry of Foreign Affairs
2020: Visiting Professor, University of Tokyo,
Graduate School of Public Policy
2020: Outside Director, Sojitz Corporation(current position)
2020: Outside Audit & Supervisory Board Memberof DBJ
2023: Special Advisor to the Minister for
Foreign Affairs (current position)
2023: Outside Member of the Board of Directorsof DBJ (current position)•T he Board comprises 13 men and two women (13.3% ratio of women on the Board of Directors and Audit & Supervisory Board).
•S tandards and policies related to independence in the selection of outside members of the Board of Directors and outside Audit & Supervisory Board members are not applicable.
•D irectors Kosei Shindo and Naoko Saiki are outside members of the Board of Directors in accordance with Article 2, Paragraph 15 of the Companies Act.
• Kosei Shindo, representative director and chairman of Nippon Steel Corporation, is an outside member of the Board of Directors of DBJ. DBJ has no special relationship with Mr. Shindo, and its business with Nippon Steel Corporation is conducted normally. Outside
director Naoko Saiki is also an outside director of Sojitz Corporation. DBJ has no conflicts of interest with Sojitz Corporation, and its business is conducted normally with the Company. DBJ has no special-interest relationship with any other of its outside members of theBoard of Directors or outside Audit & Supervisory Board members.
•D BJ has signed liability limitation agreements with its outside members of the Board of Directors and the Audit & Supervisory Board, based on Article 427, Paragraph 1, of the Companies Act.

Members of the Board of Directors,
Audit & Supervisory Board Members, and Executive Officers

Introduction

Value Creation Story

Strategy

Audit & Supervisory Board Members

Governance

Data

Messages from
Outside Members of
the Board of Directors
Outside Director

Kosei Shindo

Audit & Supervisory Board Member

Audit & Supervisory Board Member

Kazushige Ikeda

Koyo Nakamura

1991: Joined Japan Development Bank
2015: General Manager, General Affairs
Department
2017: President and CEO of
DBJ Real Estate Co., Ltd.
2018: General Manager,
Human Resources Management
Department
2020: Executive Officer, in charge ofInternal Audit
2021: President and CEO of
DBJ Digital Solutions Co., Ltd.
(formerly Consist, Inc.)
2023: Audit & Supervisory Board
Member of DBJ

1992: Joined Japan Development Bank
2016: General Manager, Minami-Kyushu
Branch2019: General Manager, Accounting
Department
2021: Head of Kyushu Branch2023: Audit & Supervisory Board
Member of DBJ

Outside Audit & Supervisory Board
MemberOutside Audit & Supervisory Board
MemberOutside Audit & Supervisory Board
MemberHitoshi Sato

Masato Dogauchi

Hiroko Kaneko

1984: Joined The Sumitomo Trust andBanking Co., Ltd.
2015: Managing Executive Officer of
Sumitomo Mitsui Trust Bank,
Limited2021: Director, Senior Managing
Executive Officer of Sumitomo
Mitsui Trust Bank, Limited
2022: Audit & Supervisory Board
Member of DBJ

1984: Associate Professor,
The University of Tokyo
1996: Professor, Graduate Schools for
Law and Politics, Faculty of Law,
The University of Tokyo
2004: Visiting Professor, Waseda Law
School, Waseda University
2005: Professor, Waseda Law School,
Waseda University,(current position)
2011: Senior Counsel, Nagashima Ohno
& Tsunematsu
2016: Professor Emeritus, The Universityof Tokyo2020: Outside Audit & Supervisory
Board Member of DBJ(current position)
2021: Senior Counsel, T&K Partners(current position)

1980: Joined The Sapporo Television
Broadcasting Co., Ltd.
1989: Joined Ota Showa Audit
Corporation (currently Ernst &Young ShinNihon LLC)
2018: Professor, Graduate School of
Accountancy, Waseda University
2018: Outside Auditor, The Shoko
Chukin Bank, Ltd.
2019: Outside Director, Kanagawa Chuo
Kotsu Co., Ltd. (current position)
2020: Outside Auditor, Mitsubishi UFJ
Lease & Finance Co., Ltd.
2021: Outside Director, Mitsubishi HC
Capital Inc. (current position)
2022: Outside Director, The Yokohama
Rubber Co., Ltd. (current position)
2023: Outside Audit & Supervisory
Board Member of DBJ(current position)•A uditors Hitoshi Sato, Masato Dogauchi, and Hiroko Kaneko are outside members of the Auditor & Supervisory
Board in accordance with Article 2, Paragraph 16, of the Companies Act.
•O
 utside member of the Auditor & Supervisory Board Hiroko Kaneko is an outside director of Kanagawa Chuo
Kotsu Co., Ltd., an outside director of Mitsubishi HC Capital Inc., and an outside director of The Yokohama
Rubber Co., Ltd. DBJ has no special relationship with Ms. Kaneko, and its business with Kanagawa Chuo Kotsu
Co., Ltd., Mitsubishi HC Capital Inc., and The Yokohama Rubber Co., Ltd. is conducted normally.

I became an outside director of
DBJ in 2023. I have commented
on the appropriateness of the
DBJ Group’s business execution
at the Special Investment
Operations Monitoring Board.
Amid wide-ranging social issues
in these times of increasing
uncertainty, I will do my best to
provide advice about
governance from multiple
perspectives in the context of
the DBJ Group’s organizational
management as it seeks to help
solve these social issues.
Outside Director

Naoko Saiki

Executive Officers (Excluding Those Who Are Concurrently Members of the Board of Directors)
Managing Executive Officer

Managing Executive Officer

Managing Executive Officer

Managing Executive Officer

Managing Executive Officer

Toshiyasu Takazawa

Seiji Tomosada

Tomoya Sato

Takao Isozaki

Masao Masuda

In charge of Structured Finance
Department, Economic & Industrial
Research Department, Regional
Research & Planning Department

In charge of Corporate Finance
Department, Division 3, Hokkaido
Branch, Niigata Branch, Tokai Branch

In charge of Corporate Finance
Department, Division 5

In charge of Corporate Finance
Department, Divisions 1 and 6

In charge of Corporate Finance
Department, Division 2, Sustainable
Solution Department

Managing Executive Officer

Managing Executive Officer

Managing Executive Officer

Managing Executive Officer

Fumiyo Harada

Michiyo Machida

Yoshiyuki Takada

Hirofumi Maki

In charge of GX-related divisions (Chief
Sustainability Officer), overseeing ofCorporate Finance Department, Divisions
4 and 5, Research Institute of Capital
Formation, Minami-Kyusyu Branch

In charge of Corporate Finance
Department, Division 4

In charge of Urban Development
Department, Real Estate Finance
Department, Tohoku Branch,
Hokuriku Branch

In charge of Kansai Branch, Chugoku
Branch, Shikoku Branch, Kyushu Branch

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Isao Nishio

Shingo Kobayashi

Yuichiro Mori

Shinji Ohno

Wataru Miyanaga

In charge of Financial Institution

Head of Human Resources Management
Department

Head of Business Planning &Coordination Department

In charge of Internal Audit

Head of Economic & Industrial Research
Department

Executive Officer

Executive Officer

Executive Officer

Masakazu Naruse

Tsuyoshi Kajimura

Tetsuji Ito

Head of Corporate Planning &Coordination Department

Head of Credit Analysis Department

Head of Corporate Finance
Department, Division 5

I was appointed an outside
director in 2023, and I feel theheavy responsibility of thisposition. In light of the increasingly
challenging international situation and diversifying risks,
I will leverage my knowledge andproactively fulfill my duties toreinforce governance based ona medium- and long-term
perspective. With the DBJ
Group’s pursuit of balancing
economic and social value, I
intend to provide appropriate
advice and oversight of initiatives
for solving global issues,
including carbon neutrality, andcollaboration based on dialogue
with diverse stakeholders.

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Compliance

Introduction

Value Creation Story

Strategy

Governance

Data

Related Material Issues
Strengthening of thebusiness foundation
for supplying risk capital

Basic Stance on Compliance
DBJ believes that compliance is both at the heart of our corporate management and that it complements our business model and strategy, like two sidesof the same coin. In addition, compliance risk must be properly managed in
our organization’s overall governance and control structure in implementing
our corporate philosophy. We feel that compliance is achieved when every
employee and executive actively engages in their work with complianceforemost in their minds.
Business Conduct and Compliance

The DBJ Group is a unique financial group which provides financing, investment, advisory and consulting services, asset management, and various otherfinancial services. While reinforcing collaboration within the Group, DBJ
creates proactive and advanced business and core strategies. As a financial
institution, DBJ’s first duty is to address the expectations of its customers.
While communicating closely with customers, DBJ adheres to customer-oriented
business conduct while being sensitive to the demands placed on it by society
and complying with laws and regulations. DBJ conducts operations throughappropriate functions to mitigate conduct risk under the Three Lines of
Defense model (operations, management, and internal audits). To achieve ourcorporate philosophy, all employees and executives engage in work whilepursuing both economic and social value in accordance with our Code of
Conduct (Action Guidelines), the basis for decisions and behavior by Group
employees and executives.

managers and function as contact points for reporting compliance matterswhile centralizing such matters within their departments. Through complianceofficers, relevant departments in charge of compliance provide advice andguidance to each department when necessary, with the aim of ensuring
compliance. In order to quickly discover and resolve any compliance-related
issues, DBJ has set up an internal reporting channel to relevant departments
and Audit & Supervisory Board members, which circumvents the normal
reporting channels in the organizational structure. DBJ has also created an
external reporting channel through a law office.
In light of revisions to the Whistleblower Protection Act, DBJ is updating
its protections for whistleblowers. DBJ aims to improve the credibility of its
whistleblowing system, and is encouraging Group companies to adopt
whistleblowing systems based on DBJ’s system.
Internal Reporting System
Board of Directors

Executive Committee

Audit & Supervisory
Board members

General Risk Management
Committee

Relevant departments in charge of compliance

Compliance Framework

The DBJ Group has determined basic policies and rules for compliance,
creates and distributes compliance manuals for employees and executives tofollow, and conducts training and explanatory sessions to spread awareness ofcompliance. Each fiscal year, all DBJ Group companies design complianceprograms and evaluate and implement concrete compliance action planstailored to their particular business characteristics.
DBJ has established relevant departments that report on the status ofcompliance with laws and regulations to the Executive Committee and Boardof Directors. Compliance officers have been assigned to each department toensure compliance by employees and executives at each department.
Compliance officers are in charge of internal management as internal

Compliance officers at all departments andGroup subsidiaries
Staff

Regular reporting channel
Internal reporting
Compliance hotline

Outside attorney

Compliance

Compliance Practices

The DBJ Group believes compliance with laws and regulations is essential for
maintaining the customer’s trust and ensuring the soundness and fitness of its
business operations. We recognize compliance as one of our most importantmanagement priorities. Employees and executives are keenly aware of DBJ’s
public mission and social responsibilities, as well as initiatives to mitigate
conduct risk. We engage in our business fairly, in good faith, and in compliancewith not only all laws, regulations, and rules but also social norms for supplying
risk capital or pioneering initiatives.
Measures to Prevent Insider Trading
In the provision of various financial services including investments and loans,
the DBJ Group believes that complying with insider trading regulations isessential to maintaining trust. For example, we have created rules for employees
and executives to follow when trading in securities. Moreover, DBJ has
established systems for preventing insider trading, as demonstrated by ourformulation of strict procedures for confirming and executing transactions in
our investment operations. In research operations, we manage and handle
corporate information carefully.
Elimination of Anti-Social Forces
The DBJ Group has a basic policy of not having any relationships with
anti-social forces, and resolutely coping with them in cooperation with thepolice and other external institutions. Our rules and training programs havethus been carefully crafted to prevent relationships with anti-social forces.
DBJ thoroughly assesses and manages this risk for each project and takes
appropriate measures when necessary while communicating with special
external institutions.
Anti-Money Laundering (AML) and Combating the Financing of Terrorism(CFT) Measures
As it develops business worldwide, DBJ understands the importance of taking
measures to prevent money laundering and the financing of terrorism. It has
been reinforcing these measures based on guidance from the Financial Action
Task Force (FATF) and the supervisory authorities. Although DBJ does notengage in foreign currency transactions or accept deposits, DBJ implements
risk assessments as if it did, and takes steps based on the risks that would be
involved. DBJ has systems in place to ensure that proper procedures are taken,

Introduction

Value Creation Story

Strategy

GovernanceData

periodically conducts risk management operations, and provides thoroughtraining in these for its employees and executives. We also strive tocontinuously improve this structure by evaluating a variety of measures.
Initiatives to Prevent Bribery and Corruption
Due to the public nature of DBJ, the DBJ Act stipulates that executives andemployees must not receive improper compensation, and internal rules define
matters that warrant caution when executives and employees come into
contact with clients and other parties. In addition to preventing bribery andcorruption at DBJ, we take steps to prevent involvement in the bribery andcorruption of third parties and other entities, including recipients ofinvestments and loans.
Customer Protection Management

The DBJ Group has identified “the customer’s perspective” as a key element of
its Code of Conduct (Action Guidelines). By taking the customer’s perspective,
we endeavor to improve customer protections and convenience. Furthermore,
we have created basic policies for customer protections from the standpoint of
ensuring the soundness and fitness of our operations. Accordingly, we havetaken a management posture for ensuring customer protections. Employees
and executives provide support to customers by explaining and providing
appropriate and adequate information to them.
Management of Conflicts of Interest
When providing customers with financing, investment, consulting and advisory
services, asset management, and other financial services, the DBJ Group has
systems in place for identifying and managing transactions in order to prevent
conflicts of interest and act fully in the interests of customers, based on thetransaction type and degree of risk. When obtaining consent from customers
for a transaction, we provide them with accurate and appropriate information.
Management of Customer Information
In addition to following legal requirements and rules about sharing customer
information among Group companies, preventing insider trading, andmanaging conflicts of interest, the DBJ Group has created management
structures and systems for handling customer information, with particularattention paid to minutiae in order to maintain the customer’s trust.

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66

Risk Management

Introduction

Value Creation Story

Strategy

Governance

Data

Related Material Issues
Strengthening of thebusiness foundation for
supplying risk capital

Risk Management System
DBJ has a risk management system in place designed to handle a variety of
specific risks, with the aim of maintaining the soundness and creditability ofmanagement as it pursues business based on management plans. Specifically,risks are identified, evaluated, monitored, and controlled in each risk category
and in comprehensive risk areas, and are managed within the scope of ourmanagement capabilities from a comprehensive understanding of each risk.
The Board of Directors sets out basic policies for comprehensive risk management, receives reports about risk management conditions, and ensures theeffectiveness of risk management functions. The Executive Committee creates
related rules based on these basic policies and deliberates on matters ofimportance that directly relate to management policies. In line with these basic
policies and rules, the ALM & Risk Management Committee discusses andmakes decisions on matters essential to the risk management system for financial
risk, such as credit risk, while the General Risk Management Committee deliberates
on non-financial risk, such as administrative risk. Both committees meet regularly,
and whenever necessary, conduct risk monitoring.

Overview of Risk Management System
Board of Directors

Committee on Investment and Loan Decisions
New Operation Screening Committee

Executive Committee
Advisory Panel on Investments and Loans
Sustainability Committee
Investment Management Committee

ALM & Risk Management Committee

General Risk Management Committee

Credit risk

Operational risk

Investment risk

System risk

Country risk

Compliance and legal risk

Market risk

Countermeasures for anti-social forces

Market credit risk

Countermeasures for laundering money andfunding terrorist organizations

Liquidity risk

Customer protection management

Comprehensive Risk Management
We measure the amount of each type of risk using uniform and logical methodologies to the greatest extent possible, while considering the uniqueness ofeach risk category. As the sum total of this risk, comprehensive risk is managed
within the context of our risk guidelines. These risk guidelines are determined by
the Executive Committee and reflect risk conditions in the existing portfolio andlatest business plans, within the framework for capital allocation based on theamount of our own capital.
Credit Risk
Credit risk refers to the risk of sustaining losses as a result of a decline in or lossof the value of assets due to deterioration in the financial condition of theborrower. DBJ provides corporate loans and non-recourse loans, making credit
risk a significant risk category, and DBJ conducts credit management of
individual projects as well as Bank-wide portfolio management accordingly.

Credit Administration of Individual Loans
When making an investment or loan, DBJ examines the entity’s project viability
and the project’s profitability from a fair and impartial standpoint. Based on the
Banking Act and the Act on Emergency Measures for the Revitalization of
Financial Functions (Act No. 132 of 1998), DBJ carries out independent asset
assessments in an effort to properly grasp credit risk in a timely fashion. The
results of self-assessments are subject to an audit by an auditing corporation, arereported to management, and used in the monitoring of debtors. The sales andcredit analysis departments hold separate roles in the screening and administering of credit for individual projects, and each department keeps the operationsof the other in check. The Committee on Investment and Loan Decisions meetsas needed to deliberate important issues concerning the management andoperation of individual projects. These mutual checking functions serve to ensure
the appropriateness of the finance operation and management system.

Risk Management

Introduction

Value Creation Story

Strategy

Governance

Data

Borrower Rating System
DBJ’s borrower rating system measures creditworthiness by combining an evaluation point rating and a borrower category rating, with the results quantifying a
potential client’s credit circumstances.
The evaluation point rating selects indicator and evaluation categories that are common across all industries, scoring the creditworthiness of the potential borrower
quantitatively and qualitatively. On the other hand, the borrower category rating measures specific items related to the borrower, looking at the borrower’s realistic
financial condition, cash flows, and debt repayment history, generating a comprehensive assessment of a borrower’s repayment capacity.
Borrower Rating Classifications
Borrower
category

Borrower
ratingNormalborrowers

1–8

These are borrowers with favorable business conditions who have been confirmed to have no particular problematic financial circumstances.

Borrowers
requiring
caution

9–11

Borrowers in this category are experiencing weak or unstable business conditions, or are having issues with their finances. These borrowers
need to be managed with caution.

Substandard
borrowers

12

Either some or all of the debt of these borrowers requiring caution is under management.

Substandard claims

Borrowers indanger ofbankruptcy

13

Borrowers in this category are having financial difficulties but are not bankrupt. Management improvement plans and the like are progressing
poorly, and these borrowers are highly likely to fall into bankruptcy.

Doubtful claims

Effectively
bankrupt
borrowers

14

Although not legally or formally in bankruptcy, these borrowers are experiencing severe financial difficulties and are realistically falling into
bankruptcy as their lack of potential for restructuring has been confirmed.

Bankrupt
borrowers

15

These borrowers are in bankruptcy, legally and formally. Specifically, these borrowers are in bankruptcy or liquidation, under corporate
reorganization, bankruptcy proceedings or civil rehabilitation, or have had transactions suspended by a bill clearinghouse.

Definition

Claims classified under the
Financial Revitalization Act

Normal claims

Asset Self-Assessment System
Asset self-assessments are used to define asset classifications that will offset
recoverability risk or the degree of risk of value loss based on the borrower
rating, the corresponding borrower category, and the collateral or guarantee
status. Such assessments help DBJ establish timely and appropriate
amortization schedules and reserve levels.

Claims in bankruptcy,
reorganization claims,
and similar claims

Portfolio Management
DBJ performs a statistical analysis of data based on borrower ratings andcalculates the loan portfolio’s overall exposure to credit risk. Credit risk
exposure is classified as unexpected loss (UL), the maximum loss that could beincurred at a certain rate of probability minus the expected loss (EL), theaverage loss expected during a specific loan period.
Large borrowers are identified based on standardized loan balances definedby the borrower’s rating and monitored as required in accordance with credit
management policies.

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Risk Management

Introduction

Investment Risk
Investment risk refers to the risk of sustaining losses as a result of a decline inor loss of the economic value of assets due to worsening financial conditions
for entities receiving funds and to changing market environments.
DBJ invests in corporations as well as infrastructure and real estate assets
with the aim of earning both income gains and capital gains. As a source ofprofits, investments represent one of DBJ’s most significant risk categories, aswith credit risk. DBJ makes investment decisions and manages individual
investments as well as its Bank-wide portfolio accordingly.
Type

Major risks

Returns

Corporate mezzanine financing

Credit risk, etc.

Dividends, etc.

Corporate investment(including listed shares)

Business risk
Market risk

Capital gains

Real estate andinfrastructure, etc.

Risk of change in asset value
Operating risk at operating
entities

Income gains

Investment Policy
The Executive Committee determines our investment policy following deliberations each fiscal year by the Investment Management Committee, based on
our corporate philosophy of striking a balance between economic and social
value. This policy takes into consideration the balance in risks and returns in
Overview of Investment Management System
Executive Committee
Decision on investment policy

Investment Management Committee
Monitoring
Key projects
Debate over direction

Deliberation on investment policy

Project information

Monitoring data, etc.

Chief Investment
OfficeLoan and Investment
Management Division

Chief Investment
Management Office

Investment recommendation

Information gathering and hub function

Portfolio management andindividual project monitoring

Value Creation Story

Strategy

GovernanceData

the overall portfolio, while also reflecting the external business environment,
including changes in market conditions and industrial structure, and aperformance analysis of the existing portfolio.
Credit Management of Individual Projects
Investment decisions for individual projects are made after exit strategies are
determined in case a downside scenario materializes and targets are set for
returns based on the type of investment, which is also examined in order tomanage credit risk.
In project management, DBJ periodically monitors every project and has
established the Chief Investment Management Office to enhance monitoringof key projects and improve the management of investment risks in the overall
portfolio.
Portfolio Management
The bulk of assets in our investment portfolio consists of unlisted shares andmezzanine loans. We quantify our risk exposure to these assets with a focus onrisk characteristics in each asset category and differences in methods forrecouping investments.
Specifically, DBJ assesses credit risk based on asset type with the aim ofrecovering the investment, mainly through business cash flow. We also take
into account market risk for asset types where investments are likely to be
recovered when the asset is sold to a third party or the market. In these ways,
DBJ quantifies risks by applying methods to estimate credit risk and market risk.

Risk Management

Market Risk
DBJ classifies market risk as risk pertaining to investment and loan activities.
The main risks it manages are interest rate risk and foreign exchange risk. DBJ
does not have any trading-related risk (specified transactions).
Interest Rate Risk
Interest rate fluctuations can create mismatches on rates of interest on assets
and liabilities or on interest periods, creating the risk of reduced profits or therisk of losses. Interest rate risk can reduce the economic value of DBJ’s assets
or interest income.
Based on monitoring through multifaceted indices, such as value at risk (VaR)
and interest rate sensitivity analyses (duration and basis point value), as wellas asset liability management (ALM) policies established by the ALM & Risk
Management Committee, DBJ conducts comprehensive management of
current assets and liabilities to optimize net interest expenses and economic
value by adequately controlling interest rate risk.
Foreign Exchange Risk
Foreign exchange risk is the risk of loss due to volatility in exchange rates, andthis risk affects entities holding a net excess of assets or liabilities denominatedin foreign currencies. Foreign exchange risk derives from financing in foreign­currencies and issuing foreign currency bonds. However, DBJ uses foreignexchange swaps and other instruments to limit this risk.
Market Credit Risk
DBJ aims to reduce counterparty risk in derivatives transactions throughmargin transfers by means of a centralized exchange and mutual credit support
annex. Financial institution transactions are managed within the limits of thecreditworthiness of the counterparty. Transactions with operating companies
and other customers are managed within the framework of comprehensive risk
management for fluctuation risks and measurements of credit valuation adjustment (CVA) are based on accounting standards.

Introduction

Value Creation Story

Strategy

Governance

Data

Liquidity Risk
Liquidity risk is the risk of a mismatch occurring in the periods when funds
are used and raised or of an unexpected outflow of funds, causing differencesin the flow of funds (cash liquidity risk). Such situations make securing funds
difficult and create situations in which interest rates on borrowed funds aresubstantially higher than usual rates. At other times, because of market
complexities, entities in these circumstances may become unable to participate
in market transactions, compelling them to conduct transactions undersubstantially less favorable terms than would otherwise be the case. The riskof losses for these reasons is known as market liquidity risk.
As its main methods of acquiring funds, rather than carrying out short-term
funding by issuing commercial paper, DBJ relies on the stable procurement oflong-term funds from the Japanese government’s Fiscal Investment and Loan
Program and government-guaranteed bonds while issuing bonds and taking
out long-term loans.
To prepare for unforeseen cash flow crunches caused by shocks to financial
markets, DBJ manages funds to ensure sufficient cash on hand to coverplanned capital outflows under envisioned stress conditions. DBJ has
formulated countermeasures based on contingency plans in the event they
become necessary depending on the mode classification, and it has createddifferent categories for fund operation modes based on the degree of
constriction in cash flows.

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Risk Management

Operational Risk
DBJ defines operational risk as the risk of loss arising from internal processes,
people, or systems that are inappropriate or nonfunctioning, or from external
events. DBJ works to establish a risk management system to minimize risk andprevent potential risk from materializing. The General Risk Management
Committee has been established to deliberate topics concerning operationalrisk management.
Within operational risk management, DBJ conducts administrative risk
management and system risk management as described below.
Administrative Risk Management
Administrative risk refers to the risk of sustaining losses resulting from
employees neglecting to perform their duties correctly or from accidents,
fraud, and so on. To reduce or prevent administrative risk, DBJ prepares
manuals, performs checks on administrative procedures, provides educationand training, and uses systems to reduce the burden of administrative duties.

Introduction

Value Creation Story

Strategy

Governance

Data

System Risk Management
System risk refers to the risk of loss due to a computer system breakdown or
malfunction, system defects, or improper computer use. DBJ has implemented
the following internal processes to optimize system risk management andproperly manage risk with regard to system risk. The System Risk Management
Division is responsible for managing DBJ’s system risk centrally, based on its
system risk management regulations. By determining security standards froma variety of viewpoints—from information system planning and development
to operation and use—the department extends the risk management system
Bank-wide and addresses appropriate system risk management operations.
Over the past few years, cyberattacks have rapidly become more advanced
and cunning, and the DBJ Group is aware of the increasing risk of being
damaged by a cyberattack. Given these circumstances, the Group has set up
the Cyber Security Office and the DBJ Computer Security Incident Response
Team (DBJ-CSIRT) as a team dedicated to responding to cybersecurity incidents
across related divisions, centered on the Cyber Security Office and the
Corporate Planning & Coordination Department. DBJ-CSIRT is in charge of
responding to cybersecurity incidents within the DBJ Group as well as
maintaining and updating the necessary response systems.

Stress Tests
In addition to managing comprehensive risks based on risk exposure, DBJ
performs stress tests on its own capital adequacy in order to ensure
uninterrupted financial functions, including Crisis Response Operations, while
maintaining the soundness of management under stressful conditions. These
stress tests are also used in evaluating the degree of impact on our own capitalfrom the creation of and changes to medium-term management plans andbusiness plans, as well as in examining possible responses to various
management issues.

In these stress tests, DBJ sets scenarios assuming challenging conditions
such as a major economic recession or strong market stressors, comprehensively taking into account external conditions such as the latest forecasts for
economic conditions and the international situation, as well as DBJ’s financial
position and other factors. We evaluate whether financial functions can be
executed smoothly and adequate financial health maintained under stressful
conditions, by factoring in various scenarios for how risk exposure and riskweighted assets increase as a result of erosion of our own capital, and ofchanges in our portfolio of loans and investments. We also verify the adequacyof our cash liquidity.

Risk Management

Introduction

Value Creation Story

Strategy

Governance

Data

Business Continuity Initiatives
DBJ has prepared a business continuity plan (BCP) to protect the interests of
its stakeholders, including its clients, its shareholders, and its executives andemployees, as well as to fulfill its social mission. The BCP aims to ensure thecontinuity and rapid recovery of core operations in the event of emergencies,
such as natural disasters (in particular, large-scale earthquakes), novel influenza
and other pandemics, system failures, and power outages.
The BCP describes in an easy-to-understand format the role of the Disaster
Response Committee, work priorities, and specific actions and procedures tobe taken in the event of a disaster. When drawing up policies for business
continuity and restoration, the Company envisions specific incidents, such as
an earthquake underneath the Tokyo metropolis or a novel virus outbreak, andmethodically decides how to respond to anticipated damage in each disaster
scenario.
Measures to Ensure Business Continuity
We have prepared a variety of measures to ensure business continuity.
Enhanced System Robustness
We have ensured advanced security levels at the main center and created abackup center to operate in the event that the main center ceases to operate.
Multilayered Communication Procedures
We have introduced a safety confirmation system to quickly determine thewhereabouts and status of executives and employees even at night and on
holidays. In addition, we have distributed satellite telephones to key locations
and personnel to ensure multilayered communication procedures.

Chain of Command and Delegation of Authority
To assure that decision-making concerning the continuity of core operations is
prompt and certain in the event that it becomes necessary to execute theplans of the Disaster Response Committee, we have put in place a chain ofcommand and an alternative hierarchy through which authority can bedelegated.
Clarification of Initial Response and Procedures for Continuing or Recovering
Core Operations
For individual business units, we have established in advance the proceduresfor the initial response and the continuation or recovery of core operations sothat relevant divisions can respond quickly and with certainty on core
operations even when in a state of confusion.
Initiatives to Maintain or Improve BCP Viability
DBJ conducts various types of instruction and training of executives andemployees to maintain or improve the viability of its BCP. Furthermore,
employing a plan–do–check–act cycle, we revise the BCP to reflect training
results and recent information, and the Executive Committee reviews it
regularly and amends it as necessary.

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Consolidated Financial Summary

Introduction

Value Creation Story

Strategy

Governance

Data

Securities filing for 15th fiscal year
(Billions of yen)

Fiscal 2011

Fiscal 2012

Fiscal 2013

Fiscal 2014

Fiscal 2015

Fiscal 2016

Fiscal 2017

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

Consolidated(April 1, 2011 toMarch 31, 2012)(April 1, 2012 toMarch 31, 2013)(April 1, 2013 toMarch 31, 2014)(April 1, 2014 toMarch 31, 2015)(April 1, 2015 toMarch 31, 2016)(April 1, 2016 to
March 31, 2017)(April 1, 2017 toMarch 31, 2018)(April 1, 2018 toMarch 31, 2019)(April 1, 2019 toMarch 31, 2020)(April 1, 2020 toMarch 31, 2021)(April 1, 2021 toMarch 31, 2022)(April 1, 2022 toMarch 31, 2023)

Total income

318.7

340.0

361.6

339.0

358.6

285.4

291.7

301.2

289.1

269.4

310.3

374.5

Income before income taxes

99.2

115.6

165.7

153.0

185.1

122.5

127.1

128.1

78.9

73.0

86.1

135.3

Extraordinary profit/loss

10.9

0.6

0.2

0.6

1.5

(0.0)

2.2

(1.3)

4.0

0.7

2.3

0.5

Income before income taxes andminority interests

110.2

116.2

166.0

153.6

186.7

122.4

129.4

126.7

83.0

73.8

88.5

135.9

Total income taxes(31.9)(44.5)(40.8)(58.9)(57.6)(34.6)(35.0)(33.5)(31.5)(26.9)(29.4)(40.5)Net income attributable to ownersof the parent

77.3

71.3

124.3

92.7

128.9

87.6

91.9

91.9

50.4

45.2

57.6

92.7

Total dividend amount

37.3

35.2

30.8

22.5

29.2

19.7

22.1

21.0

9.9

8.1

15.6

18.2

Total assets

15,579.8

16,248.7

16,310.7

16,360.6

15,907.1

16,570.4

16,952.2

17,079.5

17,693.6

21,221.8

21,508.5

21,482.4

Loans

13,645.4

13,918.2

13,838.4

13,261.3

12,952.5

13,039.5

12,725.2

12,923.9

12,415.9

14,757.1

14,346.1

15,058.2

Securities

1,176.6

1,357.0

1,637.5

1,887.9

1,803.0

1,750.3

1,866.4

1,961.0

2,374.2

2,535.8

3,034.4

2,911.4

Total liabilities

13,118.8

13,710.1

13,682.9

13,613.3

13,022.9

13,584.2

13,842.1

13,783.2

14,259.6

17,518.4

17,676.5

17,518.6

Borrowed money

9,170.5

9,448.3

9,182.6

8,598.2

7,892.1

8,472.3

8,574.1

7,987.8

8,070.9

10,664.5

10,573.6

10,084.5

Debentures and corporate bonds

3,671.8

3,924.5

4,237.4

4,569.3

4,727.9

4,711.8

4,932.9

5,296.9

5,696.8

6,223.4

6,392.3

6,436.0

Total equity

2,461.0

2,538.5

2,627.7

2,747.2

2,884.2

2,986.2

3,110.1

3,296.3

3,434.0

3,703.4

3,832.0

3,963.7

Common stock

1,187.7

1,206.9

1,206.9

1,206.9

1,000.4

1,000.4

1,000.4

1,000.4

1,000.4

1,000.4

1,000.4

1,000.4

Capital adequacy ratio(Basel II, BIS standard)

18.56%

—

—

—

—

—

—

—

—

—

—

—

—

14.93%

15.30%

16.22%

17.54%

17.22%

16.81%

16.65%

17.26%

16.65%

16.97%

16.34%

Common equity Tier 1 capital ratio(Basel III, BIS standard)
Non-performing loan ratio*

1.47%

1.23%

0.99%

0.77%

0.64%

0.54%

0.47%

0.40%

0.46%

0.76%

0.70%

0.90%

Return on assets (ROA)

0.51%

0.45%

0.76%

0.57%

0.80%

0.54%

0.55%

0.54%

0.29%

0.23%

0.27%

0.43%

Return on equity (ROE)

3.18%

2.86%

4.83%

3.47%

4.60%

2.99%

3.03%

2.88%

1.51%

1.27%

1.54%

2.39%

Number of employees

1,270

1,315

1,391

1,407

1,435

1,546

1,631

1,650

1,703

1,781

1,809

1,839

*Based on the Banking Act and the Civil Rehabilitation Act, balance of accounts receivable excluding performing loans ÷ balance of accounts receivable. Under the previous standard before fiscal 2020, the formula for calculating this ratio wasbalance of risk-managed assets ÷ loan balance.
Investment and fund–raising flow
(non–consolidated)
Loans and investments (flow)Loans

2,927.0

2,652.4

2,943.3

2,544.2

3,027.7

4,012.6

3,153.4

3,790.8

3,951.8

5,786.7

3,222.6

4,021.9

2,849.0

2,524.5

2,805.1

2,262.7

2,861.3

3,805.8

2,973.6

3,490.4

3,401.5

5,484.2

2,994.6

3,830.3

Investments

78.0

127.8

138.2

281.4

166.3

206.7

179.7

300.4

550.3

302.5

227.9

191.5

Funds raised (flow)

2,927.0

2,652.4

2,943.3

2,544.2

3,027.7

4,012.6

3,153.4

3,790.8

3,951.8

5,786.7

3,222.6

4,021.9

691.7

502.2

1,307.5

1,129.9

1,639.7

1,526.1

1,005.0

2,051.4

1,546.1

1,191.4

1,078.0

2,588.6

Of which, recovered, etc.

First Medium-Term
Management Plan

Second Medium-Term
Management Plan

Third Medium-Term
Management Plan

Fourth Medium-Term
Management Plan

CHALLENGE 2010

Endeavor 2013

Supporting Japan’s Sustained Growth as a
Global Innovator

Initiate Change,
Create the Future

Fifth Medium-Term
Management Plan
Crisis Response
Operations during the
COVID-19 pandemic

Connect and Value Creation–Innovation for Sustainability–

Tokai Branch

Corporate Finance Department, Division 5

Energy Strategy Office

Corporate Finance Department, Division 2

Aerospace OfficeUrban Development Department
Financial Institutions Department
Business Planning & Coordination Department

Transition Business Promotion Office
Global Business Planning OfficeInnovation Promotion Office

Chief Industry
Strategy Office
Audit & Supervisory Board
Members/Audit & Supervisory
Board

Audit & Supervisory
Board Office

General Meeting of
Shareholders

Board of Directors

GovernanceCorporate Finance Department, Division 1

Corporate Finance Department, Division 3

Global Logistics Office

Executive Committee

Strategy

Corporate Finance Department, Division 4

Corporate Finance Department, Division 6

Healthcare Industry Office

Hokkaido Branch

Advisory Board

Value Creation Story

Tohoku Branch

Niigata BranchSpecial Investment Operations
Monitoring Board

The Chief Investment Management Office consists of the Corporate Planning & Coordination Department,
the Business Planning & Coordination Department, the Credit Analysis Department, the Risk Management Department,
and the Accounting Department.

Hokuriku Branch

Chief Investment Office

Chief Research Office

Representative Offices: Hakodate, Kushiro, Aomori, Toyama, Matsue, Okayama, Matsuyama, Oita
Overseas Subsidiaries: D
 BJ Singapore Limited, DBJ Europe Limited, DBJ Investment Consulting (Beijing) Co., Ltd.,DBJ Americas Inc.

Kansai Branch

Chugoku Branch

Shikoku Branch

Kyushu Branch

Minami-Kyushu Branch

Strategic Finance Department

Growth & Cross Border Investment Department

Regional Investment Department

Real Estate Finance Department

Structured Finance Department

Syndication & Credit Trading Department

Business Development Department

Sustainable Solution Department

Economic & Industrial Research Department

Regional Research & Planning Department

Research Institute of Capital Formation

Chief Investment
Management OfficeInternal Audit
Committee

Introduction

Tohoku Recovery & Growth Support Office

Kumamoto Recovery OfficeEnvironmental & Social Assessment Office

Economic Research Office

Industrial Research & Customer Solution Planning Office

Corporate Management & Accounting Research Office

Human Resources Management Department

Public Relations OfficeSecretariat Office

Risk Management Department
Corporate Planning & Coordination Department

Digital Strategy OfficeSustainability Management OfficeInformation Resources Department

General Affairs Department

Accounting Department

Cyber Security Office

Credit Analysis Department

Investment Evaluation Office
Settlement & Accounting Operation Office

Legal Affairs & Compliance Department

Treasury Department

Internal Audit Department

Organizational Structure (As of June 30, 2023)
Data

73

74

Corporate Information

Corporate Information

Introduction(As of March 31, 2023)

Name

Development Bank of Japan Inc.

Established

October 1, 2008

Head Office

Otemachi Financial City South Tower, 9-6,
Otemachi 1-chome, Chiyoda-ku, Tokyo 100-8178,
Japan
Tel: +81-3-3270-3211

Capital¥1,000,424 million (All capital is funded by theGovernment of Japan.)Number of
employees

1,839 (non-consolidated 1,270)

Value Creation Story

Strategy

Governance

Shareholder Information
NameFinance Minister
Total

Address

1-1, Kasumigaseki 3-chome,
Chiyoda-ku, Tokyo—

Summary of Changes to the DBJ Act after Conversion to a Joint-Stock Company
On October 1, 2008, DBJ transitioned from a special public corporation to a
joint-stock company. In preparation for full-scale privatization following thedisposal of all Japanese government-owned shares, DBJ has continued working
to enhance its corporate value through integrated investment and loan services.
These activities include providing long-term loans; equity, mezzanine financing,and other types of risk capital; and M&A advisory services.
On the other hand, shortly after DBJ’s conversion to a joint-stock company,
the global financial crisis and the Great East Japan Earthquake occurred. The
Japanese government called on DBJ to steadily mount large-scale Crisis
Response Operations. Due to these crises, the Development Bank of Japan Inc.
Act (Act No. 85 of 2007) was amended twice, with DBJ accepting an additional
increase in Japanese government capital. Also, by the end of fiscal 2014,
the Japanese government was committed to reviewing DBJ’s organization,
including its shareholdings, as stipulated by the revision.
Based on the deliberations by the Japanese government’s Study Panel
Concerning the Promotion of Expanding Growth Funding, the Act for Partial
Amendment of the Development Bank of Japan Inc. Act (Act No. 23 of 2015),
which was enacted on May 20, 2015, maintains the direction toward full-scale
privatization. At the same time, in order to fully ensure the provision of funding
in response to large-scale disasters and economic crises, the amended act
makes DBJ’s Crisis Response Operations obligatory for an indefinite period.
From the perspective of promoting the provision of growth capital to revitalize
regional economies and increase the competitiveness of enterprises, theamended act calls for DBJ to accept a certain amount of capital from theData(As of March 31, 2023)

Number of
Shares Held(Thousands ofShares)Percentage of Total Equity (%)

43,632100.0043,632100.00The Development Bank of Japan Inc. Act

Japanese government (industrial investment). This investment is to be used fora new scheme, Special Investment Operations, to strengthen and develop theFund for Japanese Industrial Competitiveness. In addition, with regard to theapplication of DBJ’s investment and loan functions toward crisis response andthe provision of growth capital, measures were introduced obliging theJapanese government to hold at least a certain percentage of DBJ’s shares.
As part of this structural revision, deliberations by the Japanese government’s Study Panel Concerning the Promotion of Expanding Growth Funding
covered such topics as DBJ’s proper implementation of Crisis Response
Operations, the importance of initiatives for providing growth capital (equity
and mezzanine financing) to address shortages in Japanese financial andcapital markets, and an evaluation of DBJ’s initiatives following its conversion
to a joint-stock company.
In light of discussions in 2019 by the Japanese government’s Study Panel
Concerning the Future Vision of Special Investment Operations at
Development Bank of Japan Inc. under the Act for Partial Amendment of theDevelopment Bank of Japan Inc. Act (Act No. 29 of 2020), which was enacted
on May 22, 2020, Special Investment Operations shall take the following
required measures:(1) Extend the investment decision term and government financing term fromMarch 31, 2021, until March 31, 2026, and(2) Extend the deadline for ending operations from March 31, 2026, until
March 31, 2031.

Group Company Information

Introduction

Value Creation Story

Strategy

Governance

Data

The DBJ Group provides diverse services that satisfy the needs of its customers.

Overseas Bases
DBJ Singapore Limited

DBJ Singapore Limited is a Singapore-based subsidiary. It mainly provides support for investments and loans as well as advisory services in the Asia-Pacificregion and also collects and disseminates information locally.

DBJ Europe Limited

DBJ Europe Limited is a London-based subsidiary. It mainly provides support for investment and loan services in Europe and also collects and disseminates information locally.

DBJ Investment Consulting(Beijing) Co., Ltd.

DBJ Investment Consulting (Beijing) Co., Ltd. is based in Beijing. It mainly offers support for investment and loan services in China and also collects and disseminates
information locally.

DBJ Americas Inc.

DBJ Americas Inc. is a local subsidiary based in New York, U.S.A. It mainly provides support for investment and loan services in the Americas and also collects anddisseminates information locally.

Investments / Securities / Asset Management
DBJ Capital Co., Ltd.

DBJ Capital Co., Ltd. is the venture capital arm of the DBJ Group. It mainly makes early-stage equity investments in venturefirms and supports their growth through hands-on management.

DBJ Securities Co., Ltd.

DBJ Securities Co., Ltd. is a securities subsidiary that assists the DBJ Group with investment and loan services. It supports
optimal capital procurement, centered on alternative product fields, provides asset management opportunities, and flexibly
fulfills diverse needs.

DBJ Asset Management Co., Ltd.

DBJ Asset Management Co., Ltd. Is an asset management company focused on real estate, private equity, and infrastructure
investments. It provides quality investment opportunities to investors with the comprehensive financial backing of the DBJ Group.

Research / Consulting
Japan Economic ResearchInstitute Inc.

Value Management Institute, Inc.

Japan Economic Research Institute Inc. is a comprehensive think tank that primarily conducts surveys and consulting. It meets
customer needs from a comprehensive viewpoint, leveraging synergies in its three survey fields: public, solutions, andinternational.
Value Management Institute, Inc. is a comprehensive think tank with strengths derived from its insight into advanced technologies
and analysis using proprietary economic models. It provides tailor-made solutions to a broad range of government policy issues.

Real Estate Management / IT Services / Shared Services
DBJ Real Estate Co., Ltd.

DBJ Real Estate Co., Ltd. handles administrative functions for the DBJ Group for office building leasing, rental conference
rooms, and business libraries.

DBJ Digital Solutions Co., Ltd.

DBJ Digital Solutions Co., Ltd. provides one-stop consulting services for developing, maintaining, and operating IT,
using technology to help solve social issues.

DBJ Business Support Co., Ltd.

DBJ Business Support Co., Ltd. is a shared services company of the DBJ Group. It supports DBJ Group companies businessby consolidating their administrative operations and also streamlining processes with its operational expertise.

75https://www.dbj.jp/en

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