Response to Natural Capital and Biodiversity

Our corporate activities are dependent on our “natural capital,” which is a blessing of the earth’s natural environment and the diverse creatures living in it. We recognize that conserving natural capital is an important issue closely related to climate change and that we must address the issue from both aspects of opportunity and risk management as a financial institution.

We have established an Environmental Policy and Investment and Lending Policies regarding Environmental and Societal Issues, and are taking initiatives for achieving a sustainable environment and society.

We also made an analysis of each sector’s dependencies on natural capital and their impacts utilizing ENCORE^*1 in accordance with the LEAP approach^*2 in order to identify relationships between our business and natural capital. We will deepen our analysis of nature-related risks and opportunities by utilizing our customers’ disclosed information, and promote comprehensive disclosure of our initiatives addressing environmental issues.

1. A tool to evaluate dependencies and impacts on nature
2. A systematic evaluation approach for nature-related risks and opportunities. LEAP is comprised of the four phases of Locate, Evaluate, Assess and Prepare.

Heat Map of Dependencies

• Many sectors are dependent on surface water, groundwater, and flood and storm control ecosystem services, of which “paper products and forest products” and “food and agriculture” sectors are strongly dependent on ecosystem services.

Heat Map of Impacts

• A wide range of sectors have a significant impact on environment-related capital through terrestrial ecosystem use and water use.