Response to Natural Capital and Biodiversity

We recognize the importance of the nature-related risks in our investments and loans, as our Group is indirectly linked to nature capital through its investments and loans.

To better grasp the relationship between the Group’s business and natural capital, we analyze our dependency and impact across various sectors in accordance with the LEAP approach^*1. Employing ENCORE^*2, we analyzed and evaluated the nature and degree of “dependency” and “impact” by sector.

Collectively, these analyses revealed that the Public Utilities, Raw Materials, and Food and Beverage sectors have a high degree of dependency and impact on water-related ecosystem services. Moreover, we are conducting research and analyses into water-related risks and countermeasures in business activities across the value chain by utilizing customers’ business activities and disclosure of information.

Moving forward, we will incorporate the results of the research and analyses into our risk management framework and in other areas, including our investment and lending policies.

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

Evaluation of Dependencies by Sector (Heat Map)

Evaluation of Impact by Sector (Heat Map)