Key Sustainability Issues (Materiality)

Any involvement in or neglect of human rights abuses may pose the risk of legal compliance violation, administrative penalty, as well as social criticism and damage to our reputation. While it is natural that we do not violate human rights as a business entity, it is extremely important to eliminate human rights abuse, discrimination, and corruption from all businesses and supply chains involving the Group and take proper measures through dialogue when improvements are necessary.

• Establishment and implementation of a human rights due diligence framework based on international norms (production of a human rights issues map)
• Further raising of awareness of human rights and elimination of harassment in the workplace
• Ensuring anti-bribery and corruption measures

• Number of human rights e-learning participants: 2,147 (FY2023)

Aozora has an important role and an opportunity to expand our business to support the structural transformation of customers who are taking on new challenges during the time of industrial transition by providing unique and value-added financial services and proactive involvement in their management through the promotion of Aozora’s Strategic Investments Business.

• Support for structural transformation through equity investments with a primary focus on engagement, M&A advisory, LBO finance, transition support, real estate business, etc.
• Support for solving management issues faced by regional financial institutions and their clients through Aozora’s network of regional financial institutions

• Number of equity investments with a primary focus on engagement: Total 130 transactions (FY2021-2025)

Aozora has an important role to play and an opportunity to expand its business by ensuring that all individuals and companies have access to the financial services they need to obtain opportunities for economic activity and by contributing to corporate growth and community revitalization, particularly focusing on the two areas of support for the growth of start-ups and support for companies’ business recovery and restart in the community.

• Support for funding with a focus on venture debt available through our venture capital subsidiary, Aozora Corporate Investment
• Business support that contributes to business expansion and increasing corporate value at each phase of growth (GMO Aozora Net Bank (GANB), B Spark)
• Support for companies’ business recovery and restart through recovery funds provided by Aozora Loan Services
• Strengthening of collaboration with regional financial institutions and other partners, investment in business recovery claims, and provision of solutions at each stage of recovery

• Number of venture-related investments: Total 130 (FY2021-2025)
• Number of business recovery fund-based transactions: Total 150 (FY2021-2025)

The accelerated advancement of digital technology is having irreversible and widespread effects on all companies and individuals, including the loss of existing business areas and lifestyle changes. The Group increases its corporate competitiveness and provides new opportunities for business expansion by advancing digital transformation (DX) within the Group and improving the productivity of operations and the quality of products and services, while focusing on services that support its customers’ DX.

• Provision of DX solutions and support for the growth of start-ups through B Spark, a DX support company for corporate customers, and GANB, a bank with a next-generation tech-first approach, and support for the growth of start-ups.
• Improvement of UI/UX and customer convenience in the BANK™ app and online services

• Appropriate management, storage, and utilization of diverse information assets (data) and strengthening of digital marketing
• Fostering open communications, improving business efficiency and productivity, and promoting working styles that are not bound by location
• DX talent development

• GANB Account openings by small businesses & start-ups: Total 200,000 (FY2021-2030)

• Number of DX talent development program participants: 172 (FY2023)

In Japan’s aging society, Aozora has an important role to play and an opportunity to expand its business by helping individuals lead fulfilling lives and pass on their assets to the next generation and by helping SMEs, which are a source of competitiveness in domestic industries, solve succession and human resource challenges for passing on the business to the next generation.

• Support for medium- to long-term wealth accumulation through the provision of Aozora Core Funds and other products
• Expansion of non-financial services to meet a wide range of customer needs, such as business succession, asset succession, and utilization of real estate

• Number of non-financial service customers per year: 3,000 (FY2025)
• Number of business and asset succession consulting contracts: Total 1,000 (FY2021-2025)

Improper corporate governance, neglect of compliance, triggering of damage to creditworthiness and delayed response to system failures are risks that have a material impact on all of the stakeholders involved in the operations of financial institutions as well as the sustainability of corporate management. It is extremely important to maintain management discipline and ensure soundness through the enhancement of the proper risk governance framework in response to external environmental changes and by upgrading compliance risk management.

• Enhancement of a risk management framework, maintenance of financial strength, and reinforcement of compliance
• Strengthening of an operational resilience framework (cybersecurity and crisis management)
• Strengthening and improving the effectiveness of internal audit governance
• Refinement of the crisis management structure and methods, implementation of support for multiple offices

• Number of cases opened by the Aozora Hotline whistle-blower program: 16 (FY2023)
• Number of compliance cases found: 0 (FY2023)

Any personnel shortage/outflow as well as insufficient progress on skill/expertise transfer to the next generation mainly due to the slow development of the HR system and working environment are risks that have a material impact on the sustainability of Aozora’s corporate management. On the other hand, in order to enhance corporate competitiveness, it is important to make investments in human capital that support Aozora’s value creation, such as the provision of highly professional and distinctive financial services.

• Developing, hiring, and deploying human resources in line with business strategies, and redeployment of human resources to focus areas
• Support for career development, creation of a more comfortable workplace, and high job satisfaction
• Creation of a work environment where personnel with a diverse range of backgrounds/values can play an active role; improvement of diversity, equity & inclusion

• Percentage of female managers: 20% (by March 31, 2028)
• Percentage of female deputy managers: 40% (by March 31, 2028)
• Percentage of eligible male employees taking childcare leave: 100% (by March 31, 2028)
• Percentage of non-Japanese managers: 3% (by March 31, 2028)
• Percentage of mid-career managers: Maintain 40% or higher