Sustainability Management
Basic Policy on Sustainability Initiatives
- Strive to enhance the Group’s medium- to long-term corporate value by balancing social value and economic value.
- In its business, undertake initiatives that are aligned with the Group’s areas of strength and characteristics.
- As a company listed on the Prime Market, respond appropriately to the expectations and demands of stakeholders.
Governance
Sustainability Promotion System
Under the supervision of the Board of Directors, Aozora has established a sustainability promotion system led by the Sustainability Committee to advance sustainability initiatives that are integrated with our overall management strategy.
The Bank’s Board of Directors is responsible for overseeing sustainability-related opportunities and risks. Comprised of directors with diverse backgrounds, including those with expertise and experience related to sustainability, the Board resolves matters regarding the setting and reviewing of Aozora’s Sustainability Targets, our management goals, covering areas on which Aozora Group focuses. In addition, the Board of Directors approves the results of the review of Key Sustainability Issues (Materiality and Core Foundations) and also reviews the progress being made on the promotion of sustainability.
Serving an executive function, the Sustainability Committee is chaired by the CEO, with the Executive Officer in charge of Sustainability Management serving as deputy chair. Meetings of the Sustainability Committee are attended by the CFO, CRO, and all other executive officers. The Committee is responsible for identifying and assessing sustainability-related opportunities and risks across the entire Group, considering specific measures and confirming their progress, and submitting proposals and reports to the Board of Directors as necessary.
The status of progress and achievement of Aozora’s Sustainability Targets is considered an important qualitative factor in determining remuneration of internal directors and executive officers.
Status of Sustainability Committee Meetings Held in FY2025
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Members |
CEO (Chairperson), the Executive Officer in charge of Sustainability Management (Deputy Chairperson), all executive officers including CFO, CRO, and Executive Officer in charge of Human Resources, Standing Audit & Supervisory Board Member, etc. |
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Number of meetings held |
6 |
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Main agenda items |
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Sustainability Policy Framework
Aozora’s management philosophy is to contribute to the development of society through the creation of new value-added financial services. To put this philosophy into practice, we have established a Code of Ethics and Conduct as a guideline to which all Aozora officers and employees must strictly adhere.
We have also put in place a Basic Policy on Sustainability Initiatives as a guideline for the Group’s sustainability-related activities and the cornerstone of its management structure and systems.
As a sustainability-related approach based on this code and these guidelines, we are promoting measures aimed at realizing our management philosophy by putting into action specific initiatives in business, operational, and social contribution activities in accordance with the Group’s Human Rights and Environmental policies.
Strategy
Materiality and Core Foundations
In light of social trends, the expectations as well as demands of stakeholders, and their importance to Aozora’s corporate management, Aozora defines Materiality as a key challenge area in terms of both opportunities and risks, and Core Foundations as items that underpin Materiality-based business operations.
Aozora’s ESG Support Framework
Aozora provides both financial and non-financial solutions to support customers’ initiatives to solve environmental, social, governance and other sustainability issues through the Aozora’s ESG Support Framework.
Promoting Sustainable Finance
Aozora has set the goal for sustainable financing at 2 trillion yen (including environmental financing of 1.5 trillion yen) by FY2035 (for 15 years) as part of Aozora’s Sustainability Targets.
Risk Management
Risk Appetite Framework / Key Risks
We have established a Risk Appetite Framework to appropriately manage risk toward achieving business strategies and financial plans, and to enhance corporate value in a sustainable way.
We have established an integrated risk management framework that categorizes risk by risk factors including credit risk, market risk, liquidity risk, and operational risk, and manage risk according to each risk characteristic to identify, evaluate, and control overall risk exposure.
Risks related to sustainability are also incorporated into each key risk category, which is updated annually, and used in discussions for business plans by the Board of Directors, Management Committee, and Sustainability Committee. We have specifically identified the following as key risks related to sustainability.
- Declining competitiveness due to changes in social/industrial structures: Deterioration in the Aozora Group’s corporate value resulting from a decline in its ESG rating; deterioration in the corporate value of investees and borrowers due to delays in addressing climate change and human rights issues and occurrence of associated losses
- Sustainability of human resources: Shortage and departure of human resources who are capable of responding to changes in the business environment or possess the skill sets necessary for our focus business areas
Investment and Lending Policies regarding Environmental and Societal Issues
Under our Investment and Lending Policies regarding Environmental and Societal Issues, we have in place policies on initiatives for addressing issues that may have a negative impact on the environment or society. By prohibiting or discouraging investments in, and financing to, companies or projects that may have a negative impact, we are taking appropriate measures to address social issues, including environmental and human rights concerns, while also mitigating risks within the Group itself.
The Policies are reviewed from time to time through discussions by the Management Committee and Sustainability Committee in response to changes in the business environment, societal demands, and business activities.
Aozora’s Structure for Implementing Environment/Society-focused Investments and Loans
In accordance with the investment and lending policies approved by the Management Committee, the Aozora Group reviews all investment/loan transactions to assess any risk to or negative impact on the environment and society. If a risk or negative impact is identified, the transaction is screened in terms of risk/impact severity as well as the customer’s efforts to resolve corresponding environmental and social issues, and then submitted to the Credit Committee or the Investment Committee for their approval.
Aozora supports its business divisions and branch offices in gathering information regarding customers’ consideration of and stance on addressing environmental and social issues by presenting a prepared checklist and sharing specific cases internally.
Metrics and Targets
Aozora’s Sustainability Targets
We have announced the establishment of Aozora’s Sustainability Targets as long-term management goals aimed at creating social and economic value and shared across the entire Group.
Aozora’s Sustainability Targets are comprised of 18 issues linked to three Materiality issues. We have set medium- to long-term numerical targets centered on Aozora’s focus areas and commit to contributing sustainably to the environment and society.
We regularly monitor the status of progress toward these targets, and also review any changes in target items, including updates and additions, as required. In March 2026, we updated target values, which included upward revisions to multiple items. We also added new targets such as “LBO finance origination/syndication amount,” “AUM of investment trusts and fund wrap products,” and “employee engagement score.”