Sustainability Promotion
Executive Officer
in charge of Sustainability Management
The Aozora Group aims to create both social and economic value by promoting sustainability that is integrated with its management strategy in all of its financial services and activities as a business entity.
From a long-term perspective, we will enhance our corporate value by realizing a sustainable society and contributing to society, customers, shareholders, employees, and all other stakeholders.
Our Key Sustainability Issues (Materiality), which are the issues we must prioritize in order to realize our management philosophy, are incorporated in the business plans of each business group under the new Mid-term Plan “Aozora 2025,” and we have established a system to allocate resources in focus areas to steadily implement the plan.
We have made steady progress toward achieving Aozora’s Sustainability Targets set in September 2021 through our ambitious efforts. We revised the targets in conjunction with the formulation of the Mid-term Plan and announced them in May 2023. In addition to revising targets for the Group’s distinctive financial services and “Diversity, Equity, & Inclusion,” the deadline for achieving net zero CO₂ emissions as a business entity has been brought forward to FY2030, and a target for achieving net zero CO₂ emissions in our investment and loan portfolio has been newly set for FY2050. As part of our responsibility as a financial institution, we will promote the decarbonization of society as a whole by setting long-term targets.
Public awareness of sustainability has been growing over the past few years. The Group sees this as an important phase in making sustainability a personal matter for each individual so that it will impact society in a positive way on a daily practice basis. We will continue as one in our tireless efforts toward a better future and actively contribute to the sustainable development of society.
Basic Approach to Sustainability Promotion
Sustainability Governance
Under the supervision of the Board of Directors, the Group has established a sustainability promotion system led by the Sustainability Committee to advance stainability initiatives that are integrated with its management strategy.
The Sustainability Committee evaluates and decides on important Group-wide sustainability issues, such as identifying and reviewing Key Sustainability Issues (Materiality) and addressing climate change. Matters for deliberation are discussed and reported to the Board of Directors as necessary.
The Liaison Meeting of Group Sustainability discusses practical matters and shares general sustainability information with the participation of Group companies and affiliates in order to improve Group governance.
Status of Meetings Held in FY2022
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Sustainability |
Liaison Meeting of Group Sustainability |
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Members |
CEO (Chairperson), Executive Officer in charge of Sustainability Management (Deputy Chairperson), all executive officers, Standing Auditor and Supervisory Board member |
Executive Officer in charge of Sustainability Management (Chairperson), presidents of subsidiaries, representatives from relevant divisions of related initiatives |
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Number of meetings held |
9 |
5 |
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Main agenda items |
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(In addition to sharing information on the matters listed on the left with each Group company)
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Sustainability Promotion System
The Sustainability Management Division, which plans and oversees the initiatives of the entire Group, plays a central role in addressing sustainability issues by incorporating the measures for each item of Materiality in the Mid-term Plan into the annual plans of each division and implementing the PDCA cycle.
In April 2023, the Sustainable Business Office, a team specializing in sustainable finance and decarbonization consulting, was integrated into the Sustainability Management Division. Through this integration, we will (1) strengthen our business with a focus on climate change response, (2) complement each other through integrated management of our business and initiatives as a business entity, and (3) develop human resources for sustainability.
Sustainability Implementation Framework
(From April 2023)
Sustainability Policy Framework
Companies are expected to assume increasingly sophisticated and diverse roles regarding environmental and social issues, including environmental conservation, protecting human rights, eliminating unfair labor practices, and preventing corruption. Companies are also expected to fulfill environmental and social responsibilities not only in their own business activities but also throughout the supply chain. In particular, financial institutions are expected to contribute to solving environmental and social issues through their investment and loan portfolios.
The Group has developed a Code of Ethics and Conduct to be complied by all Group officers and employees to practice our management philosophy. Our Environmental Policy and Human Rights Policy have set forth policies for environmental protection and respect for human rights, including those of our supply chain, based on the Code of Ethics and Conduct.
Based on our Environmental Policy and Human Rights Policy, we have established the Aozora Bank Group Investment and Lending Policies regarding Environmental and Societal Issues for investments and loans (business-related) and the Outsourcing Policy for external procurement (operations-related), including the purchase of goods and services, including systems and facilities, and outsourcing of business.
In June 2023, we established a new Social Contribution Activity Policy as a guideline for social contribution-related activities, and systematically organized the significance and positioning of donations, volunteer activities, and other social contribution activities of the Group.
These policies are disclosed to all stakeholders.
Aozora Group’s
Sustainability Policy Framework
For the full text of each policy, please click the following links:
Investments and Loans that Take into Consideration Environmental and Societal Issues
The Aozora Group has established a set of “Investment and Lending Policies regarding Environmental & Societal Issues,” which provide for its “cross-sectoral” and “specific sector” policies regarding issues that may have a negative impact on the environment or on society. In January 2024, we revised the policies to specify our initiatives to actively provide transition finance and reinforce the perspectives of respect for human rights and conservation of biodiversity.
Policies regarding sectors that may have a negative impact on the environment or society
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Policy |
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Cross-sectoral |
Credit prohibited |
Businesses subject to the prohibition of financing through investments and loans
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Credit that requires close attention |
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Project finance (Equator Principles) |
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Specific sector |
Coal-fired power generation |
The Aozora Group will decline to provide financing for the construction of new coal-fired power plants or expansion of coal-fired power generation facilities. Meanwhile, the Group will proactively provide investments and loans to support its customers’ initiatives that contribute to the transition to a decarbonized society, including carbon dioxide capture, usage, and storage technologies. |
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Coal mining |
When considering making investments or loans for the development of a new coal mine, the Aozora Group will confirm the customer’s implementation of initiatives that take into account environmental and social issues. The Aozora Group will decline to make an investment or loan for mountaintop removal (MTR) coal mining which has a substantial impact on the environment as well as for the development of new coal mines that supply power generation operators with coal. |
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Oil and gas |
When considering making investments or loans for oil sands, shale oil and gas, oil and gas pipelines, and development in the Arctic Circle (the area 66°33’ north of the Equator), the Aozora Group will confirm the customer’s implementation of initiatives that take into account environmental and social issues. |
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Large-scale hydroelectric power generation |
When considering making investments or loans for new large-scale hydroelectric power generation (with an embankment of 15 meters or higher, as well as output of 30,000 kW or above), the Aozora Group will confirm the customer’s implementation of initiatives that take into account environmental and social issues. |
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Deforestation |
When considering making investments or loans for businesses involved in deforestation, including timber, pulp and paper production, the Aozora Group will confirm the customer’s implementation of initiatives that take into account environmental and social issues. |
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Palm oil |
When providing investments or loans for the development of palm oil plantations, the Aozora Group requests its customers to disclose their compliance with NDPE (No Deforestation, No Peat, No Exploitation). When considering making investments or loans for businesses associated mainly with the distribution of palm oil, the Aozora Group will confirm the customer’s implementation of initiatives that take into account environmental and social issues, including whether they have obtained RSPO (Roundtable on Sustainable Palm Oil) certification. |
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Tobacco manufacturing |
When considering making investments or loans for tobacco manufacturing, the Aozora Group will confirm the customer’s implementation of initiatives that take into account environmental and social issues regarding child and forced labor and health hazards. |
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Inhumane weapons |
The Aozora Group will decline to make an investment or loan for the manufacturing of inhumane weapons such as cluster munitions. |
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Nuclear power, plastics, shipping and mines |
When considering making investments or loans for related businesses, the Aozora Group will gather information regarding the customer’s implementation of, and stance on, initiatives that take into account environmental and social issues. |
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.
Outsourcing Policy
The Aozora Group has developed an Outsourcing Policy to promote environmentally and socially responsible outsourcing activities throughout the supply chain that conform with international standards such as the United Nations Global Compact and Guiding Principles on Business and Human Rights.
Based on this policy, Aozora will comply with all relevant laws and regulations in its outsourcing activities and implement fair, impartial, and transparent procedures based on the principle of free competition.
Overview of the Outsourcing Policy
- Fairness in choosing suppliers
- Compliance with laws, regulations, and social norms
- Consideration of the importance of human rights and environmental issues, such as climate change and biodiversity
- Collaboration and communication with suppliers
Initiatives to Promote Respect for Human Rights
The Group regards respect for human rights as one of its Key Sustainability Issues. While it is natural that the Group does not violate human rights as a business entity, we aim to fulfill our social responsibility by eliminating human rights abuse, discrimination, and corruption from all businesses and supply chains involving the Group and taking proper countermeasures through dialogue when improvements are necessary.
In June 2023, we made significant revisions to our Human Rights Policy to be complied by all Group officers and employees, and added new provisions on compliance with international standards such as the United Nations’ Guiding Principles on Business and Human Rights, specific details on what should be addressed for each stakeholder, and human rights due diligence and remedial measures.
Going forward, we will improve our implementation of human rights due diligence, develop a framework for respecting human rights in our operations, and continue to conduct educational programs for our employees to further raise human rights awareness throughout the Group.
Support for and Participation in External Initiatives
The United Nations Global Compact
Since 2022 Aozora Bank has been committed to the UN Global Compact corporate responsibility initiatives and its principles in the areas of human rights, labor, the environment and anti-corruption.
Inclusion in ESG Indexes (as of June 2023)
Evaluation by Third Parties
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