Top MessageJAPANESE

Materiality (high priority issues) refers to events that have a material impact on a company’s value creation process. The SuMi TRUST Group promotes materiality management that identifies materiality issues that need to be addressed as priorities from a medium- to long-term perspective, and dealt with at the top level of management.

Materiality is identified both in terms of impact on the Group’s medium- to long-term enterprise value, and in terms of the impact of the Group on society through its relationships with stakeholders. In this process, we consider themes related to our management foundation, including governance, social themes, including relationships with employees and the community, and environmental themes that are directly related to resource and energy problems. Accordingly, materiality is a concept that overlaps with ESG (environmental, social, and governance).

One of the strengths of the Group is that we do not merely define materiality through slogans. Rather, the Sustainability Management Office of the Corporate Planning Department plays the role of an “in-house quasi-investor,” and engages in dialogue with related departments. This creates an opportunity for departments that have little direct dialogue with external institutional investors and stakeholders to become aware of issues from an investor perspective, and to examine specific measures to address these issues.

Materiality Identification and Practice

Internal Engagement in FY2016-2017

Theme Target Departments Engagement in FY2016 Results from FY2016/ Engagement in FY2017
Corporate
governance
Corporate Administration Department,
Corporate Secretariat
Relayed that investor interest in governance themes such as Board composition and director and executive officer compensation is extremely high, and provided information for strengthening governance systems Provided evaluation results on the Group’s governance reforms received from ESG research institutions, and relayed recent items of interest among investors and the Group’s issues from the perspective of investors
Enhancing
human capital,
increasing enterprise value
Human Resources Department Relayed the growing calls for disclosure on linkages between HR policies and enterprise value, given elevated investor concerns regarding human capital, and discussed countermeasures for the Group After engagement, prepared a map of the linkages between HR policies and enterprise value, and disclosed the information in an integrated report; continuously discussed methods to enhance the level of disclosure of content regarding human capital
Overseas
anti-bribery
Compliance Department Relayed the status of growing investor interest in this theme, amid stricter anti-bribery regulations in the US and other nations, and discussed the need to strengthen anti-bribery initiatives After engagement, commenced an investigation of anti-bribery measures, including those in Japan; conducted risk assessment, set policies, devised a prevention program, and commenced operations
Climate change Wholesale Business Planning Department,
Stewardship Development Department
Relayed the rapidly growing interest among international financial authorities, financial institutions, and institutional investors in climate change risks accompanying conclusion of the Paris Agreement, and discussed its impacts on our businesses Shared awareness regarding the loan and investment risks related to fossil fuels; engaged in in-depth discussions regarding project financing for coal-fired power generators
Stewardship report Stewardship Development Department Discussed the need for information disclosure on stewardship activities and ESG initiatives as fiduciary responsibilities to investors; deliberated on preparation of the Stewardship Report, and published the completed report
Improvement of client satisfaction Customer Satisfaction Promotion Department Shared information such as ESG evaluation agency assessments of CS activities, global disclosure trends in the banking sector, and the direction to take when establishing KPI
Long-term environmental goals Corporate Administration Department Held deliberations on the setting of long-term targets for the reduction of CO2 emissions stemming from the Group’s business activities
Integrated report Relevant Departments Discussed non-financial (ESG) information disclosure policies with the relevant departments (coordinated by the Sustainability Management Office)
 

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