Create Social Value / Pursue Economic Value

Even as SMBC Group’s environment and the values and lifestyles of individuals undergo rapid change and diversification, the importance of people to SMBC Group never changes. Rather, in this era of drastic change, it is critical that the employees of our Group, over 120,000, exert their abilities and align their direction with a sense of unity. As a symbol to guide this action, we established the “SMBC Group Talent Policy” (hereinafter “Talent Policy”).

Our Talent Policy sets out what we expect employees to be (Professional, Collaborative, Agile) and our value proposition to employees (Be Yourself, Make a Difference, Build Your Career). These items are imbued with values that SMBC Group feels are vital. These values are also present in the DNA and the business spirit that Mitsui and Sumitomo have inherited through our long histories: refining personal capabilities, uniting as a team, and contributing to the advancement of society and the businesses of our customers and ourselves.As CHRO, I will position our Talent Policy as the foundation underlying our human resources measures, and will maximize our human resource capabilities and achieve the creation of social value and pursuit of economic value set forth in our management strategy.

To achieve the human resources strategy linked to our management strategy, it is essential that we possess a human resources platform and an organizational culture by which employees holding diverse career backgrounds and values can play active roles. At the same time, it is also important that the values of the Company and of individuals overlap and resonate with each other.

To that end, we will swiftly accelerate the transformation of our frameworks for personnel evaluations, compensation, and careers, while continually providing opportunities for internal communication through dialogues in town hall meetings, seminars, and small-group sessions to ensure that the thinking and backgrounds embedded in our human resources strategy are properly communicated.

We believe that realizing employees’ diverse aspirations will connect to our growth and competitiveness, increase employees’ identification with the Company, and give rise to further endeavors and successes for employees. This virtuous cycle represents the human resource management and the maximization of human resource power that I aim to achieve.

As CHRO, I will continue challenging myself wholeheartedly to create a compelling environment where diverse human resources can play active roles in their own way through various initiatives that lead to transformation.

The social issues faced by the world have become increasingly diverse and severe in recent years, and the mindset of stakeholders is steadily changing. Amid growing expectations toward companies to proactively and concretely contribute to solving social issues, in our Medium-Term Management Plan that began in April 2023, SMBC Group set forth “Create Social Value” as one pillar of our management and established “Environment,” “DE&I/Human Rights,” “Poverty & Inequality,” “Declining Birthrate & Declining Population,” and “Japan’s Regrowth” as five priority issues (materialities). Under this framework, our Group has begun working as one to solve social issues.

Many employees endorsed our aim of creating social value upon the release of the Medium-Term Management Plan, yet some expressed uncertainty over what specifically should be done. To first ensure that employees solidly understand and agree with our aims, we held town hall meetings at sites in Japan and overseas, repeatedly discussed the background behind our addressing the creation of social value and our specific actions, and incorporated efforts to create social value into our evaluation system for all departments and employees.

To further back up our employees, in FY2024 we put forth a slogan of “Participation by all” for the 120,000 employees in our Group, under which we are energetically advancing measures that include support for activities and expansion of opportunities to be part of the creation of social value. Specific actions include setting an expense budget of ¥10 billion and an investment fund of ¥40 billion, creation of materials for use by employees in discussing social issues with customers, and expansion of our pro-bono work and commendation systems. Our measures are yielding results, with our most recent questionnaire showing over 60% of employees responding positively that they’ve undertaken actions to solve social issues in conjunction with their own work.

Through our initiatives under participation by all employees and leveraging our extensive customer base and our wide-ranging points of contact with society, we will cooperate with partners in tackling solutions to even more social issues.

On the topic of environmental issues, the correlation between climate change and natural capital and the impacts of climate change on social issues such as human rights and health are pointed out. The company of climate change issues have become apparent. We intend to make the greatest possible contribution as a global financial group to address this major challenge. Specifically, we are focusing on initiatives such as, financial and non-financial support for decarbonization efforts by domestic and overseas customers, raising our level of risk-taking for new energy and other new technologies such as offshore wind power and hydrogen-reduced iron, and providing transition finance. While transitions in Asia are particularly difficult from the “Just Transition” perspective, as a financial institution pursing a multi-franchise strategy in Asia and aiming for sustainable growth together with regional economies, we are commited to responding effectively. Given that the climate change presents us with not only business opportunities but also risks, we will strive to constantly raise the level of our governance.

We are also promoting visualization of our efforts aimed at creation of social value and have decided to publish details in our Impact Report. As the creation of social value becomes more important, we believe that along with financial indicators, positive and negative impacts on society and the environment will grow in importance as new metrics for measuring corporate value. By making these impacts visual, we will work toward the expansion of relevant solutions, enhancement of employees’ understanding, and objective and transparent disclosure toward stakeholders.

As Group CSuO, I will make every effort to ensure that SMBC Group executives and employees continue working as one to take the lead in solving social issues, and connect our action to the creation of social value and further to the enhancement of our corporate value.

I am deeply committed to the creation of social value through digital innovation.

While using digital technology to promote digital transformation in our existing financial businesses, as Group CDIO I undertake the creation of new business models and solutions with utmost effort that go beyond the framework of a financial institution.

Our keywords are “Beyond & Connect” and “Empower Innovation.”

Our Company engages in business development that integrates the financial and non-financial across regions, based on collaboration with partner companies of differing types by making use of digital technologies (Beyond & Connect). As a global solutions provider, we offer customers added value that goes beyond our financial business, while creating, developing, and nurturing businesses that will lead to the future transformation of SMBC Group’s business model.

In creating new businesses, it is vital that we have a framework to promote innovation (Empower Innovation). To accelerate the strengthening of business development in cooperation with startups in the fast-growing Asian region, we have established corporate venture capital and prepared functions for the promotion of digital innovation. In the area of “Producing new CEOs,” we actively promote employees with vision and ambition to the position of president of new business companies, engage in ongoing efforts aimed at transformation of our culture such as internal social media networks, and are accelerating the creation of mechanisms for generating new business seeds inside and outside the company.