“Managing environmental risks” is one of SMBC Group's three key environmental themes, articulated in the Group’s environment policy. As a global financial group, SMBC is working to strengthen its structure for managing environmental and social risks.
Recognition of Social Issues
The global environment is an important asset that is shared by all of humanity, regardless of region or age, and a healthy environment is prerequisite to the realization of a sustainable society. SMBC Group is earnestly engaging with climate change and various other environmental issues. By helping resolve such issues through our business, we aim to ensure that we can pass on a healthy environment to future generations.
SMBC Group's Approach
Having recognition of social issues, in order to contribute to the realization of a sustainable society, SMBC group has set forth a long-term vision toward 2050 that we as a global financial group will promote financial services consistent with the country's goals to counter global warming, and contribute to global environmental protection by leveraging its financial functions.
|Group Environmental Policy|
Group Environmental Policy
Recognizing the importance of realizing a sustainable society, SMBC Group is continuously making efforts to harmonize environmental preservation and pollution control with corporate activities, in order to support the economy and contribute to the betterment of society as a whole.
Group Environmental Policy
- 1.We provide environment-friendly financial products, information and solutions which support our clients in their efforts to preserve the eco-system.
- 2.We devise means to reduce environmental risks posed by our own activities and the society.
- 3.We are determined to fulfill our social responsibilities through the conservation of resources and energy, and the reduction of waste.
- 4.We strictly comply with environment-related laws and regulations.
- 5.We will continuously enhance our disclosure related to the Group's environmental activities and consistently improve our efforts to contribute to environmental preservation by communicating with our staff as well as the third parties.
- 6.We thoroughly educate our staff about our environmental principles to ensure that they conform to these principles in the performance of their work.
- 7.We actively and effectively implement "environmental management," and make continuous efforts to improve our system to deal with environmental issues by setting goals and targets for every fiscal year and reviewing them as deemed necessary.
- 8.These policies are disclosed on the Group's website, and the printed version is available upon request.
- Environmental Policies of SMBC Group CompaniesOpen
SMBC Group's Management
- ●SMBC Group’s environmental management is based on our environmental policy and ISO14001. As for our financial services, we promote our business based on international principles such as UN Global Compact and the Equator principles.
- ●SMBC Group regards three pillar points in Group Environmental Policy: "Environmental Business" "Environmental risk" and "Reduction of Environmental Impacts". Every year, we set environment targets for, such as reducing greenhouse gas emissions, conserving resources and promotes global warming countermeasures, in accordance with the PDCA cycle.
- ●Execute green finance and finance that contribute to realizing sustainability equivalent to JPY 30 trillion between FY2020 to FY2029 (of which JPY 20 trillion is green finance).
- ●SMBC Group will become net zero*1 in its groupwide operations by 2030
- ●Outstanding coal-fired thermal power generation loans to be reduced to zero by FY2040 (applicable to project finance*2)
*1 Scope1 and Scope2
*2 Excludes projects entailing technologies pertaining to carbon recycling and other projects that contribute to the realization of a low-carbon society
Environmental Management System (EMS)
SMBC Group has developed an original structure for promoting Environmental Management
System (EMS) that meets the requirements of ISO14001* adoption across the Group led by the
Corporate Planning Department, including environmental officer(i.e. the director
responsible for the Corporate Planning Department).
Our EMS is operated in SMFG and its major companies (SMBC, Sumitomo Mitsui Finance and Leasing(including SMFL Rental), SMBC Nikko Securities, Sumitomo Mitsui Card, SMBC Finance Service, SMBC Consumer Finance and The Japan Research Institute).
*In 1998, SMBC was the first bank in Japan to obtain the environmental management certification of ISO14001. Since then, it has been expanded to the group companies and continued to be operated, and the certification has been maintained through an examination by an external organization. Although certification has been withdrawn, we have continued our own EMS that meets the requirements of ISO14001 and continue to promote environmental efforts.
SMBC Group also conducts an EMS test every year aimed at employees trying to raise the environmental awareness of individuals.
There were no bleaches during Fiscal 2019.
Promotion of Environmental Businesses
SMBC group considers that environmental businesses are means to preserve and improve the
global environment in its core business operations as a financial institution.
We will outline our environmental businesses, including solar power-based renewable energy operations and investment projects with a positive environmental contribution, as well as other environment-related products and services.
Management of Environmental Risks
Response to climate change(Working on TCFD Recommendations)
|Metrics and Targets||
*1 Excludes loans for renewable energy projects to provide a more accurate picture of transition risk exposure
*2 Scope1 and Scope2
*3 Excludes projects entailing technologies pertaining to carbon recycling and other projects that contribute to the realization of a low-carbon society
Environmental Risks That Financial Institutions Should Address
SMBC has adopted the Equator Principles, a set of principles for determining, assessing
and managing social and environmental risks in finance to large-scale development projects
and has established the Environment Analysis Department (ENAD) to assess the social and
environmental risks in accordance with the principles.
For details, please visit the Equator Principles' official website below.
Consideration of ESG risks
In SMBC's Credit Policy, which contains our overall financing policy, guidelines and rules, we declare not to extend any credit considered problematic in terms of public responsibility, or which may have a negative impact on the environment.
Also, we recognize our customers' environmental and social impacts from their business activities by understanding not only their financial information, but also non-financial information represented by ESG. We will engage closely with customers through gathering non-financial information, and strive to improve expected risk with customers while actively supporting their environmental and social consideration activities.
We establish policies for each business and sector which is likely to have a significant impact on the environment and society.
These policies are also rolled out to SMBC Group companies, which include SMBC Trust Bank, Sumitomo Mitsui Finance and Leasing Company and SMBC Nikko Securities, in line with their business. This strengthens our risk management system.
- 1.Coal-Fired Power Generationclose
Support for newly planned coal-fired power plants and the expansion of existing plants are not provided.
(Understanding of the Business/Sector)
SMBC Group expects our customers to establish and publicly announce long-term strategies aimed at realizing a carbon neutral business model and other initiatives to address climate change. Moreover, SMBC Group will support the activities of our clients contributing to the transition toward and realization of a decarbonized society.
- 2.Hydroelectric Power Generationclose
For those cases in which financing is used for hydroelectric power generation projects, SMBC Group carefully monitors whether appropriate mitigation measures against the impact on biodiversity and local communities caused by resettlement have been implemented and conducts environmental and social risk assessments when we consider lending.
(Understanding of the Business/Sector)
As the transition to a decarbonized society progresses, hydroelectric power generation will play a greater role in power supply. However, when constructing a hydroelectric power plant, it is important to consider the impact on biodiversity associated with dam construction and also on local communities caused by resettlement.
- 3.Oil and Gasclose
The scope of environmental and social risk assessments that take into account Equator Principles is be expanded for the following business and sectors when we consider lending. After identifying and evaluating environmental and social risks, appropriate measures are considered.
Oil sand (tar sand) has relatively high carbon intensity and large environmental impacts are associated with its development. As such, SMBC Group conducts environmental and social risk assessments, paying close attention to soil and water pollution caused by wastewater, deforestation, and efforts to protect biodiversity and indigenous communities, when we consider lending.
(2)Shale Oil and Shale Gas
During shale oil and shale gas development, the use of hydraulic fracturing methods is assumed to cause groundwater contamination and induce earthquakes. SMBC Group carefully monitors whether appropriate mitigation measures have been implemented for these issues, and then we conduct environmental and social risk assessments when we consider lending.
(3)Oil and Gas Mining Projects in the Arctic
The Arctic Circle (an area north of the 66º33' latitude) is home to rare ecosystems and indigenous people with a unique culture. For mining projects in this region, SMBC Group conducts environmental and social risk assessments, playing close attention not only to environmental considerations but also to measures to protect biodiversity and indigenous communities, when we consider lending.
(4)Oil and Gas Pipelines
Pipelines are expected to have a wide range of environmental impacts due to oil spills and deforestation, as well as social impacts on indigenous communities, not only at the time of construction but also when completed. SMBC Group carefully monitors whether appropriate mitigation measures have been implemented for these issues, and then we conduct environmental and social risk assessments when we consider lending.
(Understanding of the Business/Sector)
Oil and gas will continue to be an important source of energy, and we actively consider measures that contribute to the transition to a decarbonized society low-carbon society. On the other hand, as the transition to a decarbonized society low-carbon society progresses, it is important to consider the risk of stranded assets that will cause the value of the assets owned to decline in the future, measures to reduce the environmental impact associated with development, and give proper consideration to the residents of the development area.
- 4.Coal Miningclose
The scope of environmental and social risk assessment that take into account Equator Principals is expanded for coal mining businesses when we consider lending. Through this, environment and social risks are identified and evaluated. In addition, we don't provide support for coal mining projects that are conducted using the Mountain Top Removal (MTR) method, as this method has a large environmental impact.
(Understanding of the Business/Sector)
In addition to the risks of stranded assets associated with the transition to a decarbonized society, it is important to consider human rights with respect to the elimination of illegal labor and child labor in coal mines and biodiversity issues associated with mining.
- 5.Tobacco Manufacturingclose
With regard for support for tobacco manufacturers, Sumitomo Mitsui Banking Corporation has confirmed that particular issues including health hazards and considering of human rights to eliminate illegal labor and child labor are being addressed.
(Understanding of the Business/Sector)
Smoking can cause health hazards, such as lung cancer and respiratory dysfunction. In addition, with the cultivation of leaf tobacco (a raw material of cigarettes), it is important to consider human rights to eliminate illegal labor and child labor.
- 6.Nature Conservation Areasclose
SMBC Group does not provide support for new projects that are perceived to have a significant negative impact on wetlands specified in the Ramsar Convention and UNESCO-designated World Natural Heritage sites.
- 7.Palm Oil Plantation Developmentclose
For palm oil plantation development projects, whether they have been certified by the Roundtable on Sustainable Palm Oil (RSPO), which is given for palm oil produced with environmental and social consideration, or by an equivalent certifying body is confirmed. Support is only provided after confirming that forest resources and biodiversity are protected when new plantations are developed and that there are no human rights violations, such as child labor. For those customers that have not yet been certified, obtaining certification is encouraged and supported. We will require our business partners to publicly declare their compliance with NDPE (No Deforestation, No Peat, No Exploitation).
For any business involving deforestation, we provide them with support only after having confirmed as per the laws and regulations of respective country that there is no illegal deforestation, burning, nor illegal labor. Among them, especially regarding large-scale farm (*) development projects, we will require them to publicly declare their compliance with NDPE. In addition, when considering financing for any large-scale project, not limited to farm development projects, we will surely conduct environmental and social risk assessments as per the Equator Principles, while closely monitoring the applicant’s stance on the following points: impact on virgin forests and ecosystems and mitigation measures for the foregoing; inclusion of peatland development; considerations for workers and local residents, etc.
- *Farm of 10,000 ha or more (e. g. business aimed at cultivating soybeans, natural rubber, coffee, etc., or using it as a grazing land for livestock)
- 9.Manufacturing of Cluster Bombs and Other Weapons of Destructionclose
Cluster bombs are considered inhumane, therefore SMBC Group prohibits credit to those manufacturers. In addition, it is confirmed that loans are not used for manufacturing of other weapons of destruction.
Reduction of Environmental Impacts
The three pillars of the environmental activities of SMBC Group are Promotion of Environmental Businesses, Management of Environmental Risks, and Reduction of Environmental Impact. Each group company sets targets for Reduction of Environmental Impact and implements diverse measures.
SMBC Group Environmental Data
|Measurement Items||Units||Fiscal 2017||Fiscal 2018||Fiscal 2019|
|Direct energy consumption||City gas||Thousand m3||2,479||2,225||1,930|
|Liquefied petroleum gas（LPG）||t||10||10||9|
|Heavy fuel oil||kl||131||94||112|
|Indirect energy Consumption||Electricity(*3)||Thousand kWh||323,731||291,045||275,868|
|Other energy consumption||CO2 emissions from business trips(*4)||t-CO2||17,780||18,432||44,582|
|Water supply||Thousand m3||34||36||39|
|Total water and sewage||Thousand m3||2,594||2,662||2,303|
|Total||Direct energy CO2 emissions||t-CO2||17,120||14,863||13,526|
|Indirect energy CO2 emissions
|Total CO2 emissions||t-CO2
|Total CO2 emissions
- *The main reason for the increase in results of FY2019 compared to that of FY2018 is that the CO2 conversion factors for business trips have been updated to ver 3.0 in the "Database of emission intensity for calculating greenhouse gas emissions of the organization throughout its supply chain ", developed by MINISTRY OF THE ENVIRONMENT.
- [Scope of data]
- *Each item is simply the sum of the values of the
following group companies. Sumitomo Mitsui Banking Corporation, SMBC Trust Bank, Sumitomo
Mitsui Finance and Leasing, SMBC Nikko Securities, SMBC Friend Securities(*1),
Sumitomo Mitsui Card Company, SMBC Financial Service, SMBC Consumer Finance, The Japan Research Institute, Sumitomo Mitsui DS Asset Management Company, THE MINATO BANK(*2), and Kansai Urban Banking Corporation(*2)
- (*1)Merged with SMBC Nikko Securities as of January 2018.
- (*2)Excluded from the Group as of April 2018.
- [CO2 conversion method]
- (*3)Actual emission factor for each electric business company is used.
- (*4)Refer to MINISTRY OF THE ENVIRONMENT's " Database of emission intensity for calculating greenhouse gas emissions of the organization throughout its supply chain".Ver 2.2 is applied until FY2018, and ver 3.0 from FY2019.
- (*5)Others uses "Support tool of Calculating CO2 Emissions from Energy Use" provided by the Agency for Natural Resources and Energy.
- [Third party verification]
These data are being tested third-party certification from the Japan Quality Assurance Organization.
Reducing Energy Consumption
SMBC Group conducts management in line with the Energy Conservation Law of Japan, and reports in line with the "report Book System for Global Warming Countermeasures" handled by the Tokyo metropolitan government. Our actions and targets are line with the measures taken by the governments, and industrial groups such as the Japan Federation of Economic Organizations, the Japanese Bankers Association, and Japan Securities Dealers Association.
SMBC Group Green Bond
SMBC Group is a major issuer of green bonds both domestically and in international markets.
SMBC Group applies the net proceeds of green bonds to finance qualifying renewable energy generation and energy efficiency projects. SMBC Group has a strong track record in providing project finance for renewal energy (solar energy, wind energy, etc.) both domestically and internationally.