Participation in Initiatives and Reference Guidelines

The significance of taking part in, and supporting initiatives in Japan and overseas

The term "initiative" means taking a leading role, and refers to companies' principles and codes of conduct. SMBC Group supports a range of initiatives in Japan and overseas, such as the United Nations Global Compact.

Seamless cooperation between various organizations is essential to solve problems on a global scale and create a sustainable society. SMBC Group believes in the importance of participating in these initiatives in Japan and overseas, and remains committed to furthering SMBC Group’s sustainability objectives in light of these initiatives, pursuant to applicable laws and our independent credit decision, to evaluate the environmental and social impact of any project or transaction. Mindful of the social impact as a financial institution, SMBC Group declares such intentions to the society by taking part in these initiatives, and will take an active role as a member of the global community.

Particularly concerning climate change issues, we are committed to achieving net zero emissions across our overall investment and loan portfolio by 2050, in addition to achieving net zero emissions in our groupwide operation by 2030. In light of these commitments, we are participating in the discussions of the workstreams in “Glasgow Financial Alliance for Net-Zero” and the “Net-Zero Banking Alliance (NZBA)”, and to drive forward our efforts to realize our net zero targets, we are also participating in the “Taskforce on Scaling Voluntary Carbon Markets (TSVCM)” and the “Partnership for Carbon Accounting Financials (PCAF)”. Particularly, in the GFANZ and NZBA, we are a member of the Sectoral Pathway workstream and the Financing and Engagement workstream, and are involved in the discussions of making suggestions to the industry regarding net zero transition as the finance sector, and in the establishment of transition finance guidelines, etc. In the PCAF, we are contributing to the discussions to elaborate calculation methods of Financed Emissions. As such, by actively participating in these global initiatives, we are striving to realize a decarbonized society.

Moreover, Sumitomo Mitsui Banking Corporation (SMBC), the core banking subsidiary of SMBC Group, is a member of the Japanese Bankers Association (JBA). In December 2021, JBA introduced the “Carbon Neutrality Initiative (CNI)” to enhance such activities as the banking industry in Japan. SMBC performed a leading role in developing the CNI as the chair bank of the association at the time.

SMBC Group will further enhance its activities towards the achievement of the net zero target and contribute to leading the realization of a decarbonized society by actively being a part of discussions concerning climate change both domestically and globally.

Initiatives supported by the SMBC Group

United Nations Global Compact

Ten principles proposed by the United Nations concerning human rights, labor, environment and corruption prevention.

Human Rights
Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and
Principle 2: make sure that they are not complicit in human rights abuses.
Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;
Principle 4: the elimination of all forms of forced and compulsory labour;
Principle 5: the effective abolition of child labour; and
Principle 6: the elimination of discrimination in respect of employment and occupation.
Principle 7: Businesses should support a precautionary approach to environmental challenges;
Principle 8: undertake initiatives to promote greater environmental responsibility; and
Principle 9: encourage the development and diffusion of environmentally friendly technologies.
Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.

Links to related website

Sustainable Development Goals (SDGs)

The SDGs are a set of 17 goals and 169 targets for achieving human and global prosperity adopted at the "United Nations Sustainable Development Summit."
SMBC Group will contribute to the achievement of these goals as a member of the Global Compact Network Japan.

UNEP Finance Initiative (UNEP FI)

Organization which pursues, develops and promotes the ideal financial institutions which pay attention to the environment and sustainability.

Responsible investment Principles (PRI)

The principle which is intended to improve long-term investment performance by incorporating environmental, social and corporate governance (ESG) issues into investment decision making for customers and the beneficiaries.
Announced in April 2006 by UN Secretary-General Kofi Annan (at that time).

Principle of Responsible Banks (PRB)

The principle which is intended to promote transparent disclosure.
Signatories is encouraged to set goals and strategy in line with the social goals set out in the SDGs and the Paris Agreement to achieve sustainable development of society.

Task Force on Climate-related Financial Disclosures (TCFD)

The Financial Stability Board established this task force in April 2015. The task force seeks individual companies to use financial reporting to disclose the impact of climate change. The SMBC Group declared its support for the One Planet Summit held in Paris in December 2017

Task Force on Nature-Related Financial Disclosures (TNFD)

An international organization established in June 2021 to build a risk management and disclosure framework related to nature capital, inspired by the 2019 World Economic Forum (Davos Conference), companies aim to achieve “Nature-Positive” by disclosing information related to nature.
SMBC Group officially adopted TNFD recommendation in November 2023.

Net-Zero Banking Alliance

Net-Zero Banking Alliance (NZBA)

A global alliance convened by the United Nations Environment Programme Finance Initiative (UNEP-FI), aiming to achieve net zero greenhouse gas emissions from loans and investments portfolio by 2050, through setting science-based medium-to long-term reduction targets and disclosing the progress, launched in April 2021.

Partnership for Carbon Accounting Financials (PCAF)

A collaboration between financial institutions worldwide to enable harmonized assessments and disclosures of greenhouse gas emissions financed by loans and investments, launched in December 2015
SMBC Group is a member of the PCAF Japan coalition, promoting the adoption and expansion of the measurement and disclosure of greenhouse gas emissions from loans and investments by Japanese financial institutions.


Initiatives which measures, manages and reduces effects of climate changes by prompting institutional investors and business managers to have dialogues regarding such climate changes.

Poseidon Principles

A framework for integrating climate considerations into each institution’s independent lending decisions to promote international shipping’s decarbonization.
From SMBC Group, Sumitomo Mitsui Banking Corporation and Sumitomo Mitsui Finance and Leasing are signatories to the Principles.

Principles for Financial Action toward a Sustainable Society (Principles for Financial Action for the 21st Century)

Aspirational principles adopted in October 2011 by and among Japanese financial institutions to expand the reach and improve the quality of environmental finance in Japan.

Principles of action for financial institutions in Japan adopted in October 2011 for the purpose of expanding and improving the quality of environmental finance.
*As of July 2020, the principles had been signed by 285 financial institutions, including companies from SMBC Group; SMBC, Sumitomo Mitsui Finance and Leasing, and SMBC Nikko Securities and Sumitomo Mitsui DS Asset Management.

Guidelines Used for Reference

SMBC Group

SMBC Group refers to the following guidelines in its disclosure of initiatives to realize sustainability.

GRI Standard

SMBC Group refers to the GRI Standard, a global information disclosure standard provided by the Global Reporting Initiative (GRI) to deliver reporting on the organization’s impacts to the economy, environment and society, and its contribution to a sustainable development.
The following table indicates where we disclose information that corresponds to the standard.

Standard Disclosure Location
GRI 2: General Disclosures 2021 2-1 Organizational details
2-2 Entities included in the organization’s sustainability reporting
2-3 Reporting period, frequency and contact point
2-4 Restatements of information  
2-5 External assurance
2-6 Activities, value chain and other business relationships
2-7 Employees
2-8 Workers who are not employees  
2-9 Governance structure and composition
2-10 Nomination and selection of the highest governance body
2-11 Chair of the highest governance body
2-12 Role of the highest governance body in overseeing the management of impacts
2-13 Delegation of responsibility for managing impacts
2-14 Role of the highest governance body in sustainability reporting
2-15 Conflicts of interest
2-16 Communication of critical concerns
2-17 Collective knowledge of the highest governance body
2-18 Evaluation of the performance of the highest governance body
2-19 Remuneration policies
2-20 Process to determine remuneration
2-21 Annual total compensation ratio
2-22 Statement on sustainable development strategy
2-23 Policy commitments
2-24 Embedding policy commitments
2-25 Processes to remediate negative impacts
2-26 Mechanisms for seeking advice and raising concerns
2-27 Compliance with laws and regulations
2-28 Membership associations
2-29 Approach to stakeholder engagement
2-30 Collective bargaining agreements
GRI 3: Material Topics 2021 3-1 Process to determine material topics
3-2 List of material topics
3-3 Management of material topics

Standard Disclosure Location
GRI201:Economic Performance2016 201-1 Direct economic value generated and distributed
201-2 Financial implications and other risks and opportunities due to climate change
201-3 Defined benefit plan obligations and other retirement plans
201-4 Financial assistance received from government  
GRI202:Market Presence 2016 202-1 Ratios of standard entry level wage by gender compared to local minimum wage  
202-2 Proportion of senior management hired from the local community
GRI203:Indirect Economic Impacts 2016 203-1 Infrastructure investments and services supported
203-2 Significant indirect economic impacts  
GRI204:Procurement Practices 2016 204-1 Proportion of spending on local suppliers  
GRI205:Anti-corruption 2016 205-1 Operations assessed for risks related to corruption
205-2 Communication and training about anti-corruption policies and procedures
205-3 Confirmed incidents of corruption and actions taken  
GRI206: Anti-competitive Behavior 2016 206-1 Legal actions for anti-competitive behavior, anti-trust, and monopoly practices  
GRI207: Tax2019 207-1 Approach to tax
207-2 Tax governance, control, and risk management
207-3 Stakeholder engagement and management of concerns related to tax  
207-4 Country-by-country reporting  

Standard Disclosure Location
GRI301:Materials 2016 301-1 Materials used by weight or volume  
301-2 Recycled input materials used
301-3 Reclaimed products and their packaging materials
GRI302:Energy 2016 302-1 Energy consumption within the organization
302-2 Energy consumption outside of the organization
302-3 Energy intensity  
302-4 Reduction of energy consumption
302-5 Reductions in energy requirements of products and services  
GRI303:Water and Effluents 2018 303-1 Interactions with water as a shared resource  
303-2 Management of water discharge-related impacts  
303-3 Water withdrawal  
303-4 Water discharge  
303-5 Water consumption
GRI304:Biodiversity 2016 304-1 Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas  
304-2 Significant impacts of activities, products and services on biodiversity  
304-3 Habitats protected or restored  
304-4 IUCN Red List species and national conservation list species with habitats in areas affected by operations  
GRI305:Emissions 2016 305-1 Direct (Scope 1) GHG emissions
305-2 Energy indirect (Scope 2) GHG emissions
305-3 Other indirect (Scope 3) GHG emissions
305-4 GHG emissions intensity
305-5 Reduction of GHG emissions
305-6 Emissions of ozone-depleting substances (ODS)  
305-7 Nitrogen oxides (NOx), sulfur oxides (SOx), and other significant air emissions  
GRI306: Waste2020 306-1 Waste generation and significant waste-related impacts  
306-2 Management of significant waste-related impacts  
306-3 Waste generated  
306-4 Waste diverted from disposal  
306-5 Waste directed to disposal  
GRI308:Supplier Environmental Assessment 308-1 New suppliers that were screened using environmental criteria  
308-2 Negative environmental impacts in the supply chain and actions taken  

Standard Disclosure Location
GRI401:Employment 2016 401-1 New employee hires and employee turnover
401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees  
401-3 Parental leave
GRI402: Labor/Management Relations 2016 402-1 Minimum notice periods regarding operational changes  
GRI403:Occupational Health and Safety 2018 403-1 Occupational health and safety management system
403-2 Hazard identification, risk assessment, and incident investigation  
403-3 Occupational health services  
403-4 Worker participation, consultation, and communication on occupational health and safety
403-5 Worker training on occupational health and safety
403-6 Promotion of worker health
403-7 Prevention and mitigation of occupational health and safety impacts directly linked by business relationships  
403-8 Workers covered by an occupational health and safety management system
403-9 Work-related injuries  
403-10 Work-related ill health  
GRI404:Training and Education 2016 404-1 Average hours of training per year per employee
404-2 Programs for upgrading employee skills and transition assistance programs
404-3 Percentage of employees receiving regular performance and career development reviews
GRI405: 2016 405-1 Diversity of governance bodies and employees
405-2 Ratio of basic salary and remuneration of women to men  
GRI406:Non-discrimination 2016 406-1 Incidents of discrimination and corrective actions taken  
GRI407:Freedom of Association and Collective Bargaining 2016 407-1 Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk
GRI408:Child Labor 2016 408-1 Operations and suppliers at significant risk for incidents of child labor
GRI409:Forced or Compulsory Labor 2016 409-1 Operations and suppliers at significant risk for incidents of forced or compulsory labor
GRI410:Security Practices 2016 410-1 Security personnel trained in human rights policies or procedures  
GRI411:Rights of Indigenous Peoples 2016 411-1 Incidents of violations involving rights of indigenous peoples  
GRI413:Local Communities 2016 413-1 Operations with local community engagement, impact assessments, and development programs  
413-2 Operations with significant actual and potential negative impacts on local communities  
GRI414:Supplier Social Assessment 2016 414-1 New suppliers that were screened using social criteria  
414-2 Negative social impacts in the supply chain and actions taken  
GRI415:Public Policy 415-1 Political contributions  
GRI416:Customer Health and Safety 2016 416-1 Assessment of the health and safety impacts of product and service categories
416-2 Incidents of non-compliance concerning the health and safety impacts of products and services  
GRI417:Marketing and Labeling 2016 417-1 417-1 Requirements for product and service information and labeling  
417-2 417-2 Incidents of non-compliance concerning product and service information and labeling  
417-3 417-3 Incidents of non-compliance concerning marketing communications  
GRI418:Customer Privacy 2016 418-1 Substanti3ated complaints concerning breaches of customer privacy and losses of customer data  

SASB Standard

SMBC Group refers to the SASB Standard, a global information disclosure standard issued by the U.S. Sustainability Accounting Standards Board (SASB) in October 2018.
The following table indicates where we disclose information that corresponds to the standard for Commercial Banks (FN-CB) and Investment Banking & Brokerage (FN-IB).

Sector Topic Code Metric Location
CB Data Security FN-CB-230a.1 (1) Number of data breaches, (2) percentage involving personally identifiable information
(PII), (3) number of account holders affected
CB FN-CB-230a.2 Description of approach to identifying and
addressing data security risks
CB Financial
Inclusion &
FN-CB-240a.1 (1) Number and (2) amount of loans
outstanding qualified to programs designed to promote small business and community
CB FN-CB-240a.2 (1) Number and (2) amount of past due and
nonaccrual loans qualified to programs
designed to promote small business and
community development
CB FN-CB-240a.3 Number of no-cost retail checking accounts
provided to previously unbanked or
underbanked customers
CB FN-CB-240a.4 Number of participants in financial literacy
initiatives for unbanked, underbanked, or
underserved customers
CB Incorporation of
Social, and
Factors in Credit
FN-CB-410a.1 Commercial and industrial credit exposure, by
IB FN-IB-410a.1 Revenue from (1) underwriting, (2) advisory,
and (3) securitization transactions
incorporating integration of environmental,
social, and governance (ESG) factors, by
IB FN-IB-410a.2 (1) Number and (2) total value of investments and loans incorporating integration of
CB/IB FN-CB 410a.2 Description of approach to incorporation of
environmental, social, and governance (ESG)
factors in credit analysis
CB/IB Business Ethics FN-CB-510a.1 Total amount of monetary losses as a result of
legal proceedings associated with fraud,
insider trading, anti-trust, anti-competitive
behavior, market manipulation, malpractice, or
other related financial industry laws or
CB/IB FN-CB-510a.2 Description of whistleblower policies and
CB/IB Systemic Risk
FN-CB-550a.1 Global Systemically Important Bank (G-SIB)
score, by category
CB/IB FN-CB-550a.2 Description of approach to incorporation of
results of mandatory and voluntary stress tests
into capital adequacy planning, long-term
corporate strategy, and other business
IB Employee
Diversity &
FN-IB-330a.1 Percentage of gender and racial/ethnic group representation for (1) executive management, (2) non-executive management, (3)professionals, and (4) all other employees
IB Professional
FN-IB-510b.1 (1) Number and (2) percentage of covered
employees with a record of investment-related investigations, consumer-initiated complaints, private civil litigations, or other regulatory proceedings
IB FN-IB-510b.2 Number of mediation and arbitration cases
associated with professional integrity,
including duty of care, by party
IB FN-IB-510b.3 Total amount of monetary losses as a result of legal proceedings associated with professional integrity, including duty of care
IB FN-IB-510b.4 Description of approach to ensuring
professional integrity, including duty of care
IB Employee
Incentives &
Risk Taking
FN-IB-550b.1 Percentage of total remuneration that is
variable for Material Risk Takers (MRTs)
IB FN-IB-550b.2 Percentage of variable remuneration of
Material Risk Takers (MRTs) to which malus or clawback provisions were applied
IB FN-IB-550b.3 Discussion of policies around supervision,
control, and validation of traders’ pricing of
Level 3 assets and liabilities
CB Activity Metrics FN-CB-000.A (1) Number and (2) value of checking and savings accounts by segment: (a) personal and (b) small business
CB FN-CB-000.B (1) Number and (2) value of checking and savings accounts by segment: (a) personal and (b) small business
IB FN-IB-000.A (1) Number and (2) value of (a) underwriting, (b) advisory, and (c)securitization transactions
IB FN-IB-000.B (1) Number and (2) value of proprietary investments and loans by sector  
IB FN-IB-000.C (1) Number and (2) value of market making transactions in (a) fixed income, (b) equity, (c) currency, (d) derivatives, and (e) commodity products  

United Nations Global Compact, COP (Communication on Progress), Advanced Level Criteria

SMBC Group supports the 10 principles of the "United Nations Global Compact," in the areas of human rights, labor standards, environment and anti-corruption measures. We also refer to the 24 criteria presented for achieving "Advanced Level" in creating Communication on Progress reports for the execution status of the principles.

Stakeholder Capitalism Metrics

In September 2020, the World Economic Forum (WEF) published a report through the International Business Council (IBC), a subordinate community of business leaders within the forum, entitled “Measuring Stakeholder Capitalism: Towards Common Metrics and Consistent Reporting of Sustainable Value Creation”, where a corporate reporting framework for non-financial information is outlined. The recommended metrics are organized under four pillars that are aligned with the SDGs and principal ESG domains: Principles of Governance, Planet, People and Prosperity.

SMBC Group has been a proactive member in the process of developing the metrics by the IBC. The following table indicates where in our report we disclose information that corresponds to each of the IBC metrics.

Principles of Governance
Theme Core metrics Reference
Governing purpose Setting purpose
Quality of governing body Governance body composition
Stakeholder engagement Material issues impacting stakeholders
Ethical behaviour Anti-corruption
Protected ethics advice and reporting mechanisms
Risk and opportunity oversight Integrating risk and opportunity into business process

Theme Core metrics Reference
Climate change Greenhouse gas (GHG) emissions
TCFD implementation
Nature loss Land use and ecological sensitivity
Freshwater availability Water consumption and withdrawal in water-stressed areas -

Theme Core metrics Reference
Dignity and equality Diversity and inclusion
Pay equality
Wage level -
Risk for incidents of child, forced or compulsory labour
Health andwell-being Health and safety
Skills for the future Training provided

Theme Core metrics Reference
Employment and wealth generation Absolute number and rate of employment
Economic contribution
Financial investment contribution
Innovation of better products and services Total R&D expenses
Community and social vitality Total tax paid