Long-Term Sustainability Indicators

To accelerate the initiatives to achieve sustainable improvement in social and corporate value, in May 2023 we updated the Long-Term Sustainability Targets announced in June 2021 by incorporating additional long-term indicators. We will continue to address issues our customers and society as a whole are confronting to become a company capable of contributing to the enhancement of diverse value for multiple stakeholder groups.

About the New Indicators

1.Retail Transition Financing Target

Cumulative total of transition financing from FY2021 to FY2030: 10 trillion yen

Priority Themes	Local Communities, Low Birthrate and Aging Society, Environment, Human Rights (Diversity & Inclusion)
Financing Coverage	Financing aimed at helping retail customers update their awareness, transform their modes of behavior and stably move forward from their current situation. (Including financing for such green projects as renewable energy generation, as well as large corporate financing involving third-party verification)

FY2022 results: Approximately 1,019.8 billion yen (of this, 303.5 billion yen for environment-related fields)^*3

Breakdown of Financing

Investment and financing aimed at supporting or facilitating initiatives to promote social or business sustainability Investment and financing requiring recipients to use such funds for the resolution of social issues (Main examples) Sustainability Linked Loans, Resona SX Framework Loans and SME loans with conditions linked to ESG target accomplishments Financing for social infrastructure development, regional vitalization, etc. SDGs Consulting Fund and private placement SDGs promotion bonds SDGs- and ESG-related funds*4

Financing in the environment- related fields

Investment and financing aimed at supporting or facilitating initiatives to address environmental issues (Main examples) Financing for renewable energy power generation businesses, including project finance and private placement Green Bonds Sustainability Linked Loans, Resona SX Framework Loans, SME loans with conditions linked to ESG target accomplishments (setting targets in environment-related fields) Housing loans with conditions linked to conformity with prescribed energy-saving standards SDGs- and ESG-related funds*4 (to help tackle environmental issues)

Promoting In-Depth Dialogue and Enhancing Solutions

The questionnaires conducted in FY2021 targeting approximately 31,000 SME customers revealed that around 80% of the respondents were facing such issues as “lack of employee understanding and insufficient employee awareness” or “No idea what to do.”

With this in mind, in FY2022 we launched ESG-focused business potential assessment, with the aim of helping SME customers visualize various risks and opportunities confronting them from the aspect of sustainability so that they can maintain and enhance business continuity and profitability. At the same time, we focused on delivering such solutions as loan products with conditions linked to ESG target accomplishment and a simplified, charge-free CO₂ emission calculation service.

Steps of Our Response Aimed at Helping Customers Update Their Awareness and Transform Their Modes of Behavior

We have taken the various types of organizational action we are able to take to help customers update their awareness and transform their modes of behavior and arranged them as six steps as illustrated in the diagram on the right. Every year, we specify a step for particular focus.

In FY2022, the corporate division positioned “engaging in dialogue“ (step③) as its focus and worked to encourage customers to transform their behavior and utilize the solutions we offer. In line with this positioning, we rallied the Group’s overall strength to promote the initiatives specified in this step.

For FY2023, the two steps we are focusing on are “gathering information” (step④), i.e., helping customers systematically assess their current situation via the use of a broader perspective, and “providing SX-related solutions” (step⑤).

Delivering SX-Related Solutions Appropriate to the Stages of Customer Initiatives

The status of sustainability efforts undertaken by SMEs and the management resources they can afford to allocate to such efforts vary greatly by company. Accordingly, we deliver and continually work to upgrade our diverse solution lineup to best assist each SME seeking to push ahead with sustainability initiatives appropriate to their current situation. For individual customers, we released “Resona SX Housing Loans,” which cover an even broader scope of housing than previous similar loans. Based on the updated definition of eco-friendly housing, borrowers who purchase such housing are eligible to receive a variety of peripheral services under the SX Housing Loan scheme.

2.Carbon Neutrality Target

Reduce CO₂ emissions^*6 attributable to energy used by the Group to Net Zero by the end of fiscal 2030 via the proactive switchover to renewable energy

Priority Themes	Environment

FY2022 results: 56% reduction from the FY2013 level (a year-on-year decrease of 11,495 t-CO₂)

CO₂ Emissions Volume^*7

Breakdown of FY2022 Emissions (Provisional)

Since approximately 90% of CO₂ emissions from Group operations are attributable to energy use, we initiated a phased switchover to energy procured from renewable energy sources in FY2021, starting with energy-intensive facilities.

In FY2022, we implemented energy-saving activities on a Groupwide basis in light of public concerns regarding the possible worsening of energy demand-supply balance in summer and winter, to this end visualizing the status of energy consumption volumes at each base. Simultaneously, we promoted the introduction of renewable energy at each Group company facility.

As a result, the volume of CO₂ emissions attributable to the Resona Group’s operations in FY2022 decreased by 56% (provisional basis) compared with the FY2013 level. This also represented a year-on-year decrease of 11,495 t-CO₂.

In FY2023, we became a member of the “GX League” promoted by the Ministry of Economy, Trade and Industry. In line with the GX League concept, we intend to formulate interim emission reduction targets for FY2030.

Going forward, we will continue to promote energy-saving activities across the board to curb the financial impact of the current surge in energy prices and offset costs associated with the switchover to renewable energy to ensure that we can lead the way in the energy transition of our own operations.

Facilities That Introduced Renewable Energy

Initiatives to Reduce the Volume of Greenhouse Gas (GHG) Emissions from Our Investment and Financing Portfolio (Scope 3, Category 15)

In May 2023, we declared our intention to reduce the volume of GHG emissions attributable to our investment and financing portfolio (Scope 3, Category 15) to net zero by 2050. At the same time, we announced interim reduction targets for the energy sector.

Going forward, we will regularly disclose results of financed emissions associated with the energy sector, including our investees in the power generation industry, while assessing financed emissions from and formulating interim targets for other sectors.

Declaration of Net-zero Greenhouse Gas Emissions in the Investment and Financing Portfolio

The Resona Group will strive to reduce the volume of GHG emissions from its investment and financing portfolio to net zero by 2050.

●About the interim target for the energy sector

Initiatives being undertaken thus far

New initiatives (identification of interim target)

Identified “Real estate / Construction,” “Automotive / Transportation” and “Energy” as priority sectors in light of such factors as the potential impact of climate change on carbon related sectors specified by the TCFD,*8 the size of our portfolio, and a sector-based analysis of financed emissions determined using simple calculation methods. Further analyses, including quantitative risk assessments, were also conducted.

Implemented the assessment and analysis of financed emissions, emphasizing the energy sector over other priority sectors as it has already seen advances in the development of measurement methods and data accumulation Measurements of three sector components were conducted*9: “Energy (electric power),” “Oil / Gas” and “Coal.”

●Taking the above factors into account, we have identified an interim target for the energy sector (targets have not been set for “Oil / Gas” and “Coal” as the number of customers in these fields is very low)

Concepts behind target setting for the energy sector

The current carbon emission intensity, which amounts to 139gCO2e/kWh, falls short of the standard for 2030 envisioned in the 1.5°C scenario (NZE2050),*10 due mainly to the general termination of new project financing for coal-fired power generation businesses and proactive lending to domestic borrowers engaged in renewable energy-related businesses. On the other hand, the energy sector is an infrastructure component supporting all industries as well as people’s daily lives. Accordingly, pursuing the decarbonization of this sector is essential to helping retail customers achieve decarbonization. Therefore, we will strive for the popularization of renewable energy, which is integral to nationwide decarbonization, while supporting power generation businesses endeavoring to achieve transition and technological innovation. In these ways, we aim to reduce emissions from the energy sector to a level that is substantially lower than the global standard stipulated in the 1.5°C target.

The interim target

Carbon emission intensity in FY2030: 100 to 130gCO2e/kWh

●Basis for the calculation of financed emissions

• The volume of GHG emissions from each investee/borrower corporation is multiplied by the attribution factor (Balance of investment and financing / Sum of assets and liabilities) and the resulting numerical values for all investee/borrower corporations are aggregated

3.Targets for the Empowerment and Promotion of Women

Achieve the ratios presented below for the representation of women in various positions, an increase of 10% or more from the current levels, by the end of fiscal 2030
〈Ratio of female directors and executive officers: 30% or more^*1〉
〈Ratio of female senior managers: 20% or more^*2〉
〈Ratio of female line managers: 40% or more^*2〉

Priority Themes	Local Communities, Low Birthrate and Aging Society, Environment, Human Rights (Diversity & Inclusion)

Ratio of women	2021*13	2023*13	FY2030 targets
Directors and executive officers*1	19.2%	10.3%*14	30% or more
Line managers*2	29.7%	31.4%	40% or more
Senior managers*2	10.5%	13.4%	20% or more

External Recognitions

1. *1Resona Holdings
2. *2Sum of Resona Holdings, Resona Bank, Saitama Resona Bank, Kansai Mirai Bank and Minato Bank. The figures of FY2023 and before include those of Kansai Mirai Financial Group.
3. *3Results of each Group bank: 1) Resona Bank: 603.0 billion yen, 2) Saitama Resona Bank: 187.4 billion yen, 3) Kansai Mirai Bank: 149.4 billion yen, and 4) Minato Bank: 58.2 billion yen (of this, environment accounts for the following: 165.6billion yen for Resona Bank, 82.9 billion yen for Saitama Resona Bank, 26.7 billion yen for Kansai Mirai Bank, and 29.7 billion yen for Minato Bank)
4. *4Investment trusts and investment advisory services run by Resona Asset Management
5. *5Private placement SDGs promotion bonds, SDGs Consulting Fund, loan products with conditions linked to ESG target accomplishments, SX Framework Loan, SLL, Green Loans, etc.
6. *6Sum of Scope 1 and Scope 2
7. *7Scope 1 and Scope 2 CO₂ emissions attributable to Group banks are calculated based on methods stipulated by Japan’s Energy Saving Act for statutory periodic reporting. Figures for FY2019 and earlier are calculated by multiplying emissions volumes by the basic emission factors of each electricity supplier. Figures for FY2020 and later are calculated by multiplying emissions volumes by the adjusted emission factors of each electricity supplier. CO₂ emissions attributable to fuel consumption by Company-owned cars are determined via a simplified calculation method using the Group’s annual fuel costs and publicized figures for the annual and national average price of gasoline and the emissions coefficient.
8. *8The Company’s sector classification consists of Energy, Real estate / Construction, Automotive / Transportation, Material, Agriculture / Food, Pulp / Forestry products, and Banking / Life Insurance.
9. *9Calculated with reference to methods developed by the PCAF
10. *10Comparison with the 2030 carbon emission intensity (165g CO₂e/kWh) envisioned in the NZE2050(WEO2022)
11. *11Coverage ratio by sector, a lending-balance basis
12. *12Data quality score defined by the PCAF
13. *13The ratio of female directors and executive officers is as of June 30, 2023; the ratios of female senior managers and line managers in 2021 and 2023 are as of April 1 and March 31, respectively
14. *14Due to the increase in the overall number of executive officers and the appointment of female internal officers to serve as directors at Resona Bank and Saitama Resona Bank
15. *15Survey of Workplace Opportunities for Female Workers undertaken by Nikkei WOMAN