Special FeatureMessage from the Executive in Charge Of Sustainability

Basic Stance

What is the Bank focusing on in its promotion of sustainability?

Our focus is on aiming for the happiness of customers and employees and contributing to the development of society and the region. This is the purpose of JAPAN POST BANK.

JAPAN POST BANK began in 1875 as a postal money order service established by the government. Since then, we have continued to pass on the spirit of founder Hisoka Maejima, aiming to build financial infrastructure equally accessible for everyone. Even after the Bank was privatized in 2007, the Bank's stance of providing "safe and secure" financial services to anyone and everyone throughout Japan has never changed. As a bank that holds around 120 million accounts, a number roughly equal to the total population of Japan, we recognize that our purpose is to aim for the happiness of our customers and employees, and contribute to the development of society and the region.

JAPAN POST BANK also places importance on contributing to the Sustainable Development Goals (SDGs) of the United Nations and strives to realize a sustainable society through its business activities. In FY2021/3, we established a Sustainability Management Office within the Corporate Planning Department, building a framework for the advancement of sustainability in unison with management. As Executive in Charge Of Sustainability, I serve as the Chairperson of the Sustainability Committee which acts as an advisory body for the Executive Committee. The Sustainability Committee discusses various sustainability-related themes we should work toward through our business activities, such as environment, social, and governance (ESG). The key measures formulated by the Sustainability Committee are then discussed by the Executive Committee before being discussed and decided upon by the Board of Directors. The progress and results of initiatives are then monitored.

In FY2022/3, JAPAN POST BANK launched its new Medium-term Management Plan (FY2022/3 to FY2026/3). Under the plan, we will reaffirm our purpose and clarify the Threee Missions of JAPAN POST BANK, aiming for ESG management that combines corporate value enhancement and solutions for issues facing society. These Threee Missions are deeply connected to the basic principle of the SDGs, "leave no one behind." To achieve these missions, from the two perspectives of importance to stakeholders and the impact of our business activities, we have established four priority issues (Materiality) to be addressed among those facing society, and we have clearly stated our strategies for solving these issues and the target KPIs that we must achieve. I believe that my role as Executive in Charge Of Sustainability is to fully instill an understanding throughout the entire company that the promotion of ESG management relies on the daily efforts of each individual employee to address the priority issues raised in the Medium-term Management Plan. From this standpoint, in FY2023/3, we began an initiative under which all branches develop an "SDGs declaration." It aims to have each branch think about their own SDGs declaration that is tied to the Bank's four priority issues (Materiality), as well as specific initiatives for achieving it, before putting these ideas into practice in their daily work. In this way, all employees can feel a sense of solidarity and advance sustainability management through initiatives that align with their daily work.

Three Missions

Four Priority Issues (Materiality)

Initiatives and Targets

Please tell us about the progress of initiatives toward addressing each of the priority issues (Materiality).

We are steadily implementing strategies for solving each of priority issues in a way that is unique to the Bank.

The first priority issue is “providing ‘safe and secure’ financial services to anyone and everyone throughout Japan.” To achieve this, we will expand digital services that can be used easily by all of our customers, while putting safety and security foremost. The key point is that we will do this by realizing the complementarity of the physical and digital, which is an approach that is unique to the Bank. Specifically, we will harness our nationwide post office network , and employees will provide kind and courteous support for the use of digital services. We will thereby ensure that all customers can use digital services safely, including customers who are currently not familiar with them. For example, in the Medium-term Management Plan, we have set the target of increasing the number of registered Bankbook App accounts to 10 million by FY2026/3. As of March 31, 2022, we already had 4.81 million registered accounts.

The second priority issue, "contributing to regional economic expansions," relates to the purpose of JAPAN POST BANK. We are working to ensure fund flow to regional communities in a way that is unique to the Bank, where funds are provided not through loans (debt funding) but through fund investment (equity funding). For example, we are working with regional financial institutions throughout all of Japan by participating in regional revitalization funds. As of March 31, 2022, we had invested in a total of 39 funds, and we aim to have invested in a total of 50 funds by FY2026/3. In addition, through Japan Post Investment Corporation, our consolidated subsidiary established in 2018, we are focusing efforts on providing the flow of equity funding. The Company has already formed three funds. In particular, "Japan Post Investment Regional Development and Impact Fund I, ILP," which was formed in April 2022, aims to build a sustainable society through investment in companies and businesses that create a positive social impact by contributing to regional revitalization and the SDGs.

The third priority issue is "reducing environmental impact." Here, we will strengthen initiatives that accord with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations, which are a global standard. In the Bank's business model, the management of securities (internationally diversified investment) represents a key pillar of its operations. Therefore, in terms of greenhouse gas (GHG) emissions, the emissions of our investees (scope 3) are considerably larger than our direct emissions (scope 1 and 2). We have therefore set the target of a 46% reduction (Note: The reduction target was raised from 46% reduction to 60% reduction in Mar. 2023) in scope 1 and 2 emissions by FY2031/3 compared to FY2020/3, and a target of net zero emissions by 2050, which includes scope 3 (category 15: investments) GHG emissions. We are making steady progress toward these goals. In addition, from the viewpoint of contributing to the realization of a sustainable society through our securities management operations, we are expanding balances for ESG-themed investment such as green bonds. We have increased the target balance for the end of FY2026/3 from \2 trillion to \4 trillion, accelerating our initiatives for realizing a decarbonized society.

The fourth priority issue is the "advancement of work style reforms, and sophistication of governance." We are addressing this issue from the perspective of enhancing the well-being of our employees, as stated in our basic purpose to "aim for happiness of customers and employees and contribute to the development of society and the region." I believe that diversity management is an important part of this. Since the lifestyles of customers are diversifying with changes in the social structure, their needs are also becoming more diverse. This means that we, as the provider of services, must also diversify to meet their needs. Based on this awareness, I will strive to create an environment where each of the Bank's diverse and unique employees can work autonomously and independently and build their careers while sharing the purpose of JAPAN POST BANK. By doing so, I hope to make the Bank a place where they can experience well-being. We are also making considerable efforts toward promoting women's empowerment in the workplace, and as of March 31, 2022, the ratio of female employees was approximately 43%, which is comparatively high. Having been selected under the Nadeshiko Brand and MSCI Japan Empowering Women Index programs, we have received high external evaluations as a business that excels in supporting women's empowerment, and we are further strengthening our initiatives in this area. The ratio of women in managerial positions is currently 16.6%. However, given that the ratio of women is currently higher among new graduate hires, I would like to firmly build on this by increasing the target ratio of women in managerial positions to at least 20% by April 1, 2026.

Future Outlook

Could you please tell us about the Bank’s medium- to long-term challenges and policies?

We will make proactive efforts to communicate information and engage in dialog with all of our stakeholders to ensure that they have a deeper understanding and empathy with the Bank.

From children to adults, I believe that we are the most accessible bank for a wide range of people. I remember going to the post office (JAPAN POST BANK) as a child to deposit my pocket money. As a place where even children can feel comfortable, I feel we are a truly unique bank. While continuing in this way by upholding our principle of "providing safe and secure financial services to anyone and everyone throughout Japan" as a company that is intertwined with people's lives, I also strongly feel that we must transform our business model to align with the changing social structure.

As I mentioned earlier, over the medium to long term, it is important that we change this model to expand digital services that all customers can readily use. With the change in the social structure due to factors such as accelerated demographic aging and an increase in one-person households, as well as clear demand for contactless services as a result of COVID-19, it is vital that we expand digital services. In addition, "regional digitalization" is an issue facing the entire country, and the Government of Japan has established its promotion as one of its basic policies. By transforming our business model through realizing complementarity between the physical and the digital, we are accelerating various initiatives to digitalize financial services under the principle of "leave no one behind."

From now on, it will become even more important that all of our investors in both Japan and overseas, including individual investors, understand the unique business model of JAPAN POST BANK and our aim to increase corporate value while maintaining our public nature. Furthermore, to promote sustainability over the medium to long term and achieve targets, the cooperation of various stakeholders both within and outside the Bank is essential. Based on this awareness, JAPAN POST BANK will work harder than ever before to proactively communicate information in an easy-to-understand manner and engage in constructive dialog with all stakeholders to deepen their understanding and empathy with the Bank.

November 2022