Launch of SMBC’s impact investing approach to startups

Sumitomo Mitsui Financial Group, Sumitomo Mitsui Banking Corporation, and SMBC Venture Capital will begin impact investing for startups as of this fiscal year.

Impact investing refers to investment activities intended to generate positive and measurable social and environmental impact alongside financial returns. Amidst the growing severity of social and environmental issues such as climate change, poverty, and gender inequality, impact investing is gaining global attention as an effective approach to address these challenges. The global impact investing market has reached USD 1.16 trillion, and Japan’s impact investing market has also expanded to JPY 5.8 trillion, a roughly 4.4-fold increase in one year.

The government has also stated in its “Basic Policy on Economic and Fiscal Management and Reform 2023” that it will strengthen support for social entrepreneurs (impact startups) through the promotion of impact investing. Additionally, in March 2024, the Financial Services Agency published the “Basic Guidelines on Impact Investing (Impact Finance).”

Following this trend, the SMBC Group signed the Impact-Oriented Finance Declaration in 2023 and joined the Japan Impact Startup Association as a supporting member, among other initiatives related to impact.

To further advance efforts toward impact creation, SMBC and SMBCVC have jointly established an impact investing function. SMBCVC will engage in impact investing in startups that contribute to solving SMBC Group’s priority issues (materiality), namely “environment,” “DE&I and human rights,” “poverty and inequality,” “declining birthrate and aging population,” and “Japan’s re-growth.” Impact investing is positioned as one of the measures to accelerate the achievement of the JPY 135 billion in investment and financing for startups (FY2023–2025) set out in the Medium-Term Management Plan.

In addition to its usual investment activities, SMBCVC will conduct impact measurement, management, and disclosure together with the startups eligible for impact investing. Additionally, SMBC will collaborate with SMBCVC to provide impact creation support by leveraging the SMBC Group’s network and expertise. Furthermore, SMBC plans to hold events and individual consultations for startups interested in impact investing, as well as workshops to support the development of logic models, in order to broaden the base of impact investing.

The SMBC Group will continue to strive to create social value by addressing materiality issues and working towards building a sustainable society.

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