SMFG enhances its initiatives for sustainability

Sumitomo Mitsui Financial Group plans to enhance its initiatives for sustainability across three key areas:

• Setting medium-term portfolio GHG emissions reduction targets for automobile and steel sectors
• Revision of policies for specific sectors and businesses (coal-fired power generation, thermal coal, biomass, and human rights)
• Introduction of environmental and social due diligence

Medium-term portfolio GHG emissions reduction targets

SMBC Group joined the Net Zero Banking Alliance (NZBA) in October 2021 and is committed to achieve net zero greenhouse gas (GHG) emissions across its investment and loan portfolios by 2050. SMBC Group has now set medium-term GHG reduction targets for the automobile and steel sectors.

In order to contribute to the decarbonization of the real economy through transition finance, SMBC Group has published the “Transition Finance Playbook”, which sets out definitions and criteria for transition finance.

Currently, the Playbook covers power and oil and gas sectors. Based on the above medium-term GHG reduction targets, SMBC Group plans to expand its scope to the automobile and steel sectors in fiscal year 2024. SMBC Group will continue to be engaged in dialogue with customers in utilizing the Playbook, aiming to achieve the medium-term GHG reduction targets and realize a decarbonized society.

Revision of policies for specific businesses and sectors

SMBC Group has established policies for specific businesses and sectors which are likely to have significant impact on the environment and society.

With the aim of respecting human rights and enhancing responses to climate change and efforts to conserve and restore natural capital, SMBC Group has newly established and revised the following policies. More information on the revised sector and business policies can be found in the SMBC Group Sustainability Policy.

Introduction of environmental and social due diligence

Sumitomo Mitsui Banking Corporation (SMBC) will introduce environmental and social due diligence in fiscal year 2024. SMBC has already been working to understand the status of customers’ responses to environmental and social risks, and it will develop an advanced due diligence framework as “environmental and social due diligence.”

From a globally unified perspective, SMBC will understand and evaluate its customers’ environmental and social initiatives (including climate change, biodiversity, and human rights violations) and their risk mitigation measures, and use them to improve risk management through the enhancement of conventional credit decisions and to engage with customers to solve social issues.

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