Sumitomo Mitsui Banking Corporation

RATING

SECTOR

Banking

WEBSITE

CONTACT

1-1-2, Marunouchi, Chiyoda-ku, Tokyo, Japan

TEL: 81-3-3282-8111

STOCK EXCHANGE

LISTING

  • FTSE4Good Global 100 Index
  • FTSE Blossom Japan Index
  • MSCI Japan ESG Select Leaders Index
  • MSCI Japan Empowering Woman Index(WIN)
  • SOMPO Sustainability Index
  • Bloomberg Gender-Equality Index
  • #10 in Forbes’ 2021 World’s Best Banks
 

EMPLOYEES

28,000

GENERAL MANAGER

Takanobu Suehiro

AWARDS

  • SMBC Received the Bronze Prize in the financial service Category of “ESG Finance Awards” sponsored by the Ministry of the Environment (2020)
  • Recognized as a 2020 Certified Health and Productivity Management Organization (large enterprise category) 

To see the complete list of the Group’s awards and recognition, click here.

CONTENT SOURCE

FURTHER READING

Report created by Maribel Sabino

 

Sumitomo Mitsui Banking Corporation

SECTIONS :  Sustainability Targets   Evaluation  •  Key Points  •  Overview

 

Company Activity

Sumitomo Mitsui Banking Corporation (SMBC) is a Japanese multinational banking and financial services institution headquartered in Yurakucho, Chiyoda, Tokyo, Japan. The group operates in retail, corporate, and investment banking segments worldwide.

SMBC and its group companies offer a broad range of financial services centered on banking. The company is engaged in leasing, securities, credit card, investment, mortgage securitization, venture capital and other credit-related businesses.

SMBC’s headquarters and branches, including overseas branches, engage in deposit-taking, lending, securities brokering and trading, securities investment, money transfer, foreign currency exchange, corporate bond trustee services and custody services, financial futures underwriting, investment trust sales and other commercial banking activities.

Sumitomo Mitsui Banking Corporation (SMBC) is the subsidiary of the holding company Sumitomo Mitsui Financial Group, Inc.(SMFG).

Company Sustainability Activity

As a financial institution, SMBC Group has continuously upheld its commitment to sustainability and engages with customers and other stakeholders to contribute to the global transformation into a better society.

SMBC Group recognizes the societal and environmental challenges, alongside the need for urgent actions and transformation to transition to a sustainable world.  SMBC Group aims to incorporate the UN Sustainable Development Goals (SDGs) for sustainable development and to resolve social issues.

SMBC Group supports the spirit of the Paris Agreement and will contribute to resolving environmental issues.

In October 2020, the Japanese Government announced a net-zero emissions goal for 2050, committing to achieving a transition toward a decarbonized society. SMBC Group endorses the Government’s policy and strives to achieve greenhouse gas (“GHG”) emissions reductions in line with the goals of the Paris Agreement.

Moreover, SMBC will support the activities of its clients contributing to the transition toward and realization of a decarbonized society. SMBC Group has established “SMBC Group GREEN x GLOBE 2030“, a ten-year plan that extends to 2030 and is based upon the Sustainability Statement.

Highlights

Environment

  • SMBC Group is engaging with climate change and various other environmental issues. By helping resolve such issues through its business, SMBC aims to ensure a healthy environment for future generations.

Community

  • SMBC embraces a community that embodies connection, support, and safety. As a responsible member of the Community, SMBC Group continues to make contributions to society.

Next Generation

  • SMBC Group is working on various measures to foster the next generation to build a vibrant society that strikes a balance between maturity and growth. One of these is support for growth industries, helping new businesses create new technologies and services.

Diversity and Inclusion

  • SMBC Group regards “Diversity and Inclusion” as an important strategy for growth. Management is promoting greater diversity and inclusion to create a working environment where people from various backgrounds can fulfill their potential based on strong mutual respect, creating greater value for customers.

Targets

Reduction targets for greenhouse gas emissions

  • SMBC Group has set a target of “SMBC Group will become net zero in its group-wide operations by 2030” in its long-term plan, “SMBC Group GREEN x GLOBE 2030”, and is making efforts to achieve it.
  • To achieve this goal, the basic concept is to directly reduce GHG emissions by switching electricity to renewable sources making use of non-fossil fuel energy certificates, etc. For unavoidable emissions, carbon offsets such as purchasing credits will be considered to achieve net zero.

Green x Globe 2030

  • Execute green finance and finance that contributes to realizing sustainability equivalent to JPY 30 trillion between FY2020 to FY2029
  • 1.5 million participants in financial education programs held by SMBC group (FY2020 to FY2029)
  • Publicly release a minimum of one report per year which is based on the results of social impact measurements that target social contribution activities
  • Conduct surveys targeting front office personnel and customers to measure their awareness of SDGs and engagement levels regarding solving social issues
  • SMBC Group will become net zero in its group-wide operations by 2030

Compliance with Amended Energy Saving Act

  • As a company (enterprise) with annual energy consumption (crude oil equivalent) of 1,500 kiloliters or more, under the Energy Saving Act SMBC is required to develop an energy management system, create a medium/long-term plan and reduce its energy consumption intensity by 1% or more each year.

“SMBC Green Program” through Selling JGBs to Retail Clients

  • SMBC is pursuing the “SMBC Green Program” through selling JGBs to retail clients, in which SMBC implements certain measures to reduce carbon emissions (e.g., donations for tree-planting projects) by using part of the profit earned in such sales.
  • SMBC endeavors to ensure environmental conservation for the Earth jointly with clients through the reduction in carbon emissions equal to 100kg or tree planting for the equivalent of 1m2 of forest (forest improvement, etc.) per client.

Reduction of environmental impact within the company

  • SMBC reduced 187 tons in carbon per year as a result of recycling high-efficiency filters for air conditioning systems and energy-saving effects.

Progress

Reducing Environmental Impact through Products and Services

  • SMBC has been undertaking efforts to improve hospitality by implementing paperless branches that utilize cutting-edge technology to improve services for our customers.
  • In April 2017, the Ginza branch achieved digitalization of store services by using in-store transaction navigation, electronic signatures, and electronic seals.

Reduction of environmental impact within the company

  • The SMBC head office building has rainwater storage tanks, solar power facilities, a rooftop garden and human sensors, and makes use of recycled materials. These various environmental features and facilities are designed to give the building 30% lower annual CO2 emissions than the average leased office building in Tokyo. 
  • SMBC East Tower, which opened in the summer of 2015, has the environmental features on the head office building with the addition of all LED lighting and high-performance exterior walls​ performance. These features enable a 35% reduction in annual CO2 emissions compared to the average leased office building in Tokyo.
  • The Osaka head office building underwent a major renovation that finished in fiscal 2015. SMBC installed high-performing exterior wall frames, LED lighting, and solar panels to substantially improve the environmental performance while retaining the original charm of the facilities.
  • Initiatives are being conducted overseas to select and use buildings with environmental features and facilities.

Green Purchasing

  • A “green purchasing” system is adopted by the Group, whereby it is ensured that items that impose less of a burden on the environment are chosen and purchased to the extent possible, for the purpose of protecting the environment.

Initiatives Towards Realizing a Low-Carbon Society

  • As part of its initiatives to realize a low-carbon society, SMBC has promoted business activities related to emissions trading since 2005.​
    Specifically, SMBC provides financial support for energy conservation and renewable energy development projects conducted overseas with environmental technologies from Japan in connection with the Joint Crediting Mechanism (JCM), a new framework promoted by the Japanese government in the post-Kyoto Protocol era. SMBC intends to utilize JCM to support the overseas application of exceptional Japanese environmental technologies. It will take on environmental issues such as climate change, and continue to contribute to the development of a sustainable society. ​

SMBC Group Green Bond

  • SMBC Group is a major issuer of green bonds both domestically and in international markets.
  • SMBC Group applies the net proceeds of green bonds to finance qualifying renewable energy generation and energy efficiency projects. SMBC Group has a strong track record in providing project finance for renewable energy (solar energy, wind energy, etc.) both domestically and internationally.
  • In September 2018, SMBC Nikko formed the SDGs Finance Dept., which is responsible for providing advice on funding through SDG bonds (e.g. green bonds) and presenting related proposals.
  • SMBC Nikko became a member of the Climate Bonds Partners Programme, which is run by the Climate Bonds Initiative (CBI), in order to further promote support for activities related to the SDGs and climate change problems. SMBC Nikko will continue to support many green bond issuance deals and pursue relevant investments going forward as well while strengthening the collaboration with CBI through its membership in the said Programme.
  • In October 2017, SMBC invested in Tokyo Green Bonds issued by the Tokyo Metropolitan Government, an initiative for contributing to society through asset management.​

Social Impact Bond

  • SMBC and SMBC Trust Bank are jointly pursuing measures for the “social impact bonds” that typify a scheme for public-private partnerships.

Certificates

UN Sustainable Development Goals

UN SDGs Compliance

SMBC Group has designated goals from among the United Nations Sustainable Development Goals (SDGs) as areas of focus in 2018, addressing them within the three priority issues of “Environment,” ” Community,” and ” Next Generation.”

SMBC Group will seek to contribute to the resolution of social issues around the world to accomplish the SDGs through its business activities as a global financial group.​

SDG 1: No Poverty

  • In Indonesia, SMBC is providing financial services through its subsidiary BTPN Syariah, to small local business owners who have not had access to banking services before.
  • Through these activities that contribute to financial inclusion, SMBC Group will continue to endeavor to assist even increasing numbers of customers to expand their businesses, which is expected to make a contribution to the further development of Indonesia’s society as a whole.

SDG 4: Quality Education 

  • SMBC Group seeks to create a society where everyone can live safely, equipped with an accurate knowledge of money, by providing financial literacy education for all ages as a group-wide program.

SDG 7: Affordable and Clean Energy

  • SMBC has been providing project finance for renewable energy businesses such as solar power generation and wind power generation in Japan and overseas. These operations are to reduce CO2 emissions by the power they generate, replacing energy from non-renewable sources such as coal, oil and natural gas. Support for such projects contributes to reductions in CO2 emissions and environmental impact.
  • SMBC Trust Bank conducts renewable energy business initiatives that include receiving on trust for solar power facilities and site usage rights (ownership, leasehold, and surface rights) and managing them as trust assets as the trustee paying dividends to beneficiaries on income from the electricity sold.​
  • Sumitomo Mitsui Finance and Leasing provides leases for solar power generation equipment used in a solar sharing project where support columns are erected on farmland for the installation of solar panels while leaving space underneath to farm. The project is generating solar power on unused farmland in Fukushima Prefecture, while enabling the production of ginger crops. This approach is attracting attention as a potential way to develop farmland in Japan, where many farmers are elderly and young people are moving to cities rather than take up farming.

SDG 8: Decent Work and Economic Growth

  • The Real Tech Fund supported by SMBC Nikko is a venture capital fund created in April 2015 with euglena Co., Ltd. and Leave a Nest Co., Ltd. The aim of the fund is to address social and environmental issues that society faces, revitalizing the Japanese economy and promote greater investment in Japan by providing comprehensive support of human, finance and material resources for venture companies with exceptional technologies.
  • SMBC supports SMEs around the country in installing cashless payment systems by promoting a payments service provided by U.S. business alliance partner Square, Inc.​

SDG 9: Industry, Infrsutrusture and Innovation

  • The SMBC Group has established SMBC Startup Hub, an activity base in Shibuya, to improve and develop services for startups where the company can work closely with them. SMBC Group head office employees with specialist knowledge of supporting startups are deployed in Shibuya to help startups that are potential global players of tomorrow by providing a range of services dedicated to these companies and offer collaborative open innovation opportunities for startups, major corporations, and overseas organizations.
  • The Japan Research Institute (JRI) and SMBC has launched the “Incubation & Innovation Initiative,” a business consortium of cross-sector alliances, together. The consortium will support the commercialization of highly progressive technologies and business ideas that will form the foundation of Japan’s growth strategy. It will also research factors that inhibit innovation and make policy recommendations, such as designing legal systems and making regulatory reforms that reflect actual conditions, thereby contributing to the further invigoration of Japan’s economy.

SDG 11: Sustainable Cities and Communities

  • With the theme of “public policy for a super-aging society,” the Japan Research Institute harnesses the knowledge of both public researchers and consultants on social security, long-term care and businesses targeting senior citizens, medicine and healthcare, urban planning, etc., to promote recommendations and implementation of new policies and business.
  • SMBC is working to advance universal design compliance at branches. When installing new equipment or facilities at branches, SMBC checks whether it will be easy for people with disabilities to use them during the development stage, and also ask for feedback from customers after installation. SMBC Trust Bank is also conducting Web-based training for all bank employees regarding universal manners, as we work to improve services as a group.

SDG 13: Climate Action

  • SMBC Group has set a target of “SMBC Group will become net zero in its group-wide operations by 2030” in its long-term plan, “SMBC Group GREEN x GLOBE 2030”, and is making efforts to achieve it.
  • To achieve this goal, the basic concept is to directly reduce GHG emissions by switching electricity to renewable sources making use of non-fossil fuel energy certificates, etc. For unavoidable emissions, carbon offsets such as purchasing credits will be considered to achieve net zero.

Evaluation

SMBC Group develops and supplies financial solutions and products for customers engaged in addressing various social issues, notably climate change and other environmental issues through the promotion of energy and resource conservation and countermeasures for global warming. ​

SMBC Group has continuously upheld its commitment to sustainability, as seen in its progress for reducing environmental impact throughout its operations and buildings. The company has implemented green purchasing systems and has promoted and provided financial support for energy conservation, such as green and social impact bonds, and investments in renewable energy projects.

The group has also set targets for greenhouse gas emission reduction through its SMBC Group GREEN x GLOBE 2030 initiatives, which sets a goal for SMBC to become net-zero by 2030. Other initiatives include complying with the Energy Savings Act, and other green programs.

SMBC does have several certificates, notable listings such as FTSE4Good, MSCI, CDP, and awards. The group has also addressed the UN SDGs and is seeking to continue pursuing the goals.

It is evident that SMBC is on the path to sustainability. However, it has contributed $86.261 B to the fossil fuel industry since the adoption of the Paris Agreement. Even more so, it has been steadily increasing its investments since 2016. 

SMBC has been rated a D.

Analyst Outlook: Positive

SMBC has clear targets and initiatives that are supported by its CSR listings and certificates. SMBC would benefit from implementing more specific and measurable goals.

However, the Impakter Index cannot ignore its and detrimental contribution to the fossil fuel industry. SMBC will only receive a higher rating once it begins to divest and detach from the fossil fuel industry.

 

Key Points

  • The Impakter Index identifies and analyzes the SMBC Group’s version of its Sustainability Report. The group’s report identifies and discusses key issues that should be addressed by the SMBC Group, as well as providing useful links within pages so that readers can view information relevant to their purpose.
  • Initiatives supported by SMBC: United Nations Global Compact, United Nations Sustainable Development Goals, UNEP Finance Initiative, Responsible Investment Principles (PRI), Principles of Responsible Banks (PRB), Task Force on Climate-related Financial Disclosure (TFCD), CDP, Equator Principles, Principles for Financial Actions of a Sustainable Society
Share this Post