Keio Business School-Strategic Management with Social Impacts-                   Social Impacts by Leveraging             ...
Contents1. Mission at Financial, Capital Markets      & Daiwa Securities Group                                            ...
Mission at Financial & Capital Markets  Supply and demand of funds are connected through Financial and Capital  Markets. ...
Leveraging Financial Capabilities To contribute to a sustainable society.                                            3 ©D...
Global Network                                    Office in 20 countries and regions                               Daiwa ...
Stakeholders & Corporate Principles               Customers                                   Society           Building T...
Stakeholder Concerns                                                            Po g h n                                  ...
Materially Rich   Towards a Sustainable Society                                                        Paradigm           ...
MDGs (Millennium Development Goals) 1. End Poverty                               In addition to $57 billion of ODA in     ...
Public Money for Social Issues          Source: website of Japan’s MOFA                                            9©Daiwa...
Private Money for Social Issues      World financial assets = $178 trillion in 2008 (world GDP, $58 trillion x3)      Wo...
Impact Investing Awareness ■ Do you support Impact Investing?                                            ■ Which of financ...
Household Financial Assets          Japan                                  United Kingdom                                 ...
Extremely Low in Japan          Socially Responsible Investment (SRI)                     SRI市場規模 (10億ユーロ)    Billion Euro...
SRI issues in Japan 1.        Regulation and Guideline to promote SRI. 2.        Interests among Labor Unions, Religious G...
SRI Initiatives in Japan1.     Principles for Financial Action towards a Sustainable       Society (Principles for Financi...
CSR at Daiwa Securities Group                               CSR Activities (Implementations)                              ...
1. Core Business                               17©Daiwa Securities Group Inc.
Impact Investment Bonds              ▼Total in Japan                       ▼Daiwa             JPY 608.8 Billion           ...
Impact by IFFIm Vaccine BondsIFFIm has raised over US$ 3.6 billion since 2006 by July 2012.Daiwa has arranged US$ 1.2 bi...
MDGs & Impact Investment Bonds                                                                                            ...
Daiwa Asset Management■ ¥9.1 trillion Financial assets under management (as of Mar. 2012)■ Eco Funds, SRI Funds and etc.■ ...
Daiwa Microfinance Fund (DMF)■ Major Characteristics The first microfinance  mutual fund in Japan. Minimum investment un...
Impact by Daiwa Microfinance Fund    DMF supports 80,000 people in developing    countries to pursue self-sustaining.    ...
Forum & Daiwa Internet TV▼Forum play back at Website                                http://www.daiwatv.jp/                ...
Investor Forum for SRI        Daiwa Africa Forum 2010Date:     July 21st, 2010Venue:    GranTokyo North Tower 18F Conferen...
ESG Research by DIR Daiwa Institute of Research (DIR) has been providing highly distinctive information services, consult...
2. Social Engagement      ■Participating in ESG Initiatives     Principles for Financial Action for the 21st Century     ...
3. Corporate Citizenship  ■Partnership with NPOs for Financial Capabilities・Finance Park at Shinagawa ↑・Workshop for teach...
Corporate Citizenship ■Real business as a result of partnership with NPO/NGOs1)Social Business College(Kopernik)This is a ...
CSR Management - Work-life Balance■Creating a working environment that fit the life stage Work-life balance promotion int...
Disclosure                                             ■To Stakeholders                                             Proac...
External Appraisal   ■Evaluation on ESG / CSR  SRI index constituent      Dow         Jones Sustainability Indexes (14 c...
Conclusion1. A financial institution has a social calling to serve as   a mediator between asset management and financing ...
Contact :Corporate Communication Department                        e-mail:daiwacsr@dsgi.daiwa.co.jp                       ...
Appendix   This document has been prepared by Daiwa Securities Group (Daiwa) based on information, the sources of which ar...
The Triple Bottom Line【PPP】                                地球環境             【ESG】                               (Planet/En...
ISO 26000 (Publish in Nov. 2010)  From CSR to SR                   Guidance on Social Responsibility, provides harmonized...
Funding type for Development                                Private               Donation                               I...
Money flows to developing countries         Remittances and other flows to developing countries, 1990-2014               ...
Highlights of “Impact Investment Bonds”       Vaccine Bond                                                               M...
Impact Investment Bond Uridashi                                Total $5,338 mil / Daiwa’s arrangements $ 3,721 / Daiwa’s m...
Impact Investment Bond Uridashi                                Total $5,338 mil / Daiwa’s arrangements $ 3,721 / Daiwa’s m...
Impact Investment Bond Uridashi                                Total $5,338 mil / Daiwa’s arrangements $ 3,721 / Daiwa’s m...
Impact investment bond PrivatePlacement to Regional Banks  Impact Investment type bond Private Placement (Publicly announc...
Event SponsorshipMay 15 (Sat) – June 13 (Sun), 2010   October 31 (Sun) – November 7 (Sun)                                 ...
Daiwa Microfinance FundPursuing financial return as well as social return         Taking Currency risk, Interest rate ris...
80,000 poverty alleviation        DMF Pursues Financial and Social return. ■    Daiwa Microfinance Fund Loan Portfolio Fi...
MFI Interest Yield to borrowers                            50                                                             ...
Myth & Fact of Microfinance                              Myth                                            Fact             ...
MF potential market size 2.7 billion                                        50©Daiwa Securities Group Inc.
Cross-border funding to MFIs                                                      $21.3 billion*           Private donors ...
Towards the End of Poverty in 2025                               Assumptions                               5% Inflation p....
SRI Products :Mutual funds     SRI Funds                                ●Daiwa SRI Fund                                  ...
CSR Dialogue                                                                        No. 26 “Cluster Bombs”■Pondering CSR t...
55©Daiwa Securities Group Inc.
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Keio BS 20121024 Daiwa

  1. 1. Keio Business School-Strategic Management with Social Impacts- Social Impacts by Leveraging Financial Capabilities IWAI Toru, October 24, 2012
  2. 2. Contents1. Mission at Financial, Capital Markets & Daiwa Securities Group (P. 2∼5)2. MDGs (Millennium Development Goals) & SRI(Socially Responsible Investment)(P. 6∼ 15)3. SRI / Impact Investment Products & CSR at Daiwa Securities Group (P. 16∼32)4. Conclusion (P. 33) Appendix (P. 34 ∼55) This document has been prepared by Daiwa Securities Group (Daiwa) based on information, the sources of which are believed by Daiwa to be reliable, but Daiwa makes no representation nor warranty as to the accuracy or completeness of such information. Recipients of this document must make their own decisions on whether or not to adopt the recommendations discussed in this document, based upon their specific situations and objectives. Any use, disclosure, distribution, dissemination, copying, or reproduction of this document without prior written consent from Daiwa is prohibited. 1©Daiwa Securities Group Inc.
  3. 3. Mission at Financial & Capital Markets Supply and demand of funds are connected through Financial and Capital Markets. Its mission is to create a smooth money flow, provide capital as a blood in economy and contribute to a sustainable society. Financial & Capital Markets 2 ©Daiwa Securities Group Inc.
  4. 4. Leveraging Financial Capabilities To contribute to a sustainable society. 3 ©Daiwa Securities Group Inc.
  5. 5. Global Network Office in 20 countries and regions Daiwa Capital Markets Europe Limited Daiwa Capital Markets Asia Holding B.V. Daiwa Capital Markets Europe Limited Daiwa Capital Markets Asia Holding B.V. Beijing Representative Office Beijing Representative Office Daiwa Capital Markets America Inc Daiwa Capital Markets America Inc Moscow Moscow Seoul Branch Beijing Seoul Branch Beijing Warsaw Warsaw Moscow Representative Office Seoul Seoul Moscow Representative Office NY Head Office Daiwa SSC Securities =Merger with Shanghai NY Head Office Daiwa SSC Securities Shanghais Shanghais Bahrain Branch Bahrain Branch Securities (Daiwa: 33% Chicago Chicago NY NY Bahrain Bahrain Hong Kong of share) Hong Kong Dubai Dubai Taipei Taipei San Francisco San Francisco Hong Kong Hong Kong Taiwan Taiwan シャーロット シャーロット Bangkok Rep.Office Bangkok Rep.Office Dubai Branch Dubai Branch Hanoi HanoiSan Francisco BranchSan Francisco Branch Mumbai Mumbai Bangkok Bangkok Manila Manila The Philippines =Development The Philippines Hanoi Rep. Office Hanoi Rep. Office Bank of Philippines According to the M&A division According to the M&A division India India Singapore Singapore has 40% of share ,, another 20% of another 20% of investment for partnership investment for partnership Singapore Singapore Australia Australia Melbourne Melbourne Manchester Manchester London Head Office London Head Office Frankfurt Branch Frankfurt Branch Frankfurt Frankfurt Our company’s stronghold London London Daiwa Securities Trust Company (US) Lyon Lyon Zurich Zurich Daiwa Europe Fund Managers (Ireland) Limited Geneva Geneva Geneva Branch Daiwa Europe Trustees (Ireland) Limited Paris Branch Geneva Branch Paris Branch Paris Paris Milan Milan Milan Branch Milan Branch Special hubs for M&A Madrid Madrid Barcelona Barcelona Acquisition of M&A Advisory Division of Close Brothers and Close Brothers Corporate Finance on Jul. 2009. 4 ©Daiwa Securities Group Inc.
  6. 6. Stakeholders & Corporate Principles Customers Society Building Trust Contributing to Society Contributing to Society Building TrustTrust from the clients is the foundation Contribute to the community and Contribute to the community and Trust from the clients is the foundation economic development through financeof our business. of our business. economic development through finance and capital markets. and capital markets. Employees Shareholders Valuing Human Valuing Human Earning Sound Profits Resources Earning Sound Profits Resources Improve corporate value by developing aa Improve corporate value by developingEmployees are the source of our Employees are the source of our healthy business. healthy business.competitiveness. competitiveness. 5 ©Daiwa Securities Group Inc.
  7. 7. Stakeholder Concerns Po g h n Ri ma Business Customers; Clients ve ts Shareholders Improve SCM Partners y Hu n tio rt w; la i e s’ gu ’v r re S i ac rs me the le t iv e to m to g nt e to us sin us c ea sh sh r c ing by C ha Cl an ar ar te n ric hte tion liim ng eh eh St eig ta C m ge Ch ol old H ien de e Governance att e a or rs rs e e ComplianceDiversity Local Community; Citizens EmployeesFrom lifetime employment to Strengthening monitoringperformance-base; of the enterprise;Aiming to be a professional Enterprise Social business 6 ©Daiwa Securities Group Inc.
  8. 8. Materially Rich Towards a Sustainable Society Paradigm Shift Sustainability h owt Gr Carbon energy Renewable EnergyIndustrial replaced animals (Solar, wind, gravitational, geothermal)Revolution and manpower Low Carbon Community ∼20th century 21st Century∼ <Unlimited Resource> <Limited Resource> 7 ©Daiwa Securities Group Inc.
  9. 9. MDGs (Millennium Development Goals) 1. End Poverty In addition to $57 billion of ODA in 1999, another $40-60 billions p.a. 2. Universal Education are needed to achieve the MDGs . 3. Gender Equality ■Additional fund necessary to; (include double count) (Bil. USD) 4. Child Health Poverty Eradication 39 ∼ 54 5. Maternal Health Education 10 ∼ 25 6. Combat HIV/AIDS Health care 20 ∼ 25 7. Environmental Emvironment 5 ∼ 21 Sustainability Source: The World Bank, “The costs of attaining the millennium development goals.” Summary of World Bank Policy Research Working Paper, “Development 8. Global Partnership Goals: History, Prospects and Costs,” by Shantayanan Devarajan, Margaret J. Miller, and Eric V.Swanson. http://www.un.org/millenniumgoals/ 8 ©Daiwa Securities Group Inc.
  10. 10. Public Money for Social Issues Source: website of Japan’s MOFA 9©Daiwa Securities Group Inc.
  11. 11. Private Money for Social Issues   World financial assets = $178 trillion in 2008 (world GDP, $58 trillion x3) World financial assets = $178 trillion in 2008 (world GDP, $58 trillion x3) <Background> <Background>   Fiscal condition of each country grows increasingly severe (policy makers’ side) Fiscal condition of each country grows increasingly severe (policy makers’ side)   Not only Grant/ODA, but also Investments are required to solve social issues Not only Grant/ODA, but also Investments are required to solve social issues   Reflect on the financial crisis (investors’ side) Reflect on the financial crisis (investors’ side)■ GIIN (Global Impact Investing Network) GIIN is a not-for-profit organization created to “increase the scaleand effectiveness of impact investing.” It was inaugurated at Clinton Global Initiative in Sep. 2009, to measure growth andincrease of the social investment, ‘Impact Investment’, in which is more direct and hasan immediate result compare to conventional SRI (Socially Responsible Investment) Representative examples of investment products: vaccine bonds of IFFIm, GenerationInvestment Management of Al Gore, former US Vice President. Main investment target: poverty & hunger; global warming; water, food and energy;medical care, health, welfare; community development, education 10©Daiwa Securities Group Inc.
  12. 12. Impact Investing Awareness ■ Do you support Impact Investing? ■ Which of financial return or social return do you care? 0 20 40 60 80 100 120 0 20 40 60 80 100 Yes 賛同する 97 Both 双方 89Strongly Yes 大いに賛同する 31 38 Financial Return 投資リターン No 賛同しない 0 Social社会貢献 return 30 ■ What social problems are you seriously ■ What aspect do you most value when concerned about? 40 0 20 60 80 100 investing?0 20 40 60 80 100 120 Water 水・衛生 79 成長性が見込める Revenue growth 102 貧困・飢餓 Poverty 70 Health 69 CSR strategy 社会性を重視した経営姿勢かどうか 83 医療・保健 Education 教育 56 利益を上げている Profit 64 社会基盤整備Infrastructure 37 Climate Dividend 株主への還元 52 気候変動 33 Change No興味がない interest 17 Scale of operation 事業規模 11 Source: Questionnaire at Impact Investment Forum 2010, September 9th 11 ©Daiwa Securities Group Inc.
  13. 13. Household Financial Assets Japan United Kingdom France United States 4% 6% 3% 7% 3%3% Others 17% 9% Mutual 11% 29% 29% 18% 7% funds Germany Currency Shares 1% & 16% Mutual 20% deposits Currency funds Insuranc and e& 55% 38% deposits27% Pension 54% 8% 40% Insuranc e& Shares Pension Deep pocket 34% 30% seeking quality 32% Currency and deposits Life insurance and pension fund reserves Shares and other equity Mutual funds and securitis other than shares Others Billions of dollars, as of the end of 2009 Japan* United Kingdom* Germany* France* United States (%) (%) (%) (%) (%) Total Financial Assets 15,638 100.0 6,709 100.0 6,688 100.0 5,388 100.0 44,510 100.0 Currency and deposits 8,592 54.9 1,913 28.5 2,560 38.3 1,553 28.8 7,756 17.4 Life insurance and pension fund reserves 4,228 27.0 3,615 53.9 2,241 33.5 2,126 39.5 13,191 29.6 Shares and other equity 1,104 7.1 744 11.1 523 7.8 879 16.3 13,972 31.4 Mutual funds and securitis other than shares 1,047 6.7 218 3.3 1,315 19.7 504 9.4 8,135 18.3 Others 668 4.3 218 3.3 49 0.7 327 6.1 1,457 3.3 Total Financial Liabilities 4,085 26.1 2,474 36.9 2,193 32.8 1,864 34.6 14,068 31.6 Net Financial Assets 11,553 73.9 4,235 63.1 4,495 67.2 3,524 65.4 30,442 68.4 * converted into US dollars based on the year-end exchange rates of GBPUSD=1.62, EURUSD=1.43, USDJPY=92.90 Primary sources: Japan: Bank of Japan, Flow of Funds Accounts , June 17, 2010 United Kingdom: Office for National Statistics, Financial Statistics No 580, August 2010 Germany: Deutsche Bundesbank, Financial Accounts for Germany 1991 to 2009. France: Banque de France, Financial Accounts and Financial Balance Sheets, June1, 2010. United States: Federal Reserve Statistical Release, Flow of Funds Accounts, June10, 2010. 12 ©Daiwa Securities Group Inc.
  14. 14. Extremely Low in Japan Socially Responsible Investment (SRI) SRI市場規模 (10億ユーロ) Billion Euro Market size 6,000 4,986 5,000 4,000 3,000 2,141 2,000 1,000 405 58 4 0 Europe 欧州 US 米国 Canada カナダ Aus/NZ 豪州・NZ JPN 日本 (2009) (2010) (2008) (2010) (2009) Source:「European SRI Study 2010」; based on Eurosif publication and SIF-J material, compiled by Daiwa Securities Group. Exchange rate as of Dec 31, 2009 13©Daiwa Securities Group Inc.
  15. 15. SRI issues in Japan 1. Regulation and Guideline to promote SRI. 2. Interests among Labor Unions, Religious Groups. 3. SRI Product and Service. 4. Consciousness of a social impact through investing. 5. School Education about Finance and Investment. 14©Daiwa Securities Group Inc.
  16. 16. SRI Initiatives in Japan1. Principles for Financial Action towards a Sustainable Society (Principles for Financial Action for the 21st Century), Nov.20112. “Workers’ Capital Guideline” by RENGO (Japanese Trade Union Confederation), Dec.20103. New SRI / Impact Investment products4. Events and Forums for SRI and Impact Investment5. Workshops for teacher and student financial capabilities. 15 ©Daiwa Securities Group Inc.
  17. 17. CSR at Daiwa Securities Group CSR Activities (Implementations) Objective 1. Core Business 1. Daily business 2. Developing & offering SRI/Impact Investing products ︵ CSR Management -Eco fund; SRI fund; microfinance fundMarket WLB, Info disclosure, external appraisal Sustainable Enterprise -Vaccine bonds; microfinance bonds, etc. Sustainable Society 3. Enlightening Event for SRI & Impact Investing 4. SRI/ESG Research 2. Social Engagement ・2011 Principles for Financial Action for the 21st Century ・2010 Signing the UN Global Compact (GC) ・2006 Signing the UN Principles for Responsible Investment (PRI)Non-market ・2004 Signing the UNEP Finance Initiative (UNEP FI) & Carbon Disclosure Project (CDP) 3. Corporate Citizenship 1.Teacher and Student Financial Capabilities 2. Daiwa Securities Group Tsunami Reconstruction Foundation ︶ 3. Daiwa Phoenix Japan Grant Program (Nippon Support Fund) 16 ©Daiwa Securities Group Inc.
  18. 18. 1. Core Business 17©Daiwa Securities Group Inc.
  19. 19. Impact Investment Bonds ▼Total in Japan ▼Daiwa JPY 608.8 Billion JPY 386.5 Billion Food, 8.3 Education,11.8 Poverty , 108.8 Others March 2008 Vaccine, Total ∼July 2012 111.8 37% 608.8 Source: Daiwa JPY in Billion Securities. Daiwa 63% Environment, 145.8 18©Daiwa Securities Group Inc.
  20. 20. Impact by IFFIm Vaccine BondsIFFIm has raised over US$ 3.6 billion since 2006 by July 2012.Daiwa has arranged US$ 1.2 billion Vaccine Bond since 2008.GAVI has disbursed US$ 3.6 billion to 70 countries (from 2000 to March 2012)GAVI had contributed tothe immunization of anadditional 326 millionchildren, who might nototherwise have had accessto vaccines by the end of2011.As a results, 5.5millionfuture deaths avertedthrough GAVI support.(2000-2011). GAVI Website: http://www.gavialliance.org/index.aspx 19©Daiwa Securities Group Inc.
  21. 21. MDGs & Impact Investment Bonds d Fun Impact Investment Bond ion e uct i con sunam anc in A tion a fin fric ne str te T uca en MDGs ter ma ro cci Gr e Mic Wa Ed Cli Va Re Goal 1: Eradicate extreme poverty & hunger ◎ ◎ ○ Goal 2: Achieve universal primary education ○ ◎ ○ ○ Goal 3: Promote gender equity and empower women ◎ ○ ○ ○ Goal 4: Reduce child mortality rates ◎ ◎ Goal 5: Improve maternal health ○ Goal 6: Combat HIV/AIDS, malaria and other diseases ◎ ◎ Goal 7: Ensure environmental sustainability ○ ◎ ◎ ◎ Goal 8: Develop a global partnership for development ○ ○ ○ ○ ○ ○ 20©Daiwa Securities Group Inc.
  22. 22. Daiwa Asset Management■ ¥9.1 trillion Financial assets under management (as of Mar. 2012)■ Eco Funds, SRI Funds and etc.■ As a PRI signatory, considering ESG issues■ Implementing SRI in daily asset management. e.g. Investment Principles against Cluster Munitions Producers The Japanese government ratified the Convention on Cluster Munitions (Oslo Declaration), which takes effect on August 1, 2010. As an asset management company in the country ratifying the convention, Daiwa Asset Management established the basic principles for investment in, and other actions against, cluster munitions producers, and would like to announce the basic principles as follows: http://www.daiwa-am.co.jp/english/cluster/index.html Daiwa Asset Management shall not invest in securities issued by cluster munitions producers in active funds. In cases where the active funds hold such securities, Daiwa Asset Management shall immediately sell the securities. In cases where withdrawal from, or contraction of, the business for producing cluster munitions is proposed at shareholders’ meeting of cluster munitions producers, Daiwa Asset Management shall agree with such shareholders’ proposals. 21©Daiwa Securities Group Inc.
  23. 23. Daiwa Microfinance Fund (DMF)■ Major Characteristics The first microfinance mutual fund in Japan. Minimum investment unit is 1,000 yen, you can pursue both social and financial return. Lending to MFIs in local currency. (currency risk free funding for MFIs ) 22 ©Daiwa Securities Group Inc.
  24. 24. Impact by Daiwa Microfinance Fund DMF supports 80,000 people in developing countries to pursue self-sustaining.  Key Findings 1. DMF lends 64 million USD to 21MFIs (Its lending rate is 11% on average. The term is 2years) 2. Total loan portfolio of 21 MFIs is 3 billion USD. (DMF lending counts 2% of the loan portfolio) 3. 21 MFIs outreaches to 2.6 million people 4. DMF lending supports 79,630+α. 5. Average loan per person is 806 USD. (As of March 2012) 23 ©Daiwa Securities Group Inc.
  25. 25. Forum & Daiwa Internet TV▼Forum play back at Website http://www.daiwatv.jp/ 24 ©Daiwa Securities Group Inc.
  26. 26. Investor Forum for SRI Daiwa Africa Forum 2010Date: July 21st, 2010Venue: GranTokyo North Tower 18F Conference RoomSpeaker: Mr. Thierry de Longuemar, Vice President Finance, African Development Bank (AfDB) Mr. Pierre Van Peteghem, Treasurer, AfDB Dr. Boukary Savadogo, Manager of the Division of Education, Science and Technology, AfDB Dr. Naoyuki Kawahara, Director, NPO Rocinantes Ms. Keiko Sano, Director, East Africa Division 2, Africa Department, Japan International Cooperation Agency Ms. Agnes Chan, the ambassador of the Japan Committee for UNICEF, a pop singer, a television personalityNo. of Audience: 221 25 ©Daiwa Securities Group Inc.
  27. 27. ESG Research by DIR Daiwa Institute of Research (DIR) has been providing highly distinctive information services, consulting and system solutions since its establishment in 1989.http://www.dir.co.jp/souken/research/esg/index.html 26 ©Daiwa Securities Group Inc.
  28. 28. 2. Social Engagement ■Participating in ESG Initiatives Principles for Financial Action for the 21st Century GC (UN Global Compact) PRI (Principle for Responsible Investment) UNEP FI (UNEP Finance Initiative) CDP (Carbon Disclosure Project) 27©Daiwa Securities Group Inc.
  29. 29. 3. Corporate Citizenship ■Partnership with NPOs for Financial Capabilities・Finance Park at Shinagawa ↑・Workshop for teachers atDaiwa’s Tama Training Centre → 28©Daiwa Securities Group Inc.
  30. 30. Corporate Citizenship ■Real business as a result of partnership with NPO/NGOs1)Social Business College(Kopernik)This is a seminar series on social entrepreneur for social business practice, heldbimonthly since Oct. 2010 (12 lectures in 2 years), not only for university studentsbut also for common people. The college is funded by grant from Daiwa Eco Fundmanagement fee. Its contents can be found in the web.2)Daiwa Securities Group Tsunami Reconstruction Fund (Asia Community Center 21) From 2005 (after appeal from the UN), for the next 10 years, we committed total 100 million yen grant for reconstruction assistance to NGOs in devastated areas (India, Sri Lanka, Indonesia). A part of grant is used as a source for Microfinance.3)Daiwa Phoenix Japan Grant Program (Nippon NPO Center) In order to strengthen capacity of NGOs in Tohoku disaster areas after 3.11 (2011), we support them for personnel expenditure (instead of program cost) aiming at nurturing leaders for the core of the organization. This 5 year program is made possible by donations from management fee of Daiwa Nippon Support Fund Vol.3. (or Phoenix Japan Fund) (In the brackets are the name of NGO/NPO) 29 ©Daiwa Securities Group Inc.
  31. 31. CSR Management - Work-life Balance■Creating a working environment that fit the life stage Work-life balance promotion intranet site for employees 1. Work-life balance promotion committee 2. Enforcing leaving the office by 19:00 → Efficiency at work “Work hard, Live hard” 3. 「Professional Return Plan」・ 4. 「Changing of Work Location System」 5. ‘Child-rearing break’ until 3 years old, exceeding the statutory period 6. 「Day-care expenses subsidy system」 7. Distributing 「Guidebook for Childcare」 30©Daiwa Securities Group Inc.
  32. 32. Disclosure ■To Stakeholders Proactive Fair Prompt■Annual Report ■CSR Report Financial Non-financial Clear understanding Proper Evaluation Daiwa Securities Group http://www.daiwa-grp.jp/english/index.cfm 31©Daiwa Securities Group Inc.
  33. 33. External Appraisal ■Evaluation on ESG / CSR  SRI index constituent Dow Jones Sustainability Indexes (14 consecutive years) FTSE4Good Index (7 consecutive years) ■Ranking for Work Place NIKKEI Most Famous Companies for Job Seekers (2009) Rank 5 for Financial Institution (Rank 1 for Securities Industry) NIKKEI Woman (2011) Best 100 Companies with friendly working environment for women Rank 1 for Financial Institution (Rank 3 for general category) 32©Daiwa Securities Group Inc.
  34. 34. Conclusion1. A financial institution has a social calling to serve as a mediator between asset management and financing for public and private sectors.2. While acknowledging environment, social and governance issues, harmony amongst various stakeholders is required to develop a sustainable society in the 21st century onwards.3. Daiwa Securities Group is implementing its mission by leveraging financial capabilities. 33©Daiwa Securities Group Inc.
  35. 35. Contact :Corporate Communication Department e-mail:daiwacsr@dsgi.daiwa.co.jp Tel:03-5555-1312 Fax:03-5555-0662 34©Daiwa Securities Group Inc.
  36. 36. Appendix This document has been prepared by Daiwa Securities Group (Daiwa) based on information, the sources of which are believed by Daiwa to be reliable, but Daiwa makes no representation nor warranty as to the accuracy or completeness of such information. Recipients of this document must make their own decisions on whether or not to adopt the recommendations discussed in this document, based upon their specific situations and objectives. Any use, disclosure, distribution, dissemination, copying, or reproduction of this document without prior written consent from Daiwa is prohibited. 35©Daiwa Securities Group Inc.
  37. 37. The Triple Bottom Line【PPP】 地球環境 【ESG】 (Planet/Environment) 人間社会 (People/Society) 経済 (Profit/Governance) 企業・団体 (Enterprise) 36©Daiwa Securities Group Inc.
  38. 38. ISO 26000 (Publish in Nov. 2010) From CSR to SR  Guidance on Social Responsibility, provides harmonized, globally relevant guidance for private and public sector organizations of all types based on international consensus among expert representatives of the main stakeholder groups,.  What will ISO 26000 achieve? It will integrate international expertise on social responsibility –will be a powerful SR tool to assist organizations to move from good intentions to good actions. 7 Core Subjects 7 Code of Conducts 1. Accountability 1. Administration of the organization 2. Transparency 2. Human rights 3. Ethical behavior 3. Labor practice 4. Respect the interest of stakeholders 4. Environment 5. Respect the rule of law 5. Fair business practice 6. Respect the international code of 6. Consumer issues conduct 7. Community participation and 7. Respect the human rights development Source: ISO Web site . Japan Business Federation Political Sociology Division 2010.6.10「Summary of Result of Copenhagen Conference ISO260000」 37 ©Daiwa Securities Group Inc.
  39. 39. Funding type for Development Private Donation InvestmentNo-financial return Financial return* *Possible for negative return due to exchange fluctuations and credit risk and so on. Grant Aid Yen Loan Public 38 ©Daiwa Securities Group Inc.
  40. 40. Money flows to developing countries Remittances and other flows to developing countries, 1990-2014 332 127 •Source: THE WORLD BANK Migration and Development Brief 18. •Data on FDI, external private debt, and net inflows of portfolio equity are from the World Development Indicators database. •ODA data is from OECD DAC. Remittances data is from world bank, IMF 39©Daiwa Securities Group Inc.
  41. 41. Highlights of “Impact Investment Bonds” Vaccine Bond Microfinance Bond Issuer: IFFIm Issuer: IFC Purpose: Raise funds in the capital markets to Purpose: Support microfinance businesses with the purpose accelerate funding available for health and immunization of fostering economic independence by providing programmes in 70 of the developing countries small scale financial services to the poor segments. around the world. Issue date and amount: Issue date and amount: Mar. 19, 2008 $211 million equivalent Nov. 20, 2009 $275 million equivalent Feb. 20, 2009 $437 million equivalent Sep. 22, 2010 $342 million equivalent Mar. 24, 2010 $338 million equivalent Mar. 31, 2011 $227 million equivalent Green Bond Issuer: IBRD Purpose: Support projects in the World Bank’s member Support for vaccine countries that meet specific criteria for low-carbon Financial securing program project. management Issue date and amount: Funding : February 3, 2010 $106 million equivalent Investors Donator Investment Donation for up to Water Bond in capital market 20 years Issuer: ADBDaiwa Securities joined the panel with GAVI on the 8th plenary session of Purpose: Support water project by developing countries inthe Leading Group on Innovative Financing for Development (16-17 Dec Asia and the Pacific.2010, Tokyo) Issue date and amount April 16, 2010 $628 million equivalent Feb. 22, 2010 $270 million equivalent 40 ©Daiwa Securities Group Inc.
  42. 42. Impact Investment Bond Uridashi Total $5,338 mil / Daiwa’s arrangements $ 3,721 / Daiwa’s market share 69% 41 ©Daiwa Securities Group Inc.
  43. 43. Impact Investment Bond Uridashi Total $5,338 mil / Daiwa’s arrangements $ 3,721 / Daiwa’s market share 69% 42 ©Daiwa Securities Group Inc.
  44. 44. Impact Investment Bond Uridashi Total $5,338 mil / Daiwa’s arrangements $ 3,721 / Daiwa’s market share 69% 43 ©Daiwa Securities Group Inc.
  45. 45. Impact investment bond PrivatePlacement to Regional Banks Impact Investment type bond Private Placement (Publicly announced) Investor Issuer Currency Name Issue Amount Lead Manager Press Release World Bank The Iyo Bank, Ltd. (International Bank for Reconstruction USD Green Bond 50 mil USD J.P. Morgan Securities Ltd. 2010/9/1 and Development, IBRD) World Bank The San-in Godo (International Bank for Reconstruction AUD Green Bond 30 mil AUD J.P. Morgan Securities Ltd. 2010/11/16 Bank, Ltd. and Development, IBRD) World Bank The Bank of Iwate, Daiwa Securities Capital (International Bank for Reconstruction USD Green Bond 10 mil USD 2010/12/1 Ltd. and Development, IBRD) Markets Co. Ltd. World Bank The Kiyo Bank, Daiwa Securities Capital (International Bank for Reconstruction USD Green Bond 10 mil USD 2010/12/24 Ltd. and Development, IBRD) Markets Co. Ltd. World Bank The Aichi Bank, (International Bank for Reconstruction USD Green Bond 30 mil USD J.P. Morgan Securities Ltd. 2011/1/14 Ltd. and Development, IBRD) World Bank The Kagawa Bank, Daiwa Securities Capital (International Bank for Reconstruction USD Green Bond 5 mil USD 2011/1/19 Ltd. and Development, IBRD) Markets Co. Ltd. World Bank The Fukui Bank, Daiwa Securities Capital (International Bank for Reconstruction USD Green Bond 10 mil USD 2011/1/24 Ltd. and Development, IBRD) Markets Co. Ltd. World Bank The Daishi Bank, Daiwa Securities Capital (International Bank for Reconstruction USD Green Bond 10 mil USD 2011/1/24 Ltd. and Development, IBRD) Markets Co. Ltd. THE NISHI-NIPPON Asian Development Bank Daiwa Securities Capital USD Water Bond 30 mil USD 2011/1/26 CITY BANK, LTD. (ADB) Markets Co. Ltd. World Bank The San-in Godo (International Bank for Reconstruction USD Green Bond 30 mil USD J.P. Morgan Securities Ltd. 2011/2/17 Bank, Ltd. and Development, IBRD) World Bank North Pacific Bank, Daiwa Securities Capital (International Bank for Reconstruction USD Green Bond 10 mil USD 2011/2/18 Ltd. and Development, IBRD) Markets Co. Ltd. World Bank The Nanto Bank, Daiwa Securities Capital (International Bank for Reconstruction USD Green Bond 20 mil USD 2011/2/25 Ltd. and Development, IBRD) Markets Co. Ltd. World Bank Daiwa Securities Capital The Oita Bank, Ltd. (International Bank for Reconstruction USD Green Bond 10 mil USD 2011/4/25 and Development, IBRD) Markets Co. Ltd. World Bank The Musashino Daiwa Securities Capital (International Bank for Reconstruction USD Green Bond 10 mil USD 2011/4/19 Bank, Ltd. and Development, IBRD) Markets Co. Ltd. World Bank Ogaki Kyoritsu Daiwa Securities Capital (International Bank for Reconstruction USD Green Bond 10 mil USD 2011/6/14 Bank, Ltd and Development, IBRD) Markets Co. Ltd. Kagoshima Bank, Asian Development Bank Daiwa Securities Capital USD Water Bond 10 mil USD 2011/6/30 Ltd. (ADB) Markets Co. Ltd. World Bank Daiwa Securities Capital Waseda University (International Bank for Reconstruction AUD Green Bond 10 mil AUD 2011/11/8 and Development, IBRD) Markets Co. Ltd. World Bank Chiba Kogyo Bank, Daiwa Securities Capital (International Bank for Reconstruction USD Green Bond 10 mil USD 2012/2/1 Ltd. and Development, IBRD) Markets Co. Ltd. (As of April 30, 2011) Source: Daiwa Securitiess Product Planning Department 44©Daiwa Securities Group Inc.
  46. 46. Event SponsorshipMay 15 (Sat) – June 13 (Sun), 2010 October 31 (Sun) – November 7 (Sun) @Osaka International Convention Center@Tokyo Mid-Town Design HubHost: Committee for ‘Imagine Host: Junior Chamber International (JCI) Sponsor: Daiwa Securitiesanother Life through the ・ Running a booth at ‘Future Expo’,Products’, CANPAN Center ・ Panelists for sectional meetingSpecial Sponsor: Daiwa Securities 45 ©Daiwa Securities Group Inc.
  47. 47. Daiwa Microfinance FundPursuing financial return as well as social return  Taking Currency risk, Interest rate risk and Credit risk  Managing risks by deversifying portfolio ■Investment Universe ■Model Portfolio Loan users BOP Reviewed by DWM* 300 MFIs ︵ Over 10,000 MFIs ︶ Source: Daiwa Microfinance Fund prospectus (available only in Japanese) (E) Return *Developing World Markets 46©Daiwa Securities Group Inc.
  48. 48. 80,000 poverty alleviation DMF Pursues Financial and Social return. ■ Daiwa Microfinance Fund Loan Portfolio Financial return & Impact 基準日(as of ) 2012/3/31 Yield on Amount DMF Annual Countrry/ Gross Loan gross Number of Average Write- Lending Impact by Name of MFI lennding from contribu revenue to Term Currency portfolio portfolio borrowers borrowing off % rate DMF DMF shion DMF (nominal) 1 Access Bank Azerbaijani manat 378,073,808 32.9% 119,501 3,164 0.0% 4,000,000 8.5% 1.1% 340,000 1,264 2.0 2 AzerCredit Azerbaijani manat 41,693,473 41.1% 47,232 883 0.0% 863,000 10.5% 2.1% 90,615 977 1.5 3 FORUS Russian Ruble 40,557,007 38.4% 9,645 4,205 8.1% 2,000,000 11.5% 4.9% 229,400 476 2.6 4 Inicjatywa Mikro Polish Zloty 10,200,000 (2009)19.6% 1,769 4.3% 143,000 9.4% 1.4% 13,499 2.3 5 PRASAC Thai Baht 151,954,229 23.8% 125,127 1,214 0.0% 370,000 8.6% 0.2% 31,746 305 2.0 6 TPC Cambodia Riel 33,311,940 31.0% 96,542 345 1.7% 2,000,000 13.2% 6.0% 263,000 5,797 2.2 7 Ujjivan Indian Rupee 113,473,518 29.4% 762,923 149 0.2% 5,600,000 13.1% 4.9% 734,720 37,584 1.8 8 Camesa Mexico Mexican Peso 63,558,332 na 290,820 219 6.4% 600,000 10.8% 0.9% 64,500 2,740 1.3 9 NBD Bank Russian Ruble 275,400,000 na 3,241 0.6% 10,200,000 11.3% 3.7% 1,148,520 2.3 10 FINCA Russia Russian Ruble 22,116,000 39.0% 8,023 2,757 3.6% 1,560,000 11.5% 7.1% 178,932 566 2.6 11 Banco Popular (Bancovelo) Honduras Lempira 44,439,495 20.1% 14,553 3,054 4.6% 1,148,000 11.8% 2.6% 134,890 376 1.4 12 Crear Arequipa Peruvian Nuevo Sol 748,676,221 35.0% 212,844 3,517 1.4% 7,000,000 9.6% 0.9% 668,500 1,990 2.3 13 FINCA Azerbaijan Azerbaijan 117,207,401 43.1% 119,867 978 0.1% 10,000,000 10.0% 8.5% 1,000,000 10,225 1.3 14 Genesis Guatemala Quetzal 65,057,180 (2007年)44.9% 129,744 501 2.0% 2,345,000 9.5% 3.6% 222,775 4,681 1.6 15 MFW Jordanian Dinar 20,639,344 37.7% 57,334 360 1.2% 2,000,000 7.0% 9.7% 140,000 5,556 0.8 16 Xac Bank Mongolia To~uguruku 263,594,653 19.9% 75,736 3,480 0.1% 7,024,000 12.0% 2.7% 842,880 2,018 1.2 17 EDPYME Solidaridad Peruvian Nuevo Sol 33,116,001 (2011年)35.6% 21,691 1,527 2.2% 555,000 10.5% 1.7% 58,275 363 2.0 18 Coocique Costa Rica Colon 110,800,000 na 17,072 4,051 0.4% 2,975,000 12.8% 2.7% 379,313 734 2.1 19 Bank Andara Indonesian Rupiah 18,200,000 na 165 0.0% 299,000 10.3% 1.6% 30,648 0.7 20 EDPYME Raiz Peruvian Nuevo Sol 166,338,585 (2011年)30.4% 87,876 1,893 3.0% 501,000 10.5% 0.3% 52,605 265 1.1 21 Popayan Colombian Peso 330,133,610 (2011年)36.3% 408,570 808 2.7% 3,000,000 9.2% 0.9% 277,200 3,713 1.9total 3,048,540,797 2,610,275 806 64,183,000 10.8% 2.1% 6,902,017 79,630+α 1.8total-4-9-19 2,744,740,797 2,605,100 672 53,541,000 10.7% 2.0% 5,709,351 79,630 1.7 47 ©Daiwa Securities Group Inc.
  49. 49. MFI Interest Yield to borrowers 50 44.3 45 2003 40 2006% of Gross Loan Portfolio 35.1 36 34.5 35 32.6 31.7 30 28.2 28 25.5 24.8 26.1 26.2 25 23.9 20.9 20 15 10 5 0 World Africa EAP ECA LAC MENA South Saurce: OCCASIONAL PAPER No. 15 , February 2009 Asia The New Moneylenders: Are the Poor Being Exploited by High Microcredit Interest Rates? Note: Total Interest and Fee Income/Average Total GLP: average of 175 sustainable MIX MFIs, weighted by loan portfolio. 48 ©Daiwa Securities Group Inc.
  50. 50. Myth & Fact of Microfinance Myth Fact Customer continue to repay as long as they value the1 Poor people do not repay a loan. service. The greatest incentive for the poor to repay the loan is to access to repeat loans. Poor people can not pay the interest rates The poor willing to pay the cost for quality services.2 necessary to cover the costs to delivering the For the poor, access to the financial service is more service. Poor can not pay the price. important than the price. Economic shock is frequent and diverse for the poor. Credit for consumption purposes should never3 They should prevent selling income generating assets to be provided. coop with these risks by microfinance The borrower or user of MF create opportunity. Only4 Microfinance creates economic opportunity. people with economic opportunity can benefit from credit. Poor people do saving. Saving is more important than5 Poor can not save the money. borrowing for the very poor to manage their future. MFI can reach to the very poorest of the poor Debt financing is not a good development tool for the6 through credit. destitute. There are over 600 Financially self sufficient (FSS) MFIs.7 MFI is donor dependent institutions. FSS is necessary for an MFI to reach large numbers of people Source: Microfinance Distance Learning Course (UNCDF) 49 ©Daiwa Securities Group Inc.
  51. 51. MF potential market size 2.7 billion 50©Daiwa Securities Group Inc.
  52. 52. Cross-border funding to MFIs $21.3 billion* Private donors and Public donors and Investors (2009) Investors (Foundations, (Multilaterals, Bilaterals, Institutional and DFIs) Individual Investors) $14.6 billion $6.7 billion Microfinance Investment Intermediaries (MIIs) Apex & other Intermediaries (Support for microfinance at all levels of the financial system: retail, market infrastructure, and policy) MFI Loan Portfolio $65.0billion ( MIX、FY2009、1,058MFIs) Source :CGAP Focus Note No. 70 April 2011, Cross-border Funding of Microfinance * Amounts based on data submitted by 61 funders and 90 MIIs. 51©Daiwa Securities Group Inc.
  53. 53. Towards the End of Poverty in 2025 Assumptions 5% Inflation p.a. for nominal, 23% increase p.a. in loan users to fulfill 2.7 billion needs. 52©Daiwa Securities Group Inc.
  54. 54. SRI Products :Mutual funds SRI Funds ●Daiwa SRI Fund Domestic Equities ●Daiwa Eco Fund Domestic Equities distributed by Focus on integrity & Economy & Ecology transparency of the enterprise Daiwa Securities Creator:Daiwa Asset Management Creator:Daiwa Asset Management Formulated:March 9th, 2006 Total net asset Formulated:May 20th, 2004 (Redemption date:Feb. 22nd, 2016) (Redemption date:May 9th, 2014) As of April 28th, 2011 of 15 products As of April 28th, 2011 Basic price:4,814円 ¥92.8Billion Basic price:6,837円 Total net asset:24.73億円 Total net asset:89.20億円●Russel World Environment ●Daiwa Energy Technology Fund ●Environmental Business Fund for Technology Fund Next Generation Domestic Equities Foreign Equities Focus on the Domestic Equities environmental technology of each Focus on alternative energy Economy & Ecology which nation global demand is estimated to increase Creator:Russel Investment Creator:Daiwa SB Investment Creator:Daiwa Asset Formulated:May 1st, 2008 Management Formulated:Feb. 27th, 2009 (Unlimited term) Formulated:Dec. 25th, 2008 (Redemption date:Feb. 26th, 2014)As of April 28th, 2011 (Redemption date:Jan. 14th, 2014) As of April 28th, 2011Basic price:8,560円 Total net asset:143 As of April 28th, 2011 Basic price:9,840円億円 Total net asset:10.13億円 Basic price:10,127円 53 ©Daiwa Securities Group Inc. Total net asset:38.92億円
  55. 55. CSR Dialogue No. 26 “Cluster Bombs”■Pondering CSR through dialoguehttp://www.daiwa-grp.jp/csr/dialogue/http://www.daiwa- grp.jp/csr/dialogueIn the CSR website, you can find series of dialogue with key figures June 8,2010who play an active role in the front lines of each field.<Recent themes:> themes:> 38:No. 38:Tsunami Reconstruction Support (2011年5月12日) 2011年 12日)−Increasing true self-alliance− 37:No. 37:Affordable Energy Saving at Work Place and Home (2011年4月27日) 2011年 27日)−Smart energy saving by knowing the mechanism of devices and climate− 36:No. 36:Poverty (2011年2月2日) 2011年−’Support’ for young homeless, instead of ‘care’− 35:No. 35:Eco Right (2011年1月27日)−Through CDM, supporting environmentalpreservation from finances − 34:NO. 34:Microfinance (2011年1月26日)−Aiming at social contribution through microfinance− 31:NO. 31:Biodiversity (2010年9月9日)−Building an aquarium in the town thatgives a feeling of ‘water’ 54 ©Daiwa Securities Group Inc.
  56. 56. 55©Daiwa Securities Group Inc.

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