T&D : Sustainablity Management

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Sustainability Management

Creating both economic value and social value Contributing to a sustainable society through the creation of shared value

Creation of shared value

The Group's core business is the life insurance business, and we mainly focus on having sustainable business that provides customers with safety and peace of mind through our products and services. At the same time, as an institutional investor, we are closely connected to economic development and the realization of a sustainable society, and we have a responsibility to contribute to society through our business.

In 2021, T&D Insurance Group developed a Group Long-Term Vision towards FY2025 under the Management Vision: "Sow happi- ness, make change with boldness." The Group Long-Term Vision identifies SDGs management and creation of value as one of the challenges to the Group's Growth Strategy and priority themes and sets new non-financial KPIs to quantitatively measure the

Achieving our

non-financial KPIs

Basic approach

Through life insurance business, the Group's core business, we will create shared value and sow happiness in the world by addressing the sustainability priority themes (materiality).

created social value.

The Group believes that its efforts to promote SDGs management and solve social issues will lead the Group to achieve its goals of creation of shared value and sowing happiness in the world.

We, T&D Insurance Group, will take steady steps to become a sustainable insurance group that grows along with society.

We will contribute to solving social issues by providing optimal, high-quality products and services that meet the needs of our customers.

We will promote business activities that respect the human rights of all stakeholders, including our business partners and employees.

Through our business activities, we will contribute to climate change mitigation and adaptation, and work to create a net-zero society and conserve biodiversity.

As a responsible institutional investor, we will contribute to environmental, social, and corporate governance (ESG) issues through our investment and financing activities.

Try＆Discover Introduction Strategies to Realize the Group's Corporate Philosophy

Sustainable global environment

More efficient resource and energy use

A resilient and vibrant society

Strong but friendly community development

Employment and job satisfaction [Priority theme 2]

Provide workplace environments that enable all people to participate actively

Sustainable global environment [Priority theme 3]

Help mitigate and adapt to climate change

Healthy and abundant lives [Priority theme 1]

Promote healthy and abundant lives for all people

A resilient and vibrant society [Priority theme 4]

Invest to help build a sustainable society

Relevance to the Group's business and initiatives (importance to the Group)

Process for Selecting Priority Themes

(1) Identify important social issues

We considered various social issues to be targeted, based on what society expects of us as a Group engaged mainly in the insurance business, as well as how we can help develop a sustainable society.

After examining the SDG goals and targets, our Group CSR Charter, changes in the social environment, trends in technological innovation, and other sources, we identified 40 (important) target-related social issues relevant to our policies, products, services, and business model.

1. Identify initiatives that address the important social issues

We identified the initiatives that have been implemented to increase social value with respect to the important social issues through our business activities and our critical business and sustainability management platforms.

1. Identify the shared value to be realized by the initia- tives and the corresponding sustainability themes

We identified initiatives that address important social issues and the shared value of their impact. In order to create shared value, we set themes that promote Group sustainability from the perspectives of the areas of the issues to be addressed and the ways of addressing them.

(4) Prioritize shared values and sustainability themes

We evaluated the importance of each shared value and sustainability theme based on both a) importance to society, and b) relevance to the Group's business (influence on social issues). We then clarified the priority of the initiatives for the Group to pursue.

a) Importance to society: Evaluation based on its impact on society and its contribution to the SDGs

b) Relevance to the Group's business: Evaluation based on

the relationship with policies and actions defined in the T&D Insurance Group CSR Charter

(5) Select sustainability priority themes

We set priority themes for promoting Group sustainability that can have an impact on the creation of shared value by addressing important social issues.

1. Verify the adequacy of sustainability priority themes
   • We engaged in dialogue and exchanged views on the selec- tion process of priority themes with a qualified third party, then confirmed the adequacy of social issues to be targeted and the validity of our priority evaluation.
   • In addition, we received approval from the Group SDGs Com- mittee and reported to the Executive Committee (now the Executive Management Board) and Board of Directors.

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Recommendations on overall sustainability

A global policy debate is underway that views climate change not only as a means and cost of reducing CO2 emissions, but also as a human rights issue that affects human life, health, and living areas. Furthermore, the younger generations are calling for climate justice, and they are speaking out from the perspective of creating an equal society with an eye to human rights, race, and poverty issues. The age where their values influence society is right before us, which will bring a big impact on business moving forward.

Recommendation 1

Toward de-carbonization

(1) The Group Long-Term Vision indicates a CO2 emissions reduction target with a deadline of FY2025 (40% reduction from FY2013), but there is no mention of net-zero emissions. That the T&D Insurance Group has not yet adopted the

2050 globally-championed Net Zero goal is a lag behind the global trend. The global trend is already changing from "low carbon" to "de-carbonization." In view of the recent severity of climate change, we presume that the target date will be moved earlier than 2050.

(2) In the financial industry, there is a trend toward a shift to a net-zero investment and financing portfolio by 2050. Since the T&D Insurance Group has made the effort to sign the Principles for Responsible Investment (PRI), it should consider a proactive course of action, such as committing to net zero CO2 emissions and interim targets for its investees and borrowers, and release them.

Response

While we had set a target to reduce CO2 emissions (Scope 1 and 2) by 40% by FY2025 compared to FY2013 in the non-financial KPIs in our Group Long-Term Vision, established in 2021, the Committee commented on the fact that no net-zero targets or targets for investees and borrowers had been established. In response to this, on September 30, 2021, an additional target was set to achieve net zero in FY2050, including own investment and loan recipients (Scope 3, Category 15). In addition, an interim target was set on April 11, 2022 for own investees and borrowers.

Recommendation 2

Sustainability Statement

(1) It is necessary to discuss one's values in the preparation of a statement. The company should determine where in the world the problems related to its business are and how it can contribute to the world through its business, and then communicate its stance to the world. Japanese companies' lack of issue awareness regarding why they are tackling these issues is a weakness. To simply list responses without an underlying message would result in a disconnect between stance and evaluation. The company should clarify what its purpose of existence is, and communicate products and investment policies based on that purpose.

(2) Any sustainability initiatives to be described in the statement should be noted with an awareness of their connection to the sustainability priority themes. In addition, because prime market listing standards require Task Force on Climate-related Financial Disclosures (TCFD) or equivalent disclosure of climate change measures, the T&D Insurance Group, as a prime listed company, should prepare its statement with TCFD in mind.

Response

In response to the opinions of the committee, we started writing a statement in September 2021. We exchanged opinions with the committee midway through this process, and the statement was completed and disclosed on May 23, 2022.

We have established four sustainability priority themes, which reflect the Group's basic approach to sustainability and the issues to be addressed in the future, and have communicated to our stakeholders the direction and specifics of the Group's initiatives. We report on related results and progress via media such as our website and the Sustainability Report.

In May 2023, we updated our statement in light of changing social attitudes and initiatives to date.