Sumitomo Mitsui Financial Group

In terms of its approach towards impact management, SMFG acknowledges that its financing activities have both positive and negative impacts and it identified and prioritised its impacts through a materiality assessment process which included feedback from external stakeholders. The financial institution assigns responsibility for sustainability issues to the board-level Sustainability Committee and links the remuneration of its executive team to sustainability performance criteria.  

As a member of Net-Zero Banking Alliance, SMFG has set a target of net-zero financed emissions by 2050. It discloses absolute financed emissions from lending to the energy sector. It also discloses the aggregate amount provided for green finance, specifies what this includes and aligns its green finance definition with the International Capital Market Association principles. The financial institution provided JPY 2.7 trillion in green financing towards its 2029 goal of JPY 20 trillion. SMFG discloses nature- and biodiversity-related impacts as one of its engagement topics with clients in several sectors. 

SMFG has a publicly available policy statement committing it to respect human rights and the ILO core labour rights. It discloses the proportion of women in its total direct operations workforce for each employee category. It also has a policy prohibiting bribery and corruption and discloses a global tax strategy. SMFG discloses a breakdown of its domestic lending clients by company size.

SMFG could link the remuneration of its management team to sustainability performance criteria. Furthermore, women are underrepresented on the board of directors where only 2 out of 15 board members are women. In terms of gender equality, the financial institution also has an opportunity to reach at least 40% female representation in senior leadership positions and to disclose the ratio of basic salary and remuneration of women to men in its total direct operations workforce for each employee category. The financial institution could describe its engagement approach on sustainability themes and impact topics with clients and investees, across its financing activities. 

While SMFG has an interim intensity emission reduction target for its lending portfolio to the energy sector, it has an opportunity to disclose an interim absolute emission reduction target which covers all its financing activities. It also has an opportunity to disclose the key sectors and companies it has identified as priorities to engage with on climate change, specifically on the alignment with the Paris Agreement. No evidence was found regarding SMFG’s approach to fossil fuels that spans across the fossil fuel value chain and its financing activities, such as the amount or share of finance it directs towards fuels, or its stance on financing companies with new fossil fuel projects. The financial institution could also disclose a commitment to minimising the negative impacts its financing activities have on nature and biodiversity. 

SMFG has an opportunity to describe a comprehensive process for identifying its human rights risks and impacts across all its activities, especially its financing activities. It also has an opportunity to establish a grievance mechanism accessible to all workers, external individuals and communities to raise human rights complaints or concerns. Furthermore, the financial institution could disclose the proportion of its total direct operations workforce for each employee category by age group. To provide transparency on financial inclusivity, SMFG has an opportunity to disclose the amount of finance directed towards, for example, women-owned businesses or low-income developing countries.