Environment

Rakuten Bank is committed to promoting environmentally responsible business activities, with the goal of contributing to the realization of a sustainable society.

Environmental Policy

We will contribute to the realization of a sustainable society by striving to solve environmental problems through our business activities through financial services.

• Support through our Business Activities

  We will support our customers in their efforts to address environmental issues by providing products, services, and information.

• Compliance with Relevant Laws and Regulations

  We will comply with laws, regulations, and agreements related to the environment. We will also link our corporate activities to social demands to realize a sustainable society.

• Reduction of Environmental Impact

  We will strive to reduce the environmental impact of our business activities by promoting resource conservation, switching to renewable energy, recycling, etc.

• Employee Awareness

  We will strive to raise the awareness of environmental issues among all employees and encourage them to actively engage in environmental conservation activities through corporate efforts.

Initiatives for Socially Responsible Investing and Lending

• 1 Basic Stance

  Toward realizing a sustainable environment and society, Rakuten Bank will proactively support projects that address climate change and solve social issues while reducing and avoiding negative impacts on the environment and society to the greatest extent possible.

• 2 Areas for Proactive Commitment

  From the perspective of positively impacting the environment and society, we will proactively engage in the following measures that can take advantage of our expertise and market strengths.
  • ■ Expansion of investments and loans for renewable energy through trust schemes.
  • ■ Establishment and expansion of a system that provides benefits and preferential treatment to customers who convert to renewable energy.
  • ■ Establishment and evolution of mechanisms that contribute to the promotion of diversity across generations and gender, etc.
  We will proactively make investments and loans by communicating with customers who actively address a wide range of other environmental and social issues and by understanding how they respond to opportunities and risks.

• 3 Areas to Avoid Negative Impact

  Considering the significant negative impact, we will not invest or provide loans with the specific use of funds in the following projects : coal-fired power generation, deforestation, palm oil farm development,
  development, manufacture or possession of inhumane weapons, projects involving human rights violations and other projects that could exert a seriously negative impact on society and the environment.

Initiatives to Adress Climate Change

Governance

We recognize that the impacts of climate change pose a management risk to the Bank. The Sustainability Promotion Council deliberates on policies and action plans to address the challenges and opportunities associated with climate change.
For more details, please refer to our Governance Structure for Sustainable Business Management.

Strategy

■Opportunities

As support for climate-related business becomes essential, we are committed to assisting our clients in their transition to carbon neutrality by providing innovative financial services.

■Physical risk

We anticipate an increase in credit-related costs due to the economic slowdown and the impairment of collateral values caused by extreme weather events, such as typhoons and torrential rains. Given the recent occurrences of large-scale natural disasters, we will continue to analyze the financial impact of climate change.

■transition risk

In response to the transition toward a decarbonized society, our bank monitors risks arising from climate-related policies and regulations, such as the potential introduction of carbon taxes, as well as those stemming from technological innovations. Furthermore, in accordance with our 'Initiatives for Socially Responsible Investing and Lending,' and considering the significant negative impact, we will not invest or provide loans with the specific use of funds in the following projects:coal-fired power generation, deforestation, palm oil farm development, development, manufacture or possession of inhumane weapons,  projects involving human rights violations, and other projects that could exert a seriously negative impact on society and the environment.

Climate Scenario Analysis

To understand the impact of climate change on our investment and loan portfolio, we conducted scenario analyses of both physical and transition risks. Using multiple scenarios, we identified increasingly severe storm and flood disasters resulting from extreme weather events as a physical risk, while assuming rising carbon prices as a transition risk. By quantitatively assessing the impact of these risks on our investments and loans, we are working to further enhance our climate change risk management.

Regarding physical risks, we prioritized the analysis of storm and flood disasters, which are expected to become more severe as extreme weather events intensify. Using information on the locations of borrowers and collateral properties, climate simulation data, and flood hazard maps, we estimated the impact of disasters under each scenario on the value of collateral assets and credit costs. The analysis was conducted using the IPCC SSP1-1.9 and IPCC SSP5-8.5 scenarios and covered housing loans (including investment condominium loans), asset-based lending (ABL) secured by real estate, and trust beneficiary rights.
The analysis estimated that annual credit costs would increase by approximately JPY 0.4–0.7 billion if a disaster were to occur in 2050. Given the high degree of uncertainty associated with physical risks and their significant dependence on factors such as default rates following disasters, we recognize the need for ongoing reassessment, taking into account future changes in our portfolio.

Regarding transition risks, we analyzed the impact of carbon costs and costs associated with emissions reductions on the future financial performance and credit ratings of borrowers and investees based on their financial information and GHG emissions under the assumption of rising carbon prices. Based on this analysis, we estimated the fair value of the relevant assets and the associated valuation losses after reflecting these impacts. The analysis was conducted using the NGFS Net Zero 2050 and NGFS Current Policies scenarios and covered corporate loans (all sectors) and corporate bonds (domestic and international). The analysis showed that, while the impact on the loan portfolio was limited, corporate bonds could face a certain degree of financial impact due to significant exposure to specific issuers, with cumulative impairment losses through 2050 estimated at approximately JPY 5.6 billion.

We will continue to enhance our climate change scenario analysis while promoting decarbonization through dialogue with customers and striving to appropriately manage climate change-related risks.

Risk Management

We have established an integrated risk management framework centered on the Risk Management Division. Regarding matters related to risk management, including market and credit risk management, liquidity risk management, and operational risk management, the Risk Management Committee meets monthly to discuss and report on the formulation of management frameworks and operational policies, as well as the status of risk management, from a perspective of integrated risk management. The status of risk management is reported to the Management Conference and the Board of Directors.

As part of integrated risk management, the Risk Management Committee conducts an annual assessment and review of our risk profile, including items related to sustainability.
Under the above risk management framework, we make lending decisions in accordance with our screening criteria, taking into consideration the environmental and social impacts, in line with the initiatives for Socially Responsible Investing and Lending.

Metrics and Targets

In alignment with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), which we endorsed in March 2022, we are steadily advancing initiatives to achieve decarbonization across our entire value chain. These efforts include supporting society’s transition to carbon neutrality through our environment-related investment and lending, measuring greenhouse gas (GHG) emissions in alignment with the GHG Protocol, and transitioning to 100% renewable energy.

As indicators, we have adopted the following indicators: the balance of our environment-related investment and financing, our GHG emissions (Scope 1, 2, and 3 for the consolidated group), and the progress toward our 100% renewable energy transition.
For further details, please refer to our ESG Data Book.

GHG emissions

• *1 CO2 emissions, energy consumption, water withdrawal, and waste generation have been aggregated on a fiscal year basis (April 1–March 31) since FY2024. Prior to that, data were aggregated on a calendar year basis (January 1–December 31).
  Starting in 2022, the scope and calculation methodologies for CO2 emissions and energy consumption were revised to improve calculation accuracy. Past data have not been retroactively restated.
• *2 The scope 2 data used market-based method.

Outstanding balance of environment-related Investment and financing

As of March 31, 2024, the environmental investment and loan balance stood at 132.6 billion yen, surpassing ahead of schedule the initial target of 100.0 billion yen set for March 31, 2027. The balance continued to grow steadily in fiscal 2025, reaching 220.9billion yen as of March 31, 2026, and reaching 236.4 billion yen as of March 31.

ESG Data Book

FY2025 ESG Data Book

Independent Assurance Report

FY2025  Independent Assurance Report

Participation to Initiatives

TCFD

To constantly improve our reporting related to climate change in line with stakeholders’ expectations, Rakuten Bank announced its endorsement of the international initiative TCFD (Task Force on Climate-related Financial Disclosures) in March 2022.TCFD was established by the Financial Stability Board (FSB) in 2015 at the request of the G20, and its work has since been transitioned to the International Sustainability Standards Board (ISSB) under the IFRS Foundation.

JCI

The Japan Climate Initiative (JCI) is a network of non-state actors (companies, local governments and NGOs) in Japan which are actively engaged in climate action and committed to strengthening communication and exchanging related strategies and solutions.
Rakuten Bank joined JCI in March 2022, pledging to stand at the forefront of society’s decarbonization as envisioned in the Paris Agreement. In support of JCI, Rakuten Bank believes that Japan can and should play a greater role in realizing a decarbonized society primarily through the expansion of renewable energies.

Initiatives for environmental issues