Sustainability

Sustainability Management

An overview of Orico's sustainability management

Sustainability Basic Policy
Our Sustainability Management Goals
Sustainability Management Structure
Materialities
The Process of Identifying Sustainability Initiatives
Sustainability Initiatives and Targets for FY2022-2024
Sustainability Report

Sustainability Basic Policy

Based on the expectations and demands of our stakeholders, we have prioritized and selected several material topics out of various social issues. Through initiatives such as providing financial products and services that align with our fundamental principle of being a "company that contributes to society", we aim to enhance corporate value and realize a sustainable society.

Our Sustainability Management Goals

サステナビリティ担当役員メッセージサステナビリティ経営を次のステージへ常務執行役員企画グループ長宇田真也

In sustainability management, we believe that it is important for Orico to solve social problems through our business, while increasing our profits in a sustainable manner, ensuring our stakeholders recognise the significance of Orico for the society. Based on this belief, we have positioned "sustainability" that aims to balance social value and corporate value as a priority in our medium-term management plan and as an axis of our management.
At the same time, we have organized our materiality and established KPIs to realize our "Vision for Society in 10 Years". These KPIs are non-financial management targets alongside financial targets, and are publicly announced as management commitments.
In terms of structure, in April 2022, we established the Sustainability Committee, chaired by the President and Director, that deliberates on KPI progress management, internal and external communications, and other matters. Alongside, three subcommittee were established, each composed of the heads and deputy heads of each division and group. The subcommittees intend to bring together the collective wisdom of the entire company to engage in in-depth discussions that will lead to the creation of new businesses and organizational reforms that will contribute to solving social issues.
The management team aims to build a community of employees who all understand the social significance of their job, department, and company, and constantly think about what we should do to realize a better society. In order to realize this vision, I would like to put my heart and soul into the promotion of sustainability under the new structure.

Sustainability Management Structure

Materialities

Contributing to Realize a Safe, Secure, and Convenient Cashless Society. Creating New Customer Experience Value through the Use of Financial Expertise. Contributing to Realize a Decarbonized and Circular Society. Contributing to Sustainable Community Development. Focusing more on diversity, employee-development, and work-style reforms. Strengthening governance.

The Process of Identifying Sustainability Initiatives

Our Company has established specific initiatives and KPIs in con junction with the medium-term management plan to address social issues through our business activities and to achieve our materiality, as outlined in the following process.
By advancing these initiatives, we are striving to generate new businesses that contribute to solving social issues and to drive organizational transformation, thereby achieving a balance between social and corporate value.

1. Identifying Materiality, We define our 10-year visions for society and of the Company, and identify key issues (mateiralities) that must be prioritized in order to achieve them. 2. Selection of Initiatives, To resolve social issues, we select materiality-related action items from among division/group strategies. 3. Analysis of Importance, Map the items based on stakeholder expectations and requests and importance to Orico's strategy, and identify high-priority items as a preliminary draft. 4. Decision on Initiatives Upon the Sustainability Committee's review and submission of a report to the Board of Directors, the President and Director decides.

Sustainability Initiatives and Targets for FY2022-2024

We aim to create social value and enhance corporate value by solving various issues using the PDCA (Plan-Do-Check-Act) cycle, which sets specific initiatives, targets, and KPIs for each materiality.

Contributing to the realization of a safe, secure, and convenient cashless society

Initiatives	Key Performance Indicators (targeting March 2025)	Social Value/ Corporate Value Targets
Expanding the use of credit cards	Expand credit card membership base Strengthen promotion of debit cards Strengthen the promotion of acquiring Expand card shopping transaction volume to 3.5 trillion yen to achieve a cashless ratio of 40% in Japan by 2025	Contribute to consumer convenience by promoting cashless payment through increased use of credit cards
Expand use of business cards	Strengthen promotion of business cards and loan products that meet customer needs	Contribute to improving the productivity of small and medium-sized enterprises and sole proprietors by promoting cashless payment in the business field.
Provide new cashless payment services	Development of QR code payment (immediate use) Development of digital cards Develop BNPL as a new product	Through the development of new products and services, provide a variety of cashless means of payment and contribute to further convenience.
Strengthen information security measures	Strengthen measures against credit card fraud by introducing new tools utilizing digital technology.	Provide an environment where everyone can use payment services safely

Materiality

Creating new customer experience value through the use of financial know-how

Initiatives	Key Performance Indicators (targeting March 2025)	Social Value/ Corporate Value Targets
Automation of asessment operations	Promote web-based applications, automated asessment Digitalization of customer contact points (e.g., confirmation of contract intention via SMS, digitalization of various information) Advance AI credit checks for credit cards Double the rate of fully automated reception and screening operations to provide high quality services and improve customer convenience Credit card automation rate of 80% or more Total automation rate of 40% or more	Improve customer convenience, provide high-quality services, and increase productivity by promoting automation of business operations.
Provide customer experience value through the use of digital technology.	Create new market-in type products and services Realization of embedded finance	Provide new experience value by developing innovative solutions utilizing digital technology
Creation of new business models for ethical consumption	Develop a platform business on the theme of ethical consumption, including the environment.	Develop a platform business to promote ethical consumption and support consumers' efforts to solve social issues.
Develop new financial services in collaboration with financial institutions	Develop financial services through the use of AI and collaboration with fintech companies, etc. (data mining, personal loan matching, immediate screening)	Provide an environment where customers can easily select and use the most appropriate financial products through the development of new services
Digitalization of auto loans in Southeast Asia	Develop DX and digital strategies with a focus on future markets	Developing innovative applications using digital technology and shortening the time required for screening to improve convenience for customers and provide high-quality services.
Improvement of customer satisfaction	Create an environment where customers can easily make inquiries anytime, anywhere (UX improvements and functional enhancements such as eOrico) Implementation of automated voice response and voice-to-text Digitalization of reminders (one-time site-based guidance) Expansion of non-voice channels, such as enhancement of FAQs and chatbot support for individual products Enhancement of customer service for people with disabilities and those who have difficulty making inquiries	Improve the relationship of trust with customers by enhancing the value of the customer experience in a variety of situations.
Support for improving literacy among young people, the elderly, and people with disabilities	Educational activities aimed at improving credit literacy among young people, the elderly, and people with disabilities Expand financial literacy education to elementary, junior high, and high school students Launch of credit literacy awareness web page and updating of content	Contribute to building a society where everyone has correct knowledge about money and can use financial services with peace of mind
Continuous implementation of ESG procurement	Continue to implement ESG procurement every fiscal year In addition to green bonds and social bonds, consider new methods such as sustainability bonds and sustainability-linked bonds/loans	Promote ESG procurement with the aim of contributing to the achievement of the SDGs, and provide products and services to customers on an ongoing basis

Materiality

Contributing to a Decarbonized Society and Circular Economy

Initiatives	Key Performance Indicators (targeting March 2025)	Social value/corporate value Targets
Reduction of greenhouse gas emissions and energy usage in business operations	Promoting the transition to eco-friendly vehicles (EV, FCV, HV, fuel-efficient vehicles) for company-owned cars. Reducing the total number of company-owned cars. Reducing CO2 emissions through the transition to eco-friendly vehicles and reducing gasoline usage by promoting online operations and decreasing travel distance. Reducing energy usage. Further introduction of energy-efficient and renewable energy equipment. Updating energy-efficient equipment in company buildings. Considering the adoption of renewable energy and equipment. An eco-friendly vehicle ratio of 75% or higher. Promoting the eventual shift to using eco-friendly vehicles for 100% of company-owned cars 10% reduction in the total number of company-owned cars 3% reduction in energy usage (based on original units) compared to FY 2021.	Contributing to a decarbonized society through the reduction of greenhouse gas emissions and energy usage.
Promoting a paperless business operation	Reducing paper usage through digitization. (Application forms, copy sheets (800 types), card issuance materials, business contracts for products, accounting documents) Reducing Orient Group's overall purchase of printing papers. Reducing appx. 800 tons of CO2 emissions per year. Reducing 15% purchase of printing paper compared to FY2021	By promoting the efficient utilization of limited resources throughout the Orient Group, we contribute to a circular economy/society
Expansion of EV and Promotion of Environmental Products	Collaborating with local dealers to spread the adoption of Vehicle-to-Home (V2H) technology. Utilizing the vehicle procurement network in the auto leasing business to promote the adoption of EVs in local communities. Introducing new schemes and products for environmental products such as solar power and batteries.	By promoting environmentally friendly products through financial services, we contribute to realizing a decarbonized and circular society.
Expansion of EV and Promotion of Environmental Products	Contributing to the development of the EV market in Southeast Asia Monitoring market trends in Southeast Asia. Strengthening approaches to EV manufacturers and new car dealers.

Materiality

Contributing to Sustainable Community Development

Initiatives	Details and Key Performance Indicators (targeting March 2025)	Social Value/Corporate Value Targets
Using our expertise to provide financial products in Southeast Asia	Expansion of auto loan business Research market trends in each country and expand into new markets to increase market presence. Achieving a loan volume of 133.5 billion yen to contribute to civic life. Expanding the number of loan users to 65,000, including auto loans.	By providing tailored services for each country, we contribute to the development of the automotive market in Southeast Asia.
Expanding credit provision to small and medium-sized enterprises (SMEs) and individual business owners.	Expanding Accounts Receivable Settlement Guarantee Business Full-scale deployment of guarantee factoring and development/release of purchase factoring. Exploring major partnerships through product improvements in "Smart Plan (debt assignment type). To further enhance the credit intermediation function in the local community, expand the transaction volume of accounts receivable settlement guarantees to 300 billion yen.	By providing a secure business transaction environment, we contribute to the revitalization of the local economy through support for SMEs and individual business owners.
Providing sustainable products through collaboration with regional financial institutions.	Developing sustainable products in collaboration with financial institutions (such as decarbonization-focused multipurpose loans). Partnering with more than 10 financial institutions to develop sustainable products that contribute to solving regional challenges.	We contribute to regional revitalization by offering financial products and services tailored to local challenges.
Revitalizing the local economy through support for SMEs and individual business owners through financial products.	Collaborating with financial institutions to develop business loans and new services that contribute to regional revitalization (such as expanding companies' sales channels, business matchmaking). Introducing equipment and machinery to affiliated stores and providing finance leasing services.	By offering services that provide credit and business support to SMEs, we support the revitalization of the local economy.
Providing secure housing options.	Expanding the rental guarantee business Expanding partnerships with large-scale member merchants and influential local affiliated stores through collaboration with main operating branches. Addressing the industry-wide shift towards contract digitization.	We support the provision of secure housing not only in urban areas but also in rural areas, contributing to community development and regional revitalization.
Supporting regional revitalization through utilizing our company's resources.	Engaging in dialogue and collaboration with local governments through utilizing our leasing resources, including financial expertise, products, and services.	By partnering with local governments through the provision of our company's resources, we aim to address regional challenges

Materiality

Diversifying human resources and reforming work style

Initiatives	Details and Key Performance Indicators (targeting March 2025))	Social value/corporate value Targets
Creating an environment where diverse talents can thrive.	Raising awareness among manager candidates Creating an environment for women to succeed. We aim to promote the active participation of women and create an organization where diverse talents with unique characteristics can thrive. Female executive ratio (senior manager level or higher) Target for FY 2024: 27% or higher. Target for FY 2026: 30% or higher. Female executive ratio (department/ office manager level) Target for FY 2024: 9% or higher. Target for FY 2026: 12% or higher.	By promoting initiatives that leverage diversity, we will create an environment where each employee can work enthusiastically and thrive.
	Promotion of paternity leave uptake among men. We continue to strive for a society where work-life balance is achievable for both men and women, aiming for a 100% paternity leave uptake among men.
	Utilizing surveys to enhance employee engagement. Improvement of Employee Engagement Score to BBB level. (3 ranks increase out of the 11 ranks from AAA to DD).
Expanding support measures for autonomous career development that cater to each employee's drive to grow	Meeting employees' drive to grow by expanding opportunities Providing opportunities to gain experience in other companies' overseas divisions or digital divisions. Offering opportunities for external side jobs and cross-border learning. Posting internal job openings within the company. Over 3 years, 200 employees have participated in new experiential programs both within and outside the company, including side jobs and trainee positions in startup companies.	Through the provision of diverse learning opportunities and platforms, we will foster employees who can excel in various situations.
	Expanding talent with DX skills (Promoting DX personnel). Developing DX talent development programs. Cultivation of DX culture. Expanding talent with DX skills (DX promotion personnel) to 3,000 individuals.
	Enhancing educational content. Deploying initiatives to provide learning opportunities (Expansion of e-learning, provision of a wide range of learning content through online seminars).
Promoting Work-Life Balance	Optimizing total working hours through initiatives such as improving the rate of taking paid vacations. Achieving a paid vacation utilization rate of 70% or higher to establish a work-life balance.	We promote a work style that emphasizes a healthy balance which will enhance employee satisfaction and improve productivity.
Initiatives on Human Rights	Implementing training programs on promoting human rights awareness in the workplace.	Through human rights education, we recognize the fundamental social responsibility in our business activities and conduct our operations with consideration for human rights.

Materiality

Strengthening Governance

Initiatives	Details and Key Performance Indicators (targeting March 2025))	Social value/corporate value Targets
Establishing the Operation of Risk Appetite Framework	Defining and establishing Risk Capacity (RC) and Risk Appetite Framework (RAF) operation flow and regulations. Calculating capital adequacy considering credit, market, and operational risks, and allocating to growth areas. Formulating strategies and plans for each sub-portfolio and progress management.	Through further improvement of the governance framework, we aim to achieve sustainable growth and long-term improvement in corporate value.
Initiatives for Improving ESG Evaluation	Establishing a governance framework aligned with prime market standards and high-quality communication with rating agencies.
Establishing and Improving Compliance System	Developing a new compliance code of conduct ("New OriCode"). Implementing measures to promote internal adoption and raising awareness among employees of the "New OriCode" through education and training programs. Creating and disseminating OriCode applicable to employees of overseas group companies.

Sustainability Report

This section contains information on our basic approach to sustainability, our initiatives, and our future direction.

Sustainability Report 2022

Integrated Report has been issued since FY2023.

Integrated Report

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