Sustainability Risks and Opportunities

In a rapidly changing market and social environment, we believe that adopting strategies that identify risks and opportunities that could affect the Group's business help ensure the sustainability of our business. The Group estimates the timelines of associated risks and opportunities of 20 materiality issues identified in the core materiality selection process and reflects in our Medium Term Management Plan.

No. Material issues for the Group Recognized risks and opportunities for the Group Timeline*
Short
Term		 Medium
Term		 Long
Term
Society 1 Individual health and well-being Risks Increases in insurance claims and benefit payments as gap widens between life expectancy and healthy life expectancy ●
Declining insurance needs due to reduced risk of death ● ●
Decreased attractiveness of products and services due to insufficient understanding of diverse values and delays in response to advances in medical technology and techniques ● ●
Opportunities Growing need for private insurance coverage to compensate for increased medical costs ● ●
Creation of new businesses and insurance-related services connected to health promotion ● ●
Protection that supports a prosperous daily lifestyle ● ●
2 Connecting individual's life satisfaction (job satisfaction) with society Connections with local Community Risks Decline in employee productivity due to reduced sense of life satisfaction (job satisfaction) and diluted connections to local communities ● ●
Opportunities Providing new services to employees connected to improving job satisfaction ● ●
3 Increased need for new services that provide "connections" that bring spiritual happiness ● ●
Utilizing company-owned real estate, development know-how, and other assets to revitalize local communities ● ●
4 DE & I Risks Delayed response to diversifying market needs and loss of new business opportunities due to inability to fully utilize diverse human capital and values ● ●
Risk of "self-cleansing" process not occurring due to highly homogenous corporate culture ● ●
Reduced competitiveness in recruiting and increased rate of employee turnover ● ●
Opportunities Increased opportunities for producing innovation through collaboration with diverse employees and values ●
Stable recruitment of talented human resources and high retention rate ●
5 Demographic Shifts Risks Contraction of life insurance business due to decreased demand stemming from Japan's population decline ●
Decreased attractiveness of products and service due to inability to adapt to rapid demographic shifts (such as the declining birth rate, an aging population, and increased immigration) ● ●
Opportunities Expansion of the life insurance business thanks to increased demand in countries with growing populations in which the Group operates ● ●
Increased need for asset formation and protection, nursing care, and end-of-life care together with a shrinking and aging population and a declining birth rate ● ●
Differentiation of employee services offered by domestic companies accompanying reduced working population size ● ●
6 Sustainable financial
Services		 Risks Reduction in universal financial services due to regulations and managerial decisions by financial institutions ●
Rising uncertainty accompanying destabilization of the world economy due to issues such as persistent and widening financial disparity between rich and poor, and increasing refugee numbers ● ●
Opportunities Creation of new markets by providing products and services to meet customer needs in countries where we have newly entered the market ● ● ●
Providing new services that capture opportunities presented by environmental changes such as the rise of fintech and the democratization of finance ● ●
7 Youth collaboration and outreach programs Risks Delayed response to trend shifts and lost new business opportunities due to insufficient understanding of future generations ●
Opportunities Increased opportunities for innovative creation through collaboration with diverse human resources and values ●
Creation of new businesses and services through collaboration with youth ● ●
8 Creation of industrial promotion and innovation Risks Reduced regional robustness due to factors including regional depopulation, reduced birth rate, an aging population, and aging social infrastructure ● ●
Risk of inability to keep pace with new innovations ● ●
Opportunities Providing new products and services utilizing digital technology including AI ● ●
Creation of new businesses and services through cooperation with regional communities ●
Supporting innovation, resolving social issues, and acquiring financial returns through venture investment ● ●
9 Providing sustainable education Risks Growing economic disparity and slowdowns in national and societal growth connected to increasing persistent poverty related to lack of education ● ●
Opportunities Expanding the asset formation market by providing educational opportunities to improve financial literacy ● ●
Providing reskilling education as well as IT and programming education opportunities ● ●
10 Enriching fair, high- quality social security Risks Slowdowns in national and societal growth due to increasing persistent poverty related to unstable and insufficient social security systems ● ●
Opportunities Growing need for private insurance protection to supplement social security systems ● ●
Providing fair and equitable business services aligned toward improved worker conditions ● ●
Improving the quality and convenience of the current medical system through increased efficiency, DX promotion, and utilization of mobile technology ● ●
11 Business and human rights Risks Damage to corporate brand and trustworthiness, lawsuits, strikes, and outflow of human resources if human rights violations or possibilities of such occur ● ●
Damage to the Group's asset values in the event of problems occurring among companies invested in or loaned to, or within the supply chain ● ●
Opportunities Increased societal trust and improved corporate value through recognition as an organization that proactively respects human rights ● ●
Stable recruitment and retention of talented human resources ● ●
12 Geopolitical risk Risks Review of business operations and developments in countries with rising political and military tensions to which the Group has expanded operations ● ● ●
Adverse effects on finances and business performance due to introduction of new laws and regulations ● ● ●
Damage to the Group's asset values in the event of problems occurring at companies invested in or loaned to, or within the supply chain ● ● ●
Opportunities Expansion of emerging markets accompanying geopolitical realignment ● ● ●
Environment 13 Responding to climate change Risks Increased insurance claims and payments due to factors accompanying global warming such as increased instances of heat stroke, infectious diseases, and flooding due to typhoons ● ●
Significant changes in carbon taxes, asset impairment due to market and social environmental changes, development of new technologies contributing to climate change countermeasures, and decrease in investment and financing value of companies that inadequately respond to environmental changes such as shifts in consumer behavior ● ● ●
Damaged reputation and lawsuits stemming from delayed climate change responses ● ●
Opportunities Providing products and services that contribute to reducing greenhouse gas emissions ● ●
Reducing operating costs through introduction of resource-efficient infrastructure ● ●
Strengthening resilience of investment portfolios utilizing investment and loan evaluations related to climate change risks and opportunities ● ●
Acquisition of new investment and loan opportunities ● ● ●
14 Renewable energy Risks Increased cost of electricity accompanying rapid introduction of renewable energy ● ●
Opportunities Acquisition of new investment and loan opportunities ● ● ●
Innovations popularizing renewable energy and transitioning to a decarbonized society ● ●
15 Stable energy supply Risks Business activity downturn due to tight energy supply, rapidly rising resource prices, and stable procurement difficulties ● ●
Risk of business activity downturn due to tight energy market resulting from increased demand accompanying digitalization ● ●
Opportunities Acquisition of new investment and loan opportunities ● ● ●
16 Natural disaster response Risks Difficulty in predicting insurance benefits due to large-scale natural disasters ● ● ●
Significant hinderance to business operations due to physical damage ● ● ●
Damage to investment and loan assets due to natural disasters ● ● ●
Opportunities Providing products and services connected to natural disaster preparedness ● ● ●
Acquisition of new investment and loan opportunities ● ● ●
17 Loss of natural capital and biodiversity Risks Reduced business performance of companies invested in or loaned to, as well as other business partner companies, stemming from loss of natural capital ● ●
Damaged reputation and lawsuits due to delayed response to natural capital and biodiversity conservation ● ●
Opportunities Acquisition of new investment and loan opportunities ● ● ●
Governance 18 Improved corporate governance and corruption prevention Risks Reduced business activity due to poor governance ● ●
Damage to corporate value due to diminished reputation and loss of societal trust if problems become apparent ● ●
Loss of reputation and customer trust stemming from emergence of problems caused by lack of employee compliance training ● ●
Damage to the Group's reputation due to not carrying out responsible investment and financing activities ● ●
Opportunities Stabilizing business operations through transparent decision-making and appropriate responses to environmental changes ● ●
Improving corporate governance through implementation of proper supervision by the board of directors and other further strengthened supervision ● ●
Increasing stakeholder trust and corporate value ● ●
Stabilizing or increasing asset management income through improved governance in investees and loanees ● ●
19 Cybersecurity Risks Suspension of services and asset management operations due to cyberattacks and system disruptions ● ●
Loss of reputation and customer trust when risks become apparent ● ●
Opportunities Increased societal trust and corporate value through being recognized as a company proactively responsive to cyber risks ● ●
Stable recruitment and retention of talented human resources ● ●
20 AI technology and DX Risks Information leaks and rights infringement stemming from lack of proper AI and technology controls ● ●
Reduced competitiveness due to lesser and later initiatives than other companies, or inability to respond to radical innovations ● ●
Opportunities Expanding product lineup based on accumulated big data ● ●
Providing optimal service by utilizing customer data including consumption activities ●
Diversification of sales channels utilizing digital technology and improvement of customer service ● ●
  • *
    For risks, attention is focused on the timing of their manifestation, and for opportunities the focus is on the timing of implementation of concrete initiatives, with short-term opportunities defined as a period of three years or less, medium term as 10 years, and long term as 40 to 50 years.