Daiwa Securities : Revision of the "Environmental and Social Policy Framework"

December 27, 2023

Press Release

Daiwa Securities Group Inc.

Revision of the "Environmental and Social Policy Framework"

Daiwa Securities Group Inc. (the "Group") aims to realize the SDGs by creating a sustainable capital cycle with the core concept of "From savings to SDGs" in its management vision "Vision 2030."

In 2021, we announced the "Daiwa Securities Group Net Zero Carbon Declaration" toward the achievement of a carbon-neutral society based on "Green & Social", which is one of priority areas of our vision. In the same year, we formulated the "Environmental and Social Policy Framework" (the "Framework") to strengthen our environmental and social risk management. In response to recent global trends regarding human rights and supply chain management, we today announced to revise the Framework, including stricter policies as below.

Working together with our stakeholders, we strive to strengthen our medium- to long-term corporate value and create a sustainable and prosperous society through SDGs and ESG initiatives.

(Reference) Daiwa Securities Group's SDGs Initiatives: https://www.daiwa-grp.jp/english/sdgs/?cid=ad_eir_ensdgspress

1. Key changes in the Framework

1) Business involving human trafficking

Considering the global trends on human rights, we will clarify that providing financing to a business involving human trafficking is prohibited.

(Excerpt from the Framework）

Previous		Revised
Businesses involving human rights	Businesses involving human rights
violations such as child labor and forced	violations such as child labor, forced labor
labor	and human trafficking

1. New construction of coal-fired power generation and expansion of existing facilities The previous Framework prohibited any financing where the use of proceeds are directed

toward new construction of coal-fired power generation. In order to enhance efforts towards achieving a carbon-neutral society, we will also prohibit any financing for expansion of existing facilities under the revised Framework.

(Excerpt from the Framework）

Previous				Revised
New construction of coal-fired power		New construction of coal-fired power
generation		generation and expansion of existing
		facilities

3) Palm oil plantation development

Regarding new investments and loans,wewill encourage our clientstoenhance their supply chain management and traceability to ensure that similar initiatives will also apply to their supply chain.

(Excerpt from the Framework）

Previous		Revised
Whenprovidingfinancingtoabusiness, we	Whenprovidingfinancingto abusiness,we
will carry out ESG due diligence, carefully	will carry out ESG due diligence, carefully
assessing whether the loss of wildlife habitat	assessing whether the loss of wildlife habitat
due to overdevelopment may lead to aloss of	due to overdevelopment may lead to aloss of
biodiversity, or land conflicts with	biodiversity, or land conflicts with
indigenous residents, or human rights	indigenous residents, or human rights
violations such as child labor/forced labor,	violations such as child labor/forced labor
or whether appropriate measures are taken	/humantrafficking,orwhether appropriate
to prevent them. We will utilize these results	measures are taken to prevent them. We will
in making decisions.	utilize these results in making decisions.
Whenprovidingfinancingtoabusiness, we	Whenprovidingfinancingtoabusiness,we
will confirm if RSPO (Roundtable on	will confirm if RSPO (Roundtable on
Sustainable Palm Oil), an international	Sustainable Palm Oil), an international
certification system for palm oil, has been	certification system for palm oil, has been
acquired. Where this is not in place, we will	acquired. Where this is not in place, we will
encourage our clients to obtain certification.	encourage our clients to obtain certification.
We will encourage our clients to make	We will encourage our clients to make

environmental and human rights policies such as NDPE (No Deforestation, No Peat and No Exploitation) or other compatible policies.

environmental and human rights policies such as NDPE (No Deforestation, No Peat and No Exploitation) or other compatible policies.

Regarding new investments and loans, we will encourage our clients to enhance their

supply chain management and traceability

to ensure that similar initiatives will also

apply to their supply chain.

4) Business involving deforestation

Regarding new investments and loans,wewill encourage our clientstoenhance their supply chain management and traceability to ensure that similar initiatives will also apply to their supply chain.

(Excerpt from the Framework）

	Previous						Revised
Whenprovidingfinancingtoabusiness,we			Whenprovidingfinancingtoabusiness, we
will carry out ESG due diligence, carefully		will carry out ESG due diligence, carefully
assessing whether appropriate measures will		assessing whether appropriate measures will
be taken to prevent a negative impact on the		be taken to prevent a negative impact on the
environment caused by the destruction of		environment caused by the destruction of
ecosystems, and whether illegal logging is		ecosystems, and whether illegal logging is
carried out. We will utilize these results in		carried out. We will utilize these results in
making decisions.				making decisions.
Whenprovidingfinancingtoabusiness,we			Whenprovidingfinancingtoabusiness, we
will encourage our clients to obtain FSC		will encourage our clients to obtain FSC
(Forest	Stewardship	Council),	an		(Forest	Stewardship	Council),	an
international forest certification system or		international forest certification system or
other compatible certifications or to make		other compatible certifications or to make
environmental and human rights policies		environmental and human rights policies
such as NDPE or other compatible policies.		such as NDPE or other compatible policies.
						Regarding new investments and loans, we
					will encourage our clients to enhance their
					supply chain management and traceability
					to ensure that similar initiatives will also
					apply to their supply chain.

2. Effective date

This revision will take effect from January 1, 2024. We will continue to review the Framework regularly based on trends in Japan and overseas, changes in the business environment, and operational status.

End

Daiwa Securities Group "Environmental and Social Policy Framework"

１．Introduction

As awareness of environmental and social issues such as climate change and human rights violations continues to grow in Japan and overseas, the Daiwa Securities Group(the "Group") is committed to playing its role, as a comprehensive securities group, in supporting the realization of a sustainable and prosperous society in order to meet the environmental and social goals of all stakeholders.

The Group established its "Environmental Vision" in 2012 and, based on the "Environmental Principles" and the "Basic Environmental Policies" announced at the same time, it has been working to help solve environmental issues and continuously reduce the environmental footprint that results from its business activities. Furthermore, in May 2021, it established its management vision "Vision 2030", putting the realization of the UN's SDGs at the center of the Daiwa Group's strategy, proactively working towards the promotion of the transition to a carbon-neutral society and the realization of a resilient society.

In addition, the Group has formulated the "Environmental and Social Policy Framework" (the "Framework") in order to strengthen its management and governance infrastructure for environmental and social risks, such as the conservation of the global environment / biodiversity and the protection of human rights. We want to create a better society in partnership with our stakeholders by acknowledging the risks for businesses that may have negative impacts on the environment and society, and taking appropriate measures through engagement.

The Group will actively support innovation and technological initiatives that will lead to the realization of carbon neutrality, and will focus on providing a variety of financial solutions, including transition finance, to support these.

2. Governance on this Framework

The Group discusses SDG and ESG issues related to the environment and society at the

Sustainability Promotion Committee, chaired by the President and CEO. The results of these discussions are reported to the Board of Directors as appropriate, and important matters are passed through the Board of Directors as resolutions, which strengthens the system for supervision by the Board of Directors. This Framework was approved by the Board of Directors following discussion with the Sustainability Promotion Committee.

This Framework will be assessed regularly, with the aim of strengthening it, based on the experience of its implementation and changes in the external environment.

1

3. Applicable products and services

This Framework covers new investments and loans, and the underwriting of bonds and

stocks issuance (hereinafter, financing) made by Daiwa Securities Group Inc. and its major group companies.

4. Applicable business

1. Prohibited business

• Businesses that negatively impact UNESCO-designated World Heritage Sites
• Businesses that negatively impact wetlands designated under the Ramsar Convention
• Businesses violating the Washington Convention
• Businessesinvolving humanrightsviolationssuch aschildlabor,forcedlabor andhuman trafficking

1. Restricted business

1. Businesses affecting indigenous communities

When providing financing to a business, we will carry out ESG due diligence including environmental and social risk assessments ("ESG due diligence"), carefully assessing whether they will cause serious cultural, social and economic damage to indigenous communities, and whether appropriate measures are taken to mitigate them. We will utilize these risk assessments in making decisions.

1. Business involving land expropriation that leads to involuntary relocation of residents When providing financing to a business, we will carry out ESG due diligence, carefully

assessing whether they result in land expropriation that forces residents to relocate against their wishes and whether appropriate measures are taken to prevent them, and utilize these results in making decisions.

1. New construction of coal-fired power generation and expansion of existing facilities We prohibit any financing where the use of proceeds are directed toward this type of

business.

Regardingtheunderwriting ofbonds andstocksissuance,however,issuers that announce a target for net zero greenhouse gas (GHG) emissions by 2050, or businesses adopting new technology aligned with the goals of the Paris Agreement, may be considered on a case-by- case basis.

2

4) Weapons of mass destruction / inhumane weapons manufacturing

We prohibit any financing where the use of proceeds are directed toward this type of business. Weapons of mass destruction include nuclear weapons, chemical weapons, biological weapons, and inhumane weapons include cluster munitions and antipersonnel land mines.

5) Palm oil plantation development

When providing financing to a business, we will carry out ESG due diligence, carefully assessing whether the loss of wildlife habitat due to overdevelopment may lead to a loss of biodiversity, or land conflicts with indigenous residents, or human rights violations such as child labor/forced labor/human trafficking, or whether appropriate measures are taken to prevent them. We will utilize these results in making decisions.

When providing financing to a business, we will confirm if RSPO (Roundtable on Sustainable Palm Oil), an international certification system for palm oil, has been acquired. Where this is not in place, we will encourage our clients to obtain certification. We will encourage our clients to make environmental and human rights policies such as NDPE (No Deforestation, No Peat and No Exploitation) or other compatible policies.

Regarding new investments and loans, we will encourage our clients to enhance their supply chain management and traceability to ensure that similar initiatives will also apply to their supply chain.

6) Business involving deforestation

When providing financing to a business, we will carry out ESG due diligence, carefully assessing whether appropriate measures will be taken to prevent a negative impact on the environment caused by the destruction of ecosystems, and whether illegal logging is carried out. We will utilize these results in making decisions.

When providing financing to a business, we will encourage our clients to obtain FSC (Forest Stewardship Council), an international forest certification system or other compatible certifications or to make environmental and human rights policies such as NDPE or other compatible policies.

Regarding new investments and loans, we will encourage our clients to enhance their supply chain management and traceability to ensure that similar initiatives will also apply to their supply chain.

3

7) Coal mining

Weprohibit any financingwheretheuseofproceeds are directedtoward businessesusing the mountaintop removal (MTR) method and new thermal coal mining businesses.

When providing financing to a business, we will carry out ESG due diligence, carefully assessing whether appropriate measures are taken to ensure occupational safety and a sanitary environment to prevent cave-in accidents, flood accidents, gas explosions, and human rights violations such as illegal labor. We will utilize these results in making decisions.

8) Large-scale hydroelectric power generation construction

When providing financing to a business, we will carry out ESG due diligence, carefully assessing whether appropriate measures will be taken against the destruction of the environment and ecosystems and negative impacts on local residents due to the construction of a dam. We will utilize these results in making decisions.

9) Oil and gas development

When providing financing to a business, we will carry out ESG due diligence, carefully assessing whether appropriate measures are taken against their impact on the environment, ecosystems and local communities. We will utilize these results in making decisions. In particular, we will make careful decisions when providing financing to development businesses in the Arctic, oil sands and shale oil and gas development businesses, pipeline businesses which may have significant negative impacts on the environment and society.

5. Assessment process

When providing financing to the above businesses, we will carry out initial ESG due

diligence. If it is determined that additional confirmation is necessary as a result of the assessment, wewill apply enhanced ESG due diligence to determinewhether ornot to provide financing. If the implementation of the business may have a serious impact on the corporate value of the Group, the executive management will discuss further and make a final decision on whether or not to provide financing.

December 27, 2023

4