Shiga Bank : All page download (4,433k)

2022

INTEGRATED REPORT

ANNUAL REPORT 2022 Year ended March 31, 2022

The Bank's Motto

Be tough on ourselves,

kind to others and

serve society.

CSR Charter (Management Principles)

Instituted in April 2007

The Shiga Bank has its own motto of "Be tough on ourselves, kind to others and serve society," which forms the starting point for Corporate Social Responsibility (CSR). As a member of society, the Bank will work for mutual prosperity with society. The Bank's motto carries on the "Sampo yoshi" philosophy, a management philosophy embraced by Omi Merchants of central Japan, which means to bring happiness to three sides: being good for the seller, the buyer, and society.

Mutual prosperity with the regional

As a bank that advances hand-in-hand with society, in order to win customer confidence and meet customer expectations, we maintain a sound and enterprising bank and work for the development of regional communities.

Mutual prosperity with all employees

Respecting the human rights and individuality of each and

every executive and regular employee, we will build a satisfying workplace, and turn our bank into "Clean Bank Shigagin."

Harmonious coexistence with the environment

The social mission of our company, which is headquartered next to Lake Biwa, is environmental management. We are committed to protection of the global environment and the building of a sustainable society.

SHIGA BANK REPORT 2022

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TOP MESSAGE							3
Shojiro Takahashi, President, Shiga Bank
ABOUT SHIGA BANK
	10
Looking Back on Shiga Bank's History
Strengths of Shiga Bank	12
External Evaluation and Support for External Initiatives	13
Financial Highlights	14
ESG Highlights	16
MEASURES FOR CLIMATE CHANGE/GLOBAL WARMING			18
IMPLEMENTING THE PRINCIPLES FOR RESPONSIBLE BANKING			26
CHALLENGES FOR VALUE CREATION
			32
Risks and Opportunities
Value Creation Story	34
Sustainability Vision (Long-term Vision)	36
The 7th Medium-Term Business Plan	38
Basic Strategy #1: Turning SDGs into Business	40
Striving to Achieve a Nature Positive Economy through
ESG Regional Financing
Basic Strategy #2: Increasing Productivity of the Regional Communities	44
Dialogue: Digitalization of the Regional Communities
-Considering Initiatives to Revitalize and Digitalize Communities-
Interlocutor: Yuri Okina, Chairperson of Japan Research Institute, Ltd.
Basic Strategy #3: Evolving into a Problem-solution Type	54
	Financial Information Services Provider
Conversation with Nonohana Prize Winner
-Create Businesses in the Regional Community That Will Blossom in the Future-
Basic Strategy #4: Shifting to Sustainable Earnings Structure	62
Centralization of Managerial Resources
Finance Office Initiatives to Strengthen Investment Capabilities
Basic Strategy #5: Mindset-Work Reforms (Mindset Reform	66
	and Work Style Reform)
Diversity and Inclusion Initiatives
- from the Diversity Promotion Team -
POWERS SUPPORTING VALUE CREATION
		72
Corporate Governance
Message from Outside Directors	76
Capital Policy	79
Directors and Executive Officers	80
Stakeholder Communication	82
Risk Management	84
Enhancing Legal Compliance	90
FINANCIAL SECTION			92

Shiga Bank's Disclosure Policy

1. Basic views

Based on our social responsibility and public mission as a regional financial institution, we aim to ensure highly transparent disclosure. We shall ensure timely, due, continuous, fair and accurate disclosure of information, to foster understanding and appropriate evaluation of Bank operations by all of our stakeholders, including our customers, shareholders, investors and regional communities.

2. Information to be disclosed

The Bank will disclose management information in accordance with laws and regulations such as the Banking Act and the Financial Instruments and Exchange Act, as well as the Rules on Timely Disclosure of Corporate Information by Issuers of Listed Securities established by the Tokyo Stock Exchange (hereinafter referred to as the "Timely Disclosure Rules").

In addition, we will disclose information that is deemed useful to our stakeholders in a fair and timely manner to the greatest extent possible, even if the information does not fall under the category of material facts specified by laws and regulations or the Timely Disclosure Rules.

3. Methods of information disclosure

Information required to be disclosed under laws and regulations as well as the Timely Disclosure Rules will be disclosed in a timely and appropriate manner in accordance with such rules and regulations, and will also be posted on the Bank's website.

For other voluntarily disclosed information, we will strive to disclose information that is fair and useful in an appropriate manner.

4. Information disclosure procedures and systems

The Bank has established the "Rules on Management-related Information Disclosure" and has designated the General Planning Department as the department responsible for disclosure of management-related information in order to develop and enhance procedures and systems for timely and appropriate information disclosure.

In addition, to maintain the appropriateness of the information, we consult with audit firms and other experts as necessary, and periodically verify the appropriateness and effectiveness of the information.

5. Forward-looking statements

The information on the Bank's website and in the Integrated Report contains statements regarding the financial position of and future forecasts concerning the Bank and other Group companies. These forward-looking statements do not guarantee that future performance will be achieved as stated. They are affected by certain risks and uncertainties and may not necessarily be consistent with actual results due to changes in the business environment in the future.

On the Publication of Integrated Report

Shiga Bank has compiled the integrated report SHIGA BANK ANNUAL REPORT 2022. This report links financial information to non-financial information, such as the Management Principles, environmental, social and governance (ESG) information by reference to the "International Integrated Reporting Framework" proposed by the International Integrated Reporting Council (IIRC) and "The Guidance for Collaborative Value Creation" by the Ministry of Economy, Trade and Industry. It serves as an integrated review of measures for creation of sustainable value for the Bank and in regional communities. This report serves also as disclosure materials (briefing documents of status of operations and assets) pursuant to Article 21 of the Banking Act. The reader is recommended, when using this document for disclosure purposes, to

refer also to the material section and "Financial Data, Basel III, Column 3 of SHIGA BANK ANNUAL REPORT 2022" (both viewable on our website (https://www. shigagin.com). (Japanese only)

The management team of the Bank confirms that this combined report has been duly disclosed in accordance with the Disclosure Policy of the Bank.

Cautionary Statement with Respect to Forward-Looking Statements

This material contains statements regarding future earnings forecasts and targets, etc. relating to the Bank. These statements are based on information available at the time of compilation of these materials and forecasts or certain conditions (assumptions) that could affect business performance. They are not guarantees of future performance of the Bank, and involve various risks and uncertainties.

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TOP MESSAGE	ABOUT SHIGA BANK	MEASURES FOR CLIMATE	IMPLEMENTING THE PRINCIPLES	CHALLENGES FOR	POWERS SUPPORTING	FINANCIAL SECTION
CHANGE/GLOBAL WARMING	FOR RESPONSIBLE BANKING	VALUE CREATION	VALUE CREATION

Enriching the regional economy and people's lives for the future

In recent years we have been hit by one historic crisis after the other - from the global COVID-19 pandemic, to the conflict between the US and China, to the critical situation in Ukraine. In Japan, issues such as the declining population, the declining birthrate, increasing aged population, gap between urban and rural areas, and rapid digitalization have transformed not only how we work and our daily lives, but also our values regarding social and economic activities, and has even impacted individuals' outlook on life.

When social and economic structures start to change so dramatically, I think what we need to be wary of most is having the mindset of avoiding change and choosing to maintain the status quo. I believe that maintaining the status quo in times of change is the biggest factor in a company's downfall. Identifying signs of change, creating new businesses by leveraging your organization's strengths, and enhancing added value further based on firm convictions will contribute to sustainability.

In today's age of mounting social problems, sustainability has become crucial in a wide range of areas. Companies need to recognize that if they actively tackle SDGs and ESG (environmental, social and governance), it will become a source of competitiveness, and if they do not, it will be a considerable risk.

Here at the halfway point of the 7th Medium-Term Business Plan (April 2019 - March 2024), the Bank has decided to make "SX (Sustainability Transformation) for the future" the key phrase for completing the plan. "SX" means to balance a company's earning power with ESG principles and make changes to create a sustainable society. Below I will explain the Group's initiatives to transform society and enrich the regional economy and people's lives for future generations.

SHIGA BANK REPORT 2022

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Our motto is the cornerstone of our sustainability efforts

The Bank's motto:

Be tough on ourselves, kind to others and serve society

Recently, "sustainability management" has gained public attention. It refers to corporate management that achieves sustainability in all aspects of the environment, society, and economy. The Bank has been practicing sustainability- conscious management since early on. At the heart of this lies our motto, "Be tough on ourselves, kind to others and serve society," which we announced in 1966. The Bank's motto carries on the "Sampo yoshi" management philosophy of the Omi Merchants, which means to bring happiness to three sides - being good for the seller, the buyer, and society

• a philosophy that shares much with modern stakeholders' idea of capitalism.
  The first part of the motto, "Be tough on ourselves," means that if every employee clearly realizes they are part of history and society, they will be able to enhance their raison d'etre.
  The second part, "be kind to others," refers to recognizing that we are not simply individuals but members of society, and that it is essential for us to always discipline ourselves. The third part, "serve society" expresses that we must contribute to society by acting based on a sense of gratitude to society as a member of a company. This motto serves as our guideline in everything we do, and we instill the mindset of contributing to society through business in every Group employee.
  The motto also forms the starting point of our Corporate Social Responsibility (CSR), and in 2007 we formulated our CSR Charter (Management Principles), which sets out our commitment to pursuing mutual prosperity with the regional community, all employees, and the environment. The Charter is a strong statement of our pledge to continue progressing to achieve a sustainable society with the community based on sustainability management. In these times of great change, I believe we must further efforts to implement SX that will both resolve social issues and enhance corporate value, and not delay our responsibility to future generations.

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