toru iwai

Iwai Toru

September 15, 2011

Impact Investment Efforts

TBLI CONFERENCE™ ASIA 2011Workshop 8 – Impact Investing

©Daiwa Securities Group Inc.1

Contents

1. Daiwa Securities Group at a glance (P.2～5)

2. MDGs and SRI, Impact Investment (P.6～ 12)

3. SRI & Impact Investment Efforts (P.13～23)

4. Conclusion (P24)

Appendix (P27～41)

This document has been prepared by Daiwa Securities Group (Daiwa) based on information, the sources of which are believed by Daiwa to be reliable, but Daiwa makes no representation nor warranty as to the accuracy or completeness of such information. Recipients of this document must make their own decisions on whether or not to adopt the recommendations discussed in this document, based upon their specific situations and objectives. Any use, disclosure, distribution, dissemination, copying, or reproduction of this document without prior written consent from Daiwa is prohibited.


Members of Daiwa Securities GroupInvestment and Financial Services (Holding company, 58 subsidiaries, 6 equity method affiliated companies)


Through 120 Sales Offices and more than 6,000 employees with Japan Securities Dealers Association sales representative qualification, one of the largest sales networks in Japan, Daiwa covers broad range of retail and institutional investors throughout Japan. Daiwa Group’s total customer assets reached JPY42.7 trillion as ofMarch 2011. In addition, “Daiwa Direct” the online brokerage within the Daiwa Securities Group, has over 2.24 million accounts as of March 2011 and maintains a leading position in the online segment.

Broad Retail Investor BaseBroad Retail Investor Base

Online service has over 2.24 mil accounts（i-mode, EZ-web, J-Sky）.

Daiwa Call service package offers advice on securities investment.

ATM alliance with Postal Savings

120 Sales Offices NationwideOne of The Largest Online Brokers

1 sales officeHeadquarter Retail Sales Office

5 branchesShikoku Area

26 branchesTokyo

24 branchesGreater Tokyo Area

10 branchesKyusyu, Okinawa Area

10 branches Hokkaido，Tohoku Area

0400800

1,2001,6002,0002,400

05/1

206

/306

/606

/906

/12

07/3

07/6

07/9

07/1

208

/308

/608

/908

/12

09/3

09/6

09/9

09/1

210

/310

/610

/910

/12

11/3

18 branches Kinki Area

7 branchesChugoku Area

19 branchesChubu, Hokuriku Area

Online Trading Accounts （‘000）

Covering Japan

（Number of Sales Offices as of March 2011）

Sales Network in Japan


Global Network

Geneva BranchGeneva Branch

Hong KongHong Kong

AustraliaAustralia

LondonLondon

ParisParis

MilanMilan

FrankfurtFrankfurt

Melbourne Melbourne

Hong KongHong Kong

Frankfurt BranchFrankfurt Branch

SingaporeSingapore

SingaporeSingapore

Paris BranchParis Branch

NYNY

London Head OfficeLondon Head Office

Milan BranchMilan Branch

Bahrain BranchBahrain Branch

Seoul BranchSeoul Branch

TaiwanTaiwan

The PhilippinesThe Philippines

Beijing Representative OfficeBeijing Representative Office

Daiwa SSC SecuritiesDaiwa SSC Securities

ManilaManila

ShanghaisShanghais

BeijingBeijing

SeoulSeoul

TaipeiTaipei

Bangkok Rep.Office Bangkok Rep.Office San FranciscoSan Francisco

Dubai BranchDubai Branch

DubaiDubai

MoscowMoscow

MumbaiMumbai BangkokBangkok

Hanoi Rep. OfficeHanoi Rep. Office

HanoiHanoiシャーロットシャーロット

ChicagoChicago

=Development Bank of Philippines has 40% of share

Our company’s stronghold

Special hubs for M&AAcquisition of M&A Advisory Division of Close Brothers and Close Brothers Corporate Finance on Jul. 2009.MadridMadrid BarcelonaBarcelona

LyonLyon

Manchester Manchester

WarsawWarsaw

GenevaGeneva

ZurichZurich

NY Head OfficeNY Head Office

San Francisco BranchSan Francisco Branch

According to the M&A division, another 20% of

investment for partnership

According to the M&A division, another 20% of

investment for partnership

Daiwa Capital Markets America IncDaiwa Capital Markets America Inc

Daiwa Capital Markets Europe LimitedDaiwa Capital Markets Europe Limited

IndiaIndia

Moscow Representative OfficeMoscow Representative Office

Daiwa Capital Markets Asia Holding B.V.Daiwa Capital Markets Asia Holding B.V.

=Merger with Shanghai Securities (Daiwa: 33% of share)BahrainBahrain

Daiwa Securities Trust Company (US)Daiwa Europe Fund Managers (Ireland) LimitedDaiwa Europe Trustees (Ireland) Limited

Overall 26 sites worldwide


Valuing Human Resources

Employees are the source of our competitiveness.

Valuing Human Valuing Human Resources Resources

Employees are the source of our competitiveness.

EmployeesEmployees

Earning Sound ProfitsImprove corporate value by developing a healthy business.

Earning Sound ProfitsEarning Sound ProfitsImprove corporate value by developing a healthy business.

ShareholdersShareholders

Building TrustTrust from the clients is the foundation of our business.

Building TrustBuilding TrustTrust from the clients is the foundation of our business.

CustomersCustomers

Contributing to Society Contribute to the community and economic development through finance and capital markets.

Contributing to Society Contributing to Society Contribute to the community and economic development through finance and capital markets.

Society Society

Stakeholders & Corporate Principles


Stakeholder ConcernsShareholders Customers; Clients

Employees

Stricter c

ustomers

’ view

;

Heighte

ning cus

tomers’

orientatio

n by e

asing t

he re

gulatio

nFrom silent shareholders

to active shareholders

From lifetime employment to performance-base;Aiming to be a professional

Strengthening monitoring of the enterprise;Social business

Local Community; Citizens

Stakeholders’ domain to give influence to the organization

Company Im

prove SC

M

Business Partners

Climate Change

Climate Change

Global Warming

Global Warming

Governance Governance ComplianceCompliance

Human

Human

Rights

Rights

Pover

ty

Pover

ty

DiversityDiversity


（MDGs logos were created by 「Don’t let it be – world poverty」）

Goal 1: Eradicate extreme poverty & hunger Goal 2: Achieve universal primary educationGoal 3: Promote gender equity and empower womenGoal 4: Reduce child mortality ratesGoal 5: Improve maternal healthGoal 6: Combat HIV/AIDS, malaria and other diseasesGoal 7: Ensure environmental sustainabilityGoal 8: Develop a global partnership for development

MDGs (Millennium Development Goals)

Source: The World Bank, “The costs of attaining the millennium development goals.” Summary of World Bank Policy Research Working Paper, “Development Goals: History, Prospects and Costs,” by Shantayanan Devarajan, Margaret J. Miller, and Eric V.Swanson.

In addition to $57 billion of ODA in 1999, another $40-60 billions p.a. are needed to achieve the MDGs .

■Additional fund necessary to; （include double count）（Bil. USD）

Poverty Eradication 39 ～ 54

Education 10 ～ 25

Health care 20 ～ 25

Emvironment 5 ～ 21


主要援助国のODA実績の推移(支出純額ベース)

9.39.59.67.7

11.113.1

8.98.99.8

13.5

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

(暦年)

(10億ドル)

米国

フランスドイツ

英国

日本

カナダ

イタリア

(出典)OECD･DAC(注1)東欧および卒業国向け実績を除く。

ODA Trend

Source: website of Japan’s MOFA

Billion USD

Japan

USA

Official Development Assistance by G7


Private money for Social Issues

＜Background＞

Fiscal condition of each country grows increasingly severe (policy makers’ side)

Reflect on the financial crisis (investors’ side)

world’s financial assets = $178 trillion in 2008 (world’s GDP is $58 trillion)

Not only Donations/ODA, but also Investments are required to solve social issues

＜Background＞

Fiscal condition of each country grows increasingly severe (policy makers’ side)

Reflect on the financial crisis (investors’ side)

worldworld’’s financial assets = $178 trillion in 2008 (worlds financial assets = $178 trillion in 2008 (world’’s GDP is $58 trillion)s GDP is $58 trillion)

Not only Donations/ODA, but also Investments are required to sNot only Donations/ODA, but also Investments are required to solve social issues olve social issues

■ GIIN (Global Impact Investing Network) GIIN is a not-for-profit organization created to “increase the scale and effectiveness of impact investing.”

It was inaugurated at Clinton Global Initiative in Sep. 2009, to measure growth and increase of the social investment, ‘Impact Investment’, in which is more direct and has an immediate result compare to conventional SRI. Representative examples of investment products: vaccine bonds of IFFIm, Generation Investment Management of Al Gore, former US Vice President. Main investment target: poverty & hunger; global warming; water, food and energy; medical care, health, welfare; community development, education


17%

32%

18%

3%

30%

55%

7%

7% 4%

27%

Billions of dollars, as of the end of 2009Japan* United Kingdom* Germany* France* United States

(%) (%) (%) (%) (%)Total Financial Assets 15,638 100.0 6,709 100.0 6,688 100.0 5,388 100.0 44,510 100.0

Currency and deposits 8,592 54.9 1,913 28.5 2,560 38.3 1,553 28.8 7,756 17.4Life insurance and pension fund reserves 4,228 27.0 3,615 53.9 2,241 33.5 2,126 39.5 13,191 29.6Shares and other equity 1,104 7.1 744 11.1 523 7.8 879 16.3 13,972 31.4Mutual funds and securitis other than shares 1,047 6.7 218 3.3 1,315 19.7 504 9.4 8,135 18.3Others 668 4.3 218 3.3 49 0.7 327 6.1 1,457 3.3

Total Financial Liabilities 4,085 26.1 2,474 36.9 2,193 32.8 1,864 34.6 14,068 31.6Net Financial Assets 11,553 73.9 4,235 63.1 4,495 67.2 3,524 65.4 30,442 68.4

Deep pocket seeking quality

Primary sources: Japan: Bank of Japan, Flow of Funds Accounts , June 17, 2010 United Kingdom: Office for National Statistics, Financial Statistics No 580, August 2010 Germany: Deutsche Bundesbank, Financial Accounts for Germany 1991 to 2009. France: Banque de France, Financial Accounts and Financial Balance Sheets, June1, 2010. United States: Federal Reserve Statistical Release, Flow of Funds Accounts, June10, 2010.

* converted into US dollars based on the year-end exchange rates of GBPUSD=1.62, EURUSD=1.43, USDJPY=92.90

Household Financial Assets

Japan United Kingdom

Germany

France United States

Currency and deposits Life insurance and pension fund reserves Shares and other equity Mutual funds and securitis other than shares Others

Currency and

deposits

Currency &

deposits

Insurance&

PensionShares

Mutual funds

Others29%

3%3%

54%

11%

20%1%

38%

34%

8%

29%9%

6%

16%

40%

Insurance&

Pension

Shares

Mutual funds


Extremely Low in Japan

Source：「European SRI Study 2010」; based on Eurosif publication and SIF-J material,

compiled by Daiwa Securities Group. Exchange rate as of Dec 31, 2009

SRI市場規模

4,986

2,141

40558 4

0

1,000

2,000

3,000

4,000

5,000

6,000

欧州(2009)

米国(2010)

カナダ(2008)

豪州・NZ (2010)

日本(2009)

（10億ユーロ）Billion Euro SRI Market size

Europe US Canada Aus/NZ JPN


SRI Issues in Japan

1. Inadequate regulation and guideline to promote SRI.2. Less interests in SRI among labor unions, religious

groups or private organizations which have a mission of social contribution.

3. Weak self-awareness in exercising a big impact on social development through financing and investing.

4. Fewer opportunities in school education that teaches how the investment behavior can have social impact.

5. SRI product and service development & offerings


CSR at Daiwa Securities Group

1）Daily business 2）Developing & offering SRI/ESG products

-Eco fund; SRI fund; microfinance fund -Vaccine bonds; microfinance bonds, etc.

3）Enlightening activity for SRI & Impact Investing4）Releasing SRI/ESG research

1）Social Business College （Daiwa Eco Fund）

2）Civil Society Initiative Fund (Daiwa SRI Fund)

3）Daiwa Securities Group – Tsunami Reconstruction Fund

・2010年 Signing the UN Global Compact (GC)・2006年 Signing the UN Principles for Responsible Investment

by Daiwa Asset Management (PRI)・2004年 Signing the UNEP Finance Initiative (UNEP FI) &

Carbon Disclosure Project (CDP)

Non-m

arketM

arket

（WLB, Info disclosure, external appraisal

）

④CSR

Managem

ent

Sustainable Enterprise

Sustainable Society/Com

munity

②Social Engagement

③Corporate Citizenship

①Core Business

ObjectiveCSR Activities (Implementations)


①-1) Daily business: Retails

Foreign Bond

Mutual Fund

Billion Yen Sales and Distribution Amount by Product Category

¥2.9Trillion(In FY2010)


Foreign Equities Focus on theenvironmental technology of each

nationCreator：Russell Investment

Formulated：May 1st, 2008（Unlimited term）

As of April 28th, 2011

Basic price：8,560円 Total net asset：143億円

●●Daiwa Eco FundDaiwa Eco Fund●●Daiwa SRI FundDaiwa SRI Fund

①-2) SRI product: Mutual funds

●●Environmental Business Fund for Environmental Business Fund for Next Generation Next Generation

Domestic EquitiesEconomy & Ecology

Creator：Daiwa SB Investment

Formulated：Feb. 27th, 2009

（Redemption date：Feb. 26th, 2014）


Basic price：9,840円Total net asset：10.13億円

Domestic Equities

Economy & Ecology

Creator：Daiwa Asset Management

Formulated：March 9th, 2006

（Redemption date：Feb. 22nd, 2016）



●●Russell World Environment Russell World Environment

Technology FundTechnology Fund

●●Daiwa Energy Technology FundDaiwa Energy Technology Fund

Domestic Equities

Focus on alternative energy which

global demand is estimated to increase


Formulated：Dec. 25th, 2008

（Redemption date：Jan. 14th, 2014）



Domestic Equities

Focus on integrity & transparency of the enterprise


Formulated：May 20th, 2004

（Redemption date：May 9th, 2014）



SRI Funds distributed by

Daiwa SecuritiesTotal net asset of 15 products￥92.8Billion


■ Major Characteristics

The first microfinance mutual fund in Japan

Minimum investment unit is 1,031 yen, you can pursue both social and financial return

Direct lending in local currency to MFIs (currency risk free to MFIs）

Daiwa Microfinance Fund


Source： Daiwa Microfinance Fund prospectus

(available only in Japanese)

*Developing World MarketsLoan users

（BOP

）

Taking Currency risk, Interest rate risk and Credit risk Reducing risks by deversifying portfolio

Pursuing financial return as well as social return

Daiwa Microfinance Fund

■Investment Universe ■Model Portfolio

Reviewed by DWM*300 MFIs

Over 10,000 MFIs

(E) Return


￥Billion

①-2) SRI product: Bonds

【 Annual Sales Trends】

（十億円）

29.0Microfinance Bonds2010年9月22日

13.9Latin America Child Education Support Bonds

2010年7月15日

11.8Africa Education Bonds2010年8月30日

9.8Ecology Bonds2010年11月12日

8.7Microfinance Bonds2010年6月15日

32.6Ecology Bonds2010年5月21日

60.4Water Bonds2010年4月16日

Sales VolumeName of the ProductsDate of

Issuance

Daiwa69％

Source：Daiwa Securities ※Only for Individual bond （Mar.2008-Mar.2011）

Domestic share of the bonds

Total approx.: ￥482.4 Billion

￥Billion

Impact Investment Bond Sales Volume at Daiwa Securities

Major Impact Investment Bonds


MDGｓ & Impact Investment Bonds

Impact Investment Bond

MDGs

Mic

rofin

ance

Educ

atio

nin

Afri

caVa

ccin

eW

ater

Gre

en

Clim

ate Tsun

ami

Reco

nstru

ctio

n Fu

nd

Goal 1: Eradicate extreme poverty & hunger ◎ ◎ ○

○ ◎ ○ ○

◎ ○ ○ ○

◎ ◎

○

◎ ◎

○ ◎ ◎ ◎

○ ○ ○ ○ ○ ○Goal 8: Develop a global partnership for development

Goal 5: Improve maternal health

Goal 6: Combat HIV/AIDS, malaria and other diseases

Goal 7: Ensure environmental sustainability

Goal 1: Eradicate extreme poverty & hunger

Goal 2: Achieve universal primary education

Goal 3: Promote gender equity and empower women

Goal 4: Reduce child mortality rates

©Daiwa Securities Group Inc.20http://www.daiwatv.jp/http://www.daiwatv.jp/

Communication via the Internet

①-3） Enlightening Activities

http://www.daiwatv.jp/

http://www.daiwatv.jp/


①-3） Enlightening activity: ForumDaiwa Africa Forum 2010

Date: July 21st, 2010

Venue: GranTokyo North Tower 18F Conference Room

Speaker: Mr. Thierry de Longuemar, Vice President Finance, African Development Bank (AfDB)

Mr. Pierre Van Peteghem, Treasurer, AfDB

Dr. Boukary Savadogo, Manager of the Division of Education, Science and Technology, AfDB

Dr. Naoyuki Kawahara, Director, NPO Rocinantes

Ms. Keiko Sano, Director, East Africa Division 2, Africa Department, Japan International Cooperation Agency

Ms. Agnes Chan, the ambassador of the Japan Committee for UNICEF, a pop singer, a television personality

No. of Audience: 221


Impact Investment Awareness

70

69

33

79

37

56

17

0 20 40 60 80 100

水・衛生

貧困・飢餓

医療・保健

教育

社会基盤整備

気候変動

興味がない

102

83

64

52

11

0 20 40 60 80 100 120

成長性が見込める

社会性を重視した経営姿勢かどうか

利益を上げている

株主への還元

事業規模

89

38

30

0 20 40 60 80 100

双方

投資リターン

社会貢献

97

31

0

0 20 40 60 80 100 120

賛同する

大いに賛同する

賛同しない

■ Which of financial return or social return do you care?

■ Do you support Impact Investment?

■ What social problems are you seriously concerned about?

■ What aspect do you most value when investing?

Yes

Strongly Yes

No

Both

Financial Return

Social return

Water

PovertyHealth

Education

InfrastructureClimate Change

No interest

Revenue growth

Profit

Scale of operation

CSR strategy

Dividend

Source: Questionnaire at Impact Investment Forum 2010, September 9th


Pondering Pondering CSRCSR through dialoguethrough dialoguehttp://www.daiwahttp://www.daiwa--grp.jp/csr/dialoguegrp.jp/csr/dialogue/

In the CSR website, you can find series of dialogue with key figures who play an active role in the front lines of each field.

■No. 26 “Cluster Bombs”8 June 2010 http://www.daiwa-grp.jp/csr/dialogue/26/

①-4）SRI/ESG Research and Dialogue

■ “Rethinking Growth”http://www.daiwa-grp.jp/english/csr/publication/100205.html

http://www.dir.co.jp/souken/research/esg/index.html

Research ReportsResearch Reports

■ ESG Research by Daiwa Institute of Research

http://www.daiwa

http://www.daiwa

http://www.daiwa-grp.jp/csr/dialogue/26/

http://www.daiwa-

http://www.dir.co.jp/souken/research/esg/index.html


Conclusion

1. A financial institution has a social calling to serve as a mediator between asset management and fund raising for public and private sectors.

2. While acknowledging environment, social and governance issues, harmony amongst various stakeholders is required to develop a sustainable community in the 21st century onwards.

3. Daiwa Securities Group is implementing its mission by leveraging financial capabilities


Contact ：Corporate Communication Departmente-mail：[email protected]

Tel:03-5555-1312 Fax:03-5555-0662

mailto:[email protected]


Appendix

・ Our Surrounding Environment （P.27）・ Paradigm Shift （P.28）・ ISO 26000 （Publish in Nov. 2010）（P.29）・ Funding type for Development （P.30）・ MFI Interest Yield Trend to borrowers （P.31）・ Cross-border funding landscape to MF （P.32）・ Impact Investment Bond Uridashi （P.33）・ Impact investment bond Private Placement to Regional Banks

（P.34）・ Highlights of “Impact Investment Bonds” （P.35-36）・ ①-3） Enlightening Activities （P.37）・ ② Social Engagement （P.38）・ ③ Corporate Citizenship （P.39）・ ④ Information Disclosure (CSR Report) （P.40）・ ④-2) Third-party Evaluation （P.41）


Our Surrounding Environment

経済(Profit/Governance)

人間社会(People/Society)

地球環境

(Planet/Environment)

企業・団体(Enterprise)

【【PPPPPP】】【【ESGESG】】


Paradigm Shift

Sustainability EraSustainability Era

～20th century

＜Unlimited Resource＞

21st Century～Low Carbon Community

＜Limited Resource＞

Materially R

ich

Carbon energy Carbon energy replaced animals and replaced animals and manpowermanpower

New/Renewable Energy Era New/Renewable Energy Era (Solar, wind, gravitational energy, (Solar, wind, gravitational energy, biomass) biomass)

Growth Era

ParadigmParadigmShiftShift

Industrial Industrial RevolutionRevolution

Environment, Resource & Human rights constraint Environment, Resource & Human rights constraint


Guidance on Social Responsibility, provides harmonized, globally relevant guidance for private and public sector organizations of all types based on international consensus among expert representatives of the main stakeholder groups,.

What will ISO 26000 achieve? It will integrate international expertise on social responsibility –will be a powerful SR tool to assist organizations to move from good intentions to good actions.

Source: ISO Web site . Japan Business Federation Political Sociology Division 2010.6.10「Summary of Result of Copenhagen Conference ISO260000」

ISO 26000 （Publish in Nov. 2010）

1. Accountability 2. Transparency 3. Ethical behavior 4. Respect the interest of stakeholders 5. Respect the rule of law6. Respect the international code of

conduct7. Respect the human rights

7 Code of Conducts

1. Administration of the organization2. Human rights3. Labor practice4. Environment 5. Fair business practice6. Consumer issues7. Community participation and

development

7 Core Subjects

From CSR to SR


No-financial return

Private

Public

Donation

Grant Aid Yen Loan

SRI(e.g.: Microfinance

bond)

Financial return*

Funding type for Development

*Possible for negative return due to exchange fluctuations and credit risk and so on.


MFI Interest Yield Trend to borrowers

35.1

28

44.3

25.5

34.536

26.128.2

23.9

32.6

20.9

31.7

24.826.2

0

5

10

15

20

25

30

35

40

45

50

World Africa EAP ECA LAC MENA SouthAsia

％ o

f G

ross

Loan

Port

folio

2003

2006

Saurce: OCCASIONAL PAPER No. 15 , February 2009 The New Moneylenders: Are the Poor Being Exploited by High Microcredit Interest Rates?Note: Total Interest and Fee Income/Average Total GLP: average of 175 sustainable MIX MFIs, weighted by loan portfolio.


MFI Loan Portfolio ＄65.0billion （ MIX、FY2009、1,058ＭＦＩｓ）

Source ：ＣＧＡＰＦｏｃｕｓＮｏｔｅ No. 70 April 2011, Cross-border Funding of Microfinance* Amounts based on data submitted by 61 funders and 90 MIIs.

$21.3 billion* (2009)

Cross-border funding landscape to MF

Public donors and Investors

(Multilaterals, Bilaterals, DFIs)

$14.6 billionMicrofinanceInvestment

Intermediaries(MIIs)

Private donors and Investors(Foundations,

Institutional andIndividual Investors)

$6.7 billion

Apex & other Intermediaries

(Support for microfinance at all levels of the financial system: retail, market infrastructure, and policy)


Impact Investment Bond UridashiYear Name Issuer Lead Manager Tenor Settlement Date in Japan Amount ($mil)

Vaccine Bonds IFFIm Daiwa 2y 19-Mar-08 $211World CO2LTM Bonds World Bank Daiwa 5y3m 27-Jun-08 $25

Vaccine Bonds IFFIm Daiwa 3y 20-Feb-09 $437Vaccine Bonds IFFIm Mitsubishi UFJ 3y 28-May-09 $144Vaccine Bonds IFFIm HSBC 4y 25-Jun-09 $132

Microfinance Bonds IFC Daiwa 3y 20-Nov-09 $275Green Bonds World Bank Daiwa 5y 03-Feb-10 $106

Environmental Support Bonds NIB Nomura 3y 03-Feb-10 $207Climate Awareness Bonds EIB HSBC 5y 16-Mar-10 $200

Vaccine Bonds IFFIm Daiwa 3y 24-Mar-10 $338Clean Energy Bonds AfDB Mizuho 4y 30-Mar-10 $78

Water Bond ADB Daiwa 3y 16-Apr-10 $645Climate Awareness Bonds EIB Daiwa 3y 21-May-10 $368

Clean Energy Bonds AfDB Mizuho 3y6m 28-May-10 $108Green Bonds Kommunalbanken Norway Nikko 3y 28-May-10 $102Green Bonds World Bank SBI 5y 09-Jun-10 $6

Microfinance Bonds EBRD Daiwa 3y 15-Jun-10 $96Green Bonds Kommunalbanken Norway Nikko 3y 29-Jun-10 $47

Vaccine Bonds IFFIm HSBC 10y 29-Jun-10 $102Poverty Reduction Bonds IADB Daiwa 4y 15-Jul-10 $158

Clean Energy Bonds AfDB HSBC 7y 29-Jul-10 $13Green Bonds AfDB Nikko 3y 27-Aug-10 $30

Education Bonds AfDB Daiwa 3y 30-Aug-10 $136Microfinance Bonds IFC Daiwa 3y 22-Sep-10 $342Clean Energy Bonds AfDB HSBC 4y 30-Sep-10 $237Clean Energy Bonds AfDB HSBC 6y 29-Oct-10 $13Clean Energy Bonds AfDB Mizuho 4y 29-Oct-10 $123

Climate Awareness Bonds EIB Daiwa 3y 12-Nov-10 $118Poverty Reduction Bonds IADB Daiwa 3y 02-Feb-11 $239

Green IFC Bonds IFC Nomura 3y 25-Feb-11 $44Clean Energy Bonds Kommunalbanken Norway HSBC 4y 29-Mar-11 $83

Vaccine Bonds IFFIm Daiwa 3y 31-Mar-11 $228

2010

2011

2008

2009

Total $5,338 mil / Daiwa’s arrangements $ 3,721 / Daiwa’s market share 69%


Impact investment bond Private Placement to Regional Banks

DaiwaOgaki Kyoritsu Bank$10mil5 yearUSDGreen BondWorld Bank6/14/2011

DaiwaMusashino Bank$10mil5 yearUSDGreen BondWorld Bank4/14/2011

DaiwaOita bank$10mil5 yearUSDGreen BondWorld Bank3/17/2011

DaiwaHokuyo Bank$10mil5 yearUSDGreen BondWorld Bank2/18/2011

DaiwaNanto Bank$20mil5 yearUSDGreen BondWorld Bank2/24/2011

DaiwaKagoshima Bank$10mil5 yearUSDWater BondAsian Development Bank6/30/2011

JP MorganSan-in Godo Bank$30mil5 yearUSDGreen BondWorld Bank2/17/2011

DaiwaPublic company$12mil5 yearUSDEducation BondAfrican Development Bank8/19/2010

DaiwaNishi-Nippon City Bank$30mil5 yearUSDWater BondAsian Development

Bank1/25/2011

5.25 year

5 year

5 year

10 year

5 year

5 year

5 year

5 year

TermTerm

JP MorganAichi Bank$30milUSDGreen BondWorld Bank1/25/2011

DaiwaDaishi Bank$10milUSDGreen BondWorld Bank1/20/2011

DaiwaFukui Bank$10milUSDGreen BondWorld Bank1/20/2011

DaiwaKagawa Bank$5milUSDGreen BondWorld Bank1/18/2011

DaiwaKiyo Bank$10milUSDGreen BondWorld Bank12/21/2010

DaiwaIwate bank$10milUSDGreen BondWorld Bank11/30/2010

JP MorganSan-in Godo BankA$30milAUDGreen BondWorld Bank11/16/2010

JP MorganIyo Bank$50milUSDGreen BondWorld Bank9/1/2010

Lead managerLead managerinvestorinvestorAmountAmountCurrencyCurrencyProductProductIssuerIssuerIssue dateIssue date


Issuer: IFFImPurpose: Raise funds in the capital markets to accelerate funding available for health and immunization

programmes in 70 of the developing countries around the world.

Issue date and amount:Mar. 19, 2008 $211 million equivalentFeb. 20, 2009 $437 million equivalentMar. 24, 2010 $338 million equivalent

Highlights of “Impact Investment Bonds”Vaccine Bonds

Issuer: IFCPurpose: Support microfinance businesses with the purpose

of fostering economic independence by providing small scale financial services to the poor segments.

Issue date and amount:Nov. 20, 2009 $275 million equivalentSep. 22, 2010 $342 million equivalent

Microfinance Bonds

Issuer: IBRD

Purpose: Support projects in the World Bank’s member countries that meet specific criteria for low-carbon project.

Issue date: February 3, 2010Issue amount: $106 million equivalent

Green Bonds

Issuer: ADB

Purpose: Support water project by developing countries inAsia and the Pacific.

Issue date: April 16, 2010 Issue amount: $628 million equivalent

Water Bonds

InvestorsInvestment

in capital market

Financial management

Funding

Support for vaccine securing program

DonatorDonation for up to

20 years

Daiwa Securities joined the panel with GAVI on the 8th plenary session of the Leading Group on Innovative Financing for Development (16-17 Dec 2010, Tokyo)


Issuer: EIB

Purpose: Support future lending projects in renewable energy and energy efficiency, both of which

are identified by EIB as key areas for mitigating the effects of climate change.

Issue date and amount:

May. 21, 2010 $393 million equivalentNov. 12, 2010 $118 million equivalent

Climate Awareness Bonds

Microfinance Bonds Education Bonds

Issuer: EBRD

Purpose: Support micro and small enterprises, which are

not catered for by the formal financial sector, with sustainable access to financial services, via a range of financial institutions.

Issue date: June 15, 2010 Issue amount: $96 million equivalent

Issuer: AfDB

Purpose: Finance projects in the field of education and hence foster economic and social growth in African countries.

Issue date: August 30, 2010 Issue amount: $137 million equivalent

Poverty Reduction Bonds

Issuer: IADB

Purpose: Support innovative poverty alleviation programs

in Latin America and the Caribbean, including several conditional cash transfer programs,

such as Oportunidades in Mexico.

Issue date: July 15, 2010 Issue amount: $158 million equivalent

Highlights of “Impact Investment Bonds”


May 15 (Sat) May 15 (Sat) –– June 13 (Sun), 2010 June 13 (Sun), 2010

＠＠Tokyo MidTokyo Mid--Town Design HubTown Design HubHost: Host: Committee for Committee for ‘‘Imagine Imagine another Life through the another Life through the ProductsProducts’’, , CANPANCANPAN CenterCenter

Special Sponsor: Special Sponsor: Daiwa SecuritiesDaiwa Securities

October 31 (Sun) October 31 (Sun) –– November 7 (Sun)November 7 (Sun)

＠＠Osaka International Convention CenterOsaka International Convention Center

Host: Junior Chamber International (JCI)Host: Junior Chamber International (JCI)Sponsor: Daiwa SecuritiesSponsor: Daiwa Securities・・ Running a booth at Running a booth at ‘‘Future ExpoFuture Expo’’, ,

・・ Panelists for sectional meetinganelists for sectional meeting

①-3） Enlightening Activities


② Social Engagement

■Participating in the international initiatives GC (UN Global Compact）PRI （Principle for Responsible Investment）UNEP FI （UNEP Finance Initiative）CDP （Carbon Disclosure Project）

■Cooperation with the international organization/NGOGRI （Global Reporting Initiative）FTSE4Good （Policy Committee Member of an SRI Index）SIF-J（Board Member of Social Investment Forum Japan）


■Real business as a result of partnership with ＮＰＯ・ＮＧＯ

2）Daiwa SRI Fund Grant Program （Civil Society Initiative Fund）

In order to strengthen the basis of domestic NGOs operating in the field of human security, we support them for personnel expenditure (instead of program cost) aiming at nurturing leaders for the core of the organization. The operation is taken from the outstanding balanceof donation of Daiwa SRI Fund & Daiwa Eco Fund. Since 2006, there have been 24 cases in total with more than 42 million yen of support.

1）Social Business College（Kopernik）

This is a lecture by social entrepreneur for social business practice, held bimonthly since Oct. 2010 (12 lectures in 2 years), for the university students and working persons. The operation is funded by the outstanding balance of donation of Daiwa Eco Fund and contents can be found in the web.

3）Daiwa Securities Group – Tsunami Reconstruction Fund（Asia Community Center 21）

From 2005 (after receiving appeal from the UN), for the next 10 years, we provide support of 10 million yen every year for reconstruction assistance NGOs in devastated areas (India, Sri Lanka, Indonesia) and is used as a source for microfinance and many more.

In the brackets are the name of NGO/NPO

③ Corporate Citizenship


Posting pictures of employees’ baby on the cover

④ Information Disclosure (CSR Report)

２０１０

２００７２００８

２００９

■Employees as stakeholders (CSR promotion base)

２０１１


④-2) External Appraisal

■Evaluation on CSR in general SRI index constituent

■Ranking for Work Place

Dow Jones Sustainability Indexes (12 consecutive years)

FTSE４Good Index (6 consecutive years)

NIKKEI Most Famous Companies for Job Seekers (2009)Rank 5 for Financial Institution (Rank 1 for Securities Industry)

NIKKEI Woman (2011) Best 100 Companies with friendly working environment for women Rank 1 for Financial Institution (Rank 3 for general category)

toru iwai

Economy & Finance

border funding landscape

millennium development goals

daiwa securities group

policy makers side

daiwa eco fund

impact investment bonds

impact investment

outstanding balance