Sustainability Risks and Opportunities

Society
Environment
Governance

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 materiality issues identified in the Core Materilality selection process and reflects in our Medium Term Management Plan.

Society

Material issues for the Group	Identified risks and opportunities for the Group		Time Horizon^*
Material issues for the Group	Identified risks and opportunities for the Group		Short Term	Medium Term	Long Term
1Individual health and well-being	Risks	Increase of insurance claims and benefit payments as gap widens between life expectancy and healthy life expectancy		●
		Increase in adverse selection risk and benefit payments due to advances in disease risk prediction	●	●
		Decline in protection needs due to reduced mortality and severe illness risks driven by advances in medical technology	●	●
		Decline in the attractiveness of products and services due to insufficient understanding of the diverse customer values and delayed responses to advances in medical technology	●	●
		Reduced employee productivity due to deterioration in employee health, higher employee turnover, and lower talent attraction	●	●
	Opportunities	Creation of new businesses and insurance-related services that lead to health promotion	●	●
		Provision of products and services that support enriched and everyday living	●	●
		Decrease in insurance claims and benefit payments due to growing health consciousness and advances in medical technology		●	●
		Acquisition of new investment opportunities	●	●	●
		Improved employee productivity, lower turnover, enhanced talent attraction, and the resulting increase in corporate value through the promotion of health and productivity management	●	●
2Individual's purpose in life (job satisfaction) and connections with society 3Connections with local community	Risks	Reduced employee productivity, higher turnover, and lower talent attraction resulting from weaker community connections and declining employee engagement	●	●
	Opportunities	Provision of new services related to the “bond” that requires job satisfaction and mental well-being	●	●
		Improved employee productivity, lower turnover, and enhanced talent attraction through stronger community ties and higher employee engagement	●	●
		Regional revitalization through the utilization of owned real estate assets and development expertise		●	●
4Diversity	Risks	Delayed responses to diversified market needs, and loss of new business opportunities due to overly homogeneous organization that is unable to leverage diverse talent and perspectives	●	●
4Diversity	Opportunities	Improved productivity and innovation through fostering an environment where diverse talent can freely generate ideas and engage in creative work	●	●
5Demographic changes	Risks	Contraction of the life insurance business due to declining demand for life insurance resulting from Japan's shrinking population		●
	Risks	Decrease in the attractiveness of products and services due to insufficient understanding of rapid demographic changes (declining birthrate and aging population, increase of immigration, etc.)		●	●
	Opportunities	Expansion of the life insurance business along with an increase in demand for life insurance in countries with growing populations in which the Group operates	●	●
		Rising demand for long-term nursing and end-of-life care due to the declining birthrate and aging population, and increase in the need to secure self insurance and asset formation	●	●
		Growing demand for differentiate employee services provided by companies along with the decrease in the working population in Japan	●	●
6Sustainable financial services	Risks	Market contraction resulting from a decline in access to universal financial services due to regulations and managerial judgment by financial institutions		●	●
	Opportunities	Creation of new markets by providing products and services, including microinsurance, that meet customer needs in the regions and countries that the Group operates	●	●	●
		Provision of new services in response to environmental changes such as the rise of fintech and the democratization of finance	●	●
		Acquisition of new investment opportunities	●	●	●
7Collaboration and outreach with the youth	Risks	Delayed adaptation to changing societal and market needs and loss of new business opportunities due to an insufficient understanding of future generations		●
	Opportunities	Innovation creation and provision of new products and services through collaborations among people with divers perspective, including the younger generation		●
	Opportunities	Creation of new businesses and services through collaboration with younger generations	●	●
8Industrial promotion and innovation creation	Risks	Declining regional vitality and market contraction due to regional depopulation, declining birthrate and an aging population, deterioration of social infrastructures, etc.	●	●
	Risks	Decrease in competitiveness due to delayed adaptation to new technologies and innovations	●	●
	Opportunities	Provision of new products and services utilizing IT and digital technologies	●	●
		Creation of new businesses and services through collaboration with local communities	●	●
		Supporting innovation, addressing social challenges, and generating investment returns through venture capital investments		●	●
9Provision of sustainable education	Risks	Widening economic disparities, slower national and social development, and the resulting contraction of markets and lower investment returns, particularly in countries where the Group operates, due to the expansion and persistence of poverty caused by inadequate education		●	●
	Opportunities	Expansion of the asset formation market through the provision of educational opportunities to improve financial literacy	●	●
	Opportunities	Acquisition of potential customers and enhancement of corporate value through the provision of recurrent learning, reskilling, and IT/programming education opportunities		●	●
10Enhancement of fair and high-quality social security	Risks	Widening economic disparities, slower social and economic development, and the resulting market contraction and lower investment returns, particularly in countries where the Group operates, due to unstable or inadequate social security systems that contribute to the expansion and persistence of poverty		●	●
	Opportunities	Growing demand for protection solutions that complement social security systems	●	●
		Provision of businesses and services that promote fair and equitable treatment	●	●
		Provision of cutting-edge medical care and acquisition of financial returns through venture capital investments		●	●
11Business and human rights	Risks	Damage to corporate brand and credibility, lawsuits and administrative penalties, strikes and human resource outflow, divestment and stock price declines in cases of actual or potential human rights violations	●	●
	Risks	Damage to the Group's asset values arising from human rights-related issues within the operations or supply chains of acquired companies and investees	●	●	●
	Opportunities	Acquisition of societal trust and improvement of corporate value through recognition as an organization committed to respecting human rights	●	●
12Geopolitical risks	Risks	Review of business operations and expansion plans due to rising political and military tensions, geopolitical instability, or national restructuring in countries where the Group operates	●	●	●
		Adverse influence on financial results due to the introduction of new laws and regulations	●	●	●
		Damage to the Group's asset values arising from issues within the operations or supply chains of investee companies	●	●	●
	Opportunities	Expansion of opportunities in emerging markets along with geopolitical reformations	●	●	●

*Risks focused on the timing of occurrence, and Opportunities focus on the timing of implementation of specific measures. Short-term is defined as less than 3 years, medium-term as 3 to 10 years, and long-term as 10 years or more.

Environment

Material issues for the Group	Identified risks and opportunities for the Group		Time Horizon^*
Material issues for the Group	Identified risks and opportunities for the Group		Short Term	Medium Term	Long Term
13Response to climate change	Risks	Increase in insurance claims and payments due to factors accompanying global warming such as increase in instances of heat stroke, infectious diseases, and flooding due to typhoons, etc.		●	●
		Impairment of the Group's investment assets where investee companies maintain facilities or value chains that are vulnerable to climate change-related natural disasters, as well as the risk of stranded assets among investees that fail to adequately respond to tightening policies and regulations, technological innovation, and shifts in consumer behavior	●	●	●
		Increase in operating costs due to significant changes in carbon taxes	●	●	●
		Reputational damage and potential litigation resulting from delays in addressing climate change	●	●
		Higher costs associated with transitioning to low-carbon products and services and measuring GHG emissions	●	●	●
	Opportunities	Provision of products and services contributing to reducing GHG emissions		●	●
		Reduction of operating costs through the introduction of resource-efficient infrastructure		●	●
		Strengthening of investment portfolio resilience utilizing investments assessments related to climate change risks and opportunities	●	●	●
		Acquisition of new investments opportunities	●	●	●
14Renewable energy	Risks	Increase in electricity purchase costs along with urgent implementation of renewable energy	●	●
14Renewable energy	Opportunities	Venture investment opportunities and investment returns arising from innovations that support renewable energy and the transition to a decarbonized society		●	●
15Stable energy supply	Risks	Increase in operating costs due to strained energy supply and demand, rise in resource prices, difficulty in stable procurement, etc.	●	●
15Stable energy supply	Opportunities	Acquisition of new investment opportunities	●	●	●
16Response to natural disasters	Risks	Difficulty in predicting insurance and benefit payments due to large-scale disasters such as earthquakes and tsunamis	●	●	●
		Significant disruption to business operations caused by the physical impacts of increasing natural disasters such as earthquakes and tsunamis	●	●	●
		Damage to investee assets and owned real estate due to the increase in natural disasters such as earthquakes and tsunamis	●	●	●
	Opportunities	Provision of products and services that help customers prepare for increasing natural disasters such as earthquakes and tsunamis	●	●	●
	Opportunities	Acquisition of new investment opportunities	●	●	●
17Loss of natural capital and biodiversity	Risks	Deterioration in the performance of investees and business partners resulting from the depletion of natural capital		●	●
	Risks	Reputational damage and potential litigation, due to delayed action on the conservation of natural capital and biodiversity	●	●	●
	Opportunities	Enhanced social trust and corporate value through recognition as a company that committed to the conservation of natural capital and biodiversity	●	●
		Increased asset value of owned real estate through greening initiatives	●	●	●
		Acquisition of new investment opportunities	●	●	●

*Risks focused on the timing of occurrence, and Opportunities focus on the timing of implementation of specific measures. Short-term is defined as less than 3 years, medium-term as 3 to 10 years, and long-term as 10 years or more.

Governance

Material issues for the Group	Identified risks and opportunities for the Group		Time Horizon^*
Material issues for the Group	Identified risks and opportunities for the Group		Short Term	Medium Term	Long Term
18Corporate governance management and anti-corruption	Risks	Damage to corporate reputation, brand value, and customer trust, as well as disruption to business activities resulting from compliance issues arising from insufficient adherence to management principles and codes of conduct, including inappropriate sales practices and improper handling of information assets	●	●	●
	Risks	Damage to the Group reputation due to inappropriate responsible investment practices	●	●	●
	Opportunities	More stable business operations through highly transparent decision-making and appropriate responses to environmental changes	●	●
		Enhanced corporate governance through effective oversight by the Board of Directors and the continuous strengthening of its supervisory function, leading to greater stakeholder trust and increased corporate value	●	●	●
		More stable and enhanced investment returns through the improvement of governance at investee companies	●	●
19Cyber security	Risks	Business disruption and reputational damage resulting from the leakage of sensitive or confidential information, prolonged outages of critical systems and data, or the unauthorized alteration of systems and data	●	●	●
19Cyber security	Opportunities	Enhanced social trust and corporate value through recognition as a company actively taking cybersecurity measures	●	●
20AI technology and DX	Risks	Information leakage and violation of rights stemming from lack of proper AI and technology controls	●	●
	Risks	Loss of competitiveness due to lagging behind peers in technology initiatives or failing to adapt to disruptive innovation	●	●
	Opportunities	Expansion of product offerings based on accumulated big data	●	●
		Provision of optimal services by utilizing customer data, including consumption-related data	●	●
		Diversification of sales channels and improvement of customer services through digital technologies	●	●

*Risks focused on the timing of occurrence, and Opportunities focus on the timing of implementation of specific measures. Short-term is defined as less than 3 years, medium-term as 3 to 10 years, and long-term as 10 years or more.