Natural Capital

SuMi TRUST Group recognizes that not only climate change related risks, but natural capital related risks are also significant risks to our lending and asset management businesses. And our Group has developed a wide variety of financial products and services that contribute to proper evaluation and preservation of natural capital since the 2000s.

In September 2023, the Taskforce on Nature-related Financial Disclosures (TNFD) that promotes companies to disclose their information on natural capital, was announced to shift the global finance to flow into the nature positive businesses, by which the entire society has recognized the importance of natural capital more clearly.

We joined the TNFD forum in 2023 and started the experimental analysis to grasp nature-related risks and deepen our basic understanding in the 2024 fiscal year.

As financial institutions are linked with natural capital and biodiversity through their borrowers and investees, to identify our nature related dependency, impacts, and risks, we selected important sectors from the investment and loan portfolios of Sumitomo Mitsui Trust Bank and made an analysis in each sector with “ENCORE.”^*

*ENCORE has been developed by the ENCORE Partnership made of UNEP World Conservation Monitoring Centre (UNEP-WCMC), UNEP FI, and Global Canopy, as a tool that enables financial institutions to collectively evaluate the outcomes of existing various tools on nature related risks.

In 2020, they were entrusted with a “Forestry Trust,” in which a forest is a trust asset, from individual clients that own approximately 10 hectares of forest in Nishiawakura Village, Okayama Prefecture. They have entrusted management activities to forestry entities on behalf of the owners, managed revenues, and distributed dividends. It not only enables the forestry entities to manage forests efficiently, but also secures the perfect management and the continuous preservation of the forests by preventing the situation where the owners of the land becomes unclear due to inheritance and other factors.

In February 2025, SuMi TRUST Bank launched one of our sustainable finance products, Impact Finance for Nature (“IFN”). IFN is designed to assess the impacts on nature from our clients’ business operations and empower them to address these challenges. Following the adoption of the Kunming-Montreal Global Biodiversity Framework (GBF) at COP15, societal need for corporate reporting of nature-related risks, dependencies and impacts has increased. IFN provides a solution for such requirements through the assessment of sustainability management, impacts on nature, and nature-related disclosure based on the global standards including TNFD Recommendations. As the IFN Lender, we monitor our clients’ KPIs and progress toward achieving their targets to catalyze the positive impacts.

In March 2025, we closed the first deal of IFN.

Sumitomo Mitsui Trust Investment, a subsidiary of SuMi TRUST Bank, has been selected as the fund manager for the "Circular Economy and Natural Capital Promotion Fund" launched by Tokyo, and established “Circular Economy and Nature Positive Investment Ⅰ Limited Partnership” together with SBI Shinsei Corporate Investment. In addition, SuMi TRUST Bank has become an investor as a LP. We aim to contribute to the realization of a sustainable and enriched society through the construction of circular systems and nature-based transformation, by supporting startups in the fields of circular economy and nature positive.

Click here for further information about “Circular Economy and Nature Positive Investment Ⅰ Limited Partnership.”

Sumitomo Mitsui Trust Bank established an exclusive organization for environmental real estate in 2010 and has played a leading role in the spread of environmental real estate, focusing around supporting a client to gain CASBEE, a certificate which evaluates the environmental efficiency of a building. As a menu of construction consulting, they now give advice on environmental consideration such as total life cycle costs of a building, introduction of energy saving systems, consideration to the landscape and ecosystems, and a longer lifespan of a building.

Click here to see Sumitomo Mitsui Trsut Bank's support for ESG Real Estate(Japanese text only)

Sumitomo Mitsui Trust Asset Management has joined natural capital related global initiatives as an investor and actively engaged with its stakeholders including companies. They have joined the TNFD since the launch of the preparatory committee in September 2020 as the only Japanese asset manager and contributed to starting it through the framework preparation and the discussion on its administration. As a TNFD Early Adopter, they declared early disclosure based on the recommendation in January 2024, and issued the first edition of the TCFD TNFD Report in October that year.