Governance

For more information on MUFG's corporate governance, please refer to the below.

Sustainability-related issues are managed by the Executive Committee with various management sub-committees, subject to the oversight of the Board of Directors. The Sustainability Committee, which is a sub-committee formed under the Executive Committee and is chaired by the Chief Sustainability Officer, regularly deliberates policies on addressing sustainability-related matters, including risks and opportunities arising from such matters, and monitors the progress on the MUFG Group’s measures designed to address such matters. The committee reports to the Executive Committee and, as necessary, reports to the Board of Directors.

The Executive Committee is established as a decision-making body for business execution and discusses and decides on important matters related to management of the operations of the MUFG Group based on the basic policies determined by the Board of Directors. The Executive Committee reports to the Board of Directors from time to time as necessary.

The Board of Directors oversees management of sustainability-related matters in line with its business strategy, risk management and financial oversight. Such oversight is performed based on, among other things, a plan-do-check-act, or PDCA, cycle. The Board of Directors deems sustainability-related matters including climate change to be of high-priority importance and accordingly discusses and deliberates them regularly based on an annual schedule or as appropriate.

In addition, three external advisors have been invited to provide expert opinions on sustainability issues and risks at any time. These advisors exchange opinions with the members of the top managements and others and provide advice and recommendations from their professional standpoints on MUFG's sustainability initiatives.

The Group Chief Sustainability Officer is responsible for all initiatives to promote sustainability management. The CSuO promotes sustainability initiatives in line with management strategies under the leadership of the Group CSO (Chief Strategy Officer), who is responsible for corporate planning and strategy.

The external advisor regularly exchanges views with the management in order to make use of external knowledge for sustainability management.

The Sustainability Office is responsible for developing the foundation of MUFG's sustainability management as well as planning and promoting strategies for solving environmental and social issues while achieving sustainable growth.

An organization dedicated to promoting sustainable business. By integrating MUFG's expertise in sustainability both in Japan and overseas, the Division supports the sustainable growth of customers by providing various types of information and solutions from the standpoint of solving environmental and social issues.

The Sustainability Risk Management Office is responsible for planning MUFG's sustainability risk management, including the assessment and management of climate-related risks and the development and enhancement of related methodologies.

MUFG holds Sustainability Committee in principle at least once a year to identify sustainability issues affecting corporate management, and report and discuss how the Group is responding to them.

Since 2019, we have engaged external experts in the environmental and social fields as permanent external advisors. Opinions were exchanged between the experts and the members of the Board of Directors, allowing us to use their broad knowledge in our sustainability initiatives.

In order to invigorate internal discussions on sustainability, MUFG group companies invited experts in various fields to hold study sessions. In study sessions, the management team actively exchanges opinions with these experts.

Metrics related to sustainability-related risks and opportunities are included in the executive compensation policy in Japan. For the performance-linked portion of stock-based compensation that is based on the evaluation of the degree of achievement of the medium-term business plan and other factors, MUFG has adopted internal sustainability evaluation metrics in order to support further advancement of sustainability management. These metrics include global greenhouse gas (GHG) emissions from MUFG's own operations, the employee survey score for engagement, and the ratio of women in management positions in Japan. In addition, from the standpoint of objectively evaluating MUFG's broad sustainability initiatives, MUFG conducts a relative evaluation of the three-year improvement in external ratings by five major rating agencies. The qualitative evaluation method used for cash bonuses for officers, including the President & Group CEO, is as follows. First, approximately five evaluation items are set, such as “expand & refine growth strategies,” “drive social & environmental progress,” “accelerate transformation & innovation,” “optimize resource and portfolio management,” and “enhance stakeholder value.” Each item is then evaluated based on its own KPIs (key performance indicators), after which an overall qualitative evaluation is conducted on an eight-level scale. Sustainability is also included in the bonus evaluations for each executive officer by incorporating elements related to the resolution of social issues in accordance with the business strategies, etc. for the officer's area of responsibility.

*1 MUFG has set the reduction of global greenhouse gas (GHG) emissions from MUFG's own operations, the employee survey score for engagement, and the ratio of women in management positions in Japan as unique ESG self-assessment metrics to support the further enhancement of sustainability management. In addition, from the perspective of objectively assessing MUFG's broad sustainability initiatives, a relative evaluation is conducted based on the degree of improvement over a three-year period in external ratings by five major rating agencies (MSCI, FTSE, Sustainalytics, S&PDJ and CDP).

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