Environmental Initiatives by Group Companies Environmental businesses The Group considers that environmental businesses are part of its core business operations, through which it contributes to the con- tinued well-being and improvement of the global environment. In fiscal 2005, SMBC started its cross-organizational Eco-Biz Promotion  Council, for periodical discussion of the development of sophisticated and efficient products and services for environmental maintenance  and improvement. Other SMFG Group companies have become members of this Council, meeting on a regular basis. *$^{1}$ Sumitomo Mitsui Banking Corporation *$^{2}$ The Japan Research Institute Limited *$^{3}$ SMBC Nikko Securities Inc. *$^{4}$ Sumitomo Mitsui Finance and Leasing Co., Ltd. *$^{5}$ Sumitomo Mitsui Banking Corporation (China) Limited *$^{6}$ The Japan Research Institute (Shanghai) Consulting Co., Ltd. *$^{7}$ Sumitomo Mitsui Card Company, Limited *$^{8}$ SMBC Friend Securities Co., Ltd. *$^{9}$ THE MINATO BANK, LTD. *$^{10}$ Kansai Urban Banking Corporation SMFG  2011 56 Company Clients Program/Product Description SMFG Corporate SAFE environmental magazine Started in 1996, this bimonthly magazine contains interviews with top management of environmentally advanced companies,  analyses of business and the latest regulatory trends, and other useful information for corporate environmental activities. It can be  viewed online at SMFG’s website (in Japanese). http://www.smfg.co.jp/responsibility/csrinfo/safe.html SMFG Environmental Business Forum SMBC holds multifunctional programs, including environmental seminars and business matching opportunities at the Eco-Products  event, one of Japan’s largest environmental exhibitions. SMBC*$^{1}$/ JRI* 2 SMBC Environmental Assessment Loan/ Private Placement Bond Terms and conditions of this loan/bond depend on the results of an assessment of a company’s environmental friendliness using  standards established by SMBC and JRI. Clients can choose the fund procurement method — loans or private placement bonds. SMBC SMBC-ECO Loan This loan offers reductions on interest rates of up to 0.25% for SMEs with environmental management systems certified by any of  more than 20 organizations, including NPOs and local governments. Ministry of Environment’s interest- subsidized financing program Under this program, companies may receive loans from financial institutions, with interest subsidized by the government to finance  global warming-related capital investment, provided that they set and achieve CO2 emission reduction targets during a specified  period. As one of the financial institutions authorized to provide loans under this program, the bank supports companies taking  environmental initiatives. Carbon-credit related business  activities (matching, advisory, trust and  consultation activities) SMBC serves clients with needs associated with carbon credits by using overseas offices for their trust operations and other  resources to offer products and services such as introducing sellers in developing countries, providing advisory services to support  transactions, offering trust products and financing. SMBC established a consultation company in Brazil to assist in development of  Clean Development Mechanism (CDM) projects. Carbon credit trading In June 2009, SMBC became a carbon credit trader, the first Japanese bank to trade carbon credits directly with clients. Strengthening alliances with interna- tional and financial institutions In April 2010, the bank executed a Memorandum of Understanding with the Federation of Malaysian Manufacturers and Green  Purchasing Network Association Malaysia for the promotion of environmental businesses in Malaysia. In efforts to further establish  a more solid global network, SMBC has formed business alliances with local financial institutions and economic organizations in  the Philippines, Brazil and other countries for the promotion of financing for renewable energy projects and carbon-credit trading. “Climate & Children Supporters” An original program of SMBC which supports measures to prevent global warming through the trading of carbon credits while  helping children affected by drastic climate changes through UNICEF. When participating companies trade carbon credits to  prevent global warming, they automatically support elementary schools in Mozambique which is known for its frequent droughts  and natural disasters, having built 17 wells and 44 toilets under the UNICEF water management and public hygiene project. (as of  June 30, 2010) Individuals Environmental campaign using JGBs  for individuals We have been contributing to global environmental protection by 1) trading the equivalent of 100kg of carbon credits and  2) planting trees equivalent to the number of trees planted in 1m$^{2}$ for the number of individuals who purchased JGBs. Concurrently,  we have been supporting the recovery and reconstruction of areas struck by the Great East Japan Earthquake by trading carbon  credits generated in northeastern Japan. Nikko* 3 Nikko World Trust – Nikko Green New  Deal Fund (JPY Non-hedged Class)/ (JPY Hedged Class) The Green New Deal is an economic recovery policy based on global environmental initiatives. This fund invests by purchasing  stocks of companies in countries where high growth in green businesses is anticipated. Green Bonds “Green Bonds”, the purpose of which is to promote environmental preservation, is the generic name given to the various bonds  offered by SMBC Nikko Securities starting in 2010. Funds raised from these bonds must be used for environmental protection  measures. SMBC/ Nikko SMBC Nikko World Bank Bond Fund This is the first fund in the world to invest in the green bonds issued by the World Bank (data provided by Nikko Asset Management  Co., Ltd.) The funds raised by the issuances of these bonds should essentially be used only for loans for projects to prevent global warming  in emerging countries. Furthermore, a portion of earnings from the fund will be donated to the Japan Committee for UNICEF and the Japanese Red Cross  Society for the resolution of social conflicts around the world. SMBC /  SMFL* 4 Individuals  Corporate eco japan cup This is a contest for selecting companies which have practical environmental technologies and ideas. SMBC also arranges for venture companies to conduct R&D jointly with Japanese universities and the funding of their R&D activities. http://www.eco-japan-cup.com/ (in Japanese only) SMFL Corporate Carbon-neutral leases The first new service in the leasing industry started in August 2007, which renders the greenhouse gases released by leased  assets neutral through the allocation of carbon credits to these assets. The goal is to provide further support to companies that  protect the environment through their own activities. Trading of used machinery and  equipment Machinery and facilities with expired leases or bought back from the client are sold by SMFL to clients needing such items.  Through the purchase and sale of used machinery, SMFL aims to become an environment-friendly leaser committed to the  recycling and reuse of products.