Reducing Environmental Impact • Initiatives for Carbon Neutrality • Responding to the Amendments to the Rational Use of  Energy Act • Eco-Friendly Branches Managing Environmental Risks • Dealing with Soil Contamination and Asbestos Risks • Greening IT Operations • Adoption of the “Equator Principles” • Environmental measures taken in the Head Office building ■  Flow chart of the Social and Environmental Risk Assessment  of SMBC power-generation, rooftop-greening, motion sensors and  recycled material usage. We have taken various other measures  to achieve efficient administrative operations by co-sharing  office spaces and promoting  paperless meetings. SMFG sets forth objectives each fiscal year for reducing its use  of electric power and other energy resources, and it is actively  engaged in achieving these energy conservation goals. SMBC ensures that its head offices are carbon neutral by  using Green Energy and trading carbon credits*. Sumitomo  Mitsui Finance and Leasing’s Tokyo Head Office is also carbon  neutral. In addition, SMBC Friend Securities and Sumitomo Mitsui  Auto Service Company, Limited are converting their automobiles  to more environment-friendly ones for their transport needs and  making their transportation carbon neutral by offsetting emission  volumes. * “Carbon credits” are also referred to as “emission allowances.” In this annual  report, we use “carbon credits.” In order to generate new and  creative ideas on energy- saving at branches, the bank  publicly began soliciting ideas  by newly creating the “SMBC  eco-banking office prize” for  the “eco japan cup 2010,” a competition open to the public for  new environmental businesses held annually for which SMBC  is one of the sponsors. Prize-winning ideas will be incorporated  into the planning and designing of environment-friendly model  branches of the bank. SMBC Friend Securities is converting its branches to more  environment-friendly ones at the time of branch relocation  or renovation by installing carpet tiles made of materials with  carbon-offset initiatives. Under the Amendments to the Rational Use of Energy Act of  April 2010, companies using 1,500kl or more energy (crude oil  equivalent) per annum are now required to establish an energy  consumption management system and develop a medium-  to long-term energy efficiency improvement plan for reducing  energy consumption by at least 1% per year. The Group is taking measures to reduce its energy usage in  its business operations at all locations, in accordance with this  law, and developing consultation business to meet the needs  of our clients for energy conservation and the reduction of CO 2  emissions. In order to deal with the risk of contamination of the borrower’s  collateral land, SMBC requires contamination risk assessment  to be conducted for the land to meet certain criteria. When it  is considered that the contamination risk is high, the assessed  value of such potential risks is deducted from the assessment  value of the collateral.  SMBC has been promoting greening IT operations at its branch  terminals and ATMs. The new CUTE* terminals for over-the- counter transactions, which are jointly developed with NEC  Corporation and Oki Electric Industry Co., Ltd., have made it  possible to convert paper-based documents, such as images  of driver’s license and other forms of IDs into electronic images  and to store them quickly. The CUTE terminals have reduced  approximately 3 million A4-size sheets of paper annually. SMBC  donated part of the cost saved from paper reduction by the  CUTE to the Tokyo Metropolitan Government’s Green Tokyo  Fund, specifically for the “Creating Umi-no-Mori (Sea Forest)”  project, one of the four projects’ funds. We also donated to the  University of Tokyo’s “Life in Green Project” for the construction  of research facilities for botanical studies. Similarly with the risk of asbestos exposure, the assessed  value of this risk is deducted from the assessment value of the  collateral. SMBC also recommends to its clients that they con- duct such contamination assessments. SMBC conducts such  contamination assessments and properly removes asbestos  from its buildings. SMBC has adopted the Equator Principles, a set of principles  for determining, assessing and managing the social and envi- ronmental risk of project financing. Its Environment Analysis  Department assesses the social and environmental risk of large  projects in accordance with such Principles. We are further promoting efforts to make our offices more  paperless and efficient through various measures, such as  converting the records of ATM’s transactional data (called “ATM  Journal”) and reports submitted to the Head Office in electronic  format. These efforts will make a great contribution in the saving  of the equivalent of 28 million A4-size sheets of paper annually. SMFG and SMBC moved to a new Head Office building in  October 2010. The new building is designed to achieve a 30%  reduction in annual CO2 emissions, compared with the aver- age office building in Tokyo, by implementing environmental  measures, such as rainwater storage facilities, photovoltaic  * CUTE: Common User Terminal Engine Environment-friendly model branch Clients Lending Branches Environment Analysis Department Credit Departments Social and Environmental Risk Assessment Environmental Monitoring Environmental Review Screening Covenants Compliance (Environmental Monitoring) Project Information SMFG  2011 55