Sustainability
Message from the CEO
One Christmas holiday, I happened to notice a huge gap in the personal financial wealth between my Japanese parents and my American parents-in-law, despite their similar ages and backgrounds. I found that the gap was primarily driven by whether or not they had made long-term investments with a diversified portfolio alongside professional advice. In Japan, under the life-time employment system with a lump sum retirement bonus and ample pensions, there was no need for wealth management to prepare for retirement and thus there was no financial service suitable for busy working families. But what if my Japanese parents had access to a financial service to support sound investing?
At the same time, I became aware that this is beyond a personal issue. Having more than half of personal assets in bank deposits in Japan, we had missed a chance to develop and foster new business opportunities as well as to empower individuals through investment. What if Japanese people had been investing for future growth? Therefore I decided to found WealthNavi aiming to democratize the financial services which help to realize financial inclusion, foster financial independence, and drive economic growth.
We know that growing our customer base and supporting them for the long term means we have to operate sustainably. We have been proactively investing in people and promoting diversity and openness. We are also enhancing corporate governance, compliance, risk management and security. And we do not settle for one-time fixes — our efforts in these areas are consistent and ongoing.
We are striving to make a world free from financial worries and stress where each one of us will be able to spend more time pursuing our own dreams. We are also endeavoring to encourage investment which leads to innovation and growth. And we put just as much thought into how we work as what we do, to help make the world a more sustainable place.
Kazuhisa Shibayama
Founder & CEO
Materiality: Determining what matters most
Materiality assessment
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Developing a long list of sustainability issues
We have developed a long list of sustainability issues which are related to our business activities and our corporate culture. We referred to such international frameworks as the Sustainability Accounting Standards Board (SASB) Standards, the Global Reporting Initiative (GRI) Standards, the UN SDGs (United Nations Sustainable Development Goals) and ESG rating assessments as well as voices of our stakeholders.
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Identifying key issues
Through discussion and dialogue with our stakeholders including users, investors and employees, we comprehended their expectations. Then, we rated each issue according to their importance and identified key issues.
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Identifying our material issues
Our management and employees discussed on the key issues considering contribution to sustainability while achieving our mid to long term growth. We assessed key issues that would be most significant to our business and most relevant to our stakeholders, and identified our material issues with the resolution by the Board of Directors.
Our material issues
| Material issues | Contribution to the UN SDGs |
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|---|---|---|---|
| What we do |
Helping working families |
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| Empowering local communities |
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| How we do it |
Diversity and openness |
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| Operating steadily for the long term |
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| Material issues | Contribution to the UN SDGs |
|---|---|
| What we do |
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| Helping working families | |
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| Empowering local communities |
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| How we do it |
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| Diversity and openness | |
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| Operating steadily for the long term |
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Sustainability promotion
We have established a “Sustainability Promotion Team” headed by Director and CFO. We are going to review, reassess and redefine our materiality annually in consideration of societal expectations, our business progress as well as dialogue with stakeholders.
Our approach to material issues
Helping working families
We are pursuing our long-term aspiration to promote financial inclusion and help realize a sustainable world through our services for working families.
WealthNavi was established in April 2015 with the goal of creating a wealth management service which supports working families in building wealth for a more comfortable retirement. We strive to make our services easy to use, safe and reliable in order to serve as many working families as possible, regardless of asset size and financial literacy.
We also aim to innovate financial services by utilizing cutting-edge technology. We proactively develop and provide a trustworthy financial service accessible to anyone at any time and from anywhere in Japan.
We are supporting working families to build and maintain a long-term, globally diversified investment portfolio on our service. By providing investment experience and actively encouraging financial literacy, we are endeavoring to help working families be more confident in wealth management.
Empowering local communities
We are aiming to empower local communities and contribute to energizing regional economies across Japan through our business activities.
We are actively partnering with regional financial organizations. In Japan, there are a number of regional and local banking organizations which have deep roots in local communities. Through our alliance partnerships with these organizations, we are providing managed account services with a hybrid of online and face-to-face support. This hybrid service enables us to reach out to users with limited internet literacy and mitigates the digital divide.
At the same time, we support regional financial organizations to accelerate their digitalization. For instance, our service can be a paperless solution for our partners. WealthNavi is a fully automated online wealth management service, and there is no need to prepare paper application forms at the time of account opening.
With these initiatives, we are striving to awaken dormant bank deposits and put them to work for economic growth. As a result, the regional economy will be invigorated and the users of our service will enjoy the fruits of their investment.
Diversity and openness
We believe diversity in the workplace with an inclusive corporate culture is essential to providing innovative services for our customers.
We are endeavoring to build an integrated team of professionals with diverse backgrounds. About a half of our employees are engineers and designers, and they work alongside technology and finance experts. Different professionals have different cultural orientations, so we are proactively cultivating a culture of open communication, mutual respect and collaboration in our workplace. We are striving to bridge the cultural gap and to leverage the perspectives and experience of these diverse talents.
We are not only hiring the best talent, but also trying to realize their potential and develop leadership through various development and support opportunities. We are also serious about the advancement of women in our workplace. To that end, we promote a flexible working style to support, attract and retain talented professionals with different lifestyles.
We believe that diversity and openness will lead to our sustainable growth and the enhancement of our mid-to-long term corporate value.
Operating steadily for the long term
With our mission “Helping working families build wealth,” we are striving to realize a sustainable world and to pursue our long-term business development. To this end, we work on enhancing and improving our corporate governance, compliance, risk management and security as a foundation for sustainable business operation.
Enhancing corporate governance
We recognize that the enhancement of corporate governance is one of the key issues of corporate management in order to achieve sustainable growth as well as to improve corporate value in the mid to long term.
We have been improving the independence and diversity of the Board. Now, more than half of Board members are independent outsiders and we have 2 female Directors. Additionally, we have reinforced our corporate governance by establishing our own voluntary bodies, such as the Risk Compliance Committee and the Investment Committee, in addition to the bodies that are required by Japan’s Companies Act.
Our management understands the importance of consistent effort to ensure transparency and objectivity in governance. Good governance is crucial to build public trust, and it strengthens our sustainable growth. We are committed to maintaining sound and effective corporate governance practices.
Ensuring compliance
As a financial service provider, credibility from users and society is indispensable. We have placed the highest priority on complying with all laws and regulations, the principles of self-regulatory organizations, and in-house rules and regulations required for financial institutions. Under a compliance management structure, we are striving to work on areas including anti-money laundering, anti-corruption and exclusion of anti-social forces.
On top of that, we understand that each and every employee has to recognize the public nature of financial services. We have to govern our behavior by complying with social norms and ethics and to perform our duties with integrity, putting our customers at the center of everything. In order to be aware of the importance of compliance and keep ourselves up-to-date, we have training programs on various compliance topics.
Improving risk management
When we aim to achieve sustainable growth, what we have to do is not only to pursue earnings growth and profitability but also to manage risks properly and mitigate adverse impacts. We take a comprehensive and proactive approach to risk management.
Under a risk management structure, we assess overall risks that our business and organization face and prioritize mitigation based on a risk’s probability and impact. We are expanding risk areas under control and aiming to establish enterprise risk management (ERM).
We are endeavoring to maximize our long term corporate value by balancing risk and reward through proper risk management.
Strengthening security
Security has been and continues to be a CEO-level agenda at WealthNavi. In order for our customers to use our services with trust and confidence, we are striving to enhance our cybersecurity and privacy protection.
We have established an information security structure in accordance with the relevant laws and regulations. We have set our security policy as well as in-house information security management regulations and procedures. Additionally, we have been proactively investing in cybersecurity to protect assets and personal information of our users.
We are also innovating to protect user privacy. For instance, we are not only improving measures to prevent data leakage, we have additional measures in case that an unexpected incident occurs, such as data masking. We also understand the importance of the right for a user to control their own personal information, and we are working on it.
We are committed to place the highest priority on security and privacy of our users.