Trust is important for Mitsubishi UFJ Financial Group (‘MUFG’), a leading global financial services group and one of the largest banking institutions in Japan. With over 360 years of history, and a global network with around 2,600 locations in more than 50 countries, MUFG aims to “be the world’s most trusted financial group”.
Corporate purpose is critical to building trust with stakeholders, from customers to employees. At MUFG, the pandemic was an opportunity to reflect on what was important to the group and its stakeholders and rethink its purpose. “The COVID-19 pandemic itself was an opportunity for us to fundamentally think about our way of living,” explains Hironori Kamezawa. “It led to more opportunities for management to gather online, which allowed us to start rethinking our purpose together. After proceeding with discussions, we arrived at ‘Committed to empowering a brighter future’. This means that we ourselves are only able to grow when there is social growth. It is impossible for us alone to achieve growth without the growth of society as a whole.”
At the group, purpose is more than just a statement – clear environmental, social and governance (ESG) goals ensure MUFG’s purpose delivers impact and tangible results.
Hironori Kamezawa makes it very clear that there is a strong link between ESG principles and value delivery and that ESG factors should drive strategic planning. “Environmental and social sustainability is the starting point and the premise of our growth,” he says. “These include response to climate change and environmental protection; response to an aging population and low birthrate; and inclusion and diversity. Reversing the order of our way of thinking was a major factor here. We formulated our new medium-term business plan by first identifying the environmental and social issues we would like to address. Then we took steps to carefully examine the content of our business and made sure they address the issue we identified. I believe that by ensuring both upstream and downstream are properly linked, solutions to social issues and corporate strategy will be integrated. This aligns with today’s stakeholder capitalism, leading to a rise in stock prices as a result of higher investor valuations as well as the proper evaluation of non-financial information.”
The pandemic, as well as sparking fresh conversations within MUFG on its purpose, also reinforced the link between ESG programs and the digital agenda. The accelerated and widespread move to remote work in particular showed the potential for leveraging digital technologies to deliver social and governance gains, from a better life for employees to more leadership collaboration. “ESG is key for digitalization,” he explains. “For example, while the way we work has changed due to the COVID-19 pandemic, there has been an advantage for me personally in having more opportunities to meet with overseas CEOs. Young employees raising children have expressed their appreciation of the ability to work while participating in a social community. I think the approach of linking digitalization to ESG is very important.”
For Hironori Kamezawa, realizing the value of ESG and digital will only happen if the group’s culture is right: “I think that the biggest risk for our company comes down to whether we can transform our culture, and whether we can adapt to this era of radical change and remain an organization that is capable of adapting.” He adds: “We are currently making efforts to change our mindset. This is about listening to the opinions of younger generations, listening to a variety of views, asking everyone to act freely based on their own views, and questioning what is going on in the present world. To this end, our purpose serves as a tool, and we are disseminating the ‘MUFG Way’.”
Unless otherwise indicated, throughout this report, “we”, “KPMG”, “us” and “our” refer to the network of independent member firms operating under the KPMG name and affiliated with KPMG International or to one or more of these firms or to KPMG International.