Risk Factors and Risk Management

The kind of key risk factors that could affect the business operation and financial position of ORIX, as well as our management of them, include the following.

Risk Factors	Risk Management	Departments Handling Risks	Executive Bodies Related to Risk Management
External environment-related risk	Establishment of a system that enables sound financial operation to continue by diversifying our profit structure with diversified business development and by securing sufficient liquidity Establishment of a disaster risk management system Disaster Risk Management System Establishment of a system to respond to climate change risks Sustainability Governance Structure Information Disclosure Based on TCFD Recommendations	Corporate planning, Credit, Public relations, Public affairs, Investor relations, Sustainability, Treasury, ERM	Executive Committee, Sustainability Committee
Credit risk	When appraising individual projects, comprehensively evaluate the credit recipient’s financial condition, cash flow, underlying security interests, profitability, etc. Strengthen credit risk management methods for individual projects and portfolios (obtaining sufficient collateral and guarantees, diversifying industries and credit recipients, controlling exposure to potentially high-risk markets) Risk Management System for Investing and Lending	Credit, Corporate planning, Accounting, ERM	Investment and Credit Committee
Business risk	Thoroughly analyze risk (scenario analysis and stress testing) before executing a business or investment Improvement of the quality of products and services through regular monitoring as well as evaluation and verification of withdrawal costs, after execution of businesses and investments Risk Management System for Investing and Lending	Credit, Corporate planning, Accounting, ERM	Investment and Credit Committee
Market risk	Establishment of an integrated management system for assets and liabilities (comprehensive understanding and verification system for market risks, using derivative transactions as a means of hedging)	Credit, Treasury, Corporate planning, Accounting, ERM	Executive Committee
Liquidity risk (risk related to funding)	Promotion of diversification of procurement methods Strengthen management of liquidity on hand (implementing stress tests of liquidity risk and developing countermeasures, understanding liquidity risks for each country as well as subsidiary and developing countermeasures)	Treasury, ERM	Executive Committee
Compliance risk	Establishment of an effective compliance structure alongside a corporate culture that values high ethical standards (formulating and implementing a compliance program, establishing internal regulations and promoting compliance awareness through activities to disseminate information, establishing internal and external compliance hotlines) Compliance	Compliance, Public relations, Public affairs	Executive Committee, Sustainability Committee
Legal risk	Establishment of a legal compliance and legal risk management system (establishing internal regulations for legal compliance, understanding laws and regulations applicable to each business, and implementing appropriate responses to revisions to the law)	Legal, Accounting, Investor relations, Sustainability	Executive Committee, Sustainability Committee
Information/cybersecurity risk and IT risk	Establishment of an information/cybersecurity risk, and IT risk management system (establishing internal regulations, implementing technical measures such as vulnerability management measures for information systems and network protection, establishing systems for response in the event of information cybersecurity incidents, and implementing measures to reduce the risk of system failures) Information Security	Information Security	Information Technology Management Committee
Operational risk	Establishing, disseminating, and training about internal regulations Establishment of systems related to execution of operations Building an internal control system for financial reporting Establishment of a personnel system and a work environment to stably secure diverse human resources Human Capital Management to Support Sustainable Growth Continuously strengthen the overall risk management system through monitoring of operational risks by the Audit Department Establishing system for responding to and preventing recurrence of operational risk incidents, and risk control self-assessment Incident Management System	ERM, Human resources, Corporate administration, Accounting, Public relations, Public affairs	Executive Committee, Sustainability Committee