Corporate Financial Services

Our Approach to Our Sustainability Themes

As a core platform for Group sales, we will create new ESG-related services that meet customer needs. We will also fully deploy our network in Japan in initiatives to resolve social issues.

• We support business succession among small and medium-sized enterprises (SMEs) and help local economies develop and maintain and create employment. We also continue to strengthen our framework for being a single source for services including M&A intermediation, real estate brokerage, share transfer, and inheritance tax minimization.
• We help customers decarbonize by providing environmentally responsible power supply services represented by the PPA model.
• Our preventive healthcare business helps to extend healthy life expectancy, reduce medical expenses, and protect the ongoing integrity of Japan’s medical insurance system. We support health management at SMEs with a focus on preventive healthcare services provided at newly established medical examination centers.
• We invest in digital transformation (DX) and ESG-related startups with the goal of creating new services by supporting growth and collaboration.

Business Activities and Sustainability Themes Matrix

Business succession support

• #Vitalizing small and medium-size enterprises
• #Regional vitalization
• #Aging society

In Japan, where the population is aging rapidly, many small and medium-sized enterprises (SMEs) are often forced to close due to a lack of successors to continue the business despite stable performance and being valued in the community and industry. ORIX's Corporate Financial Services Department established a dedicated team in 2018 to address the business succession needs of SMEs. Closing businesses due to lack of successors is a major social dilemma, and the department sees this as an important challenge for its client base of SMEs.
ORIX's business succession support services are intended to ensure the survival of these companies. In addition to providing support by utilizing management and financial expertise cultivated through our financial business, we also provide sales support using the Group's sales network. We acquire shares of a target company and are granted management oversight, but the company remains at the center of operation. Company names remain unchanged and employees maintain their pre-acquisition positions while we work with companies to develop internal control systems and train successors. Once business succession discussions are resolved, we respect the wishes of the executives and employees of the target companies and transfer the acquired shares to successors and other stakeholders. In 2021, we also launched M&A brokerage services to further enhance our solution options for business succession.
ORIX's business succession support business is an initiative that not only enables and empowers companies to survive into the future, but also helps develop local economies and create jobs.

Successful business succession cases

Tokyo Soil Research Co., Ltd. (Headquarters: Meguro, Tokyo, President: Tetsuo Tabei)
Established in 1966 as a ground surveying company. Expecting to expand its business opportunities, Tokyo Soil Research transferred its shares to ORIX in March 2019 with the objective of strengthening its management structure and growing its business.

Medical Corporation Junseikai (Shinjuku, Tokyo, Chairman: Minoru Tahara)
A medical corporation established in 1995 that operates the Hirooka Clinic. Upon retirement of the Representative Director, management consulting services were outsourced in December 2019 to CMC Corporation—a consolidated subsidiary of ORIX that provides management support services to medical institutions—with the objective of creating an environment in which the company can focus on medical management.

Keisoku Net Service Co., Ltd. (Kita, Tokyo, CEO: Tetsuro Sato)
A measurement system development and measuring equipment rental company established in 1998. With business opportunities expected to expand, the company transferred its shares to ORIX in December 2020 in order to achieve sustainable business growth and further strengthen its management structure.

Preventive healthcare support

• #Promoting health / Extending healthy life expectancy
• #Aging society

In Japan's rapidly aging society, preventive healthcare—in addition to the advancement of medical technology and heightened public health awareness—is a field with great growth potential. We also believe that encouraging the extension of healthy life expectancy through preventive healthcare and medicine will help reduce growing medical costs and contribute to the maintenance and continuation of the health insurance system. On the other hand, small- and medium-sized enterprises (SMEs) can have health-related management issues, such as instability in corporate management due to health problems of managers and decreased productivity when executives and employees fall ill.
The Corporate Financial Services Department provides preventive healthcare services such as physical examinations and health checkups at clinics where our capital partner CMC Corporation^*1 provides business support. In addition, at the members-only medical service Central Medical Club Setagaya^*2 (established March 2023 in Setagaya-ku, Tokyo), members can receive complete medical examinations related to the three major diseases (cancer, heart disease, and cerebrovascular disease) assisted by a dedicated concierge, as well as manage their own health data and access day-to-day health consultation services. ORIX will continue to recruit members through its domestic sales network and agents to provide not only financial services and business succession supports, and also provide health-related support for the management of small and medium-sized businesses.

1. CMC Corporation: A company that provides medical office operations support services to medical institutions to which we formed a capital alliance in 2017.
2. Central Medical Club Setagaya will partner with “Central Clinic Setagaya” which has advanced diagnostic imaging equipment such as Canon's PET-CT and Philips’ 1.5 Tesla MRI, and outsource medical examinations.

Championing decarbonization

• #Climate change / Reducing GHG emissions

Small- and medium-sized enterprises (SMEs) are required to respond proactively to the global trend toward decarbonization. The Corporate Financial Services Department, in cooperation with the Environment and Energy Business Department within the Group, has so far supported the introduction of energy-saving equipment through subsidized leasing, supported investment in solar power generation, and sold solar panels for private consumption. Recently, ORIX has also offered environmentally friendly power supply services, such as the third-party ownership model for solar power generation systems (PPA model)^*, to help customers promote decarbonization.

1. The PPA (Power Purchase Agreement) model is a business model in which a third party leases the site or roof of an electricity consumer, installs a solar power generation system, and supplies the generated electricity to the customer. ORIX installs and operates the solar power generation system on the customer's facility (e.g., the roof of a factory) and supplies the customer with electricity generated by the solar power system. Customers will be able to reduce CO₂ emissions by switching part of their electricity use to renewable energy through this initiative.

Soil remediation service

• #Climate change / Reducing GHG emissions

EcoCycle Corporation, a consolidated subsidiary of ORIX, provides total solutions for soil contamination, including soil surveys, remediation work, and environmental consulting in addition to the manufacture and sale of bio-remediation agents. In recent years, companies are facing more challenges with regards to environmental measures, such as the UN’s Sustainable Development Goals and decarbonization efforts. The company's in-situ soil remediation using a bio-remediation agent is a method of on-site soil remediation that does not require the soil to be removed from the site. Compared to existing excavation and removal methods, in-situ remediation can reduce CO₂ emissions during the construction period to around 1/10th of previous levels. What’s more, this method is also less expensive than previous practices, and is thus a solution which can contribute to both cost savings and reduction in the environmental load. This method has also been highly acclaimed, winning the “Minister of the Environment Award" at the 2017 Environmental Awards sponsored by the National Institute for Environmental Studies, a National Research and Development Agency.

Currently, EcoCycle’s services have been adopted by a wide variety of industries and sectors. At both major and small/mid-size general contractors, it is offered as one new method of environmental engineering. Developers use these services as a hedge against the risk of soil contamination when acquiring new real estate development sites. Leading manufacturers utilize the services for soil surveys and other measures when renovating factories, and trust banks, city banks, and regional banks rely upon them for due diligence related to real estate transactions and M&A.

Related Link

• EcoCycle Corporation

Corporate pension services

• #Aging society
• #Decreasing workforce

Due to a declining birthrate and aging population, Japan is facing a serious shortage of labor. In addition, the "Workplace Reform Bill"—effective from April 2020 (from April 2021 for small and medium-sized enterprises)—will mandate equal pay for equal work and eliminate the disparity in treatment between regular employees and part-time and contract employees, forcing many companies to respond. For this reason, an increasing number of companies are introducing ORIX's "Corporate Pension Service," in which part-time and contract employees can also participate, in order to secure human resources and comply with the legal system.
The Corporate Financial Services Department has been providing this service since 2010, and by March 2023, a cumulative total of roughly 1,100 offices had used the service, with more than 110,000 service users as of March 2023. The benefits of introducing this service to companies are not limited to securing human resources; providing a workplace where workers can work comfortably will also help them work long-term while being aware of contributions they can make to the company. In addition, the existence of a corporate pension plan provides workers with comfort and stability in preparing for retirement. We will provide this service to more companies in the hopes of helping contribute to labor shortage due to a declining birthrate and aging population, in addition to creating rewarding workplaces and secure and stable post-retirement lives.

An example of a corporate pension service: A base reserve implemented by the company for all eligible employees in addition to an amount the employees themselves elect to receive as a corporate pension as part of their salary. The reserve can be received consolidated as a retirement lump sum or in installments as an annuity at the time of retirement.