In November 2020, we established the Risk Management Office to manage Group-wide risk management, and I was appointed Chief Risk Officer to head the new office. This organizational change reflects the importance of a risk management function that is independent of the business execution as SBG evolves into an investment company.
SBG is exposed to significant investment risks through its equity investments in listed and unlisted high-tech companies via SVF1 and SVF2, as well as SB Northstar and SoftBank Latin America Fund. At the same time, we maintain a flexible financial management approach, including keeping LTV at a low level and maintaining funds covering bond redemptions for the next two years, providing a foundation that supports SBG’s business model. In particular, we monetized some of our assets as part of the \4.5 trillion program announced in March 2020. This highlights our management policy of placing top priority on swift decision-making in preparation for crises and securing a sound financial base.
The Risk Management Office works to strengthen risk management activities with the aims of eliminating and minimizing the obstructive factors to the sustainable growth of the Group. Factors that could threaten the financial base of the Company, which actively invests in equities and utilizes its assets to raise funds, include market crises, such as the global financial crisis triggered by the subprime mortgage crisis, and the sharp deterioration of the business of large portfolio companies. Accordingly, we conduct stress tests based on assumptions of past largescale market fluctuations and identify concentration risks for large investees. In these ways, we contribute to discussions aimed at enhancing our crisis preparedness. With respect to our main business of investing in unlisted companies via SVF1, SVF2, and other vehicles, we aim to strengthen our system for monitoring and analyzing the status of new investments as well as post investments.
With respect to non-financial risks, we focus on identifying risks that may threaten the sustainable growth of the entire Group and the status of responses to such risks through regular collaboration with SBG’s departments and major Group companies. We also engage with relevant parties to discuss various risks such as governance, conflict of interest, reputation, information leaks, ESG-related matters including climate change and human rights to assess the importance of each risk and consider countermeasures from a Groupwide perspective. These major financial and non-financial risks are reported to the Board of Directors and GRCC on a regular basis to contribute to management decisions.
With a wide range of investment targets and a rapidly changing business environment, it is essential for us to continually enhance our risk management framework as swift decisions are made daily. To ensure sustainable growth of the Group over the long term, we will continue seeking and applying the best practice that suits the Company so we can identify risks at an early stage and avoid or minimize losses.