The Sustainability Standards Board of Japan (SSBJ) has announced its first-ever Sustainability Disclosure Standards, marking a significant step toward enhancing transparency and international comparability in corporate ESG reporting. The new framework closely aligns with the ISSB’s IFRS Sustainability Disclosure Standards, reinforcing Japan’s commitment to global sustainability practices.
Key Developments:
- Three new disclosure standards introduced:
- General Disclosures – Aligns with IFRS S1, covering core sustainability risks and opportunities.
- Climate-related Disclosures – Modeled after IFRS S2, providing guidelines on climate risk reporting.
- Application Standard – Establishes requirements for sustainability-related risk and opportunity disclosures.
- Expected regulatory adoption for companies listed on the Tokyo Stock Exchange’s Prime Market.
- Strengthened ESG framework to meet global investor expectations while addressing domestic regulatory needs.
The introduction of these standards aligns Japan’s sustainability reporting framework with global best practices, ensuring greater consistency for investors and businesses. Market observers anticipate that this move will improve corporate transparency, enhance Japan’s competitive edge in sustainable finance, and align with international ESG disclosure expectations.
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