• Japan aligns with global reporting: The Sustainability Standards Board of Japan (SSBJ) has issued its first-ever sustainability disclosure standards, closely aligned with ISSB’s IFRS Sustainability Disclosure Standards to ensure international comparability.
• Three new standards introduced: The framework includes General Disclosures, Climate-related Disclosures, and an Application Standard, guiding companies on sustainability-related risks and opportunities.
• Future regulatory adoption expected: The standards are expected to apply to companies listed on the Tokyo Stock Exchange’s Prime Market, reinforcing Japan’s commitment to transparent ESG reporting.

SSBJ Introduces First Sustainability Disclosure Standards

The Sustainability Standards Board of Japan (SSBJ) has officially launched its inaugural Sustainability Disclosure Standards (SSBJ Standards) to enhance corporate sustainability reporting in Japan. These standards mark a significant milestone in the country’s transition toward more transparent and internationally aligned ESG disclosures.

The newly issued SSBJ Standards include three key disclosure requirements:

1. Application of the Sustainability Disclosure Standards – Lays out general requirements for companies preparing sustainability-related disclosures.
2. General Disclosures – Covers core sustainability risks and opportunities, aligning with the ISSB’s IFRS S1 framework.
3. Climate-related Disclosures – Provides reporting guidelines on climate risks, modeled after IFRS S2.

These standards will enable international comparability by aligning with ISSB’s IFRS Sustainability Disclosure Standards, helping Japanese companies meet global investor expectations while maintaining local regulatory considerations.

SSBJ Strengthens Japan’s ESG Framework

The SSBJ was established in July 2022 to develop sustainability reporting requirements and contribute to the evolution of international disclosure standards. Japan’s approach mirrors the ISSB’s global reporting framework, ensuring companies listed on the Tokyo Stock Exchange’s Prime Market can comply with both domestic and international sustainability expectations.

SSBJ Chair Yasunobu Kawanishi emphasized the importance of industry feedback in shaping these standards:

“We would like to express our sincere gratitude to everyone who has responded to our Exposure Drafts. Based on the feedback received, we have reduced further potential differences between SSBJ Standards and ISSB Standards. A few differences remain, but we are committed to monitoring how disclosure practices develop in Japan and internationally.”

While the SSBJ Standards are currently only available in Japanese, an English-language overview, concordance tables, and details on key differences from ISSB Standards will be published soon.

Global Support for SSBJ’s Standards

The ISSB welcomed Japan’s move toward harmonized sustainability reporting. Sue Lloyd, Vice Chair of the ISSB, expressed her support for the initiative, stating:

“The ISSB warmly welcomes the SSBJ’s basic policy to align with ISSB Standards to ensure international comparability of disclosures. We look forward to continued engagement and collaboration with the SSBJ and Japan’s Financial Services Agency (JFSA) as they consider the application of SSBJ Standards.”

The SSBJ’s adoption of ISSB-aligned reporting frameworks represents a major step forward in Japan’s sustainable finance ecosystem, enhancing transparency for investors and ensuring businesses remain competitive in global markets.

With sustainability disclosures becoming a key driver of investment decisions, Japan’s commitment to standardized ESG reporting reinforces its role as a leader in sustainable corporate governance and responsible business practices.

Follow ESG News on LinkedIn