Japan releases ISSB-based reporting standards

April 10th, 2024

The Sustainability Standards Board of Japan (SSBJ) has issued a proposal of its Sustainability Disclosure Standards to be applied in Japan, aligned with the International Sustainability Standards Board (ISSB).

The SSBJ announced that it has incorporated all the requirements in the ISSB’s International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards and added, where it considered necessary jurisdiction-specific options the company can choose to apply.

The board has published three exposure drafts, one on the application of the standards, one on general disclosures and one specific to climate-related disclosures.

The standards were developed under the assumption that they would eventually be required, under the Japanese securities laws and regulations, to be applied by companies listed on the Prime Market of the Tokyo Stock Exchange.

The drafts are now open for a consultation period, which will end on 31 July, 2024.

The IFRS released drafts of its reporting standards – the IFRS S1 General Requirements for Disclosure and Exposure Draft and IFRS S2 Climate-related Disclosures – in March 2022, and the standards came into effect in January 2024.

All entities will be required to file reports under the two standards from early 2025.

The SSBJ was established in July 2022 to develop a set of sustainability reporting standards to be applied in Japan and contribute to the development of international sustainability disclosure standards.

In December, the Government of Japan published a new policy plan to position the country as a leading asset management centre, including corporate governance reforms.

The plan includes reforms to stewardship activities in Japan, promoting effective engagement efforts between institutional investors and companies, as well as a review of the largest shareholding companies.