Japan introduces ISSB-aligned sustainability reporting standards

The Sustainability Standards Board of Japan (SSBJ) has proposed sustainability disclosure standards closely aligned with the International Sustainability Standards Board (ISSB) for adoption in Japan. These standards integrate the ISSB’s International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards while allowing for jurisdiction-specific options. The SSBJ has released three exposure drafts covering application, general disclosures and climate-related disclosures. Anticipated to become mandatory for companies listed on the prime market of the Tokyo Stock Exchange under Japanese securities laws, the drafts are open for public consultation until 31 July  2024.

These standards complement the ISSB’s existing IFRS S1 General Requirements for Disclosure and IFRS S2 Climate-related Disclosures, which became effective in January 2024, with all entities expected to comply starting early 2025. Established in July 2022, the SSBJ aims to develop domestic sustainability reporting standards while contributing to global sustainability efforts. Japan’s government, in line with its policy to enhance corporate governance, has outlined reforms to bolster stewardship activities and shareholder engagement among institutional investors and companies, emphasising transparency and accountability.

Source: Japan releases ISSB-based reporting standards – Minerva-Manifest

About the Authors

Associate Director, Investment Banking

Prachurjya has over 16 years of experience in investment banking with Acuity Knowledge Partners. At Acuity, he has led sector and product-specialist pilot teams across Capital Markets, ESG, Debt Advisory, Loan Syndications, Metals & Mining and Real Estate. He has been actively involved in setting up and on-boarding new ESG Advisory, ESG DCM and Sustainable Finance teams for various bulge bracket investment banks. Within DCM and Rating Advisory, he has been instrumental in helping the clients achieve over 30% in annual savings on both regular and adhoc tasks through standardization of the outputs and deployment of our proprietary BEAT tools.

Delivery Manager, Investment Banking

Puja has 6 years of extensive experience in ESG, Climate Change & Sustainability and she is supervising the ESG team at Acuity. She also has diverse experience in conducting ESIA, EHS compliance audits, ESG Risks and Controls, EHS & ESG Due Diligence assessments. Prior to joining Acuity, she was working with companies like KPMG Global Services, EY India and ERM India. She has expertise in provisioning extensive research requirements for clients through preparation of Peer Benchmarking, Target Compilation, Sustainability report, Sustainable Finance Updates and Sectoral ESG Thematic Detailing Engagement.

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