Daily ESG Briefing: Japan publishes updated corporate governance code

The Tokyo Stock Exchange last week published a revision of Japan’s corporate governance code, which came into effect on 11 June. The updated code requires, on a comply-or-explain basis, Prime Market-listed companies to "enhance the quality and quantity of their climate-related disclosures" based on TCFD recommendations or equivalent international frameworks. The revised code also includes provisions for companies to develop a basic sustainability policy and disclose their sustainability initiatives as well as disclose diversity policies and their implementation.

The Association of Member Nominated Trustees has updated its ‘Red Lines’ – voting guidance on ESG issues for UK pension fund trustees – to include the expectation of TCFD reporting and lobbying in line with the Paris agreement. The updated guidelines recommend a vote against the Chair of the Board if the company does not produce a TCFD report or disclose its climate-related lobbying activities. Other updates include more stringent gender diversity targets and the introduction of requirements related to the UK’s modern slavery act.

Nine out of 10 UK SMEs see sustainability as an important consideration, but 40% don’t know how the net-zero transition will affect their business, according to a new survey by Lloyds Bank. The research found that a quarter of SMEs were unaware that the UK has a legislated net-zero target and 47% of the smallest businesses had no net-zero commitments.

Ryanair’s CEO has branded an InfluenceMap report accusing the airline industry of lobbying against EU climate policies as “less accurate than a children’s comic.” Speaking at the annual summit of Airlines for Europe, Michael O’Leary said “I don’t think we should give this report too much time or credibility.” Meanwhile, Airlines for Europe’s Managing Director Thomas Reynaert suggested that InfluenceMap “clearly hasn’t read [the industry’s net-zero roadmap] carefully”.

Overzealous tree planting and increases in bioenergy usage may prove harmful to natural ecosystems, according to a report by the Intergovernmental Panel on Climate Change and the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services. The report warned that planting single species crops to use in bioenergy is “detrimental to ecosystems when deployed at very large scales”, and that offsetting programmes had to be careful to plant the right species of tree in the right place so as to avoid damaging local ecosystems.

Bharat Electronics Limited, the aerospace and defence company, has made at least seven shipments of radar technology to the Myanmar military since its coup in February, according to a new report by Justice for Myanmar. The campaign group called on Bharat to immediately terminate its involvement with the military and to close its Myanmar office.