Japanese authorities will table sustainability disclosure standards, based on the forthcoming International Sustainability Standards Board (ISSB) framework, ahead of the 2025-26 financial year.
The timeline was announced by Japanese standard setters on Thursday following an inaugural meeting with the ISSB. The standards will be available for voluntary application immediately. Mandatory requirements are due to follow at a later date, which has yet to be decided.
An initial draft will be issued by 31 March 2024 for feedback, a year prior to the due date of the finalised standards.
The standards will be developed and implemented by the Sustainability Standards Board of Japan (SSBJ), which was established by local standard-setting body the Financial Accounting Standards Foundation (FASF) of Japan just a month after the formation of the ISSB in November 2021. The board includes accounting bodies and major Japanese corporates.
Japan has engaged extensively with the ISSB since its creation and hosts one of four offices globally that support the ISSB, in Tokyo. The others are in Frankfurt, Montreal and San Francisco.
FASF has now committed to supporting the ISSB and its Tokyo office for a further five years with the signing of an MOU, which will include funding for ISSB members Hiroshi Komori and Tae-Young Paik, as well as staff supporting ISSB capacity-building and engagement projects in the region.
Komori was formerly head of stewardship at Japan’s mammoth Government Pension Investment Fund and is credited with being the driving force behind GPIF’s ESG initiatives.
Erkki Liikanen, chair of the IFRS Foundation Trustees, said: “The expansion of the Asia-Oceania office in Tokyo to support the work of the ISSB will connect with the recently established SSBJ under the governance of the FASF. We look forward to the Asia-Oceania office in Tokyo playing an important role in the work of both the International Accounting Standards Board and the ISSB.”
A first cut of the ISSB standards is expected to be released by the end of June, according to chair Emmanuel Faber, and will be finalised by the end of 2023.
UK to partner with Singapore on ESG
The UK and Singapore governments have agreed to draw up a work plan on joint sustainable finance projects, which will be overseen by the UK Treasury and the Monetary Authority of Singapore.
It is one of several priority areas identified by an MOU signed by the UK and Singapore that will establish a shared “Green Economy Framework”. The collaboration will span three key pillars: green transport, low-carbon energy technologies and sustainable finance and carbon markets.
It comes soon after the UK was advised to use its diplomatic influence to promote global convergence of green taxonomies and disclosure standards.
Both the UK and Singapore are in the later stages of developing national green taxonomies. The UK is expected to repurpose the EU’s taxonomy, while Singapore has adopted a traffic-light framework emphasising transitional activities.
Separately, the UK Competition and Markets Authority (CMA) has issued draft guidance to support industry collaborations aimed at reducing emissions or improving climate adaptation. The work will help businesses take action on climate change and environmental sustainability without undue fear of breaching competition rules, said the CMA.