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Japan launches TCFD Guidance 2.0 with private sector and government backing

News comes as GPIF seeks to award new mandates

Japan’s private sector-led TCFD Consortium has updated the country’s guidance on climate disclosures for corporates in TCFD Guidance 2.0 – a new bumper document endorsed by the Japanese economy and trade ministry. 

The latest effort to enhance disclosure aligned with the recommendations of the Taskforce on Climate-related Financial Disclosures in the country, the new document adds sector-specific guidance and Japanese company case studies, as well as incorporating new knowledge and data on the TCFD in Japan and globally.

Over the last couple of years, the country has shot up to first place for the number of TCFD-supporting institutions it has, counting 290 as of July this year.

Japan’s original TCFD guidance was put together and released by the Ministry of Economy, Trade and Industry (METI) in December 2018, inspired by the final recommendations of the Financial Stability Board’s renowned taskforce.

The private sector-led TCFD Consortium, established in May 2019 with strong government and regulator backing from METI, the Financial Services Agency and the Ministry of the Environment, inherited the work

The Consortium’s founding members include its Chair, Kunio Ito, an academic whose 2014 review catalysed sweeping corporate governance reform in Japan, and representatives from the Keidanren, Japan’s powerful business lobby, and Tokio Marine Holdings, the insurance group.

Members are required to sign up as TCFD signatories before joining the consortium, which has 271 members, mostly financial institutions, financial services companies and corporates including the likes of Japan’s three ‘megabanks’, Moody’s, BlackRock Japan, BNP Paribas, Nissay Asset Management, and Japan Post Insurance.

Sector-specific guidance in the document covers the banking, life insurance, non-life insurance, food, automobile, steel, chemicals, electricity and energy industries.

The guidance features forewords from Ito, and the TCFD’s own Mary Schapiro, who used to chair the US Securities and Exchange Commission.

Schapiro wrote: “TCFD leaders in Japan are now showing the next steps needed to move from endorsement to implementation.”

“The TCFD Consortium provides a valuable platform for businesses and investors to facilitate constructive dialogue on implementing TCFD recommendations.”

The launch of the guidance came alongside the news that METI would hold its second TCFD Summit on October 9, 2020 in a bid to continue to promote the recommendations.

Its first summit in October 2019 was attended by more than 1,350 institutions and is considered by METI to have played a key role in pushing the broad uptake of the recommendations in the Japanese market.

Also in Japan this week, the Government Pension Investment Fund (GPIF), which says it integrates ESG into all its assets via its manager selection process, put out a call for fund-of-funds managers to apply to manage some of its private equity, infrastructure and real estate portfolios. 

It’s looking for fund-of-funds products to be established as Separate Managed Accounts for: global diversified private equity; global infrastructure, mainly in core/brown-field infrastructure in developed countries; and global and domestic core real estate.

GPIF is reviewing applications on an ongoing basis.