New Sustainability Disclosure Requirements for Listed Companies in Japan – Izumi Kawashima

New Sustainability Disclosure Requirements for Listed Companies in Japan – Izumi Kawashima

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After the amendment of the Cabinet Office Ordinance on the Disclosure of Corporate Affairs in Japan, “sustainability-related policy and initiatives” have been added to the annual securities report as a disclosure item. Under this item, the disclosure of “governance,” “strategy,” “risk management,” and “metrics and targets” is required. These are widely used both domestically and internationally as core elements in climate-related financial disclosures based on TCFD Recommendations. This chapter first reviews the content and characteristics of this amended Ordinance, focusing on climate-related disclosure, and then explains the method of description, treatment of forward-looking information, criteria for materiality, and the materiality adopted by the amended Ordinance. Trends in sustainability disclosure standards have also been discussed. After confirming the status of the amended Ordinance in comparison with the UK Companies Act and its guidance, the chapter concludes with a brief outlook on the future. The statutory requirement to disclose listed companies’ sustainability-related information is not simply a demand to disclose the current status of the companies. However, it is positioned to encourage them to generate business profits and avoid losses by creating a sustainable business environment for them. This is expected to contribute to the realization of a carbon-neutral society.

New Sustainability Disclosure Requirements for Listed Companies in Japan | Springer Nature Link