Japan has aligned its sustainability standards with ISSB’s IFRS standards.
The standards are expected to apply to companies listed on the Tokyo Stock Exchange’s Prime Market, according to a release by Sustainability Standards Borad of Japan (SSBJ).
The new framework includes three sets of standards: general disclosures, climate-related disclosures, and an application standard, guiding companies on sustainability-related risks and opportunities.
• Application of the Sustainability Disclosure Standards: Lays out general requirements for companies preparing sustainability-related disclosures.
• General Disclosures: Covers core sustainability risks and opportunities, aligning with the ISSB’s IFRS S1 framework.
• Climate-related Disclosures: Provides reporting guidelines on climate risks, modeled after IFRS S2.
The new standards will enable international comparability by aligning with ISSB’s IFRS Sustainability Disclosure Standards, helping Japanese companies meet global investor expectations while maintaining local regulatory considerations.
Japan’s approach mirrors the ISSB’s global reporting framework, ensuring companies listed on the Tokyo Stock Exchange’s Prime Market can comply with both domestic and international sustainability expectations.
Yasunobu Kawanishi, Chair, SSBJ, said: “We would like to express our sincere gratitude to everyone who has responded to our exposure drafts. Based on the feedback received, we have reduced further potential differences between SSBJ Standards and ISSB Standards. A few differences remain, but we are committed to monitoring how disclosure practices develop in Japan and internationally.”
While the SSBJ Standards are currently only available in Japanese, an English-language overview, concordance tables, and details on key differences from ISSB Standards will be published soon, according to the release.
The Sustainability Standards Board of Japan (SSBJ) was established in July 2022 under the Financial Accounting Standards Foundation (FASF) to develop sustainability disclosure standards to be applied in Japan and to contribute to the development of international sustainability disclosure standards, following the establishment of the International Sustainability Standards Board (ISSB).
