This briefing sets out the results of a survey and targeted stakeholder interviews regarding the requirements and expectations of investors in relation to a potential sustainable finance taxonomy for Japan. These results are accompanied by an analysis of selected existing sustainable finance policies, regulations and guidance and a set of policy recommendations.

Key messages

  • Only 35% of respondents agreed that existing financial disclosure regulations and frameworks adequately support their achievement of sustainability-related investment objectives.
  • Around 60% of respondents supported the development of a sustainable finance taxonomy in Japan.
  • Over two-thirds of respondents perceived the absence of a sustainable finance taxonomy for Japan as a potential risk for investors.
  • The majority of respondents agreed that if a taxonomy is introduced in Japan, taxonomy-based information disclosure should be mandatory for companies.

Key recommendations

  1. Japanese policymakers and regulators should carry out a study to consider developing and implementing a sustainable finance taxonomy for Japan.
  2. Existing tools, such as the basic guidelines on climate transition finance and sector-specific technology roadmaps for the transition to decarbonization, need to be better integrated into disclosure frameworks and financial and investor regulations and supervision.
  3. The Japanese Financial Services Agency (FSA) should play a leadership role in considering the development and implementation of a sustainable finance taxonomy for Japan.
  4. Japanese policymakers and regulators should keep working towards supporting global harmonisation and interoperability between different taxonomies and disclosure frameworks.

This research and the report have been prepared and carried out in conjunction with CSR Design Green Investment Advisory Co., Ltd (CSR Design).

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