Japan Aligns with Global Trends: SSBJ Rolls Out New ESG Disclosure Standards

Overview

The Sustainability Standards Board of Japan (SSBJ) has issued its first set of sustainability disclosure standards aimed at aligning Japanese practices with international benchmarks. These standards, rooted in the International Sustainability Standards Board’s (ISSB) framework, aim to ensure comparability and enhance transparency in corporate sustainability disclosures.

Photo by Romeo A. on Unsplash

Established in 2022, the SSBJ has played a pivotal role in advancing Japan’s sustainability reporting. Inspired by the ISSB framework, the SSBJ’s core mission is to develop disclosure standards that resonate both locally and internationally. By aligning its standards with the ISSB's IFRS Sustainability Disclosure Standards, the SSBJ aims to ensure global relevance.

The Three Pillars of Disclosure

The SSBJ's inaugural standards, approved in February 2025, comprise three core components:

  1. Application Standard: Covers the fundamental requirements for preparing sustainability-related financial disclosures.

  2. General Standard: Focuses on disclosures of sustainability-related risks and opportunities, following the "Core content" section of IFRS S1.

  3. Climate Standard: Specifically addresses climate-related disclosures.

This structure ensures clarity and usability, as these standards must be applied collectively to provide comprehensive insights.

Balancing Alignment and Flexibility

The SSBJ has actively worked to minimize differences between its standards and the ISSB framework. However, some minor distinctions remain to address local practices. The board has committed to monitoring disclosure trends and adapting standards over time to meet evolving needs.

A Call to Action for Japanese Companies

SSBJ Standards are anticipated to become mandatory for entities listed on the Tokyo Stock Exchange’s Prime Market. Chair Yasunobu Kawanishi expressed gratitude to stakeholders who reviewed the Exposure Drafts, emphasizing the importance of feedback for refinement. He encouraged companies to adopt these standards and provide further insights to enhance their effectiveness.

Looking Ahead

While the complete SSBJ Standards are available in Japanese, efforts are underway to provide English resources, including an overview, schedules of differences, and concordance tables with ISSB Standards. The SSBJ’s active participation in international forums underscores its commitment to global collaboration.

Read the full insights here: https://www.ssb-j.jp/jp/wp-content/uploads/sites/7/news_release_20250305_e.pdf

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