The Bank of Japan (BoJ) is intensifying its support for climate-related investments by pledging ¥7.2 trillion (US$49 billion) in loans for financial institutions’ climate initiatives. This commitment, part of a fund-provisioning measure launched in 2021, now totals nearly US$84 billion. Loans are contingent upon the disclosure of specific sustainability information, aiming to bolster climate finance transparency. 

However, Japan’s draft sustainability disclosure standards face criticism for inconsistencies with the International Sustainability Standards Board (ISSB) criteria, according to Environmental Finance. Key issues include potential misalignments in reporting periods, raising concerns among investors and regulators about the standards’ international alignment. Norges Bank Investment Management and other stakeholders advocate for closer adherence to ISSB and Global Reporting Initiative (GRI) guidelines. 

The GRI is pushing for Japan to align its standards with GRI’s and European Sustainability Reporting Standards, emphasizing a double materiality approach. The GRI argues this would be manageable, as 90% of Japan’s top 100 companies already comply with its standards. 

In related news, the GRI and the Taskforce on Nature-related Financial Disclosures (TNFD) have launched a joint resource to streamline biodiversity reporting. Their collaboration, active since 2022, highlights alignment in nature-related definitions and metrics, though differences remain in geographic focus and stakeholder engagement, particularly regarding Indigenous Peoples. 

The Bank of England has reported a 21% reduction in its carbon footprint over the past year, outlining its climate strategy in its annual financial disclosure. Critics, however, suggest further actions, such as excluding fossil fuel expansion bonds from collateral frameworks and supporting energy efficiency. 

Additionally, the National Bank of Moldova has approved a sustainable finance roadmap for 2024-2028, focusing on integrating sustainable finance into its financial system, developing a green taxonomy, and enhancing energy efficiency. 

Sources: 

https://greencentralbanking.com/2024/09/18/japan-boosts-green-investment/ 

https://www.japantimes.co.jp/business/2024/08/19/esg-sustainable-finance-japan/