“TCFD Study Group” on Green Finance and Corporate Disclosure

 “TCFD Study Group” on Green Finance and Corporate Disclosure

• The climate change landscape has changed dramatically since the Paris Agreement was signed in 2015. With the expansion of ESG investment, there is a growing movement of investors and others to demand corporate disclosure of ESG elements. In particular, the Task Force on Climate-related Financial Disclosures (TCFD), established by the Financial Stability Board (FSB) under the direction of G20, has been making progress in establishing international rules for the disclosure of information related to corporate initiatives on climate change, and global demand for such information from investors and others is increasing.
• In addition, in Japan, the Prime Minister's statement at the Future Investment Conference held on June 4, 2018 on "Enhancing green finance by promoting disclosure and visualization of information instead of conventional regulations" positioned the enhancement of green finance through information disclosure as one of the pillars in developing Japan's long-term strategy.
• In light of these circumstances, Japanese companies are also required to disclose information on their climate-related initiatives in response to TCFD recommendations, taking into account the characteristics of each company.
• The TCFD recommendations call for the disclosure of strategies at the corporate management level on how to address climate change issues in order to promote sustainable corporate growth. Therefore, this study group consists mainly of executives in charge of corporate planning and finance, and is tasked with the work of compiling the essence of TCFD as well as formulating ways to disclose information in response to TCFD recommendations to be used as reference by companies.
• Through this study group, it is hoped that companies will promote information disclosure in response to TCFD recommendations, and that Japanese companies' contributions and strengths to global warming issues will be recognized internationally.

First meeting: August 8, 2018

Second meeting: November 7, 2018

Third meeting: December 25, 2018

Working Group of the “TCFD Study Group” on Green Finance and Corporate Disclosure

• The TCFD Recommendations call for the disclosure of impacts caused by climate change on companies through financial analysis, as well as the disclosure of forward-looking corporate information, which differs in many respects from the disclosure framework generally used in the past. Therefore, the practitioners of corporate disclosure are struggling to deal with the situation.
• In light of these circumstances, in order to conduct a detailed review of the specific disclosure items and methods, in response to the TCFD recommendations, on the strengths of and points to be emphasized by Japanese companies and the obstacles faced in disseminating information, persons who are actually in charge of practical aspects of corporate disclosure are invited to conduct more specific discussions (working group; WG) on the issue.
• In this way, discussion from the perspective of solving problems faced by practitioners and discussion at the management level will be conducted in parallel, and a Guidance that contributes to the proactive dissemination of information by companies will be compiled, taking into account both top-down and bottom-up views.

First meeting: September 10, 2018

Second meeting: September 27, 2018

Third meeting: October 22, 2018

Fourth meeting: December 14, 2018

Division in Charge

Environmental Economy Office, Industrial Science and Technology Policy and Environment Bureau