July 31, 2020
As ESG investments grow, a corporate disclosure framework that enables investors to appropriately assess a company's climate-related risks and opportunities is becoming increasingly important. The TCFD Consortium, which is a private sector-led initiative, took over the work of revising the "Guidance on Climate-related Financial Disclosures (TCFD Guidance)" formulated by the Ministry of Economy, Trade and Industry in December 2018, and today announced its revised release as the "TCFD Guidance 2.0".
The Ministry of Economy, Trade and Industry will also hold the TCFD Summit 2020 on October 9, 2020 to continue to promote an implementation of the TCFD recommendations.
As a result of the Paris Agreement adopted in December 2015, there has been a worldwide movement, particularly in the financial sector, to assess the impact of climate change on the business activities of investee/borrower companies. The Task Force on Climate-related Financial Disclosures (TCFD) released its final report (the TCFD recommendations) in June 2017, and the Ministry of Economy, Trade and Industry formulated the "Guidance on Climate-related Financial Disclosures (TCFD Guidance)" in December 2018 as a handbook for implementing the TCFD recommendations.
The TCFD Guidance increased the momentum towards implementing the TCFD recommendations and led to the establishment of the TCFD Consortium in May 2019, led by the private sector, which discussed effective disclosure methods of corporate information and efforts by financial institutions to utilize disclosed information in taking appropriate investment decisions.
Based on these discussions, today, the TCFD Consortium announced the release of "TCFD Guidance 2.0", which was a continuation of the work of revising the TCFD Guidance formulated by the Ministry of Economy, Trade and Industry.
2. Overview of TCFD Guidance 2.0 (Major revisions)
This guidance has been developed to enhance disclosure by companies in line with the TCFD recommendations and has been revised mainly on the following points.
- Expansion of explanations based on recent knowledge and data on TCFD implementation in Japan and overseas.
- Addition of industry-specific guidance (for the food, banking, life insurance and non-life insurance sectors)
- Expansion of case studies of TCFD disclosure mainly from Japanese companies
The TCFD Consortium also published a message to further promote TCFD disclosure (“Toward More Decision-Useful TCFD Disclosure”) in response to international discussions for promoting TCFD disclosure.
3. TCFD Summit 2020
In October 2019, the Ministry of Economy, Trade and Industry held the world's first TCFD Summit, bringing together leaders of leading global companies and financial institutions to discuss the future direction of the TCFD. More than 1,350 organizations from around the world, and 290 organizations from Japan (As of July 27, 2020) support the TCFD. Japan becomes the world's largest supporter of TCFD by learning the importance of TCFD highlighted in the summit. The content of information disclosure is enhanced every year.
In order for Japan to take the lead in international discussions by enacting the TCFD recommendations toward the acceleration of the "virtuous cycle of environment and growth", the TCFD Summit 2020 will be held online later this year, on October 9. The TCFD Summit 2020 will also discuss the "TCFD Guidance 2.0" and "Toward More Decision-Useful TCFD Disclosure" announced by the TCFD Consortium.
Links to related information
Division in Charge
Environmental Economy Office, Industrial Science and Technology Policy and Environment Bureau