Japan's SSBJ Releases First ISSB-Aligned Sustainability Disclosure Standards

The Sustainability Standards Board of Japan released its first sustainability disclosure standards, comprising an Application Standard, General Disclosures and Climate-related Disclosures aligned with ISSB's IFRS S1 and S2. The move reinforces global convergence toward ISSB-based reporting that also underpins India's evolving BRSR framework.

The Sustainability Standards Board of Japan (SSBJ) launched its inaugural Sustainability Disclosure Standards, closely aligned with ISSB's IFRS Sustainability Disclosure Standards for international comparability. The framework introduces three standards: an Application Standard outlining general requirements, General Disclosures covering core sustainability risks and opportunities aligned with IFRS S1, and Climate-related Disclosures modelled after IFRS S2. Established in July 2022 to develop sustainability reporting standards, the SSBJ reduced potential differences from ISSB Standards based on Exposure Draft feedback, though a few differences remain under monitoring.

The standards are expected to apply to companies listed on the Tokyo Stock Exchange's Prime Market, requiring them to comply with both domestic and international sustainability requirements. Japanese corporations affected gain alignment that helps them meet global investor expectations while accommodating local regulatory considerations. SSBJ Chair Yasunobu Kawanishi credited industry feedback for refining the standards. The ISSB welcomed the move, with Vice Chair Sue Lloyd supporting the alignment and citing continued engagement with the SSBJ and Japan's Financial Services Agency (JFSA) on application.

Prime Market-listed companies should prepare for the standards' anticipated regulatory implementation by aligning reporting systems with IFRS S1 and S2 requirements. Since the SSBJ Standards are currently available only in Japanese, companies and international users should monitor for the forthcoming English-language overview, concordance tables and details on key differences from ISSB Standards. Firms should also track how the JFSA considers the application of SSBJ Standards, which will determine the scope and timing of mandatory compliance.

Key figure — Standards issued: three (Application, General Disclosures, Climate-related Disclosures)