In March 2025, the Sustainability Standards Board of Japan (SSBJ) issued its inaugural Sustainability Disclosure Standards, reflecting the impact of investor demand in the region. Since July 2022, the SSBJ has represented Japan’s jurisdiction-specific incorporation of International Sustainability Standards Board (ISSB), aiming to “achieve international comparability”. With this, Japan becomes part of the global majority – by GDP – working towards either national or supra-national disclosures.
In practice, the SSBJ splits the ISSB’s two standards into three:
- Universal Sustainability Disclosure Standard “Application of the Sustainability Disclosure Standards” (known as the ‘Application Standard’)
- Theme-based Sustainability Disclosure Standard No. 1 “General Disclosures” (known as the ‘General Standard’)
- Theme-based Sustainability Disclosure Standard No. 2 “Climate-related Disclosures” (known as the ‘Climate Standard’)
All three standards must still be applied together, laying the groundwork for disclosures consistent with IFRS S1 and S2. Optional jurisdiction-specific alternatives have also been added by the SSBJ, which may result in some departure from ISSB compliance.
At present, the SSBJ has confirmed that its sustainability disclosures are voluntary, but market influences are increasingly driving organizations to prioritize transparency. Investor demand and consumer expectations around sustainability are likely to encourage voluntary reporting among Japan-based businesses. Additionally, the SSBJ’s overview of the standards states that they have been developed under a key presumption: that Japanese securities laws and regulations will soon require firms listed on the Prime Market of the Tokyo Stock Exchange to implement these standards. That is, the disclosures may be voluntary now, but organizations should be prepared for them to become mandatory in the near future.
Firms should expect further updates in guidance; the SSBJ has committed to reviewing ISSB educational material on an ongoing basis in order to stay on top of any changes in standards. Any revisions will be published in the form of Supplementary Documents as appropriate, following discussion by the SSBJ.
To find out more about Japan’s inaugural sustainability disclosure standards, read the SSBJ’s press release, and for more on the differences between the SSBJ standards and the ISSB standards, read the announcement here.
