On October 8, 2019, the government of Japan hosted the first-ever corporate summit (the “Summit”) in Tokyo to discuss and guide implementation of the Task Force on Climate-Related Financial Disclosures (“TCFD”) recommendations. The Summit attracted over 300 attendees, including senior executives from companies such as Shell and Nippon Steel. One of the Summit’s co-hosts, the Japanese business community’s recently established TCFD Consortium, took the opportunity to reveal its Green Investment Guidance to help investors engage with companies on the topic of climate. Since the publication of the TCFD recommendations in 2017, Japan has worked with a goal to position itself as a leader in implementing climate-related action and disclosure. The government and business community have largely worked together in exploring implementation of climate disclosure, resulting in three primary guidance documents on climate-related issues for companies and investors.

Build-Up to the Summit

Japan has seen a very high rate of uptake of the TCFD recommendations by the country’s business community. As of October 1, 2019, 194 of the 855 companies supporting the TCFD recommendations are from Japan (nearly 23%). A significant portion of these committed to following the TCFD recommendations at the establishment of the TCFD Consortium in May 2019. The Consortium was established to improve reporting and promote innovation in addressing climate-related issues.

Prior to the Consortium’s establishment, Japan had published two guidance documents to help with such topics: the Guidance on Climate-related Financial Disclosures (published by the Ministry of Trade, Economy and Industry (“METI”) in December 2018) and the Practical Guide for Scenario Analysis in line with TCFD Recommendations (published by the Ministry of the Environment in March 2019). These guidance documents are intended to promote implementation of the TCFD recommendations and to help companies in that process. They include detailed commentary, case-studies, and (for select sectors) specific recommendations for disclosures. However, the documents are non-binding and only meant to guide.

Green Investment Guidance

The TCFD Consortium’s Green Investment Guidance (the “Guidance”) completes the trio of climate-related guidance that has been issued for the business community in Japan. However, instead of focusing on companies, it is targeted at investors. According to the TCFD Consortium, the Guidance is designed to facilitate green investment by providing investors with insight on how to consider climate-related disclosures. It highlights important aspects of each pillar for investors, discussing how investor engagement can add value to a company and providing examples of how investors can actively pursue information on these topics. For example, governance is one of the four main pillars of the TCFD recommendations; the TCFD Consortium’s Guidance encourages investors to confirm the effectiveness of a company’s systems and processes as part of governance, such as by requesting information on how decisions by relevant committees are subsequently circulated and put into practice.

This emphasis on structured deliberation underpins much of the rest of the Guidance. In the strategy section, the Guidance suggests that investors ensure the appropriateness of scenarios examined by a company and assess the alignment between decision-making and those scenarios instead of focusing on the exact data results of the analysis. The Guidance specifies that scenarios are not designed to pinpoint a precise right answer and are instead designed to help a company properly think through the medium- to long-term ramifications of climate on their operations. This mindset also carries over into the risk management section, which the Guidance has designated “Risks and Opportunities.” As the name suggests, the Guidance encourages investors to not only focus on potential risks but also potential opportunities in the realm of climate action.

Future Plans

Although formed less than a year ago, the TCFD Consortium has served as an important catalyst for climate-disclosure in Japan. After the Summit, the Consortium plans to continue working alongside the government of Japan in guiding climate-related disclosure and action. A second summit has been discussed for 2020 with the hopes of continuing to advance climate-related disclosures in Japan and beyond. In the meantime, the TCFD Consortium plans to review the earlier guidance documents released by METI and the Ministry of the Environment as well as to encourage further participation from the Japanese business community.


Japan’s government and business community have worked together with the aim of positioning Japan as a world leader in the realm of climate-related disclosure. This has resulted in a trio of thorough guidance documents to help both companies and investors facilitate discussion and understanding of climate-related disclosures. The third of these was released at the world’s first-ever summit to discuss and guide implementation of the TCFD recommendations, and a follow-up summit has already been discussed for next year. These developments are focused on allowing Japan to have a sizeable impact in the realm of climate disclosure and action through shaping both company behavior and investor expectations.