Sustainability Standards Board of Japan (SSBJ) Standards: Domestic Sustainability Disclosure Standards Aligned with Global Practices

Background

The SSBJ was established under Japan’s Financial Accounting Standards Foundation (FASF) to develop domestic sustainability disclosure standards aligned with global practices following the creation of the ISSB. On 5 March 2025, it issued three documents — an Application Standard (general requirements), a General Standard (core sustainability disclosures), and a Climate Standard — together forming the SSBJ framework. The goal was to enhance transparency and comparability of sustainability disclosures for capital markets in Japan, particularly for climate-related financial information.

What the SSBJ Standards Ask Companies to Report

Mirroring the ISSB model, the SSBJ Standards require companies to disclose sustainability-related risks and opportunities that could reasonably affect financial prospects, including governance, strategy, risk management, metrics, and targets. Climate-related disclosures follow the structure of IFRS S2, with emphasis on climate governance, risk processes, strategy, and metrics such as GHG emissions.

How SSBJ Differs from ISSB Standards

SSBJ designed its standards to be functionally aligned with ISSB, but there are a few key adaptations and Japan-specific alternatives:

• Structural modifications: SSBJ split the ISSB’s IFRS S1 into separate “Application” and “General” standards, reorganizing content to better fit local reporting conventions while retaining the same disclosure requirements.

• Location & timing flexibility: SSBJ explicitly permits sustainability disclosures to be published at a different time or separately from financial statements when required by Japanese law or practice, whereas ISSB assumes simultaneous reporting.

• Optional national alternatives: For some items (e.g., Scope 2 emissions presentation), companies may use alternatives that are accepted under Japanese standards without losing functional alignment with ISSB outcomes.

• Additional presentation requirements: SSBJ adds items such as clear identification of units used, or legal bases for disclosure when applied under Japanese regulation — not explicit in ISSB.

These differences are intentionally limited so that disclosures made under SSBJ largely produce comparable information to ISSB reporting, as confirmed in the SSBJ’s published Schedule of Differences and Table of Concordance with ISSB.

Implementation Outlook

The standards were finalized and issued in March 2025 and are expected to be phased into mandatory corporate reporting via Japan’s securities reporting regime, beginning with larger Prime Market listed companies around fiscal years ending March 2027. Discussions continue around phased assurance requirements, with limited assurance initially focused on core items such as Scope 1 and Scope 2 emissions. Achieving consistent data collection and comparability will depend on how companies and regulators implement these standards locally.

Resources

• SSBJ “Schedule of Differences between ISSB Standards and SSBJ Standards” (English summary of differences).

• SSBJ Standards overview and documents (application, general, and climate standards).

• Japan FSA roadmap on sustainability disclosure and assurance.