One hundred and seventy-two Japanese companies have complied with the Task Force on Climate-related Financial Disclosures (TCFD), a framework for reporting on climate-related risks and opportunities, developed by bankers in 2015 following the G20 summit. This number puts Japan ahead of the UK and the US, where 109 and 107 companies have complied with the TCFD, respectively. It makes Japan the country with the most companies that disclose financial and climate risks in compliance with this framework.

The TCFD develops voluntary climate-related financial risk disclosures for companies, who can present these disclosures to investors and other stakeholders, including the wider public. The recommendations of the TCFD encourage companies to measure and evaluate climate-related risks and allow investors to make more informed decisions. Increased Japanese involvement in the TCFD comes at a time when the country has been ramping up sustainability efforts. ESG investing in Japan rose from $474bn in 2016 to $2tn in 2018. Much of the increased focus on sustainability and environmental concerns in Japan is occurring as the country prepares for the 2020 Olympics.

Japan is scheduled to hold a TCFD summit in October where it will announce guidelines and discuss environmental concerns and plans with representatives from other countries.

Despite the country’s top spot in the TCFD compliance records, recent reports from Greenpeace have identified Japan as one of the only countries still investing in new coal-fired power projects, reported on here. The report accuses Japanese coal projects of employing less strict emissions controls in other countries, effectively outsourcing coal emissions to places like Vietnam and Indonesia. Though Japanese companies may lead the world in climate-related risk disclosure, the Japanese coal industry continues to grow and pollute throughout Asia. Japan has been decreasing coal exports from countries like Australia, as the renewable sector has begun to show significant growth, though much of the energy demand is still being made up by domestic coal projects and Japanese coal investments abroad.

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