December 27, 2023
Japanese Bankers Association
JBA comments on Banks Sector Guidance by the Transition Plan Taskforce (TPT)
Questions

Comments

Application of TPT Disclosure Framework Concepts
Question 3.1

Agree

Do you think that the TPT Banks Guidance is useful in supporting effective
disclosure in line with the TPT Disclosure Framework?
・Strongly agree

・

Agree

・

Neither agree nor disagree

・Disagree・Strongly disagree

Question 3.3

Agree

The section A Strategic and Rounded Approach to Banks’ Transition Plans section(page 14) explains this Disclosure Framework concept for the Banking sector.
Please state whether you agree if this adequately explains the concept for thesector.
・Strongly agree

・Agree・

Neither agree nor disagree1Questions
・

Disagree・Strongly disagree

Question 3.5

CommentsDisagree

The section Impacts and dependencies on the natural environment section (page15) explains this TPT Disclosure Framework concept for the Banking sector.
Please state whether you agree if this is adequately explains the concept for thesector.
・Strongly agree

・

Agree

・

Neither agree nor disagree

・Disagree・Strongly disagree

Question 3.6

・

natural/environmental linkages, given that it is still in the early stages of

If “Disagree” or “Strongly disagree”:

developing an approach, we consider it to be premature for banks to integrate
broader environmental risks with climate-related transition planning. Also, weYou said that the TPT Banks Guidance was not useful in explaining the Impacts

believe there should be further explanation to incorporate these aspects intoand dependencies: the natural environment concept for the sector. Please explaintransition planning activities.

why you gave that answer.
Question 3.7

While there is no doubt about the importance of incorporating climate andDisagree

The section Impacts and dependencies: stakeholders, society, and the economy
section (page 17) explains this TPT Disclosure Framework concept for theBanking sector. Please state whether you agree if this is adequately explains theconcept for the sector.
2

Questions
・Strongly agree

・Agree・

Neither agree nor disagree・

Disagree・Strongly disagree

Question 3.8

Comments・

stakeholders in transition planning, climate change is not an issue that can be

If “Disagree” or “Strongly disagree”:

addressed by banks alone, but one that is common to all stakeholders andrequires joint efforts. It is possible that various views may arise due to

You said that the TPT Banks Guidance was not useful in explaining the Impacts

differences in the positions of each stakeholder. Therefore, it is not appropriate

and dependencies: stakeholders, society, and the economy concept for the sector.

to make the disclosure of engagement strategies mandatory for all

Please explain why you gave that answer.
Question 3.9

stakeholders, and it should be a voluntary disclosure requirement.
AgreeThe TPT Disclosure Framework requires an entity to disclose how it is responding
and contributing to the transition towards a low-GHG emissions, climate resilient
economy. Do you think that climate resilience is sufficiently and appropriately
addressed within the [Sector] Guidance?
・Strongly agree

・

Agree

・

Neither agree nor disagree

・Disagree・Strongly disagree

While there is no doubt that it is important to contemplate the impact on

Overarching Sector-Specific Questions
3

Questions
Question 4.1

Comments
・The guidance should clarify if and how investment banking activities are to betreated for transition planning purposes.

Do you think investment banking activities are sufficiently and appropriately
addressed within the TPT Banks guidance? Please explain why you gave thatanswer.
Question 4.5

・should be risk-based and evidence-based (i.e., data-driven). It should not be

Prudential supervisors are now actively considering the role of transition plans inused for the purpose of encouraging FIs to adhere to their net-zero

prudential supervision, with some having set expectations with regards to bothcommitments. When considering applying a prudential framework to FI’s

transition plans and transition planning. Do you think that the TPT Banks guidance

transition plans, prudential supervisors should ensure that such frameworks

sufficiently and appropriately helps firms in this sector to make disclosures which

will not hinder FIs from supporting the net-zero transitions of the real-economy

are aligned with what is expected of them, or is likely to be expected of them inthe future, by prudential supervisors? Please explain why you gave that answer.

The application of the prudential framework on capital requirements and buffercompanies.
・Careful consideration should be given to requirements that exceed the TCFD
recommendations and ISSB standards regarding what are required orrecommended items for prudential supervision, considering the cost and timerequired for implementation.

Sub-Element Feedback
Question 5.1

Agree

Do you agree with the selection of sub-elements for inclusion in the TPT Banks
Guidance?
・Strongly agree

・Agree・Neither agree nor disagree

・Disagree・Strongly disagree4Questions
Question 5.3

Comments
Somewhat useful

The following sub-elements were included within the TPT Banks Guidance. Pleaseassess the usefulness of the guidance provided for each of the sub-elements:
1.1 Strategic Ambition
・Very useful・Somewhat useful・Not at all useful・Don’t know

2.1 Business operations
・Very useful・Somewhat useful・Not at all useful・Don’t know

2.2 Products and services
・

Very useful・Somewhat useful・Not at all useful・Don’t know

2.3 Policies and conditions
・Very useful・Somewhat useful・Not at all useful・Don’t know

Somewhat usefulSomewhat usefulSomewhat useful5Questions
2.4 Financial Planning
・Very useful・Somewhat useful・Not at all useful・Don’t know

3.1 Engagement with value chain・Very useful・Somewhat useful・Not at all useful・Don’t know

3.3 Engagement with government, public sector and civil society
・Very useful・Somewhat useful・Not at all useful・Don’t know

4.1 Governance, engagement, business and operational metrics and targets
・Very useful・Somewhat useful・Not at all useful・Don’t know

4.2 Financial metrics and targets
・Very useful・Somewhat useful・Not at all usefulComments
Somewhat usefulSomewhat usefulSomewhat usefulSomewhat usefulSomewhat useful

6Questions
・Comments

Don’t know

4.3 GHG metrics and targets
・Very useful・Somewhat useful・Not at all useful・Don’t know

Somewhat useful

Question 5.4

1.1 Strategic Ambition

The following sub-elements were included within the TPT Banks Guidance. Please・The proposed guidance indicates that "an entity may set objectives andpriorities in relation to the various business lines and geographies used in theirselect the sub-element(s) for which you would like to provide feedback.

financial disclosures", and we understand that it is necessary to consider thedevelopment of a granular transition plan. It should be noted that if this・1.1 Strategic Ambition

・

2.1 Business operations

・

2.2 Products and services

・

2.3 Policies and conditions

cooperation and discussions with overseas branches will be necessary. In the・

2.4 Financial Planningcase of a global group, it may be difficult for the transition plans to meet all・

3.1 Engagement with value chain

regional expectations and requirements due to differences between each・

3.3 Engagement with government, public sector, and civil society

・

4.1 Governance, engagement, business and operational metrics and targets

・

4.2 Financial metrics and targets

・

4.3 GHG metrics and targets

requirement is implemented, the volume and quantity of transition plans will
inevitably increase, which may increase the burden of banks.
If transition plans by region are required, we believe that internationaloverseas location and the head office location. Therefore, it is reasonable totake an approach in which flexible consideration is given to overseas branches
in accordance with the guidelines of the country where they are located, whileobtaining guidance from the head office transition plan.
・We interpret "a systems approach which considers the expansive, economywide impact of the entity's activities and the flows between different sectors"

If you would like to provide feedback for specific sub-element(s), please provide

as a requirement for explaining "what kind of financial flows and spilloverdetail of any information that you think should be included in the TPT Bankstransmission channels are envisioned in the transition plan fromGuidance for this sub-element. In particular, we are interested to receive feedbackcomprehensive viewpoints," rather than merely examining the scenarios foreach sector separately. Since the development of this approach is still in the7Questions

Comments

about whether the guidance:

early stages, it should be noted that the disclosure of this content is difficult at• Is missing any useful content (including references to third-party guidance);

this point.

• Includes any guidance which is incorrect;•Is compatible with existing disclosure requirements (regulatory and/or3.1 Engagement with value chain
・It is reasonable to promote and support clients to transition throughengagement as well as to focus on counterparties vulnerable to transition andvoluntary)physical risk. It should be assumed that an orderly transition will not beimpeded and that banks will not indiscriminately divesting or withdrawing
financing.
3.3 Engagement with government, public sector, and civil society
・

There is no doubt that engagement with stakeholders is important, but it should
be noted that banks have limited influence and capacity. Depending on the typeof stakeholder, there may be cases where it is not cost-effective. Since it is not
appropriate in light of the original purpose to mandate disclosure ofengagement strategies based on all types of stakeholders, it is appropriate to
make it a voluntary disclosure.

4.3 GHG metrics and targets
・There is no doubt that reducing Scope 3, i.e. financed emissions, is importantfor banks, but Scope 3 may not consistently decline when financing transitionsin the hard-to-abate sector, as there may be a time lag between future reductions
by financing and temporary increases in financed emissions. Therefore, it
should be noted in this guidance that the financed emissions may not be
reduced in line with the transition plan, when achieving the transition of real
economy and bank’s balance sheet by supporting transition of the hard-to-abate
sector.

Other
Question 6.1

・Banks have an important role to play in providing finance to enable companies
to make the transition; therefore, the guidance could clearly state that the risk

Do you have any additional feedback on the TPT Banks Guidance?
8Questions

Comments
of divestment and the consequent risk of insufficient funds being available forreal economy transitions should not be created by setting ambitious targets andtransition plans.
・There are numerous links to external references in this guidance, and wesuggest to organise the hierarchy or logic of these references to follow inleveraging them for transition planning purposes.

・Many internationally operating banks are developing or have developed netzero transition plans on a global basis and at group-level to achieve the global
and group-level net-zero targets. Therefore, frameworks or guidance fortransition plans should be also globally consistent and interoperable. Following
UKTPT’s drafted guidance, MAS and HKMA have also set their supervisory
expectations through drafted guidance or letters. We expect UK TPT andstandard-setters to communicate well with each other to avoid fragmentation
among jurisdictions in transition planning frameworks.
(End)9