Key Takeaways of the TCFD Summit 2022

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Introduction

Finance is gaining importance in powerfully promoting measures against climatechange. As a framework for disclosing information related to climate change, companiesand other organizations worldwide are increasingly required to disclose climate-related
financial information, which is the mission of the Task Force on Climate-related Financial
Disclosures (TCFD).
To achieve a virtuous cycle of economic growth and environmental protection,companies should be further encouraged to be committed to TCFD disclosure. It is
important for companies to improve the quality of disclosure to help investors makeappropriate investment decisions. Meanwhile it is also vital for investors to understandthe disclosures accurately.
At the fourth TCFD Summit in 2022, leaders from the industrial and financial sectors
discussed how to make greater use of TCFD recommendations while considering theneed to improve the quality of disclosures based on appropriate international common
rules and desired disclosure methods that help investors appropriately evaluate
transition and innovation initiatives that are important means for achieving carbonneutrality and promote financing in them.

２．

Achievements concerning TCFD for the past year

Since the TCFD Summit in October 2021, the number of organizations supporting
TCFD has increased by more than 1,000 to over 3,800 across the world. As the hostof the TCFD Summit, Japan has exercised great leadership in facilitating
discussions in this field, supported by over 1,000 organizations.

In Japan, TCFD disclosures have been effectively mandatory on the Prime Market
since April 2022 while there is a global movement to make TCFD-based disclosuresmandatory, such as in the United Kingdom and the EU. Based on TCFD, the IFRSFoundation created the International Sustainability Standards Board (ISSB) to makedisclosure standards in line with TCFD recommendations.

To further enhance disclosures, the TCFD conducted a public consultation forrevising its guidance on indicators, targets, and transition plans and the Japan TCFD
Consortium released the Green Investment Guidance 3.0.

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

Financial and industrial sectors
 Transitioning
fromvoluntary
recommendations
suchasTCFD
recommendations to mandatory disclosure standards is indispensable for thetransformation of the whole financial system toward carbon neutrality.
It is important to accelerate the transition using a wide range of technologies
and energy sources, to promote the creation of new innovations and toimplement them publicly.

To realize social change through GX, large amounts of investments are neededin various fields and creating an environment to mobilize funding is essential.

Japanese government
 Supports TCFD disclosures on a continuous basis and works to further expand
a transition finance roadmap to promote transitions and help non-continuous
innovations get appropriate funding.

４．
Major discussions at the Summit

Opinion Exchange Although ISSB does not create completely new standards from scratch, it tries
to integrate existing initiatives and utilize them. For the standards, TCFD isabsolutely important and serves as the foundation to create the standards atISSB.


Commitments and recommendations submitted to the Summit

The overall purpose of ISSB is to make organizations disclose information thathas high-cost performance for them and is useful for investors to makedecisions.

Panel Discussion 1
 It is necessary to encourage identifying and disclosing opportunities as well asrisks. However, if companies do not identify or disclose opportunities, they will
fail to attract attention from investors. This is quite important for a shift toward
decarbonization.
Standards for climate-related information disclosure will continue to change andit is of the utmost importance to keep contributing to global discussions.
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 To expand the autonomous provision of funds in the private sector for transition
finance, it is important to improve the reliability of transition pathways envisionedby companies.
Financial institutions are expected to evaluate the initiatives and strategies ofcompanies from medium- and long-term perspectives, while companies arerequired to strengthen responses to information disclosure so that they canwithstand engagement.

In addition to the necessity for systems to disclose and share information related
to new technologies and relevant development situations, government financial
support and involvement is also important.

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