December 15, 2020
European Commission
1049 Brussel, Belgium

Japanese Bankers Association

JBA comments on the Draft Delegated Regulation on the EU Taxonomy focusing on climatemitigation and adaptation
Dear European Commission:
The Japanese Bankers Association 1 (JBA) commends the ongoing efforts of the European Commission onsustainable finance and welcomes the opportunity to comment on the Draft Delegated Regulation on the EU
Taxonomy, specifically focusing on climate mitigation and adaption (hereinafter "Draft Act") published onNovember 20.
Japan’s Prime Minister Yoshihide Suga recently announced the government’s commitment to a net zero world
by 2050. The financial sector in Japan, like in many other jurisdictions, plays an important role to finance theenergy transition, but also to manage the risks related to this transition. From the viewpoint of sustainability,
Japanese banks have been supporting our clients for their sustainable growth by working together to explore
solutions to medium- to long-term environmental and social issues in their businesses, as well as providing
support for the incubation and expansion of large-scale business opportunities in the future. That includes
continuous dialogue with our clients in carbon intensive sectors to explore technological solutions for overall
reductions in GHGs.
We believe a globally consistent ESG policy, regulatory and disclosure framework are key in this process.
Common understanding through definitions (e.g. taxonomy) is indeed important, but as we have previously
stated in our response to the EU consultation on the Renewed Sustainable Finance Strategy, we believetaxonomies need to be flexible enough to foster innovation and facilitate transition. If we imagine the carbon
neutral world we have committed to, we agree sustainable economic activities defined under the EU taxonomy
should have become the majority of the economy by 2050.
As stated in the TEG report published in June 2019, the JBA believes taxonomy should be positioned as aframework to facilitate transition to a net zero world. We agree with the need to establish the taxonomy withnumerical criteria/thresholds to avoid “green wash”, but we are concerned that using the taxonomy only to judge
compliance based on the current technology/output would limit the possibility of future development andinnovation. Using taxonomy only to judge the compliance against the stated criteria/thresholds could
disincentive the transition to low-carbon economy. It is our strong view that taxonomy should support not
only “pure green” activities/technologies but also the efforts aiming to “become green/greener”. Taxonomy
should take more gradual approach to support transition/innovation to become greener. This gradual approachshould be encouraged to be used in the context of applying taxonomy in areas of supervision, disclosure andproduct development.
A more flexible approach should be allowed, and this could contribute to achieving both EU goals of 55% cutby 2030 and carbon neutral by 2050.
Our key concern is also to consider how we utilize the taxonomy in the present world, 2020. We deem thetaxonomy quite useful to assist disclosure efforts as a tool to gauge and track the sustainable activities over time
towards 2050.
We hope that our comments will contribute to the discussions of the European Commission and the Sustainable
Finance Platform.
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The Japanese Bankers Association is the leading trade association for banks, bank holding companies and bankers associations in Japan. As ofDecember 15, 2020, the JBA has 116 Full Members (banks)、 3 Bank Holding Company Members (bank holding companies)、 72 AssociateMembers (banks & bank holding companies)、 58 Special Members (regionally-based bankers associations) and one Sub-Associate Member for a
total of 250 members.