JICPA Sustainability Education
Special Committee Report

Sustainability Capacity-Building
Policy and Actions

April, 2023

Table of Contents

Table of Contents

Page
Forward ...............................................................................................................................2
List of Members of Sustainability Education Special Committee andSyllabus Subcommittee .......................................................................................................3
I Sustainability Capacity-Building Policy .............................................................................5
1. Need to enhance knowledge and understanding ofsustainability for professional accountants ...............................................................5
2. Objectives of and policies on professional accountants’capacity building in sustainability ..............................................................................8
II Skills and Competencies in Sustainability Required of Professional Accountants ..........10
1. Skills and competencies required of all professional accountants ...........................10
2. Skills and competencies required of professional accountants
who take up leading roles in assurance engagements .............................................12
III Syllabus on Sustainability Education ..............................................................................18
1. Policies on development and implementation of syllabus ........................................18
2. Structure of syllabus .................................................................................................20
3. Further steps .............................................................................................................22
IV Future Actions .................................................................................................................23
1. Actions corresponding to each capacity-building phase forprofessional accountants ..........................................................................................23
2. Roadmap ..................................................................................................................26
3. Sustainability Capacity Building Council ...................................................................27
Appendix 1: JICPA Draft Syllabus for Sustainability Education (Outline) ...........................29
Appendix 2: JICPA Draft Syllabus for Sustainability Education ..........................................30-1-

Forward

ForwardRecently, sustainability has become an important topic in corporate management and investment
decision-making by investors, leading to increased demand for sustainability disclosure. As aresult, there has been a growing need for professional accountants to develop their skills andcompetencies in sustainability. Based on the awareness above, the Japanese Institute of Certified
Public Accountants (JICPA) has established the Sustainability Education Study Project Team tocomprehensively discuss education for professional accountants to develop skills andcompetencies in sustainability. In June 2022, based on such discussions, the team formulated andpublished Discussion Paper—Integrating Sustainability into Professional Accountants’Competency.
Since then, we have seen further progress in each area of regulations, standards, and practices
related to sustainability disclosure. In December 2022, the Financial Services Agency released areport by the Working Group on Corporate Disclosure of the Financial System Council,
highlighting the importance of society-wide efforts to develop talent supporting sustainability
disclosure and assurance engagements. The report also notes the need to secure practitioners who
perform assurance engagements.
These situations suggest that the need for strengthening sustainability education for professional
accountants has been growing, as presented in the aforementioned Discussion Paper publishedby the project team. Responding to the growing need, the JICPA has set up the Sustainability
Education Special Committee to discuss measures for steadfastly implementing capacity-building
initiatives for professional accountants in sustainability. Through a series of such discussions, theSustainability Education Special Committee formulated this report, which highlights: I. Basic
Policies on Capacity Building Related to Sustainability, II. Skills and Competencies in
Sustainability Required of Professional Accountants, III. Syllabus on Sustainability Education,and IV. Future Actions, which includes classification of measures into each phase of capacity
building, presentation of a clear roadmap, and establishment of the Sustainability Capacity
Building Council.
The JICPA will implement the basic policies and actions mentioned in this report, as well as
expeditiously and effectively promote professional accountants’ capacity building onsustainability in collaboration with stakeholder organizations and other bodies. In doing so, wewill contribute to sustainability-related initiatives by businesses and investors in the capital
market.

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List of Members

List of Members of Sustainability Education Special Committee and Syllabus
Subcommittee(Sustainability Education Special Committee)
Takako Fujimoto

Deputy President (Corporate Disclosure, Audit andAssurance, etc.), JICPA

MemberGeorge Iguchi

Executive officer, Deputy head of Investment Division,
Chief Corporate Governance Officer, Nissay AssetManagement Corporation
Chair of Sustainability Reporting Committee, The
Securities Analysts Association of Japan

MemberEriko Otokozawa

Executive Board Member (Corporate Accounting andDisclosure), JICPA

MemberTetsuo Kitagawa

Emeritus Professor at Aoyama Gakuin University
Professor at Tokyo Metropolitan University

MemberKiyotaka Kinugawa

Partner, Sustainability Disclosure Office, Ernst &Young ShinNihon LLC

MemberNaoaki Kobayashi

Executive Board Member (Auditing, Assurance, IT,
Research and Consultation)

MemberKuniyoshi Suzuki

Director, Sustainability Advisory,
PricewaterhouseCoopers Aarata LLC

MemberShinichi Takenaka

Climate Change/ESG Assurance Leader & Global
Inbound Group (GIG) Leader, Deloitte Touche
Tohmatsu LLC

Member

Sachiko Tsujino

Principal, Sustainable Value Head Office, KPMG AZSA
LLCMemberMitsuo Tsuruta

Deputy President (Continuing Professional
Development, Network Promotion & Support, etc.),
JICPA

MemberMasahiko Tezuka

CEO, Japan Foundation for Accounting Education andLearning (JFAEL)

MemberYoshihiko Hamada

Partner, Corporate Operations Management Office,Gyosei & Co.

MemberTakeshi Mizuguchi

President, Takasaki City University of Economics

MemberYoichi Mori

Technical Director, JICPA

Chair

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List of Members(Syllabus Subcommittee)
Chair

Yoichi Mori

Technical Director, JICPA

MemberKiyotaka Kinugawa

Partner, Sustainability Disclosure Office, Ernst &Young ShinNihon LLC

Member

Sachiko Tsujino

Principal, Sustainable Value Head Office, KPMG
AZSA LLC

MemberRyosuke Nakamura

Director, Sustainability Advisory
PricewaterhouseCoopers Aarata LLC

MemberYoshihiko Hamada

Partner, Corporate Operations Management Office,Gyosei & Co.

MemberMizuko Mase

Director, ESG/Integrated Reporting Advisory, Risk
Advisory Business Division, Deloitte Touche
Tohmatsu LLC*As of April 14, 2023
*The members are listed in Japanese alphabetical order.

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I Sustainability Capacity Building Policy

I Sustainability Capacity Building Policy
1. Need to enhance knowledge and understanding of sustainability for professional
accountants
In the face of environmental issues such as climate change, transitioning to a sustainableeconomic and social model has become a key challenge. As the impact of sustainability
challenges on corporate value is increasingly visible, the disclosure of sustainability
information has seen marked progress, along with accelerated efforts to implement new
regulations and develop international standards on sustainability disclosure, primarily by theInternational Financial Reporting Standards (IFRS) Foundation. In this context, professional
accountants are increasingly required to develop their professional knowledge andunderstanding of sustainability.
Based on the awareness that the need for improving professional accountants’ skills andcompetencies in sustainability has been increasing, the JICPA comprehensively discussed
ways for professional accountants to develop skills and competencies in sustainability at the
Sustainability Education Study Project Team. Consequently, the Project Team published
Discussion Paper Integrating Sustainability into Professional Accountants’ Competency(hereinafter referred to as “JICPA Sustainability Education PT Report”) in June 2022. In thereport, the team has identified the following four reasons why professional accountants needto develop knowledge and understanding of sustainability:
1) Professional accountants need to grasp things from a holistic view because they act in
the public interest.
2) Sustainability is important in financial statement audits.
3) Sustainability is positioned as a common language for dialogue between management
and investors.
4) Assurance engagements covering sustainability disclosure are now in greater demand
from society.
Affirming the significance of these reasons, the Sustainability Education Special Committee
discussed and revised the skills and competencies in sustainability required of professional
accountants as outlined below.
<Reasons why professional accountants need to strengthen their knowledge
and understanding of sustainability>(1) The need for professional accountants to have a holistic view as they act in the
public interest
Professional accountants are responsible for audits, which are acts of high public nature;
therefore, they need knowledge and understanding that help grasp things holistically.

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I Sustainability Capacity Building Policy

Professional accountants need to be aware of society’s demand for sustainability andcontribute to creating a sustainable society, a common global challenge.
(2) Progress in sustainability disclosure
The international and domestic development of sustainability-related regulations andstandards for capital markets has progressed in parallel. Professional accountants, who
support high-quality disclosure, need to deepen their knowledge and understanding ofsustainability-related regulations and standards. In addition, non-listed companies are also
being required to collect and manage sustainability-related information properly because
companies disclosing sustainability information need to implement sustainability
initiatives and gather such information throughout their value chains, including the nonlisted companies. It implies that professional accountants who serve non-listed companies
also need knowledge and understanding of sustainability disclosure.
(3) Significance of considering sustainability-related risks and opportunities infinancial statement audits
Understanding the financial impact of climate change and other environmental issues isessential in financial statement audits. Failure to adequately consider the medium- to longterm sustainability-related risks could ultimately bring risks to financial statement audits.
Further, sustainability-related risks and opportunities are closely connected with Key
Audit Matters (KAM). Issues associated with the environment and society are also
relevant to rules and regulations in jurisdictions where companies operate businesses, andthus, could affect their business continuity and resilience.
(4) Sustainability as a common language for dialogue with senior management andinvestors
It has become increasingly difficult to view the overall picture of corporate activities withaccounting and financial information alone. Sustainability information and otherinformation outside of financial statements have become more important. Mastering thecommon language of sustainability information provides a baseline for proper dialogue
with companies and investors in capital markets.
In financial statement audits, auditors should deeply discuss the company’s sustainability
with management. In circumstances where sustainability issues are high on the
management agenda, it is critical that professional accountants understand sustainability
in the context of management strategies and business risks during financial statement
audits.
Further, sustainability has become more important in corporate management, strategy-6-

I Sustainability Capacity Building Policy

planning, risk management, and corporate governance. Knowledge and understanding ofsustainability have thus become essentials for any professional accountant, including
professional accountants serving as independent directors, professional accountants inbusiness, and other professional accountants supporting businesses.
(5) Public demand for assurance on sustainability disclosures
In circumstances where long-term corporate value reflecting sustainability has become
more important and regulations and standards on sustainability disclosure have advanced,
ensuring the reliability of sustainability information has become a key issue. As
discussions on future models of assurance engagements have progressed globally, it isimperative that we contribute to building an environment where we can effectively carryout assurance on sustainability information. With this in mind, we should strive to develop
assurance practitioners.
Also, we now see a greater demand for assurance providers to ensure sufficient expertise,skills, and competencies in sustainability as well as in assurance engagements. 1
Professional accountants, as the experts in auditing, should upgrade their expertisenecessary for assurance engagements of sustainability information based on their current
expertise for providing high-quality assurance to sustainability information.
Sustainability-related information was traditionally distinguished from financial information
and was considered as non-financial information. However, sustainability-related
information is increasingly recognized as the information that should be disclosed in
combination with financial information because of its growing impact on financials.
Professional accountants’ contribution to ensuring the reliability of sustainability-related
information is in line with the needs of the times and will ultimately lead them to fulfill their
mission.
We expect that professional accountants will help achieve a smooth transition to a sustainableeconomy and sustainable value creation by obtaining extensive knowledge andunderstanding of sustainability, and along with their existing skills and competencies inaccounting, finance, auditing, and corporate management, contributing to high-quality
sustainability disclosure that meets the needs of capital markets.

1 “Report on International Work to Develop a Global Assurance Framework for Sustainability-related Corporate

Reporting,” published by IOSCO in March 2023, refers to, in “5.2 Consideration for assurance providers,” theneed for strengthening capacity building for assurance providers (including appropriate certification,
qualification, and credentials). Also, in the EU, the Corporate Sustainability Reporting Directive (CSRD)
requires assurance providers on sustainability information to prove they have professional knowledge andunderstanding of sustainability through sustainability-related examinations and to undergo practical training
on sustainability (for eight months) (DIRECTIVE (EU) 2022/2464 Article 8).

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I Sustainability Capacity Building Policy

2. Objectives of and policies on professional accountants’ capacity building insustainability
Recognizing the rationale for professional accountants to upgrade their skills andcompetencies in sustainability, the JICPA has defined the objectives of and basic policies on
their capacity building in sustainability as follows:(1) Objectives of capacity building in sustainability
The objectives of professional accountants’ capacity building in sustainability are to help
them contribute to achieving high-quality disclosure, realizing resource allocation incapital markets from a long-term perspective, and ultimately developing a sustainable
society and economy. More concretely, professional accountants are expected to fulfill
these objectives through constructive dialogue and coordination with companies andinvestors and by deepening their knowledge and understanding of various sustainabilityrelated issues, the interrelationship between sustainability and corporate management aswell as corporate value, and disclosure and how to ensure its reliability.
(2) JICPA policies on capacity building in sustainability(i) JICPA looks ahead to the future mega trend and support autonomous learningof professional accountants
Given the rapidly evolving needs related to sustainability, professional accountants needto address sustainability issues proactively, and to be able to anticipate changes to create
new value. The JICPA will grasp the overall picture and changing trends of sustainability
to show its members areas for learning and support autonomous learning.
(ii) JICPA supports their having fundamental sustainability knowledge andunderstanding and acquiring diverse expertise simultaneously as professional
experts
Given the importance of sustainability in corporate management, corporate value, anddisclosure, all our members of professional accountants need to have fundamental
knowledge and understanding of sustainability.
On the other hand, areas requiring a more advanced level of expertise, including
assurance engagements for sustainability reporting, need an environment where ourmembers can obtain the necessary skills and competencies in their fields and positions
and develop diverse sustainability expertise. We will design sustainability education sothat professional accountants can acquire expertise that matches their circumstances andinterests while sharing their fundamental knowledge and understanding across theindustry.

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I Sustainability Capacity Building Policy(iii) JICPA coordinates and collaborates with initiatives related to sustainability
education in Japan and overseas
We are aware of the current situation where globally consistent development is required
for sustainability-related disclosure and ensuring its reliability, as well as thecharacteristics of audit firms and accounting firms as members of global networks.
Given this situation, we will collaborate with international initiatives on a fundamental
approach to sustainability education and its contents.
In Japan, we will also collaborate with audit firms that provide sustainability education
to professional accountants and with companies, investors and other entities that provide
sustainability education to capital market participants.

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II Skills and Competencies in Sustainability Required of Professional Accountants

II Skills and Competencies in Sustainability Required of Professional Accountants
The JICPA Sustainability Education PT Report has concluded that the importance ofknowledge and understanding of sustainability has been growing for all professional
accountants, irrespective of their positions, such as external auditors, professional
accountants serving as independent directors, and professional accountants in business.
Meanwhile, the report also notes that areas in need of a more advanced level of expertise,including assurance engagements for sustainability reporting, require professional
accountants to obtain the necessary skills and competencies in their fields and positions.
As Chapter I of this report discussed, fostering assurance practitioners for sustainability
information is urgent and imperative.
In this section, based on the awareness above, we have sorted out these skills andcompetencies by dividing them into the following two types: those required of all
professional accountants and those required of professional accountants who take up leadingroles in assurance engagements.
1. Skills and competencies required of all professional accountants
Based on the recognition of the need for enhancing skills and competencies in sustainability
for professional accountants, the JICPA Sustainability Education PT Report hasconceptualized sustainability-related skills and competencies that all professional
accountants should have as follows:(i) To obtain holistic understanding of sustainability-related issues and the social andeconomic consequences based on the comprehensive knowledge base
As professional experts acting in the public interest, professional accountants should havecomprehensive knowledge and understanding of sustainability issues arising from global
environmental and social challenges. It is also essential for them to be able to grasp the
big picture of how various sustainability issues may affect modern society and theeconomy.
(ii) To understand the basic framework of the interrelationship between sustainability
and business as well as corporate value
It is essential for professional accountants to delve deeper into the big picture ofsustainability to understand the basic framework of how sustainability issues can affect acompany’s external environment, risks, and opportunities. In addition, knowing bestpractices for corporate management policies, strategies, and governance responses tosustainability contributes to understanding the interrelationship between sustainability,- 10 -II Skills and Competencies in Sustainability Required of Professional Accountants

corporate management, and corporate value. Also, understanding the interests of various
stakeholders in a company about its approach to sustainability (e.g., expectations andconcerns) can help assess the impact of sustainability-related risks and opportunities on
corporate value. Such stakeholders include shareholders, investors, consumers, employees,
local communities, and governments.
(iii) To engage in intensive and constructive dialogue with senior management anddirectors regarding major sustainability trends and their impact on sectors andcompanies
As sustainability has become a high level business issue, professional accountants shouldbe able to engage in intensive and constructive dialogue with senior management and thosecharged with governance regarding the impact (i.e., risks and opportunities) of
sustainability on business and corporate value. Further, it is also essential that professional
accountants better understand the expectations and concerns that users of information have,such as those regarding sustainability disclosure and sustainability-related issues in audit,
through exchanging views with shareholders and investors. Professional accountants’
understanding of global consensus on sustainability issues such as climate change andbiodiversity, regulations and policies, key trends in various private initiatives, and theirimplications for sectors and companies will help make the dialogue meaningful for bothparties.
(iv) To have the necessary knowledge and understanding of requirements forsustainability-related disclosure (e.g., regulations and standards)
Given the increasing importance of sustainability disclosure, professional accountants
should know and understand the status of requirements in regulations and standards onsustainability disclosure. It is important for them to understand not only sustainability
disclosure standards but also requirements for narrative information (management
commentary) and its relevance to financial reporting standards. They also need tounderstand the whole picture of disclosure information, including the interrelationshipbetween global and domestic standards, widely adopted standards and guidelines
developed by private sector initiatives, and company-specific indicators.
(v) To understand the purpose and basic framework of assurance engagements
Considering the increasing demand to ensure the reliability of sustainability information,
it is critical to understand the implications of assurance on information other than financial
statements, including sustainability information, in ensuring the reliability of suchinformation, including its limitations. In addition, professional accountants need to know

- 11 -II Skills and Competencies in Sustainability Required of Professional Accountants

and understand the basic framework of assurance engagements in the International
Standard for Assurance Engagement (ISAE) established by the International Auditing andAssurance Standards Board (IAASB). Examples of practices in sustainability assurance
engagements can help us understand practice trends.
2. Skills and competencies required of professional accountants who take up leadingroles in assurance engagements
Given that the need for developing personnel who perform assurance engagements is
growing rapidly, the Special Committee reviewed the skills and competencies required ofprofessional accountants who will take up leading roles in assurance engagements(hereinafter referred to as “key personnel in assurance engagements,” or “key personnel”).
In the previous chapter, we described that an assurance engagement leader is responsible forthe quality of an assurance engagement by leading an assurance team of diverse professional
experts and by bringing together these members’ professional expertise. This report assumes,
however, that key personnel in assurance engagements represent those who serve asassurance engagement leader or those who take up the role of leading assurance teams onsite.
In this study, we put together a list of major requirements that assurance providers(organizations/teams) should fulfill in order to meet the needs of capital markets in theassurance of sustainability information, and then reviewed and identified the roles that should
be assumed by and skills and competencies required of such key personnel who leadassurance engagements.
(1) Requirements that should be fulfilled by assurance providers (firms/teams) on
sustainability information
We have identified the factors that are particularly important for assurance providers toaddress the need to ensure the reliability of sustainability disclosure information in anassurance engagement as follows:(i) Build trust in assurance engagements and assurance providers
The objective of assurance on sustainability information is to ensure the reliability ofcompanies’ disclosure information. Trust in assurance engagements and assurance
providers is critical to achieving this objective. To earn trust in assurance from capital
market participants and broader society, assurance providers meet the fundamental
needs of the market participants and society and ensure the quality of the assurance
engagements. Moreover, it is essential to earn strong trust from market participants thatassurance providers have a high level of professional ethics, including independence,- 12 -II Skills and Competencies in Sustainability Required of Professional Accountants

and have sufficient skills and competencies in sustainability and assurance
engagements.2(ii) Assurance engagement team with diverse expertise
Sustainability disclosure covers environmental information, such as climate change andbiodiversity, and social information, such as human capital and human rights.
Companies measure, gather, and calculate data based on scientific knowledge andanalyze and evaluate them to disclose information on these topics. Firms that provide
assurance engagements, thus, need to have diverse expertise in sustainability-related
topics subject to assurance, in addition to financial reporting, corporate management,
governance, and assurance engagements. For instance, assuring climate-related
information requires expertise in science and public policies related to climate change,
whereas assuring human capital-related information involves expertise in developing
and managing human capital, including Diversity, Equity, and Inclusion (DEI).
When providing assurance to disclosure information, an assurance team is expected, as
a whole, to secure a level of expertise commensurate with the scope and complexity of
information subject to assurance.
An assurance engagement leader has to ensure high-quality assurance by leading anassurance team with diverse expertise and bringing together their professional
knowledge and understanding.3(iii) Alignment with financial statement audit (toward providing assurance in
combination with auditing)
The IFRS Foundation, the international financial reporting standards setter, hasestablished the International Sustainability Standards Board (ISSB) to develop
sustainability disclosure standards that strongly emphasize connectivity with financial
statements. Under the standards, companies are required to disclose the financial impact
of climate-related risks and opportunities and the amounts of assets vulnerable toclimate risks in the financial statements.
This connectivity between financial statements and sustainability disclosure isemphasized because sustainability information is expected to assist investors and otherusers in their decision-making when using sustainability information and financial

The report from the Working Group on Corporate Disclosure of the Financial System Council (hereinafterreferred to as ‘DWG report’) (published on December 27, 2022) points out that requirements on assurance
providers “are considered to include independence, a high level of expertise, a quality control system in place,and supervision by regulatory authorities.”
3
The DWG report suggests: “Given that sustainability themes are wide-ranging and that sustainability is an area
requiring diverse expertise, it is also considered important to secure a wide range of assurance providers.”2- 13 -II Skills and Competencies in Sustainability Required of Professional Accountants

information integrally. In addition to ensuring connectivity in corporate disclosure, we
also see a growing need for assurance providers and auditors to strengthen thecollaboration between assurance engagements and financial statement audits; forexample, some institutional investors have expressed hope for financial statement audits
to fully consider climate and related risks.
As sustainability information is to be disclosed in an Annual Securities Report (i.e.,Yuho), an assurance engagement is expected to cover the sustainability information, likean audit covering the financial statements in the report. Collaboration between an audit
team and an assurance team, and execution of their duties with a strong focus onconsistency and connectivity between financial information and sustainability
information is necessary to build the trust of the capital markets in corporate disclosure.4
Figure 1 illustrates how a firm can provide assurance to disclosure information whilesatisfying the above requirements when it provides both audit and assurance, to meetthe needs of capital markets.
Figure 1: Effective assurance engagements structure that meets the needs ofcapital markets

Illustration was drawn based on Figure 17 in the Sustainability Education Special Committee on Corporate
Disclosure and Corporate Governance Report, “Key Issues towards Useful and Reliable Corporate
Disclosure—Realizing a Sustainable Value Creation Cycle through Interaction between Disclosure andGovernance,”, JICPA 2019(2) Key personnel in assurance engagements
We have reviewed and identified the roles required of key personnel in assurance
engagements and the knowledge and understanding necessary to fulfill the role in light of

4 The DWG report suggests: “Given that the ISSB develops the sustainability disclosure standards based on thesustainability information’s connectivity with financial information, professional accountants/audit firms
auditing financial statements can also serve as assurance providers.”- 14 -II Skills and Competencies in Sustainability Required of Professional Accountants

requirements for a firm providing assurance engagements. More concretely, the firm needs
to satisfy the requirements to ensure its assurance engagements’ reliability, build anassurance team with diverse expertise, and integrate with financial statement audits.
Roles required of key personnel in assurance engagements
Key personnel in assurance engagements should lead the entire process of assurance
engagements, plan and implement assurance procedures that effectively manage risks
associated with the assurance of sustainability information, and form an opinion for thatassurance engagement.
•

Evaluating engagement risk associated with an assurance of sustainability
information•

Developing an implementation plan on an assurance engagement (timeline andprocedures)•

Communicating with directors and audit committee members•

Communicating with an audit team•Evaluating results of works performed•

Forming an opinion (conclusion) for an assurance engagement

Skills and competencies required of key personnel in assurance
engagements
In fulfilling the above role, besides the comprehensive knowledge and understanding of
the underlying subject matter of sustainability assurance engagements, the key personnel
are required to have the following knowledge and understanding:•Comprehensive knowledge and understanding of sustainability•

Understanding of corporate management and corporate governance•

Understanding of companies’ material sustainability-related risks and opportunities•

Understanding of disclosure regulations and standards•

Understanding of disclosure processes and internal controls•

Understanding of interrelationship between financial reporting and financial
statement audit•

Advanced and professional knowledge and expertise on assurance engagements

This study has identified the elements of knowledge and understanding required of key
personnel in assurance engagements in more detail and specifics (Figure 2). For instance,
we have determined that in the field of corporate management and corporate governance,
key personnel in assurance engagements should have comprehensive knowledge andunderstanding of overall corporate management, including management strategy, business- 15 -II Skills and Competencies in Sustainability Required of Professional Accountants

model, risk management; corporate finance; and corporate governance. In addition, theyshould have the knowledge and understanding of an approach to integrating sustainability
into corporate management and governance, sustainability-related risk management
process, relevant internal control, environmental management system, and sustainablefinance. Of these elements, while the former part—knowledge and understanding ofcorporate management and governance—represents imperatives for the professional
accountants who audit financial statements, the latter part—an approach to integrating
sustainability into corporate management and governance—represents the expertise thatprofessional accountants should newly strengthen in providing assurance engagements.
Figure 2: Expertise required of key personnel in assurance engagements and elements
constituting such expertise

In this study, to realize effective and efficient capacity building in sustainability for
professional accountants, we have concluded that we should develop a syllabus byclassifying the elements of knowledge and understanding they need to provide assurance
engagements on sustainability information into what they already have and what they should- 16 -II Skills and Competencies in Sustainability Required of Professional Accountants

newly strengthen or obtain and then focusing on the expertise they should newly strengthen(Figure 3).
Figure 3: Expertise required of key personnel in assurance engagements and syllabus- 17 -

III Syllabus on Sustainability Education

III Syllabus on Sustainability Education
To achieve the objectives of sustainability education, the Project Team has determined that it isappropriate to develop a syllabus on sustainability education for professional accountants. As
discussed in the previous chapter, it is important that the syllabus is designed with a particularfocus on the new elements of expertise professional accountants should strengthen among all
the skills and competencies required of them.
1. Policies on development and implementation of syllabus
Based on the results of study by the Special Committee, we have set the objectives ofdeveloping the syllabus and the policies on its development and implementation as follows:(1) Title
Syllabus on Sustainability Education for Professional Accountants(2) Objectives
Presenting an entire picture of the knowledge and understanding that should be provided
through education programs, which are designed to cover the sustainability-related skills
and competencies required of professional accountants, as well as specific guidelines fordelivering lectures on the individual themes and subjects constituting the programs.
(3) How it works
For the providers of education programs, the syllabus serves as guidelines on the planningand implementation of the training programs. For professional accountants, who are thelearners of the programs, the syllabus serves as a “compass” that helps grasp the entire
picture and details of themes they should learn about sustainability and study based onplans developed on their own.
(4) Structure of levels and the audience
The syllabus consists broadly of the following two layers: the Basic Level and theAdvanced Level.
Basic Level
Programs in this section are designed to help professional accountants obtain the basic
knowledge and understanding of sustainability irrespective of their positions, such asexternal auditors, professional accountants serving as independent directors, andprofessional accountants in business.

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III Syllabus on Sustainability Education

Advanced Level
As illustrated in Figure 4, to expeditiously meet the assurance needs in capital markets,
this section focuses on developing the capabilities of professional accountants who takeup leading roles in sustainability assurance. The Advanced Section of the syllabus consists
primarily of the programs designed to develop these capabilities. We expect the audience(targets) of the programs to expand in a phased manner in line with the growing needs forassurance.
The programs in this section will also be designed to be useful to professional accountants
who are not involved in assurance engagements but need to obtain a higher level ofknowledge and understanding of sustainability.
Figure 4: Positioning of the Basic Level and the Advanced Level in Syllabus for
Capacity Building on Sustainability(5) Updates
Given the rapidly evolving nature of the areas of sustainability, the syllabus will be updated
each fiscal year to ensure that it meets the needs of the times.
(6) Alignment with various training programs
Sustainability education based on the syllabus will be offered in various forms, including
in-house training programs within audit firms, courses provided by the Japan Foundation
for Accounting Education and Learning (JFAEL), and those offered by the JICPA. Thisapproach will allow the industry as a whole to offer, in a consistent manner, education
programs that help professional accountants obtain necessary knowledge and- 19 -

III Syllabus on Sustainability Education

understanding of sustainability, while allowing each entity the flexibility to develop its
own courses.
(7) Alignment with international initiatives
The syllabus will also serve as a starting point for international collaboration onsustainability education. The syllabus will be available in English and Japanese to ensure
consistency with the international education standards of the International Federation of
Accountants (IFAC) and syllabi of other professional accountancy organizations (PAOs)(Figure 5).
Figure 5: Image of Developing Sustainability Education through Syllabus
Development

2. Structure of syllabus
The syllabus on sustainability education consists of the following themes (Figure 6):。
(1) Introduction to Sustainability(2) Sustainability, and Corporate Management and Governance(3) Disclosure(4) Assurance Engagements- 20 -

III Syllabus on Sustainability Education

Figure 6: Draft Syllabus for Sustainability Education (Outline) *For descriptions of the draft syllabus, see Appendix.
Basic Level
Advanced Level
a1: Sustainability overview and roles expected ofA．Introduction toprofessional accountants
Sustainability
b1-1: Integration of sustainability issues into
B1-1: Integrating sustainability issues into governance andB．Sustainability, andgovernance,
strategyandrisk
management
management strategy
Corporate Management andB1-2: Risk management and internal control related toGovernancesustainability
B2-1: Sustainable financec1-1: Sustainability disclosure and integrated
C1-1: Sustainability disclosure and integrated reporting
C．Disclosure
reporting (overview)(advanced)
c2-1: Climate change (overview)
C2-1: Climate change (advanced)
c2-2: Human capital (overview)
C2-2: Biodiversity (advanced)
c2-3: Other sustainability themes (overview)
C2-3: Human capital (advanced)
C2-4: Human rights (advanced)
C2-5: Other sustainability themes (advanced)
c3-1: Key topics by industry
d1-1: Ensuring the reliability of sustainable
D1-1 to 1-10 Individual issues
D．Assurance Engagements
information and assurance engagements (overview) Code of ethics and independence, Quality control, Limited
and reasonable assurance, Materiality, Engagement
acceptance and suitable criteria, Scope of assurance
engagements, Planning (risk assessment), Composition ofassurance team, Competency in subject matters,
Sufficiency and appropriateness of evidence, Assurance
opinion and assurance reporting, Topics and subject mattersby theme (e.g., climate change) and their assurance
engagement risk and procedures- 21 -

III Syllabus on Sustainability Education

3. Further Steps
In fiscal 2023, the Sustainability Capacity Building Council (see IV 3. of this report), planned
to be newly established, will take the lead in finalizing the JICPA Sustainability Education
Syllabus and will publish its first edition. Regarding the draft syllabus (see Appendix), which
was reviewed in more detail this time, the Council will take the following steps:•

Outreach to the major providers of training programs (audit firms, the JFAEL) andothers about the contents of the draft JICPA Sustainability Education Syllabus and theways to reflect the contents in training programs, and then receive feedback fromthese providers.

•Develop the assurance engagements section of the syllabus in line with the exposure
draft on “International Standard on Sustainability Assurance 5000: ISSA5000”(scheduled to be published in September 2023).

- 22 -

IV Future Actions

IV Future Actions
1. Actions corresponding to each capacity-building phase for professional
accountants
In professional accountancy, capacity building for CPAs is designed to be delivered througha series of capacity-building phases, from education before the CPA examination, theprofessional accountancy education program, and the final CPA assessment to the Continuing
Professional Development (CPD) training programs.5 Importantly, the education aimed at
improving sustainability skills and competencies of professional accountants is also provided
in phases that correspond to the nature and objectives of each existing capacity-building
phase.
Given the growing importance of sustainability information and the intensifying
requirements for its disclosure, we should prioritize sustainability education to professional
accountants engaged in financial statement audits. In parallel, we should develop key
personnel in assurance engagements because the demand for ensuring the reliability ofsustainability information is likely to increase shortly.
As such, our capacity building on sustainability for professional accountants should focus on
the CPD phase, after registration as a CPA, for at least some time now. Specifically, toimprove their sustainability literacy, we will prepare and upgrade the training programs listed
in the Basic Level of the syllabus in the CPD phase in collaboration with the audit firms andother training organizations. Further, to foster assurance practitioners, we will develop anddisseminate the programs based on the Advanced Level of the syllabus while closely
watching the growing public demand for assurance engagements, so that we can foster thepractitioners required at the appropriate time and scale (Figure 7).
Moreover, in the future, it is also important that we ensure newly registered professional
accountants have the basic knowledge and understanding of sustainability and assurance
engagements. The professional accountancy education programs and other training delivered
before the registration should include basic knowledge and understanding (listed in the Basic
Level).

5

The Integrated Capacity Building Special Committee set up separately within the JICPA has discussed the matter andwill collaborate with initiatives by the Sustainability Education Study Special Committee.

- 23 -

IV Future Actions

Figure 7: Initiatives in each capacity-building phase for professional accountants(1) Actions for capacity building after CPA registration (CPD phase)
For professional accountants to fulfill their missions and work responsibilities andimprove the quality of audit engagements or other services, the JICPA requires its members
to take the CPD training programs and undertake minimum credits 6 every year. The
members earn credits by attending the training programs, independent studying, writing
papers, and delivering lectures.
The JICPA offers a variety of training programs for its members. In 2022, for instance, the
JICPA held seminars under a broad range of themes relating to sustainability and assurance
engagements.
Seminars on sustainability and assurance engagements held by the JICPA in 2022
March

JICPA Webinar “Climate-related disclosure and its credibility”

June

JICPA Webinar “ISSB Exposure Draft Standards”

September

JICPA Webinar “Foundation of Assurance Engagement”

October

JICPA Sustainability Seminar “Human Capital Disclosure Overview
of domestic and international discussions, Outlook for the way ofcorporate disclosure”

October

ISSB Seminar “The Vision for the Future of Sustainability Disclosure”

Audit firms have also strengthened efforts to provide learning opportunities to theirpartners and employees while accumulating knowledge and understanding ofsustainability. In particular, large audit firms have worked to develop and hold training
6

Members must accumulate at least 120 credits within the past three fiscal years and earn 20 or more credits
in the current fiscal year.

- 24 -

IV Future Actions

programs on sustainability. Training programs are becoming increasingly diverse, with therange of programs encompassing not only overviews of integrated reporting andsustainability but also those specializing in topics such as climate change and humancapital. The JICPA Sustainability Education PT Report published in June 2022 presented
a preliminary draft syllabus on sustainability education. In response to the draft, someaudit firms have launched efforts to rearrange their training programs.
The Special Committee, through a series of discussions, has formulated a draft syllabus
on sustainability education. The JICPA has worked to enhance its sustainability-related
training programs and seminars based on the syllabus. The JICPA will clearly state theirlinkages with the syllabus (i.e., name of “Subject” and the Basic Level or the Advanced
Level) for future sustainability-related training programs and seminars. To develop
effective training programs that balance practical content with the presentation of concepts,
systems, and other frameworks relating to sustainability, we will design them to combine
lectures and panel discussions. Likewise, we will proactively collaborate with subject
matter experts involved in preparing sustainability disclosure and those using that
information, including employees of companies and investors.
It is crucial for our profession to ensure the courses offered align with the syllabus and arein collaboration with audit firms and other providers of professional accountancy
education. It is also important that we proactively collaborate with other organizations
promoting initiatives related to sustainability education.
To share basic knowledge and understanding of sustainability across all professional
accountants, we need to raise awareness of training programs and seminars onsustainability among our members. We will continue to discuss how to treat sustainability
in the CPD.
(2) Fostering key personnel in assurance engagements
Chapter II of this report discussed the need to develop assurance practitioners, especiallythe key personnel in assurance engagements. The Advanced Level of the sustainability
education syllabus aims to help professional accountants gain extensive knowledge andunderstanding of sustainability and assurance engagements required of the key personnel
in assurance engagements. It is important that the talent development programs for the key
personnel in assurance engagement be developed to broadly and expeditiously foster
assurance practitioners with comprehensive and advanced expertise while being consistent
with the Advanced Level.
While the Sustainability Capacity Building Council, which the JICPA plans to establish,
is expected to discuss training programs for developing key personnel in assurance
engagements, it is important that, in developing the programs, the council gives due- 25 -

IV Future Actions

consideration to the following points.
<Points essential to developing effective training programs for fostering key
personnel in assurance engagements>(i) Develop programs that are aligned with the Advanced Level of the sustainability
education syllabus and cover all knowledge and understanding to lead assurance
engagements;(ii) Design programs in a manner to build trust from stakeholders (including companies
and investors) that their content helps develop key personnel in assurance
engagements, which requires the transparency of the content;(iii) Contribute to securing a broad range of assurance practitioners in the capital markets
by collaborating and cooperating with public policies related to assurance
engagements and talent development initiatives related to sustainability in Japan; and(iv) Make the content and framework of the programs globally trustable by ensuringconsistency with international capacity-building initiatives in assurance
engagements.
(3) Actions in Initial Professional Development (IPD)
To become a CPA in Japan, a candidate must take and pass the CPA examinations(multiple-choice tests and essay tests), undergo professional accountancy education
programs administered by the JFAEL, complete at least three years of practical experience,and pass the final assessments by the JICPA. The successful candidate is registered as a
CPA after confirmation from the Prime Minister of Japan.
The Special Committee, through a series of discussions, has concluded that basic
education on sustainability be given to professional accountants in their capacity-building
phase before the CPA registration so that all professional accountants have basic
knowledge and understanding of sustainability. We will move forward with initiatives forincorporating key sustainability-related topics into the current education programs, withthe scope of subjects covered in the Basic Level of the syllabus.
It is necessary to continue to discuss whether to test the basic knowledge andunderstanding of sustainability in the CPA examinations by carefully watchinginternational trends.
2. Roadmap
We have developed a roadmap of our initiatives (as shown in Figure 8) to advance oursustainability capacity-building initiatives and to collaborate with other organizations
providing professional accountancy training. We believe the presentation of this roadmap- 26 -

IV Future Actions

will help our members and stakeholders, such as companies and investors, understand thetimeframes for initiatives related to extensively lifting the level of professional accountants’skills and competencies in sustainability and developing the key personnel in assurance
engagements.
This roadmap will be updated, as appropriate, considering the latest trends in sustainability
both in Japan and abroad, including new public policies introduced and new standards
developed.
Figure 8: Roadmap for Capacity Building on Sustainability

3. Sustainability Capacity Building Council
The JICPA Sustainability Education PT Report notes that the JICPA should establish aplatform as an organizational foundation for promoting initiatives related to sustainability
education. The Sustainability Education Special Committee further discussed the platform
and its operating structure, and it concluded that it is appropriate to set up the Sustainability
Capacity Building Council in the JICPA as the base for exploring and implementing ourcapacity building on sustainability.
More specifically, the Council should develop, update, and operate the syllabus onsustainability education. It is also important to upgrade the training contents related tosustainability and assurance engagements based on the syllabus. They include the training
programs delivered through the professional accountancy education programs, the CPD, andother programs aimed at our members’ capacity building. Further, we should promote suchinitiatives in coordination and collaboration with audit firms, accounting firms, the JFAEL,
relevant regulators, the IFAC, and PAOs in other countries. Moreover, collaboration withsustainability-related personnel development initiatives by the government and capital
market participants is critical.

- 27 -

IV Future Actions(1) Name
Sustainability Capacity Building Council(2) Objectives
The Sustainability Capacity Building Council aims to improve the sustainability-relatedcompetence and expertise of our members and associate members (capacity building onsustainability) by formulating policies on capacity building, holding education programs,
and providing other supports related to sustainability disclosure and assurance.
In addition, the Council will promote collaboration with relevant parties in Japan andabroad, thereby contributing to enhancing capital market participants’ knowledge andunderstanding of sustainability, ultimately enabling the disclosure of sustainability
information and ensuring its reliability.
(3) Key roles expected of the Sustainability Capacity Development Council(i) Development, update, and implementation of the syllabus on sustainability
education(ii) Initiatives for integrating sustainability-related topics into each phase of theprofessional capacity building for CPAs
(iii) Fostering assurance practitioners (including the programs for developing key
personnel in assurance engagements)(iv) Collaboration with relevant training providers on sustainability(v) Planning of the JICPA’s sustainability-related seminars and training programs(vi) Monitoring the progress of personnel development and capacity building onsustainability- 28 -

Appendix 1: JICPA Draft Syllabus for Sustainability Education (Outline)

Appendix 1: JICPA Draft Syllabus for Sustainability Education (Outline)
Basic Level
A. Introduction to a1: Sustainability overview and roles expected of professional
Sustainability
accountants
Basic concepts related to sustainability, the relationship between
business/investments and environment/society, sustainability-related
initiatives by companies and investors, and the roles of professional
accountants
B. Sustainability
b1-1: Integration of sustainability issues into governance, strategy
and Corporate
and risk management
Management and
The need for integrating sustainability issues into governance, strategy
Governanceand risk management, the approaches for integration, and therequirements on governance in Japanese regulations (e.g., Corporate
Governance Code)
C. Disclosure

D. Assurance
Engagements

c1-1: Sustainability disclosure and integrated reporting (overview)
Background and trends of the demand for sustainability disclosure andintegrated reporting, characteristics of major sustainability disclosure
standards and frameworks (e.g., ISSB, CSRD/ESRS, SASB, Integrated
Reporting Framework), major issues of sustainability information (e.g.,materiality, connectivity)c2-1: Climate change (overview)
Scientific insights about climate change, international agreements (e.g.,
Paris Agreement) and respective national policies, the impact ofclimate change on companies, contents of major climate-related
disclosure frameworks (TCFD), trends in voluntary and statutory
climate-related disclosures, basics on GHG emissions
c2-2: Human capital (overview)
Social issues related to human capital, policy trends (e.g., Human
Resources Version of the Ito Review), the impact of human capital oncompanies, concepts involved in human capital (e.g., DEI), trends in
mandatory disclosurec2-3: Other sustainability themes (overview)
Major topics and outlines of sustainability themes other than climatechange and human capital, and outline of disclosures under each theme

Advanced Level

B1-1: Integration of sustainability issues into governance and management strategy and risk management
Sustainability-related roles required of management and governing bodies, internal approaches for fulfilling these roles (e.g.,
establishment of sustainability committees), and methods for integrating sustainability issues into management strategies
B1-2: Risk management and internal controls related to sustainability
Risk management processes related to sustainability (e.g., Environmental Management System, Value Chain Management),
internal control processes to properly measure, collect, manage, and report various types of data related to sustainability
B2-1: Sustainable financeDomestic and international policies related to sustainable finance, types of sustainable finance, and their schemes
C1-1: Sustainability disclosure and integrated reporting (advanced)
Systems in major countries regarding sustainability disclosure, requirements of major sustainability disclosure standards(SSBJ, IFRS S1, CSRD/ESRS), environmental and social laws related to sustainability disclosure (e.g., Act on Promotion of
Global Warming Countermeasures), and trends in disclosure practices
C2-1: Climate change (advanced)
Requirements of major climate-related disclosure standards (IFRS S2, SSBJ, ESRS E1, U.S. climate-related disclosure rules),elements included in climate-related disclosures (e.g., transition plans, assessment of climate resilience), GHG emissions
calculation and reporting systems, GHG emissions calculation exercise, and trends in disclosure practices
C2-2: Biodiversity (advanced)
Scientific insights on biodiversity, international agreements (e.g., Kunming-Montreal Global Biodiversity Framework) andnational policies, the impact of biodiversity on companies, details of major biodiversity disclosure frameworks (TNFD) andstandards (ESRS E4), and trends in disclosure practices
C2-3: Human capital (advanced)
Details of major disclosure rules, etc. regarding human capital (Cabinet Office Ordinance on Disclosure of Corporate Affairs,
etc., U.S. Regulation S-K, ESRS S1), and trends in disclosure practices
C2-4: Human rights (advanced)
Social issues related to human rights, international discussions (e.g., UN Guiding Principles on Business and Human Rights),
the impact of human rights on companies, disclosures on human rights in ESRS S2, and trends in disclosure practices
C2-5: Other sustainability themes (advanced)
Trends in national policies and initiatives related to other sustainability themes (other than climate change, biodiversity, humancapital, and human rights), the impact of each theme on companies, disclosures related to each theme in the ESRS, and trends
in disclosure practices

c3-1: Key topics by industry
Overview of key sustainability themes by industry and their relationship to business, industry-specific disclosure topics and metrics required in SASB and other standards, and trends in the developmentof industry-specific standards in the ISSB
d1-1: Ensuring the reliability of sustainability information andD1-1 to 1-10 Individual issues
assurance engagements (overview)(i) Code of ethics and independence (ii) Quality control (iii) Limited and reasonable assurance (iv) Materiality (v) Engagement
Background of the demand for sustainability assurance engagements,
acceptance and suitable criteria (vi) Scope of assurance engagements and planning (risk assessment) (vii) Composition of
overview of standards related to sustainability assurance engagements
assurance team and competency of subject matters (viii) Sufficiency and appropriateness of evidence (ix) Assurance opinion
and trends in developing and revising standards, the situation offormation and assurance reporting (x) Topics and subject matters by theme (e.g., climate change) and their assurance engagement risksustainability assurance engagements in Japan and other countries, and and proceduresconsiderations in audit (e.g., International Standards on Auditing (ISA)
720, KAM)- 29 -

Appendix 2: JICPA Draft Syllabus for Sustainability Education

Appendix 2: JICPA Draft Syllabus for Sustainability Education
A. Introduction to Sustainability
Subject
Basic Level a1: Sustainability overview and roles expected ofprofessional accountants
Objectives
Understand the basic concepts related to sustainability and therelationship between business/investments and sustainability.
Understand the roles expected of professional accountants regarding
sustainability.
Contents
Introduce how the concepts of sustainable development andsustainability have been positioned as common global goals, andexplain how business operation and investor behavior relate tosustainability. Based on this basic knowledge, describe the situations
in which professional accountants may need to consider
sustainability factors.
1. With the emergence of environmental and social issues such as
poverty, human rights, and education in the context ofglobalization and economic development, describe howinternational organizations and national governments haveworked with the private sector to identify priority issues,
articulate visions, and developed sustainability frameworks(e.g., SDGs)
2. Describe how corporate activities and investor behavior relate to
the environment, society and economy. Explain the initiatives
and frameworks for integrating sustainability into corporate
management and investor behavior.
 Explain the relationship between company/investor and theenvironment/society from the following two aspects
 Impacts of corporate activities and investor behavior
on the environment and society
 Environmental and social impacts on corporate value
and investment performance Explain corporate sustainability initiatives, with reference
to the United Nations Global Compact, etc. as well as thefollowing background.
 Expansion of management considering Corporate
Social Responsibility (CSR) Growing awareness of sustainability as a corebusiness issue Explain investors’ sustainability initiatives, with reference
to the United Nations Principles for Responsible
Investment (PRI), etc., focusing on
 Expanding sustainability investments- 30 -

Appendix 2: JICPA Draft Syllabus for Sustainability Education



Keywords

Prerequisites(recommended)

Challenges investors face in collecting sustainability
information (e.g., lack of sufficiency andcomparability)
3. Use case studies to illustrate that professional accountants working
in a variety of areas, including external auditors, professional
accountants serving as independent directors, will facesustainability issues in many aspects such as strategy
development and asset valuation.
Sustainable development, Brundtland Report (Our Common Future),
Earth Summit, Rio Declaration, MDGs (Millennium Development
Goals), SDGs (Sustainable Development Goals), ESG, Corporate
Social Responsibility (CSR), sustainable management, United
Nations Global Compact, United Nations Principles for Responsible
Investment (PRI), sustainability investment (ESG investment),
dialogue between companies and investors (engagement), ESG
rating agencies―- 31 -

Appendix 2: JICPA Draft Syllabus for Sustainability Education

B. Sustainability, and Corporate Management and Governance
Subject
Basic Level b1-1: Integration of sustainability issues into
governance, strategy and risk management
Objectives
Understand the need to consider sustainability issues in corporate
management.
Contents
Explain the need to reflect sustainability issues in governance,
strategy, and risk management, and the requirements on governancein Japanese regulations.
1. Explain the background of the need for sustainability integration,and describe the approach, focusing on Skills required of management and governing bodies
 Strategy and business model development
 Identification of material sustainability-related risks andopportunities Reflection in executive compensation standards, etc.
2. Explain the actions required for sustainability in governance underJapanese regulations, in particular the Corporate Governance
Code revised in 2021.
Keywords
Corporate Governance Code, board effectiveness review, skills
matrixPrerequisites
Basic Level a1: Sustainability overview and roles expected of(recommended) professional accountants- 32 -

Appendix 2: JICPA Draft Syllabus for Sustainability Education

Subject
Objectives
Contents

Advanced Level B1-1: Integration of sustainability issues into
governance, strategy and risk management
Understand specific approaches to integrating sustainability issues
into governance and management strategy.
Provide specific details on the organizational structure and actions tointegrate sustainability into corporate governance and management
strategies.
1. Explain the approaches to fulfill the sustainability-related roles
required of management and governing bodies, including Establishment of committees, etc. to lead sustainability
initiatives
 Development of reporting and monitoring processes forsustainability issues
 Establishment of incentive schemes such as executive
compensation systems that are linked to sustainability
indicators
2. Explain the specific methods and mechanisms for integrating
sustainability issues into management strategies, including Assessment of the short-, medium-, and long-term financial
effects of sustainability-related risks and opportunities Consideration and implementation of strategies, financial
plans, etc., taking into account sustainability-related risks
and opportunities
 Qualitative and quantitative assessment of strategies andcash flow resilience

Where appropriate, refer to Examples of Best Practice Regarding theDisclosure of Narrative Information published by the Financial
Services Agency.
Keywords
Sustainability committee, linking sustainability indicators to
executive compensation, resilience assessment
Prerequisites
Basic Level a1: Sustainability overview and roles expected of(recommended) professional accountants
Basic Level b1-1: Integration of sustainability issues into
governance, strategy and risk management- 33 -

Appendix 2: JICPA Draft Syllabus for Sustainability Education

Subject
Objectives

Contents

Advanced Level B1-2: Risk management and internal controls
related to sustainability
Understand specific approaches to internal controls to manage
sustainability risks and opportunities, as well as to appropriately
collect and manage sustainability information for internalmanagement and external reporting.
Explain specific sustainability-related risk management processes
and internal controls by companies.

1. Explain how to identify and assess risks related to sustainability,
focusing on Identification of short-, medium-, and long-termsustainability-related risks and opportunities
 Integration of sustainability-related risks into risk
management processes
 Establishment of Environmental Management System(EMS) Value Chain Management (including sustainability due
diligence)
2. Explain the establishment of internal controls to properly measure,collect, manage, and report various types of data related tosustainability, focusing on
 Internal management and external reporting ofsustainability information
 Structures and processes for measuring, collecting,managing, and reporting sustainability-related data Issues and actions to collect sustainability information
globally
Keywords
Environmental Management System (EMS), human rights andenvironmental due diligence, internal controls, data governancePrerequisites
Basic Level a1: Sustainability overview and roles expected of(recommended) professional accountants
Basic Level b1-1: Integration of sustainability issues into
governance, strategy and risk management- 34 -

Appendix 2: JICPA Draft Syllabus for Sustainability Education

Subject
Objectives
Contents

Advanced Level B2-1: Sustainable finance
Understand sustainable finance approaches and grasp why
sustainability information is important in the capital markets.
Introduce domestic and international policies related to sustainablefinance that aim to promote financing toward sustainability-related
projects, and explain various types of sustainable finance.

1. Explain the current trends regarding sustainable finance policies,
in particular Sustainable finance policies and background in Japan andabroad
2. Explain methodologies of sustainability investments (ESG
investments) such as ESG integration (passive and active management) Engagement
 Proxy voting Negative and positive screening Impact investing
3. Explain sustainability-related bonds and loans, focusing on
 Principles and guidelines widely used in Japan and abroad
 Types of sustainable finance (e.g., green bonds)
 External reviews of sustainable finance
4. Explain the use of sustainability-related information in the capital
markets, including Services provided by ESG data providers, rating agencies,etc.
 Information use by institutional investors Reflection in indexes
Keywords
Sustainable Finance Expert Panel, EU Action Plan: Financing
Sustainable Growth, EU Green Deal, SFDR (Sustainable Finance
Disclosure Regulation), ESG integration, engagement, proxy voting,
ICMA (International Capital Market Association), green bonds,
sustainability linked loans, pre-issuance and post-issuance external
review, third party assurance, Assurance Engagement Practice Note
3900 Practical Guidelines for Assurance Engagements for Use ofGreen Bond Funds Report
Prerequisites
Basic Level a1: Sustainability overview and roles expected of(recommended) professional accountants- 35 -

Appendix 2: JICPA Draft Syllabus for Sustainability Education

C. Disclosure
Subject
Objectives

Contents

Keywords

Basic Level c1-1: Sustainability disclosure and integrated reporting(overview)
Understand the latest trends in sustainability disclosure.
Understand the overview of the major sustainability disclosure
standards.
After explaining the historical background of the demand forsustainability disclosure and integrated reporting, describe thetrends in sustainability disclosure, characteristics of major
sustainability disclosure standards, and key issues related tosustainability information.
1. Explain the historical background of the requirement forcompanies to disclose sustainability-related information,
touching on the demands of investors and other stakeholders.
2. Explain the global trends in the increase of voluntarysustainability disclosure and integrated reporting, and inrecent years, the increase of mandatory sustainability
disclosure.
3. Explain sustainability disclosure requirements in Japan.
4. Provide an overview of the following major sustainability
disclosure standards and frameworks that are referred to whendisclosing sustainability information, and clarify thedifferences between them, such as intended readers.
 Standards developed by the International Sustainability
Standards Board (ISSB), established under the IFRSFoundation
 The EU Corporate Sustainability Reporting Directive(CSRD); and the European Sustainability ReportingStandards (ESRS), which set out the detailed reporting
requirements of the CSRD
 SASB (Sustainability Accounting Standards Board)
standards
 GRI (Global Reporting Initiative) standards
 Integrated Reporting Framework
5. Explain the content of key issues related to sustainability
information such as Concepts of materiality (single materiality, double
materiality, and dynamic materiality) Connectivity of sustainability and financial information
Integrated Reporting Framework, SASB, GRI, ISSB, CSRD,
ESRS, Cabinet Office Ordinance on Disclosure of Corporate
Affairs, etc., materiality, connectivity- 36 -

Appendix 2: JICPA Draft Syllabus for Sustainability Education

Prerequisites(recommended)

Basic Level a1: Sustainability overview and roles expected ofprofessional accountants- 37 -

Appendix 2: JICPA Draft Syllabus for Sustainability Education

Subject
Objectives

Contents

Advanced Level C1-1: Sustainability disclosure and integrated
reporting (details)
Understand the major domestic and international sustainability
disclosure systems.
Understand the requirements of the major sustainability disclosure
standards.
Explain the domestic and international systems for sustainability
disclosure and related environmental and social laws andregulations. In addition, cover the requirements of major
sustainability disclosure standards and disclosure practices.
1. Provide a specific description of the system for sustainability
disclosure in Japan, with reference to the following contents.
Similarly, explain the outline of disclosure systems in majorcountries.
 Requirements of sustainability information in securities
reports
 Sustainability disclosure-related discussion in the
Working Group on Corporate Disclosure of the Financial
System Council
2. Explain the major sustainability disclosure standards andregulations described below and clarify the difference
between them. In particular, explain (i) general characteristics
such as reporting scope, reporting frequency, externalreferences, etc., and (ii) key elements of disclosure (corecontent).
 Standards developed by the Sustainability Standards
Board of Japan (SSBJ)
 Standards (S1) developed by the International
Sustainability Standards Board (ISSB) (*)
 The EU Corporate Sustainability Reporting Directive(CSRD); and the European Sustainability ReportingStandards (ESRS), which set forth the detailed reporting
requirements of the CSRD(*) In addition, explain the Integrated Reporting Framework,
which is also used as a reference in the development of
ISSB standards.
3. In Japan, companies are required to report environmental andsocial information under the Act on Promotion of Global
Warming Countermeasures, Act on the Promotion of
Women’s Active Engagement in Professional Life, and otherlaws and regulations. Explain the existing systems related tosustainability disclosure, and show how they are related to thedisclosure required by the above standards and regulations. In- 38 -

Appendix 2: JICPA Draft Syllabus for Sustainability Education

Keywords

Prerequisites(recommended)

addition, provide an overview of the legal framework forsustainability in Japan, including environmental laws andlabor laws.
4. Explore statutory and voluntary sustainability disclosure
practices in Japan. Where appropriate, refer to Examples ofBest Practice Regarding the Disclosure of Narrative
Information published by the Financial Services Agency.
Cabinet Office Ordinance on Disclosure of Corporate Affairs, etc.,
Guidelines for Disclosure of Corporate Affairs, etc., Principles
Regarding the Disclosure of Narrative Information, reports by theWorking Group on Corporate Disclosure of the Financial System
Council, ISSB, SSBJ, CSRD, ESRS, Integrated Reporting
Framework, Act on Promotion of Global WarmingCountermeasures, Act on the Promotion of Women’s Active
Engagement in Professional Life, ESG report, integrated report,sustainability report
Basic Level a1: Sustainability overview and roles expected ofprofessional accountants
Basic Level c1-1: Sustainability disclosure and integrated reporting(overview)- 39 -

Appendix 2: JICPA Draft Syllabus for Sustainability Education

Subject
Objects
Contents

Basic Level c2-1: Climate change (overview)
 Understand the impact of climate change on companies.
 Understand the overview of climate-related disclosures.
Explain the impact of climate change on business, referring tointernational agreements and national policies on climate change
and the scientific background. In addition, describe the major
climate-related disclosure frameworks and practices in voluntaryand statutory climate-related disclosures. Introduce concepts andmeasurement related to GHG emissions.
1. Explain the business environment related to climate change witha focus on the following topics, and explain how it affects
corporate strategy and business operations.
 Scientific insights on climate change as presented in IPCC
(Intergovernmental Panel on Climate Change) reports, etc.
 The Paris Agreement and other international agreements
on climate change The 2050 Carbon Neutral Declaration in Japan andrelevant policies
 Climate change policies in major countries
2. Provide an overview of the core information and metrics in the
major climate-related disclosure frameworks used in Japanand abroad, focusing on the four elements (governance,
strategy, risk management, and metrics and targets) of the
TCFD (Task Force on Climate-related Financial Disclosures)
recommendation.
3. Introduce the following standards and rules to illustrate the trendof the increase of statutory disclosure of climate-related
information following the global increase of voluntary
disclosure.
 Climate-related standards (S2) developed by theInternational Sustainability Standards Board (ISSB) Discussions on climate change disclosure in the Working
Group on Corporate Disclosure of the Financial System
Council Climate-related standards developed by the Sustainability
Standards Board of Japan (SSBJ) Climate change (E1) standards of the European
Sustainability Reporting Standards (ESRS) Climate-related disclosure rules set by the U.S. SEC
4. As for the measurement of GHG emissions, explain thefollowing items, referring to the GHG Protocol.
 Basic calculation method for direct emissions (Scope 1) andindirect emissions (Scope 2)- 40 -

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

Keywords

Prerequisites(recommended)

Overview of categories included in value chain emissions(Scope 3)
GHG, Paris Agreement, IPCC, net zero (decarbonization), carbon
pricing, TCFD, climate change risks (physical risks and transition
risks), IFRS S2 Climate-related Disclosures, ESRS E1, GHG
ProtocolBasic Level a1: Sustainability overview and roles expected ofprofessional accountants
Basic Level c1-1: Sustainability disclosure and integrated reporting(overview)- 41 -

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Subject
Objectives
Contents

Keywords

Advanced Level C2-1: Climate change (details)
Understand the requirements and key issues of the major climaterelated disclosure standards.
Present the requirements in the major domestic and international
disclosure standards on climate change and explain the main issues
in climate-related disclosures. In addition, provide climate-related
disclosure examples.
1. Explain climate-related disclosures and indicators required in thefollowing climate-related disclosure standards and rules andclarify the difference between them.
 Climate-related standards (S2) developed by theInternational Sustainability Standards Board (ISSB) Climate-related standards developed by the Sustainability
Standards Board of Japan (SSBJ) Climate change (E1) standards of the European
Sustainability Reporting Standards (ESRS) Climate-related disclosure rules set by the U.S. SEC
2. Explain major issues included in climate-related disclosures,
including Identification and assessment of risks and opportunities(including assessment of financial effects)
 Development of transition plans
 Assessment of climate resilience (scenario analysis)
 Use of carbon credits (carbon offsets)
3. Explain the measurement of GHG emissions (Scope 1, 2, and 3),
focusing on Request for GHG emissions measurement and reporting
under the Act on Promotion of Global WarmingCountermeasures and the GHG emissions accounting,reporting and disclosure system (the SHK system) Calculation method based on the data quality (performanceor estimated value), etc.
 Calculation exercises with multiple examples for each of
Scope 1, 2, and 3
4. Explore examples of climate-related disclosures. Where
appropriate, refer to Examples of Best Practice Regarding theDisclosure of Narrative Information published by the Financial
Services Agency.
IFRS S2, SSBJ, ESRS E1, SEC climate-related disclosure rules,transition plans, scenario analysis, carbon credits (carbon offsets),- 42 -

Appendix 2: JICPA Draft Syllabus for Sustainability Education

SBT (Science Based Targets), Financed emission (emissions byinvestees), internal carbon price, Act on Promotion of Global
Warming Countermeasures, GHG emissions accounting, reportingand disclosure system (the SHK system)
Prerequisites
Basic Level a1: Sustainability overview and roles expected of(recommended) professional accountants
Basic Level c1-1: Sustainability disclosure and integrated reporting(overview)
Advanced Level C1-1: Sustainability disclosure and integrated
reporting (details)- 43 -

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Subject
Objectives
Contents

Keywords
Prerequisites(recommended)

Advanced Level C2-2: Biodiversity (details)
Understand the impact of biodiversity on companies.
Understand the requirements of major biodiversity-related
disclosure standards, etc.
Explain the impact of biodiversity on companies, based oninternational agreements and national policies on biodiversity andthe scientific background. In addition, cover the major biodiversity
disclosure frameworks and standards and provide disclosure
examples.
1. Explain the business environment related to biodiversity with afocus on the following topics, and explain how it affects
corporate strategy and business operations.
 Scientific insights on biodiversity as presented in theIntergovernmental
Science-Policy
Platformon
Biodiversity and Ecosystem Services (IPBES), etc.
 The Kunming-Montreal Global Biodiversity Frameworkand other international agreements
 The National Biodiversity Strategy of Japan
 Initiatives in major countries
2. Provide an overview of the core information and metrics of
disclosure, focusing on the four elements recommended by theTaskforce on Nature-related Financial Disclosures (TNFD).
3. Explain the biodiversity-related disclosures and metrics requiredin the EU, with reference to Biodiversity and ecosystems (E4) standards of theEuropean Sustainability Reporting Standards (ESRS)
4. Provide examples of disclosure based on the above frameworkand standards.
Convention on Biodiversity, Kunming-Montreal Global
Biodiversity Framework, TNFD, LEAP approach, ESRS E4
Basic Level a1: Sustainability overview and roles expected ofprofessional accountants
Basic Level c1-1: Sustainability disclosure and integrated reporting(overview)
Advanced Level C1-1: Sustainability disclosure and integrated
reporting (details)- 44 -

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Subject
Objectives
Contents

Basic Level c2-2: Human capital (overview)
Understand the impact of human capital on companies.
Understand the overview of disclosures regarding human capital.
Explain the impact of human capital on companies with reference tosocial issues and policy trends related to human capital. In addition,
describe the concepts regarding human capital and the trend towardmandatory disclosure.

1. With the emergence of social issues such as gender inequality,
explain the trends of studies on human capital, including thefollowing examples, as well as the improvement of treatment
under laws and regulations such as the Act on Securing, Etc. of
Equal Opportunity and Treatment between Men and Women in
Employment. In addition, explain how human capital issues
affect corporate strategy and business operations.
 Human Resources Version of the Ito Review and Human
Resources Version of the Ito Review 2.0 released by the
Ministry of Economy, Trade and Industry
 Publication of Human Capital Visualization Guidelines by
the Cabinet Secretariat
2. Explain the elements included in human capital such as Diversity,
Equity and Inclusion (DEI) and reskilling.
3. Explain the trend of increasing mandatory disclosure regarding
human capital with reference to Mandatory disclosure related to human capital under therevision of the Cabinet Office Ordinance on Disclosure of
Corporate Affairs, etc.
 Mandatory disclosure related to human capital under therevision of the U.S. Regulation S-K.
 Own workforce (S1) standards of the European Sustainability
Reporting Standards (ESRS)
Keywords
Diversity, Equity and Inclusion (DEI), talent development(reskilling), employee engagement, Act on Securing, Etc. of Equal
Opportunity and Treatment between Men and Women in
Employment, Act on the Promotion of Women’s Active Engagementin Professional Life, Human Resources Version of the Ito Review,
Human Capital Visualization Guidelines
Prerequisites
Basic Level a1: Sustainability overview and roles expected of(recommended) professional accountants
Basic Level c1-1: Sustainability disclosure and integrated reporting(overview)- 45 -

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Subject
Objectives
Contents

Advanced Level C2-3: Human capital (details)
Understand the disclosure information required by major disclosurerules, etc. regarding human capital.
Explain major disclosure standards and rules regarding humancapital and cover examples of disclosures.

1. Explain human capital-related disclosure information and metrics
required by disclosure standards and rules regarding humancapital described below.
 Human capital-related disclosure requirements under therevision of the Cabinet Office Ordinance on Disclosure of
Corporate Affairs, etc.
 Human capital-related disclosure requirements under therevision of the U.S. Regulation S-K.
 Own workforce (S1) standards of the European
Sustainability Reporting Standards (ESRS)
2. Provide specific examples of human capital-related disclosures.
Where appropriate, refer to Examples of Best PracticeRegarding the Disclosure of Narrative Information publishedby the Financial Services Agency.
Keywords
Ratio of women in management positions, ratio of men taking
childcare leave, gender pay gap, ESRS S1Prerequisites
Basic Level a1: Sustainability overview and roles expected of(recommended) professional accountants
Basic Level c1-1: Sustainability disclosure and integrated reporting(overview)
Basic Level c2-2: Human capital (overview)
Advanced Level C1-1: Sustainability disclosure and integrated
reporting (overview)- 46 -

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Subject
Objectives
Contents

Advanced Level C2-4: Human rights (details)
Understand the impact of human rights on companies.
Understand disclosures related to human rights.
Explain the impact of human rights on companies, referring to theinternational debate on human rights and the social issues behind it.
In addition, cover the content and examples of disclosures related tohuman rights.

1. Explain the international agreements, including the following
examples, to address social issues such as human rights abusesin the supply chain, and describe how human rights affectcorporate strategy and business operations.
 UN Guiding Principles on Business and Human Rights
 OECD Guidelines for Multinational Enterprises
 ILO Declaration on Fundamental Principles and Rights at
Work
In describing these international agreements, explain humanrights due diligence.
2. Explain disclosure information and metrics regarding humanrights required in the EU with reference to the following andprovide specific examples of disclosures.
 Workers in the value chain (S2) standards of the European
Sustainability Reporting Standards (ESRS)
Keywords
UN Guiding Principles on Business and Human Rights, OECD
Guidelines for Multinational Enterprises, ILO Declaration on
Fundamental Principles and Rights at Work, human rights due
diligence, ESRS S2Prerequisites
Basic Level a1: Sustainability overview and roles expected of(recommended) professional accountants
Basic Level c1-1: Sustainability disclosure and integrated reporting(overview)
Advanced Level C1-1: Sustainability disclosure and integrated
reporting (details)- 47 -

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Subject
Objectives
Contents

Basic Level c2-3: Other sustainability themes (overview)
Understand the overview of sustainability themes and theirdisclosure information other than climate change and human capital.
Explain the major sustainability themes and overview other thanclimate change and human capital and provide an overview of
disclosure information under each theme.

1. Explain that themes related to sustainability other than climatechange and human capital include biodiversity, water resources,
circular economy, human rights, local communities, etc., andprovide an overview of each theme.
2. Provide an overview of disclosure information and metrics foreach theme with reference to the following standards in theEuropean Sustainability Reporting Standards (ESRS).
 E2: Pollution
 E3: Water and marine resources E4: Biodiversity and ecosystems
 E5: Resource use and circular economy
 S2: Workers in the value chain S3: Affected communities
 S4: Consumers and end-users
 G1: Governance, risk management and internal control
Keywords
Biodiversity, Pollution, Water and marine resources, Circular
economy, Human rights, Local communities, ESRSPrerequisites
Basic Level a1: Sustainability overview and roles expected of(recommended) professional accountants
Basic Level c1-1: Sustainability disclosure and integrated reporting(overview)- 48 -

Appendix 2: JICPA Draft Syllabus for Sustainability Education

Subject
Objectives

Advanced Level c2-2: Other sustainability themes (details)
Understand the impact of other sustainability themes (other thanclimate change, biodiversity, human capital, and human rights) on
companies.
Understand disclosure information related to other sustainability
themes.
Contents
Explain the impact of other sustainability themes (other than climatechange, biodiversity, human capital, and human rights) on
companies. In addition, cover the content and examples of
disclosures related to other sustainability themes.
1. Explain the impact of each sustainability theme on companies,
referring to national policies and initiatives for eachsustainability theme.
2. Explain the disclosure information and metrics required in thefollowing standards in the European Sustainability ReportingStandards (ESRS) and provide specific examples of disclosures.
 E2: Pollution
 E3: Water and marine resources E5: Resource use and circular economy
 S2: Workers in the value chain S4: Consumers and end-users
 G1: Governance, risk management and internal control
Keywords
Pollution, Water and marine resources, Circular economy, Local
communities, ESRSPrerequisites
Basic Level a1: Sustainability overview and roles expected of(recommended) professional accountants
Basic Level c1-1: Sustainability disclosure and integrated reporting(overview)
Advanced Level C2-2: Sustainability disclosure and integrated
reporting (details)- 49 -

Appendix 2: JICPA Draft Syllabus for Sustainability Education

Subject
Objectives
Contents

Basic Level/Advanced Level c3-1: Key topics by industry
Understand sustainability-related issues specific to each industry
sector.
Understand disclosure topics and indicators in each industry sector.
* This subject will be provided by industry (or multiple industry
groups). Participants are expected to select and take lectures that arehighly relevant to their businesses.

Explain important sustainability themes in each industry sector,
touching on the background of related policies, etc.
In addition, explain the industry-specific disclosure topics andmetrics required by SASB (Sustainability Accounting Standards
Board) standards and others.
Cover the development of industry-specific standards at theInternational Sustainability Standards Board (ISSB) as necessary.
Keywords
SASB
Prerequisites
Basic Level a1: Sustainability overview and roles expected of(recommended) professional accountants
Basic Level c1-1: Sustainability disclosure and integrated reporting(overview)- 50 -

Appendix 2: JICPA Draft Syllabus for Sustainability Education

D. Assurance Engagements
Subject
Basic Level d1: Ensuring the reliability of sustainability information
and assurance engagements (overview)
Objectives
Understand the overview of standards related to assurance
engagements for sustainability information.
Understand the situation of assurance engagements for sustainability
information in Japan and abroad.
Contents
Explain the historical background of the demand for sustainability
assurance. Describe the current development and revision ofassurance standards and sustainability assurance engagements. In
addition, explain sustainability-related issues that should beconsidered in audits.
1. Explain the historical background of the demand for sustainability
assurance engagements of companies, touching on the trend
among investors and other stakeholders demanding for highly
reliable sustainability information.
2. Explain the purpose and approach, etc. of the frameworks forassurance engagements other than historical financial
information, which are referred to when assuring sustainability
information, focusing on
 ISAE 3000 (assurance engagements other than audits
or reviews of historical financial information)
 ISAE 3410 (assurance engagements for GHG
statements)
 Assurance Engagement Practice Note published by the
JICPA
3. Explain the current status of the International Standard on
Sustainability Assurance 5000 (ISSA 5000) by the International
Auditing and Assurance Standards Board (IAASB).
4. Explain about the situation of assurance engagements forsustainability information in Japan and other countries,
including the level of assurance and the type of assurance
engagements providers.
5. Explain sustainability-related matters to consider in audits inrelation to Auditing Standards Committee Report 720
International Standard on Auditing 720 The Auditor’s
Responsibilities Relating to Other Information- 51 -

Appendix 2: JICPA Draft Syllabus for Sustainability Education

 Key Audit Matters (KAM) Accounting estimates
Keywords
ISAE 3000, ISAE 3410, EER Guidance, accounting estimates, Key
Audit Matters (KAM), International Standard on Auditing 720 The
Auditor’s Responsibilities Relating to Other Information
Prerequisites
Basic Level a1: Sustainability overview and roles expected of(recommended) professional accountants* Advanced Level D1-1 and beyond will be considered in the next fiscal year.

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