Sent via electronic mail

July 31, 2024

Yasunobu Kawanishi
The Sustainability Standards Board of Japan
2024ed01@ssb-j.jp

Subject: UPP comments on SSBJ public consultation on sustainability disclosure standards for Japan Exposure Drafts
Dear members of The Sustainability Standards Board of Japan (SSBJ),
We appreciate the opportunity to comment on the SSBJ public consultation on sustainability disclosure standards forJapan Exposure Drafts. We welcome the efforts of the SSBJ to develop corporate sustainability disclosure standards
based on the International Financial Reporting Standards (IFRS) Foundation’s International Sustainability StandardsBoard (ISSB) IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information (IFRS S1).
UPP is a jointly sponsored pension plan created by and for Ontario’s university sector with over 40,000 members, and$11.7 billion in assets under management. As a long-term investor, UPP seeks to invest responsibly and promote thehealth of the financial, social, and environmental systems on which capital markets rely in order to deliver strong,sustainable value to members today and tomorrow. UPP is growing a resilient fund to secure pension benefits formembers today and for generations to come and is open to all employers and employees within Ontario’s university
community.
As an institutional investor we believe that sustainable returns in a long-term horizon can be achieved exclusively withcomprehensive integration of sustainability and climate change risks in the investment process. UPP invests acrossseveral asset classes globally and we encourage standardized high-quality reporting of sustainability-relatedinformation.
Adhering to ISSB Standards ensures the disclosure of sustainability related information worldwide, thus, reporting
entities can be held accountable for transparent disclosure. For UPP and other institutional investors globally, thismeans a reduction of risk and uncertainty, which in turn affects investment decision-making. UPP advocates for theadoption and enforcement of such standards in alignment with ISSB Standards and we are sharing our views,
alongside other investors, on jurisdictional sustainability consultations around the world.
Limiting modifications to ISSB Standards reduces fragmentation and promotes comparability for investors but also
streamlines and reduces the reporting burden for companies that may need to comply with multiple reporting
requirements.
UPP is supportive of these key disclosure criteria that are included in ISSB global baseline standard:-Unified approach to the definition of materiality across jurisdictions;
Reporting timeline aligned with financial statements and clear inclusion of a connection between thereported information and financial statements;
Reporting included in general-purpose financial reporting;
Provision of the information across governance, strategy, risk management, metrics and targets reporting
dimensions;

UPP comments on SSBJ public consultation on sustainability disclosure
standards for Japan Exposure DraftsPAGE 1

Reporting should include disclosures about opportunities as well as risks including all sustainability-related risks
and opportunities with potential to affect the entity’s cash flows, access to finance or cost of capital over theshort, medium or long term;
Industry-specific disclosures;
Exploration of alignment with Sustainability Accounting Standards Board (SASB) standards;
Disclosure of scopes 1, 2 and 3 in alignment with GHG Protocol and publication of financed emissions;Disclosure of climate-related scenario analysis, targets and transition plan.
We welcome the Sustainability Standards Board of Japan (SSBJ) work on adopting ISSB standards locally and werecognize the effort that was put to align SSBJ’s Exposure Drafts and IFRS S1 and IFRS S2. UPP would like to provide thefollowing comments on the exposure drafts and emphasize the following aspects. We consider them to be essential
components of the ISSB Standard but they are currently not included in the exposure drafts:-1.

2.

3.

Reporting period: UPP recommends aligning the GHG calculation period with the financial reporting period incases when a difference might occur due to reporting as per Japanese Act on Promotion of Global WarmingCountermeasures. The SSBJ Exposure Drafts allow entities to use a different reporting period under certain
circumstances, such as when the jurisdiction requires an entity to disclose certain metrics where thecalculation period is different from the financial reporting period. SSBJ Exposure Draft states that if an entity issubject to the Japanese Act on Promotion of Global Warming Countermeasures and chooses to report theGHG emissions measured under that Act, the entity shall use the latest GHG emissions data that has been
submitted to the authorities as of the date authorized for the issuance of the sustainability related financial
disclosures. For some reporting entities, this could result in having a difference of over one year, between thesustainability-related reporting period and the calculation period of GHG emissions under the Act mentioned
above.
Resources and Relationships and Dependencies and Impacts: UPP recommends including sections B4-B5 fromIFRS S1 in the SSBJ final rule as those sections provide important examples of how an entity’s resources andrelationship and an entity’s dependencies and impacts can affect an entity’s supply chain or activities andoutputs. The SSBJ appears to have interpreted IFRS S1 B4-B5 as a concept of ‘impact materiality’ andtherefore have not included these paragraphs in their Exposure Draft. IFRS S1 The inclusion of B4-B5 isimportant to align the scope of the sustainability information reported on with that required by the ISSB’sglobal baseline.
Timing of reporting (IFRS S1 para 64): UPP recommends aligning the timing of financial statements with thereporting of sustainability-related information and not providing an opportunity for such reporting to occur at
a different time. While the SSBJ ED requires that the entity report sustainability-related disclosures at the sametime as the related financial statements, it also permits entities to report on sustainability-related information
at a different time from the entity’s financial statements when there are specific requirements in law andregulation which prohibit or permit entities to do so (or when entity applies the standard on a voluntary basis).
Timing alignment is essential to investors because it ensures that all material information for decision making isavailable at the same time.

Summary
UPP strongly supports the development of the Exposure Drafts and the full adoption of ISSB Standards. It is criticallyimportant that jurisdictions around the world adopt a consistent and comparable global baseline of climate-related
and sustainability-related financial disclosures to meet the needs of capital and financial markets. Consultation onSSBJ Exposure Drafts is a significant milestone in the establishment of reporting that provides the global baseline ofinformation required by ISSB Standards in Japan. However, further alignment could be reached in relation to theapproach towards “Resources and Relationships” and “Dependencies and Impacts” in the SSBJ Exposure Drafts.
Do not hesitate to contact me at brian.minns@universitypensionplan.ca or +1 416-417-2587 if you require any
additional information.
UPP comments on SSBJ public consultation on sustainability disclosure
standards for Japan Exposure Drafts

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Thank you,

Brian Minns
Senior Managing Director, Responsible Investing

UPP comments on SSBJ public consultation on sustainability disclosure
standards for Japan Exposure Drafts

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