31 July 2024
Secretariat of the Sustainability Standards Board of Japan
Fukoku Seimei Building 20F
2-2-2 Uchisalwai-cho
Chiyoda-ku
Tokyo 100-0011, Japan
Email: 2024ed01@ssb-j.jp
Exposure Drafts of Sustainability Disclosure Standards
Dear Sir or Madam,
We write in response to an invitation for public comments on three Exposure Drafts issued
by the Sustainability Standards Board (SSBJ) on 29 March 2024. We welcome theopportunity to provide comments.
The Asian Corporate Governance Association (ACGA) is a non-profit membership association
founded in 1999. We conduct research on corporate governance and ESG in 12 markets in
Asia-Pacific and advocate at the regulatory and corporate level across the region to improvestandards and practices. ACGA is funded by a network of 100 organisations, of which 80%
are institutional investors with more than US$40 trillion in assets under management
globally.
General comments
ACGA welcomes the development of globally consistent and comparable sustainability
disclosure for listed companies based on the International Sustainability Standards Board(ISSB) standards. Alignment with ISSB standards will enable global investors to compare
Japanese companies’ sustainability initiatives and challenges with those of regional andinternational peers.
Japan has taken significant strides in sustainability reporting in recent years and ACGA
recognises that it has been an early supporter of ISSB. These factors were incorporated into
our recent CG Watch 2023 survey, where Japan rose to 2nd place in our rankings of 12
markets in the Asia-Pacific region.
We welcome the decision by SSBJ to substantially adopt the ISSB standards. As the SSBJ
finalises its reporting standards we would however encourage even greater calibration,
particularly in respect of the timing of sustainability reporting.

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While we have not had the benefit of an English translation of the SSBJ exposure drafts toprovide our response, we rely on the comparison chart published by SSBJ on 29 March, arecent note from ISSB, as well as discussions with investors and other stakeholders in Japan.
Under the current SSBJ proposals, entities may use a different reporting period forsustainability-related information in particular circumstances, notably where a company
reports GHG emissions under the Japanese Act on Promotion of Global WarmingCountermeasures. These companies can rely on the latest GHG emissions data that has
been submitted to authorities under the disclosure requirements of the Act. However inpractice, this could result in a gap of more than a year between the calculation period andthe sustainability-related reporting period.
Global investors increasingly desire reliable, comparable and timely information on issuers’
sustainability performance, strategy, risks and opportunities, and the impact this may haveon the financial position and outlook of the company. Our concern is that investment
decisions in respect of some issuers could be disadvantaged by a lag in reporting relevant
sustainability information currently permitted under the SSBJ proposals.
ACGA encourages the SSBJ to synchronize the reporting timelines to provide global investors
with the essential sustainability and financial information they require for sound decisionmaking.
ACGA has additional comments:
1. Requirement to consider SASB standards
We welcome SSBJ’s references to the consideration of the SASB Standards as a source ofguidance in preparing sustainability-related financial disclosures. ACGA supports the current
language in the exposure drafts which requires that companies “shall” rather than “may”
consider SASB Standards.
2. Climate-related risks and opportunities
ACGA notes that under IFRS S2, entities shall disclose information relevant to the crossindustry metric categories of climate-related transition risks. This is defined as the amountand percentage of assets or business activities vulnerable to climate-related transition risks.
In the SSBJ draft, there is an alternative option of providing “information about themagnitude” of the assets or business activities which are vulnerable under thesecircumstances. ACGA questions whether this would give entities scope to offer informationon a broad brush basis, rather than being qualitative. We would encourage mandatory
disclosure of the amount and percentage of climate-vulnerable assets or business activities.

23. Resources and Relationships and Dependencies and Impacts
Two paragraphs have been omitted from IFRS S1 B4-B5, as reported by ISSB in its recent
note. In the paragraphs, examples are given of resources and relationships an entity
depends on and affects by its activities and outputs—both direct and indirect. ACGA agrees
with ISSB that these descriptions are worth including as guidance as to what is relevant
information under global standards and we would encourage their inclusion in the SSBJ
standards.
4. Scope 2
The SSBJ drafts would allow issuers to disclose location-based Scope 2 GHG emissions anddisclose information about contractual instruments or market-based emissions. ACGA takes
the view that investors would benefit from as much information on Scope 2 as possible andwould encourage disclosure of both location-based and market-based emissions, withinformation on contractual instruments.
5. Governance and disclosures
A specific objective of the IFRS S2 “is to enable users of general-purpose financial reports tounderstand the governance processes, controls and procedures an entity uses to monitor,manage and oversee climate-related risks and opportunities”. The adoption of ISSB
standards will hopefully encourage companies to ensure data integrity with effective board
oversight on reporting as well as sustainability related risks, opportunities and initiatives of
the respective companies. We recommend the SSBJ Standards consider requiring companies
to disclose material information on corporate engagement relating to climate policy. This
includes climate-related positions, as well as direct engagements with governments andindirect engagements through industry groups, along with the governance of theseinitiatives.

ACGA thanks SSBJ for the opportunity to comment on the draft proposals. We would
welcome any further opportunity to share our views as the drafts are finalized.

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Yours faithfully,

Jane Moir
Head of Research, ACGA
jane@acga-asia.org

Amar Gill
Secretary General, ACGA
amar@acga-asia.org

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