The views expressed in this presentation are the views of the author and do not necessarily reflect the

views
or policies of the Asian Development Bank Institute (ADBI), the Asian Development Bank (ADB), its Board
of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included
in this paper and accepts no responsibility for any consequences of their use. Terminology used may not
necessarily be consistent with ADB official terms.

Mobilizing Private Finance

towards a Low-Carbon Future
What’s happening and what’s missing?
Reflections on and from Japan

Session 4.2
Special Remarks on Private Financing of Low-Carbon Finance
Considerations in the Context of the Regional and Global Leadership

Maiko Morishita
Programme Manager, Finance Taskforce
 Japan: A Growing Green Bond Market

Globally…..
- Over 2,200 signatories and 70tn USD
worth of assets under managements
aligned with the PRI (PRI 2017)
- Green bond issuance hits record
155.5bn USD in 2017, a 191%
increase from 81bn USD in 2016 (CBI
2018)

In Japan….
- 69 signatories to the PRI (PRI 2018)
- Green bond issuance hits 3.3bn USD
in 2017, a 300% increase from 1.1bn
Growth in market lead by corporate issuers
USD in 2016 (CBI 2018)
Source: Climate Bond Initiative Database

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Japan: What’s Happening?

Investors Demanding Transparency & Information Disclosure
TCFD (Task Force on Climate-related Financial Disclosures)
- 36 Japanese Companies are now signatories, in addition to MoE, FSA, METI, GPIF and
the Japanese Banking Association (as of Dec 2018)
Government-lead Initiatives: Guidelines, Best Practices, & Subsidies
Initiatives Leading Entity
Green Bond Guidelines MoE (Mar 2017)
Greenbond Issuance Promotion Platform MoE (2017)
Pilot Projects for Green Bond Issuance & the Green Bond Awards MoE (Feb 2017)
Financial Support Programme for Green Bond Issuance MoE (May 2017)
Registration System of Green Bond Issuance Supporters MoE (April 2017)
‘Guidance for Climate-related Financial Disclosure’ (TCFD Guidance) METI (Dec 2018)
TCFD Study Group on Implementing TCFD Recommendations
Report to ‘Encourage improvement of quality and efficiency in disclosure and METI (Jan 2019)
dialogue of small- and mid-cap companies’
Forum for Integrated Corporate Disclosure and ESG Dialogue, Kansai
Subcommittee
list is non-exhaustive
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Challenges and Policy Considerations

Challenges
• Misalignment with sustainable development objectives
‘there are two misalignments at the heart of the sustainability challenge: one
concerns the appropriate time horizon; the other concerns the appropriate
conception of risk…’ (EUHLEG)
- study finds TOPIX to be incompatible with a 2c climate goal
(2ii in partnership with IGES / RIEF, 2018)
• Mispricing of sustainability issues
• Narrow interpretation of fiduciary duty
• Lack of information, transparency and disclosure

Policy Considerations
• Enhanced disclosure: a regulatory approach or voluntary approach?
• Enabling environment: verification schemes, tax-incentives?

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Taking the discussion further….

The Missing Social Dimension

• The necessity for a ‘Just Transition’ as an enabler for a low-carbon transition

’As investors with a requirement to act in the best interest of our beneficiaries and in line with our
fiduciary duties, we believe that strategies to tackle climate change need to incorporate the full
environmental, social and governance (ESG) dimensions of responsible investment. There is an
increasing recognition that the social dimension of the transition to a resilient and low-carbon
economy has been given insufficient attention, notably in terms of the implications in the workplace
and wider community. Achieving a just transition, in line with the 2015 Paris Agreement on Climate
Change, will help to accelerate climate action in ways that deliver the Sustainable Development
Goals.’
Statement of Investor Commitment to Support a Just Transition on Climate Change
(Presented at COP24, 126 investors, representing 6 trillion USD in assets)

• The UN Principles on Business and Human Rights – upholding human rights

and addressing negative social impacts

• What can we draw from the ongoing discussions on inequality? – business that
serves everyone and not just shareholders and or the privileged few

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Taking the discussion further….

What works for SMEs and for strengthening the community?

• Kamakura Investment Management Co. Ltd.

• Shiga Bank | “New Business Support Loan (SDGs Plan)”
• Seibu Shinkin Bank | Social Business Support Programme ‘CHANGE’

• Policy Recommendations from the High Level Meeting on ESG Finance

(January 2018)

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Thank you!
Maiko MORISHITA
m-morishita@iges.or.jp