BOJ aligns climate disclosures with TCFD recommendations
The Bank of Japan has published its climate change initiatives, detailing its approach and progress in line with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. This disclosure follows the Bank's comprehensive climate change strategy released in July 2021.
Governance and strategic pillars
The Bank of Japan's climate change strategy, decided by the Policy Board in July 2021, outlines measures across monetary policy, the financial system, research, international finance, and business operations.
To ensure coordinated action, the Bank established the Climate Coordination Hub (CCH), an internal network comprising various departments including Monetary Affairs, Financial System, and Research and Statistics.
The CCH facilitates information sharing and coordination, with regular meetings and annual performance reviews of departmental initiatives under the Medium-Term Strategic Plan.
The BOJ emphasizes its efforts are consistent with its core missions of achieving price stability and ensuring financial system stability, categorizing climate impacts as physical and transition risks affecting economic activity, prices, and the financial system.
Managing risks through financing and oversight
In its risk management efforts, the Bank of Japan introduced the Funds-Supplying Operations to Support Financing for Climate Change Responses (Climate Response Financing Operations).
Since December 2021, these operations have provided approximately 21.1 trillion yen in funds to 91 eligible counterparties, supporting investments and loans contributing to Japan's climate actions.
The BOJ requires counterparties to disclose information based on TCFD recommendations or SSBJ standards, ensuring organizational engagement under appropriate governance.
Furthermore, the Bank actively supports financial institutions in identifying and managing climate-related financial risks through on-site examinations and off-site monitoring.
In cooperation with the Financial Services Agency (FSA), the BOJ conducted a second scenario analysis on climate-related risks for major financial institutions in June 2025, encouraging enhanced disclosures and scenario analyses across the sector.
A necessary step, but more detail needed
This disclosure marks a crucial step in transparency, providing a structured overview of the BOJ's climate efforts aligned with international standards.
While the framework is clear, the report could benefit from more granular quantitative metrics beyond the financing operations.
For external stakeholders, a deeper dive into the specific outcomes and challenges faced in implementing these strategies would enhance accountability.