In February 2026, the Financial Services Agency (FSA) of Japan officially designated the standards developed by the Sustainability Standards Board of Japan (SSBJ) as the authorized standard with which annual securities reports must be prepared, under the Cabinet Office Ordinance on Disclosure of Corporate Affairs. Starting fiscal year 2026, approximately 68 companies on the Tokyo Stock Exchange (TSE)’s Prime Market will be affected by the first phase of mandatory sustainability reporting using these standards. As this significant milestone approaches, we examine the SSBJ Standards: background, requirements, scope, timeline, and the support available to help organizations prepare.
Regulatory sustainability reporting in Japan
Japan already has a reputation for active, significant involvement in sustainability programs and reporting. A remarkably large number of Japanese companies have declared support for the Task Force on Climate-related Financial Disclosures (TCFD). In fact, as of November 2023, Japanese entities constitute approximately 30% of all companies and institutions globally who have endorsed TCFD.
This high level of participation is also reflected in the high response rates and performance of Japanese companies who disclose to voluntary sustainability reporting frameworks, like CDP. Out of the 22,100 global companies who disclosed to CDP in 2025, approximately 22% of companies in Japan achieved a Leadership A score.
Since TSE’s revisions to the Corporate Governance Code in June 2021, Prime Market-listed companies have been required to report on TCFD and other social matters in their annual securities reports (yuho) following a comply-or-explain approach. This was then enhanced in March 2023 with new rules mandating a new section on sustainability-related information in annual securities reports. All listed companies in Japan (including Japan-listed foreign companies) were required to disclose sustainability-related information using the TCFD pillars Following TCFD’s sunset and the transfer of its responsibilities to the IFRS Foundation in 2023, the release of the SSBJ Standards marks a promising new chapter for sustainability reporting in Japan.
What are the SSBJ Standards?
The Sustainability Standards Board of Japan (SSBJ) was established in 2022 under the Financial Accounting Standards Foundation (FASF), which also oversees the Accounting Standards Board of Japan (ASBJ). SSBJ operates as Japan’s equivalent of the International Sustainability Standards Board (ISSB) on a national scale and is tasked with developing and contributing to sustainability disclosure standards at both the national and international level.
Following ISSB’s release of the IFRS Standards (S1 and S2) in June 2023, SSBJ released its first sustainability disclosure Standards in March 2025. Designed to meet global capital markets and investor demand for consistent, decision-useful information, the SSBJ Standards align with the IFRS Sustainability Disclosure Standards while incorporating relevant jurisdiction-specific alternatives.
SSBJ Standards follow a similar structure to IFRS S1 and S2 Standards by outlining disclosure requirements on climate and sustainability risks using a financial materiality approach, along the four TCFD pillars: Governance, Strategy, Risk Management, and Metrics & Targets. These standards are designed to be applied together and are as follows:
| SSBJ Standard name | Shortened name | Purpose | Connection to other frameworks |
| Universal Sustainability Disclosure Standard
“Application of the Sustainability Disclosure Standards” |
Application Standard | Sets the overarching principles for how standards should be applied and outlines approach to materiality, reporting boundaries, and relationship between sustainability disclosures and financial statements | |
| Theme-based Sustainability Disclosure Standard No. 1
“General Disclosures” |
General Standard | Covers general sustainability-related financial disclosures across the four pillars from the TCFD framework.
Sets requirements for companies to explain how material sustainability risks and opportunities may affect financial performance. |
Can be considered the equivalent to IFRS S1. |
| Theme-based Sustainability Disclosure Standard No. 2
“Climate-related Disclosures” |
Climate Standard | Focused on climate governance, climate-related risks and opportunities, scenario analysis, transition plans, and GHG emissions.
Contains the heaviest weight of new obligations for many companies. |
Can be considered the equivalent to IFRS S2. |
How do SSBJ Standards differ from ISSB standards?
Both SSBJ and ISSB have confirmed that SSBJ Standards provide outcomes that are functionally aligned with that of the ISSB Standards, though SSBJ Standards also offer some jurisdiction-specific reporting alternatives to achieve consistency with local laws and regulations.
Though SSBJ incorporates all requirements of IFRS S1 and S2 into its standards, there are several areas in which SSBJ Standards go beyond what is outlined in ISSB Standards. Examples of some of the differences are noted in the table below.
| Topic | ISSB Standards | SSBJ Standards |
| Identification of related financial statements | Require an entity to identify the financial statements to which the sustainability-related financial disclosures relate (IFRS S1.22) | Goes beyond what is required in IFRS S1; if the related financial statements are not included with the sustainability disclosures, companies must state where to obtain them and which accounting standards were used to prepare them (paragraph 7 of the Application Standard). |
| Date of authorization for issue | No requirement.
While IFRS Accounting Standards (paragraph 17 of IAS 10 “Events After the Reporting Period) require this disclosure, IFRS Sustainability Standards do not. |
Requires entities to disclose the date of authorization for issuing sustainability-related financial disclosures and the name of the authorizing body/individual (paragraph 70 of the Application Standard).
Note, Japanese accounting standards (Japanese GAAP) does not require this. |
| Measuring GHG emissions using a method other than GHG Protocol | No requirement. | With certain conditions, calculation and reporting of emissions using a measurement method other than the GHG Protocol is accepted if jurisdictional authority or stock exchange requires this (jurisdictional relief). Specified emitters reporting under Japan’s GHG Reporting System qualify for this jurisdictional relief. (paragraph 50 and 51 of the Climate Standard). |
| Scope 2 GHG emissions | Requires disclosure of location-based emissions and relevant information on any contractual instruments used (S2.29(a)(v)). | Requires disclosure of location-based emissions and gives the option to disclose either (1) relevant information on contractual instruments or (2) market-based emissions (paragraphs 53 and 54 of the Climate Standard). |
| Scope 3 GHG emissions | Allow a single aggregate figure although the relevant scope 3 categories that make up this figure must be disclosed. (S2.B33) | Requires disaggregated disclosure of scope 3 greenhouse gas emissions by relevant categories with relevant activities (paragraph 55 of the Climate Standard). |
| Location of standards-aligned disclosures | Allow a flexible format in which disclosures can be in either a standalone or integrated report (IFRS S1.61 and 62). | Requires disclosures to be included in a dedicated sustainability section of the annual securities report (not in SSBJ Standards directly but rather the outcome of amendments made by the FSA to the Financial Instruments and Exchange Act (FIEA) on July 15, 2026.) |
Assurance requirements
While ISSB Standards do not contain explicit requirements on third-party assurance of reported information (though it is encouraged), SSBJ Standards set specific requirements on the information that must be assured.
Limited assurance is required beginning the second annual reporting period. For the first two years of required assurance, the scope is currently limited to specific information such as Scope 1 and 2 greenhouse gas emissions, governance, and risk management).
The assurance scope from the third year onward will be determined by SSBJ and informed by international practices.
Note on assurance providers: Assurance providers must be registered and fulfill requirements relating to technical proficiency, quality management, and independence. Though the final requirements for providers are yet to be confirmed, the FSA has indicated openness towards a profession-agonistic approach, meaning both audit firms and other qualified providers of assurance are eligible to register as sustainability assurance providers so long as they meet FSA requirements. Given the variability of who can register, the FSA will not fully adopt the Japanese Institute of Certified Public Accountants’ (JICPA) existing assurance guidelines; rather, it will create its own standard by adapting the JICPA guidelines so that non-audit firms can conform and by aligning these new standards with the International Auditing and Assurance Standards Board’s (IAASB) international standard on sustainability assurance (ISSA) 5000 standard.
Scope and timeline
The table below summarizes the timeline for the application of SSBJ Standards as well as mandatory third-party assurance requirements.
SSBJ Standards currently only apply to companies listed on the Tokyo Stock Exchange (TSE) Prime Market and are introduced to in-scope companies in phases, starting with the largest companies by market capitalization.1 The FSA has announced that the mandatory application timeline for Prime Market companies with a market capitalization below ¥500 billion will be determined later, pending developments in disclosure practice and investor demands.
Foreign companies listed on the Prime Market are also in scope for the same SSBJ requirements and timelines as domestic companies if they meet the thresholds.
It is worth noting that SSBJ’s assurance requirements have a separate timeline than the disclosure timeline. Mandatory third-party assurance is required one year after the mandatory disclosure date of each wave.
As an example, a Prime Market company with market capitalization of more than ¥3 trillion will be subject to SSBJ starting the fiscal year ending March 2027. If the company is utilizing an April 1-March 31 fiscal period, as is common for many Japanese companies, this would mean that the disclosure itself is due in calendar year 2027 as part of the annual securities report for FY26 (covering April 1, 2026 to March 31, 2027). Third-party assurance requirements will be phased in for the fiscal year ending March 2028, which means that SSBJ-relevant information reported in the FY27 annual securities report (covering April 1, 2027 to March 31, 2028) must be assured for the required datapoints.
| Phase | Scope | SSBJ disclosure mandatory from | 1st SSBJ disclosure due2 | Est # of companies* | Assurance mandatory from | 1st SSBJ disclosure w/ assur. due |
| Phase 1 | Prime Market, market cap >¥3 trillion | FY ending March 2027 | CY 2027 | ~68 | FY ending March 2028 | 2028 |
| Phase 2 | Prime Market, market cap ¥1-3 trillion | FY ending March 2028 | CY 2028 | ~171 | FY ending March 2029 | 2029 |
| Phase 3 | ¥500 billion – ¥1 trillion | FY ending March 2029 | CY 2029 | ~284 | FY ending March 2030 | 2030 |
*Source: Financial Services Agency. “SSBJ Roadmap and Assurance Framework.” Retrieved October 28, 2026. https://www.fsa.go.jp/singi/singi_kinyu/tosin/20250717/02.pdf
Will there be transition relief?
One of the biggest challenges for companies facing SSBJ reporting is the requirement to integrate SSBJ disclosures into a dedicated sustainability section of their annual securities report (yuho). This requirement by the FSA is significant in that it marks SSBJ disclosures as a legally mandated filing subject to the same legal liability and scrutiny as financial statements.
To ease the early challenges associated with aligning the two reporting periods, FSA regulations will allow companies in each implementation phase to use transition relief for the first two annual reporting periods in which they apply the SSBJ Standards. During this time, companies may disclose sustainability-related financial disclosures after the publication of its relevant financial statements (the two-step filing option). Alternatively, ISSB standards give the option for companies to disclose the required information at the same time as an interim report; SSBJ Standards also allow for this option or for the disclosure to be made before and separately from the interim report.
Starting the third year of SSBJ applicability, companies will be required to release simultaneous disclosure of financial and sustainability related information.
Notably, SSBJ Standards allow for one additional year (two years total) than the standard transition relief permitted in ISSB Standards (one year). As an example, a Phase 1 company must release their first SSBJ reporting in calendar year 2027 covering FY26 information. However, because FSA regulations allow for two years of transition relief, SSBJ disclosures for reporting periods FY26 and FY27 can be released separately from the annual securities report for these respective periods. However, for Phase 1 companies, SSBJ disclosures covering FY28 and subsequent reporting periods are expected to be released simultaneously with the annual securities report.
| Phase | SSBJ disclosure mandatory from | 1st SSBJ disclosure due2 | Assurance mandatory from | 1st SSBJ disclosure w/ assur. due | Transition relief years | Simultaneous disclosure required |
| Phase 1 | FY ending March 2027 | CY 2027 (covering FY26 data) | FY ending March 2028 | CY 2028 (covering FY27 data) | FY ending March 2027
FY ending March 2028 |
FY ending March 2029 |
| Phase 2 | FY ending March 2028 | CY 2028 (covering FY27 data) | FY ending March 2029 | CY 2029 (covering FY28 data) | FY ending March 2028
FY ending March 2029 |
FY ending March 2030 |
| Phase 3 | FY ending March 2029 | CY 2029 (covering FY28 data) | FY ending March 2030 | CY 2030 (covering FY29 data) | FY ending March 2029
FY ending March 2030 |
FY ending March 2031 |
How can you start preparing for SSBJ reporting?
- Map existing disclosures to SSBJ: Review your current sustainability disclosures and map them against SSBJ. This will help streamline your reporting processes by identifying gaps as well as overlapping areas where your existing reporting already aligns. If your company responds to investor ratings such as CDP or utilizes frameworks such as TCFD in sustainability reporting, this will be your place to start, as there is clear interoperability and overlap with ISSB, which can then be modified for SSBJ-specific analyses.
- Build strong data foundations: All sustainability reporting depends on reliable, well-structured data—both to ensure accurate reporting and to help make the reporting process more efficient year over year. Robust data architecture will include consistent definitions, clear and measurable KPIs, standardized data collection processes, and traceable data flows across facilities and systems.
- Establish internal controls on data: Sustainability data should be treated with the same rigor as financial data, and internal controls can help you achieve that goal. We recommend implementing internal controls such as segregation of duties, approval thresholds, and data verifications, which serve as a set of checks and balances that safeguard accuracy and consistency in your reporting.
- Start the verification process as soon as possible: If you haven’t yet verified your emissions data, you should consider getting in the queue now. With the Standards starting to roll out across hundreds of organizations, providers are likely to be hit with a wave of verification requests at once. Act early to make the professional connections you need to secure verification in time for your deadlines. Accredited verifiers, like our sister company Cameron-Cole, are a great place to start.
- Expand scope 3 reporting if necessary: If you have only reported a single aggregated scope 3 figure, you will need to expand your reporting capabilities. SSBJ requires disaggregated disclosure of scope 3 greenhouse gas emissions across relevant categories, and it may take time to build the systems needed to accurately track and monitor the necessary data across your value chain.
- Work with a trusted consultant to kick-start your reporting program: Experienced disclosure experts can help translate SSBJ requirements into a cohesive reporting approach that’s custom-built for your organization. ADEC ESG works with companies around the world to build solutions that help them achieve their sustainability goals, from readiness assessments and gap analyses to climate transition planning and climate risk mitigation. Let our team help you use SSBJ as a strategic tool, prepare for compliance, and build systems that scale.
ADEC ESG supports a wide range of services that can help support your ISSB-aligned reporting, including:
- Gap analyses and readiness assessments
- Climate scenario analyses
- Climate risk assessments and mitigation
- Climate transition planning and advisory
- Materiality assessments
- GHG emissions reporting services
Contact our team to learn more about our services and how we can support your SSBJ reporting strategy.
1 Market capitalization to be determined by the average of the last five fiscal year-ends, up to the last fiscal year-end.
2 Listed companies and companies that meet certain criteria are generally required to release annual securities reports within three months of the end of every fiscal year (source).
This blog provides general information and does not constitute the rendering of legal, economic, business, or other professional services or advice. Consult with your advisors regarding the applicability of this content to your specific circumstances.
