JFSA Consults on Guidelines for Climate Transition Finance
JFSA proposed guidelines on the implementation of climate transition finance, with the comment period on these guidelines ending on April 16, 2021. The draft guidelines, which were formulated by the Study Group on Environmental Improvement for Effective Transition-Finance, highlight the significance of promoting transition-finance initiatives in tandem with the initiatives to realize a decarbonized society based on the global objective of carbon-neutrality by 2050. The study group that formulated these draft guidelines was established by JFSA, the Ministry of Economy, Trade, and Industry (METI), and the Ministry of Environment to formulate basic principles for transition-finance in Japan, particularly in terms of raising funds through transition bonds and loans.
The International Capital Markets Association (ICMA) issued, in December 2020, the Climate Transition Finance Handbook to provide clear guidance and common expectations to capital markets participants on the practices, actions, and disclosures to be made available when raising funds in debt markets for climate transition-related purposes. The Climate Transition Finance Handbook acts as guidance for issuers seeking to utilize green bonds, sustainability bonds, or sustainability-linked bonds toward the achievement of their climate transition strategy. The guidelines issued by JFSA are in line with the Climate Transition Finance Handbook from ICMA.
Comment Due Date: April 16, 2021
Keywords: Asia Pacific, Japan, Banking, Securities, Climate Change Risk, Green Bonds, Sustainable Finance, ESG, Transition Risk, ESG, JFSA
Featured Experts
Michael Denton, PhD, PE
Dr. Denton provides industry leadership in the quantification of sustainability issues, climate risk, trade credit and emerging lending risks. His deep foundations in market and credit risk provide critical perspectives on how climate/sustainability risks can be measured, communicated and used to drive commercial opportunities, policy, strategy, and compliance. He supports corporate clients and financial institutions in leveraging Moody’s tools and capabilities to improve decision-making and compliance capabilities, with particular focus on the energy, agriculture and physical commodities industries.
Previous Article
OSFI Unwinds Temporary Increase to Covered Bond Limit for BanksRelated Articles
US Agencies Issue Several Regulatory and Reporting Updates
The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.
ECB Issues Multiple Reports and Regulatory Updates for Banks
The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.
HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements
The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.
EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR
The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.
CBIRC Revises Measures on Corporate Governance Supervision
The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.
HKMA Publications Address Sustainability Issues in Financial Sector
The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.
EBA Updates Address Basel and NPL Requirements for Banks
The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.
ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite
The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.
FCA Sets up ESG Committee, Imposes Penalties, and Issues Other Updates
The Financial Conduct Authority (FCA) is seeking comments, until December 21, 2022, on the draft guidance for firms to support existing mortgage borrowers.
FSB Reports Assess NBFI Sector and Progress on LIBOR Transition
The Financial Stability Board (FSB) published a report that assesses progress on the transition from the Interbank Offered Rates, or IBORs, to overnight risk-free rates as well as a report that assesses global trends in the non-bank financial intermediation (NBFI) sector.
