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Greenwashing | 2 7月 2024

日本版 グリーンウォッシュと その回避方法: アジア金融業界向け 入門ガイド

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日本版 グリーンウォッシュと その回避方法: アジア金融業界向け 入門ガイド

ClientEarth and the Asia Investor Group on Climate Change (AIGCC) have launched the Japan edition of Greenwashing and How to Avoid It: A Beginner's Guide for the Asian Financial Industry.* It provides analysis on how financial players in Asia can address the growing regulatory and legal risks of greenwashing, particularly as it relates to climate change. This report is a special Japan edition, with Japan-specific updates added to the first edition of the report published in English in April 2023.

As financial risks from climate change grow and interest in transition finance grows, addressing greenwashing, including the need to avoid greenwashing risks, has become a priority for regulators and investors in Japan and around the world. This specially updated Japan edition focuses on:

  • Identifying greenwashing and the associated risks for financial institutions operating in Asia
  • An analysis of new forms of greenwashing and regulatory and legal responses to date
  • The report provides recommendations for financial institutions doing business in Japan and other Asian countries on how to prevent the risks of greenwashing, as well as case studies of best practices from investors operating in Asia.

There is no clear definition of greenwash, but in the context of the financial industry, greenwash generally refers to false, deceptive or misleading statements/representations about the nature or extent to which a financial product, investment strategy or company has a positive environmental or climate impact.

 The report profiles regulatory and voluntary measures being put in place around the world to combat greenwashing, with a particular focus on Japan, which has taken several significant steps to address the issue of greenwashing in the financial sector, including:

  • Strengthening sustainability-related disclosure requirements: For example, Japan's Sustainability Standards Board ("SSBJ") has announced that it will issue a Japanese equivalent of the International Sustainability Standards Board's IFRS S1 and IFRS S2 by March 31, 2025. This is expected to strengthen Japan's disclosure standards.
  • In response to concerns about greenwashing, rules and guidelines on the labelling of financial products and funds have also been issued.
  • Rules are being introduced to calibrate or guide the comparison of company performance on ESG factors.

Greenwashing has the potential to significantly hinder the green transition, risk distorting financial markets and undermining the effective allocation of capital. While civil society analysis has been key to identifying and prosecuting greenwashing, regulators are also stepping up their scrutiny of the issue, as the foreword to the report, written by officials from Japan's Financial Services Agency and the Singapore Exchange, indicates:

Launch event will be held on October 4, 2023

 The guide was launched during a side event at the PRI in person 2023 Annual Meeting in Tokyo. The launch event featured distinguished speakers including Masashi Ikeda, Chief Sustainable Finance Officer, Financial Services Agency. Panelists included Shinsuke Kobayashi, Attorney at Kanagawa International Law Office; Emi Onozuka, CEO and Representative Director of Eminent Group and member of the Financial Services Agency's Expert Council on Sustainable Finance; and Kaori Miyake, Head of ESG Solutions Planning and Promotion Department, Sumitomo Mitsui Trust Bank and Co-Chair of Japan Climate Leaders Partnership. The panel was moderated by Hana Heineken, Attorney at ClientEarth.

Anjali Viswamohanan , Policy Director, AIGCC , said: "The report's recommendations provide practical guidance to financial institutions active in the ESG or net-zero investment space on how to prevent greenwashing risks." Additionally, AIGCC also provides investors with net-zero frameworks and initiatives with accountability and transparency, such as the Investor Climate Action Plan (ICAP) and the Net-Zero Investment Framework (NZIF) .

"We have seen Japanese investors, such as signatories to the Net Zero Asset Managers initiative (NZAM), already using ICAP to demonstrate their progress. These tools and frameworks are granular and can help investors address concerns of greenwashing.

“Corporate engagement and evaluation are important tools to address greenwashing-related risks. The AIGCC provides investors with tools and guidelines to ensure meaningful engagement, and the guide usefully mentions these as well.”

Hana Heineken, lawyer at ClientEarth , who moderated the panel discussion at the launch event , added: "The launch of this guide is timely given the move in Japan to tackle greenwashing. It is no surprise that regulators in Japan and elsewhere are stepping up their scrutiny of this dangerous practice that distorts financial markets and undermines the allocation of capital to the necessary green transition. The risk of regulators, civil society and private actors bringing legal claims against institutions in Asia has increased significantly, including in relation to transition finance, which aims to support high-emitting companies and the gradual decarbonisation pathway of their activities. Investors and regulators need to be particularly vigilant in avoiding the risks of transition washing that could impede the achievement of net-zero emissions. We hope that the five pillars of preventing greenwashing set out in this guide will enable companies to take effective climate action and protect their interests from legal and commercial risks."

A recording of the report launch event is available to watch here: Link