Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/238440 
Year of Publication: 
2020
Series/Report no.: 
ADBI Working Paper Series No. 1083
Publisher: 
Asian Development Bank Institute (ADBI), Tokyo
Abstract: 
This paper examines the emergent role of sustainable finance and investment in Japan and scrutinizes the need for the Japanese financial system to mitigate growing climate risks and support the transition of the Japanese economy to a low-carbon, sustainable pathway. It first illustrates Japan's exposure to physical and transitional climate risks before reviewing the developments and emerging practices in sustainable finance. These include the growing importance of environmental, social, and governance criteria in financial decision-making; more rigid reporting and disclosure standards; the development of a green bond market; and the growing importance of sustainable investing by the financial sector. The paper also assesses the role of policies and regulations in scaling up sustainable finance and low-carbon infrastructure investments in Japan. Subsequently, it analyzes transitional climate risks via scenario analysis, applying the Paris Agreement Capital Transition Assessment tool to examine the exposure of subsectors of the Japanese equity market over several of the International Energy Agency's climate scenarios. The paper concludes with policy recommendations for aligning Japan's financial sector with sustainable development and the Paris agreement.
Subjects: 
sustainable finance and investment
ESG
Japan
climate-related risks
TOPIX
JEL: 
G2
G3
Q5
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.