JAPAN will ramp up efforts to promote sustainable finance such as by nurturing its green bond market and analyzing financial institutions’ resiliency to climate risks, according to the Japanese Government’s new regulatory guideline.

In collaboration with Japan’s central bank, the Financial Services Agency (FSA) – Japan’s financial regulator – will conduct scenario analyses on Japan’s three mega-banks and top three nonlife insurers to measure their resilience to risks posed by climate change.

The analyses will be based on common scenarios on climate risks and conducted as a pilot exercise through June next year, the FSA said in its fiscal 2021 regulatory guideline released Tuesday.

Japan will also set up a scheme to certify green bonds and work with Japan Exchange Group – the operator of Tokyo Stock Exchange – on a common platform that issuers and investors can tap for information on green bonds, according to the guideline.

“It’s important to create an environment where market participants can smoothly and accurately make investment decisions that contribute to decarbonization,” the FSA said.

(SD-Agencies)