BoJ lends trillions of yen to boost green investment but faces criticism over potential misalignment with global standards, Central Bank of Azerbaijan proposes green loan guidelines, a new interoperability mapping resource is released – all this and more in the latest news roundup.
Bank of Japan boosts climate lending but grapples with interoperability issues
The Bank of Japan has bolstered its support for climate-themed investments, recently committing to provide ¥7.2tn (US$49bn) in loans for financial institutions’ climate initiatives.
The lending is being provided through a “fund-provisioning measure” which commenced in 2021 and has now reached a total of nearly US$84bn in climate-related loans. Lending is conditional on disclosure of certain sustainability-related information.
Meanwhile, Japan’s draft sustainability disclosure standards are facing criticism for several inconsistencies with the International Sustainability Standards Board (ISSB) criteria they are based on, Environmental Finance reports. The potential misalignment of reporting periods was identified as a key issue by respondents to a consultation on the draft standards.
Investors, including Norges Bank Investment Management, regulators, and standard-setters have called for greater alignment with international standards.
The Global Reporting Initiative (GRI) is urging Japan to align its standards with the GRI’s own guidelines and the European Sustainability Reporting Standards, adopting a double materiality approach. The GRI contends that this would not be burdensome since 90% of the top 100 Japanese companies already report against its standards.
GRI and TNFD collaborate on biodiversity reporting
The GRI and the Taskforce on Nature-related Financial Disclosures (TNFD) have published a joint interoperability mapping resource to facilitate single reporting on biodiversity. The two organisations have been collaborating since 2022 and were key contributors to the development of each other’s biodiversity disclosure standards.
The mapping reveals consistency in nature-related concepts and definitions, such as the drivers of nature loss which are defined in line with the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services in both standards. There is also a strong consistency between TNFD core global disclosure metrics and the GRI standard’s metrics.
The TNFD recommendations incorporate the GRI’s concept of double materiality as a default option, but provide flexibility for national regulators that chose to focus only on financial materiality.
Other key differences between the two frameworks include the TNFD’s stronger emphasis on geographic location compared to GRI, and while both frameworks address stakeholder engagement, the TNFD places more specific emphasis on Indigenous Peoples and local communities.
Bank of England publishes climate disclosure
The Bank of England (BoE) has achieved a 21% reduction in carbon footprint from the previous year, according to its annual climate-related financial disclosure report. The report also outlines the bank’s approach to integrating climate risks into its governance framework and its five-pillar climate strategy.
“The Bank of England’s climate-related financial disclosure indicates some welcome progress in key areas “, Ellie McLaughlin, senior policy and advocacy officer at Positive Money said in comments to Green Central Banking.
However, she expressed disappointment in the seemingly reduced focus on supporting the economy-wide transition and suggested the BoE exclude bonds from firms investing in fossil fuel expansion from its collateral framework. The bank should also “consider active tools like dual interest rates to support cheaper lending for energy efficiency”.
Meanwhile, the UK’s Financial Conduct Authority (FCA) is seeking a finance specialist to provide technical input into the regulator’s efforts to support the transition.
The job description states, “the transition finance market is at an early stage in developing, but the environmental and economic opportunities that it presents are increasingly being recognised by policymakers, regulators and financial institutions”.
The description also underscores the growing importance of climate expertise in financial regulation and the FCA’s commitment to shaping the future of sustainable and transition-related economic growth.
Moldova approves sustainable finance roadmap
The National Bank of Moldova (NBM) has approved a sustainable finance roadmap, setting a strategic vision for 2024-2028. The roadmap was developed in collaboration with the International Finance Corporation and informed by the SBFN toolkit for developing national sustainable finance roadmaps. It aims to integrate sustainable finance principles into Moldova’s financial system.
It includes four main pillars with specific actions and measures to be implemented over the next five years, focusing on introducing key sustainable finance terms into the country’s legal framework, setting priorities for action in sustainable finance development, and ensuring coherence of stakeholders’ efforts in greening investments and improving energy efficiency.
The roadmap also includes a commitment to developing a green taxonomy.
This page was last updated January 6, 2025
Written by
Ike Walker, a Green Central Banking contributor since 2023, has a decade's experience in research writing. An Utrecht-based scholar, Ingrid specialises in transformative justice, green finance, law and systems change. They are an Utrecht University's Bright Minds scholar and previously worked for Cambridge University and various justice-based NGOs.
