Central Banks

Bank of Japan Bank of Japan

Under the governorship of Haruhiko Kuroda, the Bank of Japan (BoJ) has published a comprehensive climate strategy, which covers the actions it is taking to integrate climate considerations into its monetary policy, financial stability and research functions.

The BoJ has won plaudits among climate advocates for its green loans scheme, which provides zero-interest financing to lenders supporting action to address climate change.

Climate action

  • The BoJ’s climate response financing operations provide zero-interest loans to banks supporting the low-carbon transition.

  • The BoJ is developing a pilot climate scenario analysis exercise for the largest financial institutions.

  • Banks and investors are required to publish TCFD-aligned disclosures.

Climate inaction

  • The Bank of Japan’s monetary policy operations strongly support fossil fuel finance, according to a report by Oil Change International.

  • Japan has not yet made climate risk disclosures mandatory, although the country’s Financial Services Authority has said it will do so for the biggest firms in 2022.

  • The BoJ has not made adjustments to its capital requirements or collateral frameworks to specifically account for climate risks.

Haruhiko Kuroda

Haruhiko Kuroda

Governor of the Bank of Japan

Term of appointment

March 2013 - March 2023

Link to biography

How the Bank of Japan stacks up

Rank Country Aggregate Score (out of 130) Grade (A+ to F) Research and Advocacy (out of 10) Monetary Policy (out of 50) Financial Policy (out of 50) Leading by Example (out of 20)
8 JapanJapan 35 D+ 10 6 14 5

Central Bank/Supervisor

Bank of Japan and Financial Services Agency

More info

Research & Advocacy

10 out of 10

High-impact

  • N/A

Medium-impact

  • BoJ and FSA are members of NGFS

Low-impact

Monetary Policy

6 out of 50

High-impact

  • N/A

Medium-impact

Low-impact

  • Loan support programme offers loans at below market rate to financial institutions to support priority lending sectors including environment business (downgraded from medium impact as the wording is vague and the environment portion of this has effectively been replaced by the scheme above)

Financial Policy

14 out of 50

High-impact

  • N/A

Medium-impact

Low-impact

Leading by Example

5 out of 20

High-impact

  • N/A

Medium-impact

  • N/A

Low-impact

What steps are missing in the Bank of Japan toolbox to address climate risk?

Civil society expects the bank to do the following:

  • Exclude fossil fuels from all of its asset purchases, including its corporate bond purchase programme.

  • Develop and publish a robust sustainable finance taxonomy.

  • Discourage fossil fuel finance through reserves requirements and/or collateral frameworks.

  • Require firms to publish plans outlining how they will align their businesses with Japan’s climate goals, including its target of reaching net zero by 2050.

Latest News

Opinion
News| April 13, 2023

Closing the gap: how well have regulators and banks driven climate actions in Asia Pacific?

A new analysis from WWF reveals what progress has been made in climate-releated banking regulation and supervision in Asia Pacific nations, and how much still needs to be done.
Opinion
News| April 13, 2023

Closing the gap: how can Asia Pacific financial regulators respond to climate risks?

What can Asia Pacific countries do to improve climate-related banking regulation and supervision? A team of policy experts from WWF provide the answers.
News| March 9, 2023

Kazuo Ueda nominated as Bank of Japan governor

Ueda’s few statements on using monetary policy to address climate change suggest he may not support the idea.
Weekly roundup
News| February 1, 2023

Central banks urged to study nature-economy tipping points

Nature-related risk assessments must consider tipping points, World Bank considers impact of climate capital measures, and more from this week in green central banking.
News| January 19, 2023

Fed scenario analysis, World Bank reform push and ECB deadline: 2023 in green central banking

The Fed’s inaugural climate scenario analysis exercise and an ECB deadline on banks’ management of climate risks are among the key milestones in green central banking in the year ahead.
Opinion
News| January 13, 2023

Heat on the horizon: how Asia’s financial regulators must rise to the climate challenge

Countries in the Asia Pacific region are highly vulnerable to climate change and central banks must do more to mitigate the physical and transition risks, say policy experts from WWF.
News| November 29, 2022

BoJ admits operations are subject to carbon bias

The Bank of Japan says it is taking steps to correct a potential carbon bias in its operations, but critics claim its actions are inadequate.
News| November 24, 2022

Federal Reserve still performs poorly in Green Central Banking Scorecard

The report finds that the US central bank has still taken no action at all to consider climate change when conducting monetary policy.
News| November 15, 2022

BoJ climate loanbook grows to $26bn

The Bank of Japan has now dispersed climate loans totalling nearly $26bn, governor Haruhiko Kuroda said today. …
Weekly roundup
News| September 2, 2022

BoJ releases results of climate scenario analysis

The BoJ releases climate scenario analysis results, CEBRA focuses on the green transition, how the ECB’s climate strategy increased green bond issuance, new E-axes policy briefs and more from this week in green central banking.