The Japan Financial Services Agency (FSA) promulgated and brought into force amendments to the corporate and specified securities disclosure ordinances, together with new notices and revised disclosure guidelines, following a public consultation. The package sets a phased framework for mandatory sustainability disclosures aligned to the SSBJ Standards, broadens human capital disclosure requirements, and makes additional changes to reduce burden and facilitate earlier securities report disclosure ahead of shareholders’ meetings. Under new sustainability disclosure provisions, companies listed on an exchange financial instruments market designated by the FSA Commissioner (designated by notice as the Tokyo Stock Exchange Prime Market) with an average market capitalisation of at least JPY 1 trillion must include sustainability information in securities reports in accordance with the SSBJ Standards designated by notice. Average market capitalisation is determined using end-of-fiscal-year market capitalisation over the previous five fiscal years (or fewer years for more recently listed issuers). For the first two years of application, companies may use “two-stage disclosure” by omitting required sustainability information initially and then submitting a corrected report by the deadline for filing the following fiscal year’s semi-annual report. The amendments also add related disclosure items, including statements of compliance with the SSBJ Standards and the status of any two-stage disclosure or transitional measures, additional explanations of estimation processes and internal disclosure procedures for forward-looking and quantitative Scope 3 greenhouse gas emissions information, and a safe-harbour approach for false statements on Scope 3 quantitative information where reasonable disclosure of estimation factors and internal procedures is provided. Human capital changes reposition the “status of employees” section and add new requested disclosures, including human resources strategy linked to consolidated strategy, salary-determination policy and year-on-year change in average employee salary, with additional salary disclosures where the filing entity mainly manages subsidiary businesses. Other amendments narrow what must be included when a securities report is disclosed before the annual general meeting (AGM), permit major shareholder and voting-rights information in semi-annual reports to be stated as of the interim dividend record date, establish procedures for applying to extend semi-annual report filing deadlines for specified securities, and clarify that issuing shares on predetermined conditions is not an “offering of securities” for bonds with a share conversion clause. The sustainability disclosure requirements apply to securities reports for fiscal years ending on or after 31 March 2028, with earlier application from fiscal years ending on or after 31 March 2027 for companies with average market capitalisation of at least JPY 3 trillion based on a fiscal year ending on or after 31 March 2026. The new notices and the revised disclosure guidelines apply upon promulgation.

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