Japan SSBJ Standards: Requirements, Reporting and Business Impact

Quick answer: The SSBJ Standards are Japan's mandatory climate and sustainability disclosure rules, made law in February 2026 for companies listed on the Tokyo Stock Exchange Prime Market. They apply only to large listed companies, phased in by size between 2027 and 2029, and require full-scope emissions reporting, including Scope 3 broken down by category. Most businesses elsewhere are not directly in scope, but suppliers to large Japanese companies may be asked for emissions data, even though those requests are not mandatory. The businesses best placed to respond are the ones whose carbon data is already accurate, full-scope, and ready to share. 

Japan is one of the latest major economies to put climate and sustainability disclosure on a legal footing, joining a wider move towards rules built on the same international baseline. For most businesses outside Japan, the direct obligations will not apply. The mandate falls on a specific group of large listed companies. But the way these rules are designed means the demand for emissions data travels down through global supply chains, and that reaches businesses well beyond Japan's borders. This guide explains what the SSBJ Standards are, what they require, who has to comply, the reporting timelines, and how the standards affect businesses both inside and outside Japan.

What are the SSBJ Standards?

The SSBJ Standards are Japan's national framework for corporate sustainability disclosure. They were developed by the Sustainability Standards Board of Japan, a body set up in July 2022 under the Financial Accounting Standards Foundation, shortly after the creation of the International Sustainability Standards Board (ISSB).

The framework is made up of three standards, published on 5 March 2025:

• Application Standard. Sets out the overarching principles for how the standards are applied, including the approach to materiality and reporting boundaries.
• General Standard. Covers general sustainability disclosures across governance, strategy, risk management, and metrics and targets. Together with the Application Standard, it corresponds to the ISSB's IFRS S1.
• Climate Standard. The climate-specific standard, corresponding to IFRS S2. It covers climate governance, climate-related risks and opportunities, scenario analysis, transition plans, and greenhouse gas emissions, including Scope 3 broken down by category.

The simplest way to understand the SSBJ Standards is as Japan's version of the global ISSB baseline, the same baseline the UK, Canada, Australia and others are building their own rules on. The SSBJ incorporated all of the ISSB's requirements and added a small number of optional, jurisdiction-specific alternatives that companies can choose to apply. A company that uses none of those alternatives will also be reporting in line with the ISSB Standards.

One point is worth being precise about. The standards were published in March 2025, but publication did not make them law. The decisive step came on 26 February 2026, when Japan's Financial Services Agency (FSA) finalised a Cabinet Office Order making compliance legally mandatory for companies listed on the Tokyo Stock Exchange (TSE) Prime Market. That is the moment the standards moved from a published framework to a binding legal requirement.

What do the SSBJ Standards require?

Companies in scope must disclose information across the four pillars that underpin most modern climate reporting: governance, strategy, risk management, and metrics and targets. In practice that means:

• Governance: the board-level structures that oversee sustainability-related risks and opportunities.
• Strategy: how climate and sustainability factors affect the business model, financial position, and long-term plans, supported by climate scenario analysis and a transition plan.
• Risk management: how sustainability-related risks are identified, assessed, and managed.
• Metrics and targets: Scope 1, Scope 2, and Scope 3 emissions, climate targets, and progress against them.

Two features make this a meaningful step up from what large Japanese companies were already doing.

The first is disaggregated Scope 3 reporting. The Climate Standard requires Scope 3 emissions to be reported broken down by the 15 categories defined in the GHG Protocol, rather than as a single combined figure. This is more demanding than a headline Scope 3 number, because it calls for data collection across the whole value chain, categorised consistently and sourced in a way that can be explained.

The second is connectivity with financial reporting. Disclosures must be grounded in financial materiality, also called single materiality, meaning the focus is on the sustainability matters that could affect the company's own financial prospects, rather than on its wider impact on the world. This is a narrower lens than the double materiality used by the EU's CSRD. The disclosures are also connected to the financial statements and designed to sit inside Japan's annual securities reports, so climate data now has to carry the same weight as the numbers in the accounts, rather than living in a separate, more flexible sustainability report.

This is the key shift for companies in scope. Since January 2023, TSE Prime companies have already had to include sustainability information in their annual securities reports, with a good deal of flexibility in methodology. The SSBJ mandate raises that bar considerably. For most of these companies, the change is not that they have to start reporting, but that what they have been doing is no longer enough.

Who do the SSBJ Standards apply to?

The mandate applies to companies listed on the Tokyo Stock Exchange Prime Market, phased in by market capitalisation. These are large, publicly listed companies. The standards do not directly apply to small and medium-sized businesses, or to private companies.

One detail matters for companies near a threshold: market capitalisation is calculated as an average across the last five fiscal year-ends, rather than on a single date. A company that recently crossed a threshold may therefore not yet be in scope, and one that recently dropped below it may still be.

A point that is easy to miss is that foreign companies listed on the TSE Prime Market carry the same obligations as domestic ones. A non-Japanese business with a Prime Market listing is in scope on the same terms as a Japanese one.

What are the SSBJ Standards reporting timelines?

The rollout is phased by company size, with assurance requirements following a year behind each tier's first mandatory disclosure.

• Fiscal year ending March 2026: voluntary early adoption, open to any eligible TSE Prime company.
• Fiscal year ending 31 March 2027: mandatory for companies with an average market cap of ¥3 trillion or more, around 68 companies. Assurance follows from the year ending March 2028.
• Fiscal year ending 31 March 2028: mandatory for companies with an average market cap between ¥1 trillion and ¥3 trillion, bringing the total to around 171 companies. Assurance follows from the year ending March 2029.
• Fiscal year ending 31 March 2029: mandatory for companies with an average market cap between ¥500 billion and ¥1 trillion, bringing the total to around 284 companies. Assurance follows from the year ending March 2030.

Application to the remaining Prime Market companies, those below ¥500 billion, has not yet been scheduled.

There is a timing relief built into the first years. For the first two mandatory fiscal years, companies may use a two-step filing option, which lets them file their sustainability disclosures separately from the annual securities report, by a later deadline. This provides more time to write up the disclosures, but it does not reduce the underlying data collection, which still has to take place within the normal reporting period. After two years, all disclosures revert to the annual report deadline.

On assurance, the requirement begins as limited assurance, a lower level of checking than the reasonable assurance applied to financial audits. For the first two years it is also limited in scope, covering specified information only, namely Scope 1 and 2 emissions, governance, and risk management. Any expansion of that scope from the third year is to be considered against international developments.

How are Scope 3 emissions reported under the SSBJ Standards?

Scope 3 covers emissions that occur outside a company's own operations, across its value chain, and for most large businesses it is the largest part of the footprint. It is also the hardest part to measure, because the data sits with suppliers, customers and other third parties rather than on the company's own meters and invoices.

Under the SSBJ Standards, Scope 3 cannot be reported as one combined number. It has to be broken down across the 15 GHG Protocol categories, from purchased goods and services through to business travel, transportation, and the use of sold products. Producing that breakdown to a credible standard means gathering data across the value chain and being able to show where each figure came from.

Recognising how difficult this is, the FSA built an explicit safe harbour for Scope 3 and forward-looking information, such as scenario analysis and targets. Companies will not be held liable for misstatements in these areas provided they can demonstrate the reasoning and the internal procedures behind their figures.

The protection is conditional rather than automatic. It covers companies that can show why they chose a given method, what data they used, and how they reviewed it, and it offers nothing to companies that cannot. In short, the safe harbour does not lower the data bar. It moves it onto the quality of the method and the documentation behind the numbers.

How do the SSBJ Standards affect supply chains?

This is the part of the story that reaches well beyond Japan, and the part most relevant to businesses elsewhere.

A large Japanese company reporting Scope 3 by category does not necessarily have to go to its suppliers to do it. It can build much of the figure from its own procurement records, using spend-based estimates that apply average emission factors to what it spends. Spend-based data is accepted under the standards, so engaging suppliers is not, in itself, a requirement.

In practice, though, many large companies want more than a spend-based estimate. Supplier-specific data is more accurate, more defensible, and the only way to track genuine reductions or support product-level claims. Furthermore, buyers increasingly use carbon data to choose between suppliers. So a fair number of in-scope companies do ask their suppliers for emissions data, even though they are not obliged to. Many of those suppliers are mid-market and smaller businesses in the UK, US, Canada, the EU and elsewhere.

For suppliers, the realistic position is to prepare for the possibility of a request rather than to assume one is coming. Any business that supplies an in-scope Japanese company may be asked for emissions data, regardless of whether it has a reporting obligation of its own. These requests tend to arrive through supplier questionnaires, procurement portals, and tender processes, and they can appear well before any formal deadline that applies to the customer. The legal duty rests with the large listed company, but in practice the work of producing emissions data can spread across its value chain.

This is the same supply chain logic already seen in the EU's Corporate Sustainability Due Diligence Directive (CSDDD) and in California's climate disclosure laws. It is becoming a common feature of climate regulation: rules written for the largest companies create data expectations that flow several tiers down the supply chain.

For businesses that receive these requests, there is a practical point worth noting. The data needed to answer a Japanese customer is, in large part, the same data needed for other reporting. A full-scope footprint built for a Carbon Reduction Plan, for SECR, for B Corp certification, or for a client questionnaire draws on the same underlying Scope 1, 2 and 3 measurement. It is generally one underlying exercise that supports several requirements, rather than separate work for each.

How do the SSBJ Standards compare with the ISSB and other frameworks?

Japan's rules are not happening in isolation. The country joins more than 30 jurisdictions adopting frameworks aligned with the ISSB baseline. That group includes the UK, whose Sustainability Reporting Standards closely mirror IFRS S1 and S2, as well as Canada, Australia, Singapore and others, each adapting the baseline to its own legal context.

The frameworks differ in their details, such as the approach to materiality and the disclosure deadlines, but they share a common structure: the four-pillar model of governance, strategy, risk management, and metrics and targets, with emissions measured to the GHG Protocol at the centre of the climate disclosures. For a business with customers in more than one of these markets, that shared structure is the useful part. A single, well-organised carbon dataset can support requests tied to Japanese, EU, UK and other rules, rather than requiring a separate measurement exercise for each jurisdiction.

How Seedling can help

Most businesses in Seedling's market are not directly in scope of the SSBJ Standards. Where Seedling helps is with the task the standards create further down the chain: producing a credible, full-scope carbon footprint that can answer a large customer's data request with confidence.

Seedling combines carbon accounting software with one-to-one support from a carbon expert, helping businesses measure Scope 1, 2 and 3 emissions to the GHG Protocol, move from spend-based estimates towards more accurate activity data, and produce assured outputs backed by expert review. If you expect supply chain data requests and want your emissions data in good shape, you can explore how Seedling works or book a demo.

Frequently asked questions

What does SSBJ stand for?

SSBJ stands for the Sustainability Standards Board of Japan, the body that develops Japan's national sustainability disclosure standards. The abbreviation is also commonly used to refer to the standards themselves.

Are the SSBJ Standards mandatory?

Yes, for companies listed on the Tokyo Stock Exchange Prime Market. The standards were published in March 2025, and Japan's Financial Services Agency made compliance legally mandatory through a Cabinet Office Order finalised in February 2026. They are phased in by company size from the fiscal year ending March 2027. They are not mandatory for small and medium-sized or private companies.

How do the SSBJ Standards relate to the ISSB and IFRS S1 and S2?

The SSBJ Standards are built on the ISSB's IFRS Sustainability Disclosure Standards (IFRS S1 and S2) and incorporate all of their requirements. Japan splits the general requirements into two standards, an Application Standard and a General Standard, and adds a small number of optional jurisdiction-specific alternatives. A company that applies none of those alternatives also meets the ISSB Standards.

Do the SSBJ Standards apply to companies outside Japan?

Directly, only if a non-Japanese company is itself listed on the TSE Prime Market, in which case the same obligations apply. Indirectly, businesses that supply large in-scope Japanese companies may receive Scope 3 emissions data requests, regardless of whether they have any reporting obligation of their own.

What do the SSBJ Standards require for Scope 3 emissions?

Companies in scope must report Scope 3 emissions broken down by the 15 GHG Protocol categories, rather than as a single combined figure. A safe harbour protects companies from liability for Scope 3 and forward-looking estimates, provided they can demonstrate and document the reasoning and procedures behind their figures.

Can companies use spend-based data under the SSBJ Standards?

Spend-based estimation is an accepted methodology under the standards and is not prohibited. Its limitation is that the figures move only with spending, so they can miss genuine progress that does not change cost, such as switching to a lower-carbon supplier at a similar price, and they can shift on price changes alone. For a more accurate footprint, particularly one used for assurance or for customer reporting beyond the SSBJ Standards, activity data is often the better choice.

When do the SSBJ Standards take effect?

The first mandatory reporting period is the fiscal year ending 31 March 2027, for companies with an average market cap of ¥3 trillion or more. Companies between ¥1 trillion and ¥3 trillion follow from the year ending March 2028, and companies between ¥500 billion and ¥1 trillion from the year ending March 2029. Application to the remaining Prime Market companies, those below ¥500 billion, has not yet been scheduled. Mandatory limited assurance applies one year after each tier's first disclosure.

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