Since the publication of the “
Supervisory Guidance on Climate-related Risk Management and Client Engagement” in July 2022, the Financial Services Agency (FSA) has maintained dialogues with financial institutions on climate-related risk management and client engagement.
Today, the FSA published the report which illustrates practices and issues of financial institutions addressing climate-related risks. Those case examples are based on initiatives taken by approximately 20 financial institutions covered in the in-depth dialogue conducted in FY 2024 (from summer 2024 to summer 2025).
The financial institutions covered in the FY 2024 dialogue consider climate change to be a material issue and have made progress in addressing climate-related risks in a manner suited to their respective size and business characteristics. On the other hand, they face challenges in integrating climate-related risks, which will manifest over the medium and long term, into conventional risk management frameworks. They also have difficulty with temporary increase in financed emissions when they finance their clients to support their transition to net zero.
The FSA will continue to hold discussions with financial institutions on their risk management and client engagement practices associated with climate change, while taking into account global trends and business environment surrounding them.
- Practices and Issues on Climate-related Risk Management: Overview
- Practices and Issues on Climate-related Risk Management: Main text (Japanese)
A full English version will be published shortly.
* Other initiatives on sustainable finance can be found here.
