TSE Prime-Section Firms to Disclose Climate Change-Linked Risks

Tokyo, April 4 (Jiji Press)--Companies listed on the Prime new top-tier section of the Tokyo Stock Exchange, created through the TSE's realignment on Monday, are preparing to disclose business risks related to climate change to comply with a request from the exchange's operator to do so.

The TSE's request is aimed at meeting demand for such information from institutional investors around the world and attracting new investments.

The TSE revised its corporate governance code last year to include a call for Prime section firms to disclose risks related to climate change. The clause was included based on a recommendation by the Task Force on Climate-related Financial Disclosures, a working group of finance officials from major countries.

Companies whose fiscal years end in March are expected to submit their first reports on climate change-related risks to the TSE this summer, and firms not submitting reports will be asked to give reasons.

Steel producer JFE Holdings Inc. <5411> is seen as a pioneering example of companies disclosing climate change-linked risks. In its 2019 report on corporate social responsibility, the company predicted that demand for special steel used in internal combustion engines of gasoline-powered cars will be virtually flat from the 2020 level through 2050, while demand for electromagnetic steel sheets used in electric vehicles will increase seven-fold.

[Copyright The Jiji Press, Ltd.]