Revision of Green Bond and Green Loan Guidelines Annex 1 (Green List)

MOE Japan first released its first Green Bond Guidelines in March 2017, in line with international principles to enhance the credibility of environmental benefits associated with green bonds and loans while fostering their adoption in Japan. Since then, the Guidelines have been updated to include newly developed financial products in the green finance market, such as Green Loans and Sustainability-Linked Bonds and Loans, and to provide more detailed explanations to Japanese market participants.
 
Notably, the July 2022 revision introduced the criteria for assessing project “greenness” and the Green List – a positive list of eligible green projects for green bonds and loans, with reporting KPIs and negative environmental impacts. To further develop Japan’s green finance market, it is essential to attract more issuers and sectors. Expanding and refining the Green List can contribute to achieving this goal.
 
In response, the Working Group on the Green List was formed under the Committee on Green Finance in August 2023. The Working Group aimed to stimulate potential demand from financiers and provide clearer perspectives for evaluating green projects by reflecting market trends as well as the developments of policies and technologies in the Green List, which would eventually contribute to the ongoing growth of Japan’s green finance market, while enhancing its market integrity.
 
Following discussions at the Working Group and a public consultation process, MOE Japan has revised Annex 1: Guidance on Eligibility Criteria for Green Projects with Clear Environmental Benefits and its Appended Table (Green List). The Green List will continue to be reviewed periodically.

The latest revisions to the Green List were made with the following considerations:
 

• Alignment with International Guidance and Guidelines

Examples include “Bonds to Finance the Sustainable Blue Economy” by ADB, ICMA, etc., “Handbook Harmonised Framework for Impact Reporting” by ICMA, etc.
 

• Consistency with National Plans and Strategies

Examples include Japan’s National Biodiversity Strategy and Action Plan of Japan 2023-2030 and the Specific Guidelines for Formulating a New Basic Plan for Establishing a Sound Material-Cycle Society
 
Please note that this revision does not apply retroactively to past transactions.

Committee on Green Finance and Working Group on Green List (Japanese only)
https://www.env.go.jp/policy/greenbond/gb/conf/conf_r31216.html