BOJ to Undertake Annual Assessment on Climate Finance to Foster ESG market

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by KnowESG

Deputy Governor of the Bank of Japan (BOJ) Masayoshi Amamiya said on Sunday that the central bank will survey financial institutions and businesses every year to find ways to help the country's growing climate finance market.

Amamiya says that an early poll done in August showed that "green" bonds and other environmental, social, and governance (ESG) debt instruments are in "high demand" in Japan.

According to him, some respondents reported difficulties in obtaining knowledge and adequate methodologies for analysing the risks linked with climate change.

"Climate change has an extremely big impact on economic, price, and financial developments in the medium- to long-term perspective," Amamiya said in a speech at an academic forum.

"Central banks can help achieve long-term macroeconomic stability by helping the private sector take steps to deal with climate change,"

As part of its efforts to align itself with a global movement toward a greener society, the BOJ launched a funding scheme last year focused on addressing climate change.

The central bank gives zero-interest loans twice a year to banks that improve green and sustainable loans, which can be rolled over until 2030. Through the scheme, it has lent 3.6 trillion yen ($26 billion) to 63 financial organisations.

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Source: Reuters