SSBJ April 2027 Deadline Looms: Three Preparations Suppliers Must Make Now

Countdown to Disclosure: SSBJ Standards Take Effect

In March 2025, the Sustainability Standards Board of Japan (SSBJ) finalized and published its domestic sustainability disclosure standards. Mandatory adoption begins for companies with a market capitalization of ¥3 trillion or more listed on the Tokyo Stock Exchange Prime Market for the fiscal year ending March 2027, with phased implementation expected to expand to approximately 1,600 Prime-listed companies.

When viewed through the lens of electronic component and power semiconductor suppliers, this timeline becomes significantly more pressing. As manufacturers of finished products and end-product brands become subject to disclosure obligations, demand for Scope 3 emissions data across the entire supply chain—meaning Scope 1 and 2 data from suppliers—will increase. A structure is already emerging where stating "we are not listed, so it doesn't concern us" will no longer suffice.

SSBJ and ISSB: Similarities and Differences

The standards developed by the SSBJ are aligned with the International Sustainability Standards Board's (ISSB) IFRS S1 and S2. IFRS S1 provides a framework for disclosing general sustainability-related financial information, while IFRS S2 specifically addresses climate-related disclosures. These standards are already gaining global traction.

What is new domestically is that "the SSBJ has independently implemented these standards in alignment with Japanese laws and regulations." While the structure of disclosure requirements is consistent with international standards, it is tailored to the Japanese accounting and disclosure system. Even companies that have been preparing for Western markets as global suppliers may find themselves needing separate domestic preparations.

The content of the disclosures broadly comprises four pillars: establishing governance systems, strategies and risk management incorporating climate change scenarios, measurement of Scope 1/2/3 emissions, and obtaining third-party assurance. Among these, the areas most likely to directly involve suppliers are data provision related to Scope 3 and the preparation of energy consumption data for their own facilities.

Where Data Collection Gaps Arise

For manufacturing suppliers, collecting emissions data becomes more challenging as the complexity of their processes increases. Scope 1 (direct emissions) arise from fuel consumption and refrigerant leaks in their own facilities, while Scope 2 (indirect emissions) originate from purchased electricity. While existing environmental reports often contain some data, the question remains whether this data meets auditable accuracy standards.

The issue lies with Scope 3. Emissions from the manufacturing of raw materials and components procured from suppliers (Scope 3 Category 1) cannot be aggregated without requesting activity data from upstream suppliers. On the other hand, emissions during the use phase of their own products when incorporated into customer products (Category 11) directly rely on product performance specifications—energy efficiency, standby power, and loss characteristics—as the basis for calculation. This is where technical specifications and environmental data will intersect.

The difficulty of this data response increases with the breadth of a company's product portfolio. A larger number of product types means a greater effort is required for data preparation per product, and for companies dealing with many custom products, the scale can be substantial.

The Era of Scrutinized Disclosure Quality: AI and Third-Party Assurance

KPMG Japan has established a system to support its sustainability assurance services by introducing AI agents for the automatic generation of questionnaires and analysis of responses. The fact that assurance providers are enhancing their capabilities with AI suggests a move towards more precise analysis and verification of disclosed information.

This implies that merely "tidying up the format" of disclosures will no longer be sufficient. Numerical consistency, transparency of calculation methods, and the explanatory power of year-on-year comparisons are elements that may be subjected to cross-checking by AI. The situations where product technical specifications and manufacturing process explanations are required with the same level of logical consistency as financial information are likely to increase.

Companies targeted in Phase 1 are already in some cases beginning to concretize data requests to their own suppliers.

Actions Suppliers Can Take Now: Outlining Three Preparations

Working backward from the estimate that "the end of 2026 is the practical deadline," taking action now holds significant meaning. Instead of abstract system establishment, let's identify three concrete starting points.

First, confirm the "audit readiness" of your own Scope 1/2 data. Even if numbers exist in environmental reports, whether the basis is sufficient to pass third-party assurance is a separate issue, and identifying this gap is the starting point.

Second, proactively understand what kind of data requests may come from key customers. Information gathering is increasingly possible through sales and technical contacts regarding customers' SSBJ compliance schedules and their Scope 3 calculation methodologies. A perspective that aligns your company's data preparation with your customers' disclosure preparation in terms of timeline can directly contribute to stable business relationships.

Finally, reorganize product power efficiency and loss characteristic data as "environmental performance." Technical specifications such as conversion efficiency and standby power, traditionally used in design selection contexts, can also serve as the basis for Scope 3 Category 11 calculations. Reorganizing the data so it can be used for multiple purposes is efficient both technically and commercially.

For suppliers not directly subject to mandatory disclosure, the structure of being indirectly involved through their customers' disclosure requirements is already in motion. By viewing this not as regulatory compliance but as a prerequisite for business continuity, the prioritization of preparation will likely change.