Sustainability
Decarbonization, circular economy, and supply chain due diligence
CBAM (Carbon Border Adjustment Mechanism) Explained — Covered Products, Certificate System, and Impact on Japanese Companies
A systematic overview of the CBAM (Carbon Border Adjustment Mechanism) that entered full application in January 2026, covering its regulatory design, six targeted sectors, certificate mechanism, Omnibus simplification amendments, and direct and indirect impacts on Japanese companies.
European Commission Opens 'ESRS 2.0' for Public Consultation: Draft Aligned with EFRAG Technical Advice, Additional Simplifications for Companies
The European Commission has published a draft of version 2.0 of the European Sustainability Reporting Standards (ESRS 2.0) for public consultation. The draft is aligned with the technical advice of EFRAG (European Financial Reporting Advisory Group) and includes further simplifications for companies.
GX-ETS Emissions Calculation and Reporting in Practice — A Preparation Guide for the First Year of Mandatory Compliance (FY2026)
Japan's GX Emissions Trading System (GX-ETS) launches as a mandatory scheme in April 2026, targeting GX League member companies with annual CO₂ emissions exceeding 100,000 tonnes (approximately 300–400 companies). This guide covers the end-to-end operational workflow for the first year of compliance, from inventorying emission sources and selecting calculation methods to third-party verification and integrated design with SSBJ disclosure.
SSBJ April 2027 Deadline Looms: Three Preparations Suppliers Must Make Now
Sosius has launched a free AI diagnostic tool, "SSBJ...", for companies listed on the Tokyo Stock Exchange Prime, in preparation for the Sustainability Standards Board of Japan (SSBJ) disclosure standards (applicable from the April 2027 period), enabling companies to easily assess their disclosure readiness.
CBAM After the Transition Period: What Japan's Steel and Chemical Exporters Must Address
The EU Carbon Border Adjustment Mechanism (CBAM) entered full implementation in January 2026. With six sectors covered — steel, aluminum, fertilizers, cement, hydrogen, and electricity — Japanese exporters face requirements to calculate and declare embedded emissions. This article examines the current state of compliance and the key practical issues at stake.
CSRD and CSDDD Supply Chain Provisions: How They Reach Japanese Companies and What to Prioritize
The EU's Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD) create practical compliance obligations for Japanese companies even without direct applicability — through European customers and trading partners. This article outlines the channels through which these directives cascade and the actions Japanese companies should prioritize.
Improving Your EcoVadis Score in Practice: Addressing the Four Domains Evaluated in Procurement
EcoVadis is an ESG scoring platform widely adopted by major Western companies for supplier evaluation. Assessment covers four domains — environment, labor and human rights, ethics, and sustainable procurement. This article explains what each score band means and outlines the practical steps to reach the Silver threshold (50 points).
Green Hydrogen Cost Trends 2026: Where Manufacturing Costs Stand and Procurement Implications
Green hydrogen production costs are trending downward driven by falling renewable energy prices and electrolyzer scale-up, but as of 2026 a 3-to-4x cost gap versus grey hydrogen remains. This article maps the challenges across production, transport, and demand, and outlines scenarios where Japanese manufacturers have direct exposure.
How GX-ETS Phase 2 Ripples Down to Mid-Tier Suppliers
The April 2026 enforcement of GX-ETS Phase 2 is not limited to the approximately 300–400 directly regulated companies. The cost structure that large enterprises bear for emissions reduction will inevitably flow downstream through supply chain demands on mid-tier and small manufacturers. This article maps what is coming, and through which channels.
India's Green Manufacturing Transition: The Dual Shift Created by PLI Schemes and BRSR
India is strengthening its manufacturing sector through Production Linked Incentive (PLI) schemes while advancing ESG disclosure through the phased mandatory rollout of BRSR Core. The dynamic in which PLI-benefiting manufacturers simultaneously face BRSR compliance pressure creates a dual shift in how Japanese companies evaluate Indian suppliers.
Internal Carbon Pricing: How Manufacturers Can Embed Carbon Costs in Business Decisions
ICP (Internal Carbon Price) is a mechanism by which companies set their own price on emissions ahead of external regulations such as carbon taxes and ETS, and factor it into investment decisions. Applying the ICP concept to equipment upgrades, supplier evaluation, and product design structurally embeds carbon risk into business decision-making. This article outlines implementation approaches and practical options.
Making Full Use of J-Credit for Manufacturers: A Comparison of Credit Types and Application Practicalities
The J-Credit Scheme allows manufacturers to convert CO2 reductions from energy-efficient equipment installation, renewable energy use, and forest management into certified credits, which can then be applied to GX-ETS compliance or Scope 2 reduction. This article covers the most useful methodologies for manufacturers and key practical considerations in the application process.
SBTi SME Program in Practice: Differences from the Standard Track and How to Apply
SBTi (Science Based Targets initiative) offers a simplified commitment pathway for small and medium-sized enterprises (SMEs). This article organizes the differences from the standard track, the preparation required for application, and practical examples from Japan. It serves as a practical reference for mid-size manufacturers that have begun to receive SBTi commitment requests from major customers.
TCFD Climate Risk Financial Impact Assessment: Quantifying Transition and Physical Risks for Manufacturers
TCFD framework-based climate risk disclosure requires estimating the financial impact of transition and physical risks on financial statements. This work — which is also essential for compliance with SSBJ and ISSB standards — involves organizing the conceptual approach and the specific impact pathways for manufacturers.
TNFD: Nature-Related Risk Disclosure Framework and Its Application for Manufacturers
TNFD (Taskforce on Nature-related Financial Disclosures) published its final recommendations in 2023, establishing a framework for disclosing nature-related risks in biodiversity, water, land, and ocean. This article organizes how this framework — often described as the natural counterpart to TCFD — applies to manufacturer supply chain assessment.