Director Yokoyama spoke about climate change-related shareholder proposals at a workshop organized by a subgroup under the Japan Corporate Governance Network (CG Net).  The workshop was attended by about 30 members who serve as external directors of listed companies.

Key messaging

Challenges facing us today: 

• Impacts from the climate crises and global warming are intensifying as the earth system gets closer to reaching an irreversible tipping point.
• Stronger contributions from the business community are expected to pursue the 1.5°C climate goal.

Climate change and governance: 

• Japan’s Corporate Governance Code and TCFD principles recommend more proactive disclosure of climate risks, along with associated dialogue with shareholders.
• To achieve net zero by 2050, both the government and private sector must develop detailed and credible short and medium-term climate transition plans to support Japan’s decarbonisation goals. We expect these plans to be strengthened through constructive dialogue with and stewardship from institutional investors.

Shareholder proposals:

• In 2020 the first climate-related shareholder proposal was filed in Japan (Mizuho Financial Group vs NGOs). Since then, climate-related shareholder proposals have been gaining traction from a diverse group of shareholders targeting various sectors. 
• Key stakeholders, such as institutional investors and external directors, must develop appropriate levels of understanding of climate change to avoid business risks and seize growth opportunities in corporate strategy.

CAJ will continue to engage in climate dialogues with our partners such as CG Net, to accelerate changes within corporates and support the transition to net zero.