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What Is “Sustainability Disclosure”?

  • Writer: KBC-LINK Editor
    KBC-LINK Editor
  • 2 days ago
  • 2 min read

— Why Japanese Companies Are Now Required to Disclose and What It Means for Vietnam

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What Does “Sustainability Disclosure” Mean?


You may have seen the term “Sustainability Disclosure” appearing more frequently in corporate websites or business news.In simple terms, it refers to how companies publicly report their initiatives in Environment, Social, and Governance (ESG) — key factors that show how responsibly and transparently a company operates.

Typical disclosure items include:


  • CO₂ emissions and energy-saving initiatives

  • Labor conditions and respect for human rights

  • Transparency across the supply chain

  • Corporate governance and internal control systems


In the past, such efforts were often shared voluntarily under CSR (Corporate Social Responsibility).However, these non-financial factors are now considered essential information that directly influences a company’s valuation and investors’ decisions.

From 2026: Disclosure Becomes Mandatory in Japan


Starting in FY2026 (for fiscal years ending March 2027), Japan will make sustainability disclosure mandatory for large companies listed on the Tokyo Stock Exchange Prime Market with a market capitalization of over 3 trillion yen (around 70 firms).


By the following year, the scope will expand to those valued at over 1 trillion yen.This means Japan’s major corporations will soon be required to make their ESG activities visible and accountable to investors worldwide.

Why Is Disclosure Becoming Mandatory Now?


Globally, issues such as decarbonization, human rights, and corporate transparency have gained unprecedented importance.Traditional financial data alone can no longer represent a company’s long-term sustainability or risk profile.That’s why new reporting frameworks are emerging that integrate both financial and non-financial information.


Key drivers include:

  • The International Financial Reporting Standards (IFRS) introducing new sustainability standards (IFRS S1 / S2)

  • Gradual adoption of these standards across countries, covering roughly 60% of global GDP

  • Japan’s upcoming introduction of its own SSBJ Sustainability Standards


Why It Matters to Vietnamese Companies


You might think, “This is just for Japanese listed companies.”But in reality, these requirements extend across the entire supply chain.


To meet disclosure obligations, Japanese corporations will increasingly request ESG-related data from their suppliers and partners, including:


  • Energy consumption and CO₂ emissions during production

  • Labor hours, safety management, and human rights practices

  • Environmental data such as waste and water usage


In other words, Vietnamese manufacturers, processors, and logistics providers will also become part of this sustainability reporting ecosystem.


How to Start Preparing


Based on KBC-LINK’s analysis, we recommend the following first steps:


  1. Visualize your environmental data — such as energy use and emissions.

  2. Clarify labor and safety management rules within your organization.

  3. Consider international certifications such as ISO14001, Occupational Safety and Health standards (OSHA), or ESG reporting guidelines.

  4. Build a clear communication process for sharing sustainability data with clients and partners.


These steps not only serve as the foundation for sustainability disclosure but also strengthen your credibility as a trusted business partner.


KBC-LINK’s Perspective


Sustainability-driven management is no longer just a theme for Japanese corporations —it is becoming a shared challenge and opportunity for all Japan–Vietnam business relations.

At KBC-LINK, we aim to explore these global trends together and share practical insights and ideas that help both Japanese and Vietnamese companies build sustainable partnerships.


References


Edited by KBC-LINK Editorial Team


 
 
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