Sustainable finance in Japan - statistics & facts
In 2024, Japan became the first sovereign issuer of climate transition bonds, taking on a leading role in transition financing globally. To finance the green transformation (GX) of carbon-intensive industries, the government plans to raise a substantial amount of capital in the coming decade. Transition bonds are a relatively new type of financing method used to fund the decarbonization efforts of companies that are not yet green. In October 2020, Japan declared its commitment to achieve carbon neutrality by 2050. The world's fifth-biggest carbon emitter also pledged to cut its greenhouse gas emissions by 46 percent by 2030 compared to fiscal year 2013 levels. In light of the nation’s ambitious goal, sustainable investment has seen significant growth in the past years.
Japan is among the largest Green, Social, and Sustainability (GSS) debt issuers worldwide, and its sustainable bond market has grown significantly over the past years. Social bonds accounted for the largest share of issuances in 2024. Sustainable bonds raise funds for projects related to achieving sustainability goals; while the proceeds of green bonds are used to finance environment and climate-related projects, social bonds fund projects with positive social impact. As of 2025, Japan had no taxonomy for sustainable investments.
The Japanese government estimated that around 150 trillion yen of public and private GX investments are required over the coming decade to finance green projects and the decarbonization of greenhouse gas-intensive industries. The GX acceleration agency was established in 2024 to steer these financing efforts.
As part of the Green Transformation (GX) Plan approved by the Cabinet in 2023, the government issued the first GX Economy Transition Bonds worth around 1.5 trillion yen in February 2024. Over the next 10 years, it plans to issue around 20 trillion yen in transition bonds.
Sustainable finance in Japan
Sustainable finance refers to the consideration of environmental, social, and governance (ESG) factors in financial and investment decisions. It encompasses a range of financial products that address issues of sustainability to varying degrees and can thus contribute to sustainable economic growth.Japan is among the largest Green, Social, and Sustainability (GSS) debt issuers worldwide, and its sustainable bond market has grown significantly over the past years. Social bonds accounted for the largest share of issuances in 2024. Sustainable bonds raise funds for projects related to achieving sustainability goals; while the proceeds of green bonds are used to finance environment and climate-related projects, social bonds fund projects with positive social impact. As of 2025, Japan had no taxonomy for sustainable investments.
Green transformation (GX) financing
The green transformation of energy and industrial sectors is a key measure in achieving a carbon-neutral society, and Japan views it as an opportunity for economic growth. The Green Growth Strategy formulated by the Ministry of Economy, Trade and Industry (METI) provides action plans for the transition towards carbon neutrality for key energy and industrial sectors.The Japanese government estimated that around 150 trillion yen of public and private GX investments are required over the coming decade to finance green projects and the decarbonization of greenhouse gas-intensive industries. The GX acceleration agency was established in 2024 to steer these financing efforts.
As part of the Green Transformation (GX) Plan approved by the Cabinet in 2023, the government issued the first GX Economy Transition Bonds worth around 1.5 trillion yen in February 2024. Over the next 10 years, it plans to issue around 20 trillion yen in transition bonds.
