Blog
Turning Ambition into Action: How Japan Advanced Sustainable Finance in 2025
Published: 29 Dec 2025
2025 was the year of consolidation and acceleration of Japan’s sustainable finance journey. Climate Bonds Japan Team focused on strengthening the market and supporting the implementation of new climate policy and national goals through close collaboration with local partners.
Japan is increasingly demonstrating leadership across the Asia Pacific region, showing serious commitment to tackling climate change through policy innovation, market development and large-scale capital mobilisation. Throughout the year, Climate Bonds worked alongside public and private sector stakeholders to help turn ambition into delivery, ensuring that emerging frameworks, standards and investment strategies are robust, credible and aligned with global best practice.
Setting the direction: GX leadership and policy engagement
The year began with a clear signal of Japan’s intent to lead. Climate Bonds CEO Sean Kidney was appointed to the advisory committee of Japan’s GX Acceleration Agency, a central pillar of the government’s Green Transformation Plan. The GX strategy aims to mobilise more than JPY 150 trillion in green investment over the next decade, positioning climate action as an engine for competitiveness, energy security and industrial renewal.
To support this, Climate Bonds appointed two new Advisors in Japan in 2025. Rintaro Tamaki, former Vice Minister of Finance for International Affairs and former OECD Deputy Secretary-General, and Miyuki Zeniya, former Chief Sustainability Officer of MUFG and former Head of Sustainable Finance at Dai-ichi Life, bring deep expertise in global financial governance, ESG integration and climate strategy.
Strengthening partnerships: global collaboration with local impact
Partnerships were a defining feature of the year. In August, Climate Bonds renewed its Memorandum of Understanding with the Institute for Global Environmental Strategies (IGES), building on a collaboration first established in 2022. The renewed agreement deepens joint work on capacity building, knowledge sharing and market development to advance both green and transition finance across Japan’s public and private markets.
At COP30 in Belem, this collaborative momentum expanded further. Climate Bonds and the Japan International Cooperation Agency (JICA) signed a new cooperation agreement, reinforcing Japan’s leadership in transition and resilience finance beyond its borders. The alliance builds on Japan’s GX momentum, linking global standards with regional and international investment opportunities at a time when climate resilience and energy security are rising priorities.
A market milestone: when resilience becomes investable
If one transaction captured the spirit of 2025, it was Tokyo’s landmark resilience bond. The Tokyo Metropolitan Government priced a EUR 300 million five-year Climate Bonds Certified resilience-labelled bond, the world’s first Certification under the Climate Bonds Resilience Criteria and Taxonomy.
The bond attracted EUR 2.2 billion in demand, achieving a seven-times oversubscription and demonstrating strong investor appetite for credible, resilience-focused investment opportunities. Proceeds will finance projects to strengthen Tokyo’s resilience to flooding, storm surges and typhoon impacts. More than a global first, the transaction showed how clear criteria and credible certification can turn resilience from a policy priority into an investable opportunity.
Accessible guidance for market implementation
Alongside market activity, 2025 was a year of expanding access to practical guidance in Japan. Our team on the ground delivered key resources in Japanese, including the translation of the Climate Bonds Resilience Taxonomy brochure. These materials help ensure that global best practice is accessible to domestic issuers, investors and policymakers.
An updated briefing revisiting Japan’s Sustainable Growth Strategy examined developments in the first half of 2025 against rising geopolitical risk and continued reliance on imported fossil fuels. Supported by the Global Methane Hub, the briefing highlights the need for investment in grid infrastructure to support renewable energy growth, alongside scaling up methane abatement as a priority for the oil and gas sector.
A further milestone was the launch of the Team Sapporo–Hokkaido Green Finance Framework. Referencing Climate Bonds’ Criteria alongside the EU Taxonomy, the framework introduces clear, quantitative benchmarks to guide sustainable investment and support regional revitalisation. This framework launch builds on the agreement announced in November 2024, where Climate Bonds, Hokkaido government and the City of Sapporo jointly called for the acceleration of regional revitalisation in Hokkaido and Sapporo through the promotion of Green Transformation (GX) in the region. By providing objective, comparable information, it strengthens investor confidence and enhances Hokkaido’s appeal as a hub for green and transition finance.
Sean Kidney and the Mayor of Sapporo during the Sapporo–Hokkaido GX Summit
Bringing the market together
Throughout the year, Climate Bonds Japan team engaged extensively with stakeholders across the public and private sectors, including government agencies, financial institutions, corporates, municipalities and policymakers, ensuring that capital flows at the speed and scale required.
Highlights included two roundtables on Japan’s transition finance in May and November, both supported by the GX Acceleration Agency. A follow-up roundtable was held as the second part of the May discussion, further deepening engagement around national security and energy transition pathways.
To amplify the key messages from the May roundtable to a wider audience, we co-hosted a seminar with the Asia Investor Group on Climate Change (AIGCC) and the Principles for Responsible Investment (PRI) in July. A series of transition finance workshops was also conducted with the Kamakura Sustainability Institute (KSI), focusing on shaping the future of transition finance.
Together, these engagements contributed to building a more aligned and robust market for sustainable finance in Japan, bringing together key stakeholders — policymakers, investors, and financial institutions — to strengthen the outlook for transition finance in light of Japan’s energy policy and its positioning within the broader international context.
Discussions focused on key issues shaping Japan’s transition, including the impact of geopolitical volatility on transition finance, opportunities for Japan to take a leadership role in the Asia Pacific region, methane emissions across the Liquified Natural Gas value chain, bottlenecks to renewable energy deployment, the growing importance of resilience-related investments and renewable energy development as an energy security strategy, and the alignment of domestic frameworks with the Climate Bonds Standard.
Yumiko Watanabe, Japan Programme Lead, Climate Bonds Initiative
"2025 showed how far Japan’s sustainable finance market has come. By aligning policy ambition with credible frameworks and strong partnerships, we are seeing real progress in mobilising capital at scale."
Looking ahead
Taken together, the milestones of 2025 show a market moving decisively from ambition to implementation. Policy, standards, partnerships and capital are increasingly aligned, reinforcing Japan’s position as a regional leader in sustainable and transition finance, while strengthening economic resilience and energy security.
Climate Bonds is proud to have worked alongside Japanese partners throughout this pivotal year, helping connect policy goals with credible frameworks and investment opportunities that support long-term resilience and a secure energy transition.
Looking ahead to 2026, further milestones are expected as Japan continues to advance its Green Transformation agenda, scale renewable energy investment and strengthen its leadership in global climate finance.
Until next time,
Climate Bonds Initiative