Ministry of the Environment declares finance for a greener economy

Japan’s Ministry of the Environment unveiled the “Declaration on Financial Actions Toward Building a Green Economic System” on 13 March during the eighth ESG Finance High-Level Panel. The declaration is part of a national push to leverage finance in building a sustainable society by redirecting capital flows, supporting regional businesses, and investing in environmental startups.

The declaration contains three key objectives. First, it calls for expanding investment and financing for climate change mitigation and the promotion of a circular economy. Second, it seeks to support regional enterprises by funding projects that transform local challenges into economic opportunities, encouraging greener management. Third, it emphasises increased investment in environmental startups to both deploy existing green technologies and foster new innovations. These measures aim to build a more environmentally considerate economy through strategic financial action.

The ESG Finance High-Level Panel was formed following recommendations from the 2018 ESG Finance Conference to promote collaboration between financial industry leaders and government bodies. The panel serves as a platform for advancing ESG finance and monitoring progress on relevant policies. In this latest meeting, members discussed the scaling up of sustainable finance initiatives in line with Japan’s Sixth Basic Environment Plan, which seeks to materialise a circular and symbiotic society.

This plan aims to enhance the quality of the environment while prioritising the concept of “well-being” as its ultimate goal, advocating for an integrated approach that combines net-zero emissions, resource circulation, and nature-positive strategies.

Stakeholders include representatives from major financial institutions such as the Development Bank of Japan, the Tokyo Stock Exchange, and the General Insurance Association of Japan. They explored ways to advance nature-positive and circular economy initiatives and discussed the challenges of implementing such policies across different sectors. Financial institutions are expected to contribute actively by promoting green investments and facilitating the shift to a low-carbon, resource-efficient economy.