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The financial sector continues to face new rules and government expectations as part of the broader effort to aid the green transition. The following green finance policy developments represent a sample of wider regulatory and policy coverage available to Bloomberg Terminal customers. Run REGS <GO> to find out more or contact your Bloomberg representative:
- South Africa: FSCA consults on ESG rating services and data providers
- Japan: Japan updates Sustainability Disclosure Standards
- EU: European Commission seeks ESAs Advice on EU Taxonomy
- Vietnam: Government opens international exchange of GHG and carbon credits
South Africa: FSCA consults on ESG rating services and data providers
South Africa’s conduct regulator, the Financial Sector Conduct Authority (FSCA), has published its Discussion Paper on ESG rating services and data providers.
The paper marks an early-stage consultation on how South Africa should approach the regulation of ESG rating services and data providers. The initiative sits within the FSCA’s broader mandate to enhance market integrity and protect financial customers, and forms part of its Sustainable Finance Programme of Work (launched in 2023).
The FSCA discussion paper examines the growing role of ESG rating services and data providers in financial markets, reviews international regulatory approaches and IOSCO/OECD recommendations, and seeks stakeholder input on potential regulatory frameworks for South Africa.
Next steps:
The FSCA has invited comments from ESG rating and data providers, users of ESG ratings, credit rating agencies, and other interested parties no later than 30 April 2026.
Japan: Updates to sustainability disclosure standards
Summary:
Following the International Sustainability Standards Board’s (ISSB’s) December 11, 2025, amendments to IFRS S2, the Japan Financial Services Agency (JFSA) launched a public consultation on March 31 to designate revised Sustainability Standards Board of Japan (SSBJ) sustainability disclosure standards under the Cabinet Office Ordinance. The revisions, reflecting SSBJ updates issued on March 13, 2026, cover universal, general, and climate‑related disclosure standards. Key changes clarify Scope 3 Category 15 financed emissions, allow flexibility in industry classification, permit jurisdictions-specific measurement methods and global warming potential values, and update references to SASB Standards. The revised standards are expected to take effect upon promulgation, with public comments due by April 30, 2026.
Context:
Following ISSB’s targeted amendments to IFRS S2 on greenhouse gas emissions disclosures issued on December 11, 2025, the SSBJ revised its sustainability standards on March 13, 2026, prompting the JFSA to update designated disclosure standards under the Cabinet Office Ordinance.
Key takeaways:
- On March 31, the JFSA launched a public consultation on amendments to designate revised SSBJ sustainability disclosure standards under the Cabinet Office Ordinance on corporate disclosure. The amendments reflect revisions made by the SSBJ on March 13, 2026, aligned with ISSB amendments to IFRS S2.
- Revisions cover universal sustainability standards, general disclosure standards, and climate‑related disclosure standards.
- Scope 3 Category 15 disclosures are clarified to include only financed emissions, with derivatives‑related emissions permitted to be excluded.
- Industry classification requirements for financed emissions disclosures are made more flexible, no longer mandating the use of GICS.
- Companies may use non‑GHG Protocol measurement methods where required by local regulations, including Japan’s SHK reporting framework.
- Alternative global warming potential values may be used where mandated by local authorities instead of IPCC standards.
- References to SASB Standards are updated to the latest December 2025 revisions following IFRS S2 amendments.
- The revised standards are scheduled to take effect on the date of promulgation, following completion of the public comment process.
- Public comments are invited until April 30, 2026, at 5:00 p.m. Japan time.
Next steps:
Companies should assess disclosure gaps against revised SSBJ standards, review Scope 3 financed emissions methodologies, align measurement approaches with jurisdictional allowances, and prepare feedback submissions ahead of the April 30 deadline, if any.
EU: European Commission seeks ESAs advice on EU taxonomy
Summary:
The European Commission (DG FISMA) has issued a formal call for technical advice to the European Supervisory Authorities (ESAs) to support the review of the Taxonomy Disclosures Delegated Act. The request focuses on simplifying and improving selected Key Performance Indicators (KPIs) for non-financial and financial firms. The advice will inform planned amendments expected to be adopted in Q1 2027.
Context:
The call follows stakeholder feedback that existing Taxonomy reporting requirements are complex and burdensome, despite earlier simplifications introduced under the Omnibus Delegated Act. It forms part of a broader EU effort to streamline sustainable finance disclosures, alongside the ongoing review of technical screening criteria and the proposed revision of the Sustainable Finance Disclosure Regulation (SFDR).
Key takeaways:
- Targeted KPI review:
- Non-financial firms: Operational Expenditure (OpEx) KPI to be revised.
- Banks: Commissions & Fees KPI and Trading Book KPI.
- Insurers: Underwriting KPI.
- OpEx KPI reform (non-financial firms):
- Potential expansion to include broader “green” expenditures (e.g. low-carbon inputs, R&D, energy).
- Alignment with IFRS accounting standards to improve usability.
- Greater flexibility to report only material and sector-relevant OpEx categories.
- Banking KPIs (EBA focus):
- Narrow Commissions & Fees KPI to capital markets activities supporting Taxonomy-aligned financing.
- Refocus Trading Book KPI on market-making and liquidity provision for green securities.
- Consider alignment with EU Green Bond Standard, including potential grandfathering of exposures.
- Insurance KPIs (EIOPA focus):
- Shift underwriting KPI towards exposure to Taxonomy-aligned assets/clients rather than climate risk coverage alone.
- Assess inclusion of climate-related perils as supplementary information.
- Cross-sector considerations:
- Potential use of counterparties’ OpEx data by financial institutions.
- Development of consistent group-level Taxonomy reporting rules.
- Policy objective:
- Enhance transparency on sustainable activities while reducing reporting burden and improving usability.
- Support capital allocation to Taxonomy-aligned activities and mitigate greenwashing risks.
Next steps:
- ESAs to gather stakeholder input and develop technical advice by October 2026.
- European Commission to use the advice to prepare amendments to the Disclosures Delegated Act, targeted for adoption in Q1 2027 and entry into force by Q3 2027.
- Stakeholder consultation and evidence gathering will take place throughout March–September 2026.
Vietnam: Government enables international exchange of GHG and carbon credits
Summary:
Vietnam has issued Decree No. 112/2026/NĐ-CP, establishing a legal framework for the international transfer of greenhouse gas (GHG) emission reduction outcomes and carbon credits. The Decree enables Vietnam to participate in international carbon markets while safeguarding delivery of its national climate targets and Paris Agreement commitments.
Context:
Vietnam has been developing its domestic carbon market and regulatory architecture in line with the Paris Agreement, including Article 6 cooperation mechanisms. Decree 112/2026/NĐ-CP operationalises these commitments by setting out rules for international transfers, corresponding adjustments, and government oversight, supporting Vietnam’s net‑zero by 2050 pledge.
Key takeaways:
- Government approval and oversight: The Ministry of Agriculture and Environment is designated to act on behalf of the Government in approving international transfers of emission reduction outcomes and carbon credits, and in implementing corresponding adjustments.
- Corresponding adjustment requirement: Emission reduction outcomes transferred internationally must not be counted towards Vietnam’s nationally determined contribution (NDC) and will instead be counted towards the recipient party’s climate targets.
- National registry: All international transfers must be recorded in Vietnam’s national registry for GHG emission allowances and carbon credits, ensuring transparency and traceability.
- Limits on transfer volumes:
- Up to 90% of emission reductions may be transferred for projects using new, high‑cost or advanced technologies that are not yet widely deployed in Vietnam.
- Up to 50% may be transferred for emission reduction measures already implemented domestically but requiring additional financial or technological support.
- Three eligible mechanisms: International transfers may occur under (i) Article 6.2 cooperative approaches, (ii) the Article 6.4 mechanism of the Paris Agreement, or (iii) recognised independent carbon standards, each subject to approval and strict procedural requirements.
- Sector‑specific provisions: The Decree provides a legal basis for using international carbon credits to meet obligations under international agreements, including aviation-related commitments such as CORSIA.
Next steps:
- Relevant ministries and local authorities are required to implement management, supervision and disclosure arrangements in line with the Decree.
- Market participants seeking to transfer or use international carbon credits must register projects, obtain approvals, and ensure all transactions are recorded in the national registry before transfers are executed.