Opening Remarks

Keynote Speech 1

Panel Discussion 1

• Despite political headwinds and signs of declining government support in some part of the world, expectations for the private sector continue to grow, and investor interest in climate-related solutions has strengthened. Companies, for their part, have not retreated from their commitment to disclosure, recognizing its importance for capital access, business efficiency, and regulatory compliance. Disclosure and engagement have effectively become part of the essential infrastructure of doing businesses. The sustainable finance market likewise remains robust, with little change compared to the last year. More than 90 percent of global investment in power generation continues to be directed towards clean energy.
• To mobilize the investment needed for the transition-including in hard-to-abate sectors-credible transition plans and strong policy and data foundations for disclosure are indispensable. Japan is taking a leading role in advancing GX initiatives, and by sharing case studies and experiences in transition finance-particularly in hard-to-abate industries-it can contribute meaningfully to the global market.
• To unlock high-risk, early-stage GX investments, public-private risk-sharing frameworks are vital, and blended finance will play an increasingly important role in reducing risks in frontier technologies.
• A whole-of-government and whole-of-economy approach is necessary to embed sustainability into national strategy, accompanied by strong impact management and impact measurement practices. Japan’s policy package serves as a credible international model.
• For GXA, it is important to provide platforms for dialogue and collaboration with investors and the private sector, and to share the outcomes of these efforts with a broad range of stakeholders.

Panel Discussion 2

• Japan’s transition finance is recognized as being among the most advanced globally. Underpinned by predictable government commitments, it provides an important model in which the public and private sectors share risks to meet financing needs during the transition. For companies-including those in emissions-intensive sectors-the transition to net zero is directly linked to long-term economic and social value. Labeled transition finance instruments and loans based on established frameworks make it easier to articulate investment rationales and to demonstrate alignment within institutional portfolios. At the same time, even investments without transition labels can make substantial contributions to decarbonization, and labeled instruments are not inherently definitive.
• Evaluating transition plans requires a holistic assessment of factors such as technology roadmaps, R&D progress, project viability, capital investment strategies, and workforce and talent-development strategies. Strengthening comprehensive evaluation capabilities remains an important challenge.
• The concept of "avoided emissions" is extremely important, as it directly shapes corporate incentives. It is crucial to build mechanisms in which autonomous efforts are properly rewarded. If avoided emissions metrics become more formally embedded in the concept of transition finance, it will create a positive cycle: investors will find it easier to invest, and companies will be better able to communicate the value of their efforts.
• Transition projects are still largely at the R&D stage, making it difficult for financial institutions to expand lending. A negative cycle persists in which capital investment and financing do not progress because the eventual corporate off-takers remain unclear. Increasing the number of off-takers and ensuring predictability are therefore extremely important.
• Long-term commitments from government, companies, and financial institutions are essential to advancing sustainability challenges, including GX. A shift towards investment behavior that is not constrained by short-term market indicators-such as tracking error-along with strong long-term commitments from corporate leadership and stable policy design, are fundamental prerequisites for a successful transition and for market formation.
• The integration of policies, markets, and education-along with active participation by citizens and consumers-is critical. A sustainable GX ecosystem requires promoting participation through retail products (such as CT bonds), enhancing demand-side awareness, and strengthening engagement with company and financial institutions."

Guest Remarks

Panel Discussion 3

• Investment and financing for the energy transition are becoming increasingly necessary, while economic and geopolitical uncertainties continue to rise. In such an environment, transition finance-including for high-emitting industries and emerging economies-is needed as a second pillar alongside with green finance.
• The importance of transition finance is now widely recognized and "Japan’s approach" appears to have gained international visibility. However, differences remain in how the term "transition finance" is understood and in the tendency to narrowly define eligible transition activities.
• To further advance transition finance, it is essential to balance the "credibility" of transition strategies with "inclusiveness," so as not to exclude segments facing capacity constraints (such as Asia, emerging economies, and SMEs) or those lacking incentives (such as companies in advanced economies).
• Overemphasizing credibility could lead to the acceptance that some sectors or regions simply cannot access finance. However, supporting only part of the overall transition while leaving the rest behind is incompatible with the concept of a "Just Transition." A macro-level transition strategy-namely, NDCs-must guide the process, with banks, asset managers, and MDBs working together to provide financing. An exclusionary approach based on "rightness" will not succeed.
• A joint report by ADB, ERIA, and METI focuses on Southeast Asia and presents a roadmap designed to inform policy decisions that can help promote a variety of financing approaches. Clear and credible roadmaps-at the national, sectoral, or corporate level-are essential. There is a wide range of potential transition-related projects-including early retirement of coal-fired power plants, CCS, blue hydrogen, and green steel-but none of these can be realized by a single business operator or financial institution alone. Diverse actors must mobilize capital, and partnerships among industry, finance, government, and even across international and regional boundaries are essential.
• In Asia, many countries see gas-fired power as an important transition energy source. Operators need confidence that gas-fired power can qualify for transition finance. The "Inclusive Approach" discussed in the Japan Public-Private Group on Promoting Transition Finance in Asia must permeate financial institutions and become a shared value.
• The "credibility" of transition finance often hinges on how efforts aligned with current NDCs are evaluated. If initiatives linked to national NDCs are not considered credible and financed, macro-level transition will not be achieved. Government can provide overarching direction through sectoral technology roadmaps and similar tools, complementing the credibility of companies and emerging economies that cannot realize the transition on their own. It is also important to incorporate perspectives from the demand side of financing through international partnerships such as AZEC.

Keynote Speech 2

Panel Discussion 4

• Developing and implementing technologies for decarbonization and the transition requires substantial funding, and recovering these investments depends on the creation and growth of a GX market in which green products can be sold with a sufficient environmental premium.
• Both business corporations and financial institutions are advancing various initiatives toward the creation of such a GX market. For example, a Japanese manufacturer is preparing a framework that link GX products with sustainable finance for procurement, enabling customers to access sustainable financing when purchasing such products. Other efforts include developing impact finance focused on emissions reduction contributions and assessments of green enabling projects.
• Institutional investors can contribute to the creation of a GX market by making investment decisions based on a multifaceted assessment of corporate initiatives that support future cash flows and emissions-reduction efforts, while also supporting supply chain management through engagement.
• Within the value chain, it is necessary for banks, trading partners, manufacturers, and end users each to bear a portion of the environmental premium. However, expanding the GX market requires policy support, and the government can provide such support in various ways-including direct support for supply, mandatory procurement schemes, demand-side incentives, and carbon-pricing mechanisms.
• Companies have responsibilities such as maintaining factories, securing suppliers, and providing employment, making large-scale shifts difficult even when market conditions change. Therefore, investors also need to take a long-term perspective, recognizing the importance of investments on a 10-20-year horizon. This requires increasing number of long-term investors who understand that long-term risk–return profiles can be favorable, and also consistent policy signal from the government over time.
• Disclosure should be applied in ways that benefit companies and enhance their motivation. For example, Scope 3 emissions may increase even when sales of high-efficiency products rise, making standalone evaluation difficult; therefore, it is necessary to assess companies using a multifaceted approach that considers product carbon footprints and emissions-reduction contributions. These issues are being discussed within the TCFD Consortium, which is currently developing guidance on Scope 3. Tools and platforms related to emissions-reduction contributions are also being developed internationally, and global standardization efforts-such as sector-specific average emissions-reduction coefficients-are underway. Disclosure should foster mutual understanding between companies and investors, serving as a starting point for co-creation and value creation.
• Although the GX market has not yet been fully established, it is beginning to take shape both in Japan and around the world. The actions of various stakeholders are expected to support the growth of this market.

Closing Remarks