Turning Point for Japan on Climate – 2025

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• The Japanese government is about to make key decisions on key areas of its climate and energy policy that will determine its 1.5C pathway to net zero and commitments under the Paris Agreement.
• Japan’s choices are likely to be misaligned with science-based policy recommendations from the Intergovernmental Panel on Climate Change (IPCC) and with global market and technology trends around renewable energy, fossil fuels, and the electrification of transport.
• InfluenceMap’s ongoing research of policy influencing in Japan suggests that the government is primarily guided by the views of the Japan Business Federation (Keidanren) which in turn appears to be almost entirely guided by the views of a narrow group of sectors representing less than 15% of the Japanese economy.
• Energy demand-side sectors (retail, information technology, construction, healthcare etc.) remain largely absent from the climate policy influencing process. It is likely that as an alternative voice to that of Keidanren, many of Japan’s largest companies in these and other sectors established the Japan Corporate Leaders’ Partnership (JCLP) and the Japan Climate Initiative (JCI).
• Companies in these two advocacy groups make up more than a third of the Nikkei 225 index (representing 35% of the Nikkei 225 market cap total value) and appear to take profoundly different positions from those promoted by Keidanren on climate. Most of these companies are also members of Keidanren. Despite this, Keidanren states on its website that it represents a "consensus" of Japanese business opinion.
• The recent draft government proposal of 60% reduction in greenhouse gas (GHG) emissions from 2013 levels by 2035 appears to have been heavily influenced by Keidanren. Keidanren’s position is misaligned with a significant portion of the Japanese economy/its membership, as well as with IPCC recommendations.

Background on Corporate Climate Policy Engagement in Japan

This is a critical time for Japan's climate agenda as the country prepares to formulate its 7th Strategic Energy Plan, submit its Nationally Determined Contribution (NDC) to the UNFCCC global climate process and further evolve its GX (Green Transformation) Policy and associated GX bond issuance process.

• The most powerful lobbying group in Japan is the Japan Business Federation (Keidanren). Keidanren is a Tokyo-based federation with more than 200 staff and members from over 100 key industry associations across the Japanese economy. It also has over 1,500 individual corporate members. The group states that it “establishes consensus in the business community on a variety of important domestic and international issues” and that its function is to “support corporate activities which contribute to the sustainable development of the Japanese economy.”
• Ongoing research by InfluenceMap of over 50 industry groups and 40 companies, shows that the most strategic and intensive engagement on climate and energy policy is conducted by heavy industry. Only seven sectors, all within heavy industry (steel, electric power, autos, oil/gas, coal, hydrogen and industrial machinery), engage strategically and intensively on climate and energy policy, representing virtually all evidence of sector specific industry associations captured on the InfluenceMap’s database¹. The alignment between Keidanren's policy views and the interests of these minority sectors, combined with the makeup of its leadership—including its president, vice presidents, and key figures in the energy and environment committees—indicates a significant influence of heavy industry on the federation's positions.
• The remaining sectors, such as retail, pharmaceuticals, electronics, communications, finance and others, in fact represent 70% of the economy, yet engage only moderately and hold minimal representation on key Ministry of Economy, Trade and Industry (METI) subcommittees compared to the heavy industry sectors.
• The Japanese policy system characterized by the dominance of Keidanren, which in turn appears to engage on behalf of certain sector interests only, has likely led to the formation of the advocacy groups Japan Climate Initiative (JCI) and the Japan Climate Leaders' Partnership (JCLP). JCLP and JCI corporate members have long been frustrated by their inability to influence the climate policy process despite their significance in the Japanese economy. Companies such as Sony, Softbank, Takeda Pharmaceuticals and Ricoh are members or signatories of one or both groups, and together these groups represent 35% of the value of the Nikkei 225 stock market index².

Corporate Climate Policy Engagement on Japan’s 2035 GHG emissions target

A key area of concern is Japan’s upcoming 2035 GHG emission target. In late November 2024, the government unveiled a draft plan to adopt a GHG emission reductions target of 60% by below 2013 levels by 2035. This is lower than the minimum 66% reduction supported by JCI signatories, minimum 75% reduction supported by JCLP, and the science-based emissions pathway for a developed country like Japan to keep warming to 1.5°C. The government’s draft target level is the same as the one proposed by Keidanren.

InfluenceMap’s ongoing research shows that only three groups - Keidanren, JCLP and JCI - have submitted explicit statements on Japan's 2035 GHG emission target which will be submitted as part of Japan's nationally determined contributions (NDC). JCLP's proposal is the most consistent with the science-based guidance, which requires advanced economies to take the lead in emissions reductions. JCI's recommendation is slightly lower but also based on the IPCC's global analysis. Keidanren’s proposal, meanwhile, presents the least ambitious level among these three organizations and does not meet the 1.5°C target.

Corporate Climate Policy Engagement on Wider Climate Policy in Japan

The direction of Japan's climate policy as evidenced by comparison of the elements of the GX Policy with the IPCC's guidance to governments shows significant misalignment with science-based policy. This is an overview from InfluenceMap’s November 2023 report:

The current state and likely future direction of climate and energy policy in Japan is likely a result of how the corporate sector currently engages with such policy in Japan, particularly with the Ministry of Economics Trade and Industry (METI) which holds most sway over key policy areas like the Strategic Energy Plan and GX Policy.

The level of ambition proposed by Keidanren, JCLP, and JCI on the 2035 target described in the previous section appears to be reflective of their wider advocacy on climate policy in Japan.

• Regarding its influence on the GX Policy, the current chair of Keidanren, Masakazu Tokura of Sumitomo Chemical, has stated that the proposals made by Keidanren were "almost fully adopted" in the GX Basic Policy. Its positions on carbon pricing, renewables, thermal power, and transportation policy closely mirror the positions of the seven sectors, representing heavy industry (steel, electric power, autos, oil/gas, coal, hydrogen, and industrial machinery).
• It appears that these sectors hold most influence over climate and energy policy in Japan, largely by channeling individual company positions through sector-based trade groups and then through Keidanren, which presents the positions to METI and the Japanese government as a "consensus in the business community." However, InfluenceMap's research, including tracking of the JCLP and JCI, suggests that Keidanren's positions on climate and energy are far from a consensus.
• JCLP members and JCI proposal signatories have called for much more ambitious policies, such as: a greater 2035 renewable energy target, a carbon price aligned with the International Energy Agency (IEA)'s net zero scenario at roughly 130 USD/t-CO2 by 2030, and a 1.5°C aligned trajectory for thermal power, with implied phase out of coal and ammonia co-firing after 2035.