In 2027, SSBJ (Japan’s Sustainability Disclosure Standards) will become mandatory in Annual Securities Reports. However, multiple surveys suggest that around half of Japanese companies may still be struggling to describe the “financial impacts of climate change” in a sufficiently concrete way. Even among large enterprises with market capitalizations exceeding JPY 1 trillion, some companies are reportedly unable to disclose their latest GHG (greenhouse gas) emissions in an adequate manner. Why does this situation continue to occur?
At Neuromagic, based on what we have repeatedly observed in the field through corporate support, we see one underlying factor: a “corporate structure that makes it difficult to produce reliable numbers.” This often includes structural issues such as insufficient information management systems, unclear ownership for data integration, and challenges in maintaining data consistency across departments.
The year 2026 may become a turning point—from an era of simply “disclosing information” to one in which companies are expected to “explain management and strategy through integrated data.” How a company prepares for this shift could have a meaningful impact on its competitiveness.
The Data Exists—So Why Doesn’t It Connect to Strategy?
In many companies, the necessary data already exists internally. Procurement data, production data, financial data, and HR data are often held across different functions and departments. So why do many organizations still feel that their data does not connect to strategy? Through ongoing dialogue with a wide range of companies, Neuromagic has observed three recurring patterns that help explain this challenge.
1) Supply chain information is fragmented across the organization
One common situation is that supply chain-related information is dispersed across multiple departments—procurement, sales, factories, HR, finance, and others. Systems and Excel files also differ by department. As a result, data is not sufficiently connected, and the organization tends to lose visibility into the overall picture.
2) Calculation logic becomes tacit knowledge held by individuals
Another frequent issue is that calculation formulas and underlying assumptions become black-boxed and dependent on individual knowledge. This can lead to a situation where the company must “rebuild from scratch” every year during the disclosure cycle. This point has also been increasingly discussed as a common challenge for Japanese companies, including in conversations related to METI and GX League initiatives.
3) The “numbers behind business strategy” are not organized
A more fundamental challenge often lies in the fact that the numbers underpinning business strategy are not sufficiently structured. For example: Where are the true sources of profit? What does the cost structure look like? What market scenarios should the company assume? When these basics are not visible, it becomes difficult to connect non-financial and financial information. As a result, even when companies try to conduct climate scenario analysis, they may struggle to explain it clearly because the underlying numbers are not in place.
To address this, what becomes important is the capability to connect scattered internal data and organize it into a form that management can use—what we refer to as “data integration capability.” It is not only about collecting data, but about shaping it into something that supports decision-making and can be explained with confidence. This will become a foundation for both disclosure and management going forward.
Climate Scenarios Are Not Something to “Write”—They Are Something to Interpret
Of course, TCFD and ISSB require narrative descriptions. However, in practice, what is increasingly being questioned is not the writing itself, but the numerical basis and consistency behind it.
A climate scenario is closer to a “strategy told through numbers,” and narrative is simply one way to express the final outcome.
When interpreting climate risks, it is important to ask concrete questions such as:
- Is it realistically possible to pass costs through via pricing?
- Are alternative raw materials feasible in practice?
- How will investment decisions change, and where should the exit threshold be set?
The same applies to climate opportunities:
- What level of ROI can be expected from energy-efficiency investments?
- Where do new markets exist, and how large could they become?
- Which business areas should be strengthened?
Ultimately, these are all topics that need to be explainable through numbers. Rather than making the scenario “work as a narrative,” the key is to prepare financial linkages and design it in a way that aligns with decision-making.
Scenarios written solely “for disclosure purposes” can sometimes create a sense of inconsistency for investors and evaluators. If the data foundation is weak, the linkage to financials is unclear, or the scenario does not align well with the company’s management strategy, the material may be less likely to be evaluated positively—despite the effort invested in preparing it.
Three Foundations to Build Before You “Write” a Scenario
Climate scenarios can become difficult to develop if the process starts with writing. What matters first is building the foundations that enable scenarios to be constructed.
Neuromagic believes that once the following three foundations are reasonably in place, scenarios become less about “writing” and more about “assembling.”
1) Data inventory: consolidating company-wide facts into one place
The first step is to clarify what data exists and where.
- Which department holds which data
- What calculation logic (assumptions and formulas) is used
- How frequently the data is updated
- Who owns responsibility for the data
This applies not only to GHG emissions, but also to procurement data, factory data, financial data, and market data. A structured inventory helps establish the foundation.
2) Financial linkage routes: translating non-financial into financial impact
Next, it is important to establish a clear route for translating climate-related impacts into financial terms.
This includes clarifying how climate risks could affect revenue, costs, and investment plans:
- What level of impact could carbon pricing have?
- How could profitability change through alternative materials or energy-efficiency investments?
- How should these insights be reflected in the business portfolio?
Building this translation route is essential.
3) Governance: update cycles, ownership, and decision-making processes
Finally, companies need a governance structure that enables continuous operation. Rather than treating disclosure as a once-a-year “event,” the goal is to transition to a data operations cycle embedded into management.
This may include:
- Standardizing reporting formats for management meetings
- Creating a materials structure that allows quantitative comparison of risks and opportunities
- Clarifying update frequency and data ownership
- Defining decision-making processes
SSBJ disclosures are structured around four elements—governance, strategy, risk management, and metrics & targets—and governance in particular is positioned as a core foundation.
Neuromagic’s Approach: Designing an “Integrated Story”
At Neuromagic, our support is designed to avoid turning disclosure into a purely operational task. We help reorganize complex internal information into a state where it can be used for management decision-making.
Information organization (extracting cross-functional “facts only”)
We begin by extracting and aligning “facts” across departments. This includes visualizing Excel-based management, building data maps, sorting what is necessary vs. unnecessary, and creating a shared language for KPI structures—so that discussions can be built on a consistent foundation.
Strategy logic structuring (building a bridge to financials)
We translate climate risks and opportunities into financial models, organize the key points linked to investment decisions, and design the structure in collaboration with corporate planning and finance teams.
Structuring in alignment with the SSBJ format
Based on the latest published requirements, we design a consistent structure that connects management strategy, financial scenarios, and disclosure materials. This creates a “logic line” that evaluators can follow smoothly.
Designing materials usable at the management level
We design decision-making materials at a level that can be used collaboratively with corporate planning teams—such as issue-based structuring and quantitative comparisons between risks and opportunities.
In 2026, Only Companies That Can Explain Management Through Numbers Will Be Chosen
SSBJ implementation is not simply about “disclosure techniques.” We are entering a phase where the quality of corporate strategy itself will be tested. Data integration capability may become a new competitive axis that shapes corporate value. And to be ready by the time mandatory disclosure begins in 2027, 2026 may be the final window to take action. This is precisely why starting “information governance reform” now can matter.
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Neuromagic supports the design of an “integrated story” tailored to each company’s unique data structure and business strategy.
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