2026/5/18
Development Bank of Japan Inc.
Japan Economic Research Institute Inc.
Development Bank of Japan Inc. ("DBJ") and the Japan Economic Research Institute Inc. ("JERI"), in collaboration with the Government of Japan, have led the project to develop the international standard on risk finance with the aim of realizing a resilient society. On 12 May 2026, the International Organization for Standards ("ISO") published "ISO 37116 Risk Finance"*1.
Due to climate change and other factors, disasters induced by natural hazards are increasing in frequency and intensity across the globe, with the amount of damage increasing every year. Moreover, in response to unstable international politics and the transformation of the international economic order, it is becoming increasingly necessary to secure economic security and strategic autonomy in domains such as economic security and global supply chains. Furthermore, innovations resulting from the development of advanced technologies are expected to be socially implemented as functional elements of next-generation social infrastructure and smart cities and to further enhance the lives of present and future generations, but simultaneously expose them to risks such as cyberattack. Against the backdrop of the increasing severity of natural hazards, the instability of international affairs, and the various risks associated with the sophistication of society brought about by advanced technologies, the importance of financial techniques for risk reduction is rapidly increasing globally. The financial technique is "risk finance" to prevent loss occurrence and escalation during normal times at the ex-ante stage, rather than solely relying on the recovery and compensation for already-incurred losses post-disaster.
In recent years, alongside sustainability, the concept of "resilience" has also garnered attention. In particular, from the perspectives of finance, insurance, and fiscal matters, it has been pointed out that, in addition to post-disaster loss compensation, there is a need for "ex-ante investment in risk reduction" that contributes to reducing disaster risks. ISO 37116 Risk Finance is the world's first international standard. A key feature of this standard is its "all-hazards approach," which covers all events that threaten socio-economic activities, including not only natural hazards such as earthquakes and floods, but also infectious diseases, cyberattacks, supply chain disruptions, and geopolitical risks. This enables companies, local governments, and financial institutions to build cross-organizational and integrated risk finance strategies, rather than fragmented, individual responses to each risk. This will also contribute to addressing a wide range of policy and management challenges, such as climate change adaptation and ensuring economic security.
The DBJ Group established and organized a domestic committee for developing risk finance international rules in 2021 in cooperation with the Government of Japan, related organizations, and experts. Since 2022, we have advanced international negotiations within ISO. DBJ has coordinated in alignment with the "New International Standardization Strategy" announced by the Government of Japan in June 2025, which designated "DRR (Ex-ante Investment)" as a strategic sector in Japan. We have engaged in policy dialogue at forums such as the United Nations (GPDRR*2, COP30*3, etc.) and the G20, fostering international momentum to advocate for the need for "Ex-ante Investment in Risk Reduction" and contributing to the formation of international rules and policy decisions.
Going forward, we plan to develop ISO 37116-conforming financial products and consulting services, issue policy proposals, and publish research reports and books on the theme of risk finance, as well as to launch a risk finance implementation platform in society.
References:
・ " DBJ Group Magazine" No. 58 titled "Changing the World: Japan's Disaster Risk Reduction"
・ Commentary: Toward the Establishment of the ISO International Standard on Risk Finance for a Resilient Society
*1 ISO 37116: Sustainable cities and communities ー Disaster risk finance ー Principles and general requirements for financing ex-ante investment in risk reduction.
*2The Global Platform for Disaster Risk Reduction (GPDRR) is a global forum held triennially by the UN Office for Disaster Risk Reduction (UNDRR) and attended by governments, the UN system and all stakeholders, where participants take stock of progress, share new knowledge, exchange best practice and discuss the latest developments and trends in reducing disaster risk.
*3 COP30 is the 30th session of the Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC).
【Contact Information】
Research Institute of Capital Formation, Development Bank of Japan Inc.
TEL +81-03-6311-5048 (Mr. Yoshiki Hiruma)
Japan Economic Research Institute Inc.
TEL +81-70-1533-9486 (Mr. Kenji Omi)