From Information to Insight: Connecting Disclosure, Data and Investor Decision-making

Introduction

Capital markets around the world are more accessible than ever before. Advances in digital technology have dramatically improved market access, enabling investors to obtain more information with greater ease.

The information environment surrounding investors has also changed significantly. In recent years, interest has expanded beyond traditional financial information to include climate change, human capital, corporate governance, supply chains, and other factors that influence long-term value creation. As both the quantity and quality of corporate disclosures continue to improve, investors are increasingly expected to interpret and use this information effectively.

In this environment, investor education is no longer simply a matter of financial literacy. Rather, it is becoming an important foundation for market transparency, trust, and the long-term sustainability of capital markets.

Sustainable Finance and Investor Understanding

In discussions of sustainable finance, attention is often focused on financing the transition to a low-carbon economy and addressing climate-related challenges. However, an equally important prerequisite is the ability of investors to appropriately assess companies' sustainability and long-term growth prospects.

Around the world, sustainability-related disclosure requirements continue to expand. Yet greater disclosure does not guarantee better market outcomes. The effectiveness of such disclosure ultimately depends on investors' ability to understand and incorporate this information into their decision-making. Investor education therefore plays a critical role in helping sustainable finance function effectively.

The Role of Exchanges as Market Infrastructure

Markets function most effectively when disclosure, information access, and informed decision-making work together. Exchanges occupy a unique position as market infrastructure between listed companies and investors. Beyond providing a venue for capital formation and trading, they increasingly have a responsibility to foster an environment in which market participants can effectively share, understand, and utilise information.

With this in mind, JPX has supported improvements in corporate communication through initiatives such as corporate governance reform and the promotion of sustainability-related disclosure. More recently, our focus has extended beyond encouraging disclosure itself to fostering conditions in which information supports constructive dialogue between companies and investors and contributes to enhanced corporate value.

Data and AI as Information Infrastructure

As sustainability disclosure has expanded, the amount of available information has grown significantly, making it increasingly difficult to identify, compare, and analyse what matters most.

JPX's analysis shows that the volume of materials submitted through TDnet, Japan's timely disclosure system for listed companies, has increased substantially over the past several years.

For many investors, the challenge is increasingly shifting from access to information to the ability to identify what is most relevant.

To help investors identify and navigate sustainability-related information, JPX has developed initiatives such as JPX ESG Link, a platform that improves access to ESG-related information by providing a single gateway to sustainability-related disclosures published by listed companies.

JPX is also enhancing its information infrastructure through JPxData Portal, a platform that leverages generative AI to help market participants explore corporate disclosures and market information by theme, topic, and area of interest, rather than relying solely on company names or stock codes. Within this platform, J-LENS provides an AI-powered search function that enables users to search disclosed documents in natural language, helping investors and other market participants find relevant information more efficiently when conventional keyword searches may not be sufficient.

These initiatives are not simply digital services. They are intended to serve as information infrastructure that supports market participants in locating material information efficiently, gaining deeper insights, and making more informed investment decisions. In this way, they complement investor education by helping investors apply their knowledge in practice.

The same perspective also applies to the quality and reliability of sustainability-related data. One example is Digitally Tracked Green Bonds (DTGBs), which utilise blockchain technology to enhance the transparency and reliability of environmental data related to the use of proceeds, enabling investors to make decisions based on more objective information.

Taken together, these initiatives aim to shift the focus in capital markets from merely disclosing information to enabling its effective use.

From Information Access to Information Understanding

While AI offers enormous potential to improve the efficiency of information search and analysis, its growing adoption is also changing the capabilities required of investors.

No matter how advanced technology becomes, evaluating corporate strategies, assessing risks and opportunities, and judging long-term value creation will remain fundamentally human responsibilities.

Investor education must therefore continue to evolve. In addition to traditional financial knowledge, investors will increasingly need the ability to interpret sustainability-related disclosures, assess the reliability and relevance of information, and make appropriate use of digital and AI-enabled tools. In this way, investor education can help investors move from simply accessing information to understanding and applying it in their own decision-making.

These challenges are not unique to Japan. They are increasingly shared across markets regardless of their size, level of development, or regulatory framework. As the Secretariat of the Asian and Oceanian Stock Exchanges Federation (AOSEF), JPX engages in ongoing dialogue and cooperation with exchanges across the region. Through these interactions, we have observed that many markets are facing common challenges related to information overload, sustainability-related disclosure, and the rapid adoption of digital technologies and AI.

Looking Ahead

Sustainable capital markets depend on more than sound rules and technology.

They require high-quality disclosure, trusted information infrastructure, and investors who are capable of understanding and utilising information effectively.

JPX will continue to promote sustainability-related disclosure, enhance information infrastructure, and leverage data and AI technologies to strengthen the market foundations that connect investors and companies.

In the years ahead, the competitiveness of capital markets will depend not only on the quality of their regulation and technology, but also on their ability to help investors navigate and utilise increasingly complex information.

Through international dialogue and collaboration, JPX seeks to contribute to the development of capital markets that are more sustainable, more transparent, and more trusted. In an era of information abundance, the challenge is no longer simply generating more information, but transforming information into insight.