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The Bank of Japan said on Wednesday it will begin disbursing loans in late December under a new scheme targeting activities aimed at combating climate change, as part of efforts to align itself with a global push toward a greener society.

The central bank will begin accepting applications on Wednesday from financial institutions seeking to tap the new scheme. After the December disbursement, loans will be offered about twice a year, the BOJ said in a statement.

Financial institutions will be required to disclose targets and actual results on green investment and loans, as well as what steps they are taking to meet proposed disclosure rules set by the Task Force on Climate-Related Financial Disclosures (TCFD), the central bank said.

The central bank decided on the details of the scheme during its two-day rate review, which ended on Wednesday.

The BOJ's green plans come as other major central banks seek to use their institutional heft to tackle climate change.

In July, the BOJ laid out an outline of the climate scheme under which it will offer zero-interest loans that can be rolled over until 2030 to banks that boost green and sustainable loans. read more

Since then, the central bank has been exchanging views with financial institutions to sort out details, such as disclosure rules and frequency of market operations.

The TCFD is an international body created by the Financial Stability Board (FSB) to develop disclosure rules on climate-related financial risks for companies, banks and investors. (Reuters)