Below is an excerpt from ISS-Corporate’s recently released article “Mandatory Climate Disclosure in South Korea”. The full article is available on the ISS-Corporate online library.
Mandatory sustainability disclosure has become a reality in South Korea, as the Korea Sustainability Standards Board (KSSB) published the Exposure Draft of the ‘Korean Sustainability Disclosure Standards’ on May 2. While the exact scope and timing of the initiative are yet to be unveiled, starting from 2026, climate-related disclosures will become mandatory.
In its announcement, the Financial Services Commission (FSC) made it clear that the agency is focused on finding the right balance between enhancing interoperability and avoiding excessive burdens. South Korea’s export-driven economy centers on large corporations with global footprints whose operations likely fall under the scope of new upcoming regulations across the world. Ensuring consistency with global disclosure standards therefore not only helps domestic firms to prepare themselves for upcoming requirements and maintain their competitiveness in the global capital market but also reduces duplicative reporting burdens. Against this backdrop, IFRS Sustainability Disclosure Standards serves as a basis for the new disclosure requirements in South Korea.
Considering the disclosure readiness in the country as well as its unique economic structure, the FSC decided not to follow suit with IFRS on some of the requirements, namely Scope 3 emissions.
By:
Rudy Kwack, CFA, FRM, Sustainability Advisor, North America, ISS-Corporate
Ingo Tietboehl, Senior ESG Advisor (Japan), APAC, ISS-Corporate
