Overview
South Korea’s Financial Services Commission (FSC) has announced a draft roadmap to introduce mandatory sustainability (ESG) reporting beginning in 2028. The requirement will initially apply to large companies listed on the KOSPI exchange, based on asset-based thresholds, and aims to align Korea’s sustainability disclosures with global ESG reporting frameworks.
Background
The reporting framework will follow standards developed by the Korea Sustainability Standards Board (KSSB), which are designed to align with the International Sustainability Standards Board (ISSB) standards, including IFRS S1 (general sustainability disclosures) and IFRS S2 (climate-related disclosures).
The initiative is intended to strengthen transparency, improve comparability of sustainability information, and enhance investor confidence in Korea’s capital markets.
Public Consultation
The Financial Services Commission has launched a public consultation on the proposed roadmap and plans to finalize the framework in April 2026 following stakeholder feedback.
The proposed roadmap has been opened for public consultation, allowing stakeholders to provide feedback on the proposed disclosure framework. The comment period will remain open until 31 March 2026, after which regulators are expected to finalize the reporting roadmap
Threshold and Applicability
The mandatory reporting requirement will be introduced in phases:
- From 2028: Mandatory ESG reporting for KOSPI-listed companies with consolidated assets ≥ KRW 30 trillion (≈ USD 20.4 billion).
- From 2029: Expansion to companies with assets ≥ KRW 10 trillion (≈ USD 6.8 billion).
- Additional expansion to smaller listed companies may occur later depending on market readiness.
Reporting Requirements
Companies subject to the regulation will be required to disclose sustainability-related information, including:
- Climate-related risks and opportunities
- Governance structures and sustainability strategies
- Greenhouse gas (GHG) emissions data
- Financial impacts of climate and sustainability risks
Scope 1 and Scope 2 Emissions Reporting
Under the ESG disclosure framework aligned with the International Sustainability Standards Board (ISSB) standards, companies must report greenhouse gas emissions following the Greenhouse Gas Protocol classification:
- Scope 1: Direct emissions from company-owned or controlled operations (e.g., factories, company vehicles).
- Scope 2: Indirect emissions from purchased energy such as electricity, heating, or cooling.
Grace Period for Scope 3 Emissions
Scope 3: Indirect emissions across the value chain, including suppliers, logistics, product use, and disposal.
Due to challenges in collecting supply-chain emissions data, Scope 3 greenhouse gas emissions reporting will receive a grace period until around 2031 for the first group of companies.
Implementation Timeline
| Year | Requirement |
|---|---|
| 2027 | First reporting year (data collection begins) |
| 2028 | Mandatory ESG reporting (Scope 1 and Scope 2) for KOSPI firms with ≥ KRW 30 trillion assets |
| 2029 | Expansion to firms with ≥ KRW 10 trillion assets |
| 2031 | Expected disclosure of Scope 3 emissions for the first group |
Impacted Industries and Supply Chains
The regulation applies primarily to large publicly listed companies, meaning sectors with major listed firms are most likely to be affected. These include:
- Energy and utilities
- Manufacturing and heavy industry (automotive, electronics, steel, chemicals)
- Transportation and logistics
- Financial services and investment firms
- Large conglomerates operating across multiple sectors
Although the regulation does not target specific products, companies will need to disclose sustainability data related to energy-intensive production, manufactured goods, financial activities, and supply-chain emissions.
Implications for Exporters and Importers
The regulation does not directly apply to exporters or importers. However, companies supplying goods or services to firms subject to the Korea Sustainability Standards Board (KSSB) disclosure rules aligned with the International Sustainability Standards Board (ISSB) may be indirectly affected. Korean companies required to disclose Scope 3 emissions may request sustainability information from suppliers, including carbon footprint data, ESG policies, and environmental performance details, to support their supply-chain reporting.
Outlook
The proposed regulation represents a significant step in South Korea’s move toward mandatory ESG transparency aligned with global ISSB standards, placing greater emphasis on sustainability reporting, corporate accountability, and supply-chain transparency across industries.
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