Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
Korea to release draft of corporate ESG disclosure standards by April
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By Anna J. Park
FSC aims for global consistency to minimize corporate burden
The Financial Services Commission (FSC) plans to release a draft of environmental, social, and corporate governance (ESG) disclosure standards, which will apply to companies listed on the Korean stock exchanges. This draft is scheduled to be released between March and April, according to the financial regulator.
The FSC will release a final draft after gathering feedback from stakeholders, including business lobbies, investors and experts.
The FSC said Wednesday that the government aims to minimize the burden on companies by setting the ESG disclosure standards. This will be achieved by reflecting Korea's industrial structure while also adhering to global standards.
"First and foremost, the government aims to draw up the draft of ESG disclosure standards that are aligned with global standards in order to minimize companies' dual disclosure burdens," FSC Vice Chairman Kim So-young said during a government-hosted seminar to discuss the corporate ESG disclosure standards at the Korea Chamber of Commerce & Industry (KCCI) earlier in the day.
In October of last year, the FSC decided to postpone the mandatory requirement for companies to issue ESG disclosures, originally set for 2025, to a later date after 2026. This delay was primarily due to requests from companies for additional time to prepare. The decision was also influenced by similar delays in adopting mandatory ESG disclosure systems in the U.S. and other major countries.
The seminar was attended by key officials from financial authorities, business associations — including the KCCI, the Korea Enterprises Federation, and the Korea Listed Companies Association — the National Pension Service, KB Financial Group and academics.
Kim said the ESG disclosure standards should provide useful information for investors while ensuring domestic companies maintain global competitiveness.
"Accordingly, the government plans to enact ESG disclosure standards that are interoperable with international ESG disclosure standards, including those from the United States and the European Union," Kim said.
He added that the government will fully consider Korea's industrial structure in writing the draft, noting Korea's high reliance on the manufacturing sector for its economic output, unlike the U.S. or European countries, making reducing carbon emissions more challenging.
Financial Services Commission (FSC) Vice Chairman Kim So-young, center, speaks during a government-hosted seminar to discuss the corporate ESG disclosure standards at the Korea Chamber of Commerce & Industry in Seoul, Wednesday. Courtesy of FSC
Regarding a specific timing of the start of the mandatory ESG disclosures, the FSC reiterated its position on Wednesday that it will be decided later, after consultations with related ministries.
In addition, the government plans to apply the minimum level of sanctions during the initial phase of the mandatory ESG disclosures.
Business associations welcomed the government's move focusing on reducing burdens on the part of companies.
"One of the most important elements of the ESG goals is to reduce carbon emissions. Yet, for instance, there could exist limitations for a domestic company to gather exact related data from its overseas subsidiaries or affiliated companies. Thus, systemic government assistance or support on such matters would be necessary to smoothly implement the mandatory ESG disclosures," Cho Young-jun, executive director heading sustainable management at the KCCI — Korea's oldest and largest business organization — told The Korea Times on Wednesday.
He also said that the business association supports the government's aim to seek international consistency in its ESG disclosure standards, as it will lower companies' burden in preparing themselves for both domestic and global regulatory directions.
He added that domestic companies also hope to see more organized and systemic regulations from institutions that conduct verification and assurance of corporate ESG goals.