South Korea will mandate environmental, social, and governance (ESG) disclosure for large KOSPI-listed companies starting in 2028. Companies will receive a three-year grace period for Scope 3 emissions reporting, which covers supply chain greenhouse gas emissions, in consideration of the compliance burden.
Financial Services Commission Chairman Lee Eok-won unveiled the draft ESG disclosure roadmap at the 4th Productive Finance Transformation Conference held at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul, on February 25.
The ESG disclosure requirements will be phased in gradually: KOSPI-listed companies with consolidated assets of 30 trillion won or more in 2028, followed by those with consolidated assets of 10 trillion won or more in 2029.
The timeline reflects comprehensive consideration of several factors, including Japan—which has a similar economic and industrial structure to Korea—implementing mandatory ESG disclosure for Prime Market-listed companies with market capitalization of 3 trillion yen (approximately 27.8 trillion won) or more starting June 2027, and some Korean conglomerates becoming subject to European Union extraterritorial disclosure requirements from 2029.
The government also proposed exempting domestic and overseas subsidiaries meeting certain criteria—such as assets and revenue below 10 percent of consolidated figures—from disclosure requirements during the first year of implementation.
Scope 3 disclosure, covering emissions across the entire corporate value chain, will begin in principle from 2031 after infrastructure for calculating and estimating greenhouse gas emissions is established. However, value chains involving small enterprises under the Small and Medium Enterprise Basic Act that are not in high-carbon emission industries will be exempt. The scope of exemptions will be reviewed after the system is established and converted to disclosure under the Capital Markets Act.
ESG disclosure will initially operate under exchange disclosure rules before transitioning to statutory disclosure requirements once the system is established. The transition timing will be determined through future consultations.
Companies will in principle disclose at the fiscal year-end settlement period (end of March), though greenhouse gas emissions information may be disclosed at the semi-annual settlement period (mid-August).
The Korea Accounting Standards Board will finalize domestic ESG disclosure standards (Sustainability Disclosure Standards) based on International Sustainability Standards Board (ISSB) standards on February 26. The first set of standards to be finalized includes Disclosure Standard No. 1 (General Requirements) and No. 2 (Climate-related Disclosures). Standard No. 101 (Additional Disclosures Considering Policy Objectives), which was included in the public draft, will not be enacted in consideration of the practical burden on companies.
"We will continue to gather broad opinions on the draft ESG disclosure roadmap through March and finalize the roadmap in April," Chairman Lee said.
