The South Korean government plans to introduce mandatory ESG reporting for large public companies starting in 2028. This is reported by foreign media with reference to a government representative.
According to the decision of the South Korean regulator ( (FSC)), KOSPI-listed companies with consolidated assets of 10 trillion won (about $6.5 billion) or more will have to disclose information on sustainable development (ESG) in business reports starting in 2028.
The government lowered the threshold from the previously proposed 30 trillion won, significantly expanding the scope of the rules. Thus, in 2028, 291 companies will be subject to the requirements, and in 2029 — 3,171.
In 2029, the threshold will be further lowered to 5 trillion won, and from 2030, the requirements will apply to companies with assets of more than 2 trillion won.
The government's policy is aimed at providing institutional investors with sufficient data for diversified investments. Companies will be exempt from damages, administrative fines and criminal liability for information disclosed under the ESG during the first three years of implementation.
The requirements for companies are based on international standards and include clear substantive blocks. The company's reports should disclose the sustainability management structure, strategy (the impact of risks and opportunities on business decisions), risk management system, as well as indicators and goals (greenhouse gas emissions data for Scopes 1 and 2, while a grace period is provided for Scopes 3 (supply chain) - up to in 2031).
The regulator organizes consultations, develops guidelines and introduces an exemption from liability for certain types of statements in the early years.
At the same time, market participants, including institutional investors, note the disadvantages of the new requirements, including a too long grace period for disclosure of supply chain data (Scopes 3), which reduces the quality of climate risk assessment, as well as uncertainty about responsibility for mistakes by subsidiaries.
The South Korean government is committed to transparency and corporate sustainability to attract investors.
