ESG Disclosure Requirements for KOSPI-Listed Companies with Assets Exceeding KRW10 Trillion

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ESG Disclosure to be Required from 2028 for KOSPI-listed Companies with KRW10 Trillion or More in Total Consolidated Assets Jul 08, 2026

The Financial Services Commission announced that the government and the ruling Democratic Party of Korea held a consultative meeting and announced the final version of the roadmap for sustainability (ESG) disclosure on July 8.

Background

The FSC has been continuously working to establish rules on sustainability disclosure as a key policy agenda of this administration and has sought opinions from various stakeholders.

Over the months, opinions and suggestions have been collected from institutional investors, non-governmental organizations, professional groups, industry groups, and businesses. In this regard, institutional investors asked for an expansion in the scope of disclosure entities considering the usefulness of sustainability disclosure data for investment purposes. In the meantime, there have been various proposals for revising the Financial Investment Services and Capital Markets Act (FSCMA) introduced at the National Assembly, which intend to require sustainability disclosure as part of the statutory disclosure of corporate business reports.

In addition, uncertainty surrounding energy prices has risen recently amid the war in the Middle East. In this regard, effectively managing climate and energy risks has become an essential policy strategy to ensure sustainable growth for both the country and individual businesses.

Against this backdrop, the government and the ruling party have agreed to upgrade the previously announced roadmap for sustainability disclosure to make the schedule more progressive and to operate a comprehensive support system to ensure the provision of adequate and effective assistance for businesses.

Roadmap for Sustainability Disclosure

a) Disclosure timetable and scope of entities

The scope of disclosure entities will be expanded in stages to move up the previously announced timetable and make major KOSPI-listed companies subject to the sustainability disclosure duty. From 2028 (FY2027), KOSPI-listed companies with total consolidated assets worth KRW10 trillion or more will be required to file ESG disclosures, and from 2029, the threshold will be lowered to KRW5 trillion or more. After reviewing disclosure practices and conditions in 2028-2029, authorities will consider a further lowering of the threshold to KRW2 trillion or more thereafter from 2030. To promote a seamless implementation of consolidated ESG disclosures, for the first disclosure year only, companies may exclude the affiliates that have both their assets and sales volume amounting to less than 10 percent on the basis of consolidation.

According to this timetable, the number of companies (including affiliates) that will be subject to the ESG disclosure duty will be 291 in 2028 and 3,171 in 2029.

b) Disclosure method and safe harbor

ESG disclosures will take effect immediately from 2028 (FY2027) in the form of corporate business reports required under the FSCMA. To facilitate this, authorities will seek to revise relevant rules this year. In addition, authorities plan to introduce safe harbor rules insofar as they do not come in conflict with the maintenance of responsibility and credibility in disclosure practices.

During the first three years, in order to ensure a seamless adoption and encourage active disclosure practices, companies will be exempted from damage compensations, administrative sanctions, or criminal punishments imposable under the FSCMA with regard to the entire content of the sustainability disclosure information they provide. However, authorities will make sure to strictly deal with intentional greenwashing activities through damage compensations and administrative sanctions imposable under the FSCMA to ensure credibility in the overall disclosure practices.

After the first three years, there will be a safe harbor introduced which will take into account particular characteristics of sustainability disclosures. With regard to the content of information that is considered to have a degree of uncertainty, such as information about a forecast (related to future risks), an estimate (related to greenhouse gas emissions), or a collection of data gathered by a third-party or a partner business, an exemption will be granted from damage compensations, administrative sanctions, or criminal liabilities imposable under the FSCMA on the condition that sustainability disclosures have been filed faithfully with reasonable grounds and best judgement.

c) Third-party verification

In order to ensure credibility in sustainability disclosures as part of the statutory disclosure, third-party verification will be required through a revision to the FSCMA. However, the third-party verification duty will take effect from 2030—two years after the disclosure requirement kicks in—taking into account the need to provide a grace period for the development of relevant workforce. Specific details regarding the scope of verification and the entry regulations for third-party verification service providers will be drawn up through revisions to relevant rules in time for the implementation of this requirement.

d) Postponement of scope 3 emissions disclosure

With regard to the disclosure of scope 3 emissions, considering the need to provide time to establish necessary infrastructures for calculating and producing GHG emissions, the disclosure requirement will be postponed for three years for every category of disclosure entities. For companies with total consolidated assets worth KRW10 trillion or more, the scope 3 disclosure requirement will take effect from 2031. For those with total consolidated assets of KRW5 trillion or more, the scope 3 disclosure will begin from 2032. Companies with total consolidated assets worth KRW2 trillion or more are expected to be subject to the scope 3 disclosure requirement from 2033. In addition, small businesses categorized as such under the Framework Act on Small and Medium Enterprises and are not considered as high-carbon emitters will be exempted from the scope 3 disclosure duty.

In the meantime, companies will be encouraged to file sustainability disclosures on a voluntary basis with the Korea Exchange (KRX) considering various demands from businesses and investors. An update will be made to the KRX voluntary disclosure system to facilitate listed companies that are not legally bound to file ESG disclosures to disclose their sustainability reports in accordance with the standards put forward by the Korea Sustainability Standards Board (KSSB). For those engaging in voluntary disclosures of sustainability reports, an advantage will be given by the KRX when making a selection of outstanding disclosure companies.

Compliance Assistance and Use of Disclosure Data

The consultative meeting today was also joined by officials from the Ministry of Climate, Energy and Environment (MCEE), the Ministry of Trade, Industry and Resources (MOTIR), and the Ministry of SMEs and Startups (MSS). At the meeting, authorities discussed various support measures to help improve the sustainability disclosure capacity of companies and better prepare them for global climate and environment related regulations.

a) Working level assistance for disclosure practices

The Korea Accounting Institute (KAI) will carry out a pilot test with businesses from key industries. Officials from the Financial Supervisory Service (FSS) and the KRX and private sector experts will come together to review frequently asked questions on sustainability disclosures to prepare best practice standards, which will be opened up and can be used as a source of reference for other companies in their preparation for sustainability disclosures.

In addition, the MCEE plans to develop an integrated platform on climate risks, which is expected to be unveiled in 2028. This comprehensive platform will serve as an essential tool for analyzing and examining climate related risks for Korean businesses that currently have to rely on costly analysis programs made available from overseas.

b) Development and management of supply chains data

In preparation for the scope 3 disclosure, the MCEE plans to finish up developing sector-by-sector guidelines on scope 3 emissions for 15 key export industries by 2028. In addition, by 2028, the MCEE will seek to establish about 1,000 datasets of Life Cycle Inventory (LCI) database to be used as secondary data if companies are unable to directly acquire emissions data from their partner businesses.

The MOTIR will seek to develop an ESG platform for industrial supply chains to help boost efficiency and effectiveness in the management of ESG data. With this platform in place, a data input by a partner business can be utilized by multiple companies for their sustainability disclosure purposes.

c) ESG consulting programs

The government plans to expand the provision of consulting programs on ESG management and relevant disclosure processes. The MOTIR will seek to provide consulting services to companies that have total consolidated assets worth KRW2 trillion or more as they will eventually become subject to the sustainability disclosure requirement in the future. The FSC plans to bolster the provision of ESG consulting and related funding support programs offered to companies that are in partnership with large companies under the co-prosperity partnership program operated by policy financial institutions. The MCEE and the MSS will also seek to make available their own consulting programs.

d) Enhancing the utility of sustainability disclosure data

At today’s meeting, authorities also discussed ways to promote and expand the use of sustainability disclosure data by institutional investors and financial companies. The National Pension Service plans to expand the use of ESG disclosure data in its overall operation of fund management. To encourage other institutional investors to more actively consider ESG factors in performing their fiduciary duties, their stewardship code policies will be examined to see whether there are provisions for making use of ESG factors. Additionally, authorities plan to look into ways to encourage financial companies to more actively use sustainability disclosure data when supplying funds for transition finance.

Further Plan

At today’s meeting, the government and the ruling party agreed to promptly carry out the legislation process needed to implement the sustainability disclosure roadmap. To this end, authorities agreed to draw up a revision bill for the FSCMA as early as in July this year.

There will be a working group set up with officials from related government ministries and organizations, businesses, and private sector experts to seek revisions to the FSCMA and consider ways to adopt the third-party verification system. Moreover, the working group will continue to check how businesses are preparing for sustainability disclosures and make efforts to ensure adequate and effective provision of assistance.

• Please refer to the attached PDF for details.

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