South Korea’s FSC has announced a delay in the country’s ESG disclosure roadmap, responding to the evolving global regulatory landscape and increasing pressure for harmonisation.
According to Business Korea, the update came during the 5th meeting of the ESG Finance Promotion Task Force, held on 23 April at the Korea Financial Investment Association in Yeouido, Seoul.
The task force, established in February 2024, unites various government departments, industry groups and regulatory bodies to address ESG disclosure policies. The recent meeting focused on aligning South Korea’s roadmap with international developments, while also accounting for the country’s unique industrial characteristics, particularly its manufacturing-heavy economy.
FSC vice chairman Kim So-young highlighted recent moves by global regulators to ease ESG requirements. “The European Commission announced a plan at the end of February to ease sustainability regulations. Disclosures for companies with fewer than 1,000 employees are exempted, and the scope of companies subject to disclosure has been reduced. Non-listed large EU companies are expected to have a two-year deferral for disclosure timelines, and the disclosure standards will be simplified,” Kim said.
He also pointed to Japan’s phased approach for large-cap listed companies beginning in 2027 and noted that ESG frameworks in the UK, US, and Canada remain under development. While 19 countries, including France, have already initiated ESG disclosures under the EU’s Corporate Sustainability Reporting Directive (CSRD), Kim emphasised the challenges of global inconsistency for multinational companies.
As a result, South Korea’s original plan to begin ESG disclosures in 2025 for KOSPI-listed firms with assets over 2 trillion won has been postponed to post-2026, with further delays possible. “Given South Korea’s manufacturing-heavy industrial structure,” Kim said, “we must observe global trends when determining disclosure standards and a roadmap.”
The task force also reviewed key technical aspects of the reporting framework. These included plans to base disclosures on consolidated financial statements, excluding non-material subsidiaries, and a proposal to defer Scope 3 emissions reporting due to the complexity and cost of tracking supply chain-wide emissions.
Vice chairman Kim also referenced the EU’s 2029 deadline for third-country companies with subsidiaries operating in the bloc and annual net sales exceeding €450m. This requirement, he stressed, reinforces the importance for South Korean firms to prepare for cross-border ESG reporting obligations to remain competitive in the global market.
Back in 2022, Korea’s Financial Services Commission (FSC) approved a set of regulatory revisions to help facilitate financial institutions’ overseas operation and investment activities.
According to the FSC, the measures are aimed at promoting financial institutions’ overseas business expansion by easing some of the reporting and filing duties when investing overseas through a foreign direct investment or a branch office.
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