SEOUL – South Korea's Financial Services Commission (FSC) announced on Monday that it will soon require local companies to disclose only their climate-related investments and activities. This decision aims to align with global environmental, social, and governance (ESG) standards while minimizing the regulatory impact on businesses. The new ESG disclosure requirement focuses exclusively on climate issues, reflecting a globally recognized need for transparency in this area.
According to Yonhap News Agency, Vice Chairman of the FSC, the decision to limit disclosures to climate-related information is part of an effort to synchronize South Korea's standards with international frameworks, such as those established in the United States, the European Union, and by the International Sustainability Standards Board. During a meeting with representatives from government agencies and the business sector, Kim explained that other ESG aspects would not be mandatorily disclosed, allowing companies the freedom to choose whether to report on these areas.
The government is set to release a draft proposal for these ESG disclosures next Tuesday, which will be open for feedback from businesses and investors. Following the consultation period, the Korea Sustainability Standards Board (KSSB) will prepare a final draft. The FSC is also considering the timeline for implementing these disclosure requirements and determining which firms will be subject to the new rules, with implementation expected no earlier than 2026.