South Korea proposes mandatory sustainability reporting for KOSPI-listed firms with assets above KRW 30 trillion ($20.4 billion) beginning in 2028 based on 2027 data.
Reporting standards align with ISSB’s IFRS S1 and IFRS S2 frameworks through Korea’s new KSSB 1 and KSSB 2 sustainability disclosure rules.
Scope 3 emissions disclosure delayed until 2030, giving companies time to build value chain reporting infrastructure.
The Korean Financial Services Commission (FSC) has launched a consultation on a national roadmap that would introduce mandatory sustainability reporting for major listed companies, aligning the country’s disclosure framework with global standards developed by the International Sustainability Standards Board.
The draft roadmap accompanies the finalization of Korea’s new sustainability reporting standards issued by the Korean Sustainability Standards Board (KSSB). The rules include KSSB 1 General Requirements for Sustainability-related Financial Disclosures and KSSB 2 Climate-related Disclosures, which correspond closely to the ISSB’s IFRS S1 and IFRS S2 reporting frameworks.
If adopted, the regime would place South Korea among a growing group of major economies integrating ISSB standards into national disclosure systems. The Financial Services Commission confirmed that it is seeking market feedback before finalizing the roadmap in April 2026.
“Korea’s Financial Services Commission announced the release of its draft roadmap for the implementation of mandatory sustainability disclosures, with a proposed start date for climate-related reporting for large companies of 2028, based on 2027 data, and expanding to smaller firms over time.”
Reporting Requirements Target Largest KOSPI Companies First
Under the proposed timeline, companies listed on the Korea Composite Stock Price Index (KOSPI) with consolidated assets exceeding KRW 30 trillion ($20.4 billion) would begin reporting sustainability information in line with KSSB standards from fiscal year 2027, with disclosures published in 2028.
The roadmap envisions expanding the requirement one year later to firms with assets above KRW 10 trillion ($6.8 billion). Authorities also left open the possibility of extending the regime further to smaller listed firms as reporting infrastructure matures.
The phased approach reflects a broader strategy among regulators globally who are attempting to balance investor demand for standardized climate disclosures with the operational challenges companies face in collecting sustainability data.
The new Korean standards mirror the ISSB architecture that is rapidly becoming the baseline for global sustainability reporting.
“Korea’s new finalized sustainability standards include Standard No. 1: General Requirements for Sustainability-related Financial Disclosures, and Standard No. 2: Climate-related Disclosures, which correspond to the ISSB’s IFRS S1 and IFRS S2 standards.”
Transitional Reliefs And Climate First Approach
The proposed framework includes transitional reliefs designed to ease companies into compliance. In the first year of reporting, subsidiaries that account for less than 10 percent of a group’s consolidated assets would be exempt from reporting requirements. Small companies within corporate value chains would also be excluded.
The roadmap adopts a climate-first reporting structure similar to the ISSB framework. Early disclosures will focus primarily on climate risks and governance, while broader sustainability topics may be incorporated later as the system evolves.
Scope 3 greenhouse gas emissions reporting, often the most complex element of climate disclosure, will also be delayed. The FSC proposes making Scope 3 reporting mandatory from fiscal year 2030 onward, extending the transition period beyond the ISSB’s initial one-year relief.
“The roadmap includes similar transitional reporting reliefs to the ISSB’s standards, but with longer and more open timelines for implementation of some reporting requirements.”
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Assurance And Enforcement To Develop Gradually
The draft roadmap also addresses verification and enforcement of sustainability disclosures. Third-party assurance would initially remain voluntary during the implementation phase.
Regulators indicated that mandatory assurance could be introduced later, depending on international market developments and the maturity of corporate reporting systems.
Enforcement is also expected to begin cautiously. Rather than immediate sanctions, the FSC proposes an early focus on regulatory guidance and market education to help companies develop robust disclosure processes.
“The new roadmap also proposes that third-party assurance on sustainability disclosures start off as optional, with gradual mandatory adoption to be considered in line with global trends.”
Implications For Investors And Global ESG Alignment
For investors and multinational corporations operating in Korea, the proposed roadmap represents a significant step toward harmonizing the country’s corporate disclosure framework with international ESG reporting norms.
ISSB-aligned reporting has quickly emerged as a focal point for regulators seeking to standardize sustainability disclosures across jurisdictions. Europe, the United Kingdom, Japan, and several Asia-Pacific markets are already integrating ISSB frameworks into national regulatory systems.
South Korea’s phased approach reflects both the scale of its industrial base and the complexity of value chains across electronics, automotive, and heavy manufacturing sectors.
For global investors, the introduction of standardized climate reporting among major KOSPI-listed firms would improve comparability of corporate climate risk and transition strategies. For Korean companies, the roadmap signals a structural shift in corporate governance expectations, placing climate disclosure alongside financial transparency as a core reporting requirement.
The consultation period runs until March 31, 2026, after which regulators will finalize the roadmap. If implemented as proposed, South Korea would join the expanding group of jurisdictions embedding ISSB standards into domestic financial regulation, further accelerating the global convergence of climate and sustainability reporting frameworks.
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