"Climate Disclosures Must Be Mandatory Starting in 2026"
: Forum Proposes Directions for Climate Disclosure to Ensure Corporate Sustainability

- Launching climate disclosures in 2026 is critical to boosting corporate competitiveness and addressing the climate crisis.

- Proposals include integrating disclosures into statutory Annual Reports (Business Reports) and mandating Scope 3 emissions reporting.

- Taehan Kim, COO of the Korea Sustainability Investing Forum (KoSIF): "Delaying mandatory climate disclosure will only increase the compliance burden on individual companies… We must amend the Capital Markets Act, secure the legal status of the KSSB, and concurrently discuss government support for enterprises."

- Corporate ESG Practitioner: "Due to the government's delayed response, companies feel as anxious as high school seniors preparing for the College Scholastic Ability Test (CSAT) without knowing the exam date or the test coverage."

The Korea Sustainability Investing Forum (KoSIF), alongside domestic ESG advocacy groups—the Center for Good Corporate Governance (CGCG), Greenpeace, and the Green Transition Institute (GTI)—hosted a forum to propose directions for climate disclosures to ensure corporate sustainability. Held on June 22 in the First Small Conference Room of the National Assembly Members' Office Building, the forum was jointly organized with the National Assembly's Political Affairs, Trade Industry & Energy, and Health & Welfare Committees, as well as the Financial Services Commission (FSC) and the National Human Rights Commission of Korea. Attendees discussed how commencing climate disclosures in 2026 is essential not only for addressing the climate crisis but also for sharpening corporate competitiveness. Reflecting the intense market interest, the event drew over 130 industry experts, officials, and citizens.

Climate disclosure is a primary mechanism to incentivize companies to measure, publicly disclose, and reduce their greenhouse gas (GHG) emissions. Major jurisdictions, including the European Union (EU), the United States, and Japan, have already enacted sustainability disclosure standards, established legal foundations, or finalized specific implementation timelines. Domestically, the Korea Sustainability Standards Board (KSSB), under the Korea Accounting Institute (KAI), released its exposure draft on April 30. However, critical points of contention—such as the exact enforcement timeline, scope of mandated entities, disclosure channels, and whether to mandate Scope 3 value-chain GHG emissions—remain undecided. This prompted ESG advocacy groups to convene and consolidate their positions on climate disclosure rules. 

In their congratulatory remarks, participating lawmakers highlighted the National Assembly's legislative role in addressing the climate crisis. Rep. Seong-hwan Kim (Democratic Party of Korea) stated, "We have entered an era where climate crisis response is directly tied to corporate competitiveness. The National Assembly will actively work to ensure climate disclosures take root swiftly so that domestic enterprises can elevate their competitiveness in global markets." Rep. Jin-suk Jeon (Democratic Party of Korea) underscored the definition of sustainability, noting, "No sector—whether agriculture, fisheries, forestry, or industry and energy—is safe from the climate crisis. We must prevent these adverse impacts from burdening future generations." Rep. Byung-dug Min (Democratic Party of Korea) reaffirmed his commitment: "If we fail to align with the global timeline and requirements for sustainability reporting, our domestic industrial structure will face a severe blow. As a member of the Political Affairs Committee overseeing ESG disclosure legislation, I will closely monitor and drive climate change disclosures, which will dictate the future of Korean enterprises."

"Delaying Disclosures to 2029 as Lobbied by Business Groups Will Weaken Industrial Competitiveness; Amendments to the Capital Markets Act Are Vital"

During the main presentation session, ESG advocacy groups explained that mandatory climate disclosure must be implemented promptly to safeguard the international competitiveness of Korean enterprises.

The first presenter, Jiyun Shin, a Senior Specialist at Greenpeace, pointed out:

"Considering global alignment, the timeline cannot be pushed back; mandatory climate disclosure must commence in 2026. Because the Financial Services Commission (FSC) has delayed finalizing the disclosure roadmap, the overall enforcement timeline is being continuously dragged down.“

As a concrete execution strategy, Shin proposed:

1. Progressively expanding the mandate, starting with listed companies with total assets of 2 trillion KRW or more.

2. Integrating disclosures into statutory Annual Reports (Business Reports).

3. Mandating the inclusion of Scope 3 value-chain emissions reporting.

Hyun-young Ji, an attorney at the Green Transition Institute (GTI), emphasized:

"Climate-related financial disclosures are a core element and global standard that enable actual corporate climate action. Given that South Korea’s trade dependence reached 68.8% (as of 2019), our industries must begin climate disclosures in 2026, anchoring them in statutory filings and including Scope 3 emissions to preserve global competitiveness."

Ji also criticized the government's inadequate response, stating, "While mandatory climate disclosure has become the global benchmark in major economies, our government continues to shift its stance, conceal its position, and delay regulatory plans."

Taehan Kim, COO of KoSIF, drew a historical parallel to past financial reforms:

"The pushback we are seeing against sustainability disclosures mirrors the exact friction encountered during South Korea's transition to International Financial Reporting Standards (IFRS) in the past. Looking back at how the government's firm stance played a pivotal role in successfully anchoring IFRS, the government's unwavering commitment to sustainability disclosure is critical today."

During the IFRS transition, the Korean government formed a task force in 2006, announced a roadmap in 2007, and mandated the standards for all listed companies by 2008. Although corporations lobbied heavily for deferrals at the time, the government rejected those requests and maintained a consistent regulatory stance.

COO Taehan Kim further explained that South Korea’s flagship industries—such as batteries, semiconductors, and steel—are heavily exposed to climate risks, warning:

"If we do not mandate sustainability disclosures, Korean companies will be forced to respond individually to fragmented client requests and global supply chain mandates. This piecemeal approach will actually increase the compliance burden on enterprises. Therefore, we must amend the Capital Markets Act, secure the legal status of the KSSB, and concurrently discuss institutional support to ease the corporate disclosure transition."

Panel Discussion: Institutional Investors Call for Clarity and Comparability

Following the presentations, a detailed panel discussion took place on the key areas of contention surrounding climate disclosure.

Dong-sup Lee, Head of the Stewardship Code Office at the National Pension Service (NPS) Investment Management, expressed investor anxieties:

"Integrating non-financial ESG factors into corporate valuation aligns directly with our institution's responsible investment mandates. The more the disclosure mandate is delayed and the more ambiguous the reporting standards become, the more it negatively impacts the overall investment ecosystem.“

However, regarding highly technical data, Lee added a nuanced view:

"For information critical to investors like Scope 3 emissions, the government should first standardize the calculation methodologies and launch the mandate by separating companies capable of immediate disclosure from those requiring more preparation time.“

Min Kim, Representative of the youth climate group Big Wave, shared findings from voluntary corporate reports:

"Our analysis of POSCO's voluntarily disclosed Sustainability Report revealed significant inconsistencies and a lack of granularity regarding their 2030 targets. This is a systemic issue resulting from voluntary, non-binding reporting frameworks. For investors to obtain precise, actionable data, legally binding statutory disclosures are absolutely necessary.“

Yong-hwan Choi, Head of the ESG Research Team at NH-Amundi Asset Management, highlighted the utility of climate data for asset managers:

"From an investor's perspective, climate disclosures allow us to comprehensively verify a company’s climate risk strategies, exposures, and market opportunities, which we can actively utilize in corporate valuation and investment decision-making. We should avoid excessive anxiety over the regulation and instead move toward legalizing at least half-year (semi-annual) disclosures through statutory frameworks.“

Hee-eun Bae, Director at the Asia Investor Group on Climate Change (AIGCC), proposed specific enhancements to the KSSB exposure draft:

- Adding provisions that explicitly recommend compliance with the Sustainability Accounting Standards Board (SASB) standards.

- Defining distinct short-, medium-, and long-term time horizons tailored to the unique characteristics of climate change.

- Requiring disclosures to follow the "Industry-based Guidance on Implementation" of IFRS S2.

- Mandating Scope 3 disclosures (with a maximum one-year grace period if necessary).

- Mandating the disclosure of internal carbon pricing (price per ton of GHG emissions).

Woong-hee Lee, Vice Chair of the Korea Sustainability Standards Board (KSSB), concluded the panel by advocating for stakeholder balance:

"Institutional investors, including the National Pension Service, are strongly urging the application of consistent disclosure standards as a foundation for cross-company data comparability. While feedback gathered by regulators has heavily skewed toward corporate business lobbies so far, the balanced perspectives of various stakeholders—including the government, asset owners, and civil society—must be reflected in the final standards.“

Corporate Anxiety Rises Amid Government Inaction; Clear Regulatory Signals Required

During the floor Q&A session, an ESG practitioner from a domestic enterprise voiced the operational frustrations stemming from regulatory uncertainty:

"Because the government refuses to finalize the implementation timeline and the exact scope of reporting, corporate practitioners feel like high school seniors preparing for the CSAT exam without being told the exam date or what subjects will be on the test.“

This analogy drew strong consensus from the audience. When another attendee asked what else is required alongside climate disclosures to ensure long-term corporate sustainability, Taehan Kim, COO of KoSIF, added:

"We must enact the 'ESG Framework Act' to build a comprehensive ecosystem where sustainable management and responsible investment can form a virtuous cycle.“

The forum concluded with a clear consensus: mandatory climate disclosure must be implemented by 2026, and the regulatory framework needs to reflect the practical demands of global institutional investors rather than the deferral requests of domestic business lobbies.

Following this discussion, the co-organizing coalition—including KoSIF, CGCG, Greenpeace, and GTI—will host a joint press conference on August 19 at 10:00 AM to further clarify their stance and call for the immediate execution of mandatory sustainability disclosures. [END]

 Inquiries: Jong-O Lee CIO (argos68@kosif.org), Dajeong Kim  Senior Researcher (kimdj@kosif.org)