Press Releases

Joint Letter on the Announcement of
South Korea’s Mandatory Sustainability Disclosure Roadmap

Dear Members of the National Assembly ESG Forum, FSC and KSSB

The South Korean government (Financial Services Commission, FSC) has officially announced the "Draft Roadmap for Mandatory Sustainability Disclosures" on February 25. FSC has also shared its plans to hold a public consultation period, with an aim to finalize the roadmap by April. 

The Principles for Responsible Investment (PRI), Korea Sustainability Investing Forum (KoSIF) and the Asian Corporate Governance Association (ACGA) welcome the FSC’s commitment to providing regulatory clarity and resolving market uncertainty regarding sustainability disclosure requirements. 

The PRI represents over 5,000 institutional investor signatories globally, collectively managing more than US$139 trillion in assets. KoSIF serves as a leading domestic platform advancing sustainable finance in Korea through engagement with investors, policymakers and international initiatives. ACGA is an independent non-profit dedicated to advancing corporate governance in Asian markets, with investor members managing over US$40 trillion in assets.

High-quality, decision-useful sustainability and climate-related financial disclosures are foundational to well-functioning capital markets. Robust disclosure frameworks enhance transparency, improve risk pricing, support long-term competitiveness, and can strengthen Korea’s position in attracting global capital as global markets increasingly incorporate standardized sustainability reporting. As the government advances its “Productive Finance” and “Korea Premium” initiatives, sustainability disclosure should be viewed as core market infrastructure. 

In this context, PRI, KoSIF and ACGA respectfully offer the following recommendations:

1. Alignment with the ISSB’s global baseline, while reflecting local context 

While the sustainability disclosure standards should take South Korea’s unique market characteristics into account, it is imperative that they remain fully aligned with international requirements. Ensuring interoperability with global frameworks is essential to maintaining the credibility and consistency of corporate data for international investors. 

We strongly encourage South Korea to align its framework with the global baseline established by the International Sustainability Standards Board (ISSB), specifically IFRS S1 (General Requirements) and IFRS S2 (Climate-Related Disclosures). 

• Global investors consistently support adoption of ISSB standards as a common baseline to ensure comparability, consistency, and reliability across jurisdictions. Full content alignment with ISSB can:
• ·       Reduce reporting fragmentation
• ·       Improve cross-border capital allocation
• ·       Reinforce Korea’s competitiveness in global markets

While local context should be appropriately reflected, content deviations from the ISSB baseline should be minimized to preserve international interoperability, which is key to ensuring that sustainability reporting requirements are fit for purpose in the Korean context and achieve the above benefits.

2. Ambitious Implementation Timeline and Broad Scope 

We recognize the importance of proportional implementation that reflects market readiness and capacity building. A phased approach, particularly for more complex elements such as Scope 3 emissions and transition planning, can support effective adoption. At the same time, given South Korea’s economic standing and the sophistication of its capital markets, we encourage:

·       A clear and ambitious timeline for mandatory implementation

·       Early inclusion of large, listed issues and systemically important entities that allows for meaningful comparability across the economy

·       Clarity on when currently voluntary elements will become mandatory

Regulatory certainty is essential to allow both companies and investors to prepare effectively.

3. Establishing a Robust Legal Foundation through Statutory Filings 

To ensure credibility and reliability, sustainability-related financial disclosures should be embedded within 

statutory reporting frameworks, subject to appropriate governance, internal controls and assurance requirements. Incorporation into official filings enhances data quality and investor confidence and reinforces the understanding that sustainability-related risks and opportunities are financially material considerations. 

The South Korean government is building on a strong momentum of policy reforms supporting local and international investors. It has an opportunity to reinforce its leadership in sustainable finance by establishing a disclosure framework that is globally aligned, legally robust, and implemented with clarity and ambition. 

A well-designed sustainability disclosure regime can:

·       Enhance capital market efficiency, 

·       Strengthen investor confidence,

·       Support long-term economic resilience,

·       And solidify Korea’s position as a competitive, future-ready market.

PRI, KoSIF and ACGA stand ready to support continued dialogue and implementation efforts.

Yours Sincerely, 
 

                      Cambria Allen-Ratzlaff                          Karl Yang                          Amar Gill                                             

   Interim CEO, PRI                        CEO, KoSIF                  Scretary General, ACGA

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About the PRI

The Principles for Responsible Investment (PRI) works with its international network of signatories to put the six Principles for Responsible Investment into practice. Its goals are to understand the investment implications of sustainability and governance-related issues and to support signatories in integrating these issues into investment and ownership decisions. The PRI acts in the long-term interests of its signatories, of the financial markets and economies in which they operate and ultimately of the environment and society as a whole.

The six Principles for Responsible Investment are a voluntary and aspirational set of investment principles that offer a menu of possible actions for incorporating sustainability and governance-related issues into investment practice. The principles were developed by investors, for investors. In implementing them, signatories contribute to developing a more sustainable global financial system. For more information, visit www.unpri.org.

About ACGA

Asian Corporate Governance Association (ACGA) is an independent, non-profit membership organisation dedicated to promoting long-term and substantive improvements in corporate governance in Asia through research, advocacy and education. ACGA was established in Hong Kong in 1999. 

ACGA’s membership network comprises around 106 blue-chip companies, including global investment institutions, listed and unlisted companies, financial intermediaries, professional firms and educational bodies based in Asia and around the world. 

About KoSIF

KoSIF was established in 2007 as the first Korea’s non-profit think tank specializing in sustainable finance, with the mission of creating a better world through the advancement of sustainable finance grounded and Environmental, Social and Governance (ESG) principles.

KoSIF conducts a wide range of activities, including ESG research, policy development and legislative support, international cooperation, as well as education and awareness campaigns. We also serve as the local partner or secretariat for various global initiatives in Korea.