KoSIF Commentary on Korea's Final Roadmap for Mandatory Sustainability Disclosure

“KoSIF Welcomes Improvements to the Mandatory Sustainability Disclosure Roadmap, 
Calls for a Reasonable Approach to the Scope and Duration of
Safe Harbor Provisions through Amendments to the Law and Enforcement Decree” 

On July 8, the government and the Democratic Party of Korea held a government–party consultation and announced the final roadmap for mandatory sustainability disclosure, hereinafter referred to as the “mandatory ESG disclosure roadmap.

Under the roadmap, mandatory sustainability disclosures will begin in 2028 (FY2027) for KOSPI-listed companies with consolidated assets of KRW 10 trillion or more. The scope of application will expand to companies with consolidated assets of KRW 5 trillion or more in 2029 (FY2028), while a further expansion to companies with KRW 2 trillion or more will be considered in 2030 (FY2029), following an assessment of implementation. From the outset in 2028, sustainability disclosures will be incorporated directly into statutory disclosures under the Capital Markets Act, accompanied by a three-year safe harbor provision. Scope 3 emissions disclosure will begin in phases from 2031, for FY2030 reports. Third-party assurance will also become mandatory two years after the implementation of mandatory disclosure.

The Korea Sustainability Investing Forum, KoSIF, welcomes the fact that the final roadmap announced after the government–party consultation has been significantly improved compared to the draft announced by the Financial Services Commission on February 25. At the same time, however, KoSIF remains concerned that the proposed scope and duration of the safe harbor provision could undermine the fundamental purpose of mandatory sustainability disclosures. KoSIF also calls for further improvements regarding a three-year deferral of Scope 3 emissions disclosures, which would prevent investors and stakeholders from fully identifying climate risks for an extended period.

1. Scope of Companies Subject to Mandatory Disclosure

Compared with the draft proposal, which initially required disclosures only from KOSPI-listed companies with consolidated assets of KRW 30 trillion or more beginning in 2028 (FY2027), the final roadmap lowers the threshold to KRW 10 trillion. Based on FY2025 financial statements, this increases the number of companies initially subject to mandatory disclosure from 59 to 107.

The biggest problem with the draft roadmap was that the number of companies subject to disclosure was extremely limited, and many of them were concentrated in the financial and insurance sectors. For this reason, KoSIF had advocated an initial threshold of KRW 5 trillion, rather than KRW 2 trillion, taking implementation readiness into account. Nevertheless, KoSIF welcomes the government's decision, recognizing that establishing the mandatory disclosure regime itself is an important first step.

That said, while the government indicated that the disclosure will consider expanding the scope to companies with consolidated assets of KRW 2 trillion or more after evaluating implementation during 2028–2029, KoSIF believes this expansion should ultimately be confirmed, rather than merely reviewed, in order to remove market uncertainty. Furthermore, discussions should begin on extending mandatory sustainability disclosure requirements beyond KOSPI-listed companies to include KOSDAQ-listed companies and non-listed companies above an appropriate size threshold.

2. Disclosure Channel and Safe Harbor Provisions

The FSC's initial draft roadmap proposed introducing sustainability disclosures through Korea Exchange (KRX) filings before transitioning to statutory disclosures at a later stage, without specifying when that transition would occur. By contrast, the final roadmap provides that mandatory sustainability disclosures will be incorporated directly into statutory disclosures through business reports under the Capital Markets Act beginning in 2028 (FY2027), on the premise of introducing a safe harbor provision.

Statutory disclosure is intended to ensure a level of reliability comparable to that of financial statements, prevent ESG washing, enhance comparability, predictability, and promote the efficient allocation of capital and market transparency. This approach is consistent with international developments, and KoSIF welcomes the government's decision to align Korea's disclosure framework with global practice.

However, applying a safe harbor provision to all sustainability disclosures for a period of three years—while potentially facilitating a smoother transition and reducing compliance burdens—could also weaken accountability and undermine confidence in sustainability disclosures. The scope and duration of the safe harbor should therefore be carefully reconsidered in conjunction with the third-party assurance system. Through amendments to the Capital Markets Act and its Enforcement Decree, the National Assembly should establish a balanced approach that facilitates implementation without compromising the integrity and objectives of the mandatory sustainability disclosure regime.

3. Deferral of Scope 3 Emissions Disclosures

As in the draft roadmap, the final roadmap confirms that Scope 3 disclosure will be deferred by three years from the start of mandatory disclosure in 2028, for FY2027 reports, and will begin in 2031, for FY2030 reports, in phases according to company size.

Accordingly, companies with consolidated assets of KRW 30 trillion or more will begin disclosing Scope 3 emissions in 2031, those with KRW 5 trillion or more in 2032, while application to companies with KRW 2 trillion or more will be considered in 2033.

Although the share of Scope 3 emissions varies by industry, CDP analysis indicates that Scope 3 emissions account for approximately 75 percent of a company's total greenhouse gas emissions on average. Without Scope 3 information, climate-related disclosures cannot provide a comprehensive picture of a company's actual climate-related risks. This represents a material risk for investors as well as for customers. In other words, without Scope 3 data, climate disclosure captures only the visible tip of the iceberg while leaving the much larger underlying risk unexamined.

Scope 3 emissions are precisely the kind of climate-related information that can be covered by safe harbor provisions. Therefore, there is little justification for deferring Scope 3 disclosure for as long as three years after mandatory disclosure begins. As recommended by the International Sustainability Standards Board (ISSB), global investor groups, and long-term institutional investors such as the National Pension Service of Korea (NPS), a one-year deferral would be more appropriate.

This would allow companies to build knowledge and experience in Scope 3 calculation. Numerous cases have shown that deferred time is rarely used to accumulate experience; in most cases, it simply becomes a lost time. If the government swiftly establishes the necessary policy and technical infrastructure for Scope 3 calculation and provides administrative and financial support, Scope 3 disclosure is achievable.

4. Third-Party Assurance

Third-party assurance is an essential mechanism for enhancing the credibility and reliability of sustainability disclosures. The FSC's draft roadmap contained no proposal regarding assurance. The final roadmap, however, requires mandatory independent third-party assurance beginning in 2030 (FY2029), two years after the commencement of mandatory sustainability disclosures, with the necessary legal framework to be established through amendments to the Capital Markets Act.

KoSIF welcomes this policy direction. At the same time, KoSIF expects that the detailed institutional design—including the scope of assurance, levels of assurance, and market entry requirements for assurance providers—will ensure the independence, credibility, and neutrality of the assurance framework while maintaining an efficient and well-functioning assurance market.

High-quality sustainability information is fundamental to building a well-functioning sustainable finance ecosystem. Such an ecosystem enables capital to be allocated efficiently through the availability and use of reliable sustainability information. This is precisely why a well-designed and effectively implemented mandatory sustainability disclosure roadmap is essential.

Since 2012, KoSIF has been at the forefront of efforts to mandate sustainability disclosure in Korea (initially under the framework of CSR disclosure). KoSIF will continue to work with policymakers and market participants to ensure that Korea's disclosure framework supports the transition of Korean industries and businesses toward a climate-resilient and sustainable economy, while providing investors with sustainability disclosures that are credible, decision-useful, and internationally comparable.

July 9, 2026

Korea Sustainability Investing Forum(KoSIF)