Press Releases

National Assembly ESG Forum Calls for Enactment of
the Framework Act on ESG

“Korea’s fragmented ESG laws and policies are insufficient to strengthen the global competitiveness of domestic industries”

“A comprehensive policy blueprint is needed to ensure coherence and alignment across ESG policies from an ecosystem-wide perspective”

Co-Chair Rep. Byoungdug Min: “We will design a framework act that transforms ESG into a new source of competitiveness and growth opportunities for businesses”

SEOUL, South Korea — With ESG requirements increasingly becoming trade barriers and influencing capital allocation in global markets, calls are growing for the enactment of the Framework Act on ESG to improve policy coherence and strengthen the international competitiveness of Korean industries.

The National Assembly ESG Forum, co-chaired by Rep. Byoungdug Min and Rep. Heeyong Jung, held a policy roundtable on September 29 at the National Assembly Members’ Office Building to discuss the need for a Framework Act on ESG and key directions for its development. The forum, jointly supported by the Korea Sustainability Investing Forum (KoSIF) and the UN Global Compact Network Korea as its co-secretariats, reviewed global ESG regulatory and policy trends, assessed Korea’s existing ESG policy landscape, and explored priorities for establishing a comprehensive legislative framework.

During his presentation, Jong-oh Lee, CIO of KoSIF, emphasized the urgent need to strengthen Korea’s ESG legal and policy infrastructure.

"ESG-related regulations are reshaping global trade and supply chains, while ESG considerations are rapidly influencing international capital allocation, including investment exclusion decisions. Yet Korea's legal, regulatory and policy infrastructure remains insufficient and fragmented," Lee said.

"We need to identify the key actors within the ESG market ecosystem, clearly define their respective roles and responsibilities, and establish a comprehensive legal and institutional blueprint that connects these actors and facilitates ESG implementation. That blueprint is the Framework Act on ESG," he explained.

Lee further identified several structural shortcomings in Korea's current ESG policy framework, including inadequate institutional infrastructure, fragmented policy design that lacks an ecosystem-wide perspective, limited effectiveness of voluntary approaches in driving market practices, and inconsistencies in policy implementation depending on the priorities and commitment of successive administrations.

He proposed that the Framework Act on ESG should encompass a broad range of policy areas, including:

•   - Promotion of corporate sustainability management
•   - Advancement of sustainable finance, including transition finance
•   - Strengthening market integrity and trust through ESG ratings, advisory and assurance services, as well as measures to prevent greenwashing
•   - Promotion of sustainable public procurement
•   - Encouragement of sustainable consumption
•   - Development of ESG professionals and expertise
•   - Administrative, technical and financial support measures
•   - Governance arrangements, including a national master plan and an implementation framework to coordinate and advance these policies

Lee also stressed that the Framework Act should provide an overarching legal and policy framework covering mandatory ESG disclosures, supply chain sustainability due diligence, sustainable finance disclosures, a taxonomy for environmentally sustainable economic activities, transition finance, fiduciary duties, regulation of ESG rating, advisory and assurance providers, anti-greenwashing measures, and sustainable public procurement legislation.

Earlier in the session, Jung Yun Choe, Senior Research Fellow at the Korea Legislation Research Institute (KLRI), presented an overview of global ESG regulatory and policy developments.

Choe characterized the recent evolution of ESG regulation as a process of "selective recalibration," rather than a simple strengthening or rollback of requirements. She noted that major jurisdictions, including the European Union, have been adjusting the scope of mandatory sustainability reporting and easing certain reporting burdens, while strengthening regulatory measures aimed at preventing greenwashing and ensuring the reliability of ESG information through ratings, verification and assurance.

"Even companies that fall outside the scope of mandatory sustainability disclosures continue to face ESG information requirements through supply chains, international trade and financial markets," Choe said. "Korea therefore needs to establish stronger connections among its fragmented regulatory frameworks governing sustainability disclosures, finance, supply chains and consumer protection."

Regarding the proposed Framework Act, Choe explained:

"The Framework Act on ESG should serve as an institutional link that enables businesses to reuse ESG information collected and prepared once across multiple purposes, including disclosures, finance, exports and consumer protection. It should also provide proportionate support for small and medium-sized enterprises while ensuring effective accountability for false or misleading ESG claims."

The roundtable discussion was moderated by Eun-kyung Lee, Director at UN Global Compact Network Korea, and brought together representatives from the legal, business, financial and public sectors.

Panelists included Sung Taek Lim, Chair of the ESG Committee at the Korean Bar Association; Jae-hyung Song, Head of the Sustainability Management Office at the Federation of Korean Industries (FKI); Yang-gyun Park, Head of the Policy Division at the Federation of Middle Market Enterprises of Korea (FOMEK); Hong Sun Song, Senior Research Fellow at the Korea Capital Market Institute (KCMI); and Bo-ra Park, Deputy Director of the Fair Market Division at the Financial Services Commission (FSC).

The panelists shared perspectives and recommendations on the legislative priorities and policy directions for the proposed Framework Act on ESG.

In his opening remarks, Rep. Byoungdug Min, Co-Chair of the National Assembly ESG Forum, underscored the need for the Framework Act to serve as a comprehensive policy blueprint that would enhance coherence and alignment among Korea's fragmented ESG laws, regulations and policies.

"Rather than imposing additional regulatory burdens on businesses, the Framework Act on ESG should improve regulatory predictability and provide practical support for small and medium-sized enterprises and middle-market companies to adapt to evolving ESG requirements, particularly through access to data, skilled personnel, financing and consulting services," Min said.

"We will carefully incorporate perspectives from the government, the National Assembly, businesses, capital market participants, academia and civil society to design a Framework Act that transforms ESG into a new source of competitiveness and growth opportunities for Korean businesses," he added.

Building on the recommendations and perspectives presented by experts and stakeholders at the roundtable, the National Assembly ESG Forum will continue to review the key provisions of the proposed Framework Act on ESG and explore pathways toward its institutionalization.