Press Releases

- Domestic ESG Executives and Staff Have Answered -

"Listed companies with total assets of 5 trillion and 10 trillion won

or higher possess high disclosure capabilities."

- For companies with 10 trillion won or higher: 70.9% answered "High" vs. 5% answered "Low"

- For companies with 5 trillion won or higher: 45.8% answered "High" vs. 19.1% answered "Low"

- 58% of respondents from companies with assets of 10 trillion won or higher selected: 'Immediate statutory disclosure' or 'Statutory disclosure one year after exchange disclosure'

- The Office of National Assembly Member Byoungdug Min, Co-Chair of the National Assembly ESG Forum and National Assembly Member, releases the results of the "Urgent Survey on Domestic ESG Executives and Staff"

- Survey results show a significant gap in perspective compared to claims citing "insufficient disclosure capabilities, lack of preparation, and corporate burden"

- Byoungdug Min, Co-Chair of the National Assembly ESG Forum and National Assembly Member, states, "The Financial Services Commission (FSC) must reflect the feedback collected at the end of March alongside this survey to present a final proposal that is much more progressive than the initial draft."

South Korean companies' ESG executives and staff highly evaluate the ESG disclosure capabilities of domestic listed companies with consolidated total assets of 5 trillion won or higher and 10 trillion won or higher. Furthermore, a recent survey revealed that 4 out of 10 respondents agree on a transition path toward "immediate statutory disclosure" or "statutory disclosure one year after exchange disclosure." Notably, among companies with an asset size of 10 trillion won or higher, the agreement rate reached approximately 6 out of 10 respondents.

The Office of National Assembly Member Byoungdug Min, Co-Chair of the National Assembly ESG Forum and National Assembly Member, disclosed an analysis of an urgent survey conducted among ESG working-level staff and executives of the United Nations Global Compact (UNGC) Network Korea's member companies. The survey was jointly administered by the Korea Sustainability Investing Forum (KoSIF) and the UNGC Network Korea, which serve as the co-secretariats of the forum.

A total of 120 companies responded to the survey. Listed companies accounted for 71.7% of the respondents, while companies with consolidated total assets ranging from 1 trillion won to over 30 trillion won were evenly distributed, making up 75.8% of the total. Manufacturing companies accounted for approximately 60%.

According to the analysis, more than 7 out of 10 ESG practitioners (70.9%) responded that the ESG disclosure capabilities of listed companies with consolidated total assets of 10 trillion won or higher were "high" (34.2% "very high," 36.7% "high"). In contrast, only 5% responded that their capabilities were "low." For companies with assets of 5 trillion won or higher, the positive trend was maintained with 32.5% answering "high" and 13.3% answering "very high." These figures exclude "neutral" responses.

This assessment was also reflected in the responses regarding the scope of target companies subject to the initial disclosure mandate starting in 2028 (FY27). While only 33.3% supported the FSC's initial draft roadmap proposal to apply the mandate starting from companies with 30 trillion won or higher, 66.7% supported applying it to companies with 10 trillion won or less (34.2% for 2 trillion won, 12.5% for 5 trillion won, and 20% for 10 trillion won). In short, the vast majority of respondents believe that even under the most conservative application for the initial mandate, it should start with companies holding at least 10 trillion won in assets.

Regarding disclosure channels, most countries are adopting statutory disclosure to ensure data reliability, investor protection, and the prevention of ESG washing (greenwashing). However, citing corporate burdens, the FSC previously announced a plan to initiate the disclosure channel via stock exchange disclosures, enter an adjustment period, and subsequently transition to statutory disclosures within annual business reports. Nevertheless, the FSC did not disclose a precise timeline for this transition to statutory disclosure.

In contrast, 40% of all respondents selected either immediate statutory disclosure (15%) or statutory disclosure one year after exchange disclosure (25%). Among companies with an asset size of 10 trillion won, this figure reached approximately 58% (21.2% for immediate statutory disclosure + 36.4% for statutory disclosure one year after exchange disclosure). For companies with 5 trillion won, it reached 46%. It is highly significant that these responses were gathered even though the survey did not explicitly mention a "safe harbor" clause regarding statutory disclosures. If a statutory disclosure system is introduced that grants safe harbor for a certain period regarding disclosure items containing high levels of estimations—premised on reasonable efforts rather than intentional misrepresentation—this percentage is expected to rise even further.

In connection with this, Byoungdug Min, Co-Chair of the National Assembly ESG Forum and National Assembly Member, proposed an amendment to the Financial Investment Services and Capital Markets Act (Capital Markets Act) on April 8, which includes "safe harbor" provisions and "incentives.“

The survey results regarding the target scope and channels for disclosure contrast sharply with the FSC’s plan to initiate exchange-based disclosures in 2028 (FY27) targeting companies with consolidated total assets of 30 trillion won or higher based on "insufficient capabilities, lack of preparation," and "legal burdens." It is critical to note that these responses come directly from the ESG executives and staff whose primary responsibility is handling ESG data and disclosures. In fact, when asked about their own companies' level of disclosure preparation, 42.5% replied it was "high," whereas only 13.3% answered it was "low.“

International standards typically require Scope 3 disclosures to be implemented with a one-year grace period from the initial disclosure mandate. This is because Scope 3 accounts for 75% to 80% of total greenhouse gas (GHG) emissions, making it impossible to fully assess climate risks without it. However, this survey reconfirmed that Scope 3 remains a burden for corporations. Half of the respondents (50%) selected the 3-year grace period for Scope 3 disclosures proposed by the FSC. On the other hand, immediate application (11.7%) and a one-year grace period (16.7%) combined reached 28.4%. When including a two-year grace period (21.7%), the split was a tight 50-50. This indicates that if the government swiftly establishes various policy and technical infrastructures for calculating Scope 3 emissions and provides administrative and financial support, the grace period for Scope 3 disclosures could be significantly shortened.

Regarding mandatory third-party assurance—a key mechanism to increase the reliability of disclosed information—"immediate application" in 2028 (FY27) received the highest response rate at 29.2%, followed by 15.8% for 2029 (FY28), and 14.2% for 2030 (FY29). This indicates that 6 out of 10 respondents believe third-party assurance must begin by 2030 at the very latest. However, the FSC's initial draft roadmap for ESG disclosures leaves assurance as "voluntary" and lacks a concrete roadmap to make it mandatory.

Rep. Min emphasized, "We are living in an era where it is difficult to attract investment using financial information alone, and global capital markets are already demanding sustainability information." The lawmaker stressed, "ESG disclosure has effectively become a 'business license' required to secure capital from investors and financial institutions, and to maintain stable, long-term supply chain contracts with client companies." Rep. Min concluded, "The Financial Services Commission must deliver a final proposal that reflects both the feedback gathered at the end of March and the results of this survey of ESG practitioners."[END]

 Inquiries: Jong-O Lee CIO (argos68@kosif.org), Hanjin Yu  Team Lead (hwcharisma89@kosif.org)