Press Releases

Draft ESG Disclosure Roadmap Deeply Insufficient in Fueling Green Transformation and Contributing to Korea Premium

- "Sustainability Disclosures Must Begin at a Minimum Asset Threshold of KRW 10 Trillion"… KoSIF Urges Financial Services Commission (FSC) to Elevate Roadmap Standards

- Over-Reflection of Delay-Tactics Proffered by Selective Corporate Associations Results in Lax Disclosure Thresholds (KRW 30 Trillion) and Extended Scope 3 Deferrals (3 Years), Defying International Alignment

- "Amid a Global Generational Transition, the Government Must Redesign the Final April Roadmap to Reflect the Voices of Investors and Domain Experts"

Regarding the "Draft Sustainability Disclosure (ESG Disclosure) Roadmap" announced on the 25th by the Financial Services Commission (FSC), the Korea Sustainability Investing Forum (KoSIF) released a commentary stating: "While we welcome that the draft resolves a portion of market uncertainty, the detailed proposals fall severely short of international benchmarks and global momentum, representing a deeply disappointing draft." KoSIF strongly urged an across-the-board upward revision of the roadmap.

At the 4th Productive Financial Transition Conference held on the same day, the FSC unveiled a plan mandating disclosures starting in 2028 (FY27) for KOSPI-listed companies with total assets of KRW 30 trillion or more, while deferring Scope 3 greenhouse gas (GHG) emissions reporting by three years to begin in 2031. The disclosure architecture is structured to initiate via the Korea Exchange (KRX) disclosure platform before eventually transitioning into statutory reporting under official business reports.

In response, KoSIF criticized the draft for disproportionately accommodating the "delay-tactics" and stalling arguments of specific business lobbies intent on postponing climate-friendly structural overhauls. KoSIF asserted that this approach directly counteracts the core objectives of driving a Green Transformation (GX) across domestic industries and achieving a "Korea Premium" in capital markets. The forum warned that if the domestic roadmap loses international alignment, high-quality, long-term institutional capital will inevitably exit the market, leaving it vulnerable to short-term speculative capital and precipitating structural systemic risks across the broader capital market.

The most critical flaw highlighted by KoSIF is the qualifying corporate size threshold. The "KRW 30 trillion asset" benchmark represents a massive regression from the previous Moon Jae-in administration's blueprint, which aimed for a KRW 2 trillion asset threshold for KOSPI-listed companies by 2025. KoSIF pointed out that the new limit is difficult to justify even when compared against the conventional domestic regulatory standard for large enterprises (KRW 2 trillion).

KoSIF emphasized:

"Major domestic listed corporations have systematically built up climate disclosure capabilities through the CDP from 2008 to the present. To maintain industrial competitiveness against global supply-chain rivals like Japan—which mandates disclosures for companies with assets of JPY 3 trillion in 2027 and JPY 1 trillion in 2028—the 2028 rollout must, at a absolute minimum, encompass companies with assets of KRW 10 trillion or more.“

Regarding the FSC's phased approach of utilizing KRX disclosures before transitioning to official business reports, KoSIF acknowledged the intent to mitigate corporate compliance burdens but explicitly drew the line that the buffer period must not be protracted if market credibility and global alignment are to be preserved. KoSIF demanded that this transitional window be strictly limited to approximately one year, and called for the passage of pending amendments to the Capital Markets Act to explicitly cement sustainability reporting within statutory business reports.

Scope 3 Disclosure Grace Period Deemed Excessively Conservative Compared to Global Frameworks

The three-year deferral granted for Scope 3 value-chain emissions was similarly critiqued as overly cautious. This timeline lags far behind major advanced economies and standard-setting bodies, including the ISSB (1-year deferral), the EU (no deferral), and Japan and Australia (1-year deferral).

KoSIF noted:

"While measuring and calculating Scope 3 emissions presents universal methodological challenges globally, institutional investors demand this data because it is critical for evaluating climate competitiveness, risk exposure, and market opportunities—even while acknowledging inherent data data variability."

The forum argued that the grace period must be compressed to a maximum of one year. Reflecting this readiness, a substantial and growing number of South Korean enterprises are already voluntarily reporting Scope 3 data, tracking at 127 companies in 2023, 158 in 2024, and rising to 222 companies in 2025.

"Attempting to restrict the scope of sustainability disclosures and dilute reporting standards by pointing to short-term political shifts—such as policy maneuvers under the U.S. Trump administration or the EU's recent regulatory calibration—is an incredibly short-sighted approach during a global transition toward a net-zero economy"— Jong-oh Lee, CIO of KoSIF

CIO Jong-oh Lee strongly urged:

"Before finalizing the official roadmap this coming April, the government must move past superficial, check-the-box public feedback processes. It must comprehensively integrate the rigorous demands of domestic and international institutional investors, domain experts, and civil society to completely redesign a significantly more ambitious and robust roadmap than this initial draft."

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