Press Releases

South Korea Falls Behind in Climate Disclosure Race…
“Failure to Meet Global Standards Will Deliver Severe Blow to Domestic Industry”

- National Assembly Forum Outlines Definitive Climate Disclosure Frameworks for Corporate Sustainability

- Coalition Asserts Disclosures Must Commence by 2026 to Bolster Industrial Competitiveness and Address Climate Risks

- Detailed Strategies Proposed: Phased Rollouts, Statutory Filings, and Mandated Scope 3 Value-Chain Emissions Reporting

- ESG Non-Profits to Convene Joint Press Conference on August 19 to Demand Mandatory Sustainability Disclosure Roadmaps

A high-level policy forum was convened on July 22, 2024, to debate the final structural design of South Korea's "Climate Disclosure" standards—the mandatory regulatory framework requiring corporations to disclose carbon emissions and climate-related financial risks.

Co-hosted by a coalition of prominent ESG and environmental advocacy organizations (Greenpeace, the Green Transition Institute, the Economic Reform Research Institute, and the Korea Sustainability Investing Forum [KoSIF]), alongside the National Human Rights Commission of Korea and the office of Lawmaker Byung-duck Min, the forum took place at the National Assembly Members' Office Building.

The forum was specifically organized to present critical administrative corrections and structural directions for the domestic disclosure bill. While major economies like the United States, the European Union (EU), and Japan have already codified their statutory frameworks, the South Korean government's exposure draft released in April omitted the most crucial operational variables: the official mandatory timeline, targeted enforcement thresholds, required reporting media, and whether Scope 3 value-chain greenhouse gas (GHG) emissions would remain mandatory.

Panelists and speakers uniformly emphasized that climate disclosure has solidified into an inescapable global economic mandate, warning that failing to align with international criteria would severely degrade the global competitiveness of South Korean industries.

Key Forum Testimonies & Position Statements

Congressional Openings (Congratulatory Remarks)

⦁ Lawmaker Sung-hwan Kim (Democratic Party of Korea):

"We have entered an era where climate risk management directly dictates corporate survivability and international competitiveness. I will ensure the National Assembly exerts full legislative effort to rapidly institutionalize climate disclosures, providing our domestic firms with a predictable framework to elevate their global market standing."

⦁ Lawmaker Jin-suk Jeon (Democratic Party of Korea):

"Crucial structural metrics—such as the exact implementation window, targeted asset thresholds, and formal filing locations—remain unresolved in the government's current exposure draft. No sector, whether agriculture, maritime affairs, forestry, or heavy industry, is insulated from climate vulnerabilities. We cannot legislate in a manner that offloads these systemic risks onto future generations."

⦁ Lawmaker Byung-dug Min (Democratic Party of Korea):

"Failing to synchronize with the global regulatory timetable and institutional expectations will deal a catastrophic blow to our manufacturing and export-reliant industrial architecture. As a member of the National Policy Committee handling ESG legislative frameworks, I will actively advance and oversee this climate disclosure bill, given that it directly dictates the future of South Korean commerce."

Core Briefings (Key Presentations)

Ji-yoon Shin, Expert Committee Member at Greenpeace:

"To maintain international compatibility, our regulatory timeline cannot tolerate further deferral. Mandatory climate disclosures must commence in 2026. The Financial Services Commission's (FSC) ongoing administrative foot-dragging on the official disclosure roadmap is bottlenecking private sector transition plans."

⦁ Operational Strategy: Shin detailed three non-negotiable pillars:

① Executing a phased expansion starting strictly with listed enterprises holding assets of KRW 2 trillion or more, ② Mandating disclosure directly within official annual business reports, and ③ Incorporating mandatory Scope 3 value-chain emissions tracking. To secure this legally, she noted that amending the Capital Markets Act to explicitly incorporate sustainability mandates must serve as the prerequisite legislative step.

⦁ Hyun-young Ji, Legal Counsel at the Green Transition Institute:

"Transparent climate risk reporting is the fundamental engine that drives corporate decarbonization and stands as the baseline global standard. In 2019, South Korea’s trade dependence sat at a staggering 68.8%, demonstrating that our export-driven economy is deeply exposed. To safeguard our industrial survival, we must mandate statutory, Scope 3-inclusive climate disclosures by 2026. While global peers cement these mandates into law, our regulatory bodies continue to engage in shifting goalposts, obfuscating stances, and constant timeline delays."

⦁ Tae-han Kim, COO of KoSIF:

"The intense resistance we are currently seeing from certain industry groups completely mirrors the historical pushback during South Korea's initial transition to International Financial Reporting Standards (IFRS). Just as the government's unwavering stance back then was the linchpin for successfully anchoring IFRS, strong and consistent regulatory will from the administration is vital today for sustainability disclosures."

⦁ The Myth of 'Corporate Burden': Highlighting the rapid expansion of the domestic ESG finance ecosystem, Kim dismantled industry talking points: "If the government fails to mandate a standardized disclosure system, domestic corporations will still be forced to build fragmented, ad-hoc tracking systems to satisfy individual global buyers and international capital requirements. This will actually increase corporate overhead. The state must prioritize amending the Capital Markets Act, legally securing the statutory authority of the Korea Sustainability Standards Board (KSSB), and deploying structured administrative support mechanisms."

Panel Expert Discussions

⦁ Dong-sub Lee, Head of the Stewardship Office at the National Pension Service (NPS):

"Integrating non-financial risk metrics to enhance long-term corporate value directly aligns with the fiduciary and responsible investing framework of the National Pension Service. Delaying mandatory rollouts or watering down disclosure standards will introduce severe analytical noise across the entire investment landscape. However, we must remain cognizant of varying corporate sizes, sector-specific profiles, and operational readiness, meaning the targeted pool of corporations must be expanded via a predictable, stepped phase-in. For complex data like Scope 3 emissions, regulators should clarify calculation methodologies and initiate a bifurcated reporting window that distinguishes between high-capacity corporations and those requiring transitional buffers."

⦁ Yong-hwan Choi, Head of the ESG Research Team at NH-Amundi Asset Management:

"From an institutional investor's lens, comprehensive climate disclosures provide a high-utility map of a firm's transition strategies, physical risks, and green market opportunities, which we actively integrate into valuation models and capital allocation decisions. We must move past hyper-conservative corporate anxieties and advance toward codifying a legal framework that targets a minimum of half-year reporting cycles."

⦁ Hee-eun Bae, Director at the Asia Investor Group on Climate Change (AIGCC):

Bae put forward five specific administrative enhancements to optimize the government's exposure draft:

1. Mandate explicit integration with Sustainability Accounting Standards Board (SASB) criteria to enable standardized, industry-specific ESG reporting.

2. Implement distinct short-, medium-, and long-term analytical horizons tailored to the unique lifecycles of climate risk.

3. Enforce strict adherence to the IFRS S2 Industry-based Guidance on Implementation.

Formally mandate Scope 3 reporting, granting a maximum one-year grace period if operationally necessary.

4. Mandate the public disclosure of internal carbon pricing metrics (the financial cost per ton of GHG emissions).

⦁ Woong-hee Lee, Vice-Chairperson of the Korea Sustainability Standards Board (KSSB):

"Major asset managers, including the National Pension Service, are uniformly calling for a standardized, consistent disclosure benchmark to guarantee data comparability across diverse corporate profiles. Up to this point, the feedback gathered has been heavily skewed toward corporate industry defense. The final statutory standard must balance these positions by heavily weighting the insights of regulators, institutional investors, and civil society organizations."

Following the conclusion of this forum, the co-organizing coalition—including Greenpeace, the Economic Reform Research Institute, the Green Transition Institute, and KoSIF—announced they will host a high-profile joint press conference at 10:00 AM on August 19, 2024, to formally demand that the executive branch expedite the execution of mandatory sustainability disclosure frameworks.

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