Experts from financial authorities, industry, and academia are gathering to establish standards ahead of the introduction of a disclosure system that informs investors about corporations' environmental, social, and governance (ESG) related information.
On the 23rd, the Financial Services Commission held the '5th meeting of the ESG financial promotion team' at the Korea Financial Investment Association's conference hall in Yeouido, Seoul, and discussed the progress of reviewing sustainability disclosure standards and trends in major countries.
Kim So-young, vice chair of the Financial Services Commission, said during her opening remarks that they will discuss the timing of initial disclosures by corporations, noting, "We will consult on the standards to ensure sufficient information is provided to investors while minimizing the burden, taking into account overseas cases and the readiness of corporations."
The European Commission (EC) announced the 'Omnibus Package' in February to ease sustainability-related regulations for corporations. According to the package, the scope of sustainability disclosure is reduced, and the timing of disclosures will be gradually deferred. Simplification of disclosure standards is also under review. Since establishing the sustainability reporting directive (CSRD), the EU has seen 19 countries incorporate the directive into their own laws, with full disclosures commencing this year.
Japan also announced a disclosure standard based on the International Sustainability Standards Board (ISSB) in March, planning to gradually implement disclosures starting in 2027 for listed corporations with a market capitalization of over 3 trillion yen. Most major countries, including the United Kingdom, the United States, and Canada, have yet to finalize their sustainability-related disclosure systems.
Despite ongoing discussions on sustainability disclosures among major countries, the Financial Services Commission plans to establish domestic standards as the possibility of changes remains high. Considering that the EU's imposition of disclosure requirements on foreign companies is scheduled for 2029, they are reviewing the timing of initial disclosures for corporations that have a significant need to provide information.
For the draft sustainability disclosure standards announced in April last year, it is under review to disclose on a consolidated basis, but subsidiaries that are not financially significant may be excluded. Discussions are ongoing regarding the flexibility of reporting deadlines for Scope 3, which refers to external carbon emissions occurring during logistics, usage, and disposal, considering the usability of information, international consistency, and the burden on corporations, and allowing estimates in cases where data measurement is difficult.
The meeting was attended by Vice Chair Kim, along with officials from relevant ministries such as the Ministry of Strategy and Finance, the Ministry of Trade, Industry and Energy, the Ministry of Environment, the Carbon Neutral Green Growth Commission, and experts from industry and academia.