The Korean Institute of Certified Public Accountants said on the 11th that it held the 22nd Sustainability Assurance Forum on the 4th.
Held as a webinar, the forum took place under the theme of "EU sustainability reporting and the status of domestic materiality assessment and disclosure topics." About 300 diverse stakeholders took part in the event.
The forum provided a comprehensive overview by comparing disclosure trends based on the status of disclosure and assurance of the European Union (EU) sustainability reports and the results of the survey on sustainability disclosure topics in Korea.
Choi Un-yeol, president of The Korean Institute of Certified Public Accountants, said in opening remarks that "EU disclosure cases that address a variety of sustainability topics are expected to serve as important references for corporations preparing sustainability disclosures across environment, society and governance," and emphasized that "ahead of the planned release of the draft domestic sustainability disclosure roadmap at the end of Feb., the discussions accumulated through the forum and the efforts of participants are increasingly leading to concrete outcomes."
Lee Jin-gyu, a partner at Samil Accounting Corporation who delivered the first keynote presentation, said, "Key reasons for modified assurance opinions on sustainability reports under EU CSRD include limitations encountered in complying with regulations such as Scope 3 emissions calculation and the EU taxonomy, as well as shortcomings in defining reporting boundaries and data completeness." Lee added, "These cases will offer meaningful implications for domestic corporations."
Lee went on to say, "Even in situations where CSRD application is deferred, a considerable number of corporations responded that they would proceed with sustainability disclosures as scheduled," explaining, "This suggests that the preparation process for disclosure is being used not just to comply with regulations but also to create corporate value and review strategy."
Jeon Hong-min, a professor at Sungshin Women's University who delivered the second and third keynote presentations, noted, "Both EU and Korea corporations showed high disclosure rates on sustainability topics related to climate change, workers and corporate ethics," and pointed out, "However, despite many corporations conducting ESRS materiality analyses, they were found not to be fully complying with the specific requirements of the ESRS."
Jeon also emphasized, "The overall direction of disclosures by domestic corporations is sound, but going forward, it will be necessary to consider maturity from the perspective of disclosure quality."
In the general discussion that followed the keynote presentations, Baek Tae-young, an emeritus professor at Sungkyunkwan University, served as moderator, and a wide range of stakeholders from assurance bodies, rating agencies, academia, research institutes, corporations, standard setters and the accounting industry shared their views.
Kwon Seong-sik, head of center at the Korea Standards Association, suggested, "In preparation for the legalization of sustainability disclosures, we need balanced disclosures that include negative issues, the introduction of preemptive, process-based assurance for materiality assessments, and clearer criteria for defining reporting boundaries," adding, "Regarding biodiversity disclosures, we should avoid excessive reliance on overseas sources and expand connections with domestic public data from the National Institute of Ecology (NIE), the Ministry of Environment and Korea Water Resources Corporation."
Park Jeong-eun, head of center at Daishin Economic Research Institute, analyzed, "While the sustainability disclosure topics themselves are largely similar between the EU and Korean corporations, the maturity of disclosures differs depending on how organically they are linked to corporate strategy," adding, "Leading corporations are using sustainability data to make decisions for risk management and corporate value creation, whereas some corporations still remain at the level of formal reporting."
Seon Woo-hui-yeon, a professor at Sejong University, explained, "The analysis of qualified and adverse opinions on sustainability reports under CSRD shows this is a structural challenge that even corporations that have prepared disclosures over a long period have not solved," adding, "To respond to complex value chains and shifting reporting boundaries, building a systematic process across the collection, generation and management of sustainability information is key."
Lee Sang-ho, a research fellow at the Korea Capital Market Institute, said, "About 3% of corporations received modified opinions on sustainability reports under CSRD, which is by no means a low figure," adding, "Domestic corporations are also highly likely to face similar difficulties." Lee also said, "Strengthening the linkage between sustainability and corporate value creation and improving the accuracy and reliability of disclosed information are essential tasks for the overall disclosure framework going forward."
Lee Seung-pil, Head of Team at Yuhan-Kimberly, explained, "The policy direction is more important than the timing of mandatory disclosure," adding, "In fact, after the release of the draft domestic sustainability disclosure standards, awareness of the need for proactive disclosure has been spreading."
Lee emphasized, "Due to data uncertainty such as Scope 3 emissions and climate transition plans, there are limits to disclosure quality and comparability, so standardization focused on key indicators is needed."
Ju Seong-ho, a director at the Korea Accounting Standards Board, said, "The confirmation of domestic sustainability disclosure standards and the draft roadmap are scheduled to be announced at the end of Feb., and discussions have converged without major disagreements from the exposure draft of the sustainability disclosure standards," adding, "Scope 3 deferrals and the timing and targets for application are also matters that can be resolved, and we have a positive outlook for deriving the roadmap."
Han Dae-geun, a partner at Samjung Accounting Corporation, suggested, "If disclosure and assurance are not discussed together, controversies may arise over already disclosed information when assurance becomes mandatory in the future, so discussions on assurance should proceed preemptively."
Since 2022, The Korean Institute of Certified Public Accountants has held the Sustainability Assurance Forum to enhance the transparency and reliability of sustainability information.
At the forums held so far, a variety of topics such as domestic and international sustainability disclosure and assurance status, systems, standards and practical issues have been discussed, sharing knowledge accumulated by the accounting industry and jointly exploring directions for development.