The Korean Institute of Certified Public Accountants said on the 8th that it held the 23rd Sustainability Assurance Forum on the 6th.
Held as a webinar, the forum took place under the theme of "domestic sustainability disclosure roadmap and plans to introduce assurance and oversight systems," with more than 300 diverse stakeholders participating.
The Korean Institute of Certified Public Accountants has been holding the Sustainability Assurance Forum since 2022 to enhance the transparency and reliability of sustainability information.
The forum reviewed key elements of the domestic sustainability disclosure roadmap and sought ways to introduce domestic sustainability assurance and oversight systems based on overseas cases.
Choi Un-yeol, president of The Korean Institute of Certified Public Accountants, said in greetings that "the roadmap draft released by the Financial Services Commission is significant in that both corporations and investors can prepare with predictability about regulatory changes," adding, "However, we hope to raise the competitiveness of our corporations and the trust of the capital market by establishing a disclosure, assurance, and oversight framework aligned internationally through further review of disclosure scope and channels, and assurance and oversight structures."
Kim Ye-won, a professor at Sejong University who delivered the first keynote presentation at the forum, said, "In EU countries and many others, sustainability disclosure and assurance obligations are codified and operated, and sustainability information oversight systems are being designed in connection with financial information oversight frameworks."
She added, "In Korea as well, since KSSB standards will be promulgated and disclosure will be phased in as mandatory starting with large KOSPI-listed corporations after 2028, it is necessary to establish an oversight framework that, while harmonizing with related laws and regulations, can sufficiently support corporations' disclosure and assurance compliance."
Kwon Se-won, a professor at Ewha Womans University, said in the second keynote presentation, "There is a need to design a domestic sustainability information oversight framework with reference to the EU sustainability disclosure supervision guidelines and the domestic financial statement quality oversight system," adding, "The financial information oversight system, consisting of policy decisions, supervisory enforcement, and supplementation by professional associations, can be extended to sustainability information oversight."
She added, "The roadmap should also present the timeline for assurance mandates and the basic principles for the qualifications that assurers must have."
In the ensuing general discussion, Paik Tae-young, an emeritus professor at Sungkyunkwan University, served as moderator, and a variety of stakeholders from assurance bodies, academia, the accounting industry, investors, standard-setting bodies, and related institutions offered their views.
Kwon Seong-sik, head of the Sustainability Center at the Korea Standards Association, said, "To ensure the policy effectiveness of the sustainability disclosure regime, the assurance system also needs to be designed in concrete terms," adding, "Not only disclosure data but also the processes by which disclosure information is generated should be reviewed together."
He further suggested, "For environmental information, it is necessary to actively utilize experts within systems such as target management schemes or emissions trading schemes."
Kim Beom-jun, a professor at The Catholic University of Korea, said, "It is regrettable that the current roadmap draft omits matters related to assurance and oversight," adding, "Presenting assurance and oversight frameworks within the roadmap can reduce the burden on corporations and market confusion and provide useful information to investors."
Oh Gwang-uk, a professor at the Korea Investors Forum, said, "According to overseas research, assurance is a key factor that induces ethical management by corporations, so there is a need to improve the legal basis for activating assurance systems and to create incentives for voluntary assurance."
He added, "Accounting firms have strict ethics and independence rules and quality control systems, and there is research showing that the larger the corporation, the greater the incentive to choose an accounting firm as the assurance provider."
Oh Chang-taek, a partner at EY Hanyoung, explained, "In the early stages of introducing a disclosure regime, the quality gap in disclosures between corporations is large, so third-party assurance should be used to enhance the reliability and comparability of information," adding, "The roadmap should detail a phased plan for mandating assurance and, by referring to systems such as the United Kingdom's voluntary registration system for sustainability assurers, provide mechanisms to ensure at least minimum quality even during voluntary assurance phases."
Lee Dong-seop, head of the Stewardship Responsibility Office at the National Pension Service (NPS), stressed, "From an investor's perspective, forward-looking information such as scenario analysis, transition plans, and estimates is more important than finalized historical figures," adding, "Assurance should also be carried out in a way that reviews the assumptions, input variables, and uncertainties of such information."
He also said, "Disclosure information should include not only success stories for corporate promotion but also failure cases and risk factors to provide useful information to investors."
Lee Ung-hee, a standing member of the Korea Accounting Standards Board, said, "Regarding the roadmap, issues such as expanding the target corporations in the first year of disclosure and the scope of exemptions for subsidiaries appear to be matters for consideration," adding, "There is a growing need for an early transition to statutory disclosure in terms of the reliability of information and the effectiveness of safe harbors, and if the transition timing is accelerated, discussions on assurance will also accelerate."
Cho Young-jun, head of the Center for Sustainable Management at the Korea Chamber of Commerce and Industry, stressed, "The current roadmap draft appears to consider not only international alignment but also corporations' acceptability," adding, "It is necessary to promptly prepare a phased assurance roadmap separate from the disclosure roadmap and to build the institutional foundation, including the qualifications of assurers and the oversight framework."