Korea Plans Mandatory Sustainability Reporting Beginning in 2028

Why It Matters

The mandate pushes Korean corporations toward greater climate transparency, aligning them with global ESG norms and potentially attracting international sustainable capital. It also sets a regional benchmark that could influence sustainability regulation across Asia.

Key Takeaways

• Mandatory reporting starts 2028 for KOSPI firms >KRW30T
• Standards align with ISSB IFRS S1 and S2
• Scope 3 emissions reporting required after three years
• Third‑party assurance initially optional, may become mandatory
• Smaller firms phased in based on readiness

Pulse Analysis

Korea is positioning itself as a regional leader in corporate sustainability by mandating disclosures that mirror the International Sustainability Standards Board’s framework. The Financial Services Commission’s draft roadmap, released alongside the Accounting Standards Board’s finalized standards, ties the nation’s reporting regime to IFRS S1 and S2, covering general sustainability and climate‑related information. By anchoring its rules to globally recognised benchmarks, Korea aims to reduce compliance complexity for multinational firms and attract ESG‑focused capital. The move also signals the government’s commitment to transparent climate risk management as part of its broader green growth agenda.

The roadmap sets a clear timetable: companies listed on the KOSPI index with assets exceeding KRW 30 trillion must file sustainability reports for 2027 data beginning in 2028, with a lower threshold of KRW 10 trillion slated for the following year. Notably, Korea extends the ISSB’s one‑year Scope 3 relief to three years, giving firms time to build data‑collection infrastructure. Third‑party assurance is introduced as optional, with a gradual shift toward mandatory verification as market practices evolve. Enforcement will start with guidance rather than penalties, allowing companies to adapt without immediate sanctions.

For Korean conglomerates and foreign investors, the new requirements create both compliance obligations and strategic opportunities. Early adopters can differentiate themselves by showcasing robust climate metrics, potentially lowering cost of capital and meeting the expectations of ESG‑focused funds. The phased approach also gives smaller firms a runway to develop internal reporting capabilities before mandatory enforcement. As other Asian economies watch Korea’s rollout, the country may set a de‑facto standard for the region, encouraging harmonisation of sustainability disclosures and facilitating cross‑border investment flows. Ongoing public consultation ensures the framework can adapt to emerging best practices.