Ask a company's accounting and disclosure staff when they should start preparing for sustainability disclosure and no answer comes back. The starting year has not been set. The final roadmap remains at the stage of coordination between the ruling party and the government, with the aim of announcing it in the first half of the year, and about a month and a half is left until the first half ends. A delay offered in the name of giving companies time to prepare is bringing that preparation to a halt.
Europe is the example that always comes up when the delay is explained. The European Union removed more than 60% of the mandatory data points that companies had to fill in for sustainability disclosure. In Korea this adjustment is cited as a sign of regulatory retreat, and, tied to the phrase corporate acceptability, it is used as grounds for pushing the schedule back. The reasoning is that there is no reason for Korea alone to hurry while international standards are stepping back.
But cutting the items required and leaving the start date blank are different in kind. What Europe reworked was the scope of what and how much to submit, and what is being put off in Korea is when submission begins. Scope can be adjusted while the system is running, but without a date the system does not start. Rather than borrowing someone else's retreat, nailing down the dates that can be fixed does more to lower the burden on companies.
The corporate acceptability argument is not without basis. The cost of the staff and systems for collecting emissions data and of building a verification framework weighs more heavily the smaller the company. There are also concerns that fixing domestic standards ahead of time, at a point when international discussions are unsettled, would mean doing the work twice. The fact that the burden is real is hard to dispute.
Yet when the date is blank, that cost does not disappear, it moves back. Without an implementation year, budgeting, the assignment of staff and orders for data collection systems all shift to the next fiscal year. What is left is responding all at once over a short period, and a compressed response drives up the price of outside advice and outsourcing. The cheapest way to raise acceptability is predictability.
On the other side of cost is comparability. If companies in the same industry release their data under different standards and in different years, neither investors nor suppliers have anything to compare. Even though Europe cut the items it requires, it is hard to see the data requests coming down the supply chain disappearing along with them. If the domestic standard is blank, the cost of meeting those requests falls on each company individually.
Not everything has to be decided at once. Implementation years by the size of the companies covered, the scope of liability relief for the first few years, and the timing for introducing third-party verification differ in nature and can be fixed separately. If international standards change further, items can be trimmed then. Fixing the start date first and reworking the scope of application later is better for companies than putting off the date because the scope is still under discussion.
If the final plan comes out within the first half of the year, the place to read is not the number of items. It is enough to look at whether that one line is written in: which size of company submits what, starting in which year. The longer the coordination runs, the less a fixed rule is worth, and the case for a grace period will be reused unchanged next year as well. If it is announced with that one line blank, this announcement too becomes another name for delay.
