The government and the Democratic Party of Korea confirmed the final version of the "sustainability disclosure institutionalization plan" at a party-government consultative meeting on July 8, 2026. From 2028, KOSPI-listed companies with total consolidated assets of 10 trillion won or more must disclose sustainability information in the climate category. The first disclosures will cover information for fiscal year 2027. The number of companies subject to the rule was counted at 107.
Compared with the draft released by the Financial Services Commission in February 2026, the threshold has come down considerably. The draft proposed an application line of consolidated assets of 30 trillion won or more in 2028 and 10 trillion won or more in 2029. Had the 30 trillion won standard been applied as it was, only about 57 companies would have been covered.
The final version brought nearly twice that number of companies into the system from the first year. The reasons cited for the expansion were demands from global institutional investors and the need to raise the credibility of disclosures.
In 2029, the application standard drops to consolidated assets of 5 trillion won or more and the number of companies covered rises to 157. Whether to widen it to 2 trillion won or more will be taken up in 2030 after an assessment of how disclosure goes in 2028-2029. If the line comes down that far, 259 companies would fall within scope.
The bigger change is the shift in the legal character of the disclosure. The draft assumed a two-stage path moving to statutory disclosure after going through exchange disclosure. The final version eliminates that stage and requires sustainability information to be placed directly in business reports under the Financial Investment Services and Capital Markets Act from 2028. To that end, the government will push for an amendment to the act within 2026.
Inclusion in the business report means that false statements or the omission of material facts can lead to damages, administrative sanctions and criminal punishment.
Measures to cushion the impact were attached as well. For the first three years after the system is introduced, the application of damages, administrative sanctions and criminal punishment under the capital markets act will be waived. Deliberate greenwashing is an exception, bearing damages and administrative liability even during the exemption period. After the exemption ends, a safe harbor will apply under which no liability is imposed on forward-looking information, greenhouse gas emissions estimates, or information received from third parties such as suppliers, provided it was disclosed in good faith with reasonable grounds.
The scope of disclosure items was also set. The mandatory category is climate, while environmental matters other than climate, along with social and governance matters, remain voluntary disclosures. Scope 3, the most contested area within the emissions calculation scope, keeps the three-year deferral as in the draft, so companies with assets of 10 trillion won or more will be covered from 2031.
Scope 3 refers to greenhouse gas emissions arising across the entire value chain, from raw material procurement and transport to product use and disposal. Kim Mi-jung, head of the FSC's fair markets division, explained that the deferral was left in place because of the burden on small and mid-sized suppliers.
Assessments differ on how effective the system will be. At many manufacturing and distribution companies, a substantial share of emissions is concentrated in Scope 3. Taken together with the exclusion of social indicators into voluntary disclosure, the range of information the first disclosures in 2028 will capture is narrower than the name of the system suggests. On the other side, some see the shift to statutory disclosure and the expansion of coverage alone as sharply increasing what companies have to shoulder.
The corporate response came on July 7, the day before the announcement. Business groups including the Federation of Korean Industries, the Korea Chamber of Commerce and Industry and the Korea Enterprises Federation issued a joint statement that day calling for implementation support measures. On the civil society side, the Korean Federation for Environmental Movements and People's Solidarity for Participatory Democracy, among others, criticized the roadmap as a retreat at a press conference in front of the Cheong Wa Dae fountain in Seoul on April 27.
Han Jeoung-ae, chair of the Democratic Party's policy committee, said many voices held that it was better to move up the introduction date given overseas cases. FSC Chairman Lee Eok-won assessed the revised plan as more assertive than Japan's.
Third-party assurance is targeted to become mandatory in 2030, and the design of the assurance system will be handled together in the course of the capital markets act amendment.
For the 2028 start date to hold, the capital markets act amendment must be completed within this year, and the actual wording of the exemption scope and the sanction requirements will be settled in that process. For companies, the preparation period runs until fiscal year 2027 begins, leaving less than a year and a half.
