KOSPI-listed companies with consolidated total assets of 10 trillion won or more must disclose sustainability information starting in 2028. That is the backbone of the final version of the "ESG Disclosure Institutionalization Plan," confirmed and announced by the government and the Democratic Party of Korea at a party-government consultation on July 8. The threshold set out in the draft opened for comment last February was 30 trillion won or more. In five months it fell to one-third of that level.
The information goes into the business report. It does not pass through the Korea Exchange disclosure system but becomes a statutory disclosure under the Financial Investment Services and Capital Markets Act. The nature of liability for errors or omissions in the filing changes as a result. The joint statement issued by six business associations on July 7 opposing the direct move to statutory disclosure is aimed at this point.
Five years passed between the draft roadmap and the final version. The draft released by financial authorities in 2021 called for mandatory disclosure to begin with listed companies holding consolidated total assets of 2 trillion won or more. The final version had originally been scheduled for release on June 30, but the party-government consultation was pushed back as the formation of National Assembly standing committees was delayed.
The expansion path in the final version runs to 5 trillion won or more in 2029 and 2 trillion won or more in 2030 (provisional). Counting subsidiaries, the number of companies covered comes to 184 in 2028, 3,014 the following year, and 3,490 if coverage widens to the 2 trillion won level. The People's Solidarity for Participatory Democracy and the Korea Sustainability Investing Forum issued commentaries the same day, assessing the expansion of coverage itself as progress. The two groups took issue with the fact that application at the 2 trillion won level remains subject to "review after assessment," and called for the timeline to be fixed.
The questions about effectiveness center on Scope 3. Mandatory disclosure of other indirect emissions, which occur outside the company's own boundary, has been deferred by three years. The People's Solidarity for Participatory Democracy named this deferral the most worrying part of the final version. Depending on whether the three years are counted from the first disclosure year or from the date the system takes effect, the year in which Scope 3 is actually disclosed changes.
The core of sustainability disclosure in the banking sector is financed emissions, the emissions produced by client companies through the supply of finance, and critics point out that these emissions account for most of a bank's total emissions. Calculations often rely on industry averages or estimated coefficients. One view holds that the deferral period gives time to refine methodology, while another holds that the largest share of emissions is left out of early disclosures altogether.
The mechanisms underpinning the reliability of the information also drew comment. If items with a heavy verification burden, such as third-party assurance and Scope 3, are left out of early disclosures, accountability and reliability are hard to guarantee. Calls were also raised to define safe harbor conditions more tightly and to supplement supply chain management rules.
On the reasons for lowering the threshold to 10 trillion won, an official at the Financial Services Commission cited demands from global institutional investors and the introduction of a bill in the National Assembly to amend the Financial Investment Services and Capital Markets Act, explaining that the level chosen was one that could take in KOSPI 200 companies. After the February draft was made public, business groups and environmental groups held a press conference at the presidential office and criticized the narrowing of coverage.
The first business report disclosures come in 2028. Before then, the starting point for counting the Scope 3 deferral, the level of assurance, and whether coverage expands to the 2 trillion won level will be settled in turn. The items the two civic groups called to be fixed are among them.
