The Financial Services Commission (FSC) of South Korea is set to unveil a draft of its environmental, social, and governance (ESG) disclosure standards by the end of April. The draft is expected to mandate companies to disclose ESG information, including details related to climate change, while allowing for voluntary disclosure of issues requiring policy support, such as low birth rates and aging populations.
On April 22, Kim So-young, Vice Chairman of the FSC, announced this initiative during the fourth meeting of the ESG Finance Promotion Committee held in Yeouido, Seoul. Kim stated that the commission aims to align with international standards while minimizing the dual reporting burden on companies.
The draft will focus on making climate-related disclosures mandatory, referencing global standards. However, for other ESG factors, companies will have the flexibility to provide information voluntarily. Additionally, in cases where financial impacts or measurement uncertainties are significant, qualitative information will also be permitted.
In recognition of the challenges in measuring greenhouse gas emissions, the draft will allow companies to disclose information based on domestic standards alongside international benchmarks. These measures are designed to accommodate the readiness and capabilities of South Korean companies in preparing for ESG disclosures.
