
Korean regulators have pushed back the introduction of ESG disclosure requirements to 2026 or later, citing similar delays in the US and pressure from local companies.
The move means that national-level plans to make sustainability disclosures mandatory, which have been in place since 2021, no longer have a clear deadline.
The regulatory roadmap was developed as part of a joint initiative between Korea’s financial regulators – the Financial Services Commission (FSC) and the Financial Supervisory Service – and KRX, the country’s sole exchange operator.
The rules were initially expected to apply to KRX-listed firms valued at more than 2 trillion won ($1.5 billion; €1.4 billion), before being gradually expanded to all listed companies by 2030. Only 20 KRX-listed companies voluntarily published sustainability reports as of 2021, according to the FSC.
The FSC reiterated its plans to bring in disclosures rules by 2025 as recently as May at an ISSB meeting in Frankfurt.
The postponement was announced on Monday at a meeting of the cross-regulatory Taskforce on ESG Finance by FSC vice-chairman Kim So-young. “Taking into account the relevant regulatory timelines in major economies overseas, introducing an ESG disclosure system in domestic market will be postponed until after 2026,” he said.
He noted that ESG disclosures “in major countries such as the US” have been delayed, while global disclosure standards being developed by the ISSB “were only recently finalised”. Companies have also requested a delay “in order to provide sufficient preparation time”, he added.
The FSC has indicated that penalties for non-compliance will be kept to a minimum when companies start reporting, and that it will introduce additional measures to enhance corporate ESG practices in Korea, including incentives linked to sustainable finance and support from the trade ministry.
The announcement came a day after the Federation of Korean Industries (FKI), a local trade body, published a critical analysis of the 2025 implementation deadline which highlighted concerns over “vague disclosure concepts”, the lack of trained ESG personnel to undertake disclosures, and potential litigation risks “if disclosure is made without sufficient preparation”.
According to the FKI, the “burden of hasty ESG disclosure” in Korea is greater than in EU countries due to its carbon-intensive economy.
“Competitors such as the US and Japan have also taken a cautious stance on mandatory ESG disclosure, and stated that rather than pre-emptively introducing international standards, it is important to consider the timing of implementation in major countries and then introduce them in accordance with domestic circumstances,” the FKI added.
The ISSB disclosure framework is being adapted for local usage by the Korea Accounting Standards Board, with a draft expected by the end of the year.
A separate survey by the Korea Chamber of Commerce and Industry found that around 56 percent of executives from 100 large and medium-sized companies were in favour of postponing the mandatory disclosure requirements for at least another year, and would back an initial liability exemption period.
It comes as Korean lawmakers are due to consider a bill which would make human rights and environmental due diligence mandatory in the country. This is the first time such legislation has been proposed in Asia.
If adopted, the bill would require the Korean government to develop due diligence standards, which will be applied by companies, and create a human rights committee with the power to issue corrective orders in response to infringements.