The financial regulator said Monday it will only require local firms to disclose their investments and business activities related to climate issues, a move aimed at minimizing additional burdens that will be placed on companies following the implementation of new environmental, social and governance (ESG) disclosure requirements.

Kim So-young, vice chairman of the Financial Services Commission (FSC), stressed that new standards for ESG disclosures will be in line with global standards.

“We sought to minimize the burden of having to make separate disclosures for our firms by considering interoperability with global standards such as those of the United States and the European Union, as well as the International Sustainability Standards Board,” Kim said of the proposed standards in a meeting with officials from related government agencies and businesses.

“Also, we have decided to first require public disclosures in the climate sector where a global recognition for the need exists, but allow firms to freely
decide whether to make disclosures on other ESG elements,” he added.

Kim said the government will fully unveil its “draft proposal” for ESG disclosures next Tuesday.

“It will then collect feedback from businesses and investors on the draft proposal and come up with a final draft to be proposed by the Korea Sustainability Standards Board (KSSB),” he told the meeting.

“In addition, it will continue to review when the local ESG disclosure requirements will be implemented and which firms will be required to make such disclosures.”

The FSC earlier said the new ESG disclosure standards will likely be implemented in 2026 or later.

Source: Yonhap News Agency