South Korea Sets Mandatory Climate Reporting Path
South Korea has set out how climate disclosure will enter the statutory reporting system. The roadmap defines the proposed scope and phase-in, but legislative amendments are still required.
South Korea has finalised a roadmap for mandatory sustainability disclosure and linked it to the first standards issued by the Korea Sustainability Standards Board (KSSB). The regime is scheduled to start in 2028 with climate reporting by the largest KOSPI-listed companies, while the standards remain available for voluntary application before and alongside the statutory requirements.
The First KSSB Standards
The KSSB officially published its first set of Sustainability Disclosure Standards on 26 February 2026. KSSB Standard No. 1, General Requirements for Disclosure of Sustainability-related Financial Information, establishes the conceptual foundations and general requirements for sustainability-related financial disclosures. KSSB Standard No. 2, Climate-related Disclosures, addresses climate-related risks and opportunities.
Standard No. 1 is based on IFRS S1, while Standard No. 2 is based on IFRS S2. Both use the ISSB reporting architecture of governance, strategy, risk management, and metrics and targets.
Standard No. 1 provides the general framework across sustainability-related matters. Standard No. 2 applies that framework to climate-related risks and opportunities, including greenhouse gas emissions and related metrics.
The KSSB Standards support internationally comparable reporting but adapt the ISSB baseline to South Korea’s national regime. Mandatory reporting will initially cover climate information only. Other sustainability-related matters may be disclosed voluntarily, while disclosure of internal carbon prices and industry-based metrics is also optional.
The Korean standards are therefore based on IFRS S1 and IFRS S2 but do not constitute an identical application of the ISSB Standards.
From Voluntary Standards to Legal Filing
The standards are final and currently available for voluntary application. The mandatory regime is set out in the Financial Services Commission’s final roadmap of 8 July 2026, but statutory reporting still requires amendments to the Financial Investment Services and Capital Markets Act (FSCMA) and related rules.
From 2028, using financial year 2027 information, KOSPI-listed companies with total consolidated assets of at least KRW 10 trillion will have to disclose climate information through their business reports. The threshold is scheduled to fall to KRW 5 trillion in 2029.
A possible reduction to KRW 2 trillion from 2030 remains subject to a review of reporting practices and market conditions during 2028 and 2029.
For the first reporting year, companies may exclude subsidiaries whose assets and sales each account for less than 10% of the relevant consolidated totals. Material sustainability-related information from subsidiaries that is expected to affect the reporting company’s financial position must still be disclosed.
The roadmap estimates that the reporting perimeter will cover 291 entities, including subsidiaries, in 2028 and 3,171 in 2029.
Alongside the phased mandatory regime, the Korea Exchange will update its voluntary disclosure system to support KSSB-based reporting by companies outside the statutory scope.
Scope 3, Liability and Verification
Scope 3 greenhouse gas emissions disclosure will be deferred for three years for each reporting cohort. It is scheduled to begin in 2031 for the KRW 10 trillion group and in 2032 for the KRW 5 trillion group.
If the KRW 2 trillion threshold is introduced, Scope 3 disclosure for that cohort is expected to begin in 2033.
Small businesses covered by the Framework Act on Small and Medium Enterprises that are not high-carbon emitters will be exempt from Scope 3 disclosure.
During the first three years, companies will be exempt from liability for damages, administrative sanctions and criminal penalties relating to the content of sustainability disclosures. Intentional greenwashing will remain subject to liability for damages and administrative sanctions.
A later safe harbour is planned for uncertain information where the disclosure is made faithfully, on reasonable grounds and using best judgement.
Third-party verification is scheduled to become mandatory from 2030. Its scope, level and the eligibility requirements for verification providers will be defined through further rulemaking.
Alignment with the ISSB Baseline
The relationship between KSSB Standards No. 1 and No. 2 and IFRS S1 and IFRS S2 gives Korean reporting an internationally recognisable structure. For groups already preparing ISSB-based information, this may reduce conceptual duplication across the four core content areas.
The Korean regime will still have its own legal filing channel, reporting thresholds, consolidation reliefs and transition arrangements. ISSB alignment supports interoperability, but it does not remove the need to apply the Korean standards and implementing rules on their own terms.
Practical Focus
For reporting teams, the immediate focus is the reporting perimeter, ownership of climate disclosures, evidence supporting judgements and metrics, and consistent application of Standard No. 1 when preparing information under Standard No. 2.
The Scope 3 deferral provides additional preparation time, but companies should use this period to build supplier-data processes, calculation methodologies and supporting controls. Disclosure controls should also take account of the forthcoming verification requirements.
South Korea has finalised the KSSB Standards and the policy roadmap, but the mandatory regime is not yet legally complete. The next developments to follow are the legislative amendments, detailed filing rules and third-party verification framework.
