The U.S. Retreats, Europe Simplifies, and South Korea Finally Reaches the Starting Line
The Three Paths of Global ESG Management in 2026 — Strategic Differences Among the U.S., Europe, and South Korea, and Challenges for Korean Companies
Same 'ESG', Different Grammars
By 2026, ESG (Environmental, Social, and Governance) has firmly established itself as a core agenda in corporate management worldwide, yet its practical implementation varies significantly across regions. In the United States, federal-level climate disclosure regulations are effectively being rescinded, whereas the European Union (EU) implemented its omnibus package in March 2026 to drastically streamline extensive disclosure obligations. Following a long period of deliberation, South Korea finally finalized its disclosure standards in February 2026 and officially announced a roadmap for phased mandatory implementation starting in 2028.
While the three letters 'ESG' remain identical, the ways in which this concept operates in corporate management—legal enforceability, disclosure scope, verification requirements, and the structure of liability attribution—are distinctly diverging across the three regions. Based on the current landscape of June 2026, this article provides a multi-dimensional comparison of how the ESG management structures differ between the U.S., Europe, and South Korea, and outlines how Korean companies exposed to global supply chains and capital markets should interpret these changes.
United States: Retreat of Federal Regulation and a Fragmented ESG Landscape
The landscape of U.S. ESG management underwent rapid reorganization starting in 2025. The climate-related disclosure rules adopted by the Securities and Exchange Commission (SEC) under the Biden administration on March 6, 2024, were a historic measure requiring public companies to disclose greenhouse gas emissions, climate risk management plans, and climate-related governance in their business reports. However, these rules faced immediate and fierce legal challenges from corporate groups and Republican state attorneys general. In April of the same year, the SEC voluntarily paused the implementation of the rules pending the completion of litigation lodged in the Eighth Circuit Court of Appeals.
The direction shifted 180 degrees with the inauguration of the Trump administration in January 2025. Acting SEC Chair Mark Uyeda moved to neutralize the rules, calling them "excessively costly and unnecessarily intrusive," and on March 27, 2025, the SEC officially abandoned its legal defense of the climate disclosure rules. Subsequently, on May 29, 2026, the SEC formally proposed a rule to repeal the entirety of the climate-related disclosure rules adopted in 2024. Originally scheduled to take effect sequentially starting with large public companies for fiscal year 2027, the rules effectively entered a repeal trajectory without ever taking effect.
The regulatory rollback spread across the broader ESG ecosystem. The U.S. Department of Labor (DOL) announced plans to withdraw and restructure rules that had permitted retirement plan managers to factor ESG elements into investment decisions. The Environmental Protection Agency (EPA) also initiated a sweeping dismantling of the Biden administration's climate agenda by implementing 31 regulatory relief measures, including the Greenhouse Gas Reporting Program.
The anti-ESG movement intensified further at the state level. In 2025 alone, 11 anti-ESG bills were passed in conservative-leaning states such as Texas, Florida, and West Virginia, representing a 57% increase compared to 2024. These bills prohibit state government pension funds from incorporating ESG factors into investment decisions, restrict government contracts with financial institutions applying ESG criteria, and ban actions deemed a "boycott" of the fossil fuel industry. The U.S. has become another front of political polarization, earning the description of a "Disunited States" in the context of ESG.
This does not mean ESG has completely vanished in the U.S. State-level jurisdictions are partially filling the federal regulatory vacuum. The State of California pioneeringly passed a bill (SB 253) requiring companies doing business in California with annual revenues of $1 billion or more to disclose Scope 1, 2, and 3 greenhouse gas emissions. New York, New Jersey, Colorado, and Illinois are also pursuing similar legislation. However, the California legislation has also faced temporary injunctions due to legal challenges by the U.S. Chamber of Commerce, demonstrating that state-level regulations are not guaranteed a smooth path either.
On the investor demand side, a complex picture is unfolding. ESG demand within the investment community itself remains intact, with 95% of institutional investors responding in 2025 that they would continue to evaluate sustainability-related financial risks. However, with the disappearance of a federal standard disclosure framework, the burden of securing comparable ESG data has shifted backward from companies to investors, running the risk of significantly degrading the reliability and comparability of disclosure data. U.S. ESG in 2026 is reorganizing into a highly fragmented structure where "market pressure without regulation" and "state obligations with regulation" coexist.