Five Years of Uncertainty Nearing Its End
It has been exactly five years since the Financial Services Commission first formalized the mandatory ESG disclosure roadmap in 2021. In the meantime, the mandatory implementation timeline has repeatedly shifted from 2025 to 2026 and back to 'undetermined.' It was five years with a direction but no timeline. That gap will finally be filled this month.
The Financial Services Commission announced the draft roadmap on February 25, 2026, and plans to finalize the final roadmap in April 2026 after undergoing additional public comment collection through March.
This is the first time a specific implementation schedule has been presented in about five years since related discussions began in 2021. With this, South Korea's transition to a mandatory disclosure system based on ISSB standards has been formalized, following major Asian countries such as Japan, Singapore, and Taiwan.
The message left for companies is clear. It is no longer a question of 'when it starts,' but of 'how well prepared you are.'
■ Core Structure of the Roadmap Draft: Starting with Large Corporations in 2028, Phased Expansion
The framework of the roadmap draft to be finalized in April is 'large companies first, phased expansion.'
The Financial Services Commission presented the direction of introducing mandatory ESG disclosures in phases, starting with KOSPI-listed companies with total consolidated assets of 30 trillion won or more from 2028 (for the 2027 fiscal year). As for the expansion of the application scope thereafter, the draft roadmap only presents the principle of phased application, and the specific expansion timing and targets are presented in the form of examples. For instance, a plan to expand the application scope to companies with total consolidated assets of 10 trillion won or more starting in 2029 (FY2028) was mentioned. However, this part remains open at the level of 'subject to discussion' and may change in the final finalized announcement in April.
The disclosure standard system will be based on global standards while reflecting domestic industrial characteristics. Domestic ESG disclosure standards will be based on the standards established by the ISSB, while also taking into account the specificity of the domestic industrial structure, which has a high proportion of manufacturing. Accordingly, disclosures on matters other than climate, internal carbon pricing per ton, and industry-specific metrics are expected to be permitted as optional disclosures.
Disclosure channels will also be transitioned in phases. It will be operated primarily through exchange disclosures initially and then transitioned to statutory disclosures, and the provision of a Safe Harbor for predictive and estimated information disclosures is being promoted. This is intended to ease the legal burden on companies in the early stages of the system. However, from the point of transition to statutory disclosures, disclosure violations can lead to fines and criminal penalties, so establishing a system from the early stages is advantageous in the long run.
■ Key Issue ①: Scope 3 — 'Included, but Deferred Until 2031'
The most fierce debate in this roadmap draft was whether to include mandatory Scope 3 emission disclosures.
Scope 3 refers to indirect emissions generated across the entire supply chain from raw material procurement to product disposal, in addition to direct greenhouse gas emissions by companies (Scopes 1 and 2). The business community demanded exclusion, claiming that "data aggregation itself is impossible," while investors and civil society countered that "climate disclosure without Scope 3 is half-baked."
The conclusion is a compromise. Scope 3 has been deferred for three years, but is mandated to be disclosed starting in 2031 in principle. Companies within the value chain that are small businesses under the Framework Act on Small and Medium Enterprises and are not high-carbon emission industries are exempt from disclosure, but the scope of exemption will be re-examined when transitioning to statutory disclosures later.
However, this 'deferral' does not mean a safe zone for small and medium-sized enterprises. This is because large companies subject to mandatory disclosure must have emission data from partner companies in order to calculate Scope 3 data. Regardless of legal obligations, companies within the supply chain will soon face situations where they are requested by ordering companies to submit carbon data.
■ Key Issue ②: Governance (G) Disclosure Already Began This Year
Apart from mandatory ESG disclosure (2028), the scope of governance disclosure has already been significantly expanded this year.
Apart from ESG disclosure, the 'Corporate Governance Report' implemented from 2026 is an exchange disclosure that deals only with 'G (Governance)' among sustainability disclosures (ESG disclosures). As the Financial Services Commission approved the amendment to the Korea Exchange Listing Regulations in July 2025, the target of mandatory disclosure was expanded from 541 KOSPI-listed companies with total assets of 500 billion won or more to all 842 KOSPI companies starting in 2026.
The Corporate Governance Report is a document that discloses overall corporate governance, such as the composition and operation of the board of directors, the independence of audit bodies, and shareholder rights protection devices. Investors use this report as basic infrastructure for judging corporate value. Given that global institutional investors use governance transparency as a core indicator when evaluating the Korean market, this change has significance beyond a simple regulatory expansion.
■ Global Context: Not Just Korea's Choice
The finalization of the roadmap in April is not an independent decision within South Korea. It is also the product of the realistic recognition that it can no longer remain an 'exception' to global disclosure trends.
The EU has already applied mandatory ESG disclosure to companies within the EU in phases starting from the 2024 financial year (2025 disclosure), and is expanding mandatory implementation to global companies conducting business above a certain scale in the EU in 2026. In Asia, Singapore has mandated ESG disclosures starting with the climate sector from 2025, and Japan has announced plans to sequentially mandate ESG disclosures according to company size starting from 2027.
In particular, the EU's CBAM (Carbon Border Adjustment Mechanism) and ESPR (Ecodesign for Sustainable Products Regulation) go beyond simple disclosure demands and require changes to product design and supply chain structures themselves.
What CBAM and ESPR commonly urge is a fundamental reorganization of product design methods and supply chain operating systems, which means innovation in the product- and supply chain-centric industrial structure beyond simple regulatory response.
If ESG was once 'reputation management,' from 2026 it is becoming a clear trade barrier and cost. An era has already opened where the level of ESG response becomes a condition of export contracts itself.
■ Corporate Tasks: 'Data Infrastructure' Rather Than 'Report Writing'
The trap that experts commonly warn against is the attitude of still approaching ESG disclosure as 'making a report.'
ESG disclosure is not a matter of document creation, but will show whether data collection, management, and verification systems throughout the company are operating properly, and is likely to serve as an opportunity for the company's management maturity and regulatory response capabilities to be revealed to the market.
In fact, companies that aggregate emission data on a consolidated basis including overseas subsidiaries, subsidiaries, and partners for the first time experience significant confusion due to data errors and internal standard mismatches.
Given that the numbers of the first year of disclosure serve as the 'comparative baseline' for the next several years, the accuracy of initial data is particularly important. Quantitative analysis of carbon costs based on long-term scenarios and the establishment of an enterprise-wide decision-making system utilizing internal carbon pricing are required.
Beyond aggregating Scope 1 and 2 emissions, having a structure where carbon costs are reflected in product-by-product profit and loss becomes the foundation of mid- to long-term competitiveness.