South Korea delays ESG disclosure rules
October 24th, 2023
South Korea’s Financial Services Commission (FSC) will postpone implementing ESG disclosure rules following similar moves from other countries.
The regulator said it would delay the implementation until after 2026 after “taking into account the relevant regulatory timelines in major economies overseas”.
The UK’s Financial Conduct Authority announced in July it was delaying publishing its final Sustainability Disclosure Requirements (SDR) until Q4 2023. And in June, the US Securities and Exchange Commission postponed the publication of its proposed ESG disclosure rules.
Although the SEC rules will be released this month, the backdrop of rising anti-ESG sentiment in the US could result in less stringent requirements despite the recent disclosure rules passed in California.
The FSC’s statement on the ESG disclosure rules emphasised the role domestic disclosure requirements would play in preparing Korean firms to comply with disclosure requirements abroad.
This has led to the regulator to consider standards set in other major economies when establishing its rules on ESG disclosure.
FSC vice chairman Kim So-young said: “As domestic firms are both directly and indirectly affected by global value chains, it is necessary to lay a regulatory foundation to help them adjust to the strengthening of relevant regulations in major overseas markets.”
The regulator also announced that the rollout of ESG disclosure rules will take place in phases, starting with the largest listed companies.
When the disclosure rules are introduced, penalties for non-compliance will be kept to a minimum level, but these will increase the longer the standards are in place.Last Updated: 25 October 2023