South Korea to Mandate ESG Disclosures for Large Listed Firms Starting 2028
South Korea announced plans to require large listed companies to publish environmental, social, and governance (ESG) reports starting in 2028, according to Yonhap News Agency. The move aims to strengthen confidence in the country's capital markets and align with global standards.
Disclosure Requirements and Timeline
Under the plan, Kospi-listed companies with consolidated assets of 10 trillion won (approximately $6.5 billion) or more will be required to disclose ESG information starting in 2028. The mandate will expand to companies with assets of 5 trillion won or more in 2029. Authorities will also consider extending the requirement to companies with assets of 2 trillion won or more beginning in 2030.
The number of companies subject to the mandatory disclosure is expected to reach 291 in 2028 and 3,171 in 2029, according to officials cited by Yonhap.
The government and the ruling Democratic Party announced the plan after revising an initial draft from February that would have required disclosures only for companies with assets of 30 trillion won or more. The revision broadens the disclosure requirement to help investors and stakeholders assess companies' sustainability, ethical practices, and long-term value, while discouraging greenwashing.
The government plans to amend relevant laws to implement the program.
Criticism and Corporate Governance Concerns
Critics warn that the new rules may outpace corporate governance reforms and companies' ability to comply, according to a Yonhap report. The criticism centers on recent decisions by major conglomerates, including SK Group and Samsung Group, where large-scale investments were announced without formal board approval.
The report notes that Heungkuk Asset Management sent a formal shareholder letter to SK hynix's board, criticizing the decision-making process behind a massive investment plan announced by SK Group Chairman Chey Tae-won and the government. The letter argued that announcing such a major investment before obtaining formal board approval falls short of the global standard of board-centered corporate governance.
According to the report, Chey effectively controls SK Group but is not a registered executive or board member of SK hynix. He is the largest shareholder of SK Inc., which in turn is the largest shareholder of SK Square, the controlling shareholder of SK hynix.
Similarly, Samsung Electronics Executive Chairman Lee Jae-yong, who also announced a large-scale investment plan, serves as the designated head of Samsung Group under the Monopoly Regulation and Fair Trade Act but is not a member of Samsung Electronics' board.
Yonhap's report suggests that if Korea's leading companies are governed this way, questions about corporate governance are likely to persist. It emphasizes that ESG management has become a global standard, and ESG disclosures, including greenhouse gas emissions, are now an important benchmark for international institutional investors.