South Korea's Financial Services Commission (FSC) has finalized its roadmap for mandatory sustainability disclosures, significantly broadening the scope of companies required to report under the Korean Sustainability Disclosure Standards (KSSB 1 and KSSB 2), which are closely aligned with the ISSB's IFRS S1 and IFRS S2 standards. Reporting will begin in 2028 (covering FY2027) for KOSPI-listed companies with consolidated assets of KRW 10 trillion or more, expand to companies with KRW 5 trillion or more in 2029, and authorities will consider lowering the threshold further to KRW 2 trillion from 2030 after reviewing implementation progress. The finalized roadmap replaces the much narrower draft proposal, which initially targeted only companies with KRW 30 trillion or more in assets.

Key Requirements

• Mandatory reporting under KSSB 1 (General Requirements) and KSSB 2 (Climate-related Disclosures), aligned with ISSB IFRS S1 and IFRS S2.

• Initial reporting applies to KOSPI-listed companies with ≥ KRW 10 trillion in consolidated assets beginning in 2028 (FY2027 reporting period).

• Scope expands to companies with ≥ KRW 5 trillion in assets in 2029, with a potential reduction to KRW 2 trillion beginning in 2030, subject to government review.

• Scope 3 greenhouse gas emissions disclosures are deferred until FY2030 (three years after initial reporting) to allow companies time to build reporting capabilities.

• Sustainability disclosures must be included in the annual report, mandatory assurance begins two years after each company's reporting obligation starts, and regulators will provide a three-year penalty relief period for most compliance issues (excluding greenwashing).

Why This Matters

This roadmap substantially increases the number of companies subject to mandatory sustainability reporting, expanding coverage from only a handful of Korea's largest issuers under the draft proposal to more than 290 companies in 2028 and over 3,100 companies in 2029. The decision contrasts with recent efforts in Europe to narrow the scope of mandatory sustainability reporting under the CSRD while reinforcing the continued global momentum behind ISSB-based disclosure frameworks. Multinational companies with Korean listed subsidiaries, significant Korean operations, or investors active in the Korean market should assess whether they will fall within scope and begin preparing governance, climate data collection, and internal reporting processes well ahead of the implementation deadlines.