As investor attention continues to grow regarding ESG (Environmental, Social, and Governance) issues, new sustainability disclosure frameworks are emerging globally, prompting companies to disclose sustainability issues more frequently. In line with this trend, the Korea Sustainability Standards Board (“KSSB”), under the Korea Accounting Institute (“KAI”), released its draft of the Korea Sustainability Disclosure Standards on April 30, 2024, and the Financial Services Commission (“FSC”) is currently formulating a roadmap to mandate sustainability disclosures aligned with international standards.
As noted in our previous newsletter, sustainable management reports are gaining significant attention along with corporate governance reports, for which those subject to mandatory disclosure were recently expanded to include all KOSPI-listed companies (Link). While sustainability reporting remains voluntary for now, it has become a key channel for companies to transparently communicate environmental, social, and other issues with investors and shareholders.
Regarding sustainable management reports, on January 5, 2026, the Korea Exchange (“KRX”) released its analysis of 2025 sustainable management report disclosures by KOSPI-listed companies. The key findings are as summarized below.
According to the analysis, the number of domestic companies disclosing sustainable management reports is increasing annually, and the quality of the disclosures is also improving. In particular, given the heightened emphasis on communication between companies and shareholders—especially regarding directors’ fiduciary duties to protect the interests of all shareholders under the amended Commercial Code—sustainable management reporting is now seen as a critical tool to mitigate the risk of breach of duty and legal liability for directors. In this regard, it is essential to stay informed about current reporting status and future regulatory policies on sustainable management reporting. We will keep you informed of any further developments in market practices and regulatory changes.
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Sustainable Management Report Disclosure Status
A total of 225 companies disclosed their sustainable management reports in 2025, marking an increase of over 10% from last year’s 204 companies. Compared to only 78 companies that disclosed reports in 2021, the number of disclosures has risen sharply over the last four years.
By asset sizes, 67% (173 out of 257 companies) of listed companies with consolidated assets of KRW 2 trillion or more disclosed their sustainable management reports.
By market capitalization, as of the end of November 2025, 86% (50 out of 58 companies) of listed companies with a market cap of KRW 10 trillion or more disclosed their sustainable management reports. For those with a market cap between KRW 2 trillion and KRW 10 trillion, the rate was 65% (66 out of 101 companies).
Lastly, by industry, companies in the manufacturing (113 companies) and finance and insurance (48 companies) sectors demonstrated a more proactive approach to sustainability reporting.
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Analysis of Sustainable Management Report Disclosures
According to the 2025 sustainable management reports, 95% (213 out of 225 companies) separately identified and disclosed climate-related risk factors. Notably, most reports covered transition risks (risks arising from the shift toward a low-carbon economy including policy, legal, technological, and reputational risks) and physical risks (risks resulting from long-term shifts in climate patterns, such as extreme weather events and changes in precipitation and temperature).
Additionally, the number of companies that analyzed and disclosed the financial impact of risks and opportunities increased by 62 year-on-year, bringing the total to 207 companies (92% of the total 225 companies).
Similarly, the number of companies that conducted and disclosed a scenario analysis (the process of identifying and assessing impacts under various future scenarios) reached 85 (38% of the total), an increase of 18 from the previous year. Despite this growth, however, scenario analysis was still absent in the majority of disclosures.
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Selection of Best Practices
To enhance climate-related disclosure capabilities and reporting quality of companies, the KRX selected the following best practices: (i) a report that prioritized climate-related risks and opportunities and set out response strategies; (ii) a report that analyzed the impacts of climate-related risks and opportunities on financial statements both quantitatively and qualitatively and provided a basis for calculation; (iii) a report that conducted a scenario analysis and presented the results using quantitative metrics; and (iv) a report that faithfully disclosed greenhouse gas emissions and reduction targets.
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Future Plan
The KRX has stated that it plans to come up with various support measures to enhance the ESG disclosure capabilities of companies and ensure the successful implementation of the ESG disclosure framework in Korea. More specifically, the KRX plans to: (i) bolster the disclosure capabilities of companies by hosting seminars and roundtable discussions; and (ii) work closely with government authorities and relevant organizations to ensure that the voices of the business community are fully reflected in the ESG disclosure framework currently under development.
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[Korean Version]
