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Key Takeaways from the Roadmap
 

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Key Implications and Considerations
 

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Statutory disclosures: As a compromise between companies concerned about litigation risks and investors demanding reliable information, statutory disclosures will be introduced from the outset, in parallel with a temporary regulatory safe harbor. Given the nature of statutory disclosures, any false statement or omission of material information may, in principle, give rise to civil, criminal, or administrative liability for violations of the disclosure requirements under the Capital Markets Act. Companies must therefore design and operate transparent internal management and control systems for sustainability information at a level comparable to those used for financial reporting in order to mitigate potential legal risks. Specifically, key tasks would include (i) strengthening the disclosure oversight authority and functions of the Board of Directors or its ESG Committee, (ii) clarifying the roles and responsibilities of the officers responsible for disclosures, (iii) regulating and documenting control procedures for each stage of data collection, verification, and approval, and (iv) establishing a correction and reporting process for any identified disclosure errors. In particular, since sustainability information, unlike financial data, encompasses a broad range of non-financial areas, including business units and supply chains, a company-wide data management system must be established. In addition, to mitigate legal risks from non-compliant disclosures, it is important to (i) ensure consistency with financial disclosures, including disclosures in existing business reports and corporate governance reports, which are currently mandatory for all KOSPI-listed companies and will become mandatory for KOSDAQ-listed companies at a later date, and (ii) prevent errors from omissions or inconsistencies.
 

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Regulatory safe harbor: With the introduction of “safe harbor” protection in amendments to the Capital Markets Act, which will be available for disclosures that use forecasts, estimates, or information collected from third parties beyond the company’s control, such as vendors, provided that such disclosures are made in good faith based on reasonable grounds and judgments, companies must introduce a management system that enhances the legitimacy and reliability of the disclosure data production process, by taking into account the supervisory authorities’ guidelines. In practice, the system must (i) maintain a documentation framework that records the basis, assumptions, and methodology used to derive each disclosed data item, (ii) specify reasonable grounds when using estimates and forecasts, and manage the relevant history, (iii) ensure that the audit trail can track circumstances and reasons for any corrections made when data errors arise, and (iv) provide regular training to, and verify the capabilities of, personnel responsible for disclosures. A focus on proactive management, rather than ex post justification, would help demonstrate compliance with the requirements for safe harbor protection in actual disputes.
 

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Third-party assurance: As mandatory third-party assurance is scheduled to take effect in 2030, to ensure the reliability of disclosure data, companies must go beyond simply publishing reports and focus on obtaining data that can be objectively substantiated to mitigate potential legal risks and respond effectively to external assurance requirements. Companies must transition from merely preparing sustainability disclosures themselves, to managing data in a way that can be verified by external assurance providers. Specifically, companies are advised to (i) comply with international standards (i.e., GHG Protocol) for greenhouse gas emissions calculation methodologies, covering Scopes 1 and 2 first, and then Scope 3, and prepare relevant documentation, (ii) ensure the verifiability of the calculation process for both source data and final disclosure figures, (iii) select and prioritize data items for verification, and (iv) introduce an internal pre-assurance review process.
 

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Scope and timeline of implementation: Taking into account alignment with international standards and the readiness of Korean companies, the scope of companies subject to the initial mandatory disclosure requirements has been expanded from the initial draft roadmap; the requirements will apply to KOSPI-listed companies with total assets of KRW 10 trillion or more in 2028, and to those with total assets of KRW 5 trillion or more in 2029. A further expansion is also planned to include companies with total assets of KRW 2 trillion or more. As the threshold has been lowered from KRW 30 trillion to KRW 10 trillion, many companies that were previously expected to be exempt, will now become subject to mandatory disclosures from 2028. In addition, given the planned expansion of the scope to include companies with total assets of KRW 2 trillion or more, KOSPI-listed mid-sized companies that are currently outside the scope should also begin preparing for mandatory sustainability disclosures in the coming years.
 

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Scope 3 disclosures: In consideration of the practical limitations of calculating supply chain data, Scope 3 disclosure has been deferred for three years. However, as Scope 3 disclosure is ultimately expected to become mandatory, companies should gradually strengthen their supply chain data management capabilities, taking into account the characteristics of their value chains and the level of demand from global customers.
 

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Reporting format and deadline: The reporting channels and deadlines for financial and non-financial information are aligned, and greenhouse gas emissions must also be disclosed in the same manner by the end of March. Just as leading global companies have shortened their reporting timelines through early quarterly closing and system automation, Korean companies should also enhance their closing processes for sustainability data.