ESG Reporting for Global Korean Companies: Complying with CSRD, SEC, and California Rules

ESG obligations don’t stop at Korea’s border

Korean companies with operations, subsidiaries, or significant revenue overseas are increasingly subject to foreign ESG regulations—even if headquartered in Seoul. The EU’s CSRD, the US SEC’s climate disclosure rules, and California’s new climate laws are reshaping the reporting landscape. For large Korean firms with global exposure, understanding and preparing for these rules is no longer optional.

The EU CSRD & ESRS: Reporting starts from FY2025

The Corporate Sustainability Reporting Directive (CSRD) affects non-EU companies with:

• EU revenue over €150 million, and
• An EU branch with at least €40 million revenue or a large EU subsidiary

These companies must report ESG data in line with the European Sustainability Reporting Standards (ESRS), beginning with fiscal years starting 2025. Key features include:

• Double materiality: both impact on society/environment and financial risk
• Scope 1, 2, and 3 emissions
• Governance, strategy, risk management, and metrics
• Third-party assurance requirements
• Reports must be in XHTML/XBRL format

Even Korean suppliers to EU companies may be asked to provide ESG data to support their clients’ disclosures.

SEC Climate Disclosure Rules: A watchpoint for US-listed or exposed firms

The US Securities and Exchange Commission (SEC) adopted new climate-related disclosure rules in 2024. While they’re currently under legal challenge, they still signal strong regulatory intent—and may influence other countries.

The rules apply to US-listed companies, including foreign private issuers, and require:

• Disclosure of Scope 1 and 2 emissions (with assurance phased in)
• Material climate risks, governance, and financial impacts
• Board oversight and integration into corporate strategy

Korean companies listed on US exchanges or with a strong US investor base should be monitoring this closely.

California SB 253 & SB 261: Climate laws with global reach

Passed in late 2023, California’s climate laws apply to any company “doing business” in the state with:

• Over $1 billion in annual revenue (SB 253 for emissions reporting)
• Over $500 million in annual revenue (SB 261 for climate risk disclosure)

The key catch? Global companies are not exempt—even if headquartered outside the US.

These laws require:

• Full Scope 1, 2, and 3 emissions disclosure
• Climate-related risk assessments and governance descriptions
• Reporting aligned with TCFD and other recognised frameworks

Many Korean exporters, manufacturers, and tech suppliers fall into this scope unknowingly.

Why this matters: Strategic & operational impacts

These foreign ESG regulations affect:

• Reporting requirements at group or entity level
• Assurance and audit preparation
• Supplier expectations (ESG data sharing, due diligence)
• Investment and procurement eligibility

Companies that delay preparation risk non-compliance, reputational harm, and strained customer relationships—particularly with EU or US-based partners.

Global ESG Starts at Home

Korean companies operating globally must treat ESG as a multi-jurisdictional responsibility. Getting ready for CSRD, SEC, and California rules requires more than awareness—it calls for materiality analysis, data infrastructure, global reporting alignment, and third-party support. Those who act early will be trusted partners in the new ESG economy.