From KRX to KASB: How Korean ESG Reporting is becoming a strategic priority
ESG disclosure is entering a new phase
What began as voluntary guidance from the Korea Exchange (KRX) is now evolving into structured, mandatory reporting through the Korea Accounting Standards Board (KASB). Korean companies, especially listed firms and global players, are facing a fundamental shift: ESG is no longer just a reputational issue—it’s becoming a strategic, regulated obligation.
KRX’s role in ESG: Laying the groundwork
Since 2021, KRX has provided guidelines encouraging listed companies to include ESG-related disclosures in their annual reports. These include recommended practices on governance, climate risks, diversity, supply chain ethics, and labour practices. While still voluntary, KRX has influenced boardroom awareness and investor expectations, setting the stage for broader standardisation.
In parallel, institutional investors in Korea and abroad began demanding more structured, transparent ESG information, reinforcing the idea that ESG should be embedded in corporate strategy—not treated as a side initiative.
The shift to KASB: Toward legally binding Standards
Now, under the leadership of the Korea Accounting Standards Board (KASB), Korea is transitioning from voluntary ESG disclosures to formal sustainability reporting standards. These new standards, based on the IFRS Sustainability Disclosure Standards, aim to unify ESG reporting across industries and align Korea with global frameworks.
This shift means companies will soon face:
- Specific reporting content requirements (e.g. governance structure, climate-related financial information, emissions data)
- Defined reporting formats and filing timelines
- Potential third-party assurance requirements
Why this matters to business strategy
This isn’t just a compliance issue. ESG performance and disclosure will directly influence:
- Access to capital and investor trust
- Eligibility for global supply chains and partnerships
- Board accountability and regulatory scrutiny
- Corporate valuation and brand reputation
For many Korean companies, ESG is becoming a board-level topic—requiring cross-functional ownership, investment, and transformation.
How companies can respond proactively
To keep pace with this shift, companies should:
- Review the current ESG disclosures in their annual reports and sustainability reports
- Monitor KASB developments and prepare to align with future IFRS-based requirements
- Conduct a gap analysis between KRX guidance and upcoming KASB standards
- Begin building infrastructure for ESG data collection, governance, and internal review
- Consider external advisory or assurance partners to support readiness
KRX started the ESG conversation. KASB is making it official. Korean companies that treat ESG reporting as a strategic investment—not just a regulatory requirement—will be best positioned to lead, compete, and thrive in a global marketplace.
