Financial Services Commission and Korea Accounting Standards Board Collect Opinions on International ESG Disclosure Standards

[Asia Economy Reporter Lee Jung-yoon] The Financial Services Commission announced on the 12th that it has distributed the translated draft of the IFRS Sustainability Disclosure Standards, which will become the international standard for global ESG (Environmental, Social, and Governance) disclosures, and is currently gathering opinions from domestic stakeholders together with the Korea Accounting Standards Board.

According to the Financial Services Commission, the International Accounting Standards Board (IASB) established the International Sustainability Standards Board (ISSB) in November last year and is promoting the establishment of the IFRS Sustainability Disclosure Standards as the international standard for sustainability disclosures. On March 31, the ISSB released the draft of IFRS S1 General Requirements and IFRS S2 Climate-related Disclosures. The IASB selected climate as the top priority among various sustainability-related issues.

IFRS S1 General Requirements set out the overall requirements such as purpose, reporting entity, frequency, and location to ensure that companies disclose information on sustainability-related risks and opportunities useful for investors' decision-making. Additionally, IFRS S2 Climate-related Disclosures provide specific requirements (industry-wide metrics, 68 industry-specific metrics, etc.) to enable companies to disclose climate-related sustainability information.

The ISSB plans to collect feedback from stakeholders worldwide on the draft until July 29 and, after review, intends to announce the final standards by the end of this year.

The Financial Services Commission and the Korea Accounting Standards Board plan to conduct sufficient consultations with various stakeholders before submitting Korea’s official comments on the draft to the ISSB.

Furthermore, through expert consultations by the Korea Accounting Standards Board and meetings with related government ministries, Korea’s opinions will be discussed in depth. Opinions will also be gathered through the Korea Accounting Standards Board’s advisory body composed of major domestic stakeholders such as companies, financial institutions, and related organizations (Sustainability Disclosure Standards Advisory Committee).

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