Establishment of the Sustainability Standards Committee... Accelerating the Preparation of ESG Disclosure System

[Asia Economy Reporter Lee Jung-yoon] The Sustainability Standards Board (KSSB) will be established within the Korea Accounting Standards Board to respond to international discussions related to ESG (Environmental, Social, and Governance) disclosure standards and to review the standards to be applied to domestic companies.

The Financial Services Commission announced on the 15th that the Sustainability Standards Board is scheduled to hold its first meeting in the first quarter of next year.

The International Financial Reporting Standards (IFRS) Foundation established the International Sustainability Standards Board (ISSB) last November and has been developing ESG disclosure standards. Major foreign countries are also strengthening ESG disclosure regulations by promoting mandatory ESG disclosures and establishing disclosure standards. The Financial Services Commission has announced a phased mandatory schedule for ESG disclosures to increase the predictability of domestic ESG disclosure policies. However, since the target companies, disclosure items, and standards have not yet been specified, an organization dedicated to these tasks was necessary.

The Sustainability Standards Board will consist of a total of seven members. The chairperson will be Kim Ui-hyung, the president of the Korea Accounting Standards Board, and the vice-chairperson will be Park Se-hwan, a standing member of the Korea Accounting Standards Board. Ex officio non-standing members include Woo Tae-hee, Executive Vice President of the Korea Chamber of Commerce and Industry; Lim Jae-jun, Vice President of the Korea Exchange; and Lee Byung-rae, Vice Chairman of the Korean Institute of Certified Public Accountants. Professor Baek Bok-hyun of Seoul National University’s College of Business Administration was recommended by the Financial Services Commission, and Cho Yoon-nam, CEO of the Korea ESG Institute, was recommended by the Financial Supervisory Service to serve as non-standing members.

The Sustainability Standards Board will respond to international discussions related to the establishment of ESG disclosure standards, including gathering opinions from domestic stakeholders on the ISSB’s disclosure standards and international cooperation with overseas standard-setting organizations. It will also support domestic companies’ voluntary ESG disclosure activities by distributing translated versions of the Sustainability Standards Board’s disclosure standards and promoting best practices in applying ESG disclosure standards. Furthermore, it plans to review ESG disclosure standards applicable domestically and submit them to the government to support the establishment of ESG disclosure standards.

The Financial Services Commission also plans to review measures to improve the overall domestic ESG disclosure system. A Financial Services Commission official explained, “The Sustainability Standards Advisory Committee will be expanded and reorganized in January next year as an official advisory body to the Sustainability Standards Board, and specialized committees by industry will be newly established and operated in the future. We plan to set policy directions and detailed measures for the overall domestic ESG disclosure system within next year.”

This content was produced with the assistance of AI translation services.