Korean Institute of Certified Public Accountants Successfully Concludes 20th Sustainability Certification Forum

The Korean Institute of Certified Public Accountants announced on the 10th that it held the 20th Sustainability Certification Forum on the 3rd. The forum, which was held as a webinar under the theme "Current Status of Domestic Sustainability Reporting and Certification and International Best Practices," concluded successfully with the participation of more than 350 diverse stakeholders.

At the 20th Sustainability Certification Forum held on the 3rd, the executives of the Korean Institute of Certified Public Accountants, forum presenters, and discussants are taking a commemorative photo. Korean Institute of Certified Public Accountants

Since 2022, the Korean Institute of Certified Public Accountants has been operating the Sustainability Certification Forum to enhance the transparency and reliability of sustainability information. Over the years, the forum has discussed a wide range of topics, including the status, systems, standards, and practical challenges of domestic and international sustainability disclosures and certifications; the qualifications of sustainability certifiers; domestic environmental and greenhouse gas disclosures; and accounting and audit issues related to sustainability. Through these discussions, the accounting industry has shared accumulated knowledge and explored future directions. This year's forum was particularly meaningful as it provided a comprehensive overview of the achievements made over the past three years.

This forum reviewed the current status of domestic sustainability reporting and certification, based on research and analysis conducted by the Korean Institute of Certified Public Accountants, and introduced outstanding international case studies.

Choi Woonyeol, President of the Korean Institute of Certified Public Accountants, stated, "This year's survey on the publication of sustainability reports revealed disclosure gaps based on company size and quality discrepancies by item. We also identified that variations in the scope and methods of certification make it difficult for information users to consistently understand the content," adding, "As the government's five-year national policy plan includes the establishment of ESG disclosure standards and a roadmap, domestic companies need to prepare more systematically."

He continued, "While major countries such as those in the European Union prefer accounting firms, especially financial statement auditors, as sustainability certification bodies, in Korea, the certification rate by accounting firms is only 6 percent. Therefore, it is necessary to expand the participation and role of accounting firms in certification."

Ki Dohun, a professor at Hanbat National University and the first presenter at the forum, said, "Multiple standards are being used to prepare sustainability reports, but the scope of application and level of compliance for each standard are unclear, and reasons for non-disclosure are not provided, which reduces the usefulness of the information." He explained, "These shortcomings have arisen in the absence of a disclosure and certification roadmap, so it is difficult to attribute them solely to companies." He further analyzed, "Accounting firms have a high level of expertise in audit and certification, and companies with excellent sustainability performance or disclosure quality tend to prefer accounting firms." He urged, "A disclosure and certification roadmap should be finalized as soon as possible."

Bae Changhyun, a professor at Gangneung-Wonju National University, in the second presentation, noted, "Internationally, the certification rate by accounting firms is high, and high-level ethical and quality management standards are applied, which differs from domestic practices." He suggested, "It is necessary to establish an authorization and management system for sustainability certification bodies going forward."

Kwon Sewon, a professor at Ewha Womans University, stated, "The disclosure rate for companies with total assets under 500 billion won accounts for only 15 percent of all sustainability reports," and suggested, "Government support is needed to ensure that small and medium-sized enterprises do not fall behind." She emphasized the need to finalize the roadmap, saying, "Once the scope and timing of mandatory sustainability disclosures are determined, small and medium-sized enterprises will have sufficient time to prepare." She also remarked, "Countries like Korea, with export-oriented economic structures, must prepare conservatively by anticipating the most stringent regulations," and called for the mandatory implementation of sustainability disclosures regardless of delays in some countries' disclosure schedules.

Park Jungeun, Head of the Center at Daishin Economic Research Institute, commented, "While the quantity of sustainability reporting and certification by domestic companies has increased, the disclosure rate for challenging items remains low, and there are structural differences from global standards in the use of certification criteria." She added, "Applying the IFRS sustainability disclosure standards requires integrated data management, and accounting-based certification involves reviewing not only figures but also data collection and internal control processes, so companies need to prepare systematically." She also suggested, "It is necessary to secure certifiers with expertise in process- and system-based effective certification and in linking financial and non-financial information."

Shin Jiweon, Team Leader at Dong-A Socio Holdings, pointed out, "Publishing reports and obtaining certification require significant costs and manpower, which is a heavy burden for small and medium-sized enterprises that lack sufficient personnel and resources." She added, "In particular, for integrated reports, it is especially challenging for the lead department because data must be collected from multiple departments and affiliates." She urged government support, saying, "Systematic support is urgently needed for small and medium-sized enterprises to ensure consistency between financial and non-financial information."

Lee Sangho, Research Fellow at the Korea Capital Market Institute, stated, "While the focus of sustainability disclosures in the past was on quantitative expansion, there is now a need to improve qualitative aspects such as content completeness, implementation, and reliability." He suggested, "As international research on sustainability certification is increasingly focused on certification quality rather than simply whether certification exists, domestic discussions should also move beyond assessing the current status to a full-fledged debate on qualitative transformation."

Meanwhile, the Korean Institute of Certified Public Accountants is building a database of sustainability report publications by domestic listed companies and making it public. In addition, it is carrying out various sustainability-related initiatives, including operating the Sustainability Certification Forum, introducing international certification standards, running the ESG Academy, and publishing related materials.