Sustainable Management Report Disclosure Companies Increase by 27% in One Year
by Lee Seunghyeong
Published 09 Jan.2025 14:02(KST)
Last year, voluntary disclosure of sustainability management reports by companies listed on the Korea Composite Stock Price Index (KOSPI) increased by 27% compared to the previous year.
On the 9th, the Korea Exchange announced that among KOSPI-listed corporations, 204 companies voluntarily disclosed sustainability management reports last year, a 27% increase from 161 companies the previous year.
By month, 136 companies, accounting for 67% of the total 204, submitted their reports in June.
By company size, larger corporations had higher disclosure rates. Among corporations with total assets exceeding 2 trillion KRW, 63% disclosed reports, whereas only 9% of companies with assets below 2 trillion KRW did so. Additionally, among companies with a market capitalization of over 10 trillion KRW, 88% disclosed reports; those with market caps between 2 trillion and 10 trillion KRW had a 73% disclosure rate, and only 16% of companies with less than 2 trillion KRW disclosed reports.
Among the disclosing companies, 143 belonged to large business groups, accounting for 70% of the total (204). By group, Hyundai Motor Company (11 companies), Samsung (10 companies), Lotte, SK, LG (9 companies each), and Hanwha, HD Hyundai (8 companies each) had the most disclosing companies. By industry, manufacturing (105 companies) and finance and insurance (44 companies) sectors had the highest number of disclosures.
Regarding disclosure content, 79% of disclosing companies identified and disclosed risks and opportunities related to climate change. The number of companies conducting quantitative financial impact assessments (18%) and scenario analyses (33%) related to risks and opportunities increased compared to the previous year but remains low.
Furthermore, 99% of companies disclosed 'Scope 1 and 2' greenhouse gas emissions, but only 3% disclosed on a consolidated basis, indicating ongoing difficulties in calculating emissions including subsidiaries.
Scope 1 refers to direct emissions from sources owned or controlled by the company, while Scope 2 refers to indirect emissions from the consumption of purchased electricity and other energy.
Companies disclosing 'Scope 3' emissions, which include other indirect emissions not covered by Scope 2 arising throughout the value chain such as logistics, use, and disposal, accounted for 66%. However, the Korea Exchange explained that the reliability and comparability of these emissions remain insufficient.
The Korea Exchange plans to post exemplary disclosure cases by sector on its ESG portal to strengthen corporate disclosure capabilities related to climate and improve the completeness of disclosures.
An official from the Korea Exchange stated, "In preparation for mandatory ESG (Environmental, Social, and Governance) disclosures in Korea, we plan to review various support measures to enhance corporate disclosure capabilities. In particular, through education based on the upcoming Sustainability Standards Board (KSSB) standards, we aim to assist companies in preparing for disclosure practices and promote more active voluntary disclosures before mandatory disclosure requirements take effect."
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