Deloitte: "Preparation for Mandatory ESG Disclosures Should Begin This Year"

Korea Deloitte Group has advised that it will take 1 year and 6 months to prepare for mandatory Environmental, Social, and Governance (ESG) disclosures, and that companies should begin designing their systems starting this year.

On April 21, Korea Deloitte Group announced the release of its report titled "KSSB-Based Strategy for Responding to Mandatory ESG Disclosures." Mandatory ESG disclosures are expected to be implemented starting in 2028, initially targeting KOSPI-listed companies with consolidated total assets of at least 30 trillion won, and are likely to be expanded later to include companies with assets exceeding 10 trillion won.

In the report, Deloitte stated, "Based on global cases, preparing for mandatory ESG disclosures requires a preparation period of more than 1.5 years, as it takes time to establish a consolidated operating model, standardize data, and build company-wide data control systems and infrastructure." Accordingly, companies are advised to start designing their disclosure systems in the second half of this year and to simultaneously build and execute them next year.

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The report pointed out that, regarding the impact on each industry, the burden of KSSB-based ESG disclosures depends on the company’s emissions structure and data management system. It also emphasized that responding to disclosures is becoming an enterprise-wide initiative that extends beyond dedicated teams to include finance, risk management, strategy, information technology (IT), and board-level decision-making. "Companies need to overhaul their consolidated data management systems, establish integrated disclosure processes, and introduce data control systems and infrastructure as part of their operational transformation," the report added.

Park Taeho, Partner at Korea Deloitte’s ESG Integrated Services Group (One ESG), said, "As the institutionalization of mandatory ESG disclosures becomes more visible, companies need to make proactive preparations across data, processes, and systems," adding, "We hope this report serves as a useful guide for companies to develop step-by-step and systematic response capabilities."

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