Investors view climate disclosure as a critical tool to navigate the evolving landscape of climate-related risks and opportunities. AIGCC supports the development of consistent sustainability reporting standards globally.
An open letter was sent to Korea’s Financial Services Commission (FSC), signed by a group of institutional investors responsible for more than USD 3.5+ trillion (₩4,700 trillion) in assets under management. This group of investors recommends the FSC set out a clear sustainability-related disclosure roadmap as well as to mandate a phased-in approach to climate disclosure by 2026.
More specifically, the letter calls the FSC to:
- Announce a clear roadmap for the early implementation of mandatory sustainability-related disclosures by the end of 2024.
- Mandate climate-related disclosure for listed companies that have total assets amounting to over 2 trillion KRW by 2026 (FY2025).
- Publish an English version of the Korean Sustainability Disclosure Standards and mandate companies to likewise publish English versions of their sustainability disclosures.
This open letter follows AIGCC’s recent response to the Korea Sustainability Standards Board (KSSB) as part of a public consultation regarding its drafts of the Korea Sustainability Disclosure Standards.
AIGCC CEO, Rebecca Mikula-Wright, said:
“We strongly encourage FSC to implement mandatory sustainability-related disclosure in Korea by 2026.
“Investors have a fiduciary duty to act in the best interests of their clients. In order to invest responsibly, investors require relevant, consistent, and comparable information from corporates to support investment decision-making and capital allocation.
“Having Korean reporting standards align with international frameworks will boost investor confidence in investing in Korean companies, fostering greater capital inflows and supporting sustainable economic growth. This would also enhance Korea’s corporate transparency and competitiveness in the global capital market.
“Addressing climate change requires a coordinated effort from all stakeholders. Regular dialogue among companies, investors, and governments is vital to identify effective policies and drive capital investment towards climate solutions.”
AIGCC Director of Investor Practice, Monica Bae, said:
“We see good examples of sustainability-related disclosures from many Korean companies, but we need to see this accelerated across the board. We recommend the FSC to mandate sustainability disclosures, even earlier than 2026, through a phased-in approach.
“Companies can enhance their appeal to global investors if they demonstrate their commitment to sustainability by proactively disclosing their climate-related strategies, risks, and opportunities.
“This transparency empowers investors to make informed decisions and allocate capital more effectively and contribute to ‘Climate Value-Up’. This would ultimately boost the value of Korean companies in the global market.”
AIGCC now sees a growing movement of large institutional investors focussing more on engagement with Korean companies to act on climate change. AIGCC will continue to work with investors active in Korea through the Korea Working Group, established in July 2024.
Read AIGCC’s letter to the FSC