Korea Exchange CEO Sohn Byung-doo speaks during a ESG forum Thursday at the KRX headquarters in Seoul. (KRX)
Korea Exchange CEO Sohn Byung-doo said Thursday that the bourse operator will set out guidelines on the way listed companies should report their progress on environmental, social and governance issues. The sustainability disclosures become mandatory as early as 2025.
“The ESG initiative is one of the four goals we plan to see take place. We will refer to the global guidelines,” Sohn said at a forum, held to discuss the ways Korean companies can better navigate the low-carbon transition to a greener future.
Sohn was referring to the International Sustainability Standards Board, which published its first set of rules on sustainability disclosures in March this year. The Korea Sustainability Standards Board, launched a month later to work with the global body, has yet to unveil its own ESG reporting norms.
“Having companies follow the reporting norms should come at least after disclosures become mandatory in 2025,” Sohn said. The KSSB rules, which are different from the exchange’s guidelines, would require companies to file extensive ESG reports, Sohn added, saying firms need more time to get ready to do that.
Yoon Jin-soo, a chief analyst leading the ESG service division at the Korea Corporate Governance Service, said different standards make companies put in more work than necessary on ESG reporting. But there is a need to see more than one rule govern the way sustainability disclosures take place, Yoon added.
“Companies and investors should be able to do something with those reports. That’d be the strategic approach,” Yoon said. The KCGS is considered the most authoritative ESG rater in Korea.
“The investor perspective should matter the most when writing standards,” said Yoon Sok-mo, head of research at Samsung Securities. “Brokerages like us could then come up with our own ESG reports, which would help institutional investors and companies alike in their decision making.”
By Choi Si-young (firstname.lastname@example.org