As South Korea strengthens its Environmental, Social, and Governance (ESG) framework, companies operating in the country are facing increasing requirements to enhance transparency and sustainability. These regulations, aligned with global standards, aim to ensure that companies are held accountable for their environmental and social impact. Here’s what companies need to know about the evolving ESG landscape in South Korea and how Dasseti can help.
Recent Developments in ESG Regulations
South Korea’s regulatory approach has made significant strides in recent years, with the Korea Sustainability Standards Board (KSSB) leading the charge:
- KSSB Sustainability Disclosure Standards: In May 2024, the KSSB introduced a draft proposal for new sustainability disclosure standards, aligning with the International Financial Reporting Standards (IFRS) S1 and S2. These proposed standards focus on:
- KSSB 1: General sustainability-related financial disclosures, mandatory for all companies.
- KSSB 2: Climate-related disclosures, addressing how climate risks and opportunities impact financial performance.
- KSSB 101: A non-mandatory standard for additional disclosures aligned with domestic objectives.
- Mandatory Climate Disclosure: By 2026, climate-related disclosures will become compulsory for companies across South Korea, marking a critical shift in corporate environmental responsibility.
- Global Alignment: South Korea’s framework aligns closely with the International Sustainability Standards Board (ISSB), ensuring consistency with global sustainability reporting standards while adapting to local market needs.
Focus on Supply Chain Transparency
One of the most significant changes in South Korea’s ESG regulations is the emphasis on Scope 3 emissions reporting, which requires companies to report on emissions across their entire supply chain. This step promotes transparency, but also poses challenges in measurement, particularly in gathering reliable data from external suppliers.
How Dasseti Can Help
As the regulatory landscape in South Korea becomes more demanding, Dasseti ESG offers the tools companies need to stay compliant, streamline data collection, and enhance their reporting capabilities.
Comprehensive Data Collection
- Secure Data Collection: Dasseti’s platform facilitates the direct collection of data from portfolio companies and suppliers. This is crucial for accurately capturing Scope 3 emissions data, helping firms meet their reporting obligations with confidence.
- Proxy Data Utilization: When direct data collection isn’t feasible, Dasseti can fill gaps with publicly available proxy data, ensuring comprehensive reporting even in complex supply chain environments.
Dynamic Reporting Tools
- Customizable Reporting: Dasseti provides tailored reports that align with South Korea’s ESG regulations, making it easier for companies to meet disclosure requirements and address stakeholder concerns.
- Progress Tracking: With year-on-year progress tracking, organizations can monitor their sustainability improvements, demonstrating compliance with evolving regulations and their commitment to long-term environmental goals.
Benchmarking Capabilities
Through Dasseti’s partnership with Clarity AI, companies can benchmark their ESG performance, including Scope 3 emissions, against industry peers. This enables:
- Comparative Analysis: Identifying areas for improvement by comparing emissions data to industry standards.
- Strategic Insight: Leveraging data to refine sustainability strategies and strengthen overall ESG performance.
Adapting to Future Regulations
As ESG regulations continue to evolve, Dasseti’s platform is built to adapt:
- Flexible Metrics: Organizations can adjust their data collection and reporting processes to accommodate new regulatory requirements, ensuring compliance without disruption.
- Ongoing Improvement: Dasseti’s tools enable continuous refinement of ESG reporting, allowing firms to stay ahead of regulatory changes and maintain their sustainability edge.
Conclusion
With the impending mandate for Scope 3 emissions reporting and the broader push for transparency, South Korean companies must be proactive in enhancing their ESG practices. Dasseti’s comprehensive ESG solution equips organizations with the capabilities to navigate these complex regulations, offering secure data collection, dynamic reporting, and benchmarking tools that ensure compliance with South Korea’s evolving ESG standards. By preparing now, companies can not only meet today’s requirements but also stay ahead of future regulatory changes.
For more information on how Dasseti can help your firm navigate South Korea’s ESG regulations now and in the future get in touch.