KSSB Publishes the First Set of Korean Sustainability Disclosure Standards Based on the ISSB Standards

The Korea Sustainability Standards Board (KSSB) of the Korea Accounting Institute (KAI, President: Byungjin Kwak) has published the first set of Korean Sustainability Disclosure Standards (KSDS) based on IFRS S1 and IFRS S2 issued by the International Sustainability Standards Board (ISSB). This reflects the growing demand for sustainability information in global capital market and the increasing trend toward mandatory sustainability disclosures in major jurisdictions, underscoring the need for an internationally comparable and reliable disclosure framework.

1. Background

In December 2022, the Financial Services Commission (FSC) established the KSSB within the KAI to advance the development of sustainability disclosure standards aligned with the domestic environment. In April 2024, the KSSB published exposure drafts of: Sustainability Disclosure Standard 1 (KSDS 1) General Requirements, Sustainability Disclosure Standard 2 (KSDS 2) Climate-related Disclosures, and Sustainability Disclosure Standard 101 (KSDS 101) Additional Disclosure aligned with Policy Objectives, and conducted outreach activities for four months. A total of 256 comment letters were received from domestic and international stakeholders. The KSSB considered the feedback received, taking into account the standard-setting developments of the ISSB and major jurisdictions, and reviewed the comments from the perspectives of international consistency and corporate practicability.

Following this consultation and review process, on 26 February 2026, the KSSB approved and issued: KSDS 1 General Requirements and KSDS 2 Climate-related Disclosures. The KSSB decided not to issue KSDS 101, which had been proposed in the exposure draft, considering changes in the government policy environment and the potential burden on companies.

2. Structure of the Standards

The first set of KSDS consists of:

-         KSDS 1 General Requirements for Disclosure of Sustainability-related Financial Information, and

-         KSDS 2 Climate-related Disclosures.

KSDS 1 is based on IFRS S1 issued by the ISSB and sets out the conceptual foundations and general requirements that apply when an entity discloses sustainability-related financial information. KSDS 2 is based on IFRS S2 and sets out disclosure requirements relating to climate-related risks and opportunities. Through these two Standards, entities are required to provide structured disclosures in accordance with the core content areas of Governance, Strategy, Risk Management, and Metrics and Targets, regarding sustainability-related (in particular, climate-related) risks and opportunities that could reasonably be expected to affect the entity’s prospects.

3. Key Features of the Standards

The first set of KSDS has been designed to reflect Korea’s disclosure environment and companies’ practical circumstances, while ensuring interoperability with IFRS S1 and IFRS S2 issued by the ISSB. To this end, the KSSB based the Standards on IFRS S1 and IFRS S2, while tailoring certain requirements to the domestic context by permitting optional application of certain requirements, introducing a specific exception, and extending the transitional relief period (see Appendix for details). This approach both enables the Korean disclosure standards to be interoperable with ISSB standards and helps alleviate the initial implementation burden for domestic companies. The KSSB intends to gradually enhance alignment with ISSB Standards in the future, taking into account implementation experience, investor demand, and international developments.

4. Application of the Standards

The KSDS were developed on the premise that they will be used within a mandatory disclosure framework. On 25 February 2026, the FSC published a draft roadmap outlining the reporting entities, timing of reporting, and location (channel) of disclosure. Following a period of stakeholder consultation and review, the FSC plans to finalise and officially announce the roadmap in April.

Separately from the mandatory disclosure framework, entities may voluntarily apply these Standards from the beginning of the annual reporting period in which the Standards are issued and disclose sustainability-related financial information through their websites or other channels. This will enable companies to provide decision-useful sustainability information to investors and to progressively enhance their disclosure capabilities.

5. Next Steps

To facilitate the smooth implementation of the Standards in the capital market, the KSSB, together with the FSC and relevant institutions (e.g. the Korea Exchange (KRX)), plans to focus on implementation support activities, including pilot testing of selected requirements, operation of a technical inquiry service (Q&A) system, and organisation of seminars.

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About the KAI

The Korea Accounting Institute (KAI) is an independent private organization established on 1 September 1999. It is an umbrella organization of both the KASB and the KSSB.

About the KSSB

Since its establishment on 25 November 2022, the KSSB has been mandated to support setting and revising of sustainability disclosure standards in Korea. The Board is committed to enhancing the quality of sustainability reporting by supporting high-quality sustainability disclosure standards that are on a par with internationally accepted standards. The KSSB consists of 9 board members (2 of whom are full-time) who are professionals from the private sector.

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