{"id":139450,"date":"2026-04-21T10:11:50","date_gmt":"2026-04-21T10:11:50","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=139450"},"modified":"2026-04-21T10:11:50","modified_gmt":"2026-04-21T10:11:50","slug":"south-korea-environmental-social-and-governance","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/south-korea-environmental-social-and-governance\/","title":{"rendered":"South Korea: Environmental, Social and Governance"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-139450","comparative_guide","type-comparative_guide","status-publish","hentry","guides-environmental-social-and-governance","jurisdictions-south-korea"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Jipyong LLC<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2019\/12\/1_JIPYONG_CI_kor.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Jipyong LLC<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2019\/12\/1_JIPYONG_CI_kor.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Environmental, Social and Governance laws and regulations applicable in South Korea<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Climate \u2013 the law governing operations that emit Greenhouse Gases (e.g. carbon trading) is addressed by Environment and Climate Change international guides, in respect of ESG:  a. Is there any statutory duty to implement net zero business strategies;  b. Is the use of carbon offsets to meet net zero or carbon neutral commitments regulated;  c. Have there been any test cases brought against companies for undeliverable net zero strategies;  d. Have there been any test cases brought against companies for their proportionate contribution to global levels of greenhouse gases (GHGs)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>a. Currently, there is no legal obligation for Korean private enterprises to implement a net-zero business strategy.<\/p>\n<p>However, the Korean government has legislated the Nationally Determined Contribution (NDC), which targets a 40% reduction in emissions from 2018 levels by 2030, through the <em>Framework Act on Carbon Neutrality and Green Growth for Coping with Climate Crisis<\/em>. This serves as an interim target toward achieving carbon neutrality by 2050, and its binding effect is limited to the state, local governments, and public institutions. Nevertheless, the government may impose additional regulations on the private sector in the course of meeting these obligations.<\/p>\n<p>In February 2026, the Financial Services Commission announced a sustainability disclosure\u00a0 roadmap. Under this plan, sustainability disclosure based on the KSSB (Korea Sustainability Standards Board) standards will be phased in starting from 2028 (for the 2027 fiscal year), beginning with KOSPI-listed companies with consolidated total assets of KRW 30 trillion or more. These companies will be required to disclose greenhouse gas emissions, established reduction targets and progress, climate risk governance and strategy, and risk management processes<\/p>\n<p>b. There is no Korean law that regulates the use of offset credits by companies that have voluntarily set a goal to reduce their net carbon emissions to zero \u2013 i.e., net-zero target companies.<\/p>\n<p>However, the use of offset credits by net-zero target companies is expected to become subject to disclosure. Under KSSB Disclosure Standard No. 2, from 2028 onwards, such companies will be required to disclose the type and degree of reliance on offset credits used to achieve net emission targets.<\/p>\n<p>Separately, under the <em>Act on the Allocation and Trading of Greenhouse Gas Emission Permits<\/em>, companies allocated emission permits under the Emissions Trading Scheme may only submit offset credits within a limit of 5% of their total emission permits.<\/p>\n<p>c. There have been no lawsuits filed against companies on the grounds of undeliverable net-zero strategies in Korea.<\/p>\n<p>The Korean Ministry of Environment published the <em>Guidelines on Eco-friendly Business Activity Labelling and Advertising<\/em> in 2023. The guidelines require that when a company advertises environmental goals or plans, it must demonstrate that specific implementation plans and supporting resources are in place. In other words, companies must present measurable targets and timelines.<\/p>\n<p>d. To date, there have been no lawsuits filed against companies in Korea in relation to proportionate contribution to greenhouse gas emissions.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Biodiversity \u2013 are new projects required to demonstrate biodiversity net gain to receive development consent?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There is no legal obligation to demonstrate biodiversity net gain in order to obtain a new development permit.<\/p>\n<p>However, biodiversity assessment is included in the Environmental Impact Assessment (EIA) under Korean environmental law. The Environmental Impact Assessment Act imposes obligations to assess whether a development project\u2019s site includes habitats of legally protected species, to evaluate the necessity of creating alternative habitats, to construct ecological corridors for biodiversity conservation, and to review construction timing. The Minister of Environment may require changes to project routes or timelines based on review results, or impose obligations to create alternative habitats. However, current Korean law remains focused on the conservation of biodiversity and minimization of damage, and does not impose a net gain obligation.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Water \u2013 are companies required to report on water usage?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under the <em>Environmental Technology and Environmental Industry Support Act<\/em>, all central government agencies, local governments, public institutions, companies allocated under the Emissions Trading Scheme, listed companies, and green enterprises designated by the Ministry of Environment are subject to water resource reporting obligations. Green enterprises refer to environmentally friendly companies designated by the Ministry of Environment that minimize pollutant generation and conserve resources and energy throughout all stages of business activities including production, distribution, consumption, and disposal. Subject entities are required to mandatorily disclose total water consumption by source and recycled water volume.<\/p>\n<p>Additionally, companies and financial institutions that voluntarily issue or handle green bonds, green funds, and similar instruments are subject to water resource disclosure obligations under K-Taxonomy (K-Taxonomy Chapter 3, Section 1, &#8220;3. Sustainable Conservation of Water&#8221; recognition criteria). For water resource-related projects, annual reporting is required on water consumption per unit area, total water consumption before and after the project, and the rate of reduction in water consumption compared to the regional baseline (<em>K-Taxonomy Conformity Assessment Reference Guide<\/em>).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Forever chemicals \u2013 have there been any test cases brought against companies for product liability or pollution of the environment related to forever chemicals such as Perfluoroalkyl and Polyfluoroalkyl Substances (PFAS)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>To date, there have been no lawsuits filed against companies related to PFAS in Korea.<\/p>\n<p>However, the <em>Persistent Organic Pollutants Control Act<\/em> regulates the manufacture, use, and import\/export of PFAS substances. This legislation was enacted pursuant to Korea\u2019s accession to the Stockholm Convention. In line with the Stockholm Convention, Annex A substances (aldrin, endrin, chlordane, etc.) are completely prohibited from manufacture, use, and import\/export, while Annex B substances (DDT, PFOS, mercury, etc.) are permitted only for restricted uses.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Circularity \u2013 a. The law governing the waste hierarchy is addressed by the Environment international guide, in respect of ESG are any duties placed on producers, distributors or retailers of products to ensure levels of recycling and \/ or incorporate a proportionate amount of recycled materials in product construction? b. Are any duties placed on producers, distributors or retailers of products to handle the end-of-life of the products placed on the market?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>a, Under the <em>Act on Resource Circulation of Electrical and Electronic Equipment and Vehicles<\/em>, manufacturers, importers, and sellers of electrical and electronic products are subject to certain recycling obligations.<\/p>\n<ul>\n<li>Manufacturers and importers of electrical and electronic products and vehicles are obligated to design products that are easy to recycle. Under the <em>Guidelines on Improving Materials and Structures of Electrical and Electronic Products<\/em>, such products must be designed with ease of disassembly in mind, use simple materials, and bear material identification markings.<\/li>\n<li>All manufacturers, importers, and sellers of electrical and electronic products are subject to the Environmental Assurance System, which promotes the recycling of discarded products. Under this system, manufacturers and importers are obligated to collect, transfer, and recycle waste products. Furthermore, sellers are obligated to collect, free of charge, waste products of the same type and packaging materials when selling new products.<\/li>\n<\/ul>\n<p>The <em>Act on the Promotion of Transition to a Circular Economy<\/em> recommends the recycling of distribution packaging materials. It also encourages distributors and mail-order sellers to reduce excessive packaging, expand the use of reusable packaging, use easily recyclable packaging materials, reduce the use of hazardous substances, and use packaging bearing recycling information.<\/p>\n<p>The Extended Producer Responsibility (EPR) system under the <em>Act on the Promotion of Saving and Recycling of Resources<\/em> imposes recycling obligations on manufacturers and importers. Manufacturers and importers must recycle a certain amount of waste from their products and packaging materials. These companies may fulfill their obligations by directly recycling, outsourcing recycling, or joining a mutual-aid association.<\/p>\n<p>There is no regulation mandating the inclusion of recycled materials in manufactured products. However, the use of recycled raw materials is incentivized by reducing obligatory recycling volumes (<em>Enforcement Decree of the Act on the Promotion of Saving and Recycling of Resources<\/em>).<\/p>\n<p>In 2025, the Korean government designated the \u201ccreation of a circular economy ecosystem\u201d as a key national policy task. The <em>Public Notice on Mandatory Use of Recycled Raw Materials for Plastics<\/em> mandates that beverage manufacturers using colorless PET bottles must use 10% recycled raw materials from 2026. This mandatory use of recycled raw materials is set to expand to 30% by 2030.<\/p>\n<p>b. Various obligations related to end-of-life treatment of products are imposed on product producers, distributors, and retailers.<\/p>\n<ul>\n<li>Under the <em>Act on Resource Circulation of Electrical and Electronic Equipment and Vehicles<\/em>, manufacturers and importers of electrical and electronic products are obligated to collect, transfer, and recycle waste products. Sellers are also obligated to collect, free of charge, waste products of the same type and packaging materials when selling new products. Failure to meet these obligations results in recycling charges proportional to the shortfall.<\/li>\n<li>The same Act also imposes obligations on automobile manufacturers and importers to collect and process end-of-life vehicles. Automobile manufacturers and importers must accept end-of-life vehicles free of charge and meet recycling ratio standards.<\/li>\n<li>Additionally, under the <em>Chemical Substances Control Act<\/em> and the <em>Act on Resource Circulation of Electrical and Electronic Equipment and Vehicles<\/em>, for products containing climate- and ecosystem-altering substances such as refrigerants, manufacturers, importers, and recyclers are obligated to collect, separate, store, and properly dispose of such substances.<\/li>\n<\/ul>\n<p>Under the EPR system of the <em>Act on the Promotion of Saving and Recycling of Resources<\/em>, manufacturers or importers of certain product and packaging categories must recycle a specified amount of their waste. They may do so through self-recycling, outsourced recycling, or membership in a mutual-aid association. Failure to meet obligatory volumes results in recycling charges.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Plastics \u2013 what laws are in place to deter and punish plastic pollution (e.g. producer responsibility, plastic tax or bans on certain plastic uses)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The <em>Act on the Promotion of Saving and Recycling of Resources<\/em> imposes obligations on various actors within the supply chain to curb plastic pollution.<\/p>\n<ul>\n<li>Product producers have recycling obligations for a specified proportion of waste from their products and packaging materials.<\/li>\n<li>Manufacturers and importers of products, containers, and materials that are difficult to recycle or likely to cause problems upon disposal must bear the costs of waste treatment annually.<\/li>\n<\/ul>\n<p>Consumer-facing businesses such as food service establishments and group catering facilities are prohibited from providing single-use cups and containers free of charge.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Equality Diversity and Inclusion (EDI) \u2013 what legal obligations are placed on an employer to ensure equality, diversity and inclusion in the workplace?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Korea has not enacted comprehensive EDI legislation. Instead, anti-discrimination provisions have been legislated on a sector-by-sector basis.<\/p>\n<ul>\n<li>Under the <em>Act on Equal Employment and Support for Work-Family Reconciliation<\/em>, employers must not discriminate on the basis of gender throughout the entire employment process, from recruitment to dismissal and retirement. Employers are also required to promptly investigate upon receipt or awareness of sexual harassment complaints, and to take appropriate measures including protection of the victim and disciplinary action against the perpetrator.<\/li>\n<li>Under the <em>Act on the Employment Promotion and Vocational Rehabilitation of Persons with Disabilities<\/em>, private employers with 50 or more regular employees are required to employ persons with disabilities at a rate of at least 3.1% of total employees. However, surcharges for non-compliance typically apply to employers with 100 or more regular employees on a monthly average basis.<\/li>\n<li>In addition, the Act on the Protection, etc. of Fixed-Term and Part-Time Workers, the Act on the Protection, etc. of Dispatched Workers, the Act on Prohibition of Age Discrimination in Employment and Elderly Employment Promotion, and the Act on the Employment, etc. of Foreign Workers also prohibit unfair discriminatory treatment of workers on the grounds of employment type, age, or foreign nationality.<\/li>\n<\/ul>\n<p>Under the <em>Financial Investment Services and Capital Markets Act<\/em>, the board of directors of a listed company with total assets of KRW 2 trillion or more may not be composed exclusively of one gender.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Workplace welfare \u2013 in respect of ESG are there any legal duties on employers to treat employees fairly and with respect?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In addition to the legislation described in Question 7, the <em>Labor Standards Act<\/em> prohibits workplace harassment by employers and employees. Under this Act, employers are required to immediately investigate upon becoming aware of harassment, implement protective measures for the victim during the investigation period, and take corrective measures such as disciplinary action against the perpetrator. Additionally, the <em>Act on Equal Employment and Support for Work-Family Reconciliation<\/em> prohibits workplace sexual harassment by employers and further imposes obligations on employers to conduct preventive education and protect victims. The Korean government has designated the improvement of long-working-hour structures and the enhancement of working environment quality as core policies. The government aims to reduce annual actual working hours to the OECD average, with the \u201cActual Working Hours Reduction Roadmap Implementation Monitoring Group\u201d \u2013 comprising workers, companies, and the government \u2013 serving as the central body.<\/p>\n<ul>\n<li>The <em>Act on Support for Actual Working Hours Reduction<\/em> is expected to include provisions preventing the misuse of comprehensive wage systems, as well as the legislative codification of workers\u2019 \u201cright to disconnect\u201d \u2013 the right not to respond to work-related contacts or instructions outside working hours.<\/li>\n<li>Amendments to the <em>Labor Standards Act<\/em> are being pursued to legislate the recording and management of working hours, the use of annual leave in half-day increments, and the prohibition of disadvantages for using annual leave.<\/li>\n<\/ul>\n<p>Meanwhile, individuals who experience discriminatory conduct by private enterprises may file a petition with the National Human Rights Commission of Korea (<em>National Human Rights Commission Act<\/em>). However, the Commission\u2019s corrective recommendations do not have direct binding force, and the Commission may only take measures such as disclosure and reporting.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Living wage \u2013 the law governing employment rights is addressed in the Employment and Labour international guide, in respect of ESG is there a legal requirement to pay a wage that is high enough to maintain a normal standard of living?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Korea adopts a national minimum wage system that applies to all regions and all industries. Employers in all workplaces with one or more employees are required to pay the minimum wage under the <em>Minimum Wage Act<\/em>. The minimum wage is deliberated and determined annually by the Minimum Wage Commission.<\/p>\n<p>In addition, local governments operate separate living wage systems to guarantee a minimum wage necessary for actual living.<\/p>\n<p>The living wage ordinances apply only to the public sector, including the relevant local government and its affiliated public institutions, and do not have legal binding force on the private sector.<\/p>\n<p>As of April 2026, more than approximately 130 local governments, including all 17 metropolitan-level governments nationwide, have implemented the living wage system. Currently, the living wage in Gyeonggi Province is KRW 12,552 and in Seoul is KRW 12,121, both significantly exceeding the statutory minimum wage of KRW 10,320.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Human rights in the supply chain \u2013 in relation to adverse impact on human rights or the environment in the supply chain:  a. Are there any statutory duties to perform due diligence;  b. Have there been any test cases brought against companies?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>a. There is no legal duty to conduct due diligence regarding adverse impacts on human rights and the environment within the supply chain in Korea. However, bills responding to the global trend toward supply chain due diligence legislation, such as the CSDDD, have been introduced in the National Assembly.<\/p>\n<p>The <em>Act on Human Rights and Environmental Protection for Sustainable Corporate Management<\/em> was introduced by Assemblyman Jeong Tae-ho in June 2025 and is currently pending in the National Assembly (Bill No. 2210837). This bill provides that management officers of companies with 500 or more employees or annual revenue of KRW 200 billion or more shall establish a committee within the board of directors to deliberate and resolve on human rights and environmental due diligence implementation plans, results, and countermeasures against adverse impacts. It also requires management officers to prepare an annual human rights and environmental due diligence implementation plan and report it to the board of directors for approval. Administrative fines of up to KRW 10 million will be imposed for violations such as failure to report due diligence results to the board of directors. Where management officers are negligent in supervision due to intent or gross negligence, they shall be jointly and severally liable for damages together with the company. However, they shall be exempt from liability if they can prove that the harm would not have been prevented even if the company had complied with the legal requirements.<\/p>\n<p>Subsequently, in November 2025, a new <em>Act on Human Rights and Environmental Protection for Sustainable Corporate Management<\/em> was introduced by Assemblyman Park Hong-bae (Bill No. 2213897). This bill relaxed the scope of companies subject to due diligence obligations to those with 1,000 or more employees or annual revenue of KRW 500 billion or more. While it similarly provides for the establishment and operation of a dedicated human rights and environmental due diligence committee within the board (which may be omitted for companies with total assets below KRW 2 trillion), it maintains the same requirement for management officers to annually report and obtain approval for human rights and environmental due diligence policies and reports from the board. Where management officers are negligent in operation or supervision due to intent or negligence, they shall be jointly and severally liable for damages together with the company, and administrative fines of up to KRW 10 million will be imposed for violations of the legal requirements.<\/p>\n<p>b. There have been no lawsuits filed against companies in Korea in relation to supply chain human rights due diligence. However, precedents that could extend the scope of corporate legal liability to the supply chain are continuously being established.<\/p>\n<p>In 2014 and 2021, disabled workers at Taepyung Salt Farm escaped and exposed forced labor, confinement, and wage theft. In April 2025, the U.S. Customs and Border Protection (CBP) issued a Withhold Release Order (WRO) against Taepyung Salt Farm, blocking imports of all sea salt products from the farm at all U.S. ports of entry. During its investigation, CBP confirmed forced labor indicators including abuse of vulnerability, deception, restriction of movement, retention of identity documents, intimidation, physical violence, wage withholding, and other violations.<\/p>\n<p>This matter was also addressed in the USTR\u2019s 2026 National Trade Estimate (NTE) Report as \u201cone of the most notable new additions.\u201d The NTE warned that Korea lacks a system to prohibit the import of goods produced by forced labor, and that artificially suppressed labor costs could give certain goods an unfair competitive advantage.<\/p>\n<p>In 2017, at CIK Cambodia Co., Ltd., a Korean-owned garment factory in Cambodia, workers formed a trade union in response to the widespread dismissal of pregnant female workers. The company immediately dismissed three founding members of the union, and both the Cambodian Arbitration Council (2017) and the Phnom Penh Court of First Instance (2020) found the dismissals to be unlawful and ordered reinstatement and back pay. However, CIK failed to comply with the final judgments and ceased operations in 2024. Subsequently, equipment and personnel were transferred to Mix &amp; Match Garments Co., Ltd., which appears to have been established by the same owner, effectively circumventing the enforcement of the judgments.<\/p>\n<p>These cases highlighted the structural problem of companies bearing no responsibility for forced labor within their supply chains, and criticism has grown that Korea lacks a system to hold companies accountable for involvement in forced labor in the supply chain. In January 2026, President Lee Jae-myung directly referenced the CIK Cambodia case at a Cabinet meeting. The President instructed relevant ministries to inspect Korean companies that have entered developing countries and operate low-wage-dependent businesses for labor suppression and human rights violations.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Responsibility for host communities, environment and indigenous populations \u2013 in relation to adverse impact on human rights or the environment in host communities:  a. Are there any statutory duties to perform due diligence;  b. Have there been any test cases brought against companies?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>a.\u00a0Korea has no legal duty to conduct due diligence regarding adverse impacts on human rights or the environment in host communities. However, the <em>Environmental Impact Assessment Act<\/em> requires that the environmental impacts of development projects be assessed in advance, and as part of this process, the opinions of local residents must be solicited.<\/p>\n<p>b. In 2008, a protracted dispute arose in Miryang, South Gyeongsang Province, between local residents and Korea Electric Power Corporation (KEPCO) over the construction of high-voltage transmission towers. Residents opposed the construction citing concerns over electromagnetic health effects, decline in farmland and real estate values, and destruction of the living environment. In 2012, KEPCO filed a damages claim of approximately KRW 1 billion against three residents for obstruction of construction, and the residents in turn brought state compensation lawsuits against KEPCO and the state for property damage and police violence. Two residents died during the dispute, and the deployment of approximately 2,000 police officers during the 2014 administrative execution raised human rights violation concerns.<\/p>\n<p>In July 2018, an auxiliary dam of the Xe-Pian Xe-Namnoy hydropower dam collapsed in Laos, killing 71 people and displacing approximately 14,440 persons. The dam was operated by PNPC, a joint venture of SK Engineering &amp; Construction, Korea Western Power, Thailand\u2019s RATCH, and Laos\u2019s state-owned LHSE. The Independent Expert Panel of the Lao National Investigation Committee found that inadequate construction was the root cause, but SK Engineering &amp; Construction maintained that it was a natural disaster. PNPC agreed to approximately USD 91.25 million in compensation, but compensation paid to displaced persons amounted to only approximately USD 26.36 million, and serious difficulties in livelihood recovery persist as the farmland at the permanent resettlement sites is unsuitable for rice cultivation. A complaint was filed with the Korean National Contact Point (NCP) by KTCW, but the proceeding was closed after the respondents refused to participate in mediation. The UN Special Procedures criticized the poor living conditions of the displaced persons and the delay in remedies on two occasions, in 2020 and 2022.<\/p>\n<p>POSCO International commenced palm oil plantation development in Indonesia in 2011, securing 128,000 hectares of plantation land. However, allegations including the destruction of 27,000 hectares of tropical rainforest, insufficient Free, Prior and Informed Consent (FPIC) of indigenous peoples, and infringement of water rights due to river contamination were raised with the Korean NCP. International pressure followed, including divestment by the Norwegian Government Pension Fund and the Dutch public pension fund, and exclusion from transactions by more than 20 global retail companies. Ultimately, POSCO International declared Korea\u2019s first No Deforestation, No Peat, No Exploitation (NDPE) policy in 2020, obtained RSPO and ISPO certifications, and since 2021 has been pursuing ecosystem conservation activities including the allocation of farmland to residents through the Plasma program, the establishment of a wildlife conservation center, and river water quality improvements.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Have the Advertising authorities required any businesses to remove adverts for unsubstantiated sustainability claims?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Korea does not have an \u201cAdvertising Authority\u201d that directly corresponds to the UK\u2019s ASA, but the Fair Trade Commission serves a similar role as the competent authority for the <em>Act on Fair Labelling and Advertising<\/em>.<\/p>\n<p>In September 2023, the Korean Fair Trade Commission revised the <em>Guidelines on Examination of Environmental Labelling and Advertising<\/em>, specifying greenwashing prevention review standards. Under the revised guidelines, companies are required to provide specific and factual evidence for sustainability advertising. Moreover, even if there is a basis for eco-friendly activities, advertising is deemed deceptive if the company engages in environmentally harmful activities sufficient to offset those claims.<\/p>\n<p>In 2025, the Fair Trade Commission issued warnings to fashion brands Zara, Mixxo, SPAO, Musinsa Standard, and Top Ten for violations of the <em>Act on Fair Labelling and Advertising<\/em>. The FTC takes the position that a product may only be advertised as eco-friendly when its environmental performance is improved when considering the entire lifecycle from raw material acquisition to disposal. The brands in question used expressions such as \u201ceco,\u201d \u201ceco-friendly materials,\u201d and \u201csustainable\u201d in product names and descriptions for leather products that had no eco-friendly attributes. The FTC determined these to be deceptive labelling and advertising practices.<\/p>\n<p>Additionally, the Ministry of Environment and the Korea Environmental Industry &amp; Technology Institute published the <em>Guidelines on Eco-friendly Business Activity Labelling and Advertising<\/em> in October 2023. The guidelines set out compliance requirements and examples for eco-friendly labelling and advertising. Vague expressions such as \u201ceco-friendly\u201d and \u201csustainable\u201d must be accompanied by specific evidence and scope, and greenhouse gas reduction claims must be verified by a credible institution before being promoted.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Have the Competition and Markets authorities taken action, fined or prosecuted any businesses for unsubstantiated sustainability claims relating to products or services?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In 2019, the Fair Trade Commission imposed a corrective order and surcharge on Volkswagen for violation of the <em>Act on Fair Labelling and Advertising<\/em>. Volkswagen operated its exhaust gas recirculation system only during indoor certification tests to pass the tests. Based on the manipulated certification test results, the company advertised its vehicles as having \u201cthe cleanest engine on earth today\u201d and affixed certification test pass labels on the bonnets. Volkswagen appealed, but the Supreme Court upheld the FTC\u2019s decision.<\/p>\n<p>In 2025, the Fair Trade Commission issued a corrective order against POSCO and POSCO Holdings for violation of the <em>Act on Fair Labelling and Advertising<\/em>. POSCO advertised steel construction materials that received its proprietary INNOVILT certification as \u201ceco-friendly steel construction materials.\u201d However, the environmental aspect accounted for only 2 out of 100 points in the certification criteria. POSCO also advertised its proprietary brands e Autopos and Greenable as \u201ceco-friendly brands.\u201d These are brands that categorize steel products that can be used for eco-friendly vehicles and their facilities. The FTC\u2019s corrective order was based on the finding that no separate steel products exist for these brands, and POSCO cannot control the customer\u2019s use and disposal processes, meaning the products cannot be considered to have improved environmental performance.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Have there been any test cases brought against businesses for unsubstantiated enterprise wide sustainability commitments?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>SK Inc., SK Siltron, SKC, SK IE Technology, SK Telecom, and SK Hynix promoted in their sustainability reports that they had reduced carbon emissions. However, the reductions were actually attributable to purchases of Green Tariffs (Green Premium). Climate Solutions (a climate and environmental NGO) filed a complaint with the Fair Trade Commission alleging violation of the <em>Act on Fair Labelling and Advertising<\/em>, and the FTC is currently investigating. Climate Solutions takes the position that greenhouse gas reductions from renewable energy generation should be counted as reductions attributable to the power generator, not the electricity consumer, and therefore the purchasing companies cannot advertise such environmental credentials.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a statutory duty on directors to oversee environmental and social impacts?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The Supreme Court has established the legal principle that directors bear a duty of oversight under the <em>Commercial Act<\/em>, and that this duty includes the obligation to establish and operate an internal control system. In particular, in a case involving a violation of the <em>Fair Trade Act<\/em> (cartel), the Supreme Court held that an internal control system must be one that \u201csystematically identifies and manages compliance with all laws and regulations that the company must observe in its business operations, and that enables immediate reporting and corrective measures upon discovery of violations.\u201d The court further ruled that a representative director may be found to have breached the duty of oversight if they fail to establish and operate an internal control system in \u201careas with high legal risk.\u201d<\/p>\n<p>This legal principle has significant implications. \u201cAll laws and regulations that the company must observe in its business operations\u201d naturally includes legislation directly related to human rights, such as the <em>Labor Standards Act<\/em>, the <em>Occupational Safety and Health Act<\/em>, and environmental laws. Accordingly, directors bear an obligation to establish and operate an internal control system that includes the identification and compliance management of Korea\u2019s labor, occupational safety, and environmental laws and regulations.<\/p>\n<p>With respect to specific legislation, the <em>Occupational Safety and Health Act<\/em> imposes an obligation on the CEO of a stock company with 500 or more regular employees to prepare an annual safety and health plan and to report it to and obtain approval from the board of directors. Under the same Act\u2019s Enforcement Decree, the safety and health plan must include (1) management policies on safety and health, (2) the composition, staffing, and roles of the management organization, (3) budget and facility status, and (4) the previous year\u2019s activity results and the following year\u2019s activity plan. Failure to report to or obtain approval from the board results in an administrative fine of KRW 10 million.<\/p>\n<p>In addition, both human rights and environmental due diligence bills discussed in 10.b above impose obligations on management officers to establish and publish human rights and environmental due diligence policies, establish and operate grievance mechanisms, identify and assess adverse impacts, formulate and implement prevention and mitigation measures, track and evaluate effectiveness, and periodically disclose results. Where management officers are negligent in performing these obligations due to intent or negligence, causing the company to bear liability for damages to third parties, the management officers shall be jointly and severally liable for damages together with the company (Park Hong-bae Bill). The Jeong Tae-ho Bill has the same structure but requires intent or gross negligence on the part of management officers.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Have there been any test cases brought against directors for presenting misleading information on environmental and social impact?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>HD Hyundai Oilbank falsely reported phenol concentration measurements in its wastewater to obtain an exemption from installing prevention facilities. It subsequently discharged wastewater exceeding permissible emission standards illegally without passing through prevention facilities. The Ministry of Environment imposed a surcharge of approximately KRW 176.1 billion under the <em>Act on the Control and Aggravated Punishment of Environmental Crimes<\/em>. The court found that the former vice president and former and current executives had not only systematically concealed and condoned the wastewater discharge but had also falsely reported phenol concentrations and actively concealed evidence, and sentenced each to imprisonment under the <em>Water Environment Conservation Act<\/em>. The case has proceeded through the second instance, and the company and executives have appealed, with the Supreme Court proceedings currently underway.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are financial institutions and large or listed corporates required to report against sustainable investment criteria?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Korea does not yet have reporting obligations on sustainability-related investment criteria for all companies, unlike the EU\u2019s SFDR. However, the institutionalization of Korea\u2019s sustainability disclosure obligations is rapidly taking shape.<\/p>\n<p>K-Taxonomy (Korean Green Taxonomy) is a voluntary guideline established by the Korean Ministry of Environment under the <em>Environmental Technology and Environmental Industry Support Act<\/em>. It provides criteria for determining whether a particular economic activity qualifies as a green economic activity. It is used in selecting investment targets for green financial products such as green bonds, green funds, and green loans.<\/p>\n<p>To be recognized as a green economic activity, the activity must contribute to one or more of the six environmental objectives (greenhouse gas reduction, climate change adaptation, sustainable conservation of water, transition to a circular economy, pollution prevention and management, and biodiversity conservation), must not cause significant harm to other environmental objectives (DNSH), and must comply with minimum safeguards including human rights, labor, and safety standards.<\/p>\n<p>Institutions that have issued green bonds under K-Taxonomy are obligated to publish post-issuance reports. However, this obligation does not apply to companies that have not chosen to issue green bonds. Issuing institutions must prepare and publish reports on the most current information regarding the use of proceeds from green bonds and expected environmental improvement effects. Specifically, the use of proceeds, environmental improvement effects such as greenhouse gas reductions, and compliance with environmental laws and regulations under K-Taxonomy must be reported annually.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a statutory responsibility on businesses to report on managing climate related financial risks?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In February 2026, the Korea Accounting Standards Board\u2019s Sustainability Standards Board (KSSB) promulgated Disclosure Standard No. 1 \u201cGeneral Requirements\u201d and Disclosure Standard No. 2 \u201cClimate-Related Disclosure.\u201d These standards are based on the ISSB\u2019s IFRS S1 and S2, ensuring consistency with international standards. The climate-related financial disclosure obligations under KSSB No. 2 will be phased in beginning from 2028 (for the 2027 fiscal year), starting with KOSPI-listed companies with consolidated total assets of KRW 30 trillion or more. In 2029 (for the 2028 fiscal year), coverage will expand to companies with consolidated total assets of KRW 10 trillion or more, and will ultimately be extended to all companies listed on the securities market.<\/p>\n<p>KSSB No. 2 requires climate-related disclosure to be structured around four core elements: governance (the supervisory structure of the board and management), strategy (the impact of climate risks on business models and financial plans), risk management (identification, assessment, and control processes), and metrics and targets (Scope 1 and 2 greenhouse gas emissions, internal carbon pricing, executive compensation, etc.). Among the metrics, Scope 3 emissions have been deferred until 2031.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a statutory responsibility on businesses to report on energy consumption?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under the <em>Energy Use Rationalization Act<\/em>, companies consuming 2,000 toe or more of energy annually are subject to energy consumption reporting obligations. These companies must report (1) the previous year\u2019s energy consumption and product output, (2) the current year\u2019s planned energy consumption and planned product output, (3) the status of energy-consuming equipment, (4) the previous year\u2019s energy use rationalization performance and the current year\u2019s plan, and (5) the status of the energy managers responsible for these matters.<\/p>\n<p>Under the <em>Environmental Technology and Environmental Industry Support Act<\/em>, listed companies with total assets of KRW 2 trillion or more, entities subject to the greenhouse gas and energy target management system, entities allocated emission permits, green enterprises, and public institutions are required to disclose environmental information. While specific disclosure items differ by sector, energy consumption is a mandatory disclosure item common to all sectors.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a statutory responsibility on businesses to report on EDI and \/ or gender pay gaps?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Korea has not yet fully introduced a comprehensive gender pay gap disclosure system for private companies. However, under the <em>Act on Equal Employment and Support for Work-Family Reconciliation<\/em>, there are partial and indirect obligations to submit gender pay gap data. Private companies with 500 or more regular employees, and workplaces within designated business groups with 300 or more regular employees, are required to annually submit data on the number of employees by occupation and rank, the status of female managers, the average annual gross compensation per person by gender, the average length of service, and the gender ratio by wage quartile. This data is required to be submitted to the Ministry of Employment and Labor only and is not directly disclosed to the public.<\/p>\n<p>The Korean government is pursuing the introduction of a \u201cGender Pay Disclosure System.\u201d The Ministry of Gender Equality and Family aims to establish the relevant legal basis and disclosure framework for implementation by 2027. The system is currently in the legislative and institutional design stage. In addition, the Gender Pay Disclosure 5-Act package (amending the Equal Employment Act, Employment Policy Framework Act, Capital Markets Act, Public Institutions Management Act, and Local Public Enterprises Act, respectively) has been introduced in the National Assembly and is currently pending. The proposed amendments include provisions requiring employers to disclose the gender composition, wage status, proportion of female managers and executives, and gender promotion status by occupation, rank, job function, and employment type.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a statutory responsibility to report on modern day slavery in the supply chain?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Korea has no legal reporting obligation regarding modern slavery in the supply chain. However, the need to introduce systems addressing forced labor in supply chains continues to be discussed in the National Assembly.<\/p>\n<p>In 2025, a conference titled \u201cInternational Solutions for the Eradication of Forced Labor in Global Supply Chains and Korea\u2019s Institutional Improvement Measures\u201d was held in the National Assembly. The conference introduced forced labor import ban systems in major countries such as the U.S. and EU, and raised the need to adopt forced labor product import bans and supply chain human rights due diligence systems in Korea. The case in which the U.S. Customs and Border Protection issued a Withhold Release Order against sea salt from the Sinan area on grounds of suspected forced labor demonstrated that domestic forced labor issues can directly translate into supply chain and trade risks. Furthermore, National Assembly discussions on the <em>Report on Forced Labor Conditions of Migrant Workers<\/em> confirmed practices at some agricultural and livestock workplaces involving retention of foreign workers\u2019 passports, restrictions on workplace changes, and delayed wage payments. The need for institutional reforms to eradicate these practices and address forced labor risks facing migrant workers was also raised.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Trends and developments \u2013 Where do you see the most significant legal developments in ESG in your jurisdiction in the next 12 months? Do you expect a rise in Court disputes or enforcement actions?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Over the past year, Korea\u2019s ESG-related legislation and institutions have been taking concrete shape across key areas including climate, labor, corporate law, and finance.<\/p>\n<p><strong>NDC Revision<\/strong><\/p>\n<p>The Constitutional Court issued a decision of constitutional nonconformity regarding Article 8(1) of the <em>Framework Act on Carbon Neutrality<\/em>, which sets the NDC target of reducing greenhouse gas emissions by 35% or more from 2018 levels by 2030. The Court found that this provision, which sets only a 2030 target without providing quantitative criteria for the reduction pathway from 2031 to 2049, fell short of the minimum level of protection necessary for future generations. In November 2025, the government finalized the 2035 NDC at a 53-61% reduction from 2018 net emissions, establishing a new benchmark for future legislative amendments and reduction policy design.<\/p>\n<p><strong>Labor Law Amendments<\/strong><\/p>\n<p>Since its inauguration, the Lee Jae-myung administration has designated workplace safety as a core national policy task, and in September 2025, the Ministry of Employment and Labor and other relevant agencies announced the &#8220;Comprehensive Workplace Safety Measures.&#8221; These measures set the goal of &#8220;accident-free workplaces, a safe Korea&#8221; and establish the following basic directions: strengthening preemptive prevention support, expanding workplace safety infrastructure, establishing the principal employer&#8217;s safety responsibilities, and introducing effective sanctions.<\/p>\n<p>The Ministry of Employment and Labor is scheduled to implement the &#8220;Safety and Health Status Disclosure&#8221; system from August 1, 2026 (amended Occupational Safety and Health Act). This system applies to companies with 500 or more regular employees, regardless of listing status. The specific disclosure items are: (1) the company&#8217;s safety and health management system, (2) the status of industrial accidents, (3) the previous year&#8217;s safety and health activity results and the current year&#8217;s safety and health activity plan, (4) investment in safety and health, and (5) measures to prevent the recurrence of industrial accidents and implementation plans. Failure to disclose is subject to an administrative fine of up to KRW 10 million.<\/p>\n<p>In addition, Articles 2 and 3 of the Trade Union and Labor Relations Adjustment Act have been amended, strengthening the substantive guarantee of the three labor rights.<\/p>\n<ul>\n<li>(Expansion of the scope of employer) Even in the absence of a direct employment contract, a person who substantially and specifically controls or determines workers&#8217; working conditions is now deemed an employer under the Trade Union Act and bears collective bargaining obligations.<\/li>\n<li>(Right to organize for diverse working people) The previous provision that &#8220;an organization shall not be regarded as a trade union if it permits the membership of persons who are not workers&#8221; has been deleted, enabling platform workers, special-type employment workers, and others to join trade unions.<\/li>\n<li>(Expansion of the scope of legitimate industrial action) The subject matter of labor disputes now includes disagreements regarding workers&#8217; status, business management decisions affecting working conditions (such as mergers, divisions, and organizational restructuring), and disputes arising from the employer&#8217;s manifest violation of collective agreements.<\/li>\n<li>(Restriction on employer&#8217;s damages claims) The following provisions have been established: prohibition of damages claims for harm caused by legitimate union activities; immunity for defensive actions against employer&#8217;s unlawful conduct; individualization of the liability ratio for each worker; the right of trade unions and workers to request reduction of damages; exemption of guarantors from liability; and prohibition of the abusive exercise of damages claims intended to endanger the existence of a trade union or obstruct its activities.<\/li>\n<li>(Grant of employer&#8217;s authority to grant immunity) A legal basis has been established enabling employers to exempt trade unions or workers from liability for damages arising from collective bargaining, industrial action, or other union activities. This provision also applies to damages that occurred before the Act took effect.<\/li>\n<\/ul>\n<p><strong>Commercial Act Amendment<\/strong><\/p>\n<p>The 2025 Commercial Act amendment was promulgated. The key provisions of the amendment are as follows:<\/p>\n<ul>\n<li>The subject of directors\u2019 duty of loyalty was changed from \u201cthe company\u201d to \u201cthe company and shareholders.\u201d This aims to require directors to more directly consider shareholders\u2019 interests in the board\u2019s decision-making process.<\/li>\n<li>The proportion of outside directors was expanded and the appointment conditions for audit committee members were made more stringent, strengthening independence.<\/li>\n<li>Cumulative voting was made mandatory for large listed companies with total assets of KRW 2 trillion or more, and the separate election of audit committee members was expanded.<\/li>\n<li>Treasury shares shall, in principle, be retired within one year, with the exception that they may be held with shareholder meeting approval. This restricts companies from using treasury shares as a means of defending management control or strengthening controlling shareholders\u2019 influence.<\/li>\n<\/ul>\n<p><strong>Stewardship Code Application Expansion<\/strong><\/p>\n<p>The Korea Institute of Corporate Governance and Sustainability (KCGS) and relevant ministries announced the \u201cStewardship Code Enhancement Measures\u201d in December 2025. Scheduled for implementation in the first half of 2026, the key provisions include the expansion of disclosure and utilization of implementation review results, and the expansion of the Stewardship Code to reflect ESG factors and the applicable asset scope. For companies in which the National Pension Fund Management Division directly invests, voting rights on delegated investment shares will also be exercised by the Fund Management Division. For companies in which the Fund Management Division does not directly invest, voting rights will be delegated to and exercised by sub-advisors. A Stewardship Code for sub-advisors is being prepared to strengthen fiduciary responsibility activities.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">7117<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/139450","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=139450"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}