Law firm Yoon & Yang said on the 23rd that it held a seminar on corporate legal risks and response systems arising from the institutionalization of sustainability requirements, at its training center in Seoul's Gangnam district on the 22nd. The seminar, co-hosted with the Korea Chamber of Commerce and Industry, examined the legal responsibilities and internal control systems companies should review ahead of the introduction of mandatory sustainability disclosure in 2028 and tighter supply chain regulations.
Lee Kwang-wook, an attorney at Yoon & Yang, stressed the legal responsibilities of boards of directors under mandatory disclosure rules and the steps needed to build internal control systems. Lee said companies should clearly separate the roles of the board, management and their ESG and legal departments before the disclosure rules take effect, and should keep records of compliance. A proposed amendment to the Capital Markets Act now before the National Assembly includes a three-year safe harbor provision for the initial period, but Lee said it does not exempt companies from liability for intentional false disclosure or from directors' duties under the Commercial Act.
Cho Sung-moon, head of the green transition division at the Korea Environmental Industry and Technology Institute, outlined regulatory trends on greenwashing. Using terms such as "eco-friendly" or "low-carbon" without objective supporting evidence can constitute unfair labeling and advertising, he said, adding that companies should prepare for tighter European Union rules on environmental claims.
Hwang Keun-sik, head of the sustainability assurance research center at the Korean Institute of Certified Public Accountants, said assurance of domestic sustainability disclosures is set to become mandatory from 2030, and that companies should document the basis for their materiality assessments and have the disclosures reviewed by legal counsel.
Lee Keun-woo, an attorney at Yoon & Yang, pointed to the risk of "double compliance," in which meeting U.S. and EU supply chain due diligence and sanctions requirements can conflict with Chinese law. Companies should also review potential conflicts with Korean laws on labor, personal data and fair trade, he said.
Yoon & Yang said it will continue to expand tailored legal advisory services covering the full range of these requirements, including sustainability disclosure, greenwashing, assurance and supply chain due diligence, drawing on the discussions at the seminar.
"As sustainability moves into regulated areas such as disclosure, assurance and supply chain due diligence, it has become a legal risk that boards and management must manage directly," said Lee Myung-soo, managing partner at Yoon & Yang. "What matters most is pre-emptively checking even for conflicts between domestic and foreign laws, and building a response system that can be applied immediately on the ground."