South Korea's KOSPI Firms Fall Short on Nature Risk Transparency

Minimal Uptake on Environmental Reporting

South Korea's corporate sector remains far behind on nature-related financial transparency. Among 849 companies traded on the Korea Exchange's main board, just 91 report how their operations depend on or affect ecosystems, according to fresh research from the SDG Institute, a Seoul-based policy group.

That represents 10.7 percent of the benchmark KOSPI index. Even within this small cohort, companies disclose fewer than one-fifth of the criteria recommended by the Taskforce on Nature-related Financial Disclosures, a global standard-setter that published its framework to help investors and regulators understand corporate exposure to biodiversity loss and resource depletion.

The institute's 2025 analysis covered financial-year 2024 filings and applied 151 benchmarks drawn from TNFD guidance. It marks the first full-scale audit of nature disclosure practices among South Korean listed entities.

Heavy on Narrative, Light on Numbers

Firms that do report tend to describe impacts rather than measure them. More than nine out of ten companies outlined how their value chains touch natural systems, and a similar share listed facilities or asset locations. Yet only 3.4 percent supplied core indicators that quantify risks and opportunities tied to ecosystems, and 5.8 percent disclosed metrics on dependencies and impacts.

The median score for both categories was zero, meaning more than half the reporting group offered no usable numbers at all. That gap undermines the credibility of stated commitments. About 13 percent of companies set targets for nature-related action, but most failed to publish the data needed to track whether they are meeting those goals.

Kim Jong-dae, director of the SDG Institute, said the pattern raises the risk of greenwashing. Businesses may project environmental ambition without building the measurement infrastructure to back it up, he noted in the report. "Nature-related disclosure is not simply about responding to regulation, but about transforming companies so that the value of natural capital is integrated into financial decision-making," Kim said.

Strategy Outpaces Accountability

Across the four pillars of the TNFD framework, strategy disclosure scored highest at 40.7 percent. Risk and impact management came second, followed by governance. Metrics and targets lagged at just 7.5 percent, less than one-fifth the level recorded for strategy.

That sequence held true for both leading reporters and laggards, suggesting the problem is structural rather than a matter of individual capability. Companies face systemic hurdles in gathering reliable environmental data and tracing impacts through multi-tier supply chains, the institute found.

Sector Patterns Reflect Exposure and Complexity

Infrastructure operators posted the highest average disclosure rate at 26.1 percent, a reflection of their direct exposure to physical environments such as water basins, forests, and coastal zones. Food and beverage producers followed at 24.1 percent.

Consumer goods companies, despite relying heavily on natural raw materials, recorded only 13.4 percent. The institute attributed the shortfall in part to the difficulty of mapping sprawling supplier networks. Manufacturers across the board focused risk assessments on facilities they own or operate directly, showing limited ability to evaluate upstream sourcing or downstream distribution.

What Comes Next

The SDG Institute recommended that companies build primary data collection systems targeting their most material suppliers. It also urged boards to incorporate nature-related risks into enterprise risk management and to develop internal expertise on how ecosystem degradation translates into financial exposure.

On the policy side, the institute called for standardised national and industry-level databases on natural capital, along with tiered support programmes that reflect varying levels of corporate readiness. Such infrastructure would lower the cost of disclosure and reduce the risk of inconsistent or misleading reporting.

Kim said he hopes the findings will push South Korean firms beyond qualitative statements toward quantitative accountability and practical risk management. As global investors and regulators tighten expectations around environmental transparency, companies that fail to measure their nature footprint may face higher capital costs and reputational damage.

The TNFD framework, launched to complement the Task Force on Climate-related Financial Disclosures, has gained traction in Europe and parts of Asia. South Korea's slow uptake reflects broader challenges in integrating biodiversity and ecosystem services into financial analysis, a domain that lacks the mature data infrastructure and regulatory momentum that climate disclosure has begun to enjoy.

For now, the gap between stated strategy and measurable action remains wide. Whether corporate Korea can close it will depend on both private-sector investment in data systems and public-sector leadership in setting standards and providing tools.