A Study of Theoretical Justifications for Mandatory ESG Disclosure in Korea

The growing global focus on sustainable development and Environmental, Social, and Governance (ESG) factors necessitates robust disclosure legislation, including in South Korea, where corporate conglomerates, or chaebols, dominate the economy. This research underscores the critical need for comprehensive ESG disclosure laws, supported by Stakeholder Theory, Sustainability Theory, and Legitimacy Theory, within the Korean context. Stakeholder Theory emphasizes the accountability of chaebols to diverse groups beyond shareholders, advocating for transparent ESG practices that align with societal expectations. Sustainability Theory highlights the importance of aligning corporate actions with long-term national sustainability goals, such as Korea's Green New Deal, to enhance environmental and social resilience. Legitimacy Theory supports the notion that transparent ESG disclosures build local and global legitimacy, fostering trust and compliance with evolving standards. This study explores the intersection of these theories, demonstrating how mandatory ESG disclosures can enhance corporate governance, support sustainable business practices, and improve market competitiveness. By legislating comprehensive ESG disclosure requirements, Korea can ensure long-term value creation, stakeholder engagement, and alignment with global sustainability trends. This research provides a theoretical foundation for policy-makers, suggesting that robust ESG disclosure laws are essential for promoting transparency, accountability, and sustainable economic growth in Korea.