In 2025, ESG trends in Southeast Asia are accelerating as governments, investors, and businesses place stronger emphasis on sustainability, green finance, and corporate responsibility. From stricter ESG disclosure requirements in Singapore and Malaysia to innovative transition credits in the Philippines and renewable energy investments across ASEAN, the region is taking tangible steps toward a low-carbon future. Small and medium enterprises (SMEs) are also increasingly adopting ESG practices, while climate-tech startups gain momentum with new funding and innovation. This article explores how Southeast Asia is implementing ESG in 2025, highlighting progress, challenges, and the opportunities shaping the region’s sustainable growth.
1. Regulatory Momentum & Real-Time Disclosure
- Singapore: The SGX mandates climate-related disclosures aligned with ISSB starting FY2025. Broader ESG reporting—including governance and policies—is expected by 2026, with full assurance by 2027. Enterprise Singapore also helps SMEs with grants funding up to 70% of reporting costs.
- Malaysia: Bursa Malaysia and the Securities Commission require ISSB-aligned sustainability reports beginning FY2025. Malaysia introduced a Simplified ESG Disclosure Guide (SEDG) to help SMEs and provides financing via the Green Technology Financing Scheme (GTFS 4.0) and the Low Carbon Transition Facility (LCTF). Green bond and sukuk issuance has surged, reaching RM 11.9 billion in 2024.
- Indonesia, Thailand, Vietnam, Philippines: Indonesia’s regulator OJK is pushing its Sustainable Finance Roadmap. Thailand has integrated ESG into its corporate disclosures. Vietnam and the Philippines offer voluntary frameworks aligned with GRI, SASB, and SDGs.
2. Financing Mechanisms & Transition Credits
- Transition Credits: Regional players like GenZero, ACEN, and Keppel are piloting a project in the Philippines to generate transition credits, compensating for early coal-plant retirements. Singapore aims to become a carbon-credit hub with support from initiatives like the TRACTION coalition.
- Thailand: Considering a long-term equity fund within its ESG framework, offering five-year tax breaks to stabilize the market.
3. Green Finance & Policy Push
- ASEAN-Wide Initiatives: ASEAN countries are exploring enhanced green financing structures, including a regional infrastructure fund, disaster-risk financing, and a standardized project taxonomy to support climate-aligned investments.
- Nation-Specific Drives: In 2025:
- Nigeria (typo? likely meant Indonesia) opened carbon markets and de-risked renewable energy investments.
- Thailand launched ESG funds, a carbon data platform, and mandated disclosures for listed firms.
- Vietnam initiated hydrogen energy incentives and green bond eligibility criteria.
- Malaysia proposed a Carbon Capture, Utilisation, and Storage (CCUS) Bill and enforced palm oil sustainability standards.
- Singapore continued allocating strong budgets for clean energy and reinforcing low-carbon investor confidence.
4. MSMEs & Green Startups Gaining Ground
- MSMEs: A CIIP report finds 84% have adopted at least one ESG practice, particularly in waste management and social protections. Still, 60% face staffing challenges around ESG roles, and financing is a key barrier—even though half plan to increase ESG budgets by 2027.
- Green Startups: Investments in climate tech have grown significantly—rising from 3.2% of total venture funding in 2019 to 9.5% in 2023. Over US$830 million is committed across ~30 regional climate-tech funds. Malaysia, as ASEAN chair, is promoting a cohesive regional green-entrepreneurship ecosystem. Notable innovations include marine-plastic cleanup (e.g., Seven Clean Seas), vertical farming (BoomGrow), and carbon credit platforms (Climate Impact X).
5. Climate & Energy Transition
- Renewables Surge: ASEAN needs USD 27 billion annually to reach 23% renewables by 2025. Vietnam is leading—solar and wind accounted for 13% of its electricity mix by 2022. Indonesia and Vietnam have pledged to phase out coal by the 2040s, while ASEAN explores a regional supergrid via the ASEAN Power Grid initiative.Wikipedia
- Malaysia’s Green Transition: The country has:
- Rolled out Energy Exchange Malaysia (Enegem) for cross-border green electricity trade.
- Advanced its Green Technology Master Plan (target: 40% renewable energy by 2035).
- Launched a National Biodiversity Policy and a Sustainable and Circular Economy Roadmap.
- Raised renewable energy share to 22% by 2023 and initiated waste-to-energy projects.Wikipedia
6. ESG Disclosure & Tech Evolution
- Real-Time ESG Platforms: Southeast Asia is accelerating ESG disclosure with real-time, AI-powered data platforms. Examples include:
- Unravel Carbon (carbon accounting)
- ESGpedia/STACS (blockchain-based ESG registry)
- Sustaina (disclosure scorecards)
- CCR Intelligence, which stands out with sensor-level integration, AI-driven alerts, and automated reporting across ASEAN markets.
- Combatting Greenwashing: More companies face pressure to substantiate their ESG claims with data, especially with stronger regulatory frameworks like the ASEAN-wide ESG metrics rollout.
- Biodiversity & Supply Chains: Firms are integrating regenerative practices (e.g., Malaysia’s certified palm oil) and improving supply-chain transparency via digital tracking. Circular economy initiatives—like plastic recycling programs in Indonesia—are also gaining traction.
So—Is Southeast Asia doing well on ESG in 2025?
Yes, absolutely—with important caveats. Geopolitical gaps persist, and progress varies country by country. But overall:
- Regulatory mandates are increasingly rigorous.
- Sustainable finance and innovation are proliferating.
- MSMEs and startups are engaged, despite capacity and financing challenges.
- Regional cooperation is improving but still nascent.
Summary: Strengths & Challenges
| Strengths | Gaps & Challenges |
|---|---|
| Strong ESG regulations in Singapore & Malaysia | Uneven capacity, especially among MSMEs |
| Growth in transition financing (e.g., carbon/transition credits) | Lack of harmonized climate finance across ASEAN |
| Green tech innovation and startup funding | Ongoing regulatory complexity, disclosure burdens |
| Renewable energy expansion and cross-border initiatives | Dependency on coal, infrastructure hurdles |
| Emergence of real-time ESG platforms | Tech access disparity, especially for smaller firms |
Overall, Southeast Asia’s ESG journey in 2025 reflects both progress and challenges. Stronger regulations, green financing tools, and renewable energy policies are driving momentum, while SMEs and startups are proving that sustainability is no longer just a corporate trend but a business necessity. However, gaps remain in terms of financing, harmonized ESG standards, and SME capacity-building across the region. Looking ahead, ASEAN’s commitment to climate resilience, green innovation, and transparent ESG reporting will play a crucial role in attracting global investment and positioning the region as a sustainable growth hub.