Accelerating the Green Transition
Southeast Asia faces some of the most severe climate risks in the world. Rising sea levels, floods and typhoons already impact millions of lives, while economic losses from these disasters could reach $86 billion annually by 2030. Countries across the region are stepping up to address these risks.
Vietnam has emerged as a renewable energy leader, installing 16 GW of solar capacity in 2020. Indonesia is shifting its energy landscape with its $20 billion Just Energy Transition Partnership (JETP), which accelerates its move away from coal. Malaysia’s Green Technology Master Plan, with its goal of achieving 31% renewable energy by 2025, underscores its commitment to a sustainable future.
Businesses are also making bold moves. Temasek, Singapore’s state investment firm, continues to pour resources into climate tech startups, while Thailand’s PTT Group diversifies aggressively into clean energy.
As ASEAN chair, Malaysia must build on these successes by championing regional initiatives like the ASEAN Power Grid. This project could connect nations with surplus renewable energy to those in need, unlocking cost efficiencies and advancing the green transition. By prioritising these collaborations, Malaysia can position the region as a global sustainability leader.
Driving Social Equity Across the Region
Despite rapid economic growth, Southeast Asia remains deeply unequal. Many rural communities still lack access to basic infrastructure, while marginalised groups face barriers to education and healthcare. Governments and businesses across the region are already using ESG principles to bridge these gaps.
Indonesia, for example, directs billions into its village fund program, which has boosted rural development and created jobs. Thailand’s Pracharat initiative provides vocational training, equipping young people with skills for emerging industries. Malaysia aims to create 200,000 green jobs by 2030, as outlined in its Green Technology Master Plan.
Corporations are also acting. Grab, Southeast Asia’s largest ride-hailing platform, helps gig workers gain access to financial tools like microloans and insurance. Meanwhile, Thai Union, a leading seafood exporter, has raised labour standards across its supply chain, demonstrating how businesses can prioritise social responsibility without sacrificing profitability.
Malaysia’s chairmanship offers the chance to scale these efforts regionally. By promoting education, job creation and inclusion, ASEAN can ensure that everyone—from urban professionals to rural farmers—benefits from sustainable growth.
Strengthening Governance for Lasting Impact
Governance remains a weak link in Southeast Asia’s ESG efforts. Corruption, inconsistent regulations and poor enforcement hinder progress. Despite these challenges, several nations are taking bold steps to improve accountability and transparency.
Malaysia has updated its Corporate Governance Code, setting higher standards for board diversity, risk management and stakeholder engagement. Singapore mandates sustainability reporting for all listed companies, ensuring greater accountability. Indonesia’s One Map Policy resolves land-use conflicts, holding industries accountable for deforestation and other environmental damages.
At the corporate level, regional leaders are embedding governance into their strategies. DBS Bank in Singapore ties its lending criteria to sustainability performance, prioritising businesses with strong ESG credentials. Petronas, Malaysia’s energy giant, combines decarbonisation goals with robust governance reforms, setting an example for state-owned enterprises.
As ASEAN chair, Malaysia can push for harmonised ESG standards across the region. Strengthening anti-corruption measures, aligning disclosure requirements and encouraging ethical business practices will not only attract global investment but also build trust among citizens and stakeholders.
Malaysia’s Opportunity as ASEAN Chair
With Malaysia at the helm of ASEAN in 2025, the region has a golden opportunity to lead the global ESG movement. Malaysia can champion initiatives that prioritise green finance, empower small and medium-sized enterprises (SMEs) and enhance regional collaboration.
- Expand Green Finance: Malaysia can drive efforts to scale up green bonds and sustainability-linked loans. The Philippines, for instance, issued its first sustainability bond in 2022, funding renewable energy projects and social programs. Similar initiatives can unlock funding for vital infrastructure across the region.
- Empower SMEs: SMEs account for more than 90% of Southeast Asia’s businesses but often struggle to adopt ESG practices. Malaysia can leverage its experience with programs like the Enterprise Sustainability Program to provide SMEs with the tools and resources they need to embrace sustainability.
- Strengthen Regional Collaboration: By accelerating the implementation of the ASEAN Taxonomy for Sustainable Finance, Malaysia can harmonise ESG standards and create a more cohesive regional market.
Southeast Asia has everything it needs to lead the world in sustainable development. By embracing ESG principles, the region can tackle climate risks, reduce inequalities and build stronger, more transparent systems. With Malaysia driving ASEAN’s agenda this year, the region has a chance to align its efforts, share its successes and inspire global action. Together, Southeast Asia’s governments, businesses and communities can create a future that thrives—not just for today, but for generations to come.