Introduction to the roadmap for ASEAN sustainable capital markets

ASEAN faces rising social and environmental risks alongside economic growth, including potential GDP losses of up to 11% by 2100 from climate change. Achieving SDGs requires USD 2.5 trillion annually, with Southeast Asia needing USD 3.147 trillion for infrastructure (2016–2030). Capital markets are positioned to mobilise private capital to address these financing gaps.

Current landscape of ASEAN sustainable capital markets

Global sustainable bond issuance reached USD 226.4 billion in 2018, while ASEAN standards have facilitated USD 5.34 billion in issuances by 2019. ASEAN Green, Social and Sustainability Bond Standards enhance transparency, reduce due diligence costs, and support a regional sustainable asset class. Private sector uptake includes landmark issuances such as USD 300 million green bonds in the Philippines and USD 680 million SDG bonds in Malaysia.

Status of sustainable finance initiatives in ASEAN nations

ASEAN countries show varied progress, with national strategies, disclosure guidelines, and incentives emerging across markets. Six countries mandate sustainability reporting. Incentives such as tax deductions and fee waivers support issuance. Collaboration with multilateral organisations and capacity-building initiatives is increasing, though reporting practices remain heterogeneous and still evolving.

The roadmap for ASEAN sustainable capital markets

The roadmap outlines a five-year strategy to develop an integrated ecosystem that mobilises private capital for sustainable projects. It is based on stakeholder engagement and global best practices, addressing key gaps: limited data transparency, restricted market access, and insufficient capacity. Participation follows an opt-in approach reflecting differing market maturity.

Priority area I – Strengthening foundations

Focus is on improving transparency and comparability through corporate and institutional disclosures, aligning with GRI, SASB and IIRC standards. ASEAN exchanges mandate reporting, but fragmentation persists. Actions include promoting stewardship codes, exploring a common taxonomy aligned with global frameworks, and assessing transition standards to support firms shifting towards sustainability without diluting existing bond standards.

Priority Area II – Catalysing products & enabling access to under-served areas

Efforts target expanding sustainable products beyond bonds to funds and ESG indices, while improving cross-border access. Regulatory “green lanes”, FinTech solutions and simplified eligibility criteria are proposed to broaden participation, especially for SMEs. Incentives such as tax benefits and subsidies are recommended to offset higher issuance costs and mitigate greenwashing risks.

Priority area III – Raising awareness & capacity building

Capacity gaps are addressed through training, workshops and knowledge-sharing platforms for regulators, issuers and investors. Over 50% of global investors cite lack of information as a barrier to sustainable investing. Proposed actions include technical training, knowledge hubs, webinars, and public education campaigns to improve ESG understanding and participation.

Priority area IV – Increasing connectivity

The roadmap emphasises ecosystem coordination across regulators, financial institutions and public bodies. Proposed initiatives include a public database of sustainable projects and investors to reduce information asymmetry, and partnerships with multilateral and philanthropic organisations to mobilise concessional capital. Stronger policy coordination is required to align incentives, manage risks, and support sustainable asset supply.

Conclusion

The roadmap sets a coordinated framework to strengthen disclosures, develop products, build capacity and enhance regional collaboration. Immediate priorities include advancing sustainability disclosures, improving market access, developing fund standards and strengthening coordination, aiming to create a resilient and integrated ASEAN sustainable capital market ecosystem.