Mahardika, Taresa and Kurniasari, Widuri (2025) ANALYSIS OF THE IMPLEMENTATION OF ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) CRITERIA IN ASEAN COUNTRIES. International Journal of Business, Economics and Law, 36 (1). pp. 47-53. ISSN ISSN 2289-1552

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Abstract

This study involves a comparative analysis of the adoption of the ESG (Environmental, Social, and Governance) criteria by public companies in the first five ASEAN countries (Indonesia, Malaysia, the Philippines, Singapore, and Thailand) from 2019 to 2023. ESG criteria have become the central focus of corporate sustainability as they assess a firm's ability to generate and sustain value over the long term by going beyond compliance to strategically incorporate the environmental, social, and governance factors. Bloombergs’ ESG Disclosure Scores, complemented by some inferential statistics, help in illuminating the disparities in ESG disclosures of the ASEAN-5 countries, particularly Welch's ANOVA and the Games-Howell post hoc test. Malaysia has comparatively better ESG results than the Philippines and Singapore, and quite similar to Thailand. Among the five countries, Indonesia has the lowest average ESG disclosure. These differences appear to be the result of differing national regulatory frameworks and the varying levels of maturity of the countries’ sustainable capital market systems. As previously noted, IPO listing on the FTSE4Good Bursa Malaysia index and the associated regulations and polices rationalise Malaysia’s engagement, while Malaysia’s peers, which include Indonesia, the Philippines, and Singapore, are still trying to harden the regulations and streamline disclosure practices. The conclusions drawn from this analysis indicate not only the disproportionate embrace of ESG in the ASEAN grouping but also that Malaysia has a convincing lead, while Indonesia is significantly lagging. The bottom line is that a positive correlation exists between the degree of preparedness of institutions, the architecture of the regulatory framework, and the efficiency of the capital markets on the one hand, and the performance of ESG on the other. Consequently, the more uncoordinated the regulations are and the greater the level of fragmentation in terms of International Standardised Report (ISR) regulatory practices, the greater the supply of uncoordinated practices, and the more uncoordinated the sustainability reputation of ASEAN will become.

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