ASEAN banks are making strides in climate action, with 11 out of 14 major banks in Indonesia, Malaysia, Thailand, and the Philippines now setting long-term net-zero goals for financed emissions, according to a report by Asia Research & Engagement (ARE). This marks a significant increase from just three banks in 2022. However, these banks still fall short compared to their counterparts in Japan, Singapore, and South Korea, where decarbonisation targets are more comprehensive and aligned with national net-zero goals for 2050.
The report, titled “Bridging the Gap: Have ASEAN Banks Caught Up on Climate Action?”, highlights that Malaysia leads in policy progress, with Thailand and Indonesia catching up. The average policy performance rose to 38% in 2025 from 20% in 2022, with over half of the banks committing to halt new coal financing. Notably, Thailand’s KBank is the only bank with a disclosed policy on restricting gas-fired power financing.
Governance practices have also improved, with the average performance increasing to 54% from 39% in 2022. All banks now disclose board sustainability responsibilities, and more than half have climate expertise at the board level. In risk management, eight banks disclosed financed emissions for the first time in 2025, up from none in 2022.
Ben McCarron, Founder and Managing Director of ARE, commented, “ASEAN banks are making significant progress—from stronger governance and net-zero commitments to new restrictions on coal financing—but there’s more to do.” The report urges ASEAN banks to accelerate their transition to a low-carbon economy.
