Discussion on the role of the board in an increasingly sustainable role (from left to right) has Wu as moderator, with Thomas, Rejina and Joubert as panel speakers.
AS SOUTH-East Asia faces increasing vulnerability to both physical climate impacts and transition risks, such as evolving regulations and shifting market preferences and behaviours,
it is critical for corporate boards to incorporate climate considerations into their decision-making processes. Home to over 685 million people (around 8.5% of the world’s population), South-East Asia is projected to account for 6.5% of CO2 emissions by 2040.
The region faces threats of (and some areas have already witnessed) rising sea levels, increased heat waves, strengthened typhoons, extreme floods and droughts, and unprecedented weather events.
In addition, Asia could lose 14.9% of its GDP by 2050, significantly affecting livelihoods, with Indonesia, Malaysia, the Philippines, Singapore and Thailand potentially losing seven times their total economic output without ambitious climate action. Conversely, achieving net-zero emissions by 2050 could boost the Asia-Pacific’s GDP by 6.3% above projections and create up to 36.5 million additional jobs by the 2030s.
Recent commitments by countries in the South-East Asian region to achieve net-zero emissions and the growing integration of climate considerations into national policies reflect an urgent call for businesses to adapt swiftly.
The need for corporate boards to take decisive climate action has never been more critical.
With the growing adoption in South-East Asia of international reporting standards like those from the Task Force on Climate-Related Financial Disclosures (TCFD) and the International Sustainability Standards Board (ISSB), as well as the emergence of foreign regulations such as the EU’s Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CS3D), companies are urged to improve transparency and develop comprehensive decarbonisation transition plans to meet their net zero objectives.
In response to these evolving reporting requirements and standards, corporate boards in South-East Asia play a pivotal role in navigating corporations through the challenges of climate change.
To assist them, environmental law charity ClientEarth launched the Guide on Climate Action for Boards in Southeast Asia on Nov 8, at the Institute of Corporate Directors Malaysia (ICDM) in Kuala Lumpur.
The guide, co-published by Climate Governance Malaysia (CGM) and Earth on Board, aims to provide corporate directors with insights to address the increasing complexity of climate-related legal risks, regulations and governance requirements within the region.
It provides corporate directors with a comprehensive framework for climate governance.
It also offers guidance on emerging legal risks, including litigation risk directors and corporations face regarding greenwashing and other climate-related liabilities, while outlining key regulatory and market shifts in South-East Asia’s net-zero transition.
The launch opened with welcoming remarks by ICDM president and chief executive officer (CEO) Michele Kythe Lim, with keynote speakers from ClientEarth legal consultant Elizabeth Wu and its legal and policy researcher Kyoko Okuyama, as well as Cambridge Institute for Sustainability Leadership independent advisor and co-head tutor in Sustainable Finance Simon CY Wong.
“The guide highlights how climate leadership goes beyond regulatory compliance, it requires boards to set bold climate ambitions, engage meaningfully with stakeholders, and integrate sustainability into core business strategies,” said chairperson and director Datin Seri Sunita Rajakumar of CGM.
“As interest in climate-related resolutions and litigations grows in South-East Asia, corporate boards must step up to drive change, to ensure a positive impact on the communities they serve.”
Wu said, “In view of the urgency of the planetary crisis, this guide seeks to encourage robust climate leadership by directors when navigating climate challenges in South-East Asia.
She mentioned that by showcasing diverse regional examples, the guide aims to help directors translate climate ambitions into concrete action.
“Whether it’s establishing effective governance structures, grappling with legal and litigation risks or developing transition plans, the guide provides boards with practical insights adaptable to their unique industry contexts to drive meaningful climate action within their organisation,” she added.
A panel discussion was also held featuring former attorney general Tan Sri Tommy Thomas, Institutional Investors Council advisor Rejina Rahim and Earth on Board founder and CEO Philippe Joubert.
“At Earth on Board we defend the idea that 2015, with the adoption of the SDGs and the Paris Agreement, must be seen as a pivotal year in the area of boards’ duties,” said Joubert.
“Duties of care and diligence and responsibility toward the way and the content of what is reported externally by the company are now subject to a different scrutiny by society, and it is urgent that boards understand that this will challenge the way they must fulfil these duties. This guide is a tool to help the boards navigate these fundamental matters.”
Thomas opined that from a legal standpoint, corporate directors in South-East Asia must exercise heightened vigilance in climate risk governance.
“As the regulatory landscape evolves, new aspects of director liability are emerging, positioning climate risk oversight as an essential element of directors’ fiduciary duties — not merely an advisory responsibility,” he said.
He added that companies that do not adequately consider and manage foreseeable climate risks, or those that cause harm through carbon-intensive operations that exacerbate the climate crisis, are increasingly facing legal action.
Drawing from off-the-record stakeholder interviews, the guide offers actionable steps, including embedding sustainability across board-level committees, establishing dedicated governance structures, assessing climate risks and opportunities, setting science-based climate ambitions, and ensuring alignment throughout the company’s value chain.
CGM is the national chapter for the World Economic Forum’s Climate Governance Initiative, while Earth on Board represents an ecosystem of sustainability actors dedicated to helping organisations achieve an earth-competent board; where board members are proficient in sustainability.
ClientEarth is a non-profit environmental organisation that uses the law to create systemic change that protects the Earth for – and with – its inhabitants.
The Guide on Climate Action for Boards in Southeast Asia is available for download at www.clientearth.asia.
