Highlights

• 11 of 14 ASEAN banks now have long-term net-zero targets for financed emissions.
• More than half of banks have pledged to stop new coal financing, with some planning phase-out timelines.
• Green and sustainable finance opportunities have increased sharply from a low base.

A new report from Asia Research & Engagement (ARE), titled Bridging the Gap: Have ASEAN Banks Caught Up on Climate Action?, examines banking institutions in Indonesia, Malaysia, Thailand, and the Philippines, and says that ASEAN banks are making calibrative progress on climate action.

The study finds that 11 out of 14 banks now have long-term net-zero targets for financed emissions, compared with only three in 2022.

Despite this improvement, these banks lag behind institutions in Japan, Singapore, and South Korea, where decarbonisation targets are more extensive and aligned with national net-zero plans for 2050.

Policy progress varies

According to the report, policy performance rose to 38% in 2025 from 20% in 2022.

More than half of the banks have pledged to stop new coal financing, and five have timelines to phase out existing coal dealings.

Six have policies for high-carbon industries, and five align their net-zero targets with the 2050 horizon.

Read More: ESG Banking: Trends, Strategies, and Insights for the Financial Sector

Malaysia is leading in policy adoption, followed by Thailand and Indonesia, with CIMB and Maybank topping the rankings, and BRI and Siam Commercial Bank are also logging gains.

Governance practices

The report notes an improvement in board-level sustainability roles, with performance rising to 54% from 39% in 2022.

All banks now reveal board sustainability responsibilities, and over half have climate expertise on their boards.

Thailand’s KBank and Malaysia’s CIMB and Maybank rank highest; meanwhile, Indonesia’s BCA and HLB recorded quick progress.

Risk management is evolving in the region

Eight banks disclosed financed emissions in 2025, up from none in 2022, and ten reported exposure to high-carbon sectors, rising from four previously.

Indonesia’s BRI and Mandiri improved most, whereas Thailand’s KBank also advanced. Some banks have client-level transition plans and adopt PCAF methods, although only three have included physical risk scenario analysis in their assessments.

Also Read: Net-Zero Banking Pact Halts as Banks Go Independent

Green and sustainable finance

Nine banks disclosed targets for green finance in 2025, compared with five in 2022. For banks that reported in both years, the volume of financing rose dramatically.

The report concludes that ASEAN banks are progressing in governance, net-zero commitments, and coal financing restrictions, but more work is needed to match leading Asian institutions.

Ends/

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