Published 8 January 2026 –
2025 was a pivotal year for ESG across Asia Pacific, with governments, businesses, and investors all advancing sustainability efforts.
While some global markets experienced shifts in their commitment to ESG, Asia Pacific has remained steadfast, with nations like Singapore driving forward with its Green Plan 2030, Malaysia introducing the i-ESG framework, and the Philippines continuing to develop its Sustainable Finance Roadmap.
At the same time, more than 80% of CEOs in the region, according to KPMG’s recent CEO Outlook, now view ESG as essential to business resilience and growth, reinforcing the strong momentum in the private sector.
Looking ahead to 2026, companies across Asia Pacific are embracing ESG as both a regulatory necessity and a strategic opportunity.
AI-driven automation, greater supply chain transparency, and robust climate resilience strategies will be key areas of focus, enabling businesses to stay competitive and meet rising sustainability expectations.
The trends below highlight what businesses must prioritise in 2026 to remain ahead in an increasingly ESG-driven world.
1. AI Will Cut ESG Reporting Effort by 90% and Save 4.5 Months of Work
AI is set to revolutionise ESG reporting by automating tasks like sustainability reporting, greenhouse gas (GHG) emissions calculations, and data aggregation.
In 2026, businesses leveraging AI-powered platforms like ESGpedia will reduce their ESG reporting effort by up to 90.8%, saving an average of 4.5 months of manual work annually.
This automation will allow businesses to meet complex ESG standards with greater speed and accuracy, reducing errors and freeing up resources for strategic sustainability actions.
2. Climate Adaptation Will Become Critical to Business Resilience in the Face of Increasing Climate Risks
By 2026, climate adaptation will be a non-negotiable part of corporate strategy. Businesses in climate-vulnerable sectors, such as construction, agriculture, and manufacturing, will need to invest in resilient infrastructure, diversified supply chains, and disaster-preparedness plans.
This proactive approach will not only help mitigate risks but also open up new market opportunities as customers and regulators demand businesses demonstrate their ability to adapt to climate change.
Companies failing to adapt will face higher costs and increased operational disruptions.
3. Verified ESG Data Will Be Essential for Building Trust with Investors and Stakeholders
With the increasing importance of transparent ESG data, companies will need to ensure that their sustainability reports are not only comprehensive but also verifiable.
Companies can no longer rely on spreadsheets or manual processes, and will face greater pressure to use digital solutions that provide reliable, auditable ESG data.
Platforms like ESGpedia will become indispensable, automating data collection and aggregating large amounts of data to help businesses ensure that their ESG disclosures are credible, accurate, and aligned with global standards.
In addition, verified data will be a prerequisite for securing investment on favourable terms and accessing sustainability-linked financing in many jurisdictions.
4. Scope 3 Emissions Reporting Will Become Mandatory, Pushing for Full Supply Chain Transparency
As jurisdictions including Singapore, Malaysia, the Philippines, Indonesia, Hong Kong, and Thailand roll out stricter sustainability regulations in phased approaches, businesses – starting with publicly listed companies – will be required to disclose Scope 3 emissions, which accounts for the emissions coming from their supply chains.
Additionally, with the European Union (EU)’s Carbon Border Adjustment Mechanism (CBAM) becoming a global policy catalyst, carbon pricing mechanisms in Asia are emerging. Singapore in particular is raising its carbon tax from S$25/tCO₂e in 2024 to S$45/tCO₂e in 2026, reflecting a broader shift: firms operating in or exporting from Asia must start measuring their full carbon emissions, including Scope 3 emissions, to remain competitive in export markets where CBAM regulations or carbon-adjusted costs are becoming the norm.
In the year ahead, companies will have to leverage advanced digital tools to automatically track and report these emissions in real-time.
This push for supply chain transparency will drive greater accountability, with businesses using digital platforms to integrate data from suppliers, enabling accurate and verifiable Scope 3 emissions reporting across the value chain.
5. Sustainable Finance Will Become Mainstream, with Over 250 Sustainability-Linked Loans (SLLs) Issued Annually
Sustainable finance, including green bonds and sustainability-linked loans (SLLs), will continue to expand in 2026.
Banks like CIMB, DBS, OCBC, and Maybank have introduced sustainability programmes to actively engage their client ecosystems, incentivising their portfolio companies to adopt sustainability practices by offering preferential rates, promoting brand loyalty while keeping costs and resources manageable. By doing so, banks achieve better climate-related risk mitigation and portfolio monitoring against ESG Taxonomies, and are able to more effectively drive climate action and mobilise capital towards meaningful impact.
In turn, companies demonstrating strong ESG performance will benefit from preferential financing terms, with platforms like ESGpedia bridging the gap by supporting the issuance of SLLs – allowing businesses to access cheaper capital by aligning their operations with sustainability targets.
This trend will help drive global decarbonisation efforts and reward companies for meeting key ESG performance milestones.
6. Nature and Biodiversity Reporting Will Be Required, Holding Businesses Accountable for Their Environmental Footprint
As environmental regulations evolve, businesses will eventually need to report their impact on biodiversity and natural ecosystems.
By late 2026, the IFRS Foundation’s International Sustainability Standards Board (ISSB) plans to have an initial draft of standard setting for disclosure requirements on nature-related risks and opportunities. This signals an upcoming trend which sees businesses being legally required to include nature-related risks in their ESG disclosures, focusing on areas such as deforestation, water usage, and ecosystem restoration.
This shift will push industries like agriculture, mining, and energy to take measurable action toward protecting biodiversity and reducing environmental harm, as regulators demand clear and auditable data on their environmental footprint.
How ESGpedia Is Helping Businesses Prepare for 2026
At ESGpedia, we’re already empowering businesses to tackle these trends head-on. Our AI-driven platform simplifies ESG reporting, GHG emissions calculation, and compliance with the latest regulations.
We provide automated data collection, harmonise reporting across frameworks, and ensure that companies meet rigorous ESG standards, helping businesses stay ahead of regulatory trends and build a competitive advantage in the sustainability space.
The future of sustainability is clear: companies that embrace these trends and invest in digital ESG solutions will lead the way in 2026.
Ready to take the next step? Get in touch with ESGpedia today to learn how we can support your ESG goals and help you build a sustainable, resilient future.
