State Ownership and Sustainability in Asia

2. The role of boards in steering sustainability in SOEs

Abstract

This chapter reviews national practices on board mandates and institutionalisation of sustainability governance, including through board committees, reporting frameworks and performance systems. It examines how SOE boards in the reviewed jurisdictions (i) steer and oversee sustainability policies; (ii) embed sustainability into risk management and remuneration systems using sustainability-related criteria; and (iii) approach capacity building and technical support for both SOE boards and executives.

2.1. Role of SOE boards in setting and overseeing sustainability policies

Boards of directors play a pivotal role in ensuring that SOEs identify, manage and prioritise material sustainability-related risks and opportunities in a way that supports long-term value creation and resilience. The OECD Guidelines on Corporate Governance of State-Owned Enterprises recognise that sustainability expectations are typically established at the state-owner level through the legal and regulatory framework and ownership policy; however, these expectations should not be understood as a ceiling for sustainability performance. Within their mandates, SOE boards can lead by example on guiding sustainability strategy - related to overseeing integration into risk management and internal controls (including through the conduct of risk-based due diligence), and monitoring management performance on sustainability-related outcomes.

Across the surveyed countries, national practice shows differing levels of formalised duties in board mandates and varying degrees of institutionalisation of sustainability governance (e.g. through board committees, reporting frameworks, and performance systems). This chapter examines how SOE boards in the reviewed jurisdictions (i) steer and oversee sustainability policies; (ii) embed sustainability into risk management and remuneration systems using sustainability-related criteria; and (iii) approach capacity building and technical support.

Box 2.1. The evolving role of boards under global sustainability and climate disclosure frameworks

Global disclosure frameworks and reporting standards have clarified the expected role of boards in responding to sustainability, and specifically to climate-related risks and opportunities. The 2017 TCFD recommendations include a “Governance” pillar to facilitate the disclosure of enterprise governance of climate-related risks and opportunities. In 2021, the GRI Standards also provided principles and indicators for “Governance” disclosures including a description of the role of the “highest governance body” in developing, approving and updating an organisation’s purpose, value or mission statements, strategies policies and goals related to sustainable development.

In 2023, the ISSB adopted and expanded the “Governance” pillar in its two sustainability standards, IFRS S1 and IFRS S2, each requiring public disclosures of the oversight and engagement of an entity’s governance body. Specifically, there is an expectation that reporting entities can disclose:

• How responsibilities are reflected in terms of reference, mandates, role descriptions and other related policies.

• How the governance body(ies) or individual(s) determine(s) whether appropriate skills and competencies are available or will be developed to oversee sustainability- or climate-related strategies.

• How and how often the governance body(ies) or individual(s) is/are informed about sustainability- or climate-related risks and opportunities.

• How the governance body(ies) or individual(s) take into account sustainability- or climate-related risks and opportunities when overseeing strategy, decisions on major transactions and its risk management processes and related policies.

• How the governance body(s) or individual(s) oversee(s) the setting of sustainability- or climate-related targets and monitors related progress, including whether and how performance metrics are included in remuneration policies.

Sustainability reporting will focus stakeholder attention on the role of directors and the relevant liability rules that apply. Accordingly, SOE boards should consider sustainability-related risks and opportunities in the delivery of core functions. Active oversight of the development, implementation, monitoring and disclosure of sustainability-related objectives; integration of sustainability-related considerations into existing risk frameworks, controls and strategic planning; and linkages to incentives and performance management are key aspects of directors’ role.

Source: IFRS (2023[1]), IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information, https://www.ifrs.org/issued-standards/ifrs-sustainability-standards-navigator/ifrs-s1-general-requirements/#standard; IFRS (2023[2]), IFRS S2 Climate-related Disclosures, https://www.ifrs.org/issued-standards/ifrs-sustainability-standards-navigator/ifrs-s2-climate-related-disclosures/#standard.Source: IFRS (2023[1]), IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information, https://www.ifrs.org/issued-standards/ifrs-sustainability-standards-navigator/ifrs-s1-general-requirements/#standard; IFRS (2023[2]), IFRS S2 Climate-related Disclosures, https://www.ifrs.org/issued-standards/ifrs-sustainability-standards-navigator/ifrs-s2-climate-related-disclosures/#standard.

2.1.1. Board oversight and mandates on sustainability strategy

Fit-for purpose governance structures – appropriate to enterprise size, sector, scale and risk profile – are increasingly expected to incorporate sustainability-related considerations into board-level decision making. Across the surveyed countries, there are varying approaches to how explicitly national frameworks assign boards responsibility for sustainability strategy and disclosure (See Table 2.1).

Several countries set clear expectations in corporate governance codes or guidelines that boards should integrate sustainability-related considerations into corporate strategy and oversee implementation and disclosure. Japan, Korea, Malaysia, Thailand and Viet Nam have incorporated sustainability-related expectations for boards within corporate governance guidelines and codes, though the scope differs (for instance, Viet Nam’s governance guidelines may only apply to boards of listed SOEs in some cases). Japan’s Corporate Governance Code (2021) expects boards to recognise that sustainability issues are important management issues that can lead to earning opportunities as well as risk mitigation. Korea places particular emphasis on boards’ leadership in integrating sustainability considerations into enterprise direction and in communicating relevant strategies transparently with stakeholders.

In other jurisdictions, expectations are anchored primarily through disclosure obligations for listed entities, which indirectly require board engagement. For example:

• In Indonesia, OJK Circular Letter No.16/SEOJK.04/2021 states that boards of listed SOEs must include a statement in sustainability reports that outlines the company’s strategies and policies and methods for responding to implementation challenges. This encourages boards to oversee how sustainability objectives are set, operationalised and communicated, particularly where sustainability forms part of national development priorities or sectoral transition pathways (OECD, 2026[3]).

• In Singapore, SGX Listing Rules and related sustainability reporting guidance expects listed issuers’ sustainability reports to include a statement from the board that it has considered sustainability in the context of strategy, and determined, and overseen the management and monitoring of, material sustainability factors. While the requirement is disclosure-oriented, it signals that boards are expected to play an active role in ensuring that sustainability is addressed as a strategic matter and not treated solely as compliance reporting.

In jurisdictions where sustainability expectations are less explicit at board level (for example, where governance codes refer broadly to risk oversight and disclosure integrity without specifying sustainability), there are still often implicit obligations for boards to consider material sustainability-related risks and opportunities as part of fulfilling core governance functions. For instance, in the Philippines, requirements outlined in the GOCC Governance Act of 2011 (R.A. No. 10 149) to identify material risk factors, as well as expectations to oversee appropriate internal controls in high-risk sectors (e.g. oil and gas, mining, transport, utilities) will necessarily require boards to consider material environmental and social exposures, including climate transition and physical risks.

Table 2.1. The board’s responsibility for sustainability-related considerations and disclosures

Practice	China	India	Indonesia	Japan	Korea	Malaysia	Philippines	Singapore	Thailand	Viet Nam
Relevant laws / regulations / policies	Measures for the Supervision and Administration of Energy Conservation and Eco-Environmental Protection of Central State-owned Enterprises	Companies Act (2013); Securities and Exchange Board of India (SEBI) listing requirements; DPE Guidelines on CSR & Sustainability	Law No.16/2025 (Fourth Amendment to Law No.19/2003; Ministerial Regulation No. PER-02/MBU/03/2023; PSPK 1 & PSPK 2	Companies Act (2005); Corporate Governance Code (2021)	Code of Best Practices for Corporate Governance (2021); MOFE Public Institutions ESG Guidelines	Code of Corporate Governance (2021); Principles on Good Governance for Government Linked Investment Companies (2022); Bursa Malaysia Sustainability Reporting Guide	Code for Corporate Governance of Publicly-listed Companies (2016); Code of Corporate Governance for GOCCs (2012)	Code of Corporate Governance (2018); Singapore Exchange (SGX) listing requirements	Corporate Governance Code (2017); Notification of State Enterprise Policy Committee Re: Good Corporate Governance for State Enterprises B.E. 2568 (2025)	Circular No. 96/2020/TT-BTC; Corporate Governance Code (2026)
Incorporation of sustainability considerations in corporate policies and plans	Required for listed companies [1]	Required for large companies [2]	Required	Expected in corporate governance code	Expected in ESG Guidelines	Expected in corporate governance code	Not explicit [3]	Expected for listed SOEs	Expected in corporate governance code	Expected for listed SOEs in corporate governance code
Oversight and approval of sustainability reporting	Required for listed SOEs	Required for listed SOEs	Required under upcoming national sustainability reporting standards	Expected in corporate governance code	Required for listed SOEs under proposed national sustainability reporting standards	Recommended for listed SOEs. Expected to ensure the integrity of non-financial disclosures in corporate governance code	Not explicit [3]	Expected for listed SOEs	Expected in corporate governance code	Not explicit [4]
Integration of sustainability considerations into risk management and internal control systems	Not explicit	Not explicit [5]	Required	Expected in corporate governance code	Not explicit	Required for financial SOEs regarding climate risk	Not explicit	Expected for listed SOEs	Expected in corporate governance code	Expected for listed SOEs in corporate governance code

Notes:

[1] China’s Measures for the Supervision and Administration of Energy Conservation and Eco-Environmental Protection of Central State-owned Enterprises explains that the main person in charge of the enterprise shall be responsible for the main leadership of the enterprise’s energy conservation and ecological environmental protection.

[2] Under India’s Companies Act (2013), every company (including SOEs) with a net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more in the year must establish a Corporate Social Responsibility Committee. The Committee shall establish a policy to indicate the CSR activities to be undertaken by the company. The board must ensure that the company spends at least 2% of average net profits made during the three immediately preceding financial years in pursuance of the policy. The board must approve and publish the policy and include its contents in its annual report.

[3] There are requirements for boards in the Philippines’ Code of Corporate Governance for Publicly-listed Companies. However, at the time of this report there are no listed GOCCs in the Philippines. The Philippines’ Code of Corporate Governance for GOCCs places expectations on GOCCs, but not board directors specifically.

[4] In Viet Nam, Circular No. 96/2020/TT-BTC explains that for listed SOE disclosures, the board member with the highest position is expected to take charge of information disclosure if a legal representative and attorney-in-fact are absent.

[5] As part of India’s Securities and Exchange Board (SEBI) Business Responsibility and Sustainability Reporting (BRSR) framework, the top 1 000 companies by market capitalisation must disclose mechanisms for identifying and mitigating ESG-related risk. Given the expectations for the board to approve related disclosures, it can be inferred that listed SOE boards should consider sustainability-related risk management.

Source: OECD questionnaire, State Ownership and Sustainability in Asia and desktop research.

2.1.2. Communication and dialogue supporting corporate strategy

As recommended by the SOE Guidelines, governance frameworks should enable dialogue between the company, shareholders and stakeholders to exchange views on sustainability matters relevant to corporate strategy and materiality assessments.

Board-shareholder dialogue

Clear communication of state-owner expectations supports boards in translating state-owned policy objectives into enterprise strategy, objectives and implementation plans. The extent to which owner/shareholder dialogue with SOEs is mainstreamed varies across jurisdictions. Some have structured and institutionalised processes in place, to enable regular exchange with SOE boards.

Examples include:

• Indonesia, where institutional processes have expanded to facilitate ongoing dialogue between state actors and SOE boards related to sustainability expectations and performance. Ministerial Regulation PER-2/MBU/2023 outlines quarterly oversight meetings between the Ministry of SOEs and SOE boards (which is expected to be conducted between BP BUMN and SOE boards in the future), and agendas are expected to include sustainability items such as reviewing annual sustainability reporting or assessing transition milestones.

• Singapore, where the Temasek board and senior management meet annually with the Minister for Finance and officials from the Ministry of Finance to review Temasek’s performance and investment strategies. Given the importance of sustainability to Temasek, these meetings provide an opportunity for Temasek and its state owner to review performance holistically and to discuss Temasek’s sustainability priorities.

Across other jurisdictions, there are fewer clearly articulated mechanisms for regular, structured dialogue to communicate and clarify state-owner sustainability expectations through ongoing board engagement.

Board interactions with stakeholders

Boards may also support sustainability strategy by facilitating stakeholder dialogue—particularly where stakeholder input informs materiality, implementation feasibility, and risk mitigation. Practice varies:

• China’s frameworks emphasise stakeholder engagement primarily as a component of risk mitigation and the focus is on enterprise responsibilities to identify environmental influencing factors, investigate risk points, manage hidden dangers, and prevent pollution incidents. These obligations are placed on enterprises rather than SOE directors specifically, but they are indicative of the operational and risk context boards must oversee.

• In the Philippines, GOCC boards are required to identify and recognise major and other stakeholders, identify the nature of their interests, manage conflicting interests through a hierarchy system, and adopt clear policies for communicating with stakeholders “accurately, effectively and sufficiently”. GOCCs are also expected to raise awareness among affected communities on environmentally friendly initiatives – an expectation that can shape enterprise strategies and implementation approaches.

• In Thailand, the Good Corporate Governance Guidelines for State Enterprises B.E. 2568 (2025) expects boards to establish stakeholder policies and ensure mechanisms for stakeholder participation in operations. Boards are expected to ensure any sustainability reporting respects human rights and social and environmental responsibilities.

2.2. Board composition and competencies

2.2.1. Sustainability board committees and allocation of responsibilities

Specialised committees can support board effectiveness when their mandates are clearly defined and linked to board decision making. The SOE Guidelines recommend that such committees advising on social and environmental risks, opportunities, goals and strategies include qualified members and an appropriate number of independent members.

Approaches vary across the reviewed countries:

• In India, Section 135 of the Companies Act, 2013 requires companies that meet specified financial thresholds to establish CSR committees to formulate and recommend CSR policy and expenditure and to monitor implementation. This requirement is not limited to listed companies and can therefore apply to non-listed SOEs, including CPSEs incorporated as companies. However, where the CSR obligation does not exceed 50 lakh rupees, these functions may be discharged by the board instead of a CSR committee (Digital Repository of Laws, 2014[4]).

• In Indonesia, Ministerial Regulations PER‑01/MBU/2023 and PER‑02/MBU/2023 permit SOEs to establish additional committees beyond mandated audit and nomination functions in response to specific risk exposure or ministerial direction. Where sustainability committees exist, they typically set sustainability targets, oversee decarbonisation plans and approve green investment policies.

• In Korea, the ESG Infrastructure Advancement Plan encourages public institutions to lead sustainability management through internal committees and enhanced disclosure; several large SOEs (e.g. KEPCO, KOGAS and Incheon International Airport Corporation) have established board-level committees for sustainability governance.

• In China and Japan, around 20% of listed SOEs by market capitalisation have board committees overseeing sustainability risks (OECD, 2025[5]), suggesting partial uptake and indicating that committee structures may depend on listing status, enterprise size or sector exposure.

• In the Philippines, the Code of Corporate Governance for GOCCs allows governing boards to combine committee functions into structures that best serve the GOCC’s interests, providing flexibility to incorporate sustainability into committee mandates.

• In Singapore, Temasek has introduced a Risk & Sustainability Committee. The committee reviews risk appetite and profile and oversees material sustainability matters, strategies, targets, policies and disclosures.

A specialised sustainability committee is not always necessary. Some enterprises embed sustainability mandates into existing committees. For example:

• risk committees overseeing materiality and sustainability-related risk prioritisation

• nominations / governance committees assessing sustainability-related expertise needs

• remuneration committees setting and monitoring sustainability-related management incentives

• audit committees overseeing sustainability reporting and disclosures and related assurance.

In addition, SOEs in Indonesia and Viet Nam assign sustainability-related mandates to management-level committees, and in Malaysia some financial institutions have mandated a Chief Sustainability Officer to oversee climate-related risks (Tong, 2020[6]; Bank Negara Malaysia, 2025[7]). Where sustainability functions sit at an executive level, strong reporting lines of material information to the board are essential. The effectiveness of any committee structure depends on whether responsibilities are clearly articulated in committee charters and corporate policies and whether reporting enables board-level challenge and decision making. Appropriate frequency of management reporting to the board will vary based on an SOE’s circumstances.

2.2.2. Independent directors and board composition

The SOE Guidelines recommend diversity and an appropriate number of independent members across boards and committees to enhance objectivity and strengthen board deliberations. As sustainability considerations increasingly affect capital allocation, risk appetite, stakeholder engagement, and long-term strategy, board diversity and independence can support more robust decision making.

Minimum thresholds for independent directors are prevalent at board-level across the surveyed countries (see Table 2.2), and in some jurisdictions, including India, Japan, Korea and Thailand, independence requirements also apply at committee level. Sustainability-specific independence requirements are less common given the limited prevalence of mandated sustainability committees. India’s CSR committees are a notable exception: they must comprise three or more directors, with at least one independent director.

Boards may also source third-party expertise to support the board in sustainability-related considerations. For example, Temasek has created a Sustainability Group that partners with internal and external stakeholders to support initiatives, including the transition towards net zero. Where such functional expertise is used, effective board reporting and engagement are important to ensure boards receive impartial analysis that supports oversight across strategy, risk governance and performance monitoring.

Table 2.2. Minimum number of independent director requirements for SOEs

Jurisdiction	Scope	Details
China	Requirement for listed SOEs	At least one-third of the board of listed SOEs must be independent directors.
India	Requirement	At least one-third of the board must consist of independent directors. If there is an executive chair, independent directors should not be less than 50%.
Indonesia	N/A[1]	N/A
Japan	Requirement for large listed SOEs, recommended for listed SOEs	For large public companies, at least one independent director is required. It is recommended that at least one-third of the board of other listed SOEs should be independent directors (two directors if listed on other markets).
Korea	Requirement for listed SOEs	More than 50% for Korea’s largest listed companies and at least two-thirds independent directors for listed companies.
		Amendments to the Korean Commercial Code are expected to take effect in 2026, which would recommend that one-third of the board should be independent directors.
Malaysia	Requirement for listed SOEs	At least one-third or two (whichever is higher) of the board must be independent directors. If there is an executive chair of the board, there should be a majority of independent directors.
Philippines	N/A[2]	N/A
Singapore	Recommended for listed SOEs	At least one-third of the board should be independent directors. A majority of independent directors is recommended if the chair is not independent.
Thailand	Requirement	At least one-third of the board must be independent directors.
Viet Nam	Recommended	For unlisted SOEs, at least one-fifth (or if fewer than five directors, at least one member) of the board should be independent.
		For listed SOEs, at least one independent director if the board has 3-5 members; at least two independent directors if the board has 6-8 members; and at least three independent directors if the board has 9-11 members.

Note: This analysis does not consider differences in the scope and definition of “independent” between jurisdictions. [1] There are minimum independence requirements for Boards of Commissioners in Indonesia, but there are currently no thresholds for Boards of Directors. [2] There are minimum independence thresholds for listed entities in the Philippines, but there are currently no listed state-owned enterprises (GOCCs). It is also suggested in the Corporate Governance Guidelines for Companies Listed on the Philippine Stock Exchange that there is at least three (3) or 30%, whichever is higher, independent directors.

Source: OECD questionnaire, State Ownership and Sustainability in Asia, desktop research and OECD, (2025[8]), Corporate Governance Factbook, https://doi.org/10.1787/f4f43735-en.

2.3. Integrating sustainability considerations at the company level

This section explores how SOEs integrate sustainability-related considerations into their risk management systems, into sustainability-linked remuneration and incentives for executives, and capacity building and technical support for SOE boards and executives.

2.3.1. Risk management systems

Sustainability-related risks and opportunities often involve uncertainty, long time horizons, and evolving regulatory and market dynamics. Accordingly, boards require systems that integrate sustainability issues into enterprise risk management and internal control frameworks rather than treating them as standalone topics.

Across the surveyed countries, approaches to embedding sustainability in risk governance vary substantially. In jurisdictions with stronger disclosure regimes and evolving governance codes, sustainability is increasingly recognised as material to risk identification and risk appetite. Nonetheless, evidence remains uneven regarding whether boards systematically oversee:

• integration of sustainability risks in enterprise risk registers and materiality assessments

• internal control and assurance over sustainability data and reporting

• risk based due diligence processes across operations and value chains

• escalation and remediation systems for sustainability incidents.

Some national frameworks provide policy signals consistent with risk-based approaches. For example, the approach of China’s SASAC, which focuses on identifying environmental influencing factors, investigating risk points and preventing pollution incidents, underscores an operational risk management orientation. Similarly, in countries where sustainability reporting requires boards to attest to the management and monitoring of material sustainability factors (e.g. Singapore for listed issuers), the expectation implies that boards should ensure sustainability matters are embedded into governance systems that enable monitoring and control.

Where sustainability governance is developing through board or management committees, the effectiveness of integration depends on whether committee mandates and reporting lines are linked to the broader enterprise risk management, internal audit, compliance functions, and decision making on investments and operations.

Overall, a key policy implication emerging across countries is the need to strengthen explicit expectations that boards ensure sustainability-related risks are addressed through formal risk management and internal control systems—supported where relevant by risk based due diligence—rather than relying primarily on disclosure obligations or ad hoc stakeholder engagement. In this respect, the SOE Guidelines recommend that enterprise risk management systems include risk-based due diligence to identify, prevent and mitigate actual and potential adverse impacts and account for how these impacts are addressed in accordance with the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct.

2.3.2. Sustainability-linked remuneration and incentives for executives

Remuneration and incentive structures for executive management may also support the delivery of sustainability objectives if it encourages management to take a long-term view, integrate sustainability into operational decision making, and consider stakeholder impacts. This is particularly relevant in jurisdictions where the SOE executive remuneration is strictly regulated by the state (including China, India, the Philippines and Viet Nam), which constrains boards’ discretion over executive pay design but does not eliminate boards’ monitoring responsibilities (OECD, 2024[9]).

Across the reviewed countries, the uptake of sustainability-linked executive compensation remains uneven and often nascent:

• Indonesia provides one of the clearest examples of formal integration. Ministerial Regulation PER-02/MBU/03/2023 requires executive performance contracts to include ESG-linked KPIs, and bonuses may be reduced or withheld if these KPIs are not achieved. This demonstrates a direct linkage between sustainability expectations, performance assessment, and remuneration outcomes.

• In other jurisdictions, explicit links between sustainability performance and remuneration remain less common. For example, in Viet Nam, there is no systematic introduction of climate or broader sustainability oriented incentives at a management level, although evolving regulatory and stakeholder expectations indicate a potential trend towards linking performance to sustainability outcomes.

Board-level remuneration practices show limited evidence of explicit sustainability indicators which is consistent with fixed remuneration structures. However, sustainability considerations may influence board composition and continuity indirectly; for instance, SOE boards in Indonesia have referenced sustainability outcomes as a factor in determining board tenure.

These patterns are consistent with wider comparative evidence suggesting that sustainability-linked compensation is more prevalent in advanced economies than in Asia on average (OECD, 2024[10]). For the surveyed region, a key governance question is not only whether sustainability KPIs exist, but whether boards use them in a disciplined way—by ensuring KPIs are material, measurable, time-bound, linked to enterprise strategy, and supported by credible reporting systems.

Box 2.2. Performance awards recognising individual SOEs for high-quality sustainability practices

Several reviewed countries are developing initiatives that contribute to strengthening enterprise commitment to sustainability. For example, Malaysia’s Ministry of Energy Transition and Water Transformation annually organises the National Energy Awards, which recognise the companies and institutions most active in taking innovative sustainability initiatives. These awards are part of the national agenda for a just energy transition, achieving net zero emissions, and supporting sustainable economic development. Similarly, the UN Global Compact Network Singapore’s Apex Corporate Sustainability Awards celebrate exemplary enterprises whose business operations or solutions reflect the Ten Principles of the United Nations Global Compact. The awards recognise companies that stand out for the integration of sustainable practices into their activities, for the development of innovative solutions for the benefit of the environment and society, and for the results achieved in reducing carbon emissions.

At the regional level, China, India, Indonesia, Japan, Malaysia, the Philippines, Singapore, Thailand and Viet Nam participate in Enterprise Asia’s Asia Responsible Enterprise Awards which recognise model companies with a demonstrable long-term commitment to responsible business practices.

Source: OECD questionnaire, State Ownership and Sustainability in Asia; Ministry of Energy Transition and Water Transformation of Malaysia (2026[11]), National Energy Awards, https://www.nationalenergyawards.com.my; Global Compact Singapore (2024[12]), Meet the 2025 Winners, https://apexawards.unglobalcompact.sg; AREA (2026[13]), Asia Responsible Enterprise Awards, https://enterpriseasia.org/area/.

2.3.3. Capacity building and technical support for SOE boards and executives

Sustainability-related oversight requires boards to make forward-looking judgements under uncertainty. Capacity building - through targeted training, workshops, and technical guidance - can improve boards’ ability to guide strategy, oversee risk systems, and monitor management performance.

Across the reviewed countries, there is evidence of increasing attention to sustainability-related capacity building in recent years:

• China: SASAC has organised training on environmental protection and low-carbon development for central SOEs.

• India: the Standing Conference of Public Enterprises (SCOPE) has introduced a climate change and climate action course for public sector employees with certified knowledge in this area (SCOPE, 2025[14]). SCOPE has also introduced a dedicated webpage, providing public sector enterprises with a single platform to access information on their climate initiatives, international developments on sustainability, climate action, and facilitating peer learning.

• Indonesia: the BUMN School of Excellence trains executives, including on sustainability and green innovation.

• Korea: the MOFE and the Ministry of Climate, Energy and Environment provide workshops and guidelines, including on climate risk management and carbon accounting.

• Singapore: the Enterprise Sustainability Programme provides training and support on sustainability capability development projects and innovation.

While many capacity-building initiatives are cross-sectoral, relatively few appear tailored specifically to SOE governance contexts. Developing SOE-specific training and technical support mechanisms could address issues particularly relevant to SOEs - such as aligning sustainability strategies with public policy objectives, managing trade-offs between commercial and non-commercial mandates, strengthening board oversight under state ownership, and integrating sustainability commitments into measurable enterprise outcomes.

References

[13] AREA (2026), Asia Responsible Enterprise Awards, https://enterpriseasia.org/area/.

[7] Bank Negara Malaysia (2025), Climate Risk Management and Scenario Analysis, https://www.bnm.gov.my/documents/20124/938039/PD_Climate+Risk+Management+Scenario+Analysis_17+March+2025.pdf (accessed on 10 October 2025).

[4] Digital Repository of Laws (2014), The Companies (Corporate Social Responsibility Policy) Rules, 2014, https://www.indiacode.nic.in/handle/123456789/1362/simple-search?query=The+Companies+%28Corporate+Social+Responsibility+Policy%29+Rules%2C+2014&searchradio=rules.

[12] Global Compact Singapore (2024), Meet the 2025 Winners, https://apexawards.unglobalcompact.sg/.

[1] IFRS (2023), IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information, IFRS Foundation, https://www.ifrs.org/issued-standards/ifrs-sustainability-standards-navigator/ifrs-s1-general-requirements/ (accessed on 21 August 2025).

[2] IFRS (2023), IFRS S2 Climate-related Disclosures, IFRS Foundation, https://www.ifrs.org/issued-standards/ifrs-sustainability-standards-navigator/ifrs-s2-climate-related-disclosures/#standard (accessed on 21 August 2025).

[11] Ministry of Energy Transition and Water Transformation of Malaysia (2026), National Energy Awards, https://www.nationalenergyawards.com.my/about-us-2/introduction/.

[3] OECD (2026), “State ownership and sustainability in Indonesia”, OECD Business and Finance Policy Papers, No. 98, OECD Publishing, Paris, https://doi.org/10.1787/130a7188-en.

[8] OECD (2025), OECD Corporate Governance Factbook 2025, https://doi.org/10.1787/f4f43735-en.

[5] OECD (2025), State-Owned Enterprises and Sustainability: Leading by Example, OECD Publishing, Paris, https://doi.org/10.1787/c99c7ef0-en.

[10] OECD (2024), Global Corporate Sustainability Report 2024, OECD Publishing, Paris, https://doi.org/10.1787/8416b635-en.

[9] OECD (2024), Remuneration of Boards of Directors and Executive Management in State-Owned Enterprises in Asia, OECD Publishing, Paris, https://doi.org/10.1787/2226583X.

[14] SCOPE (2025), SCOPE & GIZ launch certification course and dedicated webpage on Climate Change and Climate Action, https://scopeonline.in/climate-change/.

[6] Tong, P. (2020), “More policies and laws, is it better for biodiversity conservation in Malaysia?”, Conservation Science and Practice, Vol. 2/8, https://doi.org/10.1111/csp2.235.