Navigating the ESG Shift: How GRI and CSRD Are Reshaping Southeast Asia’s Corporate Landscape

Ibarahim Sohel
May 7
3 min read

The ESG Imperative: Why Southeast Asian Companies Must Act Now

Environmental, Social, and Governance (ESG) considerations have transitioned from optional to essential in global business operations. The European Union's Corporate Sustainability Reporting Directive (CSRD), effective from January 2024, mandates comprehensive ESG disclosures from companies operating within the EU, including non-EU entities with significant EU activities . This directive, aligned with the Global Reporting Initiative (GRI) standards, emphasizes a "double materiality" approach, requiring companies to report on how sustainability issues affect their performance and how their operations impact society and the environment.

The CSRD Ripple Effect in Southeast Asia

The CSRD's reach extends beyond Europe, impacting Southeast Asian companies with EU ties. Estimates suggest that over 10,000 non-EU companies, many from Asia, will need to comply with CSRD requirements . This includes firms with EU subsidiaries, significant turnover, or listings on EU-regulated markets.Financial Times+1Deloitte Italia+1 KPMG Assets

For instance, a Singapore-based electronics manufacturer supplying EU markets must now align its ESG reporting with CSRD standards. Failure to comply could result in restricted market access, legal penalties, and reputational damage.

Real-World Impact: Data and Trends

A KPMG survey indicates that 96% of G250 companies have integrated ESG reporting into their operations, with a significant number in Asia Pacific adopting impact modeling and scenario analysis . However, the complexity of aligning with CSRD's stringent requirements poses challenges. Many Southeast Asian companies are still adapting to these changes, highlighting the need for strategic ESG integration.

The Role of GRI: Facilitating Compliance

The GRI provides a globally recognized framework for sustainability reporting, aiding companies in meeting CSRD requirements. GRI's collaboration with the European Financial Reporting Advisory Group (EFRAG) ensures that its standards are compatible with the European Sustainability Reporting Standards (ESRS), facilitating smoother compliance for companies already using GRI guidelines.

Strategic Response: Adapting ESG Strategies

To navigate this evolving landscape, Southeast Asian companies should:

Conduct ESG Gap Analyses: Assess current reporting practices against CSRD requirements to identify areas needing improvement.
Engage ESG Consultants: Leverage expertise to develop compliant ESG strategies and reporting mechanisms.
Invest in ESG Reporting Tools: Implement digital solutions for efficient data collection, analysis, and reporting.
Train Internal Teams: Educate staff on ESG principles and reporting standards to foster a culture of sustainability.

Conclusion: Turning Compliance into Competitive Advantage

The Corporate Sustainability Reporting Directive (CSRD) poses both compliance challenges and strategic opportunities for Southeast Asian companies, especially those exporting to the EU. Meeting its rigorous requirements—such as double materiality and transparent ESG disclosures—can be demanding. However, by proactively adopting ESG strategies and aligning with global frameworks like the Global Reporting Initiative (GRI), companies can streamline their reporting processes and build credibility. This not only ensures compliance but also improves brand reputation, appeals to sustainability-conscious investors, and strengthens access to international markets. Embracing CSRD early positions Southeast Asian businesses as forward-thinking and competitive in the evolving global sustainability landscape.

References and Sources

GRI & CSRD Alignment Guide (Global Reporting Initiative)GRI: "The GRI-CSRD Essentials: How GRI and the CSRD Work Together"https://www.globalreporting.org/media/nchpzct5/gri-csrd-essentials.pdf
Deloitte Southeast Asia – CSRD Asia Pacific ImpactDeloitte: "How the EU’s CSRD Will Affect Companies in Asia Pacific"https://www.deloitte.com/southeast-asia/en/services/audit-assurance/perspectives/deloitte-esg-csrd-asia-pacific.html
KPMG Global ESG Reporting Survey 2024KPMG: "The Move to Mandatory Reporting: KPMG Survey of Sustainability Reporting 2024"https://assets.kpmg.com/content/dam/kpmg/ro/pdf/2024/the-move-to-mandatory-reporting-report.pdf
EFRAG – European Sustainability Reporting Standards (ESRS)EFRAG: "Draft ESRS – European Reporting Framework in Development with GRI"https://www.efrag.org/
Green Future Project – CSRD Visual GuideInfographic: “Understanding the CSRD: A Visual Guide”https://www.greenfutureproject.com/insights/csrd-guide
EFAMA CSRD Timeline InfographicEFAMA: “CSRD Implementation Timeline and Key Milestones”https://www.efama.org/newsroom/news/infographic-csrd-timeline
ESG Professionals Network – ESG Landscape InfographicOverview: “An Infographic of the ESG Reporting Landscape”https://www.esgprofessionalsnetwork.com/an-infographic-of-the-esg-reporting-landscape/