5.1.1 Legal Drivers    Along with economic development, several laws were enacted to deal with emerging social and environmental issues. The first version of the Company Law enacted in 1994 specifies labor rights in Articles 15 and 16. Subsequent legislation clarifies the responsibilities of firms in environmental protection, labor protection, and philanthropy. In 2006, Mainland China amended the Company Law and incorporated the concept of CSR into the law. More specifically, Article 5 of the law requires “a company should comply with the laws and administrative regulations, social morality, and business morality. It shall act in good faith, accept the supervision of the government and the public, and bear social responsibility.” To give enterprises incentives to engage in CSR, the Corporate Income Tax Law (2007) was introduced to allow the tax-deductible donations from 3 percent to 12 percent of annual profits.

5.1.2 Political Drivers    The Communist Party of China (CPC) plays an important role in leading Mainland China's government to promote CSR. In 2003, Outlook on Scientific Development was proposed at the Third Plenary Session of the 16th Central Committee, emphasizing the goal of socio-economic development as “putting people first and aiming at comprehensive, coordinated and sustainable development” (CPC Central Committee, 2003). In 2006, the concept of corporate involvement in promoting greater social responsibility was officially put forward by the Central Party Committee with the issuance of the Decision on Building a Harmonious Society.⁴⁴ The government then released the Guidelines for Corporate Responsibility Reporting in China.

At the suggestion of the State Council in October 2011, Mainland China's Corporate Social Responsibility Monitoring and Evaluation System released the document Strengthening Major Activities of Environmental Protection suggesting that Mainland China has put environmental protection in an important strategic position and continuously made progress in resolving environmental problems over past years.⁴⁵ In November 2013, social responsibility was announced as one of the eight focus areas for further reform for Mainland Chinese State-Owned Enterprise (SOEs) at the Third Plenary Session of the 18th Central Party Committee on comprehensive reform. In late 2013, the Third Plenary Session of the 18th Central Committee of the Communist Party of China (CPC) decided to focus on changes designed to “improve the development outcomes evaluation system; correct the tendency of evaluating social performance simply based on the economic growth rate; pay more attention to employment, income, social security, people's health status, environmental damage, ecological benefits, excess capacity…” On July 15, 2014, President Xi Jinping gave a speech at the Sixth BRICS Summit titled “New Start, New Prospect and New Impetus,” which called for the “unswerving promotion” of “sustainable economic growth.”⁴⁶

5.1.3 State-Owned Enterprises (SOEs)    Mainland China's SOEs are major players in the economy. Since the mid 1980s, many Mainland Chinese firms have been transformed from government entities to publicly traded SOEs. Mainland China's SOEs are under political pressure to comply with the official guidelines and are more likely to report their CSR performance. As the majority shareholder, the government controls and manages the SOEs through the State-Owned Assets Supervision and Administration Commission of the State Council (SASAC). In 2008, the SASAC issued the policy directive Guidelines to the State-Owned Enterprises Directly Managed under the Central government on Fulfilling Corporate Social Responsibilities. It also announced its Corporate Social Responsibility Guidelines for the Central Level State-Owned Enterprises to encourage them to participate in CSR reporting.⁴⁷ In 2009, during a meeting with the leaders of SOEs, the SASAC mandated all SOEs under their management to set up CSR mechanisms within their governance structures. By the end of 2012, the SASAC further mandated all SOEs under its supervision to publish their first CSR report if they had not already done so. This policy initiated the subsequent momentum that led to the release of more than 1,600 Mainland Chinese sustainability reports. Half of these reports were from SOEs or listed companies and they represented a significant jump from the 22 CSR reports issued in Mainland China between 1999 and 2005.⁴⁸

5.1.4 Multinational Corporations (MNCs)    MNCs have significant influence on CSR sustainability in Mainland China. Mainland China began to attract MNCs to invest in 1978. The Western CSR concepts that the MNCs brought into Mainland China have made significant contributions to Mainland China's CSR practices. MNCs included CSR requirements in screening and selecting their local partners and they launched the campaign for factory audits which generated wide attention. After Mainland China joined the World Trade Organization (WTO) in 2001, the impact of MNCs in influencing local firms' CSR performance accelerated with the increased number of MNCs operating in Mainland China.

Furthermore, MNCs influence the CSR practices of local Mainland Chinese partners through supply chain management. In 2006, 66 members of the Executive Committee of Foreign Investment Companies (ECFIC), a self-regulated organization for MNCs in Mainland China, issued a document entitled Beijing Declaration on CSR. Members of the ECFIC agreed to promote the MNCs' requirements for CSR in Mainland China and commit to the harmonious development of business and society through self-regulation on 12 issues including law, taxes, intellectual property, employment, employee rights, environmental stewardship, social welfare, corporate information disclosures and corporate citizenship. This initiative fostered the beginning among MNCs in Mainland China of the broadening of CSR practice beyond supply chain management. In 2007, more than 1,400 MNCs in Mainland China published a Written Proposal for Fulfilling Social Responsibilities which advocates compliance with regulations and laws, high product and service quality, employee protection, harmonious employment relationships, biological environment protection and energy conservation. Many fora, seminars and promotions focusing on CSR were held in Mainland China during this period. With numerous CSR awards being established, the general public's attitude toward CSR has gradually become more positive. Companies were enthusiastic about using CSR as a public relations tool to promote their images and brands. In September 2008, the Ministry of Commerce issued the draft CSR Guideline for Foreign Investment Companies, which set the foundation for MNCs' CSR practice in Mainland China.

5.1.5 CSR-Related Financial Institutions    Several CSR-related financial institutions and policies provide Mainland Chinese firms with incentive to engage in CSR by affecting their access to finance and financing costs. The Social Responsibility Investment (SRI) fund is a financial institution that enables access of a large amount of equity capital to qualified firms. In May 2006, the Bank of China started the first SRI fund in Mainland China, the Sustainable Growth Equity Fund. In March 2008, the Industrial Management Company offered the first SRI IPO, the Xingye SRI Fund, to Mainland China's investors. At the beginning of 2008, the Shenzhen Securities Information Company and the Tianjin TEDA Company created Mainland China's first SRI index, the TEDA Environmental Protection Index, which comprises the top 40 environmentally responsible firms listed on the Shanghai Stock Exchange (SHSE) and the Shenzhen Stock Exchange (SZSE). In August 2009, the SHSE also launched the “Responsibility Index,” which includes the top 100 socially responsible firms on the stock exchange. Sustainability-themed assets have attracted interest in Mainland China. These assets have grown 157 percent annually since 2014, from $450.9 million to $2.9 billion, with most of them related to clean energy.

Mainland China has been at the forefront of SRI business leadership and innovation with its environmental disclosure requirements for IPOs. In 2008, the Chinese Ministry of Environmental Protection (MEP) launched the “Green Securities” and “Green IPO” policies in partnership with the Mainland China Securities Regulatory Commission. These policies impose restrictions on companies in raising capital by requiring environmental record disclosures if they intend to be listed on the two stock exchanges. The regulations require enterprises in 14 polluting industries to go through an environmental assessment by the MEP before initiating an IPO or obtaining refinancing from banks. Within the first year of enacting the new rules, 20 out of 38 companies had their IPOs rejected or were subject to further assessment by the MEP.⁴⁹ With the issuance of its first corporate green bond in 2015, Mainland China has since become the world's largest issuer of climate-aligned bonds, according to the Climate Bonds Initiative (CBI), with US$36.2 billion in issuances in 2016.⁵⁰ The bulk of its unlabeled climate-aligned bonds are for the railway and transport sector. It is developing a green bond market and has turned to certification firms such as Deloitte, EY and Trucost for assistance.⁵¹ On August 26, 2016, the first eco-friendly asset-backed securities—the Green Asset-backed Securities of ABC Huiying-Goldwind Sci & Tech Wind Power Tolling Right and Income Right—were listed on the SHSE.⁵²

5.1.6 Active Stakeholders and NGOs    Two events prompted Mainland China's stakeholders to engage consumers and the public in actively monitoring firms' CSR activities. The Sanlu Milk scandal in 2008 made Mainland Chinese consumers more aware of their role in monitoring the quality of products and protecting their rights through litigation, petition and social media. Partially in response to public concern on food safety, the Mainland Chinese government undertook measures to improve food safety to restore the consumer confidence in public governance and Mainland Chinese food companies. In the same year, an 8.0-magnitude earthquake hit Sichuan and caused landslides and power failures. This natural disaster triggered rapid expansion and public awareness of CSR in Mainland China. Firms were rewarded for responding to the earthquake by giving donations quickly and generously.

NGOs also play an increasingly important role in Mainland China's CSR practice. Broadly speaking, there are two types of NGOs that foster CSR practices in Mainland China, namely, Mainland Chinese branches of international CSR NGOs and domestic CSR NGOs. A notable NGO is the Global Compact Network Mainland China, which was launched in 2009. By December 2017, there were 283 company participants. The organization commits to encourage Mainland Chinese enterprises to follow the Global Compact's 10 principles and promote sustainable development of Mainland Chinese companies. Other NGOs include the China Business Council for Sustainable Development and the Chinese Federation for CSR.

5.1.7 Stock Exchanges    The two stock exchanges in Mainland China promote CSR through setting and enforcing CSR disclosure standards for their listed companies. The Shenzhen Stock Exchange (SZSE) released the Guide on Listed Companies' Social Responsibility in 2006. In May 2008, the Shanghai Stock Exchange (SHSE) issued Guidelines of Shanghai Stock Exchange for Environmental Information Disclosure of Listed Companies and Notice on Strengthening Social Responsibility of Listed Companies, which require certain listed companies to disclose environmental information in a timely manner and encourage all companies to provide CSR reports along with their annual financial reports. The two stock exchanges mandated certain listed companies including the SHSE Corporate Governance Index firms, overseas-listed firms listed on the SHSE, financial firms listed on the SHSE and the Shenzhen 100 Index firms, to report ESG in December 2008.

5.1.8 Industry Initiatives    Some industries take initiatives to promote CSR in Mainland China. In 2007, the China Banking Regulatory Commission (CBRC) promulgated Recommendations on Strengthening Large Commercial Banks' Social Responsibilities,⁵³ which mandate Mainland China's large banks to comply with the principles under the UN Global Compact. CBRC also urged banks to consider a firm's CSR performance when making credit decisions by considering, for example, the Guidelines on Credit Underwriting for Energy Saving and Emissions Reduction issued in 2007.⁵⁴ The China National Textile and Apparel Council (CNTAC), a countrywide federation of textile-related industries, developed its first CSR management code, a Social Responsibility Management System—the China Social Compliance 9000121 (CSC 9000T), for Mainland China's textile industry. The standard facilitates textile firms to implement a CSR management system that complies with the related laws and regulations in Mainland China as well as with international standards. In April 2008, the Social Responsibility Guide of the China Industrial Companies and Industrial Associations was jointly released by 11 industrial associations (including coal, mechanics, steel, petroleum and chemicals, light industry, textiles, building materials, non-ferrous metals, electricity and mining industries) to guide the firms to comply with CSR standards.

5.2.1 Government Initiatives    The Hong Kong government commits to promoting various dimensions of business sustainability. In March 2003, the Council for Sustainable Development was established by the Chief Executive to enhance sustainable development by providing advice to the government on sustainability policies. In recent years, with increasing awareness of the importance of sustainability, the government has paid more attention to business sustainability, as evidenced by the 2017–2018 budget speech. For Green finance policy, the Financial Services Development Council's report issued in 2016 indicated that Hong Kong will dedicate itself to become a regional green finance hub.⁵⁵ This goal was reiterated by the present Chief Executive Carrie Lam in her 2017 policy address.

Several sustainability-related policies have been introduced by the government. For example, the Environmental Protection Bureau (EPB) introduced the Cleaner Production Partnership Programme in April 2008 to encourage and help Hong Kong-owned factories that have operations in Guangdong Province to employ cleaner-production management and practices. The program has organized around 390 cleaner-production technology advancement activities and approved more than 2,400 funding applications as of March 31, 2015. The program will provide an additional HK$150 million in a five-year plan that ends on March 31, 2020.⁵⁶ Another EPB-initiated environmental project, the Carbon Footprint Repository, was launched by the government to facilitate Hong Kong listed companies to report their carbon footprint and share their good carbon management practices in 2014.⁵⁷

5.2.2 NGO and Business Association Initiatives    Non-governmental organizations (NGOs) and business associations collaborate to promote the development of ESG in Hong Kong. Many organizations survey, rank and award companies according to their ESG performance and disclosure practices. These surveys and awards provide publicity and motivate companies to achieve international standards. NGOs and business associations have also been lobbying governments for legislative change.

Business associations such as the Hong Kong General Chamber of Commerce promote ESG activities and reporting by, for example, forming the Environmental and Sustainability Committee to study and advise the Chamber on issues relating to sustainability and their integration with ESG developments in Hong Kong.

The Sustainability and Integrated Reporting Advisory Group of the Hong Kong Institute of Certified Public Accountants (HKICPA) takes forward the integrated reporting concept. HKICPA also promoted the corporate governance dimension of sustainability by launching the “Best Corporate Governance Awards” in 2000, and the Awards have since become one of the most well-established corporate governance awards in Hong Kong. The primary objective of the contest is to encourage corporate governance practices and disclosures and to exemplify the best corporate governance practices in Hong Kong. To promote CSR disclosure in Hong Kong, HKICPA introduced the Sustainability and Social Responsibility Reporting (“SSR”) Awards to recognize and exemplify those firms with excellent performance in ESG reporting practices in 2011. The Best Corporate Governance Awards added a category of H-share companies in 2006 and extended the category to include other giant Mainland Chinese companies in 2012. So far, the Awards have six main categories and 20 possible awards pertaining to corporate governance.

Oxfam Hong Kong leverages Oxfam's worldwide capacity and local expertise to mobilize the power of people against poverty. Since 2004, Oxfam Hong Kong has been promoting the integration of ESG into corporate policies and business operations in Hong Kong. Oxfam Hong Kong conducted three pioneering studies in 2008, 2009 and 2016, respectively to evaluate the CSR performance of the Hang Seng Index (HSI) constituents by analyzing the implementation of CSR initiatives in their respective companies. These companies constitute the top-90th percentile of the total market capitalization and the top-90th percentile of the total turnover on the Hong Kong stock market. The HSI constituents provide a solid role model for the other listed companies to follow.

CarbonCare InnoLab (CCIL) is a Hong Kong-based independent NGO committed to responding to the climate change and sustainability challenges by nurturing and promoting innovative solutions, policies and practices. In 2011, CCIL launched two carbon-related awards for listed and private companies and public organizations with excellent performance in carbon management (CarbonCare® Label) and pioneering carbon reduction actions (CarbonCare® Action Label). In 2016, in response to tighter ESG reporting requirements, CCIL added the CarbonCare® ESG Label series to recognize those organizations with high performance in ESG reporting.

The Caring Company Scheme was initiated by the Hong Kong Council of Social Service (HKCSS) in 2002 with the aim of promoting corporate citizenship and a more inclusive society. From the first year of its establishment, the scheme awarded 259 companies with the Caring Company logo. In 2017–2018, the scheme awarded around 3,700 organizations. In addition to promoting organizations' social responsibility by awarding the Caring Company logo, HKCSS also established the HKCSS CSR Institute in December 2010 to provide a platform for promoting knowledge and practice of CSR through a series of training and sharing activities. The Institute attempted to incorporate innovative CSR practices such as ISO 26000 and the GRI G3 Guidelines into their training programs.

Other local non-governmental and governmental initiatives have been established to promote ESG practices in Hong Kong. Such organizations are the Hong Kong CSR Charter established by Community Business, the Corporate Citizenship Programme launched by the Hong Kong Productivity Council and the Carbon Reduction Charter of the Hong Kong Environmental Protection Department. Independent thinktanks such as Civic Exchange also promote ESG by publishing research papers, engaging stakeholders and educating the public.⁵⁸

5.2.3 ESG Funds and Green Finance    The availability of ESG funds is limited in Hong Kong. According to the Securities and Futures Commission, as of 2017 there are only four ESG funds out of more than 2,000 listed funds in Hong Kong.⁵⁹ Three of the funds are international (BNP Paribas' Parvest Sustainable Equity High Dividend Europe Classic-Capitalization; Allianz Global Sustainability A EUR; UBS (Lux) Equity SICAV – Emerging Markets Sustainable (USD) P-acc), with one local fund (Hang Seng Corporate Sustainability Index A HKD). The latter primarily invests in Hang Seng Corporate Sustainability Index constituent firms. Several institutions started to consider allocating funds to ESG-related investment. For example, the South China Morning Post reported that the Hong Kong Monetary Authority, managing the around HK$3.99 trillion (equivalent to US$0.52 trillion) Exchange Fund, considered ESG to be an important factor for its investment analysis processes.⁶⁰ According to the same report, the Hospital Authority Provident Fund Scheme estimated that more than 90 percent of its assets of more than HK$58 billion (equivalent to US$7.54 billion) were managed by funds that are signatories of the Principles of Responsive Investment. In 2018, the Hong Kong Special Administrative Region (HKSAR) government announced its plan of issuing HK$2.5 million (equivalent to US$319,428) green bond, indicating the government's desire to promote green finance in the future.⁶¹ The increasing amount of money allocated to ESG funds will provide incentives for Hong Kong firms to engage in CSR activities to have better access to financing.

5.2.4 Stock Exchange    The Stock Exchange of Hong Kong (HKEX) has long recognized the trend of CSR/ESG practices and reporting. In 2003, Prof. Judy Tsui and Prof. Ferdinand Gul conducted three consultancy reports as part of company law reform for the Treasury and Financial Services Bureau of the Hong Kong government titled Survey on International Institutional Investors' Attitudes toward Corporate Governance Standards in Hong Kong, Roles and Functions of Audit, Nomination and Remuneration Committees and Survey on the Corporate Governance Regimes in Other Jurisdictions, which formed the basis for corporate governance reform including CSR in the Hong Kong listing rules. To promote awareness of ESG, the HKEX sponsored several free seminars and workshops on ESG disclosures for listed companies in 2011. 823 delegates from 498 HKEX listed companies and 518 representatives from 348 HKEX listed companies attended the seminars and workshops. The HKEX then drafted the ESG Reporting Guide,⁶² provided a reporting toolkit and made other ESG reporting-related information public to facilitate issuers in preparing ESG reports. In 2015, the HKEX issued a consultation paper on the review of the environmental, social and governance reporting guide to the public to solicit opinions on the report. After completing the consultation, the HKEX issued the ESG guide in its listing rules and mandated issuers to provide ESG reports based on a “comply-or-explain” approach, commencing 1 January 2016.

5.3.1 Legal Driver    The 2013 Companies Act (“the Act”) governs CSR in India. The Act and the CSR (policy) Rules came into effect on April 1, 2014. The Ministry of Corporate Affairs (MCA) is responsible for the enforcement of the Act and its regulation.⁶³ The Act requires that Indian companies with an annual turnover of more than 1,000 Crore INR (equivalent to US$150,000,000), a net worth of more than 500 Crore INR (equivalent to US$75,000,000) or a net profit of more than five Crore INR (equivalent to US$750,000) in a financial year should spend 2 percent of their net profits on CSR programs. The Act also requires Indian companies to form CSR committees consisting of corporate board members with at least one independent director to deal with CSR affairs.⁶⁴

5.3.2 Civil Society    Civic engagement in India played an important role in the political struggle for independence in 1947 while Indian women first came out into the public to fight against British colonial power. Beginning in the 1960s, civil society organizations (CSOs) began to be recognized as service providers with financial support from the government in the form of grants. During the post-independence period (from 1947), India emerged with a mixed economy, with a very wealthy sector alongside serious poverty issues. The State Governments of India had to deliver development services to the poor through CSOs. During the 1980s and 1990s, the public expected business and industry associations to contribute more toward social welfare and narrow down the wage gap.⁶⁵

In today's India, over 3 million CSOs and social movements are facilitating socio-economic, political and cultural development and playing a vital role in promoting, protecting and strengthening CSR issues such as human rights and environmental protection.⁶⁶ However, the civic space is constrained by government interference with freedom of association and speech.⁶⁷ Although many CSOs can provide CSR services, the protection of human rights, the prevention of sexual harassment and the freedom to express of diverse views are shrinking.⁶⁸

5.3.3 Standards and Codes of Conduct    Established in 1987, the Bureau of Indian Standards (BIS) is the national standard setter of India, committing to standardization, certification and testing activities with the aims of ensuring the supply of safe and quality goods, reducing public health hazards, promoting exports and import substitutes, etc. In 2017, BIS' Management and Systems Department organized a National Seminar on Good Governance in CSR to formulate CSR standards. It was the first step toward framing and implementing a good Guidance Standard for integrated and sustainable socio-economic and environmental growth in India.⁶⁹

5.3.4 Socially Responsible Investment    India has a limited domestic SRI market in the listed equity domain. The first SRI fund (ABN AMRO Sustainable Development Fund) in India was launched by ABN AMRO in March 2007 and raised the equivalent of approximately US$12 million. After the break-up of ABN AMRO in 2008, the fund is now managed by Fortis Bank. Launched in January 2008 by Standard & Poor's and other research teams, the S&P ESG India Index is the first investable index of companies which produces a score for environmental, social and governance (ESG) disclosure practices in the public domain.⁷⁰ The Indian SRI market includes both domestic and global SRIs although the global SRIs have a dominant market share.

According to a 2017 Oxfam report, 95 global socially responsible funds have invested in India with an average 18.5 percent of their funds allocated to Indian companies (total fund size is around US$78 billion). There are 41 Global Environmental & Social (E&S) seeking funds (total funds of around US$67 billion), which are global funds based on integrating ESG criteria that have invested an average of 25 percent of their funds in Indian equities. However, the Indian ethical funds underperformed when compared to the other two SRI funds (Global E&S seeking funds and global socially responsible funds).⁷¹ On May 30, 2017, the Securities Exchange Board of India (SEBI) released the Disclosure Requirements for Issuance and Listing of Green Bonds, which helps to attract investments from capital markets for funds in the renewable energy area.⁷²

5.3.5 The Scheduled Castes and Scheduled Tribes (SC/ST) Communities    The SC/ST communities in India are the historically disadvantaged socio-economic groups. The SCs have been at the bottom of the Hindu social hierarchy with limited opportunities for social mobility and growth. The STs live in and around forest areas with severe challenges of socio-economic mobility. The SCs/STs, even after years of government initiatives and subsidies, remain the two most backward communities in India.⁷³ The government of India has made progress to improve the situation of the SCs/STs by enacting legislation and regulations related to education, financial support and skills training, and established special courts aimed at preventing atrocities and violence.⁷⁴

5.4.1 Legal Driver    Several laws stipulate firms' social and environmental obligations in Indonesia.⁷⁵ The State-Owned Enterprises Law (Law No. 19/2003) mandates SOEs to be active in helping small and medium-sized enterprises (SMEs), cooperatives and the people, and these spend 2 percent of their profits on CSR. The Investment Law (Law No. 25/2007) defines CSR and specifies investors' responsibility with respect to CSR. The Limited Liability Companies Law (Law No. 40/2007) is the first law imposing a CSR obligation on limited liability companies in the natural resources industry and/or related industries. This law also requires firms to allocate funds to implement CSR and allows firms to account for the expenditure in their financial statements.

5.4.2 SRI and Sustainability Lending    In 2009, the Yayasan Keanekaragaman Hayati Indonesia (KEHATI), known as the Indonesian Biodiversity Foundation, collaborated with the Indonesian Stock Exchange (ISE) to launch the KEHATI SRI Index, the first in Indonesia. The KEHATI SRI Index selects 25 companies based on their performance in six categories including social, environmental and corporate governance. In addition to the SRI index, other SRIs also contribute to the development of green finance in Indonesia. According to the United Nations Environment Programme (UNEP), the assets managed by sustainable investment funds in 2014 are double those of 2011 and reached US$1.14 billion.⁷⁶

The Bank Indonesia Act (10/1998) mandates banks to assess environmental impact in making decisions to grant large or high-risk loans. The Bank Indonesia Act promulgates Regulation No. 7/2/PBI/2005, requiring banks to assess the “measure[s] taken by the debtor to conserve the environment” in their credit-granting decision. In addition to legislation and regulation effort, Bank Indonesia takes initiatives to develop green credits by organizing workshops for bank officials, developing green-lending guidelines and conducting studies. Despite these effort, banks' green financing made up around 1.37 percent of total bank financing in 2013. In recognition of this, the Indonesian government began to take measures to develop sustainability financing. In 2014, the Financial Services Authority of Indonesia (Indonesian: Otoritas Jasa Keuangan or OJK) initiated a Roadmap for Sustainable Finance in Indonesia, outlining a development plan for sustainability financing for 2015–2019.

5.4.3 Private Initiatives

5.5.1 Exports    Japan is the fourth largest export economy in the world. With a large middle-class consumption base, Japan is a major consumer and producer of goods and services and has an important commercial presence in global markets. Japan's technology and manufacturing-related industries play leading roles in the global economy and global supply chains.⁸⁶ In 2016, Japan exported US$605 billion and imported US$583 billion, resulting in a positive trade balance of US$21.6 billion.⁸⁷ Because of its international trade status, companies in Japan are willing to engage in socially responsible activities because they anticipate benefits from these actions, such as improved global reputation leading to higher prospects and ability to charge a premium price. These benefits would have the potential to offset the additional costs associated with CSR compliance. Indirectly, it is widely accepted in Japan that CSR is positively related to export performance.⁸⁸

5.5.2 Influence from Western Countries    The basic form of CSR has been influenced by principles of liberal and democratic rights, justice and social structures in the United States and Europe.⁸⁹ In Japan, the impact of Western influence on CSR can be summarized as follows.

5.5.3 Socially Responsible Investment    In recent years, the relationship between CSR and corporate financial performance especially in the field of social responsibility investment (SRI) has received considerable research and attention.^90,91 The UK Investment Forum specifically defines SRI as “investments enabling investors to combine financial objectives with their social values.”⁹²

The origin of SRI in Japan can be traced back to 1999. At that time, Japan set up many “eco-funds” to enable investors to invest in environment friendly enterprises and investors responded enthusiastically. By December 2007, the value of these funds' equity investments had reached 1.12 trillion yen (around US$0.01 trillion). As a result, the Social Investment Forum (SIF), a non-profit organization whose mission is to promote the development of SRI in Japan, was founded in 2003. In the same year, many large companies began to establish special departments dedicated to promoting activities related to CSR, overseeing the preparation of environmental sustainability reports and promoting stakeholder participation. Morningstar Japan launched its first Japan-specific SRI index, named MS-SRI. In August 2009, the Japanese Ministry of the Environment announced a plan to develop guidelines specifically for environmental finance with the aim of increasing eco-conscious investment and the practice of environmental finance.⁹³

Four key actors can be identified in the Japanese SRI field, namely SRI research organizations, SIF Japan, financial institutions and stock listed companies. SRI organizations and Japanese companies have worked together in developing SRI in Japan despite both groups having different motives for their actions. Japanese companies tried to regain trust by adopting socially responsible practices while the SRI organizations use the Japanese companies to evaluate the role and importance of SRI development in Japan through mobilizing CSR debate and enhancing CSR disclosure. Japanese companies were also driven to adopt sustainable practices by the media and coverage and promotion of these activities increased drastically in 2003; by 2005 media attention became the prime driver of CSR reporting.^94,95

5.5.4 Legal Drivers    In late 1993, the Japanese government passed the Basic Environment Law. This law set forth the responsibility of the central and local governments, corporations and the public to preserve the environment. The issuance of the Environmental Reporting Guidelines in 2000 and the Environmental Accounting Guidelines in 2005 by the Ministry of Environment urged businesses to implement environment awareness practices and invest in environmental protection.

In the past two decades, multiple government departments such as the Ministries of the Environment, Economy, Trade, Industry, Health, Labor and Welfare issued a series of laws and regulations on CSR and environmental responsibility and guidelines for voluntary compliance. Because Japanese society is not the same as Western societies, the Japanese government has opted for the use of voluntary guidelines and recommendations to regulate CSR activities to ensure a cooperative relationship between the company and the government.⁹⁶

5.5.5 Political Drivers    For a long time, the Japanese government has been keen to promote the development of CSR. In recent years, the government of Japan has taken various comprehensive measures to build a society with sustainable development through the improvement of environmental, economic and social conditions. The government was working to build an inclusive and participatory society that would enable every citizen to realize his or her full potential.

On May 20, 2016, the Japanese government established a new cabinet body entitled “SDGs Promotion Headquarters,” headed by the Prime Minister and composed of all sectoral ministers. The SDGs Promotion Headquarters promotes close cooperation between relevant ministries and government agencies and serves as a control center for the full and effective implementation of measures related to the sustainable development goals. In December 2016, the agency adopted a set of guiding principles for the implementation of the sustainable development goals. Under the guiding principles, Japan established the vision to “become a leader toward a future where economic, social and environmental improvements are attained in an integrated, sustainable and resilient manner while leaving no one behind.” The Japanese government's goals were to serve as a model for the world in building sustainable development and to continue to work with other countries to build sustainable societies around the world.⁹⁷

5.5.6 Stock Exchange    The Japan Exchange Group, Inc. (JPX) was established by the merging of the Tokyo Stock Exchange Group and the Osaka Securities Exchange on January 1, 2013.⁹⁸ JPX has been involved in the formation of Japan's Corporate Governance Code, the launch of several innovative fund markets, the building of sustainability structures such as the ESG and exchange-traded funds (ETF)-related indices and the recognition of outstanding companies that have promoted employee health, productivity and women's empowerment. JPX seeks to work with other exchanges globally on sustainable stock exchange initiatives as well as to promote Japan's development.⁹⁹

5.6.1 Public Initiatives    The function of Korea Smart Grid Institute (KSGI) is to implement the government's Smart Grid Roadmap. The Institute establishes the technological test-bed¹⁰⁰ and complies with the policy for smart grid-related issues¹⁰¹ to implement the vision of Green Growth, Low Carbon¹⁰² initiated by former President Lee Myung-Bak. From 2015 to 2016, the International Smart Grid Action Network (ISGAN) sponsored a series of functions to promote smart grid in line with international sustainable energy policy. In 2016, ISGAN and the Global Smart Grid Federation (GSGF) jointly hosted the ISGAN Award of Excellence annual competition, which focuses on the topic of “Excellence in Smart Grids for Renewable Energy Integration.”¹⁰³

The Korean Agency for Technology and Standards (KATS) is a government agency as well as an active member of the International Organization for Standardization (ISO), the International Electrotechnical Commission (IEC) and the Portable Application Standards Committee (PASC) of the Institute of Electrical and Electronics Engineers (IEEE). KATS contributes to South Korean companies' technological infrastructure development and product safety.¹⁰⁴ KATS established the Good Recycled program with the objective to transform recycled goods into high-quality green products.¹⁰⁵ In 2016, KATS monitored more than 4,500 electrical and children's products in South Korea. KATS cooperates with the Korea Product Safety Association (KPSA) and NGOs to jointly monitor and strengthen the recall policies for unqualified products.¹⁰⁶ The IEC-IEEE-KATS (International Electrotechnical Commission-Institute of Electrical and Electronics Engineers-Korean Agency for Technology and Standards) launched a project called Future Challenges in Standardization in 2018, focusing on the future challenges of technologies, environment and standardization.¹⁰⁷

5.6.2 Private Initiatives    The Federation of Korean Industry (FKI) is committed to globalization, development of CSR, and maintaining an improved socio-economic climate domestically and globally. In 2014, FKI established the Committee on Corporate Philanthropy with the theme “Effective Communications in Corporate Philanthropy.” FKI also operated the CSR Academy in 2014. In 2015, FKI held a CSR conference at the FKI Tower Conference Centre.¹⁰⁸ FKI also conducted a study to investigate the CSR activities of major South Korean businesses. This study revealed that South Korean corporates had focused their philanthropic activities only on art and culture until the 1990s. Today, South Korean businesses are investing in CSR activities which are concerned with public interest and popular culture.¹⁰⁹

5.6.3 Non-Government Organizations    The Korean Federation of Environment Movement (KFEM) launched the Sustainable Management and Investment Guideline (SMILE) to promote CSR practices at the level of the firm. The Global Compact Korea Network (GCKN) engages with companies' CSR performance in areas such as human rights, labor standards, environmental protection, and anti-corruption. GCKN contributes to organizing the Global Compact China-Japan-Korea Roundtable Conference (2009), which promotes CSR issues in South Korea.¹¹⁰

5.6.4 Socially Responsible Investments    The National Pension Service (NPS) established SRI-friendly investment infrastructure in South Korea. SRI trustee investment is around 5.13 trillion won (around US$4.57 billion), which accounts for more than 70 percent of total SRI in South Korea. SRI public offering funds have a total net asset of 1.63 trillion won (around US$1.44 billion). SRI exchange-traded funds (ETF) maintain a total value of 13.9 trillion won (around US$12.37 billion) in South Korea.¹¹¹ The value of South Korean SRI was estimated at US$8 billion in 2013, which was lower than Hong Kong and Malaysia but higher than Indonesia, Mainland China and Singapore among Asian jurisdictions.¹¹²

5.7.1 CSR Disclosure for Companies    The Malaysian government is one of the few in Asia to enact CSR reporting requirements for PLCs (Public Limited Companies). Since the inception of the GRI in 1999, 16 different Malaysian companies have published GRI reports (by July 2012).¹¹⁶ Although the continuous effort by the Malaysian government to protect the natural environment started in the 1980s, social and environmental reporting was made mandatory only in 2006. With this legislation, effective for annual reports for the year ending 2007 onwards, companies listed on Bursa Malaysia (BM) (Malaysian Stock Exchange) must include information on four focal areas of CSR, namely community, workplace, employees and environment.¹¹⁷ In 2012, a PwC survey covering over 700 companies from Malaysia, the Philippines, Indonesia, Thailand and Vietnam showed that nearly 80 percent of Malaysian companies report some form of sustainability, mostly due to the regulations set by Bursa Malaysia for all public listed companies to disclose their sustainability activities in their annual reports. It also highlighted that Malaysian companies scored high in terms of compliance with regulations and meeting customer demands.¹¹⁸

While making CSR disclosure mandatory is indeed a step in the right direction, enforcement is important so that CSR disclosure is not undertaken merely to comply with legal requirements.¹¹⁹ The concept of accounting “substance over form” is particularly relevant here. CSR Asia conducted an analysis of media reporting and concluded that CSR is still seen largely as philanthropy rather than as a necessary social obligation (CSR Asia, 2009). In addition, the Malaysian Association of Chartered Certified Accountants (ACCA) in conjunction with their 2007 Malaysia Environmental and Social Reporting Awards (ACCA, 2007) revealed that companies are overly focused on philanthropic activities (UNICEF Malaysia, 2012).¹²⁰ Although there are different annual award programs in Malaysia to recognize the CSR contribution of local businesses, the practice of CSR still has room for growth beyond philanthropy.

Malaysia is lagging behind in terms of environmental disclosure practices when compared to other Asia-Pacific countries. There are insufficient campaigns and promotions to raise awareness among local companies of activities regarding the environment. Lack of a recognized disclosure framework and the high cost of disclosure are other reasons to account for low levels of environmental disclosure.¹²¹ The Malaysia Accounting Standard Board (MASB) does not provide a precise standard and guidelines on environmental disclosure. According to Paragraph 10 of FRS 101, the Presentation of Financial Statements, companies are encouraged to prepare environmental reports in addition to their financial statements (Buniamin, 2010).¹²² There is also a requirement under the Malaysian Environmental Quality Act 1974 that provides guidelines for Malaysian companies in managing their disclosure on environmental sustainability. Section 33A of that Act, on environmental audit, and Section 34A on impact on the environment, are the only guiding principles for companies on disclosure on environmental sustainability (Bursa Malaysia, 2012). However, what information to disclose is to be decided by the company.

5.7.2 CSR Initiatives    As a result of several environmental challenges and corporate misconduct cases in Malaysia, the importance of extending firms' accountability to all stakeholders and acting in a socially responsible way in all areas of business activity has increased. Several initiatives have been taken by the government to enhance the development of CSR reporting in Malaysia.

5.7.3 Government Initiatives    In Malaysia, the government has been the main driver in pushing the CSR agenda since the 1997 Asian Financial Crisis. Corporate Governance (CG) reform, followed by financial sector reform and a National Integrity Plan, are all measures that sought to encourage the business sector to embrace CSR. Most recently, the government published the Silver Book, a guide for government-linked companies on how to articulate and manage a company's social obligations.

To continuously promote CSR, policymakers converged in 2004 to create a new Ministry of Energy, Green Technology and Water to further buttress their support of environmental sustainability protection. The Ministry's primary function is to facilitate and regulate the growth of industries in these sectors to ensure the availability of high-quality, efficient and safe services at a reasonable price to consumers throughout the country.¹²³

5.7.4 Companies Commission    The Companies Commission of Malaysia also known as Suruhanjaya Syarikat Malaysia (SSM) under the purview of the Ministry of Domestic Trade, Co-operatives & Consumerism is a statutory body that regulates companies and businesses in Malaysia. The SSM launched its Corporate Responsibility Agenda (CR Agenda) on June 30, 2009; this aims to instill corporate responsibility into the corporate culture of Malaysian businesses and to promote good corporate governance through national agendas such as:

• The Ninth Malaysia Plan, which includes the promotion of ethical business practices and CR programs toward improving the state of national corporate governance.
• The National Integrity Plan, whose strategic objective is to improve corporate governance and business ethics, which are all linked to CR.
• Increase of the tax ceiling for tax deductions from 5 percent to 7 percent of aggregate income on contributions made by the private sector to charitable organizations and imposition of the requirement for publicly listed companies to report their CR initiatives in their annual financial reports.¹²⁴

5.7.5 Socially Responsible Investing    The establishment of “Dana Al-Aiman” by ASM Investment Services is regarded as the first ethical fund in Malaysia.¹²⁵ In 2003, Maybank Management Bhd launched the first SRI fund, “The Mayban Ethical Trust Fund,” in Malaysia. In 2006, Prime Minister Abdullah Badawi announced in his Budget speech that all listed companies in Malaysia are required to disclose CSR, and that government-linked fund companies, including the Employee Provident Fund, are required to take CSR performance into account in their investment decisions. To further provide finance for SRIs, the Securities Commission Malaysia (SC) introduced the Sustainable and Responsible Investment (SRI) Sukuk framework. The introduction of an ESG index by Bursa Malaysia Bhd in 2014 further enhanced the SRI framework in Malaysia. Malaysian SRIs are among the key players in the Asian SRI market. According to the Global Sustainable Investment Review 2016, Malaysia has the largest SRI share (30 percent share) in Asia (excluding Japan).¹²⁶

5.7.6 CSR Awards    Awards are given for exceptionally good practices in the area of CSR to encourage businesses to practice and report CSR activities, including the impact of their business operations on the environment and the society they operate in, and to raise awareness of corporate transparency issues. These awards include:

1. Association of Chartered Certified Accountants (ACCA) Malaysia Sustainability Reporting Awards (MaSRA). The MaSRA award has been in existence since 2002. Its primary objective is to encourage both private and public businesses in Malaysia to embrace sustainable practices and reporting to enhance business performance.
2. Prime Minister's CSR Award for the recognition of companies that have contributed positively to their communities through CSR programs.¹²⁷
3. StarBiz-ICR Malaysia Corporate Responsibility Award, which encourages and promotes the importance of responsible business practices in Malaysian companies.

The Prime Minister in his 2007 Budget Speech announced that private sector contributions to the community would be recognized and awarded through the Prime Minister's CSR Awards Sponsorship. CSR awards given at top government level is a significant recognition of the impact that the business sector can have on the community.¹²⁸

5.8.1 Political Drivers    The Philippine government has been making unremitting efforts to promote the development of CSR in the Philippines, where volunteerism is the most important element of CSR. In 1964, the Philippine government established the Philippine National Service Committee through Executive Order No. 134. After years of business and civic support, the committee developed into the Philippine National Volunteer Service and Coordinating Agency in 1980.

“Encouraging businesses to create their own CSR projects” is part of the Corporate Citizenship Program of the National Development Governance Project in the Philippines. The project aims to enhance Filipino citizens' understanding of globalization and CSR issues, and the ability of corporate citizens to better implement CSR in enterprises in a globalized environment. The project was integrated into other projects from 2002 to 2004 (elections, justice, anti-corruption, economic management and civil service, the right to development, globalization, decentralization and local governance reform and governance reviews).¹²⁹

To further promote the development of CSR in the Philippines, the Philippine government recently issued a tax code to provide incentives related to CSR. These incentives include:

• A limited or full deduction of income tax on contributions (Section 29)
• Abolition of inheritance tax (Section 80d)
• Abolition of donor's tax (Section 94a(3))

5.8.2 Stock Exchange    The activities of the Philippine Stock Exchange (PSE) have had a great impact on the social and economic development of the country as well as on the promotion and practice of CSR in the Philippines. Since 1995, the PSE has been committed to participating in and developing a variety of public welfare activities and community services. The PSE joined the Philippine Business for Social Progress (PBSP) and became an active member. The PSE has been supporting projects for various social welfare activities in cooperation with the PBSP. In order to popularize and deepen the significance of CSR in the Philippines, the PSE Foundation, Inc. (PSEFI) was founded on November 10, 1995. Since then, PSEFI, PSE's right hand in CSR, has been designed to help the more vulnerable members of society and to provide them with a variety of basic services. PSEFI's accession to the League of Corporate Foundations in April 1997 further strengthened its commitment to social service.¹³²

In recent years, PSE has developed laws and guidelines related to CSR to assist enterprises in practice and application of CSR. In 2007, PSE published the Interpretation of the Suitability Rule of the Exchange. In this guidance, the PSE provides recommendations for the sustainability of enterprises.¹³³ In 2017, the PSE also issued the Corporate Governance Guidelines for Listed Companies. The PSE requires enterprises to respect and protect the rights and interests of employees, communities, the environment and other stakeholders and to formulate plans related to the community and environment.¹³⁴

5.8.3 Socially Responsible Investment    Compared with other countries, the SRI market in the Philippines is still in its infancy, and there is not much information on the development of SRI in this country. Therefore, it is difficult to identify active SRI investors and ESG-related personnel in the market. To promote SRI in the Philippines, the government and other relevant organizations have taken a number of initiatives to meet the sustainable development needs of the country. Measures have focused on investing in infrastructure sensitive to climate change and local community as well as on improving the financing channels for SMEs.

Despite the above, the Philippines Investment Alliance for Infrastructure (PINAI) Fund was set up in 2013 and managed by Macquarie Infrastructure and Real Assets. This was the first dedicated infrastructure fund jointly financed by the government Service Insurance System, the Asian Development Bank, Algemen Pensionen Groep of the Netherlands and Macquarie Group. PINAI aims to fund businesses and projects linked to equity to promote sustainable growth in the country. An integrated Environmental Social Management System will safeguard the environment, prevent involuntary resettlement and protect local people.

In addition, two of the largest financial institutions in the Philippines, an integrated Environmental Social Management System (ESMS), and the Land Bank of the Philippines have launched several green industry financing programs for SMEs and local government units. The Bank of the Philippine Islands works with the International Finance Corporation to provide low-carbon investment programs for SMEs. This initiative is important in building a sustainable growth model for the Philippines.¹³⁵

5.9.1 Economic Drivers    As Singapore becomes the region's economic powerhouse, it has increasingly recognized the importance of CSR to enhance its export competitiveness, economic dynamism and productivity through innovation, enterprise, competition, skills and investment. Singapore is an industrialized economy which is dependent on trade with continuing expansion in the international markets. It is natural to promote CSR that is closely related to Singapore's export-oriented economy and the direction of its future development. CSR can be seen as a good marketing strategy to enhance its international image and a means to avoid excessive economic costs. Consequently, Singapore companies are under pressure from international partners and exposed to regulatory risk, and must avoid reputational damage caused by socially irresponsible activities. In this context, Singapore makes great efforts to promote CSR to maintain its export competitiveness and to adhere to global standards such as ISO 26000 and to be compatible with Western companies' requirements.¹³⁶

5.9.2 Political Drivers    The government of Singapore see itself as a catalyst and practitioner of CSR. On the environmental front, the government of Singapore made a strategic choice to build the country in the form of a Garden City when it became independent in 1965. In order to protect the natural environment, the Singapore government has envisioned a green environment by building abundant parks and gardens and cleaning up rivers and waterways. In addition to these, it has been encouraging its citizens to conserve water and energy as scarce resources. The strategy is reflected in a carbon tax that the government recently announced in its 2017 budget, which will become effective in 2019.¹³⁷

At the corporate level, the government of Singapore allows autonomy for local enterprises to develop their own CSR initiatives. The government considers carefully the recommendations and views expressed by various sectors of the community on any implementation of CSR. The intention of the Singapore government is to identify the latest corporate standards of conduct, the legal effects of which are based on voluntary compliance with a minimum level of government intervention. In Singapore, corporate self-regulation is achieved through complementary mechanisms including domestic and international social and market forces, industry norms and, to a lesser extent, legal liability.¹³⁸

5.9.3 Financial Institutions and Stock Exchange    Sustainability has become a key factor for companies to ensure successful long-term value creation and investors have increasingly called for greater transparency in the environmental, social, governance and CSR practices of listed companies.¹³⁹ In this context, the Singapore Exchange (SGX) has committed to improving corporate governance and promoting environmental and social initiatives in Singapore. In June 2011, SGX launched the Sustainability Reporting Guide with a view to promoting greater disclosure of environmental, social and corporate governance issues by listed companies on the SGX.¹⁴⁰ In 2017, SGX introduced a “compliance or interpretation” system for sustainable development reports, requiring listed companies to disclose and explain their sustainability practices, which became effective in 2018. In addition, SGX has shown great interest in Singapore's green bond market, including the introduction of the Green Bond Grants Scheme, which was launched in March 2017 by the Monetary Authority of Singapore (MAS).¹⁴¹

Local banks in Singapore have been playing an important role in promoting CSR and ESG. In 2015, the Singapore Banking Association issued guidelines for responsible financing. Over the next few years, Singaporean banks are expected to assess customer ESG risks as part of the credit evaluation process. The Monetary Authority of Singapore (MAS) contacts senior management and the board of directors of local banks to promote the full adoption of industry standards and enhanced ESG disclosure by enterprises. Specific measures include completing the ESG assessment of all its corporate customers and enhancing ESG disclosure through peer reviews and industry best practices.¹⁴²

With increasing attention to climate and environmental risks, Singapore's insurance industry began to attempt to quantify and model such risks. Research and analysis are conducted by the Institute of Disaster Risk Management (ICRM), Nanyang Technological University, Singapore (NTU) and the Singapore Observatory, as well as insurance brokers and risk model firms at the National Disaster Research Centre (NDRC). The research and development projects include finding solutions for disaster risk financing. ICRM, for example, is leading a project to establish a database for the analysis and exchange of data on natural disasters with the aim of creating a comprehensive and interactive database on the economic losses of natural disasters. In the coming years, participants in the Singapore insurance industry will be expected to consider environmental risks in their own risk and solvency assessments. Key players are breaking down ESG into investment and underwriting processes and supporting climate risk recovery solutions from Singapore.¹⁴³

5.9.4 Socially Responsible Investment    Socially Responsible Investment (SRI) funds in the United States and Europe are growing steadily with more than US$4 trillion under management in 2005–2006. In order to diversify the portfolio, interest in the sub-fund in the Asian region has been increasing annually. The FTSE4Good index, one of the global sustainability indicators, was first registered in Singapore in 2007. In 2008, a large European bank arranged for an SRI analyst to analyze for the first time the environmental, social and governance performance of Asian companies in Singapore. In recent years, the SGX has become aware of the potential impact of SRI funds and has carried out preliminary research in this field.¹⁴⁴ A common form of SRI in Asia is community investment which supports specific activities through finance, investment or loans. The expansion of this form of investment is conducted through direct investment in public enterprises. For example, the Singapore-based Impact Investment Exchange (IIX) aims to provide a regulated trading platform for securities issued by sustainable and non-profit social enterprises in Asia. The platform provides a mobile and transparent market for enterprise investment, enabling enterprises to raise funds and expand their social and environmental impact while at the same time providing investors with good financial, social and environmental returns.¹⁴⁵

With the rise of SRI, Singapore strengthened the guidelines for investing in sustainable SRI development. MAS and SGX are stepping up their push in this area. To move the overall environment toward more sustainable investment and to focus on CSR, the central bank announced in a statement on October 5, 2015 that it supports the provision of guidance programs to investors, especially institutional investors, on sustainability, social and environmental issues.¹⁴⁶ In addition, the Singapore Banking Association has issued a set of criteria for responsible financing in Singapore in 2015.¹⁴⁷

5.10.1 Cultural Impact    The business culture, with its Taiwanese characteristics, has great influence on CSR in Taiwan. The two pillars of business culture that support the development of enterprises are Confucian patriarchy and nepotism in Taiwan. Crony capitalism is interpreted as a capitalist political and economic system in which opportunities, interests and resources are allocated mainly on the basis of intimate relationships between people, or guanxi in Chinese culture. In the concept of guanxi, family relationships are key factors. These self-oriented relationships are extremely vulnerable to corruption and pose a serious threat to integrity and fairness in economic and political development. Confucian familyism (Ip, 1996) is the mainstream culture of Taiwanese society, and enabled the formation of Taiwan-style crony capitalism.¹⁴⁸ Confucian familyism puts the interests of the family at the top of the morality agenda. When there is a conflict of interest between family members and non-family members, this doctrine advocates that the priority should be given to protecting the interests of family members over those of non-family members. Therefore, the Confucian family doctrine and cronyism are intertwined.

Former Taiwan President Chen Shuibian, his immediate family members and close associates have become typical symbols of runaway crony capitalism. They were alleged to have engaged in unethical acts and colluded in serious crimes with a number of companies. There is a long list of charges against them including improper political interference in the activities of private enterprises, conflicts of interest, insider dealing, neglect of duty, corruption, falsification of documents, misappropriation of public funds, money-laundering, etc. Business people flocked to the then first lady, Lady Wu Shuzhen, to gain favor and benefits for their companies. This is clear evidence of cronyism at the top and it is a manifestation of abuse of power. The improper relationships between these companies and the former President and his family were typical CSR issues, including corruption. Whether CSR can thrive in Taiwan depends on how enterprises can effectively control cronyism and yet remain true to Confucian familyism. All walks of life in Taiwan are making efforts to this end.¹⁴⁹

5.10.2 Export Economy    In 2017, Taiwan's GDP stood at US$5.71 billion, ranking 22nd in the world.¹⁵⁰ International institutions such as the International Institute for Management Development, the Business Environment Risk Intelligence and the World Economic Forum have rated Taiwan highly on its overall economic performance and competitiveness. Taiwan's exports rose in January from a year earlier on the back of strong global demand in 2018, marking a 16-month year-on-year increase in Taiwan's export sales according to its Ministry of Finance.¹⁵¹

Taiwan's strong export orientation and high global foreign direct investment contribute to promoting CSR activities in the region. To maintain the stability of exports, enhance the confidence of international enterprises in Taiwan's products and further expand the influence of Taiwan enterprises in the international market, Taiwan enterprises need to meet international standards and abide by global norms on CSR. In addition, with Mainland China being one of Taiwan's largest trading partners, its transformation to a sustainable mode of operation under the concept of the “harmonious society” in recent years has had a great impact on the application of CSR in Taiwan. Since Mainland China is the largest export destination and manufacturing base for Taiwanese enterprises, Taiwan's economic development has benefited from the rapid expansion of the Mainland. It should be noted that the path of CSR transformation in the Mainland has directly affected Taiwanese businessmen with manufacturing bases in Mainland China. The current trend in the environment is toward more standardized and socially responsible enterprises. So Taiwanese companies need to change their traditional practices and take more responsibility for their own business practices both in Mainland China and Taiwan.¹⁵²

5.10.3 Political Drivers    The Taiwan government has played a leading role in promoting and standardizing CSR. The government actively promotes the OECD Guidelines for Multinational Enterprises and monitors the application of relevant CSR norms such as the United Nation's Global Compact and the Global Sullivan Principles among others. On the issue of labor, the Taiwan government set up the Taiwan Council of Labor Affair to encourage enterprises to pay attention to labor rights and autonomy. In addition, it has pushed the Legislative Yuan to pass the “Labor Three Law Amendment Draft,” which provides the regulatory basis for resolving labor issues.

On environmental issues, the Industrial Development Authority of the Ministry of Economy has established databases for promoting and monitoring progress in sustainable development. The Development Council has led the domestic environmental protection industry to provide companies with support and enabled Taiwanese companies to become models of environmental protection recognized by APEC members.¹⁵³ On May 3, 2017, the government approved the amendment of the Company Law to create the legal basis to support the advancement of CSR in Taiwan. Vice President Chen Chien-jen believes that companies should be responsible for the health of their employees, communities and the environment to achieve sustainable development of the environment, society and the economy.¹⁵⁴

5.10.4 Financial Institutions    The government of Taiwan seeks to promote the practice of CSR among domestic and international firms. The Financial Supervisory Commission (FSC) revises the scope of CSR disclosure for Taiwan firms. The government published the Corporate Social Responsibility Best Practice Principles for the Taiwan Stock Exchange (TWSE/TPEx), which launched the Ethical Corporate Management Best Practice Principles for listed companies. These steps were taken to ensure that listed companies fulfill CSR and implement integrity management measures.¹⁵⁵ In addition, FSC published the Corporate Governance Roadmap 2013 to provide guidance for Taiwanese enterprises on CSR policies. TWSE also introduced the “TWSE RA Taiwan Employment Creation 99 Index” and “TWSE High Salary 100 Index” indicators. By designing and promoting these indicators, TWSE hopes that businesses will increase employment opportunities and wages for employees. Since 2011, the FSC has been guiding TWSE and TPEx to organize the Business Integrity and Corporate Social Responsibility for Listed Companies Forum, through which model enterprises share their practical experience of corporate integrity and CSR. TWSE joined the World Federation of Exchanges Working Group on Sustainable Development in 2014 to bring Taiwan's capital market norms in line with international standards in environmental, social and corporate governance. This creates a platform to learn and share new information and allows Taiwanese enterprises to keep pace with the development of global CSR.¹⁵⁶ In addition, TWSE announced in 2015 that designated listed companies must disclose CSR reports in accordance with the GRI G4 Guidelines.

5.10.5 Socially Responsible Investment    According to a 2014 Association for Sustainable & Responsible Investment in Asia (ASrIA) survey, Taiwan has maintained a stable level of socially responsible investment. Between 2011 and 2013, its sustainable investment remained at around US$700 million, reaching a moderate level in the Asian region.¹⁵⁷ The FTSE4Good TIP Taiwan ESG Index was established in 2017. This index promotes social responsibility investment (SRI) and improves the management mechanism of corporate management tools. The FTSE4Good TIP Taiwan ESG Index is part of the FTSE Russell's extensive investment index and reflects the performance of Taiwanese companies in environmental, social and corporate governance, marking a new milestone in sustainable investment in Taiwan.¹⁵⁸

5.11.1 Legal and Political Drivers    The Ministry of Labor established the Thai Labor Standard: Thai Cooperate Social Responsibility (TLS 8001—2003) in 2004. The Pollution Control Department (PCD) was established in 1992 under the Royal Decree on the Organizational Division of Pollution Control Department and the Ministry of Science, Technology and Environment. The PCD prepares environmental quality management plans; monitors, controls, prevents and mitigates pollution; as well as developing appropriate methods for the management of solid waste.¹⁵⁹ In 1950, Prime Minister Field Marshal Plaek Pibulsongkram established the National Economic Council (NEC), which provided advice to the government on national economic issues. In 1959, Prime Minister Field Marshal Sarit Dhanarajata restructured the NEC, and renamed it the Office of the National Economic Development Board (NEDB). Social development was officially emphasized in the agenda of the National Plan in 1972, which restructured the NEDB as the National Economic and Social Development Board (NESDB) under the Office of the Prime Minister. The functions of the NESDB are to provide suggestions on national economy and social development and to establish the coordination mechanism between the NESDB, concerned agencies and state enterprises.¹⁶⁰ CSR legislation also supports CSR activities in Thailand. One notable legislative activity is the enactment of the Product Responsibility Law in 2009, which concerns potential injuries due to manufacture, import and sale of goods.

5.11.2 Multinational Corporations    Foreign Direct Investment (FDI) to Thailand reached US$7.1 billion in 2017.¹⁶¹ As one of the large FDI destinations in Asia, Thailand has attracted a large number of MNCs. MNCs influenced many aspects of CSR. In order to meet the CSR standards set by MNCs, local supply chain manufacturers are pressured to implement various standards including ISO quality (ISO 9000), safety (ISO 18000) and environment standards (ISO 14000). MNCs also actively implement CSR activities which directly contribute to the improvement of social and environmental conditions in Thailand. For example, Nike initiated the Nike Village Development project, which involves people from Nike, the government and the community in facilitating development in some districts in Thailand.

5.11.3 Non-Governmental Organizations (NGOs)    The Thailand Business Council for Sustainable Development (TBCSD) was established by former Prime Minster Mr. Anand Panyarachun in 1993. The 36-member council constitutes individuals from 36 highly profitable local companies and MNCs. The TBCSD aims to promote the sustainable development goals (SDGs) by increasing environmental awareness at firm level.¹⁶² The Carbon Reduction Certification for Buildings is one TBCSD project, which honors low-energy-consumption buildings. The buildings which qualify under this certification are environmentally friendly and can reduce greenhouse gas (GHG) emissions to a certain acceptable level.¹⁶³

The Thailand Environment Institute (TEI) was established in 1993 to deal with environmental issues. The TEI has strong connections with the government, local communities, civil society organizations (CSOs) and multinational organizations to promote global environmental standards and policies in Thailand.¹⁶⁴ Since 2005, the TEI has held a series of training programs with emphasis on environmental knowledge, natural resources management, and sustainable and efficient use of energy. The TEI also provides courses on laws and regulations. Up to 2013, more than 16,000 people had attended TEI training, workshops and seminars.¹⁶⁵

5.11.4 Stock Exchange    The Stock Exchange of Thailand (SET)'s objective is to establish a solid SDG foundation for the capital market. The SET promotes sustainable development by increasing stakeholders' awareness of long-term sustainable strategies in business processes and investments. In 2007, SET established the Social Responsibility Center (SR Center) under its original name, the Corporate Social Responsibility Institute. This SR Center offers sustainability opinions and recommendations for stakeholders in the capital market including the SET itself.¹⁶⁶

5.12.1 Legal and Political Drivers    Vietnam has been a socialist-oriented market economy ruled by the Communist Party of Vietnam (CPV). In the mid 1980s, Vietnam introduced a major economic reform called Doi Moi (renovation). Since then, the country has removed several trading barriers, attracted more FDI, and been well integrated into the global economy. Despite that, the ideology of Vietnam is the basis for the government to take social issues seriously. Nevertheless, the ideology is not consistent with the prevailing CSR standards, which largely originate from Western countries. In response to increasing globalization, the Vietnam government gradually reformed its policies and embraced the Western concept of CSR. For example, the EU–Vietnam Free Trade Agreement include CSR clauses which drive Vietnamese companies to engage in CSR activities more actively.¹⁶⁷ In Vietnam, the Ministry of Labour, Invalids and Social Affairs coordinates CSR initiatives. The Vietnam government also exerts influence on the economy through SOEs. Due to Vietnamese ideology, SOEs shoulder more social responsibilities than private companies.¹⁶⁸

5.12.2 Multinational Corporations    Following Doi Moi, Vietnam passed the FDI law in 1987 and has amended this law several times subsequently. Since the passage of the law, foreign direct investment in Vietnam has experienced a significant increase. The accession to the WTO in 2007 further fueled FDI growth in Vietnam, leaping from US$2.5 billion during 2000–2005 to US$8.4 billion in 2008–2014. In 2005, the contribution of FDI to the GDP reached 201 percent, signifying the significant impact of FDI on the economy.¹⁶⁹ Several world-class MNCs started operations in Vietnam and brought CSR practices to the country. Like other countries in Asia, many local companies that seek to become suppliers of MNCs have to follow the CSR requirements set by the MNCs. The MNCs also provide benchmarks for CSRs that allows local firms to improve their CSR practices.

5.12.3 Non-Governmental Organizations    The 1992 Constitution of the Socialist Republic of Vietnam states that its residents have freedom of assembly and association. Since then, the government has established legal channels for the development of NGOs. However, there is no specific law for associations in Vietnam. As a result, most NGOs seek legal recognition and work under the state's regulations.¹⁷⁰ A 2013 survey reported that NGOs in Vietnam are engaging in promoting philanthropic programs, with only 11 percent of the NGOs interviewed benefiting from charity. Technical cooperation is the main type of interaction (35 percent) between NGOs (especially Vietnamese NGOs) and the private sector. Many Vietnamese NGOs are serving to reduce poverty in the rural areas. CSR issues like environmental protection is only a long-term strategic objective. In this regard, only 13 percent of NGOs have strategic cooperation relations with the private sector, which implies that Vietnamese NGOs lack professionalism and credibility in their management.

Established in 2007, the Global Compact Network Vietnam (GCNV) was created jointly with the United Nations in Vietnam and the Vietnam Chamber of Commerce and Industry (VCCI). The GCNV is the Vietnamese network for the United Nations Global Compact (UNGC). The GCNV represents 70 members including domestic and international firms, non-governmental organizations (NGOs), schools or institutions and UN and other government agencies.

In November 2015, the GCNV held the CSR Calendar Forum—Special Edition on AEC (ASEAN Economic Community)¹⁷¹ in order to improve the technical standards and customer satisfaction of SMEs in the AEC. Members who attended the CSR forum shared their ideas on social-environmental-technical-ethical issues through “The Blackbox of technical and ethical expectations.”¹⁷² In September 2016, the GCNV held the CSR Calendar Forum on Food Safety, which had close connections with other CSR issues like transparency and environmental concerns. A series of fora were held to promote the importance of food safety, address standards and technology in food production and build up trust within retailers' value chains.¹⁷³

The American Chamber of Commerce in Hanoi (AmCham Hanoi) provides services for American businesses in Vietnam. AmCham Hanoi's objective is to improve Vietnam–America business.¹⁷⁴ AmCham's CSR Recognition Award honors the member companies with the best CSR projects in four areas, namely (1) business goals and societal needs (2) long-term strategic management (3) communication and sharing and (4) sustainability.¹⁷⁵ In 2017, Dow Vietnam won this CSR Award for the firm's long-term contributions to Vietnam's economy.

5.12.4 Socially Responsible Investment    Established in 2006, Vietnam Holding (VNH) is an investment fund promoting equity in Vietnam. VNH acts as a sustainable investment in line with the environmental, social and governance (ESG) practices of the United Nations Principles for Responsible Investing.¹⁷⁶ The majority of investments in VNH are from Ho Chi Minh City Stock Exchange (HOSE) and Hanoi Stock Exchange (HNX) listed firms which have long-term investment strategies. VNH holds the VNH Forum annually to discuss ESG themes and issues. VNH also provides ESG workshops at industry level. The VNH Foundation helps children with health problems.¹⁷⁷ In 2016, VNH conducted a case study on Engagements Affecting Portfolio Construction which was included in PRI's “A Practical Guide to ESG Integration for Equity Investing.”¹⁷⁸