Overview

Businesses in Southeast Asia have long supported their communities. As regional wealth grows, private sector investment is now critical for development. Many businesses, deeply connected to family and values, naturally integrate social engagement into their strategies. Used strategically, CSR creates "shared value", advancing both economic and social goals. By positioning CSR as a pathway to mutual success, companies boost regional prosperity and strengthen their own profitability, making social responsibility central to business strategy.

This policy brief reviews the current state of Corporate Social Responsibility (CSR) practices in ASEAN, including the regulatory framework, tax incentives, and published non-mandatory guidelines. It also outlines the challenges and opportunities for CSR in the region and provides policy recommendations to make CSR a more strategic, inclusive, and sustainable development instrument.

The Context and Challenges of CSR in ASEAN

ASEAN is one of the fastest-growing economies in the world, but it still grapples with complex development challenges: economic inequality, limited access to education and healthcare, vulnerability to natural disasters, and the impacts of climate change (The ASEAN, 2024). In recent decades, development needs have been largely supported by foreign aid (Lowy Institute, 2024). However, global trends indicate a significant decline in international aid flows, placing new pressure on ASEAN to seek alternative sources of financing (Woodhouse, 2025).

CSR is more than charity; it has evolved into a vital development strategy that should align with both national and regional objectives. However, the policy environment for CSR in ASEAN remains fragmented, limiting its effectiveness and impact.

CSR Regulation in ASEAN and Non-ASEAN Countries

The regulatory landscape for CSR across ASEAN and selected non-ASEAN countries remains diverse and fragmented (see Appendix 1). Among ASEAN member states, only Indonesia and the Philippines explicitly mandate CSR obligations, with requirements applying particularly to state-owned enterprises and certain industries. Other countries, such as Malaysia, Thailand, and Vietnam, adopt more flexible approaches, often focusing on encouraging CSR spending without making it compulsory. Singapore, meanwhile, relies on sustainability reporting through the Global Reporting Initiative (GRI) standards rather than mandating CSR directly.

Looking beyond ASEAN, several non-ASEAN economies have taken stronger regulatory steps. India stands out with one of the world’s most prescriptive frameworks, requiring companies above a certain threshold to allocate 2% of their net profits to CSR activities since 2013, supported by a formal governance structure and reporting mechanisms. China also enforces CSR obligations with mandatory spending, ESG reporting, and reporting requirements for non-listed companies. Nepal, Mauritius, and South Africa each have provisions that either require CSR spending or emphasize governance structures, while the European Union emphasizes mandatory ESG reporting through its major stock exchanges.

The key finding is that ASEAN, compared to more prescriptive models like India, still relies heavily on voluntary measures and ESG reporting frameworks. This creates a flexible but fragmented policy environment that makes cross-country comparison and collective regional progress difficult.

Non-Mandatory CSR Guidelines

In addition to regulations, ASEAN and four member countries (Indonesia, Laos, Malaysia, and Thailand) have issued non-mandatory CSR guidelines.

Table 1. CSR Guidelines Issued by ASEAN and ASEAN Governments

Source: ASEAN, 2025.

These guidelines are voluntary, but serve as an important reference in establishing more consistent CSR practices across the region.

Taxes as CSR Incentives

Taxes are an important tool for encouraging CSR. According to the Doing Good Index 2024, 99% of social organizations in Asia consider tax incentives crucial for corporate donors (OECD, 2020). However, most countries still limit incentives based on the amount of deductible profits and specific sectors. Only Singapore and Vietnam provide full incentives of up to 100% without significant restrictions. In contrast, Indonesia, Myanmar, and Vietnam only provide incentives in specific areas such as education, health, research, disaster relief, or social infrastructure (Meng, 2020).

Table 2. Tax Incentives for Corporate Giving in ASEAN

 Source: ASEAN, 2025.

ASEAN countries provide tax incentives for corporate donations, but the scope and generosity vary widely. Most countries allow 100% deductibility, yet the limits differ. For example, Brunei caps incentives at 16.67%, while Cambodia and the Philippines cap them at 5%, Malaysia at 10%, and Thailand as low as 2%. Laos offers only 0.3%, making it one of the most restrictive in the region.

At the other end of the spectrum, Singapore and Vietnam provide the most generous schemes, allowing 100% deductions without significant restrictions. However, in practice, Vietnam continues to direct CSR incentives toward specific sectors, including education, health, vocational training, culture, sports, and the environment. Similarly, Indonesia and Myanmar limit incentives to targeted areas, including disaster relief, social infrastructure, education, and healthcare.

These variations highlight a key challenge: while tax incentives are recognized as critical for mobilizing private capital into CSR, restrictive limits and sectoral exclusions reduce their effectiveness. Without broader coverage, incentives risk constraining CSR spending to narrow activities, instead of unlocking its full potential for development and climate resilience across ASEAN. Such limitations reduce the effectiveness of tax incentives as a driver of CSR, particularly as ASEAN aims to expand the private sector’s role in financing development and advancing the climate transition.

Future Opportunities and Recommendations

The current momentum for CSR in ASEAN shows up-and-coming prospects. The global shift toward sustainability principles is encouraging more businesses in the region to integrate CSR into their core strategy, rather than simply treating it as an additional activity. In this context, several strategic steps can be taken by ASEAN and its member states to strengthen the role of CSR in development.

First, ASEAN should standardize the definition and disclosure of CSR across the region. Clear, uniform standards will enhance data accuracy, facilitate cross-country comparisons, and support evidence-based policymaking. Success metrics such as carbon abatement or school completion rates can help track impact and align CSR efforts with regional development goals.

Second, governments need to strengthen their oversight mechanisms to ensure that CSR programs effectively contribute to national priorities and the Sustainable Development Goals (SDGs).Monitoring and evaluation systems should focus on measurable outcomes, preventing CSR from becoming symbolic or short-term activities.

Third, member states should expand enabling policies and incentives, including tax schemes that support not only corporate donations but also employee volunteering and cross-sector contributions. More flexible incentives encourage businesses to broaden their CSR activities beyond a narrow set of sectors.

Fourth, ASEAN must encourage efforts to increase the quantity of CSR capital mobilized in the region while ensuring that this capital is deployed strategically. Investments should be channeled into high-impact areas such as vocational education, energy transition, disaster resilience, and food security, where cross-sectoral collaboration can amplify results.

Finally, CSR programs must be designed to improve the impact of CSR spending and ensure inclusivity. Policymakers should require that CSR initiatives prioritize vulnerable and marginalized groups, making inclusivity a guiding principle for their initiatives. By doing so, CSR can serve both business interests and broader social goals, reinforcing ASEAN’s potential to lead among Global South nations in building a sustainable and equitable model of corporate engagement.

Conclusion

Corporate Social Responsibility (CSR) in ASEAN stands at a critical juncture: shifting from an obligation to a strategic driver of development. With the decline in foreign aid flows and the rising complexity of development challenges, the role of the private sector has become increasingly vital. Yet, without harmonized standards, robust oversight mechanisms, and effective incentives, the full potential of CSR remains underutilized.

ASEAN has a unique opportunity to lead CSR practices in the Global South by aligning CSR with long-term development priorities, strengthening cross-sectoral collaboration, and ensuring inclusivity for vulnerable groups. If collective actions are taken, such as harmonizing policies, expanding tax incentives, and advancing multi-stakeholder partnerships, CSR can evolve into a sustainable, equitable, and impactful instrument for development.

By capitalizing on the momentum of the global sustainability agenda, CSR in ASEAN can not only contribute to achieving the Sustainable Development Goals (SDGs) but also serve as a bridge connecting economic growth with inclusive social progress across the region.

References:

ASEAN Business Advisory Council Malaysia, & Centre for Asian Philanthropy and Society. (2025). Corporate social responsibility in ASEAN: Final report 2025. ASEAN-BAC Malaysia.

ASEAN Secretariat. (2016). ASEAN guidelines for corporate social responsibility on labour. Jakarta: ASEAN Secretariat.

Lowy Institute. (2024). Southeast Asia Aid Map: 2024 key findings. Lowy Institute. https://seamap.lowyinstitute.org/analysis/2024/key-findings/

Meng, K. (2020). Towards sustainable tax policies in the ASEAN region: The case of corporate tax incentives. Oxfam Novib.

OECD. (2020). Taxation and philanthropy. OECD Publishing. https://doi.org/10.1787/3ea8ea10-en

The ASEAN. (2024, March 28). Building resilience in ASEAN and reflecting on challenging times. The ASEAN Magazine. https://theaseanmagazine.asean.org/article/building-resilience-in-asean-and-reflecting-on-challenging-times/

Woodhouse, A. (2025, February 5). Development finance could fill the gaps left by cuts in aid programmes. Financial Times. https://www.ft.com/content/cf1c6b1e-f88d-4498-bfa7-aefde4936762

Appendix

Appendix 1. Summary of CSR Regulatory Requirements in ASEAN and Selected Non- ASEAN Countries and Economies

Key findings: Indonesia and the Philippines have the mandated CSR model. Most other ASEAN countries rely on Environmental, Social, and Governance (ESG) reporting, which involves disclosure of a company’s environmental impact, social contributions, and governance practices. Unlike India’s strict 2% profit mandate since 2013, ASEAN approaches are generally more flexible and varied.

Source: ASEAN, 2025.