For many foreign companies, ESG reporting has traditionally been viewed as a regulatory requirement tied to specific jurisdictions. However, since the Corporate Sustainability Reporting Directive (CSRD) was enacted in 2023 and moves into its implementation phase, that perspective is rapidly changing.
What appears to be an EU-focused regulation is, in reality, reshaping expectations across global markets, including Southeast Asia.
When ESG Requirements Extend Beyond Borders
CSRD formally applies to companies operating within the European Union, as well as non-EU companies with significant activities in the region. At a glance, this may seem limited in scope. In practice, however, its reach extends much further.
Multinational companies subject to CSRD are now required to disclose not only their internal ESG performance, but also the environmental and social impact of their broader operations. This includes subsidiaries, partners, and critically, their supply chains.
As a result, companies outside the EU may find themselves indirectly impacted, particularly if they are part of global value chains connected to European markets.
The Supply Chain Effect: A New Layer of Accountability
One of the most significant shifts introduced by CSRD is the emphasis on value chain transparency.
Companies are expected to:
- Collect ESG data from suppliers and third parties
- Ensure the reliability and consistency of that data
- Demonstrate accountability beyond their immediate operations
This creates a new dynamic. Businesses in Southeast Asia, including those in Indonesia, are increasingly being asked to provide:
- Greenhouse gas (GHG) emissions data and broader environmental impact metrics
- Workforce and labor-related information, including working conditions and policies
- Governance structures, internal controls, and compliance-related documentation
Even in the absence of direct regulatory obligations, the expectation remains clear. Companies that are unable to meet these requirements may face increased scrutiny or risk being excluded from international partnerships.
From Compliance to Market Access
In this evolving landscape, ESG reporting is no longer solely about compliance. It is becoming a key factor in maintaining access to global markets.
For foreign companies, this introduces a practical challenge: aligning global ESG frameworks with local operational realities. Differences in data availability, regulatory environments, and internal processes can create gaps that are not always immediately visible.
Without a structured approach, these gaps may delay reporting, affect credibility, or expose the business to broader risks.
Bridging Global Expectations with Local Execution
Navigating ESG reporting across jurisdictions requires more than technical understanding. It requires the ability to translate global standards into consistent, reliable practices at the local level.
This includes:
- Establishing clear ESG governance structures
- Building data collection and verification processes
- Aligning local operations with international reporting frameworks
As ESG expectations continue to evolve, companies that take a proactive approach will be better positioned to respond. Not only to regulatory developments, but also to growing stakeholder demands.
Supporting ESG Readiness Across Jurisdicition
Moores Rowland Indonesia supports companies in navigating ESG reporting requirements across jurisdictions, from readiness assessments and gap analysis to documentation and implementation support. By aligning global standards with local execution, we help businesses strengthen compliance, enhance transparency, and maintain confidence in cross-border operations.
Contact us today to explore how your organization can prepare for evolving ESG expectations.
