In 2025, the Asian Financial Forum, with “ESG and Cross-Border Payments” as its core theme, revealed how two global trends – sustainable development and fintech innovation – are reshaping Asia’s economic ecosystem. As the climate crisis intensifies and the wave of digitalization surges, enterprises and investors are no longer focused solely on short-term returns but are integrating Environmental, Social and Governance (ESG) into their strategic core, while leveraging cross-border payment technologies to break international trade barriers. This article will delve into the latest developments in these two key topics and explore their profound impact on the Asian market.
ESG has transformed from a compliance framework focused on “risk avoidance” to a competitive strategy centered on “value creation”. This paradigm shift is reflected in three aspects: the alignment of international standards with local practices, the surge of ESG investment in capital markets, and the dual challenge of regulation and talent. The following analysis will explore, from the three dimensions of corporate practices, investment trends, and institutional innovation, the key contradictions and breakthrough paths in Asia’s ESG transformation.
According to the joint report “From Ambition to Action: Exploring the Necessity of ESG” by Ernst & Young and the China, Hong Kong Trade Development Council, although Asian companies generally recognize the long-term benefits of ESG, they face challenges such as uneven resource allocation, lack of expertise, and difficulties in reconciling international standards (such as GRI and SASB) with local regulations. For example, Taiwanese companies need to overcome the dual pressure of industrial transformation costs and stakeholder communication in ESG development, particularly in making breakthroughs in supply chain decarbonization and the implementation of circular economy practices.
Bloomberg Intelligence forecasts that by 2025, global ESG-related assets will reach 53 trillion US dollars, accounting for one-third of total assets under management. This trend is particularly notable in Asia. For example, ESG strategies in China’s asset management industry have become increasingly diversified, expanding from negative screening to stewardship and thematic investing, while leveraging new tools such as biodiversity finance to align with sustainability goals. The EY report also points out that companies need to enhance their ESG metric monitoring capabilities and develop climate transition roadmaps to address investors’ stringent scrutiny over “greenwashing” risks.
ESG regulations are tightening across countries. For example, China’s “New Nine Guidelines” require companies to standardize sustainability information disclosure, while the European Union’s “Sustainable Finance Disclosure Regulation” (SFDR) enhances transparency for green financial products. At the same time, the shortage of ESG professionals has become an industry bottleneck. The “Executive Certificate in ESG Analytics” program jointly developed by Lingnan University in China, Hong Kong and industry partners, which integrates AI tools with international certifications (such as CESGA), is attempting to address this gap.
While ESG reshapes corporate value chains, cross-border payments are reshaping the “liquidity” of those value chains. From technological disruption and risk management to regional integration, the transformation of cross-border payments not only accelerates capital flows but also serves as a carrier for ESG data. The following analysis will, from the three dimensions of market scale, contract structure, and geopolitical cooperation, deconstruct the key drivers of this borderless financial revolution.
Ernst & Young’s “Beyond Borders” report forecasts that by 2030, the cross-border payments market will exceed 290 trillion US dollars, driven primarily by e-commerce expansion, increased trade volume in emerging markets, and technologies such as blockchain and real-time payment systems (e.g., India’s UPI and China’s cross-border payment platforms). For example, innovative applications of digital currencies, (such as Central Bank Digital Currencies, CBDC), are reducing foreign exchange costs and improving transaction efficiency, becoming a key focus for corporate strategies.
The explosive growth of cross-border payments is accompanied by challenges in anti-money laundering (AML) and cybersecurity. Ernst & Young proposes six key tasks, including strengthening AML monitoring systems, promoting the unification of messaging standards under ISO 20022, and establishing strategic partnerships to diversify risks. In addition, embedded finance integrated into supply chain management platforms enables enterprises to track capital flows and carbon footprints in real time, achieving synergy between ESG and the payment ecosystem.
Cross-border payment pilot programs in ASEAN and the Greater Bay Area (such as the interoperability between Thailand’s PromptPay and China, Hong Kong’s FPS) demonstrate that regional payment alliances can reduce reliance on the US dollar and promote the participation of small and medium-sized enterprises in global trade. However, fragmented regulations among countries remain a major obstacle, requiring the promotion of mutual recognition of standards through international organizations such as APEC.
The intersection of ESG and cross-border payments is not merely a simple technological overlay but a strategic coupling of “sustainability” and “efficiency”. This coupling is reflected in three key areas which are supply chain finance, carbon credit trading, and capital markets, enabling Asia to break away from traditional development paths and create new models that combine social impact with commercial viability.
Enterprises integrate carbon emissions and payment flows through ESG data platforms (such as the ESG AI tool by Friends of the Earth in China, Hong Kong), allowing banks to offer differentiated financing rates based on supply chain sustainability performance. For example, China Huaxia Wealth Management has embedded green finance into cross-border trade financing, prioritizing exporters that meet “carbon neutrality” targets.
The interconnection of carbon markets across Asian countries requires efficient cross-border payment systems. DBS Bank in Singapore has tested blockchain-based carbon credit settlement to address the delays and high costs of traditional cross-border settlements. Such innovations will accelerate the implementation of global carbon pricing mechanisms and enhance the measurability of ESG investments.
ESG funds and cross-border payment ETFs (such as financial products tracking the MSCI Emerging Markets ESG Index) are attracting investors seeking long-term stable returns. The Ernst & Young report emphasizes that companies need to transparently disclose the impact of ESG risks on cross-border operations, such as the potential impact of climate change on logistics costs, to maintain investor confidence.
The 2025 Asian Financial Forum reveals that ESG and cross-border payments have shifted from peripheral topics to strategic priorities. For enterprises, integrating sustainability goals with payment technology innovation is key to enhancing competitiveness and risk resilience; for investors, ESG data and transparency in cross-border capital flows will form the foundation of asset allocation decisions. In the future, whether Asia can establish an inclusive regulatory framework, cultivate cross-disciplinary talent, and promote public-private partnerships will determine its ability to become the hub of global sustainable finance.
ESG is the abbreviation for Environmental, Social, and Governance. It is a framework for evaluating a company’s performance in sustainable development and social responsibility. The environmental dimension focuses on the company’s impact on the natural environment, such as carbon emissions, energy consumption, and pollution control; the social dimension considers the company’s relationships with stakeholders including employees, customers, and communities, covering labor rights, occupational health and safety, and community engagement; the governance dimension emphasizes aspects such as corporate leadership structure, compensation policies, transparency, and anti-corruption measures. Through ESG assessments, investors can evaluate the risks and opportunities a company faces in its long-term development, as well as its ethical and sustainable operating practices, while companies can enhance their risk resilience and long-term competitiveness by improving ESG performance.
Cross-border payment refers to the transfer of funds between different countries or regions arising from activities such as trade, investment, and tourism. It involves currency exchange and fund settlement, with typical participants including buyers, sellers, banks, or payment institutions. There are various methods of cross-border payment: traditional methods include bank wire transfers and letters of credit; with the development of internet technology, many third-party cross-border payment platforms have emerged, offering more convenience and lower costs, particularly benefiting industries such as cross-border e-commerce, tourism, and overseas education. In addition, cross-border payment must comply with the laws, regulations, regulatory requirements, and monetary policies of different countries and regions.
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