Identifying Key Challenges and Opportunities of Green Bonds for Sustainable Finance in ASEAN

Abstract

The increasing global awareness of sustainability has led to the growth of green bonds as an essential financial instrument in ASEAN countries, particularly Indonesia, Singapore, Malaysia, Thailand, and Vietnam. This study explores the implementation of green bonds as a sustainable financing tool while identifying key challenges and opportunities in the region. The research aims to analyze the role of government policies, investor awareness, and regulatory frameworks in the adoption of green bonds. Using a qualitative research method with a literature review approach, this study examines previous findings on green bond implementation and evaluates its impact on sustainable finance. The results indicate that while ASEAN countries have taken significant steps toward green bond adoption, challenges such as low domestic awareness, inconsistent reporting standards, and limited green projects hinder market growth. Indonesia and Vietnam face regulatory and investor education gaps, while Malaysia and Thailand require better market incentives. Singapore leads in standardization and financial infrastructure but still faces challenges in expanding domestic green investment. The study concludes that harmonized policies, improved transparency, and stronger investor incentives are crucial for enhancing green bond adoption in ASEAN. Strengthening sustainable finance through green bonds will not only support environmental objectives but also provide economic growth opportunities for the region.