Q3 update | Sept 2025

In June 2025, Japan’s Financial Stability Board (FSA) issued the third revision to the Principles for Responsible Institutional Investors (the Stewardship Code, or Code), following release of the draft proposal earlier this year and a public consultation process. The Stewardship Code provides guidance to institutional investors to foster sustainable growth and corporate value of their investee companies through constructive engagement and dialogue, and was specifically amended in 2020 to introduce the integration of sustainability and ESG considerations into such engagement. The Code follows a comply or explain approach, allowing institutional investors who have adopted the Code to opt out of certain principles by providing an appropriate explanation. As of June 2025, according to reports by FSA, 344 institutional investors are signatories to the (second revised) Stewardship Code. 

The 2025 amendments place an increased emphasis on transparency and collaborations between different groups of institutional investors. Investors are now expected to disclose the extent of their shareholding in investee companies upon request and publish a formal policy for responding to such requests, a move which is expected to improve information flow regarding beneficial ownership of the investee companies and also marks a shift towards a more proactive disclosure approach. These changes follow global trends, notably in the UK and EU, aimed at increasing shareholder transparency. Moreover, the revised Code elevates the principle of collaborative engagement amongst different investors from a discretionary / beneficial option to an important recommended practice, particularly where individual engagement is likely to be ineffective. While engaging in such dialogue, investors are encouraged to consider whether such actions will contribute to the sustainable growth of their investee companies. 

Rather than imposing detailed compliance requirements on investors, the revisions are expected to foster a more meaningful dialogue between investors and companies through a shift in investor mindset. FSA, in its explanatory statement to the revisions, has also reinforced its preference for a more principles-based approach. These changes assume particular significance given the recent rise of shareholder activism in Japan, where investors are increasingly becoming more assertive and pushing for governance reforms. It remains to be seen how influential these will be in further enhancing corporate governance in the country. 

MAINLAND CHINA – The 2025 Amendment to the Anti-Unfair Competition Law: Reaffirming the Legislative Goal of Safeguarding Fair Competition and Protecting Weaker Parties

Board Member of GAIL APAC Region: Giana Lin, Partner of Fuguan Law Firm

The 2025 revision of China’s Anti-Unfair Competition Law reaffirms its original legislative intent—upholding fair competition and protecting the interests of disadvantaged market participants. One key focus of the amendment is addressing the widespread issue of delayed payments by large enterprises.

To this end, the amended law introduces a new provision prohibiting the abuse of a dominant advantage position. Specifically, large enterprises and other business operators are prohibited from leveraging their advantages in capital, technology, sales channels, or industry influence to impose clearly unreasonable transaction terms—such as payment deadlines, methods, conditions, or default liabilities—on small and medium-sized enterprises (SMEs), including the delay or refusal to pay for goods, construction projects, or services.

Globally, many jurisdictions—such as Germany, Japan, South Korea, and France—have incorporated the concept of a “relative dominant position” into their legal systems. While China’s amended law does not adopt the internationally common term “relative dominance,” it introduces the concept of “dominant advantage position” (优势地位) to serve a similar function. By intentionally blurring the threshold for establishing dominance and limiting the scope of enforcement to large enterprises vis-à-vis SMEs, the amendment lowers the evidentiary burden for regulators and enhances enforceability. As a result, practices such as setting unfair payment terms and delaying payments to SMEs are expected to become key enforcement priorities in the near term.

Notably, the new law also introduces, for the first time, provisions for extraterritorial application. It explicitly states that if an act of unfair competition is committed outside the territory of the People’s Republic of China but disrupts market order within China or harms the legitimate rights and interests of domestic operators or consumers, such acts will be subject to this law and other relevant legal provisions.

SINGAPORE – PwC Report Forecasts Tripling of Singapore’s Sustainability Legal Market

Matthew Kasdin, General Counsel, Impact Investment Exchange (IIX)

A new PwC report commissioned by the Singapore Economic Development Board, Enterprise Singapore, and the Ministry of Law projects Singapore’s sustainability legal services market will triple to S$450-500 million by 2033, with a compound annual growth rate of 10% per annum. The growth is driven by regulatory demands and Singapore’s role as a regional financial and carbon services hub, with immediate opportunities identified in green finance, capital projects and infrastructure, and technologies and digital innovations.

THAILAND – Ministry of Justice Proposes Mandatory Human Rights Due Diligence Law

Matthew Kasdin, General Counsel, Impact Investment Exchange (IIX)

Thailand’s proposed mandatory human rights and environmental due diligence law (mHREDD) will require businesses operating in Thailand to identify, prevent, and address human rights and environmental risks in their operations and supply chains. The law is driven by Thailand’s pursuit of OECD membership and aims to align with the UN Guiding Principles on Business and Human Rights, building on Thailand’s position as the first Asian country to introduce a National Action Plan on Business and Human Rights in 2019.

Cross-Jurisdictional Developments

Matthew Kasdin, General Counsel, Impact Investment Exchange (IIX)

MALAYSIA/UK: UK Supreme Court denies permission to challenge jurisdiction in novel supply chain proceedings involving Dyson factory workers in Malaysia

In early May 2025, the UK Supreme Court denied a request for permission to appeal made by the Dyson Group in respect of the Court of Appeal’s December 2024 decision that England is “clearly and distinctly” the proper forum for the case against them to be tried. The case concerns allegations of forced labour in Dyson’s supply chain in Malaysia.  In earlier proceedings, Dyson had argued that Malaysia was clearly the more appropriate jurisdiction for the case to be tried, an argument which had succeeded at first instance but failed before the Court of Appeal. 

JAPAN/PHILIPPINES/SINGAPORE: Philippines’s ACEN and Singapore’s GenZero and Keppel are joined by Japan’s Mistubishi to Pioneer the World’s First Article 6 Transition Credits Deal for Coal Plant Early Retirement

In May 2025, Japanese trading house Mitsubishi’s subsidiary Diamond Generating Asia joined the Philippine energy company ACEN and Singapore’s Temasek-backed GenZero and Keppel Ltd. To support a landmark transaction to accelerate the early retirement of the 246-megawatt South Luzon Thermal Energy Corporation (SLTEC) coal-fired power plant in Batangas by 2030—a decade ahead of schedule. The pioneering deal utilizes “Transition Credits,” a novel class of carbon credits generated from emissions reduced when coal plants are retired early and replaced with clean energy sources. The transaction demonstrates scalable cross-border collaboration for Southeast Asia’s energy transition under Article 6 of the Paris Agreement.

Knowledge Highlights from the Q3 Event

The Growing Convergence of B Corp Certification and Impact Investing in Asia September 2, 2025

Takahisa Watanabe, Vivien Teu, Bintang Capital Partners, Arowana, Merry Year Social Company, Japan’s UNERI Capital

The Convergence of B Corp Certification and Impact Investing in Asia

GAIL APAC, with the support of B Market Builder Japan, recently hosted an online event titled, “Driving Impact: The Growing Convergence of B Corp Certification and Impact Investing in Asia.” We were pleased to welcome leading figures from Asia’s impact investing ecosystem for an insightful discussion on the intersection of B Corp certification and impact investing.

In recent years, the “B Corp” movement—where companies pursue benefits (the “B”) not just for shareholders but for all stakeholders, including employees, customers, the community, and the environment—has been expanding globally. This momentum is growing in Asia, with over 300 companies now certified across 21 countries. Taiwan and South Korea are leading the market, and Japan has seen a rapid increase in certifications since the establishment of B Market Builder Japan in 2024.

Meanwhile, Asia’s impact investing market continues to grow, with assets under management exceeding $38 billion, marking the highest growth rate in the world. However, investors still face challenges such as “Impact Measurement and Management (IMM)” and the risk of “impact washing.”

Against this backdrop, B Corp certification is gaining attention as a solution, as its rigorous standards and verification process support the credibility of a company’s sustainability management. Furthermore, the B Impact Assessment (BIA), B Corp’s evaluation framework, serves as a common language for measuring and comparing impact, facilitating communication between investors and companies.

In light of these trends, GAIL APAC organised this event to explore how Asian impact investors are integrating B Corp or B Lab standards into their investment strategies.

The event kicked off with a keynote presentation by GAIL APAC board member, Takahisa Watanabe from Japan. He provided an overview of the latest B Corp and impact investment trends in Asia, and the connection between B Corps and impact investing.

Following the keynote, a panel discussion moderated by Vivien Teu, GAIL APAC board member and principal of GAIL impact law firm member, Vivien Teu Law Practice, brought together four fund houses investing across Asia. The panel engaged in a lively discussion about how they incorporate B Corp principles into their respective investment philosophies, sharing concrete strategies and challenges.

Panel Discussion:

The panel discussion highlighted the unique approaches of each firm:

• Bintang Capital Partners (Malaysia): As the first B Corp-certified investment manager in Southeast Asia, the firm requires its portfolio companies to achieve B Corp certification, with the belief that the rigor of B Lab standards offers “downside protection” and “accountability” in investments. With concrete initiatives to seek financial returns along with social impact, as the firm links  carried interest to the achievement of impact goals.
• Arowana: As a certified B Corp itself, Arowana shared its firsthand experience of the value of the certification. Internally, it has helped improve organisational culture. Externally, participating in the B Corp community, which shares a “common language,” has strengthened collaboration with investors and partners.
• Merry Year Social Company (MYSC) (South Korea): A leader in South Korea’s social innovation sector, MYSC explained the utility of B Corp as an effective tool for ensuring accountability and aids in investment screening, and how it uses B Corp as a framework for developing a culture and community of impact.
• UNERI Capital (Japan): As an incubator and venture capital firm, while many impact investing frameworks are investor-driven, the B Impact Assessment is a highly useful tool for startups to build their own business foundations. By encouraging their portfolio startups to pursue future B Corp certification, UNERI Capital helps embed an impact-oriented DNA from the earliest stages of a company’s growth.

The discussion also touched upon how the new B Lab standards released this year will shape the future of impact investing in Asia, making it a highly informative session for all participants.

GAIL’s new APAC Corporate Member

Updates on Malaysia

Vivien Teu Law Practice

GAIL APAC impact law firm member Vivien Teu Law Practice has launched in Malaysia, having registered with the Malaysia Bar Council in August, following the establishment of the law firm separately in Hong Kong in May this year.

The firm seeks to offer its international capital and investment markets experience along with its sustainable finance and impact law knowledge, towards contributing to Malaysia’s next phases of sustainable economic developments ahead.   

Malaysia Parliament recently passed the Gig Workers Bill 2025 (“Bill”) which provides clear statutory definitions for key parties and agreements, including “gig worker,” “contracting entity,” “platform provider” and “service agreement.” Every service agreement must spell out the parties, duration, scope of services, obligations, remuneration rates, payment methods and any benefits or gratuities.  To safeguard gig workers, the new legislation requires advance agreement of rates and payment timelines (or payment within seven days of service completion if unspecified), and bars discrimination in work assignments or remuneration and prohibits termination without just cause. The law also establishes a tiered dispute‐resolution framework – an internal grievance process with a 30-day resolution window, conciliation before Industrial Relations authorities and referral to a dedicated Gig Workers Tribunal whose binding awards carry the force of a Sessions Court order. A Consultative Council will advise on sector- and region-specific minimum earnings formulas and standards.

Oversight and enforcement powers reside with the Director General of Labour, whose officers may inspect premises, seize records and investigate offences. Platform providers must register gig workers under the Self-Employment Social Security Act 2017 and make mandatory deductions on the gig workers earnings and remit contributions to the social security scheme on their behalf, while contracting entities bear occupational safety and health duties. Existing service agreements remain valid but any contractual terms in the agreement less favourable than those stipulated by the law will be rendered void and automatically replaced by the law’s minimum standards.

For reference, recognising that platform workers fall outside traditional employee or independent-contractor definitions, Singapore has also introduced the Platform Workers Act 2024 which establishes a dedicated legal framework for gig-economy participants in Singapore, by defining platform workers as individuals who perform services under the management control of digital platforms and entitling them to protections such as work injury compensation under the Work Injury Compensation Act 2019, mandatory Central Provident Fund contributions, and the right to form recognised platform work associations for collective negotiation and dispute resolution. 

We encourage GAIL members to actively participate in knowledge sharing within the GAIL network. You are warmly invited to contribute to GAIL Knowledge. Your submissions will be disseminated through GAIL’s communication channels. This is not only an opportunity for knowledge exchange but also a platform for impact lawyers to connect and engage.

You are welcome to share:

• impact law updates from your jurisdiction,
• your perspectives on specific impact law issues,
• analyses and insights into cases,
• or your own impact law stories.

If you have any questions, please contact the GAIL staff:
Louise Williams (l.williams@gailnet.org)
or the APAC KWG Chair:
Giana Lin (giana.lin@fuguanlaw.com).