MoFo Asia Funds ESG + Sustainability Survey 2025: Charting a New Path Forward

Morrison Foerster, a leading global law firm, has today announced the results of its 2025 Asia Funds ESG + Sustainability Survey “Charting a New Path Forward” funds in conjunction with Asian Venture Capital Journal (AVCJ), which has found a marked and unmistakable appetite for sustainable investments, all the while operating in an era of caution owed to a fast-evolving regulatory landscape.

The report’s highlights include: the vast majority of funds have adopted green investment practices but do so discretely to avoid reputational risk and burdensome scrutiny. The survey has also found many funds do not make changes to their environmental, social, and governance (ESG) policies or practices unless required to do so by regulators and are engaging less proactively with ESG policy work. However, a significant minority shared that they have changed or slowed their approach to ESG as a result of recent anti-ESG pushback.

“Clients continue to see the benefit of investing in sustainability and bolstering corporate responsibility,” said Scott Jalowayski, partner at Morrison Foerster. “The survey has shown that, in an era of general caution and some turbulence, GPs broadly do see the importance and value in ESG due diligence and post-closing operational metrics to drive up standards, leveraging both to embrace best practices, ensure compliance, drive investment returns and find new competitive advantages.”

“We are still seeing the GPs we advise embracing responsible business and incorporating sustainability considerations as a means to both improve returns and mitigate regulatory risk,” said Marcia Ellis, partner at Morrison Foerster. “What’s also clear, is that the debate around ESG is ongoing. With stretched resources, funds are grappling with a fast-changing regulatory landscape and growing anti-ESG pressure. As a result, market participants are perhaps less willing than they once were to engage proactively in the debate and help shape policy.”

“This survey has shown again that funds and GPs see genuine business and shareholder value in investing through the responsible business-lens,” said Suz Mac Cormac, co-chair of Morrison Foerster’s Sustainability + Corporate Responsibility, and Social Enterprise + Impact Investing practices. “While the terminology is evolving, and many GPs are now breaking ESG into its component parts, the underlying principles remain the same. For decades I have been advising clients who themselves see the benefits of proactively engaging with ESG matters, from pursuing long-term sustainable investments, to making it part of their investment due diligence process, and understanding risks or embracing opportunity through responsible tech and AI.”

Survey Highlights

• Funds embrace greener investment—91% report having green investment practices, but 62% pursue these practices quietly. 72% report that they have policies in place regarding communications or green claims by portfolio companies, to minimise “greenwashing” accusations, an increase from 54% in 2022.
• GPs are formalizing climate, sustainability, and governance structures—60% of GPs say a Sustainability + Corporate Responsibility committee leads their sustainability efforts, up from 40% in 2023.
• GPs are reluctant to engage in policy work, beyond where regulation necessitates it—79% of GPs say they have not recently made any chances to polices or their implementation, and 61% said that where changes have been made it has been driven by compliance factors. Just 11% have added new policies, while 10% have scaled back or ceased implementing new policies.
• Sustainability + Corporate Responsibility considerations now well-established steps in the investment process, and more likely to derail—87% of GPs conduct Sustainability + Corporate Responsibility due diligence on most or all deals they consider, and 49% have rejected a deal following a screening for ESG concerns, up from 23% in 2023.
• Responsible tech and AI are key priorities—Awareness of the issues and risks connected to technology remains high, driving policies to support responsible investment practices. 91% of tech-focused GPs say they have adopted responsible tech polices, and 66% of fund are consulting third parties to assist with due diligence in relation to responsible tech.
• General concerns around ESG and anti-ESG pushback are minimal—just 18% of GPs say LPs have raised concerns about Sustainability + Corporate Responsibility policies, down from 33% in 2023. Only 25% of GPs say they have changed or slowed their ESG + Sustainability work as a result of pushback in the United States.

Visit Asia Funds ESG + Sustainability Report 2025 to read the full report.

Methodology

In the second quarter of 2025, on behalf of Morrison Foerster, AVCJ surveyed 100 Asia‑headquartered fund GPs with at least US$1 billion in assets under management to secure their insights on how ESG considerations are impacting their investments and the market. The respondents came from private equity funds, credit and special situations funds, sovereign wealth funds, insurance asset managers, and pension funds. By geography, 35% of respondents were based in China/Hong Kong, 25% in Japan, 15% in India, 15% in Southeast Asia, and 10% in other Asian jurisdictions, including Taiwan and South Korea. All responses are anonymous, and results are presented in aggregate.