Across Southeast Asia, family businesses have long formed the bedrock of national economies deeply rooted in tradition, driven by values, and committed to long-term wealth creation. Today, however, these legacy enterprises are entering a defining era. As intergenerational wealth transfer accelerates and environmental, social, and governance (ESG) expectations intensify, a growing number of next-generation leaders are reimagining legacy, not just as inheritance, but as a responsibility to shape a sustainable future.
A Generational Shift With Purpose
It is estimated that more than $1 trillion in family business assets will transition to the next generation in Asia over the coming years. This shift is not merely operational—it’s philosophical. According to the UBS Global Family Office Report 2025, over 65% of next-gen family office leaders in Asia are prioritizing sustainable investing and impact-driven decision-making, a notable increase from the 37% recorded among their predecessors.
For many of these rising leaders, ESG is not just a regulatory necessity or a reputational shield, it is a framework for innovation, resilience, and differentiation in a dynamic market landscape. The message is clear, enduring family legacies must evolve to remain relevant in an increasingly climate-conscious, stakeholder-driven world.
From Philanthropy to Integrated ESG Strategy
Historically, many family enterprises across the region supported societal development through philanthropy—funding schools, clinics, or places of worship. While this remains meaningful, there is a marked transition underway. More family-run businesses are integrating sustainability into their core operations, governance, and capital allocation strategies.
Industrials are embracing decarbonization targets and investing in circular production models. Agribusinesses are turning to regenerative agriculture to address both biodiversity loss and food security. In real estate, family-owned developers are focusing on green-certified buildings and resilient infrastructure to respond to increasing climate-related risks.
Importantly, the financial arms of these enterprises, family offices are also evolving. According to Bain & Company, more than 50% of family offices in Southeast Asia are now deploying capital with clear environmental and social objectives, leveraging tools such as impact bonds and blended finance to amplify systemic outcomes.
A Case in Point: Transitioning Steel Toward a Greener Future
One example of this shift is unfolding in Indonesia’s steel sector, where a long-standing family business is redefining what legacy means in a hard-to-abate industry.
When second-generation leader Kimin Tanoto stepped into a strategic leadership role at Gunung Raja Paksi (GRP) in 2019, he introduced a long-term vision rooted in sustainability. Recognizing steel’s carbon-intensive reputation, GRP began a strategic pivot—shifting from traditional blast furnace methods to electric arc furnace (EAF) technology, which recycles scrap metal and drastically reduces emissions.
In an interview with the Financial Times, Kimin highlighted the impact: “Steel produced from a blast furnace emits around 2.4 metric tonnes of CO₂ per tonne of steel, while electric arc furnaces emit as little as 0.4. It’s game-changing.”
Beyond production methods, GRP is exploring renewable energy integration to power its facilities, distancing operations from coal-based grids and aligning more closely with ESG principles. While internal alignment took time, navigating generational perspectives and operational complexity, the direction was ultimately reinforced by market realities, such as global overcapacity, investor expectations, and tightening climate policy.
The progress so far reflects how conviction and strategic alignment can unlock real momentum. GRP has not only advanced on its green steel roadmap, but also attracted global partnerships that validate its direction. Notably, it secured financing from the International Finance Corporation (IFC), marking the first IFC loan to a steelmaker in over a decade to accelerate decarbonization and innovation.
Rather than chase accolades, the GRP story is about conviction and persistence. It shows how a family-led enterprise, when guided by long-term thinking and stakeholder trust, can turn sustainability into both a business advantage and a generational commitment.
Why Family Businesses Are Uniquely Positioned
Family businesses possess a distinctive advantage in the ESG space, not because of scale, but because of perspective. Freed from quarterly pressures, they are often able to make bold, patient investments in areas such as clean technology, inclusive employment, and regenerative supply chains. Many operate in close proximity to the communities they serve, giving them a firsthand view of environmental and social needs, and a deep sense of responsibility.
This proximity also allows for intuitive capital deployment, responsive governance, and adaptive leadership, all essential traits in a world where agility and authenticity increasingly define business success.
Rather than chase accolades, the GRP story is about conviction and persistence. It shows how a family-led enterprise, when guided by long-term thinking and stakeholder trust, can turn sustainability into both a business advantage and a generational commitment.
From Succession to Stewardship
In an era marked by climate urgency, social transformation, and technological disruption, the definition of business success is expanding. Legacy is no longer just a matter of preservation, it is about contribution.
Southeast Asia’s family businesses have a pivotal role to play in advancing the region’s sustainability agenda. Not because they are obligated to do so, but because they are uniquely equipped, with long-term vision, community trust, and intergenerational ambition.
As demonstrated by leaders like Kimin Tanoto at GRP, the path forward lies in reimagining what legacy can mean: not just maintaining what was built, but transforming it to meet the challenges of the future.
