#19 GKC | 🌱 Climate Action & Resilience In Southeast Asia

Happy Monday! It’s November, aka two more months to year end. How are you doing with keeping up to your 2024 resolutions? I’m working hard on my health goal 💪

Continuing our Know Your Investors Series, in collaboration with Turbo Net Zero.

Turbo Net Zero is a pure-play sustainability consultancy company focuses on delivering ESG value-creation solutions for corporates and investors.

We’ll discuss about the evolving field of impact investing across Southeast Asia in three parts.

1. Overview of global impact investing frameworks

2. Sector-specific impact themes within SEA (Today’s Episode)

3. Case studies of successful impact investors and companies in SEA

Let’s get started!

Navigating Climate Action In Southeast Asia

In recent years, global investment in climate action has been expanding at an impressive rate of approximately 15% annually, surpassing $600 billion in 2023. This reflects a growing commitment to addressing climate change.

However, Southeast Asia (SEA) still trails behind the global average in green financing, despite being highly vulnerable to climate risks. Investment in sustainable projects across the region remains limited, falling short of meeting SEA's climate objectives by 2030 (estimated $200 billion annually).

Closing this funding gap is essential for the region to align with global climate ambitions.

Key Investments and Themes Shaping a Sustainable Future

SEA’s vulnerability to climate impacts necessitates substantial investments in sustainable initiatives to ensure a resilient future. The following 6 major investment themes, along with their 16 investable ideas were identified as prioritization.

Sources: Bain & Company, GenZero, Standard Chartered, and Temasek, 2024

i. Green Fuel Source

Green fuel sources are essential for Southeast Asia (SEA) to curb emissions in high-impact sectors. With over 70% of SEA’s energy mix still reliant on fossil fuels, transitioning to alternatives like biofuels and green hydrogen could dramatically lower carbon output, especially in hard-to-abate sectors like shipping and aviation.

Solar and Wind Energy Transformation 

Southeast Asia, with its abundant solar and wind resources, is uniquely positioned to expand its renewable energy capacity while minimizing greenhouse gas emissions—an essential step in combating climate change. Government policies, including biofuel mandates and subsidies, further support these green fuels as practical pathways for clean energy.

Economic and Policy Support

SEA’s governments are accelerating policy support for green fuels, with Indonesia and Malaysia leading in biofuel mandates. Green fuel investment aligns well with regional goals under the ASEAN Plan of Action for Energy Cooperation, highlighting a drive for energy independence and resilience against fossil fuel volatility.

ii. Greener Transportation

Southeast Asia's rapid urbanization and economic growth have led to rising emissions from vehicles, logistics, and public transport systems, with the transportation sector now contributing a significant share of the region's greenhouse gases due to its heavy reliance on fossil fuels and limited use of sustainable alternatives.

Electric Vehicle (EV) Potential

With ongoing improvements in battery technology and a decline in EV production costs, the EV market is increasingly accessible. Governments across SEA, including Thailand and Singapore, are implementing incentives and subsidies to encourage both production and purchase of EVs, building the infrastructure needed for EV adoption, such as public charging networks.

Public Transportation Electrification

Electrifying public transportation is another high-impact solution, particularly in SEA’s densely populated cities. Countries like Indonesia and the Philippines are piloting electric bus programs, signaling the shift towards cleaner urban transit. The large-scale adoption of electrified public transport would provide a sustainable solution to SEA’s urban mobility needs while reducing dependency on fossil fuels.

Climate Investment Landscape In Southeast Asia

Notable Climate Investors

• GenZero: A SG-based, Temasek-owned investment firm dedicated to accelerating decarbonization.

• Circulate Capital: An early-stage VC in circular economy in South and Southeast Asia.

• Clay Capital: An early & growth VC investing in high impact agrifood tech in Asia and Europe.

• Radical Fund: An early-stage VC investing in founders who are delivering climate resilience for Southeast Asia.

• Hatch Blue: A global catalyst for a climate-smart, truly sustainable and just (sea)food transition.

• AgFunder: An early-stage VC investing in agrifood tech globally.

Key Takeaways

Southeast Asia’s climate investment landscape is becoming more diverse, featuring a mix of venture capital, private equity, and corporate investors committed to funding climate tech and green solutions spanning renewable energy, green transportation, and sustainable agriculture.

Key challenges in SEA’s climate investment landscape include regulatory complexities, limited regional infrastructure, and the high initial costs of sustainable tech.

Despite regulatory and infrastructure challenges, SEA’s abundant natural resources and growing government support create substantial opportunities. Investors can engage in high-return, early-stage projects.

Again, thank you Turbo Net Zero for this amazing content collaboration.

If you are an impact investor looking to implement ESG strategies OR corporates exploring impact measurement strategies, hit Kenny up!

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Hope this is helpful! 🙂 

Feel free to reach out via LinkedIn or email if you have more questions.

References

• World Bank Group: Climate Finance Update

• 2023 Joint Report On Multilateral Development Banks’ Climate Change

• Southeast Asia’s Green Economy 2024 Report: Moving the Needle

• Bain & Company. (2019). Sustainability Wins as Investors in Southeast Asia Shift Focus

• HolonIQ. (2023). 2023 Southeast Asia Climate Tech 50

• Investments Pour into Southeast Asia’s Climate Tech Solutions as Temperatures Rise. KrASIA

• International Energy Agency (IEA). (2024). Southeast Asia Energy Outlook 2024: Executive Summary

• Openspace Ventures. (2024). Accelerating Venture Climate Investment in Southeast Asia

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