KUALA LUMPUR, June 7 — Forest conservation is a growing investible space towards emission reduction in South-east Asia (SEA), particularly in Indonesia and Malaysia, according to a report by global consultancy Bain & Company and Singapore’s state investment firm Temasek Holdings Ltd.
The segment is the largest carbon abatement lever in the region and will represent a US$20 billion (RM63.7 billion) investment opportunity by 2030, the companies said in a joint statement today.
This is based on their report “South-east Asia’s Green Economy 2022: Investing behind new realities”, which also saw contributions from Microsoft Corporation.
Besides forest conservation, the report identifies four other priority levers that offer concrete investible opportunities today that will drive 60 per cent of the region’s — renewables (solar and wind), electric mobility, sustainable farming, and built environment.
"Renewables (solar and wind) represent a US$30 billion opportunity by 2030, of which solar represents US$20 billion," the statement said.
It noted that corporate investment in renewable energy solutions is accelerating in the region and accounted for at least US$6.6 billion in corporate green investment since 2020.
On sustainable farming, the statement said precision agriculture and farmer service platforms present a large potential opportunity to drive yield improvements and reduce emissions.
“Malaysia, Thailand and Vietnam are most attractive due to infrastructure readiness and strong regulatory support,” it said.
Meanwhile, e-mobility looks poised to take off in Indonesia, Thailand, and Vietnam. The statement said this is especially for two-wheeler electric vehicle (EV) manufacturing and sales due to strong automotive manufacturing expertise in these markets.
On the built environment segment, it said the most attractive opportunity can be found in efficient cooling solutions, with a large potential for green building materials and products.
According to the statement, more than US$15 billion in cumulative sustainability investments have flowed into the region since 2020, with 45 per cent being deployed in the last three quarters.
"Of all investor types, corporate investors have been the main engine driving 70 per cent (US$11 billion) of total investment.
"The strong uptick in capital flow signifies that regional investors remain optimistic about the investment potential in South-east Asia green economy, although the investment scale of sustainable projects remains a key concern," it said.
Diving deeper, it said the potential investment for tangible returns and climate impact is closely linked to three sectors, namely energy, nature, and agriculture which capture 90 per cent of the region’s carbon budget.
Temasek chief sustainability officer Dr Steve Howard said with its vibrant and dynamic digital-fuelled economy, South-east Asia has tremendous potential to make a long-term, meaningful impact in the global green transition.
“The opportunities are immense, but it will take collective will, unprecedented collaboration and meaningful financing to unlock the full potential of decarbonisation levers across all green investment asset classes," he said. — Bernama
