Creating value as Asia decarbonises

Executive summary

Asia is key in realising the world’s net zero ambitions, given it is responsible for more than a third of the world’s total carbon emissions. While the region is taking active steps towards decarbonising, for instance by being a key leader in selective clean energy-related solutions, more needs to be done.

Still, the path to net zero is complex and requires large and increasingly vast investment outlays. Governments alone are unable to foot the bill. This is where private capital can come alongside public financing in narrowing the funding gap.

Although the green energy transition is paved with challenges, there are also abundant opportunities as investments in this area scales up. Asia’s decarbonisation sector is well-positioned for robust financial and ESG returns – backed by strong fundamental growth, meaningful current valuations, and rising investor interest.

The key takeaways from this report are:

  • Decarbonisation of Asia requires an extraordinary amount of capital, and the private sector will need to contribute.
  • Private sector funding is beginning to flow into Asian decarbonisation, but the pace of investment, alongside public sector funding, needs to accelerate.
  • Securing greater private sector funding will require more consistent regulation, further innovation in the finance market and blended finance to de-risk investments of large infrastructure and technology projects.
  • There is significant opportunity for private equity to both fill the investment gap and drive awareness and higher standards across the decarbonisation space in Asia.
  • Investment offers the potential for attractive returns. Renewable energy and electric vehicles currently provide the most accessible opportunities, but more will emerge.
  • There are also growing opportunities to invest in the ‘greening’ of carbon-intensive sectors, enabling the decarbonisation of activities ranging from steel production to agriculture.
  • Active engagement by asset owners and managers can play a role in influencing positive change, by getting companies to pay closer attention to decarbonisation.
  • There is rising appetite and demand for ESG-related strategies in Asia.

For more insights, please download the report below.

To learn more about how private equity can catalyse private capital towards decarbonising Asia, read our “Private equity makes a pitch for decarbonising Asia” article here.