Asean needs trillions in green investment to hit 2050 goals

New Straits Times

13 hours ago

KUALA LUMPUR: Significant investments are urgently required to accelerate Asean's journey towards sustainability, said Securities Commission (SC) chairman Datuk Mohammad Faiz Azmi.
He said these investments must focus on developing green industries such as renewable and clean energy, along with building robust regional carbon markets.
"It is estimated that green investments of around US$3.7 trillion to US$6.7 trillion will be required to meet the region's goal of achieving carbon neutrality by 2050.
"With Southeast Asia accounting for only two per cent of global clean energy spending in 2023, there remains a significant gap between the investments required and our long-term sustainability goals.
"Therefore, the ability to mobilise sufficient financing will be key to managing a successful transition," he said.
Mohammad Faiz made these remarks at the opening ceremony of the Securities Industry Development Corporation (SIDC)–Capacity-building Alliance of Sustainable Investment (CASI) Sustainable and Responsible Investment (SRI) Conference here today.
He noted that in the medium term, Asean is poised to be a major driver of global growth, contributing an estimated 33.7 per cent to global gross domestic product.
Despite this positive outlook, he stressed the importance of building long-term resilience in the face of ongoing geopolitical and economic uncertainties.
Mohammad Faiz also said businesses must increasingly pay closer attention to physical risks arising from environmental degradation and resource depletion.
He emphasised that sustainable growth today requires more than addressing financial and operational issues alone.
"The social component of sustainable growth is also important. It cannot be growth at all costs. Companies today are expected to be responsible corporate citizens.
"This means prioritising the well-being of their employees, customers, as well as the broader community," he said.
Mohammad Faiz also noted that non-compliance with safety, health and environmental standards could limit business opportunities and ultimately affect the bottom line.
He said mitigating such risks requires investment.
In supporting the move towards sustainability, Mohammad Faiz said the SC and its regulatory peers continue to encourage greater adoption of sustainable financing, including the development of taxonomies or criteria to identify green activities and projects.
He added that decarbonisation efforts are also critical, and to guide companies in their transition to net zero, the Asean Capital Markets Forum (ACMF) has released the Asean Transition Finance Guidance.
He said the aim is to help companies develop credible transition plans to access the necessary financing.
Mohammad Faiz also said the ACMF is looking at developing adaptation financing guidance under the banner of mitigation co-benefit, adaptation for resilience and sustainable finance to provide clarity on suitable projects and attract private sector interest.
According to him, adaptation projects like seawalls often lack returns and rely on government funds and making them bankable could attract private financing.
Moving forward, he said each jurisdiction has their own schedule for adoption
of the IFRS Sustainability Disclosure Standards (ISSB Standards).
He added that the implementation of ISSB Standards across the region will lead to greater availability of comparable data on sustainability.
"This, in turn, will inform better and more targeted policies, bringing us closer to the goal of a sustainable Asean community," he noted.
Mohammad Faiz also encouraged companies to fully leverage the tools and resources made available by regulators and stakeholders.
He noted that sustainable growth requires ongoing investment in capacity building and talent development.
To support this, he said the SC is facilitating the formation of an association for sustainability practitioners, which will include preparers, auditors, and other related professionals.
The initiative aims to assess current and future training needs, build essential skills, and establish professional standards.