Over $15b in green capital invested across SEA since 2020

Over US$15 billion has been deployed in green investments across Southeast Asia since 2020, according to a report by Bain & Company and Temasek.

About 45% of the total capital was deployed in the last three quarters, the report added.

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The number of sustainability-focused startups in the region has grown 13x since 2015. This growth is also reflected in the rise of investor interest as sustainability investments jumped 3x between 2020 and 2021.

Corporate investors have been the main driver of green investment, accounting for 70% or US$11 billion of all investments in the space.

The report said forest conservation offers a huge opportunity for investors and startups, especially in Indonesia and Malaysia. By 2030, the forest conservation space is estimated to be worth US$20 billion, it added

Similarly, renewables, which include solar and wind energy, could represent a US$30 billion opportunity by 2030, according to the report. Other fertile sectors for sustainability include e-mobility and farming. E-mobility is already set to take off in markets like Indonesia, Thailand, and Vietnam, the report noted.

See also: Mapping Southeast Asia’s alt-meat makers

The report also highlighted the need to reduce the large emission gap of 2.6 gigatons to 3.2 gigatons versus global 2030 targets, which are aimed at keeping global temperature rise to within 1.5 degrees celsius. The report added that current investment levels in the space were below US$20 billion, which falls short of the estimated US$1 trillion to US$3 trillion required to close the emissions gap.

“Evolving macro challenges lie ahead for national governments, as they grapple with competing priorities, including energy security amid the Ukraine conflict, Covid-19 recovery, and inflationary pressures,” the report added.