Asia must set clear and robust decarbonisation pathways meet green transition needs

Leaders and decision makers at the summit of the seventh edition of Unlocking capital for sustainability 2024 in Singapore on Thursday 12 Sept 2024.

Asia must set clear and robust decarbonisation pathways meet green transition needs, says Singapore Climate Action Ambassador Ravi Menon at regional sustainability summit

There is an urgent need to decouple economic growth from emissions in a “climate-impaired world” while adapting to the region’s unique challenges, says the ambassador at the Unlocking capital for sustainability summit 2024. Key decision-makers at the forum also discussed the importance of promoting high integrity carbon credits and credible financing mechanisms that can accelerate a fossil fuels phase-out.

The eighth edition of The Liveability Challenge, launched at the forum, will see new thematic tracks added to expand its global search for disruptive climate solutions to address urban challenges.

Singapore, 12 September – Leaders and decision-makers across the government, financial institutions and civic society gathered in Singapore today for the main summit of the seventh edition of Unlocking capital for sustainability 2024.

The summit also marked the launch of The Liveability Challenge 2025, a global crowdsourcing platform presented by Temasek Foundation that identifies and accelerates the commercialisation of innovative climate solutions to address pressing sustainability challenges.

Themed ”Transforming Asia: Mobilising finance at speed and scale”, this year’s thought leadership forum, organised by Eco-Business in partnership with United Nations Environmental Programme Finance Initiative (UNEP FI), saw high-level decision-makers convening to discuss and commit to actionable initiatives that can mobilise capital markets for sustainable development.

Amid geopolitical uncertainties and governance gaps that can impede genuine climate action, speakers highlighted the risks and opportunities that Asia would face in the immediate future.  

Ravi Menon, Singapore's Ambassador for Climate Action and Senior Adviser (National Climate Change Secretariat), who was guest of honour at the Singapore summit told decision makers: “If emissions in Asia are not abated, the result will be catastrophic climate change globally. But Asia should not have to choose between sustaining economic growth and reducing emissions. That is a false choice. Asia will have to work towards decoupling economic growth from emissions. It will not be easy.”

This requires Asia to chart a transition pathway that is contextualised to its own unique challenges and its stage of economic and social development, he said. “But there can be no compromise on the eventual goal, which is to achieve close to net zero emissions around the middle of the century. That timeline is not set by politics. It is not set by economics, but by nature.”

Asia also needs clear standards on what constitutes a credible sectoral decarbonisation pathway, Menon added. “It is not difficult to identify and invest in pure green activities like clean energy and electric mobility, but most of Asia's activities are transition activities that are about progressively ‘greening the brown’ rather than switching colours at one go. But how do we ensure that greening the brown will eventually lead to green, and is not greenwashing in disguise? We need robust and objective definitions of what we mean by transition activities to build confidence that investments in these activities will result in desired climate outcomes.”

In a special keynote speech, Professor Kishore Mahbubani, Distinguished Fellow at the Asia Research Institute, National University of Singapore (NUS), spoke on the intersection of geopolitics and climate change.

“What climate change has told us is that the world has shrunk. All eight billion of us no longer live in 193 separate boats. We live in 193 separate cabins on the same boat. But humanity is not coming together to deal with climate change or other such global challenges. Why are we doing this? The answer is geopolitics, which is a far more powerful driving force when it comes to global decision-making than common sense and rationality in dealing with a common challenge. You have to follow geopolitics if you want to understand how to win this battle against climate change,” he noted.

With just over five years left, no country in Asia is currently on track to meet any of 17 goals set out in the 2030 Sustainable Development Goals (SDG), despite notable strides in recent years. Pressure is mounting to accelerate progress within the region, which will require another 32 years to meet the 2030 SDG agenda at the current pace.

The next five years are therefore pivotal. To bridge the trillion-dollar funding gap necessary for Asia to regain momentum, resources must be mobilised through clear policies, robust investment plans, and strategic partnerships.

The forum, which gathered some 200 delegates, covered a wide range of topics including specific policy interventions in Asia, the challenges in transitioning from coal-fired power plants to clean energy, why boards must prioritise sustainability amid short-term and long-term goals, as well as how climate tech innovations in Southeast Asia can escape the “valley of death” funding gap.

The Singapore event follows regional editions of the Unlocking capital for sustainability series held in Indonesia, Malaysia and the Philippines in recent months, which has featured over 60 speakers and hundreds of delegates across the region.

On the financing gap in the region, Jessica Cheam, Founder and Managing Director of Eco-Business said: “In a record elections year, the forum’s discussions were a sobering reminder that we increasingly will see geopolitical tensions intersect with and impact climate action. At the same time, we are starting to see a lot more private sector-driven, bottom-up initiatives that could get us ahead and see the region make great strides in achieving ambitious targets. As we head into the COP29 climate summit in Baku, Azerbaijan at the end of the year, also known as the finance COP, we have an opportunity to look at the policy mechanisms and financial levers that can be real gamechangers.”

Launch of The Liveability Challenge 2025

Speaking at the launch of The Liveability Challenge 2025, Heng Li Lang, Head of Climate and Liveability at Temasek Foundation, said: “The Liveability Challenge is all about searching for bold, breakthrough innovations to tackle our toughest climate challenges. As we usher in its eighth edition, the momentum to make a climate impact is growing, fuelled by our key partnership with Eco-Business among many other strategic partners. Collectively, we are driving meaningful change for the planet and future generations. We are excited to see the next wave of game-changers rise to this global climate challenge.”

The eighth edition of The Liveability Challenge will feature two new themes seeking innovative solutions from around the world – Decarbonisation and Cool Earth. More than S$2 million in catalytic funding will be awarded at The Liveability Challenge 2025. Two grand winners will be selected across any of the themes and will receive a grand prize of S$1 million each.

The two themes of The Liveability Challenge 2025 unveiled today are:

Decarbonisation

The Liveability Challenge is looking for disruptive deep-tech solutions that provide scalable and impactful solutions to reduce carbon emissions across diverse industries, including waste-to-resource; renewable energy; and energy efficiency solutions.

Cool Earth

The Liveability Challenge is seeking groundbreaking innovations that specifically address the challenges posed by climate-induced extreme weather conditions, such as heat mitigation and nature-based solutions.

The Liveability Challenge’s call for submissions officially opened today and will close on 9 February 2025. Steering committees will convene to select the finalists, who will pitch their solutions to judges and investors at The Liveability Challenge Grand Finale in May 2025.

Industry insights

Unlocking capital for sustainability 2024 was held at ParkRoyal Collection Marina Bay and welcomed speakers and delegates across Asia and the world, including leaders in the policy arena, the financial sector and civic society.

“The theme of this year’s event perfectly aligns with LRQA’s strategic priorities, emphasising the critical role of high-quality verified data and robust regulation in driving sustainable finance and supply chains. At LRQA, we are deeply committed to advancing sustainability by empowering our clients with the essential tools and insights to navigate the evolving risk landscape and climate finance more effectively. By focusing on robust data-driven decision-making, we are contributing to a more resilient and sustainable future," said Kevin Franklin, Chief Growth Officer and Managing Director, Advisory, at LRQA.

"With three ASEAN Sustainable Bond issuances, BDO has set records for Philippine financial institutions and companies. The Bank's Stainable Finance Framework, validated by a third party, confirms alignment with global and regional bond standards, ensuring high integrity and investor impact," said Marla Garin-Alvarez, Vice President and Head, Sustainability Office, BDO Unibank.

“Three things are critical to accelerating climate finance: risk allocation, policies that stimulate demand, and driving scalability. First is to improve project bankability by allocating risks to each party in the transaction according to their ability to manage and mitigate the risks. For instance, political risk can be mitigated by blended finance with multilateral development banks. This risk allocation is critical to getting nascent projects off the ground. Secondly, governments can play their part by introducing regulations that stimulate demand for emerging green technologies. This paves the way for supply to follow. Once supply scales up, costs start to come down and we get closer to commercial viability. Finally, standardisation and alignment of approaches are key to achieving scale. In ASEAN, energy regulations vary greatly across markets and often lead to power purchase agreement delays. More consistency in regulations and agreements will help to ease and hasten the negotiations,” said Mike Ng, Group Chief Sustainability Officer, OCBC.

“To unlock the exponential capital needed to transition to a climate and nature positive economy, all parts of the ecosystem to be working in tandem. This includes governments, real economy, investors and financial institutions. From establishing clear country-specific pathways to net zero, to providing enabling grants and capacity building, and to developing the right environment to scale transition-related finance, we need to find pragmatic ways to pull as many levers as possible,” said Melissa Moi, Head of Sustainable Business, UOB.

“Stronger partnerships between the public and private sector are critical to building sustainable climate solutions. Amazon Web Services (AWS) is committed to providing not only the latest GenAI and machine learning technologies, but also deep technical expertise, to empower innovators to jointly and urgently address the climate crisis. The role of blended finance, much like our AWS financial grants, serves to lower entry barriers and support the adoption of technology to realise sustainability goals and positive environmental outcomes. These public-private partnerships are reflective of AWS’s latest leadership principle ‘Success and Scale Bring Broad Responsibility,’” said Ashley Tan, Global Head of Sustainability and Social Impact, AWS.

“Sustainable financing has a vital role to play in enabling the transition to a more sustainable economy because it incentivises businesses to extend their ambition. RGE has committed to using sustainability-linked loans for its financing requirements across its business groups, recognising their value as a strategic instrument that directly aligns our investments with measurable environmental and social outcomes. Performance-based financing is not new, but a serious range of sustainability metrics are, and they are proving to be an effective catalyst for transformation,” said Lucita Jasmin, Group Sustainability Director at RGE.

Christophe Bahuet, UNDP Deputy Regional Director for Asia and the Pacific, closed the forum by emphasising the importance of sustainable finance in addressing the region’s increasing environmental and social challenges.

“What I've been hearing throughout the day is a consensus about the need to mobilise sustainable finance to address environmental and social challenges, and the need to bring together public and private finance to unlock sustainable finance and private funds into developing new instruments. It's certainly a true consensus that has emerged and also a real debate, and I think this event today is a very good example of vitality of the debate."

“It is inspiring to witness the innovative strategies and insights that have emerged from this year’s Unlocking capital for sustainability discussions. Initiatives like The Liveability Challenge, which harness global talents, also demonstrate how funding can be effectively channelled through multistakeholder partnerships. We hope these efforts will lay the foundation for Asia’s transition to a low-carbon future, while enhancing resilience to global challenges. We are grateful to all our partners for their support and unwavering dedication to Asia’s sustainable development transition,” Cheam added.

This year’s “Tech for Good” partner was Amazon Web Services. Its strategic partners included BDO Unibank, LRQA, OCBC Bank, RGE Group and UOB.

Unlocking Capital for Sustainability 2024 also follows Sustainability Media Academy, a flagship programme delivered by Eco-Business’ non-profit arm EB Impact, hosting almost 50 of the region’s journalists and editors from across nine countries.

A full-day masterclass in collaboration with UNEP FI was held on the sidelines of the event. Participants discussed advancing financing for nature and biodiversity to build capacity among business in the region.

For more information, please visit the Unlocking capital for sustainability website at https://www.unlockingcapitalforsustainability.com/singapore/2024#partners.