Green Growth: Building green businesses in Asia

ONE of the greatest levers to get to net-zero is deploying climate technologies. Businesses and governments can apply these technologies to decarbonise the fossil fuel base and build new green businesses. There are abundant opportunities for businesses that move quickly and strategically to capture the market for green business. As of August 2022, more than 15 countries and 670 companies in Asia Pacific have set (or have committed to setting) emission-reduction targets.

Our research tells us that the addressable market size (by revenue) for sustainability-related business is expected to be US$4 trillion to US$5 trillion in Asia by 2030. Green business building (GBB) holds financial incentives for early movers, and possible disincentives for those businesses that do not join the transition.

The time for action is now. Under the Network for Greening the Financial System’s (NGFS) Net Zero 2050 scenario, it is estimated that around US$9.2 trillion will need to be spent on average every year on physical assets for energy and land-use systems from 2020 to 2050. Of this US$3.1 trillion will need to be spent in Asia. Incumbent businesses are increasing their investments in greener business operations and new green business lines. In the investment space, capital deployment to green businesses is growing in both the private and public sectors. Pivoting to play an offensive value creation strategy now could be a critical move for companies wanting to become green business leaders in Asia.