SINGAPORE, Nov. 26, 2020 /PRNewswire/ — Southeast Asia is waking up to a USD1 trillion annual economic opportunity if it pursues the economic and societal potential of the green economy, due in equal parts to need and opportunity. The region could be greener by 2030, spurred on by accelerating global momentum and investment to address sustainability and climate challenges. Yet Southeast Asia still has a long way to go. With its share of global population, biodiversity and resources, the region can play a far bigger role, offering significant growth potential moving forward. These are among the findings of Bain & Company’s Southeast Asia sustainability outlook, Southeast Asia’s Green Economy: Pathway to Full Potential, released today.
Southeast Asia could transform quickly, ensuring sustainable energy, creating healthy and sustainable food ecosystems, developing efficient industries and supply chains, establishing greener and more connected cities, and spearheading green financing. Accelerating development of the Southeast Asian green economy offers a USD1 trillion economic opportunity annually for businesses by 2030, enabling regional companies and societies to build a competitive advantage for the future.
As part of Bain’s continued efforts to drive sustainability transformation across the globe, the firm has launched a Global Sustainability Innovation Centre (GSIC), with the support of the Singapore Economic Development Board (EDB). The GSIC will seek to pioneer innovative solutions to accelerate corporates’ sustainability journeys, tackling some of the planet’s biggest challenges. The center will be based in Singapore and will support Bain’s deep expertise in sustainability in the region – helping companies to reach their ESG goals.
“Globally, countries are prioritizing sustainability investments as concerns about climate change and the resulting transition to a green economy gathers speed and urgency,” said Gerry Mattios, Co-Director of Bain’s Global Sustainability Innovation Center in Singapore and co-author of the report. “Stimulus programs injected into economies around the world to address the COVID-19 pandemic and promote ‘build back better’ initiatives are accelerating the push towards greener, more sustainable industries. Yet in this race, Southeast Asia can build a lot more momentum to seize the opportunity.”
Currently, there is a gap between where Southeast Asia is compared to other regions in their green initiatives. This gap presents a threat to Southeast Asia’s global competitiveness but also creates immense opportunities for the region.
“Adopting green practices will meet the region’s wider environmental, social and governance (ESG) ambitions and in turn deliver societal benefits such as preservation of the earth’s natural ecosystems and social inclusivity—ends in themselves that also underpin increased growth,” explained Dale Hardcastle, Co-Director of Bain’s Global Sustainability Innovation Center in Singapore and also co-author of the report. “By unlocking the green economy, the economic growth of a wide range of sectors in the region would immediately follow.”
Southeast Asia has pathways across industries that can unlock the trillion-dollar potential of the green economy. Together they illustrate the areas where Southeast Asia can be a global leader:
- Sustainable energy and resources: Where excessive resource extraction and energy consumption followed by waste mismanagement were the norm, the region could benefit from a USD270 billion opportunity as it embarks on decarbonization and electrification, a sustainable energy transition, responsible consumption and embedded circularity.
- Healthy and sustainable food systems: Where agricultural growth has typically been inefficient and wasteful, Southeast Asia has the potential to innovate and increase production in a regenerative and conscious manner that will make nutrition widely accessible. This represents an USD205 billion opportunity for the region.
- Efficient industrial operations and logistics: As industrial activity in Southeast Asia expands due to geopolitical shifts, manufacturing processes can be reimagined and supply chains connected and made transparent with full traceability. The region can help ensure low carbon footprint and capture an USD200 billion opportunity while doing so.
- Green and connected cities: As urban populations grow, the way is clear to build affordable green homes in satellite settlements connected by green public transportation, representing an USD185 billion opportunity in Southeast Asia.
- Green financing and liquid carbon markets: While sustainable initiatives have struggled for financing and carbon-offset revenues have gone to waste, Southeast Asia can take the lead in green financing be a home for a liquid carbon market where incentives to reduce emissions can be part of the prescription.
“Bain’s decision to establish its GSIC in Singapore will strengthen our sustainability ecosystem, and help companies here and across the region capture green growth opportunities,” said Dawn Lim, Vice-President and Head of Commercial and Professional Services, EDB. “As demand for sustainability services continues to grow, we look forward to working with Bain and other like-minded companies to create new business and job opportunities in areas such as clean energy, green infrastructure and buildings, as well as low-carbon technologies.”
“The launch of the GSIC is a landmark step in championing sustainability for us at Bain, and we are thrilled to have received the support of many industry leaders, especially Singapore’s Economic Development Board,” commented Satish Shankar, Managing Partner, Asia-Pacific, Bain & Company. “We believe that Southeast Asia has the potential to lead sustainability transformation efforts across the world, and we are committed to seeing this through for a better, greener world.”