Eastspring Investments
Oct 2025|5 min read
Executive Summary
- With over 60% of global emissions originating from Asia, the region has emerged as a pivotal market for climate solutions.
- Policy reforms and regulatory push are accelerating ESG adoption and sustainability reporting across the region.
- Asia offers a rich pipeline of investable opportunities - especially companies that are transitioning towards low-carbon models.
Asia continues to be a major driver of global growth, with GDP forecasted to rise by 3.9% in 2025 and 4% in 20261, even amid geopolitical tensions, tariffs, and policy uncertainty. As the region grows more diverse and dynamic, an active investment approach is essential not only to stay in sync with the forces reshaping the region but also to capture the full spectrum of opportunities.
Our 2025 Asian Expert Series, presented via curated chart sets, delves into three such transformative forces (technology-led innovation, consumer-fuelled growth, sustainability-driven progress) and reinforces the rationale for Asia to remain a vital component of investor portfolios.
Sustainability-driven progress is increasingly evident across Asia, a region acutely vulnerable to the impacts of climate change. This region presents a growing market for climate solutions, which creates investment opportunities across both the equity and bond markets in companies that provide green-related products and services, as well as those transitioning towards more sustainable practices. As Asia embraces sustainability with the help of supportive policies and government frameworks, it is laying the foundation for more resilient long-term growth.
World’s biggest decarbonisation market
Asia accounts for over 60% of global emissions and ASEAN requires about USD200 bn/yr up to 2030 in green investments to meet its climate goals. This gives the region a unique opportunity to become a significant market for climate solutions. This in turn gives investors an opportunity to close the climate investment gap, drive impact and unlock long-term returns.
Fig. Carbon hotspots: Why Asia’s pivot matters
Source: Annual CO2 emissions, 2023. Our world in data, Infrastructure Finance. Green Finance in Emerging Asia.
Growing market for climate solutions
Asia’s transition towards a lower-carbon economy is fuelling growth in Electric Vehicles (EVs), EV batteries, renewable energy and sustainable fuel, which in turn creates opportunities for investors.
Fig. Estimated market size for climate solutions in Asia
Source: China Electric Vehicles Market Size, Outlook, Share - Research Report 2030 India: India Solar Energy Market Size, Trends & Growth Report, 2030. Japan: Japan Hydrogen Generation Market Size, Share, Trends, and Forecast by Technology, Systems Type, Application, and Region, 2025-2033 SK: South Korea Electric Vehicle Battery Market Size & Share Analysis - Industry Research Report - Growth Trends. SG: :Singapore leads Southeast Asia in green finance and energy goals: report | Singapore Business Review. MY: Malaysia Palm Oil Market Size & Outlook, 2030. Thailand: Thailand Renewable Energy Market Summary, Competitive Analysis and Forecast to 2027 Vietnam: Vietnam approves $136 billion power plan to expand renewables, nuclear energy | NEWS | Reccessary. Indo: Investing in Indonesia’s Geothermal Energy Sector Philippines: Philippines Renewable Energy Market | Size, Growth, Share | 2025 – 2030.
A push for ESG integration
As Asian governments continue to shape sustainable development in the region, they have been increasingly promoting ESG integration in the public markets through regulatory reforms and policy support.
The benefits of such policy support include:
- Increased investor confidence and mitigation of regulatory risks
- Company incentives such tax breaks or subsidies for green investments
- Capital from global investors seeking to align with climate goals/SDGs
- Continuous pipeline of investable projects
Fig. Asia’s sustainability reporting landscape
Source: ESG refers to Environmental, social and governance, serving as the 3 core pillars in ESG frameworks. TCFD: The Task Force on Climate-related Financial Disclosures (TCFD) is an international body established to create standardised guidelines for companies and financial institutions to disclose climate-related financial risks, helping inform investors, stakeholders, and the public more effectively. GRI: The Global Reporting Initiative (GRI) is an independent international organization that equips businesses and institutions with a standardized framework to communicate their environmental, social, and economic impacts responsibly and transparently. These areas represent key dimensions that companies are expected to disclose in their reporting guidelines Guide to Asia Pacific's ESG Regulations & Sustainability Reporting Landscape, SEBI Mandates ESG Reporting for Top 1000 Listed Companies, An Overview of Current ESG Disclosures in ASEAN Countries - Fuller Academy. 1. Under SEC Circular 4/2019. 2. Under POJK 51/2017. 3. Under Circular 96/2020. 4. focusing on scope 1 and 2 emissions in 2025 and then scope 3 emissions in 2026. 5. Through the Form 56-1 One Report.
Increased alpha opportunities
There is room for listed Asian companies to improve their sustainability practices and ESG ratings. 37.4% of Asian companies2 have ESG ratings of “A” and higher, below the global average3 of 48.6%. Beyond companies that are already producing revenues from green-related products and services, investors should also not ignore companies and sectors that may not be traditionally included in green-focused transition solutions but are transitioning towards more sustainable practices.
Fig. Examples of transition opportunities in Asia
Source: Eastspring Investments. September 2025.
Diversified sustainable bond opportunities
The outstanding value of the ASEAN +3 (China, Japan and Korea) sustainable bond market reached USD922.7b, 18.3% of the global sustainable bond market. It is the world’s second largest regional sustainable bond market, trailing behind the EU-20, but is more diversified, according to the Herfindahl–Hirschman Index. As Asia powers ahead on its decarbonsiation path, an increase in green, sustainable and social as well as sustainability-linked bond issuances should present a diverse and growing pipeline of fixed income opportunities for investors aligned with the region’s low-carbon transition.
Fig. Breakdown of ASEAN + 3 sustainable bond market
Source: As of end March 2025. Asia Bond Monitor. June 2025. Herfindahl–Hirschman Index: The Herfindahl-Hirschman Index (HHI) is a metric used to assess market concentration by evaluating the relative size of firms within an industry. It is calculated by summing the squares of each company's market share, with values ranging from near zero to 10,000—lower scores indicating a more competitive, less concentrated market.
Explore our other themes : Asia’s technology-led innovation and Asia’s consumer-fuelled growth
Sources:
1 IMF, April 2025.
2 MSCI Asia Pacific IMI
3 MSCI ACWI IMI. Data as of 31 December 2024. MSCI ESG Research.
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