Unlocking the potential of sustainable finance in Southeast Asia

Sustainability is transforming the Banking and Capital Markets sector. Increased regulatory scrutiny, stakeholder activism, and rapid innovation are all contributing to a need for comprehensive change, alongside a redefinition of the social license. Organisations in the Banking and Capital Markets sector are required to respond promptly – not only as a bulwark against future disruptions – but to unlock, amplify and realise potential opportunities.

With regulators today committing to a sustainability agenda by setting minimum standards for sustainability reporting and disclosures in an effort to introduce more transparency and accountability on climate issues, it is not a surprise that business leaders are placing the Environmental, Social, Government (ESG) upskilling agenda as one of their top priorities. Banks and capital markets are no exception, where sustainable practices have become an imperative for businesses to not only remain profitable, but also attract the right talent.

Presently, Southeast Asia remains heavily reliant on fossil fuels, with six of the world’s top ten coal-dependent countries situated in Asia. Coal, oil and natural gas continue to dominate the region’s electricity mix, while renewable energy sources accounted for a mere 18% of its power generation in 2020. A 2017 study by Singapore’s DBS Bank and the United Nations Environment Inquiry found that USD 3 trillion in green investment is required between 2016 and 2030 to protect SEA economies from climate change and other environmental shocks.

Banking and Capital Markets are facing a shortage of talent and skills required to support sustainability shifts, and to respond to changing consumer demands. Banking and Capital Markets organisations need to consider the skills and capabilities required within their workforce to unlock the potential of sustainable finance – at pace.