Net Zero Recalibration is Driving Sustainable Capital to Asia
Compared to its western counterparts, Asia's relatively stable policy stance is attracting capital for sustainability-related developments, especially in energy, according to industry leaders.
Asia is becoming a leader in sustainable finance, not only due to internal factors such as its rapidly growing renewable energy sector, but also external ones like a US pullback. In 2024, for example, APAC investments in energy transition exceeded $1 trillion for the first time, more than doubling the amount invested in America.
According to a panel during the HKGFA (Hong Kong Green Finance Association) Annual Forum 2025, the region is expected to continue attracting sustainable capital, especially in transition finance.
«We do expect to see transition-related debt increase and accelerate pretty significantly. It was around $1 trillion, both labeled and unlabeled, last year. We think it will get to around $2-2.5 trillion by 2030,» said Rahul Ghosh, global head of sustainable finance at Moody’s Ratings.
«We really do think Asia is going to be at the forefront of that story. I can tell you that our global footprint in Asia is almost 40 percent and that's double from where it was just two or three years ago.»
Stable Policymaking
One of the major drivers leading to the region’s relative attractiveness is its stable policy stance, in contrast to the US, which has seen a reversal under President Donald Trump including a second withdrawal from the Paris Agreement and a policy move back to fossil fuels.
«That shift towards more stable policy-based harbors when it comes to energy transition, I think, is definitely what we see. And I think as a result, Asia will really benefit from that,» noted Tessa Dann, Société Générale’s head of sustainable finance, APAC. «It really is a recalibration in terms of where that investment is happening and which countries will drive the transition forward.»
Impact of Tariffs?
Not all external factors have been tailwinds for Asia, most notably the impact of growing tariffs. According to Justin Wu, head of climate change APAC, global sustainability, HSBC, the market has been undoubtedly affected but trade has also been reconfiguring to adjust to new realities.
«So between 2021 and 2024, there were about $44 billion in Chinese solar exports just to the global south. Not to the EU, not to the US,» Wu outlined.
«I think while we can talk about changes in policy, we can talk about trade barriers and all these sort of things. But at a moment like this, I always like to go back and look at the numbers of what's actually happening in the real world.»
Continued Commitment by Banks
While the interest in sustainable finance by the broader economy, there have been questions raised about the commitment by global banks, especially due to the continuous exits from the Net Zero Banking Alliance across the board, including HSBC, UBS and Citi. According to Dann, the commitment remains despite such headlines.
«We have a target to achieve 500 billion euros ($588 billion) of sustainable financing by 2030 and many of our other peer banks have those targets as well,« she emphasized.
«The point is, just because some of them have left the Net Zero Banking Alliance does not mean that they have reduced their appetite in sustainable finance.»
