Asia Pacific urgently needs stronger cross-border cooperation and integrated climate risk analysis to bridge its estimated $1.5 trillion annual sustainable financing gap. Regional and global leaders issued this urgent call at a recent summit in Singapore.
Asia Pacific requires $1.5 trillion annually in green and sustainable investments to meet its climate targets. However, many developing economies struggle to attract this capital, primarily due to high perceived risks, fragmented datasets, and inconsistent regional taxonomies. Dr. Amy Khor, former Senior Minister of State, Ministry of Sustainability and the Environment, Singapore, described the challenge as “multi-faceted,” observing that “the highest capital costs often afflict those that need financing most.”
The consensus among summit attendees was that mobilizing all sources of capital—public, private, and blended—requires clear, harmonized standards and de-risking mechanisms. Dr. Khor stressed that “De-risking through public and philanthropic funds is essential. Building confidence, credibility and cooperation across borders will be key to unlocking scale.”
In this effort, Singapore is leading efforts to harmonize frameworks, introducing the Singapore-Asia Taxonomy and aligning with the ASEAN Taxonomy Board to define credible transition activities.
A key theme of the summit was the need to systematically integrate climate adaptation capacity into investment analysis. Parag Khanna, founder and CEO, AlphaGeo, called for countries to assess climate vulnerability through data-driven tools. He unveiled the new ‘Global Investment Risk and Resilience Index,’ co-developed with Henley & Partners, which quantifies countries’ exposure to risks alongside their adaptive capacity. Khanna argued that this tool is “a step toward helping countries become more resilient — and ultimately more investable,” adding that “Adaptability confers both credibility and capital.”
Market momentum, particularly in Asia Pacific, supports the transition. Eric Usher, Head, UNEP Finance Initiative (UNEP FI), noted that mainstream financial institutions increasingly view climate risk as material to business performance. “The business case for sustainable finance is clear,” Usher said. “Integrating sustainability does not mean sacrificing profit; it means de-risking portfolios and creating new growth markets.”
This optimism is backed by data showing strong regional growth, with sustainable debt issuance in Asia Pacific reaching $274 billion in the first seven months of 2025, outpacing the US and Europe. Jessica Cheam, founder and CEO, Eco-Business, stated that Asia Pacific remains a “bright spot” driven by “courageous policy, innovative finance and good governance.”
