Authored by Ivana Popovic and Michael Wilkins, this paper examines the key socioeconomic implications of Southeast Asia’s green transition, categorised into three groups: territories, participants, and sectors. It also outlines the critical roles and responsibilities of financial institutions in addressing these impacts through their lending and investment activities, considering the region’s unique needs, existing financial frameworks, and best practices. Since taking office in January 2025, U.S. President Donald Trump has issued a series of energy and climate-related executive orders, including those concerning the U.S. withdrawal from the Paris Agreement and the promotion of domestic fossil fuel production. These actions are expected to have far-reaching consequences for climate action both within the U.S. and globally, including in developing countries across Southeast Asia.
However, regardless of the climate policies of the Trump administration, the authors of this paper believe that stakeholders worldwide—both public and private—must continue to advance a just net-zero transition. This transition is not only essential to preventing further environmental degradation but also represents the most economically efficient path forward. Given Southeast Asia’s exceptional vulnerability to climate change and the rising costs of adaptation and mitigation, sustainable economic growth can only be achieved by aligning with the goals of the Paris Agreement. A fair and inclusive transition that considers the diverse needs of all social groups is imperative for ensuring long-term prosperity in the region.
This report was jointly prepared by the Singapore Green Finance Centre and the Centre for Climate Finance and Investment at Imperial College Business School.
Key takeaways
Southeast Asia is one of the few regions in the world where economic growth continues to be accompanied by rising emissions, highlighting the urgent need for a just transition.
• Recent analyses indicate that transitioning to a low-carbon economy in Southeast Asia can deliver substantial environmental, economic, and social benefits—provided that policies and actions effectively address associated socioeconomic injustices.
• A key challenge in achieving a just transition in Southeast Asia is the inadequate financing available for clean energy projects.
• To advance just transition objectives in Southeast Asia, the finance sector should:
- Commit to addressing social injustices as part of their green transition strategies.
- Leverage existing frameworks to start incorporating just transition objectives.
- Consider region- and country-specific socioeconomic impacts in their strategies.
- Integrate just transition goals into financial products and screening processes.
- Scale up climate finance and enhance inclusivity.
- Engage with clients and other stakeholders to ensure broad and inclusive participation.
- Explore investment opportunities that offer both social and environmental benefits.
- Monitor and disclose progress in meeting just transition goals.
