In Short

• Asia-Pacific attracted 6% of global climate finance in early 2025.
• Southeast Asia has become a new sustainable finance hub with growth opportunities in clean energy, mobility, water systems, and urban resilience.
• Hong Kong and Singapore are new hubs for climate finance and green bond issuance.

The Asia-Pacific region, of late, has been attracting climate finance investors as they seek new arenas for green growth.

Six per cent of global climate fund allocations, according to recent data, channelled into the Asia-Pacific region during the first half of 2025. Even though the U.S. still attracts the largest share of these funds, as investors search for growth and opportunities elsewhere, its share has plummeted.

Read More: HKMA Adds Transition and Climate Adaptation to Green Finance Guide

A mix of factors is contributing to this new shift. The Asia-Pacific now hosts an increasing pipeline of clean-energy and infrastructure projects, in addition to favourable demographics and policies that encourage green development.

An analysis from MSCI shows that companies dealing in energy storage, low-carbon power, and green mobility in the region have logged faster annual growth since 2019 than their peers in Europe or the U.S.

Southeast Asia particularly stands head and shoulders above others within this broader area. A report shows Hong Kong as a high-growth subregion with opportunities in energy, transport, water systems, and urban resilience. They are linked to climate adaptation and resilience, which presently attract less than five per cent of total climate finance worldwide.

Investors notice that the region combines expanding urban populations, growing infrastructure demand, and rising consumer markets, which set the tone for climate-related investment. Companies, including PTT Global Chemical in Thailand, SP Group and Keppel in Singapore, are connected to these themes.

Hong Kong, in the meantime, is rolling up its sleeves to be dubbed as a sustainable finance hub in the region. Its Sustainable Finance Action Agenda is giving tough competition to Singapore.

Also Read: ESG Advisory Market in Singapore to Reach $500M

Data compiled by MSCI shows that the value of sustainable bond issuance between 2020 and 2024 in Southeast Asia and the Greater Bay Area—covering Hong Kong, Guangdong, and Macau—has been similar. Southeast Asia, during the first half of 2025, marginally outperformed the Greater Bay Area in this measure, which suggests that these two zones together form an emerging centre of gravity for Asia-Pacific sustainable finance.

Rumi Mahmood, research director at the MSCI Sustainability Institute, said: “The coming decade will define whether Asia’s fast-growing economies can transition in a way that is both sustainable and inclusive.

“Across South-east Asia and the Greater Bay Area, the twin forces of rapid economic growth and escalating climate risk are reshaping the sustainable finance agenda. Mobilising capital toward credible transition pathways is no longer optional – it is essential to securing the region’s long-term resilience and prosperity.”

Ends/

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