Sustainable finance grows in Southeast Asia and Singapore

Southeast Asian businesses are increasingly utilizing sustainable finance instruments to address a predicted $400 billion annual shortfall in climate financing. Companies are choosing between Green Bonds, which direct capital toward specific environmental projects like renewable energy or electric vehicle infrastructure, and Sustainability-Linked Loans, which focus on broader resource efficiency changes across a business.

In Singapore, the green economy is showing significant growth. The green revenue share of the Straits Times Index (STI) reached 10.9% by the end of 2024, surpassing the global average of 8.6%. This figure represents an increase from less than 4.2% in 2016. Singapore’s position as a regional hub for green investment is supported by the Singapore Green Plan 2030 and upcoming sustainability disclosure rules scheduled for 2025.