As the climate crisis intensifies, so too does the global leadership vacuum. With the United States rolling back its climate and development funding and European donors following suit, the era of Western dominance in this space is waning. And while the groundwork has been laid for a just transition, a new approach is called for to implement and operationalise it.
Combining the urgency of extreme climate vulnerability with the dynamism of emerging markets, rising innovation, and growing pools of capital, Asia is poised to take up the baton and lead in this next most critical phase. It has the most to gain and lose in the global effort to transition to a low-carbon, nature-positive economy.
A new generation of regional leaders – policymakers, entrepreneurs, financiers, and philanthropists – is emerging, ready to scale innovative solutions. These actors bring both the motive and the means to deliver systemic, inclusive change, supported by rapidly developing ecosystems of cross-sector collaboration and regional solidarity.
Across Asia, governments and financial institutions are already experimenting with bold public-private-philanthropic partnership models that integrate development, equity, and environmental stewardship. From sovereign climate funds to just transition financing facilities, regional carbon markets to national-level green taxonomies, new frameworks are emerging that reflect the region’s unique blend of state-led planning and market-driven growth.
At the heart of this transition is capital, and the way it is mobilised. Asia requires an estimated US$1.1 trillion annually by 2030 to meet its climate and nature goals. Currently, less than a third of this is being mobilised, and less than 8 per cent of global impact investment assets are deployed in the region - a glaring missed opportunity.
Traditional aid and public finance were never designed to deliver systems change at scale, and they are now being stretched thinner than ever. What’s needed is a new financial architecture: one that blends public, private, and philanthropic capital with shared goals and distributed risk. This is where impact investing - once seen as a niche or concessionary approach - comes forward as the catalytic force this moment demands.
As seen in our new report with the Singapore University of Social Sciences and the Institute of Sustainability and Technology, Accelerating Impact Investments for Climate and Nature in Asia, there are many examples of how it can work: from Singapore’s FAST-P platform, which aims to mobilise US$5 billion in green and transition finance through a blended finance model; to Hong Kong’s Green and Sustainable Finance Cross-Agency Steering Group, which unites financial regulators, the stock exchange, and government bodies to coordinate climate risk management, advance sustainable finance, and align policy with the region’s climate goals.
Impact investing is clearly gaining traction, not just as a moral imperative but as a smart capital strategy. It aligns financial performance with long-term resilience, climate risk mitigation, and rising demand from stakeholders - from regulators and investors to consumers and employees. This movement is being accelerated by the convergence of several forces: the growth of intergenerational wealth in Asia, a thriving entrepreneurial culture, and increasing awareness of climate and biodiversity risks.
Many of the region’s investors and family offices bring a worldview that is distinct from traditional Western models. Rooted in legacy, family values, and community stewardship, these institutions often operate with longer time horizons and a deeper sense of generational responsibility. They are well-positioned to serve as anchor investors in climate and nature solutions, deploying catalytic capital that can unlock additional funding and de-risk innovation.
We are already seeing this potential materialise, such as early coal retirement initiatives, nature-based restoration, and regional just transition partnerships. Governments are piloting green bonds and sustainability-linked loans. Philanthropies are funding enabling infrastructure, research, and convening platforms. And local investors are stepping into leadership roles with proximity, purpose, and agility.
Hong Kong and Singapore, as Asia’s premier financial hubs, have a particularly important role to play. Their family offices manage vast pools of wealth and are increasingly attuned to impact and sustainability priorities. They have the regulatory frameworks, financial expertise, and global connectivity to serve as launchpads for scalable, systems-oriented investment strategies.
We don’t need to reinvent the wheel: we can - and should - evolve the frameworks that have already been laid, and build on proven models such as blended finance structures, outcome-based financing, and place-based investing. To adapt and scale these approaches, we must empower local institutions, invest in capacity building, and create partnerships of unprecedented collaboration.
This is Asia’s climate moment, not just to respond to crisis, but to shape the future. It holds the resources, leadership, and lived urgency to reimagine how economies can grow in balance with nature and equity and implement them at scale and pace. As the global centre of gravity shifts, this region has the opportunity to take the helm on the journey toward a sustainable future and to redefine climate leadership.
Luis Alvarado heads the Giving to Amplify Earth Action initiative and the Strategic Philanthropic-Public-Partnerships team at the World Economic Forum, which aims to convene, incubate and scale new and existing public, private and philanthropic partnerships to unlock the capital needed to tackle climate change and nature loss, with a focus on the Asia-Pacific region.
