💸 USD 1.1 trillion, 232 million 🕶 jobs: The Adaptive Economy is South East Asia’s Next Big Wave 🌊.

New reports from World Economic Forum show a USD 1.1 trillion, 232 million jobs creation potential: this is the ROI opportunity of investing now in The Adaptive Economy in South East Asia.

Dear Adaptive Economy readers,

This is a great time for The Adaptive Economy in South East Asia. This month, Dow Jones Sustainability Indices welcomes 24 Thai companies, Singapore announced a target of two million tonnes of CO2 capture by 2030, Asia-Pacific is becoming the highest revenue contributor to the global $261B solar farm market. In the meantime, Asia Pacific is at the heart of the global biodiversity crisis. Fighting climate change through energy innovations is critical, but will not be enough to address the biodiversity crisis. Where are the business opportunities and how can the investments required to be unlocked to support a nature-positive Adaptive Economy in the region? 

In this newsletter, we will do a South East Asia-focused deep-dive from the World Economic Forum's The Future of Nature and Business report published last year.

Business-as-usual would mean that up to 42% of all biodiversity in Southeast Asia could be lost by 2100, half of which would be global extinctions.

Asia Pacific is rich in endemic biodiversity found nowhere else on the planet, with diverse ecosystems ranging from the tropical forests of Southeast Asia to the coral reefs in the Pacific Ocean. However, the region is also at the epicenter of biodiversity and nature loss. Nearly one million species are at risk of extinction because of human activity. Climate action failure, biodiversity, and nature loss, and infectious diseases ranked as the top three risks humanity will face in the next 10 years, according to the World Economic Forum’s 2020 Global Risks Report.

How does the biodiversity crisis matter for the economy and for businesses? 

Key economic activities supported by nature could be disrupted. The IPBES Global Assessment Report outlines nature’s 18 contributions to humanity, including supporting a range of key economic activities through regulation of the environmental process (e.g., regulation of air quality, pollination, and buffering against floods) and materials that sustain our lives (e.g., energy, food, and medicine).

Biodiversity and nature loss disrupt these key contributions of nature to people, in turn placing critical economic activities at risk of disruption. However, other sectors with less direct dependencies on nature still face significant disruption risks. A business-as-usual route that disregards our economy’s impact on biodiversity and nature loss is therefore not a viable option. 

Is Singapore Truly Sustainable?: Google: “Greenwashing in the 'City in a Garden”

Systemic transitions in three socioeconomic systems are key to solving the biodiversity crisis

Three systems of critical socioeconomic importance to the Asia Pacific are together responsible for the most significant business-related pressures to biodiversity, but these are also the systems with the largest opportunities in pursuing nature-positive development. These are i) food, land, and ocean use system; ii) infrastructure and built environment systems, and iii) energy and extractives systems. Together, these systems endanger around 85 percent of all threatened and near-threatened species in South East Asia.

The transitions needed are fundamental and require entire business, economic, and consumption models to be transformed, without which irreversible climate change, biodiversity loss, and other environmental risks will continue to harm the economy and human well-being.

Nature-positive development in South East Asia could unlock USD 4.3 trillion of value and 232 million jobs annually by 2030.

59 nature-positive business opportunities could transform the three major socioeconomic systems from a net-negative to net-positive impact on nature. Unlocking these business models will change the way we farm and fish; how our infrastructure is designed, built, serviced, and connected; and how we extract and recycle natural resources, and power our economy.

Altogether, the nature-positive business opportunities identified in the report for South East Asia add up to USD 4.3 trillion in annual business value by 2030, or around 43 percent of the USD 10.1 trillion annual opportunities identified at the global level.

Business opportunities in the three socio-economic systems could deliver US$4.3 trillion of economic value and 232 million jobs annually by 2030.

Innovative solutions are needed to unlock the USD 1.1 trillion to power the Nature Positive-Adaptive Economy

In total, unlocking the 59 nature-positive business opportunities across these three systems will require an annual investment of USD 1.1 trillion. While substantial, this is a fraction of the USD 31.1 trillion announced by the Asian Development Bank’s 45 member countries to combat the COVID-19 pandemic.

Business, government, and society have an opportunity to turn the vision of a nature-positive economy in the South East Asia region into reality, but this will be challenging. There remain a number of key barriers to unlocking these opportunities, chief among them mobilizing the requisite capital to develop new business models.

In an exclusive survey conducted for the report, investors and business leaders across South East Asia identified key challenges to overcome in the pursuit of nature-positive business models. These barriers can be broadly categorized into four areas: regulatory challenges, market barriers, information gaps, and the lack of supportive enablers for investment.

To overcome these barriers, business and community leaders proposed a range of innovative solutions to galvanize the investment required in the coming decade. The top three suggestions include:

1. New externality pricing models to capture the true cost of natural capital and environmental externalities;

2. Harmonized biodiversity reporting standards to ensure accountability towards biodiversity goals; and

3. New financial products and mechanisms, such as blended finance models as well as regulations to enforce compliance with existing and future environmental policies.

More research and development, as well as greater public-private dialogue, will be critical to creating an enabling environment for investment in a nature-positive economy. 

This is the mission of Atlas capital. Connecting investors, influencers, corporate executives, and entrepreneurs building a technological future that is inclusive to all humans and sustainable for our planet. Watch our interview on that topic:

If this resonates with you, join the conversation in our live Telegram chat group, talk with like-minded people and learn more about Atlas Capital’s new tech investment fund:

As always, thank you for reading. 

— Djoann & The Atlas Capital Team