Asia's blueprint for a sustainable era: Leading with innovation

Asia, with its distinctive blend of traditional ideals and cutting-edge innovation, is ushering in a progressive approach to sustainability. As the world grapples with the threat of climate change, the continent's response is a kaleidoscope of sustainability efforts across diverse sectors. From high-tech ports in Singapore to the glittering skyscrapers of Tokyo, a story of change, adaptation, and forward-thinking unfolds.

The autonomous vehicle sector epitomizes this. In the realm of technology and business, the integration of AI and autonomous mobility is a rapidly expanding frontier. Amarjit Kaur, a Singapore based partner in Withers' employment team and head of the firm's global diversity, equity and inclusion group, envisions a world where transport reaffirms our commitment to a carbon-neutral earth.

"Autonomous vehicles, with their foundation in AI, encapsulate innovation, sustainability, and efficiency. It's inspiring to see how the industry is evolving, with pioneers putting their heart and soul into developing sustainable transport solutions," reflects Amarjit.

Turning real estate green 

Gerald Fuiji, a Tokyo based partner in Withers' real estate team and the APAC head of the firm's Global Environment Group, offers his perspective on the growth of green finance in the realm of real estate. "Environmental consciousness is no longer a distant aspiration but a present necessity. And it's the world of real estate that finds itself at the helm of this transformative change," Gerald observes.

This seismic shift isn't merely due to individual corporate conscience. As Gerald highlights, "To promote green finance initiatives and incentivise sustainable practices, governments worldwide have implemented various regulatory measures that continue to evolve." 

Such dedication isn't limited to governmental or financial entities. Case in point, landmark transactions like the one Gerald mentions, "Our team at Withers closed Japan's first ever green loan and also Japan's first ever sustainability-linked loan in the data center asset class."

With Japan's commitment to become carbon neutral by 2050, the expectations are clear. As Gerald foresees, "Lenders and borrowers will be incentivized to evidence their bona fide commitment. We should see a substantial increase in green financings in the real estate sector."

Philanthropy supercharges sustainability 

In this mosaic of transformation, private fortunes are not just passively observing this evolution; they're actively steering it. 

Michelle Chow, Hong Kong based consultant in Withers' private client and tax team, encapsulates the changing dynamics of wealth. "Modern wealth isn't about amassing assets. It's a conduit for change. Today's tycoons are increasingly asking – How can my legacy catalyze a sustainable future?" 

Highlighting the paradigm shift from 'plain vanilla' charitable donations to sustainable impact investments, she mentions, "The beauty of impact investing is its ability to use the same resources but amplify the outcomes, creating recurring and sustainable impacts."

She draws attention to a noteworthy statistic. Based on a UBS and Campden Wealth Limited report, high net worth families in the Asia Pacific donated an average of US$2.7 million each through their family offices. However, only a quarter of them delved into impact investing. This presents a vast untapped potential.

Erlene emphasizes the unique position of family offices in this space. "Their infrastructure, the wisdom of their founders, and their brand can add immense value to social enterprises, helping them scale and realize their potential."

Addressing a common misconception, Erlene points out, "There's a prevailing notion that impact investments yield limited financial returns. But data from the Global Impact Investing Network paints a different picture, with 67% of impact investors targeting market risk-adjusted rates of return. Moreover, these investments often meet or even exceed expectations in terms of both financial returns and social impact."

For family offices and foundations, the call to action is clear. "Their potential to scale strategies for climate action in Asia is immense," says Stacy, who is also a board member of the Asia Community Foundation, the first Asia-focused independent community foundation, which was recently launched in September 2023. 

"While an individual family office might feel its impact is limited, the collective strength of family offices can be formidable. By funnelling resources through alliances and organisations working towards common objectives, they can amplify the influence and impact of their combined wealth towards creating transformative solutions to these pressing global challenges. Most recently, the Monetary Authority of Singapore announced changes to its tax incentive scheme for funds managed by single family offices in Singapore which seek to encourage funds to be applied whether as investments, concessionary capital or outright grants and donations to support climate related investments and blended finance structures. It signals that Singapore, as a financial centre and an international family office hub, is taking the lead to be a part of the solution." 

Indonesia's innovation hub

Shifting gears to the technology sector, a domain synonymous with modern Asia, Joel Shen, head of Withers' Indonesia practice and Withers Tech Asia, highlights Indonesia's pivotal role, "Tech for sustainability isn't our goal; it's our starting line. By leveraging Indonesia's rich entrepreneurial ecosystem, we're catalyzing a green tech revolution that, while rooted in Asia, has global repercussions." In Joel's vision, countries like Indonesia are not mere adopters of green tech but its pioneering trailblazers.

"Indonesia remains one of the most exciting markets in the world today, especially for technology startups and venture capital investors," says Joel. Venture capital funding has been a critical factor in the growth of its digital economy, with investments reaching US$ 11.96 billion in the first quarter of 2023¹. As home to 15 of Southeast Asia's unicorns and two decacorns as of 2022, the country is a testament to its burgeoning digital potential.

The interplay of technology with sustainability is evident in sectors previously unimagined. Herein lies Asia's strength - its ability to merge traditional sectors with innovative solutions, sculpting a future where technological progress doesn't undermine but uplifts environmental imperatives.