Sustainable Debt Asia Conference 2025 Round-up

By Ahren Lester

The event in Singapore heard how the region is taking a practical approach to the transition, writes Ahren Lester

As we close the door on the 2025 edition of the Environmental Finance Sustainable Debt Asia event in Singapore, what came across loud and clear was the continued focus on finding pragmatic and practical solutions to support the global debt market in achieving sustainability impact.

It was also clear that, despite headline figures suggesting a market slowdown, beneath the surface there is a real sense of growing activity.

The main message was that, facing a global environment in which Europe comes across as dogmatic and other regions as erratic in their approach to sustainable finance, Asian market participants have identified a need and an opportunity for the region to trace a pragmatic course.

As SGX's Pol de Win explained in the opening address: "Asian [sustainable finance] must be pursued with practical approaches".

What was very apparent in the discussions – both on the panels and sidelines of the event – is that Asian markets have grown increasingly confident and coherent about how to approach both mature and emerging debt themes.

Transition is perhaps the most prominent example where Asia is eager and able to take a global lead. But what you can also see are the green shoots of other areas where Asia is keen to set the global pace – including around climate adaptation and green enabling activities.

Asia is presenting an increasingly coherent picture of how to define pragmatic pathways to achieve global aims and – most importantly – is increasingly confident in delivering action to this end.

Nonetheless, there is still a long way to go – in particular, around getting private capital better mobilised.

As Kavitha Menon from the Singapore Sustainable Finance Association (SSFA) explained, Asia is set to contribute more than half of global economic growth in 2025 but also produces more than half of all global emissions.

There is an opportunity for sustainable investors within this, therefore, yet only about half of the inadequate annual climate finance comes from the private sector. As a result, she emphasised that there is a "really urgent need" to mobilise private finance to support Asian climate mitigation and adaptation.

From a debt perspective, however, this urgent need appears set to be even more poorly met in 2025. As S&P Global's Bertrand Jabouley explained, by extrapolating current issuance trends, we could see Asian sustainable bond issuance around a fifth lower in 2025 than in 2024.

Despite this, there was widespread optimism that debt markets are well-primed to adapt to meet this need. Manulife's Eric Nietsch said that, although overall volumes may be down, there were "certain pockets" of the market where sustainable debt is delivering growth – including climate adaptation, with him pointing to the inclusion of this theme in the recent Hong Kong green bond programme.

In addition, there was a strong impression that behind closed doors there is a lot of exciting activity. Almost every person I spoke to during the day was quick to highlight one or more noteworthy sustainable debt deal that is either in motion – whether at early or late stage of delivery.

Speaking on a panel, Morningstar Sustainalytics' Rashmi John said she has a "glass half full" perspective on the Asia market. For example, as a second-party opinion provider, she said she was seeing a "quite a lot of interesting deals" coming their way currently – including around transition finance, green enabling activities, and climate smart agriculture.

S&P's Jabouley said sustainability teams in the region may also have been distracted by rising sustainability disclosure expectations and demands. This was echoed by Morningstar Sustainalytics' John who said the sustainable debt slowdown in Asia may be in part a result of the region "getting its house in order" around sustainable finance.

"What I mean by that is that there is quite a lot of regulatory push that we're seeing in terms of the sustainability disclosures being made mandatory," she said. "There are regional taxonomies that are coming into play, which creates a better environment for understanding what exactly is sustainable finance."

Although clear that sustainable debt markets are perhaps in the midst of their most unstable practical and philosophical environment to date globally, it was equally clear from this event that Asia is doubling down not doubling back on delivering practical sustainable debt innovation. As a message to take from the day, that is a impressively encouraging one to close the event with.