.jpg)
The discussion explored the strategies and challenges companies face in financing and implementing decarbonization projects. Experts stressed the importance of strong leadership commitment, clear decarbonization pathways, and aligning ESG goals with financial performance. Companies must balance the drive for financial returns with their sustainability objectives, particularly as decarbonization projects require significant capital investment.
Sanjeev Sinha from Indorama Ventures shared his company’s success in raising $2.6 billion in sustainable finance since 2018, showcasing how long-term relationships with financial institutions and robust sustainability reporting can unlock funding. Challenges such as overcoming the barriers to financing smaller projects and balancing initial energy efficiency measures with more capital-intensive decarbonization projects were also discussed. The panel emphasized that companies should start with smaller, high-return projects and use joint ventures to mitigate risks for larger initiatives.
The influence of EU regulations, such as the Corporate Sustainability Reporting Directive (CSRD), was also highlighted, pushing Southeast Asian corporates to enhance their ESG reporting and compliance. Clear leadership vision and strong governance were identified as critical for the success of corporate decarbonization efforts, especially when engaging financial partners.
.jpeg)
Key Takeaways
· Leadership Commitment: Strong leadership is essential to drive decarbonization, aligning sustainability goals with the corporate strategy to ensure genuine transformation rather than mere compliance.
· Balancing Financial Returns and Sustainability: Companies must balance decarbonization with financial objectives. While initial energy efficiency projects yield quick returns, later projects require higher investment and longer payback periods.
· EU Regulations Impact: EU regulations like CSRD are pushing for better ESG transparency and supply chain diligence, placing pressure on non-EU companies to comply or face financial and reputational risks.
· Sustainable Finance Access: Building a strong track record in sustainability reporting and engaging with financial institutions early can help secure funding for decarbonization projects.
· SME Decarbonization: SMEs should start with manageable, high-return projects, such as rooftop solar installations, to demonstrate success and build momentum for larger initiatives.
· Joint Ventures for Larger Projects: To manage risks and access broader financial support, companies should consider joint ventures for large-scale decarbonization initiatives.
