2024 has been a significant year for the legal sector in Asia Pacific, as the need for a green transition continues to be felt in an increasing number of economies and industries across the region.
The region continues to offer broad opportunities for legal teams of diverse specialisms as clients become increasingly interested in helping build effective green change. Corporate and regulatory lawyers are offering vital insights into sustainability strategies and best practice; banking and finance specialists are effectively leveraging lenders’ green appetites to support businesses in their transition activities and green product development; capital market experts are well-equipped to react to public and private sector actors increasingly turning to thematic bonds for their financing needs; and projects and energy teams are key in helping clients fulfil a rapidly expanding domestic and global demand for renewable energy facilities, electric infrastructure projects, and green materials.
On the level of climate diplomacy, states remain in intense dialogue on global decarbonisation paths, with lawyers across the region providing crucial input on the implications of legal changes alongside taking up the vital role of amplifying the voice of underrepresented peoples and nations who are unequally facing the impacts of climate change.
With a growth in investor, stakeholder, and regulator pressure, Indian corporates are increasingly coming under the scrutiny of ESG regulation – including the Business Responsibility and Sustainability Reporting guideline – and firms are playing an active role in the development of ESG and sustainability best practices through vital due diligence exercises. This shift is matched by the ongoing and major growth in the clean technology space, with corporates turning to renewable energy investment, procurement, and self-generation to decarbonise their emissions generation.
Also anticipating the expansion of green regulation and industry standards, Australian businesses are continuing to explore diverse ways of embedding sustainability into their operations. High-emitting businesses are looking intensely toward green finance and renewable energy procurement in order to decarbonise their facilities and infrastructure, generating significant activity for sustainability-conscious lenders and virtual power traders.
Complementing strong developments in the wind and solar power sectors, New Zealand likewise continues to look to the decarbonisation of its highest industrial emitters as the focus of its decarbonisation initiatives. Domestic producers in industries as distinct as steel and dairy, which both share a historic reliance on coal power, are receiving targeted support to electrify their manufacturing processes and help abate national emissions.
China continues to be a key protagonist in the energy transition. Domestic investors demonstrate a green appetite that is fuelling important growth in the thematic capital markets space, while leading industrial actors continue to pursue green development through drawing upon sustainable finance and establishing renewables-based power purchase agreements. Meanwhile, the country’s solar power sector is expanding at a dramatic scale, helping generate green electricity while building up expertise to satisfy global demand. Indeed, Chinese developers and suppliers are crucial in the establishment of renewable energy across the region.
Hong Kong remains a standout hub in the thematic capital markets space, with the region serving as a global example for how governments can leverage green bonds to finance local development objectives. Increasingly, local banks, investors, and corporates are turning to green and blue bonds as well as green and sustainability-linked financings to help develop vital real estate, shipping, and infrastructure projects.
Notably, Indonesia is also committed to developing an attractive debt capital markets environment, with the government having issued blue bonds and green retail sukuks in 2023. The private sector likewise recognises the potential for sustainable growth in the country, with regional development banks utilising green and sustainability-linked loans to develop ESG-conscious industries within the country.
Singapore continues to navigate a difficult path in the green transition, owing to its electricity dependence and to the strength of its financial sector. Demonstrating the immense importance of regional cooperation, the city is playing a key role in financing green projects across the region, notably in Indonesia and Malaysia, and in turn importing clean electricity to help decarbonise its own power consumption.
Likewise historically dependent on imports for its energy consumption, Japan is maximising opportunities within the green transition. Alongside a growing focus on the offshore wind sector, interest remains strong in e-fuel projects and the solar power segment. Further accelerating sustainable growth, Japanese banks and export credit agencies continue to be key actors in the project financing of renewable energy and green transition projects across the region.
South Korea is maintaining its position as a key site of developments across various energy transition assets. Alongside a strong engagement in global wind power projects, South Korean companies continue to dominate the battery production and gigafactory landscape, fuelling notable global growth in clean electricity storage and the electric vehicle segment.
We thank you for joining us on this exploration into the region’s stellar engagement with the green transition. The legal sector continues to help make a transformative and sustainability-focused impact across the region and we look forward to continuing to shine a light on some of the key spheres of engagement in the years to come.
Anna Bauböck | EditorHarry Hyde | Senior Researcher
