ASEAN economies’ exposure to climate transition risks

The report analyzes the vulnerability of ASEAN economies to climate transition risks, highlighting a significant reliance on fossil fuels for electricity generation. It finds that carbon-intensive sectors represent approximately 25% of corporate bond issuance in the region, with a substantial portion of loans and bonds facing refinancing risks by 2030. The authors argue that current industrial classification systems are inadequate for identifying these risks and recommend that ASEAN central banks develop comprehensive 'green' and 'brown' taxonomies to enhance climate risk disclosures and manage potential asset stranding.

• Carbon-intensive sectors in the ASEAN region rely more heavily on bond financing than loans, with approximately 25% of all corporate bond issuance in the region originating from these sectors.
• A significant volume of debt in carbon-intensive sectors faces a 'refinancing wall,' with roughly 50% of loans in the analyzed dataset requiring refinancing by 2027, increasing to 85% by 2035.
• The region's electricity generation is heavily dependent on fossil fuels, particularly coal and natural gas, in all member states except Cambodia and Lao PDR, creating a long-term risk of stranded assets.
• Transition risks may be borne by taxpayers in countries where carbon-intensive entities are state-owned, such as Indonesia's PLN or Malaysia's Petronas, potentially leading to sovereign credit rating downgrades.
• International investor sentiment is shifting away from fossil fuels, with GFANZ members managing USD 130tn in assets committing to phase out such investments, which may increase borrowing costs for ASEAN nations.
• Existing industrial classification systems (such as SIC and BICS) are insufficient for climate risk assessment because they categorize by product rather than the carbon intensity of the production process.
• The report recommends that ASEAN central banks develop taxonomies that define not only 'green' activities but also 'brown' (non-sustainable) activities and entity-level transition strategies to monitor decarbonization progress.
• The European Union's proposed Carbon Border Adjustment Mechanism (CBAM) poses a policy risk to the export competitiveness of ASEAN manufacturers who have not internalized carbon costs.

APA

Burge, L., Mok, L., & Vaze, P. (2022). ASEAN economies’ exposure to climate transition risks. Climate Bonds Initiative. https://www.climatebonds.net/files/documents/publications/ASEAN-economies-exposure-to-climate-transition-risks.pdf

Chicago

Burge, Lily, Lionel Mok, and Prashant Vaze. ASEAN economies’ exposure to climate transition risks. Climate Bonds Initiative, 2022. https://www.climatebonds.net/files/documents/publications/ASEAN-economies-exposure-to-climate-transition-risks.pdf.

Wikipedia

{{cite report |last1=Burge |first1=Lily |last2=Mok |first2=Lionel |last3=Vaze |first3=Prashant |title=ASEAN economies’ exposure to climate transition risks |publisher=Climate Bonds Initiative |date=April 2022 |url=https://www.climatebonds.net/files/documents/publications/ASEAN-economies-exposure-to-climate-transition-risks.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{burge2022asean, author = {Burge, Lily and Mok, Lionel and Vaze, Prashant}, title = {{ASEAN economies’ exposure to climate transition risks}}, institution = {Climate Bonds Initiative}, year = {2022}, month = apr, url = {https://www.climatebonds.net/files/documents/publications/ASEAN-economies-exposure-to-climate-transition-risks.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }