Labelled Bonds for the Net-Zero Transition in South-East Asia: The Way Forward

The report examines the underrepresentation of ASEAN countries in the global labelled bond market, noting that cumulative issuances in the region make up only 2% globally. It identifies a critical gap where the costs of issuance—such as external consulting fees ranging from $30,000 to $60,000 and external review costs between $15,000 and $50,000—often outweigh the benefits, such as the 'greenium' (price premium). The paper proposes 19 measures across four stakeholder groups (issuers, investors, local policy-makers, and the international community) to scale the market. These include tax incentives, sovereign issuances, and direct issuance support. A case study on Viet Nam highlights the need for a country-specific standard and better alignment with local investors to move beyond the current momentum of green bonds.

• ASEAN countries are significantly underrepresented in the labelled bond market, with cumulative issuances accounting for only 23% of total issuances in emerging markets and developing economies (EMDEs) and 2% of the global market.
• There is substantial untapped potential for labelled bonds in EMDEs; if they reached the same proportion of labelled bonds as the top 20 developed economies, the volume would increase by $353 billion, with $19 billion of that potential in ASEAN.
• Issuers in EMDEs face high upfront monetary costs, including $30,000 to $60,000 for external consulting to develop frameworks and $15,000 to $50,000 for independent external reviews.
• The 'greenium'—the lower yield investors accept for labelled bonds—is not guaranteed and has been dwindling as supply increases, which can disappoint issuers expecting better financing terms.
• A functioning labelled bond market in EMDEs requires the alignment of three elements: an enabling market environment, issuer priorities, and investor expectations.
• The report proposes 19 measures to support the market, prioritizing those with high impact and ease of implementation, such as organizational preparedness of issuers, tax incentives, sovereign issuances, and direct issuance support.
• In Viet Nam, while there is strong ESG momentum and a detailed energy transition plan requiring $15.5 billion, the market lacks specific investment mandates, capital requirements for ESG risks, and tax incentives for labelled bonds.
• Viet Nam's labelled bond market is currently dominated by green bonds, but experts emphasize the need for a Viet Nam-specific standard as the existing ASEAN standard is seen as too far removed from the local context.

APA

World Economic Forum (2024). Labelled Bonds for the Net-Zero Transition in South-East Asia: The Way Forward. https://www3.weforum.org/docs/WEF_Labelled_Bonds_for_the_Net_Zero_Transition_in_South_East_Asia_2024.pdf

Chicago

World Economic Forum. Labelled Bonds for the Net-Zero Transition in South-East Asia: The Way Forward. 2024. https://www3.weforum.org/docs/WEF_Labelled_Bonds_for_the_Net_Zero_Transition_in_South_East_Asia_2024.pdf.

Wikipedia

{{cite report |author=World Economic Forum |title=Labelled Bonds for the Net-Zero Transition in South-East Asia: The Way Forward |date=July 2024 |url=https://www3.weforum.org/docs/WEF_Labelled_Bonds_for_the_Net_Zero_Transition_in_South_East_Asia_2024.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldeconomicforum2024labelled, author = {{World Economic Forum}}, title = {{Labelled Bonds for the Net-Zero Transition in South-East Asia: The Way Forward}}, institution = {World Economic Forum}, year = {2024}, month = jul, url = {https://www3.weforum.org/docs/WEF_Labelled_Bonds_for_the_Net_Zero_Transition_in_South_East_Asia_2024.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }