Decarbonization & Digitalization: Transforming South Asia’s Business Landscape

Southeast Asia is facing a gap between its net-zero ambitions and actual progress in the energy and green transition. Structural constraints—such as limited incentives for carbon reduction, the geographical dispersion of renewable resources, and inadequate access to financing—remain key impediments to decarbonization.

Despite these challenges, Southeast Asia, home to more than 650 million people, offers vast opportunities to accelerate the energy transition and build a green economy by adopting innovative solutions such as green and digital technologies.

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The Challenges of Transitioning to Digital and Decarbonized Business Models

While the shift toward decarbonization and digitalization presents vast opportunities, the path to transformation is not without obstacles.

Southeast Asia’s energy supply heavily relies on fossil fuels, with more than 50% of the region’s electricity coming from coal. The region is also among the most climate-vulnerable, frequently experiencing natural disasters such as floods, heatwaves, and rising sea levels. To address the pressing challenges posed by climate change, businesses—particularly those in high-emission industries—must mobilize substantial investments to develop and deploy low-carbon technologies.

New Sustainability Opportunities Emerge for Southeast Asian Businesses

Businesses in Southeast Asia are beginning to embrace new opportunities aligned with the growing momentum around decarbonization and sustainability. For example, the region has long struggled with waste management due to rapid industrialization and urbanization. Adopting a circular economy model in manufacturing helps promote resource efficiency, enhance material recyclability, minimize waste, and stimulate innovation in new business models.

Companies are also scaling up clean energy investments—a crucial step toward reducing regional emissions. Wind, solar, modern bioenergy, and geothermal sources are expected to supply more than a third of the region’s energy needs by 2035. This trend is reshaping industries and consumer behavior, encouraging cleaner energy adoption and generating new revenue streams beyond traditional high-emission sectors.

The climate tech sector is rapidly growing and attracting innovative companies—ranging from those developing hyper-local AI-based flood forecasting models to renewable energy storage systems, precision agriculture technologies, and digital solutions supporting circular economy platforms.

Digital transformation also plays a key role in helping businesses improve operational efficiency, expand customer reach, and develop new sustainable business models.

BBVA's Support in Asia: Leading the Way in Decarbonization and Digital Innovation

At BBVA, we are committed to supporting our clients throughout this transformation. With extensive expertise in digital finance and decarbonization, we offer a comprehensive range of services designed to help businesses navigate the transition effectively.

Our experience—particularly across Asia—enables us to deliver tailored solutions that empower companies to seize future opportunities while advancing more responsible and digitally driven business models.

"Digital transformation and clean energy are reshaping business and unlocking new growth in Southeast Asia."