Robocash Group, a multinational financial company operating in Southeast Asia, has reported the number of sustainable tech companies in the region has been growing at an average annual rate of 15.23% since 2020. This rate exceeds the global average of 10.95%, indicating the potential for a thriving sustainable tech industry in Southeast Asia.
Moreover, the funding of sustainable tech companies in the region has seen a yearly raise of 71.1%, which is a significant difference from the international trend of 42.9%. This increase is primarily due to the establishment of 2,135 sustainable businesses out of a total of 73,200 in Southeast Asia in 2022, accounting for almost 3% of the global figure. As a result, these companies have contributed to $2.15 billion of the entire global investment.
The sustainable tech industry in Southeast Asia is also constantly making efforts to comply with international sustainability standards. The industry has attracted foreign capital as it grows, helping the overall global market. The top two countries with the highest number of sustainable tech companies in 2022 are Singapore and Indonesia, with 723 and 402 companies, respectively. Vietnam is also catching up, with an average growth rate of over 22% annually.
Despite the increase in sustainable tech companies, there are still possible risks need to be addressed. High costs, resource-intensive research, workforce, and technology, and the numerous rules and regulations required for each endeavor are some of the challenges faced by the industry.
Environmental, social, and governance (ESG) experts like Bain & Company, Deloitte, EY, or McKinsey have noted that the region is a bit unstable, but there are ways for companies to remain resilient. This can be done by lowering operating costs, optimizing resources, and creating and improving new product and service markets to retain a competitive edge.
The sustainable tech industry comprises various sectors, including green funds, sustainable e-commerce, agritech, green transport, green energy, eco-manufacturing, air, water and waste pollution management, sustainable finance, circular economy, human resources, and green buildings.
Despite the possible risks, the sustainable tech industry in Southeast Asia is growing at an impressive rate, outpacing the global average.