Asia-Pacific climate risks may cost firms US$336b annually by 2030s

The report identifies investable resilience opportunities across real estate, data centres, power infrastructure, and transport.

Annual costs linked to physical climate risks could reach US$336b by the 2030s for companies with significant operations in Asia, according to a report by DBS and the Climate Bonds Initiative.

The report said Asia-Pacific is warming at about twice the global average, exposing businesses and financial institutions to operational disruptions, declining collateral values, weaker borrower repayment capacity, and higher credit losses.

Despite the growing risks, less than 10% of global climate finance supports adaptation and resilience, whilst less than 11% of that funding comes from the private sector.

Asia accounts for approximately 69% of global adaptation financing needs and 75% of the financing gap expected by 2030.

The report identified four areas where climate risks are beginning to generate investable responses: commercial real estate exposed to heat stress in India, data centres facing water stress in Singapore and Malaysia, power infrastructure vulnerable to storms in coastal China, and transport corridors exposed to floods and typhoons in Taiwan.

For data centres in Singapore and Malaysia, rising water consumption could constrain operations and expansion. Potential investments include cooling-system optimisation, recycled or alternative water sources, and liquid or immersion cooling technology.

Digital Realty’s SIN10 facility in Singapore reportedly reduced monthly cooling-water discharge by about 90% after installing water-treatment technology. Its water-use efficiency was also around 30% better than Singapore’s industry benchmark.

The report proposed two pathways for determining whether investments make a credible contribution to climate resilience: checking whether an activity appears on a pre-approved list or conducting a detailed technical assessment.

It added that evaluations should use forward-looking, location-specific climate data and confirm that investments directly address material risks without creating maladaptation or significant harm to other environmental objectives.

DBS and the Climate Bonds Initiative said resilience measures must remain tailored to local conditions, whilst more consistent standards and comparable metrics are needed to attract private capital at scale.