Can catalytic capital scale climate solutions in Asia?

From typhoons in the Philippines to droughts in India and floods in Thailand, Asia is already facing some of the world’s most severe climate impacts.

The region also holds the key to accelerating climate progress, accounting for 51% of carbon emissions and 82% of coal generation. Yet financial responses remain far from sufficient.

Public funding and traditional finance alone won’t meet the moment. Asia needs a shift to catalytic, risk-taking investment that drives systems change.

This is the focus of a new GAEA (Giving to Amplify Earth Action) and the Institute of Sustainability and Technology (IST) report, Accelerating Impact Investments for Climate and Nature in Asia, launched at the One Earth Summit this month.

Drawing on insights from more than 40 regional leaders, it charts a path to scale high-impact investments and redefines what “investability” means for sustainable development.

Asia requires an estimated $1.1 trillion annually by 2030 to meet its climate and nature goals. Current investment levels stand at just a third of that, leaving a daunting gap. But this is not just a matter of numbers; it’s a matter of how capital flows are designed.

High-impact projects in nature restoration, climate resilience and community-led adaptation remain underfunded, mainly due to small ticket sizes, perceived risk and a lack of proven business models.

Simultaneously, capital providers: governments, investors, philanthropies – often work in isolation. Promising initiatives struggle to grow or even get off the ground due to a lack of the right kind of integrated platforms for collaboration or vehicles that can blend funding types.

“To meet the scale of the climate and nature crisis, we can’t keep funding safe bets in unsafe times,” says Naina Subberwal Batra, chief executive officer of AVPN, Asia's largest network of social investors.

“Asia has both the capital and the conviction to lead a regenerative future but only if we move from fragmented pilots to a shared investment agenda that’s anchored in trust, aligned action and long-term vision.”

The report highlights the transformative power of catalytic capital – risk-absorbing, concessional or early-stage funding that unlocks larger private investment.

This includes financial tools such as blended finance, first-loss guarantees and outcome-based structures that align public, private and philanthropic funds around shared environmental and social outcomes.

Philanthropic capital is particularly unique and powerful. Its flexibility, mission alignment and early-stage risk tolerance make it ideal for funding enabling infrastructure, piloting models and supporting policy advocacy.

But systemic change requires more: a coordinated capital ecosystem where all finance types – philanthropic, public, commercial – work in synergy, anchored by shared goals, strong governance and a commitment to climate and nature solutions.

Across Asia, dozens of promising initiatives are already deploying innovative finance models for climate and nature, although many remain fragmented or too small to shift systems. The report highlights several standout examples:

“FAST-P brings together the right partners, financial tools and strategic frameworks to unlock high-impact, low-carbon investments at scale, accelerating climate solutions where they’re needed most,” says Kitty Bu, vice president of GEAPP, a FAST-P project partner, honoured with the inaugural GAEA Award in January.

While the examples above demonstrate that innovation is alive and thriving in Asia, new ways of thinking, partnering, and funding are required to reach a broad-scale impact. To shift from isolated innovation to systemic transformation, the Accelerating Impact Investments for Climate and Nature in Asia report lays out key actions, including:

With the world falling short on climate goals and traditional leadership lagging, a key question emerges. Is Asia the next frontier for clean energy, green technology, and innovative financing that will create prosperity while safeguarding the planet?

Asia faces the highest stakes but also has the appetite for innovation and collaboration. The region hosts the largest share of global emissions and the boldest shifts across finance, infrastructure, energy and nature.

“Each of us has a role to play in building an ecosystem where innovations can thrive and scale, and no one can do it alone. Partnerships will be key to delivering impact.

“That’s why events like the One Earth Summit matter, bringing leaders across sectors in Asia to accelerate the sustainable transition through bold, coordinated actions, shared knowledge and capabilities together,” says Ng Boon Heong, executive director and chief executive officer of Temasek Foundation.

The challenge – and opportunity – is to align capital with solutions, scale catalytic investments and build ecosystems that drive environmental and economic resilience.

This is more than a crisis; it’s an inflection point. With growing regional cooperation, shifting geopolitics and emerging leadership, Asia could define the next era of climate action – systemic, purposeful and collaborative.

If done right, the region won’t just respond to disruption; it will reimagine prosperity for people and the planet alike.