Asia Pacific now accounts for 35% of global GDP – exceeding the share of US and Europe – and in its aspirations has lifted millions out of poverty, but it’s also responsible for about 80% of the world’s coal consumption and up to 60% of CO2 emissions. This rate of economic development has no doubt came at an expense to the environment. While it could have been an inevitable trade off in the past, this can no longer be the case.
The radical impact wrought by the pandemic globally has sparked much-needed soul searching by governments and organisations. It has also exposed, despite tremendous economic strides, the vulnerabilities that the region continues to face. Environmental degradation has been linked as a cause for the outbreak, while the inability to suppress the human toll from infection surges has highlighted social divides.
Parallels drawn between the unforeseen risks of a pandemic and environmental issues, such as climate change, have served as a wake-up call, accelerating a rethink on the sustainability agenda and cast ESG issues at the forefront. The ADB estimates that Covid-19 has plunged 75-80 million in the region into poverty – a stark reminder that without intervention, the region risks unwinding years of economic progress.
Global epicentre of real assets
While the pandemic has disrupted growth trends in the region, the ongoing health crisis can still be looked at as just a blip against the backdrop of its long-term structural fundamentals – if it plays its cards right. The very drivers that have propelled the region as an engine of global growth can be harnessed and leveraged on, and building on the momentum from the pandemic recovery, spur the adoption of ESG agendas.
By 2030, seven of the world’s 10 largest megacities will be in the Asia Pacific region. It will be home to two-thirds of the world’s middle class and its urban population will expand by close to three billion. As the region becomes increasingly urbanised, its growing cities will require significant investments in real estate and infrastructure to build out of its urban core.
