Released on May 18, the seventh annual State of Investor Climate Transition in Asia report surveyed 240 investors — 116 asset owners and 124 asset managers of which 66 are AIGCC members. The findings are based on an extensive desktop review of these investors, of which 84% were headquartered across 19 Asian markets. The median AUM of each investor is around US$110 billion.
Is renewable energy where the money is?
Among investment opportunities, the top three options were renewable energy-related. The most popular option is energy storage with 82% of investors indicating their interest, a doubling from 2023. Renewable generation saw a 71% interest, up from 63% in 2024 while interest in renewable transmission rose y-o-y by two percentage points to 60%. These particular findings were gathered from more granular data from 59 respondents who participated in the AIGCC’s Annual Investor Climate Transition Survey 2025.
Explaining the increasing appetite for renewables-related investment, the report believes that rapid declines in technology costs, particularly for renewables are playing a part. It suggests that investors have become less experimental but more savvy, driven by data, track records and product availability. Another factor is the “improving” policy certainty in key Asian markets, including the introduction of sectoral transition roadmaps linked to nationally determined contributions.
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"In spite of ongoing geopolitical risks and conflicts that have worsened this year, investors are increasing their allocations to renewables and other low-carbon solutions,” says AIGCC CEO Rebecca Mikula-Wright. “Asset owners are leading by example and not only stepping up climate-related investments but also sending clear market signals about the transition trajectory they are on.”
Mikula-Wright adds that renewables investment is a clear example of the current and growing economic benefits of moving to new clean energy economies.
Conducted before the current Middle East conflict, the report interestingly points out that nuclear energy saw a near seven-fold increase to 27% from 4% in 2023. Interest in carbon markets saw a noticeable decline from 25% to 18%.
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It also points out that scaling climate investments remains challenging, with allocations remaining a small share of AUM. Challenges include difficulty finding projects that meet risk, return and scale requirements, limited client demand, unclear frameworks and data constraints.
Sustainability as investment opportunity
The study of 240 investors found that 30% of investors have committed to increase their investment in climate solutions or transition finance in 2025. This figure represents 11 and 22 percentage point increases from 2024 and 2023 respectively, which defies perception that climate has become less of a focus globally, report interprets. The report also indicated that 35% of asset owners and 26% of asset managers respectively indicated their commitment for this metric.
Based on the findings, the report suggests that investors are changing their minds on climate-related investment and increasingly viewing this as a significant opportunity, reflecting the transition needs of Asian economies and the potential for long-term value creation.
It notes that the share of investors setting quantitative portfolio targets for climate-related investments has seen a marked increase over the past three years, signaling a shift from exploratory activity to more intentional capital allocation into climate-related investments.
Despite the strong momentum, Mikula-Wright sounds a word of caution. “Progress cannot mean complacency. Investors must continue building climate resilient portfolios that support the scaling of renewable energy. This will help them withstand short- to medium-term stressors like energy supply shocks as well as protecting and building returns and resilience for beneficiaries and economies over the long term.”
