EY Japan's New Advisory Services: Supporting Nature-Based Solutions in Southeast Asia

Supporting Sustainable Development through Nature-Based Solutions in Southeast Asia

In a significant move towards addressing climate challenges, EY Japan's Climate Change and Sustainability Services (CCaSS) team has announced the launch of its advisory services aimed at assisting Japanese companies in Southeast Asia. This initiative will focus on promoting nature-based solutions (NbS) that leverage natural ecosystems to address pressing social issues while contributing to the preservation and restoration of nature.

Nature-based solutions involve various projects such as forest restoration, mangrove preservation, and sustainable agriculture. These initiatives not only aim to reduce CO2 emissions but also create biodiversity and generate economic value through carbon credits. According to the International Union for Conservation of Nature (IUCN), NbS projects could account for up to 37% of the required CO2 reductions by 2030. Furthermore, reports indicate that approximately $133 billion was invested in NbS globally in 2020 alone, highlighting the growing interest in these sustainable financing options.

A key focus within Southeast Asia is the potential to protect 58% of tropical forests, which covers around 114 million hectares. The region is estimated to avoid 835 million tons of CO2 emissions annually through these protective measures. The rapid growth of the sustainable bond market in Southeast Asia, which increased from $3.36 billion in 2017 to $72.69 billion in 2023, reflects the significant investment potential in NbS, with an impressive compound annual growth rate of approximately 67.5%.

EY Japan CCaSS will prioritize three specific sectors in its initiatives—forestry, marine and coastal management, and agriculture. The advisory services will include extensive market research to identify viable business opportunities, assessing greenhouse gas reduction and absorption capabilities, and monitoring policy and regulatory changes in the target countries. This holistic approach aims to ensure that NbS projects achieve sustainability and profitability.

Moreover, successful implementation of NbS in Southeast Asia relies heavily on collaboration among a diverse range of stakeholders. This includes investors, government agencies such as the National Climate Change Secretariat in Singapore and Indonesia's Ministry of Environment and Forestry, international organizations like IUCN, and local foundations such as WWF and Temasek Foundation. By forming a robust ecosystem of partnerships, EY Japan CCaSS aims to support the sustainable growth strategies of Japanese companies in the region.

Masaki Moro, the regional leader of EY CCaSS for the APAC region, emphasized the growing interest in NbS as a means of addressing climate change. He noted the potential for NbS to create co-benefits, simultaneously aiding biodiversity and combating climate issues. There is optimism that the creation of NbS-related credits will invigorate the market, fostering greater financial inflow towards nature-positive investments.

As EY Japan embarks on this journey, it underscores the significant role NbS play in sustainable development and business growth. The objective is clear: leverage natural ecosystems to not only combat climate change but also to explore new financial opportunities, paving the way for a sustainable future.

In conclusion, EY Japan's initiative marks a crucial step in merging financial returns with environmental conservation, promising a brighter, more sustainable future for Southeast Asia and beyond. Through strategic collaborations and innovative projects, it embodies a commitment to developing solutions that benefit both the economy and the planet, demonstrating that responsible business practices can indeed align with ecological stewardship.