Climate Adaptation is Critical yet Lags in Southeast Asia. Startups have Solutions

Climate Change Impacts Hurt Businesses

The impacts of extreme weather events affect every type of building, from office buildings and hotels to factories and warehouses.

For commercial property, for example, FM said extreme heat impacts can include site structural integrity, compromised indoor air quality and increased risks of fire.

In Thailand, the Bangkok Post reported, the industrial sector is highly vulnerable to climate risks. In 2011, severe floods cost the economy 1.4 trillion baht (about US$41 billion), with 70 percent of the impact concentrated in manufacturing. While industrial estates have constructed flood barriers to mitigate flooding risks, these gates do not fully protect against disruptions. “In fact, they exemplify climate maladaptation, as they often divert floodwaters towards nearby communities.”

Physical risks are likely to increase over time, Singapore’s GIC and S&P Global Sustainable1 found, raising costs related to buildings across the broader economy for customers, tenants, operators, owners, and investors.

Those impacts have a cost beyond the infrastructure. The real estate sector already has higher insurance premiums for properties exposed to extreme weather and flooding, Singapore Ambassador for Climate Action Ravi Menon noted. Firms that fail to account for climate-related vulnerabilities could face higher borrowing or financing costs.

Adaptation is Essential

Adaptation to prepare for climate change impacts is essential for preventing effects such as damage to buildings and disruptions to supply chains.

In the property sector, for example, JLL said that owners need an intentional strategy to manage climate risk that quantifies the impact on property value and overall portfolio risk and then outlines strategic solutions. “Building upgrades can fortify structures to enhance resiliency during extreme weather events, and improving a property’s energy efficiency and water consumption can reduce the environmental impacts that perpetuate these hazards.”

FM said businesses should consider preparations such as:

• Ø Structural reinforcement to strengthen buildings and infrastructure.
• Ø Heat management.
• Ø Supply chain resilience.
• Ø Insurance coverage.
• Ø Water management.

While the value of adaptation solutions such as green or cool roofs and wet or dry floodproofing could reach about US$29 billion globally through 2050, GIC and S&P found. Implementing these measures for assets represented in the S&P Global REIT Index could reduce the cumulative cost of climate hazard risks by US$45 billion by 2050.

Adaptation Lags

Despite the risks of not implementing adaptation measures, adaptation is lagging in Southeast Asia.

The Business Times in Singapore opined, for instance, that “climate adaptation has typically been viewed as the responsibility of the public sector, even though public funding cannot meet the scale of investment needed in most markets.” A recent report by the Asia Investor Group on Climate Change (AIGCC) further noted that there is a lack of clarity among Asian regulators on their countries’ national climate adaptation plans. And although investors need to quantify the financial implications of physical risks, data and methods remain insufficient for decision-making.

While some countries in Southeast Asia do have National Adaptation Plans, others will come later. Malaysia's National Adaptation Plan is expected to be finalised in 2026.

Along with the lack of regulatory clarity, the predilection of investors to put their funds into climate mitigation solutions rather than climate adaptation has slowed progress. Most investment has gone into climate change mitigation projects such as solar panels or electric vehicles rather than adaptation.

The ASEAN Secretariat said climate finance in the region that focused on mitigation activities were 68 percent of funding, while adaptation accounted for just 29 percent of public funding allocation.

An earlier report by Climate Insider estimated that renewable energy investments by the private sector comprised 84% of total climate finance in Southeast Asia, while only 12% of climate finance was directed towards adaptation.

Some Companies are Overcoming the Obstacles

With so little funding available, far more startups and even more established companies focus on climate change mitigation rather than adaptation. However, some startups and newer companies in Southeast Asia have developed adaptation solutions.

To help prepare organisations for extreme events, for example, Komunidad provides advanced weather and environmental intelligence. Customers can access observations including forecasts of multiple parameters up to 5 days in advance, to enhance preparedness. They can also gain insights into climate risks with access to more than 20,000 peril and loss metrics.

While paint may seem minor, reduces heat impacts. BeCool's solar reflective paint creates a cooler surface on painted roofing materials, Associate Professor at Universitas Pendidikan Indonesia Beta Paramita explained. By reflecting sunlight back into the atmosphere, paint can reduce outer surface temperatures by 15°C and inner space temperatures by 3°C.

Similarly, Technode said Rare Cooling offers a passive cooling technology using radiative paint which lowers indoor temperatures without consuming electricity. In a region where energy demand is growing rapidly due to urban heat, it observed, such low-impact innovations are gaining traction.

GAIA Corp is also focused on cooling, New Energy Nexus said. Its CoolRoof product is a geoengineering approach that mitigates heat gain by applying reflective coatings on buildings to reduce indoor temperatures and lower energy consumption.

When extreme events hit, maintaining the supply chain is critical for many businesses. Automa Supply Chain enhances supply chain operations with a strong emphasis on efficiency and sustainability, according to JICA. It uses advanced tools and data-driven insights to enable businesses to optimise their logistics processes. Automa said it delivers supply chain IOT solutions with flexible business models, including sustainable procurement.

Given that extreme weather can cause power outages, having a back-up is essential. Hive Energy PH offers renewable energy-powered portable power stations as back-up power. It said its services include PV systems installation, energy storage solutions and portable power stations for residential, commercial, and industrial customers.

YCP says it offers climate adaptation consulting in Indonesia, enabling industries to anticipate and reduce climate challenges, facilitating growth and resilience in volatile conditions.

While these solutions may appear incremental, their impact can be large. Given the increased need for adaptation to cope with the extreme weather events, these and other solutions are welcome additions for businesses to reduce the impact of climate change.