Rising insurance premiums, energy bills and supply chain disruptions are making climate risk a financial concern for Southeast Asian businesses, which need to look beyond disclosure requirements to assess whether investing in resilience makes economic sense, executives and officials said on Friday.
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Speaking at the launch of Ernst & Young’s (EY) Climate Resilience Centre of Excellence in Singapore, they highlighted the need for companies to assess how climate change could affect their costs, assets and operations.
“The real test of climate resilience is whether organisations can make the economics work,” said Amandeep Bedi, who co-leads the centre.
The centre will advise companies and governments across Southeast Asia on climate adaptation, energy resilience, and nature and biodiversity, according to EY.
The centre’s launch comes amid growing pressure on companies to disclose climate risks, even as Singapore gives some businesses more time to meet the reporting requirements. The Singapore Exchange introduced sustainability reporting rules for listed companies in 2016, and climate disclosures aligned with International Sustainability Standards Board standards became mandatory for Straits Times Index companies from the 2025 financial year.
In August 2025, the Accounting and Corporate Regulatory Authority and SGX RegCo gave other companies more time. Listed companies outside the index now have until the 2028 or 2030 financial year, depending on their size, to make the full disclosures, and large non-listed companies until 2030.
Natural disasters caused US$65 billion in economic losses across Asia in 2025, of which 8 per cent was insured, according to the Swiss Re Institute. The 10-year average is 17 per cent. Floods in Thailand, Indonesia and Malaysia in late November and early December caused at least US$11 billion in losses.
Heat stress cost Singapore S$1.18 billion (US$921.95 million) in lost output in 2018, according to a 2024 National University of Singapore study, which projected the figure would rise to S$2.22 billion by 2035.
Data centres use about 7 per cent of Singapore’s electricity, according to the Infocomm Media Development Authority, which expects the share to reach 12 per cent by 2030. Cooling accounts for 30 per cent to 50 per cent of a data centre’s energy use in the tropics, against 15 per cent to 30 per cent in temperate climates, the authority says.
Grace Fu, Singapore’s Minister for Sustainability and the Environment, who gave the keynote at the launch, said the city-state’s Third National Climate Change Study projects that mean temperatures could rise by up to 5°C and sea levels by up to 1.15 metres by the end of the century.
“For businesses planning investments, managing assets, and building supply chains, these are material risks which cannot be ignored,” Fu said.
Lee Hsien Loong, Singapore’s then-prime minister, estimated in 2019 that protecting the country against rising sea levels would cost “probably S$100 billion over 100 years, quite possibly more”. The government is making climate projection data publicly available, Fu said, and the Monetary Authority of Singapore is working with financial institutions on scenario analysis and stress tests.
“But Government support alone will not be enough,” she said. Companies will need to assess their own vulnerabilities, and banks, insurers and asset managers will need to price climate risk better to encourage investment in resilience.
Praveen Tekchandani, EY’s Co-leader for Climate Change and Sustainability Services speaks at EY’s launch of their Climate Centre of Excellence. Image: Ernst & Young.
Targeting the C-suites
Much of the demand for sustainability advice has so far been driven by regulation, Praveen Tekchandani, EY’s Asean co-leader and Singapore leader for Climate Change and Sustainability Services, told Eco-Business. The new centre will focus instead on the business risks climate change poses to clients, which companies should manage “with or without regulations”, he said, “because it makes sense for the business”.
“Sustainability needs to have a space in the boardroom,” Tekchandani said. The way to earn that space, he added, was to look at it through “a business lens”.
Companies signed up to environmental, social and governance (ESG) commitments with little persuasion a few years ago, he said, but boards now have geopolitical risk, artificial intelligence and much else competing for their attention.
Tekchandani said the centre would ask clients whether climate change was likely to raise the cost of insuring their assets. For a data centre operator, he said, each 1°C rise in ambient temperature adds 2 per cent to 4 per cent to energy consumption. Combined with the rising mean temperatures outlined earlier, operators in the region would find it harder to meet the service level agreements it has signed with tenants.
EY wants to discuss climate risk with chief executives, chief financial officers and chief strategy officers, rather than mainly with chief sustainability officers, he said. The centre will focus first on the built environment, financial institutions, energy and agriculture, and will start with large real estate companies and multinationals.
EY will approach smaller firms through energy efficiency, in a programme with a government agency that has yet to be announced. With those companies, EY will lead with cost savings rather than climate resilience, Tekchandani said.
He did not give client numbers or a market size for the centre, saying only that work had begun with “a couple of clients”.
EY cited its own 2025 Global Climate Action Barometer, a survey of 857 companies in 50 countries, which found that although 64 per cent had a climate transition plan, most had made no progress on it or had gone backwards. The survey also found that 92 per cent had assessed how physical climate risk would affect them, but only 44 per cent had adaptation measures in place.
The centre follows EY’s Center for Sustainable Supply Chains, launched in Singapore in 2023. Globally, EY says its staff worked on more than 25,000 client sustainability engagements in the 2025 financial year.
