The world is spending only about US$200 billion a year on nature-based solutions, against an estimated US$700 billion annual shortfall — a gap that Singapore is trying to close with a new framework built around integrity, demand and supply for a regional, nature-based carbon market, the country’s Ambassador for Climate Action Ravi Menon said on Monday.
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Delivering the keynote address at a Taskforce on Nature-related Financial Disclosures (TNFD) session at SGX Centre during Ecosperity Week, Menon said Southeast Asia holds 30 per cent of the world’s potential in nature-based solutions, with Indonesia, Cambodia, Malaysia and the Philippines as standouts.
Global financial research provider MSCI estimates that the market for nature-based carbon credits could be worth at least US$5 billion in 2030 and up to US$200 billion by 2050, he noted — but he said this can only be unlocked if three structural failures are fixed.
“Most of nature’s value is not priced. This is the foundational market failure,” Menon said.
Nature outcomes are also difficult to measure, and most projects are not bankable because their governance is complex, revenue thin and transaction costs high.
“There is capital looking for nature projects. There are nature projects that need capital. But the projects are not structured in a way that connects the two,” he told the more-than-100-strong audience.
Integrity, demand, supply
On integrity, Menon urged standard-setters to keep updating methodologies and pointed to the Core Carbon Principles set by the Integrity Council for Voluntary Carbon Markets (ICVCM) — under which Verra’s latest reforestation and conservation methodologies have now been approved. International carbon markets have been lacklustre in recent years amid concerns about overcrediting and rollbacks on climate commitments in advanced economies.
Singapore’s climate change ambassador Ravi Menon speaking at SGX Centre on 18 May 2026. Image: City Developments.
Still, Singapore is putting money behind monitoring, reporting and verification (MRV): the National Research Foundation is co-funding a S$15 million (US$11.7 million) ‘Carbon Integrity SG’ programme to improve carbon-stock estimates for the region’s mangroves, forests and peatlands.
Also, the country’s National Space Agency has issued a grant call for satellite and geospatial MRV, while the Economic Development Board is working with environmental non-profit WWF on blue carbon MRV in Asia.
A global coalition to channel financing towards high-quality carbon projects was also launched Tuesday, with members including SIngapore’s WWF and Enterprise Singapore.
On demand for carbon credits, Menon disclosed that Singapore has contracted nature-based credits worth S$76 million across four projects in Ghana, Peru and Paraguay, covering avoided deforestation, soil carbon and reforestation of degraded lands.
The republic co-chairs the Coalition to Grow Carbon Markets and is part of the Forest and Climate Leaders’ Partnership Jurisdictional REDD+ Coalition, which aims to mobilise US$3 to 6 billion a year by 2030 for tropical forests.
“The answer to a flawed market is not exit — it is reform and higher standards,” he said, calling on companies to set high bars and buy credits that meet them.
On the supply of carbon credits, he flagged that “the most critical bottleneck in nature financing is not the absence of willing investors. It is the absence of investment-ready projects.”
Blended finance must scale up, he urged, pointing to Singapore’s Financing Asia’s Transition Partnership (FAST-P), backed by a US$500 million government grant and targeting US$5 billion in mobilised capital, and the Asian Development Bank’s Nature Solutions Finance Hub, which is targeting at least US$2 billion in private finance.
“If we lose them, we lose lives, we lose livelihoods,” Menon said of the region’s forests, mangroves and reefs. “Let us build a nature-positive Southeast Asia,” he added.
Corporates already moving on TNFD
A panel discussion that followed, moderated by Eco-Business chief executive officer Jessica Cheam, provided some insights on how some Asia-Pacific corporates are already trying to operationalise Menon’s “make it bankable” message through TNFD-aligned disclosures.
City Developments Limited (CDL) chief sustainability officer Esther An said the Singapore developer has closed two sustainability-linked loans tied to nature key performance indices (KPIs) drawn from its TNFD report: a S$400 million (US$312 million) facility in 2024 and a S$300 million (US$234 million) facility launched last week with DBS Bank.
CDL has already hit several targets and earned “a few basis points” of discount, said An.
“Sustainability-linked loans are not simple — the banks and us worked very hard on the KPIs, how to really quantify the nature performance [and] how to make it bankable,” she added.
CDL’s TNFD LEAP assessment, which identifies nature-related dependencies, impacts, risks and opportunities, also produced a concrete nature-based solution: a micro-forest that bioacoustic monitoring has shown lowers temperatures inside the forest by 5°C and surrounding areas by 4°C. This proved material in a city like Singapore which is warming twice as fast as the global average and facing urban heat island effects of up to 7°C.
“As a building owner, we cannot tell a tenant, sorry, no aircon today,” An said.
Nikita Singla, head of sustainable finance at agribusiness Olam Agri, said food and agriculture sits at the top of any matrix of sector impact and dependency on nature, leaving the company little choice but to adopt TNFD.
Even before TNFD, said Singla, Olam has been a long-time pioneer of natural capital accounting, valuing soil, water and pollination alongside financial and social capital.
The harder work, she said, is justifying investment in regions where there is no carbon credit-style market to monetise avoided losses, such as in water-stressed countries growing water-hungry crops.
“If we manage these risks better than peers, we should experience less volatile earnings — and investors should hopefully apply a lower cost of capital,” she noted.
The voluntary-versus-mandatory question
Candice Dott, director of market engagement for TNFD noted that more than 760 organisations globally have committed to public TNFD reporting, with Asia-Pacific corporates among the most active adopters.
Even though the International Sustainability Standards Board (ISSB) has confirmed it will issue a practice statement rather than a new mandatory standard, with an exposure draft to be released at this year’s biodiversity COP17 for public consultation, Dott said investor stewardship policies, sell-side research and credit risk models are increasingly getting on board with TNFD-aligned disclosures.
“Investments today are not capital expenses but capital investments,” she said.
Joe Whelan of the World Business Council for Sustainable Development (WBCSD) warned of a “complete collapse in long-term thinking” amid geopolitical shocks, but said physical nature risks were now showing up on balance sheets and insurance premiums.
“Nature, like everything else, more than ever has got to compete for capital — and it’s got to win. So make those economic cases,” he urged.
Cheam closed with a sharper ask of policymakers, echoing the gap Menon had laid out in his keynote. “Companies don’t voluntarily stick their neck out and spend, especially here in this region,” she said. “It would be great to see some policy action from our leaders.”
