Accelerating Value Chain Decarbonization for Corporate Growth Perspectives from Asia 2025

Companies that fail to address these challenges face supply chain disruption, asset impairment and higher financing costs. Conversely, proactively assessing and managing climate-related risks helps mitigate potential losses while strengthening resilience and credibility with investors, customers and regulators. CDP data indicates that in 2024, companies across Asia recognized the materiality of climate- related risks, with policy and acute physical risks emerging as the dominant concerns. In the Asia- Pacific region, an average of 79% of companies identified environmental risks with substantive financial impacts – above the global average of 67% – making it the region where awareness of environmental risk is most widespread. In Greater China, 36% of companies cited policy risk as the highest perceived area of risk, followed by acute physical risks (18%) and market-related risks (15%). This pattern holds across much of Asia, where 32% of companies identify policy risk as their top concern, reflecting heightened awareness of regulatory tightening. Meanwhile, acute physical risks (e.g. extreme weather events) are ranked second overall (19%), particularly in climate-vulnerable countries like the Philippines and Thailand. Market risks, including shifting demand and reputational impacts, remain the third most reported category across the region (14%). These results highlight a growing regional alignment on both transition and physical climate threats. Three key regulatory and market forces are creating decisive competitive advantages for proactive companies, while significantly escalating risks for those who fall behind: –The rapid advancement of domestic carbon pricing and green regulations across Asia directly impacts compliance and operational costs. –The rise of cross-border compliance mechanisms, such as the Carbon Border Adjustment Mechanism (CBAM), is reshaping international trade standards and market access requirements. –The growing influence of buyer preferences and capital allocation signals increasingly reward robust environmental performance in procurement and financing decisions. These drivers collectively intensify the urgency for corporate climate action. Greater China Japan India South Korea Singapore Thailand Indonesia Malaysia Philippines Viet Nam Cambodia Policy Acute physical Market Technology Chronic physicalTop perceived climate risk types across selected Asian countries FIGURE 6 Source: World Economic Forum analysis, based on 2024 CDP data. 79% of companies in the Asia-Pacfic region identified environmental risks with substantive financial impacts – above the global average of 67%. Accelerating Value Chain Decarbonization for Corporate Growth: Perspectives from Asia 11