Asia's Carbon Markets Strategic Imperatives for Corporations 2025

Foreword The global imperative to address climate change has reached a critical juncture, with the Paris Agreement’s goal of limiting warming to 1.5°C demanding urgent, coordinated action. Central to this effort is Article 6 of the Paris Agreement, which has emerged as a transformative framework for international cooperation – enabling cross- border carbon trading, harmonizing standards and mobilizing global capital to scale up climate solutions. In this context, carbon markets have become indispensable tools, aligning environmental ambition with economic pragmatism to accelerate the transition to net zero. According to the International Monetary Fund (IMF), countries across the Asia- Pacific region face a climate financing shortfall of at least $800 billion. As innovative instruments, carbon markets serve as critical mechanisms for mobilizing resources and reducing costs, granting countries and companies the flexibility to smooth their low- carbon transitions. Asia, with more than 50% of global emissions and 55% of GDP , stands at the forefront of this transition. Against this backdrop, the World Economic Forum in collaboration with Bain & Company offers this insight report, which presents a comprehensive review of the Asian carbon market. It decodes the region’s pioneering innovations, dissects critical market dynamics and distills hard-won lessons. By spotlighting Asia’s unique carbon market practices, we aim not only to empower the region’s decarbonization journey but also to inspire global climate action, offering a blueprint for nations worldwide. The evolving landscape of carbon markets in Asia forces corporations to take the initiative amid changes to tackle challenges and capture opportunities. We move beyond generic decarbonization strategy analysis, weaving together market evolution, core participants and the broader ecosystem of stakeholders. By anchoring corporate thinking in this interconnected web, we reveal how businesses can navigate carbon market complexities, not just as participants but as catalysts for systemic change. As we move through 2025 and towards ever- escalating climate crisis, the urgency of reaching peak emissions and carbon neutrality has never been more acute. This report fuels that momentum. It calls for Asia to leverage its carbon market innovations, for corporations to embrace strategic climate leadership and for global stakeholders to unite in harnessing market mechanisms to drive irreversible, transformative change. Together, let us seize the opportunity to move from ambition to impact, exploring how economic progress and climate stewardship can be aligned.Sebastian Buckup Managing Director, World Economic ForumDominik Utama Partner and APAC Practice Lead, Sustainability and Responsibility, Bain & Company Asia’s Carbon Markets: Strategic Imperatives for CorporationsSeptember 2025 Asia’s Carbon Markets: Strategic Imperatives for Corporations 3