Energy infrastructure investment in Asia key to deliver energy transition and meet net zero targets

890 Mt of CO2 emissions per trillion dollars generated, or India, with 853 Mt of CO2 emissions per trillion dollars. These Asian countries stand out as the world’s most carbon-intensive producers followed closely by Malaysia, China, Thailand and Indonesia with at least four times more carbon emissions than Europe’s Big Four[4]. These findings suggest a need for major investment in climate infrastructure and renewable energy projects across Asia to accelerate the energy transition and tackle climate change where investment can be most impactful. Particularly in Asian emerging economies, as this analysis presents, demographic change and economic growth are rapidly driving upward the demand for energy which are relying on high carbon-emitting fuels to power their growing economies.

Additionally, ThomasLloyd’s report highlights the significance of changing global demographics, with Asia now accounting for almost 60% of the world’s population and the life expectancy of the average citizen rising to the age of 74 compared to just 41 in 1950.

With a population size of 4.68 billion people (60% of the world’s total) and rapidly growing energy consumption needs, Asia will play a vital role in global efforts to reduce carbon emissions towards a net-zero economy by 2050.

A new research report, titled “Carbon Cost of GDP: how investment in Asia can deliver the energy transition”, conducted by impact investor ThomasLloyd, shows the continent produces more than half the world’s 37.12 billion tons of CO2 emissions with just eight of these countries accounting for 45% of total global CO2 emissions. The study, which measures the amount of CO2 emitted for every trillion dollars of GDP generated, presents insightful comparisons between countries by ranking their emissions’ intensity with respect to their economic output. This comparison, rather than focusing merely on absolute emissions, makes clearer where impact investments must be allocated in the most efficient manner to tackle climate change. The study presents the findings that the global average Carbon Cost of GDP per country is 382 million tons (Mt) with Asian emerging economies, namely Emerging Asia[2] and Bangladesh, ranking for the most part notably above the 500 Mt levels in sharp contrast with Europe’s ‘Big Four’[3] with 132 Mt.

In the last few decades, Western countries have been successful in both reducing the absolute level of their CO2 emissions, and the carbon intensity of their GDP, but in Asia, it is a different story. This is shown by the 2021 Carbon Cost of GDP comparison for countries like Vietnam, with

Nick Parsons, Head of Research at ThomasLloyd commented: “As a developer and financier of sustainable real infrastructure assets, we are proud to play a part in the region’s economic transformation and in limiting the intensity of Asia’s carbon production and consumption, whilst serving the needs of the region’s rapidly growing population.

“Through this Carbon Cost of GDP report, we are able to identify where progress has been made, and where further interventions and investment are required, as part of ThomasLloyd’s commitment to helping deliver the energy transition across Asia.

With the ‘carbon cost’ of GDP in Asia almost four times higher than that of the four largest economies in Europe, investment in Asian renewable energy is a vital step to achieving a Net Zero world by 2050. “

Fintech lender Sonovate has surpassed £3.5bn in total funding and £1 billion in annual funding for the first time as rising costs force businesses to seek finance to manage cashflow and drive growth.

During 2022, Sonovate provided businesses with £1.1 billion in finance, a 58% increase on the £700 million lent in the previous year, and more than double 2020’s figure of £444 million. Lending hit £312 million in Q4 2022 alone – up 30% from the same period in 2021.

Last year also marked the first time the amount of funding provided in a month surpassed £100 million, with Sonovate initially hitting this sum in October, then again in November when £110 million was loaned to businesses. This high was a 22% jump on the previous highest performing month, when £90m was provided to businesses.

Sonovate’s record performance was driven in large part by the expanding adoption of its business finance and technology services by consultancies, recruitment agencies and labour marketplaces throughout the world to allow them to pay contractors on time.

The increase in finance deployed to businesses was made possible by the securitisation deal with BNP Paribas and M&G Investments that Sonovate completed in Q3 2022. This deal added £165 million to Sonovate’s funding structure, increasing its capital efficiency and expanding its customer base, especially in the enterprise space, whilst delivering added flexibility for export financing. The volume of funding provided to customers over the course of 2022 increased by 50% year-on-year as adoption of embedded finance models gains momentum. Meanwhile, enterprise customers* receive approximately one third of Sonovate’s total lending volume. This significant increase in volume demonstrates the continued growth in the use of contract and freelance labour, and indicates the market potential in the years ahead.

In September 2022, Sonovate surpassed £3 billion of funding since inception – an increase of £1 billion in just 12 months as the lender continues to scale at pace. Sonovate envisages continued strong growth as it expects to continue on its growth trajectory in the UK and plans to enter new markets.

Richard Prime, Co-founder & CEO of Sonovate, commented: “Rising costs have presented many challenges, but ambitious businesses are embracing the opportunities to drive growth and increase their competitiveness by securing finance to invest in their workforce.

“With workers demanding new ways of working in response to both the pandemic and the cost of living crisis, and businesses looking to reduce costs where possible, more and more companies are building their teams around a contract-based workforce. Businesses benefit from this approach as they’re more agile to adapt to changing workload or cashflow and, as this trend continues, the need for on-demand funding will continue to soar.”

To date, more than 33,000 freelancers, contractors and gig workers in 44 countries have received payments from over 3,300 businesses supported by Sonovate. During 2022, Sonovate onboarded more than 170 new customers.

To support this growth, Sonovate is accelerating recruitment and aiming to expand to 230 employees during 2023.