Cost over climate: Most ASEAN firms scaling back decarbonisation plans as higher energy prices bite
Close to eight in 10 businesses in South-east Asia have been hit by higher energy costs.
A significant proportion of businesses in South-east Asia are delaying their decarbonisation and sustainability plans due to the impact of higher energy costs caused by the Iran war. Out of the 514 surveyed companies in the ASEAN-6 economies, 79% have experienced increased energy costs since the beginning of 2026, and 76% of them have witnessed a decline in profitability.
Despite these challenges, many companies are committed to the low-carbon energy transition but are opting for productivity-led solutions to cope with cost pressures rather than relying on short-term measures. A majority of businesses are investing in artificial intelligence, with over 60% increasing their AI investments, believing that the benefits outweigh the technology's energy burden.
Vietnam's businesses stand out for their relatively higher energy costs (87%), but 61% of them still maintain that it hasn't negatively impacted their profitability. To counter these issues, 61% of companies are investing in energy efficiency, while 54% are prioritising automation and AI adoption. The report suggests a strategic shift in the region, with energy moving from being viewed as an operational expense to a critical enabler of competitiveness and business continuity.
Written by urgent.news from Straits Times Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
