As Malaysia takes over as ASEAN chair in 2025, the country is uniquely positioned to drive regional policies that foster green entrepreneurship. Malaysia has already signalled its commitment to sustainability through initiatives such as the National Energy Transition Roadmap (NETR) and its target of creating 200,000 green jobs by 2030. With ASEAN now at a crucial point in its energy transition, Malaysia’s leadership can accelerate climate-focused investments, harmonise regulatory frameworks and promote cross-border collaboration to create a more cohesive green startup ecosystem.
Investment in climate technology has increased significantly across Southeast Asia. Climate tech deals accounted for 9.5% of total venture funding in 2023, up from 3.2% in 2019. The volume of climate tech equity deals has also grown at a compound annual rate of over 15% between 2019 and 2023. Since 2020, nearly 30 climate-focused funds with a strong presence in Southeast Asia have emerged, securing over $830 million in committed capital. This surge highlights a shift in investor priorities towards sustainability and long-term resilience.
Malaysia’s chairmanship of ASEAN presents an opportunity to align regional policies to attract more investment into climate technology. The country can use its leadership to standardise green investment incentives across ASEAN, making it easier for startups to expand regionally. It can also leverage its strategic partnerships with regional development banks and sovereign wealth funds to unlock new sources of funding for green startups.
Several green startups have emerged as key players in tackling environmental challenges. Seven Clean Seas, originally based in Singapore, moved its operations to Bali in 2022 to combat marine plastic pollution. The organisation has focused on removing plastic waste from the ocean while raising awareness and leading clean-up initiatives across Indonesia. Similarly, Prevented Ocean Plastic Southeast Asia, based in Denpasar, has worked with local communities to collect and recycle plastic waste, reinforcing the circular economy and reducing environmental harm.
In Malaysia, startups like BoomGrow have pioneered indoor vertical farming, reducing agricultural carbon footprints and promoting food security. Meanwhile, EcoBali, established in 2006, has provided waste management solutions by promoting recycling, composting and responsible waste disposal. The company has also introduced education programmes to encourage sustainable practices.
In Singapore, Climate Impact X (CIX) has developed a digital platform for carbon credits, supporting businesses in their decarbonisation efforts by providing access to high-quality carbon credits. Malaysia’s leadership in ASEAN could help scale such initiatives across the region, ensuring that carbon trading mechanisms and environmental policies are aligned to create greater transparency and impact.
Governments across Southeast Asia have introduced policies to support green startups, recognising their role in sustainable economic growth. In Singapore, the government has developed partnerships and infrastructure to help startups and small and medium-sized enterprises (SMEs) create innovative green solutions, tackle sustainability challenges and expand globally. Indonesia has prioritised balancing economic growth with energy transition by introducing tested decarbonisation solutions and financial mechanisms such as blended finance to attract investment in sustainable initiatives (IEA). As ASEAN chair, Malaysia has the opportunity to unify these fragmented policies and drive a more coherent regional framework for green business growth. This could include implementing regional tax incentives for green startups to facilitate cross-border scaling, strengthening public-private partnerships to accelerate innovation in clean energy, the circular economy and green mobility, and establishing ASEAN-wide green finance mechanisms to ensure sustainable businesses have equal access to funding, regardless of their location.
Despite the momentum, green startups in Southeast Asia still face key obstacles. Regulatory uncertainty remains a significant challenge, as policies on renewable energy, carbon pricing and waste management continue to evolve. Startups must navigate shifting regulations while trying to establish long-term stability. Securing growth capital is another hurdle. While early-stage funding has increased, many green startups struggle to attract later-stage investment required for scaling operations. Consumer adoption also plays a critical role in the success of sustainable solutions. Technologies such as electric vehicles and alternative proteins require a shift in consumer behaviour, which often demands education and incentives. With Malaysia leading ASEAN’s policy discussions, the country can drive reforms that provide long-term regulatory certainty and establish regional funding mechanisms to support the growth of sustainable businesses.
The rise of green startups in Southeast Asia signals a shift towards a more sustainable and resilient economy. With Malaysia at the helm of ASEAN, the country has a unique opportunity to champion policies that support green entrepreneurship and encourage greater regional cooperation. By leveraging its leadership, Malaysia can promote regional energy integration, ensuring that green startups in renewable energy have access to a more interconnected ASEAN Power Grid. Strengthening cross-border trade of sustainable products can help create a unified ASEAN green market, making it easier for environmentally responsible businesses to scale. Additionally, facilitating green financing initiatives can ensure that both early- and late-stage green startups receive the necessary funding to grow, fostering a more robust ecosystem for sustainable innovation across the region.
However, to translate these opportunities into tangible impact, ASEAN must act decisively. Malaysia’s leadership in 2025 presents a pivotal moment to push for regulatory certainty, attract long-term green investments and establish collaborative platforms that enable green startups to thrive. A well-coordinated ASEAN strategy will not only accelerate the region’s transition to a low-carbon economy but also position Southeast Asia as a global leader in sustainable innovation. With the right policies and commitments in place, the region can turn its environmental challenges into economic opportunities—ensuring that green startups are not just the future of business, but the future of ASEAN’s growth itself.