What do we mean by sustainable and quality investment?
In 2022, Southeast Asia saw inflows of foreign direct investment (FDI) of USD 224.2 billion, 17 per cent of global FDI and an all-time high. While FDI is a major driver of economic growth, Southeast Asian governments also want to ensure that it effectively addresses challenges such as the energy transition, infrastructure development and digitalisation. This means developing targeted policies to measure the sustainability and quality impacts of FDI, attract responsible investors, and maximise the positive impacts of FDI.
The supply of capital available for sustainable investment is growing, but the managers of this capital are no different to any others in their desire for predictable regulatory environments that support FDI. Efforts to attract sustainable and quality investment therefore depend in large part on the overall investment climate. Attracting sustainable and quality investment involves bringing together the interests of governments and investors to create a policy environment that can both deliver returns for investors and assist governments to address social and environmental challenges.