This story was originally published by the Stanford Precourt Institute for Energy. David Cohen is co-director of the Southeast Asia Program at Stanford's Walter H. Shorenstein Asia-Pacific Research Center (APARC).

Improved investment strategies and policies can help bring sustainable solutions to scale across Southeast Asia, home to more than 700 million people, according to a new Stanford report.

Dozens of investment fund managers – representing trillions of dollars in venture and catalytic capital, sovereign wealth funds, and private equity –  along with corporate executives, data center developers, government officials, and academics met in Singapore in February 2026. Hosted by the Stanford Doerr School of Sustainability and the Precourt Institute for Energy, in collaboration with Temasek Trust, the philanthropic arm of Temasek, they examined sustainable economic development for the region's 11 countries: Brunei, Cambodia, East Timor (Timor-Leste), Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. The new report, "Six Actionable Insights for Advancing Sustainable Economic Development in Southeast Asia," distills the conversations and was reviewed by participants.

"Investing in sustainable economic development is now just investing," write Arun Majumdar, the Chester Naramore dean of the Doerr School of Sustainability, William Chueh, director of the Precourt Institute for Energy, and David Cohen, director of the Precourt Institute’s new Center for Sustainability in Southeast Asia, in the report. They argue that investments in sustainability must increasingly deliver competitive financial returns alongside societal benefits. "That's good news, proving that sustainability – defined in the broadest sense to include affordability, fairness, and security, in addition to environmental responsibility – is no longer seen as peripheral to profit." The three convened the roundtable and reviewed and edited the report.

Southeast Asia is one of the world's fastest-growing economic regions. Much of it is still building its energy systems from scratch. As the region rapidly expands its energy systems to support economic growth, sustainable solutions will need to compete economically to become the foundation of future development. The choices made now will shape Southeast Asia’s competitiveness, energy security, and emissions for decades.

"Asia is pivotal if impact is the goal," said an executive with a state-owned investment fund at the meeting. Participants spoke candidly under an agreement that their comments would not be attributed by name.

The region represents roughly $3.8 trillion in combined gross domestic production. Some countries have made strides in deploying and enabling clean energy – Singapore is building one of the world's largest floating solar farms, Indonesia is expanding geothermal energy capacity, and Vietnam has become a manufacturing hub for solar panels. But scaling these successes across countries with different economies and stages of development, regulatory systems, languages, and infrastructure poses a major challenge.

"Southeast Asia is at a strategic inflection point in developing its economies individually and collectively while mindful of environmental effects," the report says.

Bridging the "valley of death"

A central challenge discussed was the "valley of death" – the gap between proving a technology works in a lab and scaling it to commercial production. Unlike the software startups of previous decades that flourished with relatively little funding, today’s ventures to decarbonize the global economy require large physical infrastructure investments: like grid upgrades, electric generating capacity, and new factories. Impact investors – firms willing to accept lower financial returns in exchange for environmental or social benefits – could bridge this gap, participants agreed.

Their willingness to do so represents a big shift in mindset: "What was once deemed 'crazy' is now taken for granted and simply part of the way we operate," said one venture capital founder at the meeting.

But the valley of death isn’t the only obstacle. Market fragmentation across Southeast Asian countries compounds the challenge. A startup that proves its technology works in one country may struggle to attract investment for expansion elsewhere.

Six actionable insights

To address these and other barriers, the report distills the discussions into six strategies:

1. Guide founders to scalers. Capital allocators should actively support entrepreneurs in transitioning from startup leaders to executives capable of commercial-scale operations. This includes providing mentorship and networks, not merely passive investment.

2. Sequence catalytic capital collaboratively. Philanthropic capital, impact investors, flexible institutional funds, and strategic finance must work together to move technologies through development stages. Government venture capital and co-investment programs using blended public-private finance can de-risk early exposure and help bridge the valley of death.

3. Construct resilient portfolios. Investors should build "pyramid portfolios" with high-risk technologies at the narrow top, scalable medium-risk projects in the middle, and conventional low-risk assets at the base. Portfolios should be stress-tested against policy uncertainties rather than relying on assumed subsidies.

4. Coordinate economic goals. Southeast Asian states need stronger implementation of regional frameworks to create unified regulatory systems that attract long-term foreign capital. Harmonizing energy policies and integrating infrastructure can provide the scalable markets sustainable technologies require.

5. Quantify sustainability's economic value. Artificial intelligence could standardize carbon accounting across incompatible reporting formats, enabling real-time monitoring of environmental, social, and governance performance and accurate cross-company comparisons. Better data would direct more capital toward certifiably sustainable projects.

6. Invest in human capital. Southeast Asia produces 700,000 science, technology, and math graduates annually – far fewer per capita than China or India. Without significant education investment, the region will remain a proving ground for foreign innovation rather than an incubator for local talent. The Association of Southeast Asian Nations, the regional intergovernmental organization, could promote cooperation among scholars and disseminate best practices through existing networks like the ASEAN University Network.

Looking ahead

Unaffordable solutions cannot achieve scale, roundtable participants emphasized.  Sustainability needs to align with profitability to attract the capital needed for industrial-scale deployment.

The full report, published in August 2026, provides detailed recommendations for investors, entrepreneurs, researchers, and policymakers working to realize the vision of economically vibrant, sustainable development outlined in ASEAN's 2025 blueprints.

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Arun Majumdar is also the Jay Precourt Professor of mechanical engineering in the Stanford School of Engineering, of Energy Science & Engineering in the Doerr School, and of Photon Science at SLAC.

William Chueh is also the Kimmelman Professor of Materials Science & Engineering in the School of Engineering, of Energy Science & Engineering in the Doerr School, and of Photon Science at SLAC.

David Cohen is also the professor of Environmental Social Sciences in the Doerr School and the WSD-HANDA Professor of Human Rights & International Justice in the School of Humanities & Sciences.

Temasek is a global investment company headquartered in Singapore.