ASEAN Firms Delay Decarbonisation Amid Rising Energy Costs

Close to 80% of businesses in Southeast Asia have reported higher energy costs since the start of the Iran war. This has led many to delay their plans for decarbonisation and sustainability. A survey by The Business Times and Kantar found that about half of the companies in the region have postponed these initiatives due to rising costs. Specifically, 79% have experienced increased energy expenses, and 76% are facing profit losses.

Key Details

The survey polled 514 corporate leaders across the ASEAN-6 economies. It showed that 34% of respondents noted moderate increases in energy costs, ranging from 10% to 29%. In contrast, 23% reported a smaller rise of less than 10%. Despite these challenges, companies are focusing on improving productivity. Over 60% are increasing their investments in artificial intelligence (AI). Many believe that the long-term benefits of AI will outweigh its energy demands.

Optimism around AI adoption is high. About 78% of businesses expect significant benefits from the technology. This positive outlook is especially strong in Singapore, Vietnam, and Thailand. The survey indicated that 62% of respondents had boosted their AI investments in the past year. Indonesia showed the most significant growth, with 85% increasing their AI spending.

Background

Experts suggest that while energy costs are a concern, they are a minor part of overall AI expenses. Manik Bhandari, Asean data and AI leader at EY, noted that energy costs are “quite minimal” when developing AI applications. However, 41% of businesses expect a moderate increase in energy demand as AI adoption grows. Additionally, 40% anticipate a significant rise in energy needs.

Related coverage: Global Energy Import Costs Surge by $330 Billion Due to War.

Based on reporting by: businesstimes.com.sg