Balancing Renewable Expansion and Nature in Southeast Asia
Solar- and hydropower plants can help mitigate climate change, but their ecological footprint depends heavily on where they are located. For investors aiming to balance lower emissions with biodiversity concerns, understanding where renewable assets overlap with sensitive ecosystems is key to managing risk and identifying more sustainable opportunities.
Southeast Asia is home to both ecologically sensitive areas and rapidly expanding renewable capacity,1 but not all locations are equally affected. To highlight the spatial variation in risk, we mapped the location of solar- and hydropower plants2 against two nature-related spatial datasets:3
- Biomes: Broad ecosystem types (e.g., tropical forests and mangroves) that provide essential ecological context around assets.
- Nature Needs Half (NNH): A conservation framework that assesses how close landscapes are to critical ecological thresholds, beyond which essential life-supporting functions could deteriorate.
We found that most hydropower plants are located outside areas of severe ecological stress, but nearly half sit within landscapes at risk of degradation — where management efforts may ultimately determine whether they harm or help resilience. Solar assets, meanwhile, are typically located in already modified areas, reducing biodiversity conflict but lying close to recoverable or intact ecosystems, where future expansion could heighten nature-related risk.
Together, the data reveals that not all renewables carry the same nature footprint, and that differentiated insight is essential to balancing the energy transition with biodiversity protection. With biodiversity moving up the regulatory agenda through the Taskforce on Nature-related Financial Disclosures and EU’s Corporate Sustainability Reporting Directive, investors will need to distinguish projects that pose reputational risks from those that require stronger stewardship to ensure the energy transition supports nature-positive goals.
Data as of Aug. 14, 2025. The map shows the locations of hydro- and solar-power plants across part of the Asia-Pacific region. To improve visibility, it includes a subset of assets rather than the full dataset. The underlying colors represent the four NNH categories across the region: red for Nature Imperiled, yellow for Nature Could Recover, light green for Nature Could Reach Half and dark green for Half Protected. Source: MSCI Sustainability & Climate, MSCI GeoSpatial Asset Intelligence
MSCI Sustainability & Climate products and services are provided by MSCI Solutions LLC in the United States, MSCI Solutions (UK) Limited in the United Kingdom and certain other related entities.
Data as of Aug. 14, 2025. The chart illustrates the distribution of solar-power plants across the biome categories found in Southeast Asia. It also highlights how these plants intersect with NNH categories, illustrating the relationship between biome type, ecological condition and the distribution of solar plants within these two categories. Source: MSCI Sustainability & Climate, MSCI GeoSpatial Asset Intelligence
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Uncovering Nature Risks Through Geospatial Analysis
Nature loss is a rising risk to the global economy, disrupting supply chains, raising costs and slowing growth. Investors — such as asset managers, insurers and banks — who use geospatial analysis are better positioned to manage these location-specific risks.
An Investor's Guide to Nature and Biodiversity Risks and Impacts
Investors thinking about biodiversity are asking questions such as, how do I know which holdings are most vulnerable to biodiversity loss? And, can I measure biodiversity risk exposure across my portfolio? We aim to help them start finding answers.
1 “Renewable Energy in Southeast Asia in 2025 – 2026,” Source of Asia Sectorial Note, May 2025.
2 Data as of Aug. 14, 2025. We mapped these assets using the MSCI One Geospatial Asset Intelligence – Nature Exposure and Impact (Module 3) platform. Countries included in the analysis are Brunei Darussalam, Cambodia, Indonesia, Lao People's Democratic Republic, Malaysia, Myanmar, Philippines, Singapore, Thailand, Timor-Leste and Vietnam. Based on our data, there are 381 hydropower and 460 solar-power plants in the region.
3 Both layers are based on the Ecoregions 2017 dataset and the research of Eric Dinerstein et al., “An Ecoregion-Based Approach to Protecting Half the Terrestrial Realm,” BioScience 67, no. 6: 534–545.
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