A clean energy investment can improve health outcomes, strengthen livelihoods, and build economic resilience
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Asia is sitting on significant pools of capital committed to climate action, health, and poverty reduction. What we have not yet built is a framework that recognises these as part of the same pool. Globally, half of the $4 trillion SDG financing gap lies in the energy transition alone. That means that the single largest driver of development underfunding is also a climate problem. In India, estimates suggest that achieving the Sustainable Development Goals will require additional investments of around 6% of GDP annually, and the sectors driving this gap — energy, infrastructure, and health — are also the sectors where climate investment is most urgently needed.Multiple returnsThe challenge is not that climate and development require separate pools of capital. Both need substantially more investment. The challenge is that we continue to evaluate them separately, even when the same investment can deliver both climate and development outcomes.Every year, fossil fuel combustion accounts for 0.95 million premature deaths in India. Extreme heat cost the country 247 billion working hours in 2024 alone. A clean energy investment that displaces coal generation produces a carbon return, a health return, and a productivity return simultaneously. Yet, we currently count only the first. That means the investment case visible to funders is a fraction of what it actually is, and the capital being mobilised reflects that limited view.India’s renewable sector could generate 3.4 million jobs by 2030. Each of these jobs represents not only a livelihood outcome but also a health outcome and, in districts facing structural unemployment, a poverty-reduction outcome. So, while the funds exist in principle, what is needed is an investment framework that channels capital across the full stack of returns.Consider the Kolhapur foundry cluster, one of the most concentrated agglomerations of small manufacturing units in India, responsible for roughly 5% of the country’s cast-iron exports and supporting around 27,700 jobs. These firms burn enormous quantities of grid electricity, face rising carbon-compliance costs as the European Union’s Carbon Border Adjustment Mechanism comes into force, and are simultaneously absorbing the shock of American tariffs that have stalled certain export lines.The energy cost problem, the trade competitiveness problem, and the climate problem are, again, the same problem. Helping these firms shift to open-access renewable power does not merely reduce their emissions; it restores their price competitiveness in markets that will increasingly price carbon at the border and protects the employment base of a region with few other industrial anchors. An investor making a bet on renewable energy infrastructure for this cluster is also, whether or not they account for it, making a bet on industrial employment and export diversification.This same logic extends to agriculture. In Maharashtra’s cotton belt, a biochar programme targeting 10 lakh farmers projects an income uplift of ₹85,000 per farmer per year through soil amendment, yield improvement, reduced fertilizer dependence, and lower pest pressure. The same programme removes 1.45 million tonnes of CO2 annually. The carbon credit and the farmer’s income gain are two readings of the same physical intervention: organic matter returned to degraded soil. Investors can hold a position in one or both. Currently, most investors capture neither, because markets have not yet developed instruments that make it easy to hold both simultaneously.Unlocking capitalThe technical assistance that philanthropy can offer here is not marginal. It is the difference between a project pipeline that is analytically ready and one that sits on a shelf. Aggregating demand across rural water boards, urban local bodies, smallholder cooperatives, and industrial clusters is work that commercial capital is unlikely to fund at the origination stage. But once that aggregation is completed, load shapes are mapped, regulatory risks are documented, and payment security mechanisms are structured, the same commercial capital will compete to invest.The opportunity is not simply to mobilise more capital, though additional financing remains essential to meet Asia’s climate and development needs. It is also to help capital deployers recognise the full spectrum of returns that their investments can generate. A clean energy investment not only reduces emissions; it can improve health outcomes, strengthen livelihoods, enhance productivity, and build economic resilience. When these outcomes remain invisible in investment decision-making, capital is allocated against an incomplete investment thesis.By building frameworks that measure and value both financial and social returns, we can direct more capital towards solutions that deliver the greatest overall impact.Aravindan Srinivasan is Executive Director, Climate Action at AVPN Published - June 05, 2026 12:03 am IST
