ASEAN’s digital transformation is unfolding alongside its green transition, with profound implications for sustainability and the future of work. Emerging technologies, particularly Artificial Intelligence (AI), are reshaping industries and labour markets, offering powerful tools to accelerate renewable energy integration, enable circular manufacturing, and strengthen sustainable supply chains. At the same time, these changes are redefining the skills and capacities workers need to thrive in an increasingly digital and low-carbon economy.

Yet, the opportunities of digitalisation come with significant environmental challenges. The ICT sector already contributes an estimated 3–4% of global greenhouse gas emissions, with data centres heavily reliant on electricity accounting for nearly half of this footprint. As AI adoption accelerates, both energy demand and the carbon intensity of digital systems are projected to grow rapidly. Deliberate interventions are needed for  ASEAN to pursue its sustainability goals while harnessing digitalisation for economic competitiveness and workforce growth. If designed intentionally, digitalisation can become a driver of green workforce development by creating new pathways for employment in renewable energy, sustainable logistics, and eco-friendly industries, while equipping workers with the skills to adapt to rapidly shifting labour demands.

Against this backdrop, TFGI moderated a panel, “Industries as Key Drivers of AI-based Green Workforce Development” at the ASEAN Green Jobs Forum 2025 in Kuala Lumpur Malaysia. The event which was co-convened by the Ministry of Human Resources Malaysia (KESUMA) and the ASEAN Secretariat, supported by the Australia for ASEAN Futures (Aus4ASEAN Futures) programme gathered policymakers, industry leaders, academia, and civil society to discuss the future of work at the intersection of technology and sustainability.

Moderator and Panelists

• Arifah Sharifuddin, Institute Director, Tech for Good Institute
• Pranav Kumar, Director, IMA Asia
• Calvin Chu, Managing Partner, Eden Strategy Institute
• Sam Grayling, Insights Lead – Work Wages and Job Creation, World Economic Forum
• Ian Chew, Founder, Greenie Web

Key Takeaways

1. AI and digital technologies are powerful accelerators of ASEAN’s green transition, but its success is highly dependent on closing the skills gap.

AI and IoT are reshaping industries by optimising operations, reducing costs, and even unlocking new revenue streams. AI-enabled digital twins and sustainability models are already helping firms increase operational efficiency by up to 28%, while also enabling new innovations in R&D and product design. Yet, the region faces a growing skills mismatch, with both technical competencies and “core” skills—critical thinking, creativity, adaptability—lagging behind rapid technological change. The World Economic Forum’s Future of Jobs Report notes that skills shortages remain the number one barrier for employers globally, and in Southeast Asia, one in four companies are already investing in job transitions to reskill existing workers. This suggests that while AI can drive sustainability gains, the benefits will only be realised if governments and industries scale reskilling at pace.

2. Sustainability and digital strategies must be integrated, to drive innovation and competitiveness.

Sustainability must be pursued as a central priority instead of an added compliance for digitalisation efforts. For instance,  many firms still operate with separate Chief Sustainability and Chief Digital Officers, leading to fragmented strategies and unaligned KPIs. This separation often reduces ESG to risk mitigation, while digitalisation is seen as cost-cutting or innovation. Instead, integration can deliver dual benefits: sustainable IT practices such as low-carbon coding, efficient data centers, and circular IoT designs,  and the use of AI/ analytics to optimise energy use, supply chains, and emissions tracking. The emergence of “green-collar jobs” in IT such as coding for energy efficiency and “green AI,” are  roles that are not just environmentally necessary but also central to future workforce competitiveness. By embedding sustainability into digital transformation, companies can capture short-term cost savings while building the long-term capacity to innovate in ways that appeal to both markets and regulators. The competitive advantage lies not in choosing between green and digital, but in designing strategies that deliberately fuse them.

3. Collaboration amongst governments, industries, and SMEs is essential to ensure inclusivity in the sustainability and digital transition.

Tackling sustainable digitalisation requires collaboration across different segments of society. Effective public–private partnerships (PPPs), such as skills councils in Singapore where industry informs university curricula, or alternative financing models that invest in corporate AI and sustainability capabilities, are some promising approaches. Small Medium Enterprises (SMEs), which account for more than 90% of ASEAN businesses, play a critical role. The fast-evolving nature of sustainability regulations lowers barriers to entry, enabling SMEs and startups to compete alongside incumbents. Co-creation models, like hackathons where corporations share problem statements for startups to solve, are helping to align green and digital practices across value chains. Beyond firm-level innovation, governments must provide clarity through standards and incentives, ensuring alignment across stakeholders. Private sector collaboration with public institutions, especially on skills development, is a development multiplier which accelerates growth while ensuring that vulnerable groups are not excluded. Ultimately, collaboration is the mechanism through which ASEAN can leapfrog into global leadership in green-digital integration, turning its diversity of economies and industries into a source of resilience and innovation.