Green Economy and Climate Innovation in Cambodia’s Business Sector

How Sustainability is Powering New Growth for Enterprises in Cambodia

In the heart of Southeast Asia, Cambodia is undergoing a quiet but powerful transformation. The country’s growing commitment to sustainability, climate resilience, and green innovation is shaping a new era for its business sector. As the global economy pivots toward carbon neutrality and environmental accountability, Cambodia is stepping up with green economy strategies, renewable energy programs, and eco-friendly business models.

This blog explores how Cambodia is embracing climate innovation, what’s driving its green economy, and how local and international companies can capitalize on this rising wave of environmentally responsible growth.

1. What Is a Green Economy?

A green economy is one that promotes sustainable development without degrading the environment. It focuses on reducing carbon emissions, improving energy efficiency, protecting ecosystems, and promoting inclusive economic growth. For Cambodia, a green economy offers a solution to environmental challenges while creating new opportunities for jobs, investment, and innovation.

Key sectors driving the green economy in Cambodia include:

• Renewable energy (solar, hydro, biomass)

• Sustainable agriculture

• Green manufacturing

• Eco-tourism

• Waste management and recycling

• Water conservation and sanitation

2. Government’s Green Agenda and Climate Commitments

Cambodia’s green economy momentum is anchored in strong national policies. The Royal Government of Cambodia has laid out several frameworks aligned with the Paris Agreement and the UN Sustainable Development Goals (SDGs).

Key government initiatives:

• Cambodia’s Long-Term Strategy for Carbon Neutrality (LTS4CN) aims for net-zero emissions by 2050

• National Strategic Plan on Green Growth (2013–2030) promotes green investment, energy access, and eco-innovation

• Cambodia Climate Change Strategic Plan (CCCSP) integrates climate resilience across all development sectors

• Collaboration with ASEAN Green Recovery Initiatives to rebuild post-COVID in an eco-friendly way

For businesses, these policies create an enabling environment for sustainable investments, green product innovation, and cleaner production.

Explore: How Cambodia’s Strategic Location is Supporting Sustainable Trade

3. Renewable Energy: Cambodia’s Brightest Green Opportunity

Cambodia is making significant strides in renewable energy. The country has moved from a heavy reliance on diesel and coal to increasing use of hydropower, solar, and biomass. According to the Ministry of Mines and Energy, renewable sources now contribute nearly 60% of the country’s electricity generation capacity.

Notable energy milestones:

• National Solar Park Project in Kampong Chhnang – one of Southeast Asia’s most cost-effective solar projects

• Expansion of floating solar farms on reservoirs and hydropower dams

• Waste-to-energy pilot programs in Phnom Penh and Siem Reap

• Private sector investment in solar rooftop installations for factories and SMEs

Companies that adopt clean energy solutions can benefit from tax incentives, international green financing, and lower long-term operational costs.

Read: How Smart Warehousing is Transforming Cambodia’s Logistics Industry

4. Green Manufacturing and Export Potential

As international buyers demand environmentally responsible supply chains, Cambodian manufacturers are adapting. The rise of green factories—especially in the garment, textile, and footwear (GTF) sectors—is helping Cambodia remain competitive.

Examples of innovation:

• LEED-certified factories by global brands like H&M, Puma, and Adidas

• Installation of solar-powered machinery in export facilities

• Use of natural dyes and biodegradable materials

• Adoption of circular economy practices (recycling textiles, reducing water waste)

These trends are attracting eco-conscious buyers from Europe, North America, and Japan.

Explore: Why Cambodia Is Becoming a Destination for Sustainable Sourcing

5. Eco-Tourism and Sustainable Travel

Tourism is another green frontier. While Cambodia is world-renowned for Angkor Wat, there’s growing interest in eco-tourism ventures that emphasize nature, culture, and community.

Green travel experiences on the rise:

• Community-based tourism in Mondulkiri and Ratanakiri

• Wildlife conservation lodges in the Cardamom Mountains

• River clean-up and plastic-free travel programs in Kampot and Koh Rong

• Bicycle and hiking tours that replace motorized transit

Eco-tourism promotes local economic development, preserves biodiversity, and appeals to global travelers looking for sustainable experiences.

6. Role of Technology and Innovation in Climate Solutions

Technology is at the heart of Cambodia’s climate innovation. From AI-powered crop monitoring to smart irrigation and solar-powered logistics, digital transformation is enabling data-driven environmental solutions.

Emerging tech areas:

• AgriTech: Startups like Smart Farm Assist and Agri-Tom offer precision farming tools for climate-resilient agriculture

• Smart warehousing systems that reduce energy consumption in storage and cold chains

• Green fintech platforms offering microloans for solar panels and clean cooking stoves

• AI and IoT for monitoring emissions and optimizing water use

Related: The Role of AI in Cambodia’s Logistics and Smart Warehousing Systems

7. How Cambodia-Agent.com Supports Green Businesses

As more global businesses seek sustainable market entries, Cambodia-Agent.com offers tailored services to help navigate Cambodia’s green business ecosystem.

Our green economy services include:

• Sustainable company formation and licensing assistance

• Environmental compliance support for local and international businesses

• Green sourcing partnerships with certified manufacturers and suppliers

• Import/export logistics consultation with an eco-friendly focus

• Introductions to development programs and green financing partners

Discover: Top Services Foreign Businesses Need When Entering Cambodia

8. Future Outlook: Green is the New Growth

Cambodia’s green economy is more than a trend—it’s the foundation for long-term economic resilience and competitiveness. As more companies integrate climate-friendly practices, and as government and private sector alignment improves, Cambodia is well-positioned to become a regional leader in sustainable development.

International businesses that engage now can help shape the future—and build credibility as first movers in green innovation.