Deloitte Thailand reveals Thailand Business Transition for Future Energy Ambition Survey 2023, showcasing critical findings on the attitudes of companies towards sustainability and climate action and challenges they are facing. The survey also underscores the urgency for businesses to align with sustainability goals and take strategic actions to mitigate climate change. The findings provide a roadmap for companies seeking to navigate the evolving landscape of sustainable business practices.
Thailand Business Transition for Future Energy Ambition Survey 2023 has been conducted with 57 Thailand-based companies across four industries: Consumer, Energy, Resources & Industrials, Financial Services, and Life Sciences & Health Care. The survey is conducted with purpose to study the attitudes of companies towards sustainability and climate action and challenges they are facing. The results consist of three key focuses: Strategy, Operational approach, and Financial Measures for Sustainability and Climate Mitigation.
In terms of strategy for sustainability and climate target, it is found that regulatory and compliance factors, influenced by both international and national policies, stand out as the leading motivators for companies adopting sustainability and climate action. Among the respondents, 41% highlight the influence of international policy push, while 36% emphasize the impact of national policy push. Additionally, business considerations such as competitiveness, operational efficiencies, and business opportunities closely trail as significant drivers. External pressures from stakeholders also emerge as a crucial factor influencing corporate sustainability initiatives.
When asked about sustainability and climate targets, 40% of the respondents indicate that net zero stands out as the primary sustainability and climate target adopted by companies across various industries, with particular emphasis from those in the Energy and Chemicals sector. Following closely are goals related to greenhouse gas emission reduction and achieving carbon neutrality. However, the attainment rate for these targets remains at a moderate level, approximately 3.3 out of a full score of 5. This aligns with the commitments made under the COP26 agreements, where numerous countries have pledged significant reductions in their greenhouse gas emissions and are actively striving to achieve the Net Zero target.
When it comes to the challenges to reach the sustainability and climate target, the survey results indicates that respondents predominantly emphasize non-monetary related challenges rather than monetary related challenges, which accounts for 75% of the surveyed companies. Among these non-monetary challenges, the difficulty in collecting and tracking emission data across the supply chain ranks top with 50% of the surveyed companies. Meanwhile, 60% of those facing monetary challenges highlighted the high investment costs associated with climate change initiatives.
Narain Chutijirawong Ph.D, Executive Director, Clients & Markets, Deloitte Thailand, stated that “To address the challenges in data collection, companies can start considering what type of data is needed, indicating scope and boundary of data collection, identifying key participants in the process, locating relevant data within the business, and establishing a resilient, future-proof data collection process aligning with current and upcoming sustainability reporting standards and framework.”
Looking into operational approach towards sustainability and climate target, it is found that improving operational efficiencies, reducing emissions from transportation and supply chains, and enhancing waste management systems are identified as the top three actions for creating sustainability and addressing climate change, accounting for 70%, 54% and 43%, respectively.
To close decarbonization gap, companies are leveraging digital technologies to enhance operational efficiencies and shifting investment portfolios towards renewables such as solar, wind, hydroelectric, geothermal, and green hydrogen. In the journey towards the decarbonization, Boards play a pivotal role in guiding businesses towards a sustainable future, recognizing the need to integrate emerging opportunities and risks into strategic planning.
While climate change mitigation is imperative, the survey reveals limited government financial support in Thailand, prompting many businesses to utilize their budgets for initiatives. Notably, green bonds, loans, and company budgets are identified as key financial sources, but over half of respondents lack awareness of supportive schemes, suggesting a need for improved communication. According to the survey, 81% of the respondents states that they utilize their internal budgets to finance and implement sustainability and climate initiatives. In contrast, only 28% of the surveyed companies rely on government grants as a source of financial support for sustainability and climate mitigation.
Regarding the 30@30 Policy, which aims to produce 30% of zero emission vehicle from total vehicle production in 2030, it is found that concerns have been raised about its effectiveness, with 40% of these surveyed companies noting its negligible impact on operational processes.
Bordin Vongvitayapirom Ph.D, Senior Manager, Sustainability & Climate, Center of Excellence, Deloitte Thailand, added “In addition to directly influencing the operational processes of companies, the ’30@30′ policy has ripple effects on environmental, economic, and social aspects. Notably, there’s a challenge on increasing share of clean energy in the grid, limitation of biofuels for short-term decarbonization for internal combustion engine due to reliance of agricultural feedstock, and a shift towards electric vehicles that diminishes government revenue generated through excise taxes.”
Sophaphan Saptippayarattana, Southeast Asia Power, Utilities & Renewables Leader and Partner, Audit & Assurance, Deloitte Thailand, added “Efficiently reducing greenhouse gas (GHG) emissions doesn’t only support companies to achieve their climate change targets but it also yields business advantages such as cost savings, heightened efficiency, boosted sales, strengthened customer loyalty, innovation, and more robust stakeholder relationships.”
For more information, please download the full report via this link below.
https://www2.deloitte.com/th/en/events/2023/thailand-business-transition-for-future-energy-ambition-survey-2023.html
