Demand For ESG-Compliant Investments On The Rise

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Thailand’s evolving environmental, social and governance (ESG) ecosystem and the key role of sustainability reporting in the country’s capital market are explored in an exclusive interview given by Pakorn Peetathawatchai, President, The Stock Exchange of Thailand (SET), to Oxford Business Group (OBG).

In this wide-ranging interview, Pakorn maps out SET’s ESG and sustainable development journey – tracing the roots back to the 1997-98 Asian financial crisis, which prompted a series of initiatives to reform the country’s corporate landscape. In recent years, these have included: the 2018 launch of the SETTHSI Index; the release of a corporate sustainability guide for Thai listed companies; and the introduction of an integrated 56-1 One Report by the Securities and Exchange Commission (SEC) in 2020.

“Effective FY 2021, the 56-1 One Report requires ESG disclosures from listed firms and greenhouse gas emissions disclosure from companies that are seeking to list,” he told OBG. “This is expected to be key in supporting Thailand’s ESG performance and sustainable investing over the coming years.”

Pakorn added that SET’s efforts to provide greater clarity about what constitutes a sustainable or ESG-compliant investment through the launch of both the Thailand Sustainability Investment (THSI) list and SETTHSI Index are now delivering results.

“Our most recent data, comparing returns for the SETTHSI Index with the broader SET and SET100 indices from April 2020 to April 2021, underscores the economic benefits of these investments: the group compliant with ESG standards outperformed the other two indices on every data point,” he said. “As of May 2021 Thailand was home to corporate governance (CG) and ESG assets under management totalling BT54.8bn ($1.7bn) across 50 funds – up from 23 funds in 2019.”