The Bank of Thailand hosted the event "Financing the Transition: Supporting the Business Sector’s Shift Toward Sustainability" on August 7, 2024, at the Bank of Thailand Headquarters. The event launched financial products under the Financing the Transition initiative, designed to provide funding to support the Thai business sector’s transition to environmentally sustainable practices tailored to the Thai context. Eight commercial banks participated in the initiative: Bangkok Bank, Krungthai Bank, Bank of Ayudhya, Kasikorn Bank, Kiatnakin Phatra Bank, TMBThanachart Bank, Siam Commercial Bank, and United Overseas Bank (UOB). The event also saw participation from relevant stakeholders, including government agencies, financial institutions, the business sector, and international organizations.

Dr. Sethaput Suthiwartnarueput, the Governor of The Bank of Thailand (BOT), says that this event reflects the Bank of Thailand’s and commercial banks’ strong commitment to positioning the financial sector as a key supporter of the Thai business sector’s transition toward environmental sustainability. This is achieved through the development of financial products tailored to business needs, particularly for small and medium-sized enterprises (SMEs). This initiative marks a significant step in enabling SMEs to undertake meaningful transitions. A key principle emphasized is the importance of aligning the pace and timing of this transition with Thailand’s unique context, where a significant portion of the economy consists of high-carbon "brown" sectors and many SMEs face challenges in adapting. Thus, it is critical to balance the pursuit of sustainability goals with mitigating adverse impacts on various sectors. Consequently, providing financial support to transition businesses from environmentally unfriendly practices to more sustainable ones (from "brown" to "less brown"), or Financing the Transition, is essential for the country. This may begin with small, practical steps that yield tangible results and can be scaled broadly. During the event, participating commercial banks presented comprehensive and targeted financial products designed to meet the specific needs of their customer segments.

Mr. Ronadol Numnonda, Deputy Governor for Financial Institutions Stability, outlined the Bank of Thailand’s collaborative efforts with commercial banks to advance the financial sector toward sustainability. This journey encompasses: (1) Raising awareness of the banking sector’s critical role in supporting Thailand’s economy to grow sustainably, incorporating environmental, social, and governance (ESG) principles as the cornerstone of Sustainable Banking practices; (2) Defining the strategic direction for environmental sustainability within the financial sector, communicating expectations for commercial banks to assess opportunities and risks related to environmental issues and develop financial products that facilitate customers’ transition to environmentally sustainable practices; and (3) Establishing the foundation for a sustainable environmental ecosystem in collaboration with relevant stakeholders, including the issuance of Bank of Thailand policy guidelines to ensure commercial banks integrate environmental considerations throughout their operations and the development of the Thailand Taxonomy.

The aforementioned initiatives have led to a collaboration with commercial banks to develop financial products that support tangible business transitions tailored to Thailand’s context through the Financing the Transition initiative. During the event, senior executives from the eight participating commercial banks discussed the specific products their institutions offer to facilitate business transitions. Additionally, the event featured activities to provide knowledge and advisory services on adopting environmentally friendly business practices, covering key sectors of the Thai economy, including food and beverage manufacturing, agriculture, construction and real estate, and hospitality. Interested parties can access further details and updates on the initiative through the Bank of Thailand’s website

(https://www.bot.or.th/en/financial-innovation/sustainable-finance/green.html) and the websites of participating commercial banks. The Bank of Thailand earnestly hopes that this initiative will support the transition of the business sector, particularly small and medium-sized enterprises (SMEs), and inspire broader collaboration across various sectors to drive Thailand’s economy toward sustainability.

Bank of Thailand

7 August 2024

Supporting documents (TH)

• Supporting Document for Presentation: The Financial Sector Addressing Thailand’s Economy on the Path to Sustainability
  
• Supporting Document for Presentation: The Bank of Thailand’s Role in Advancing the
• Financial Sector Toward Sustainability