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Accelerating Sustainable Finance in Thailand

28 November 2019 (Readers 259)

The International Finance Corporation (IFC), a member of the World Bank Group, has signed a Memorandum of Understanding (MOU) with the Bank of Thailand to join forces to accelerate sustainable financing in Thailand.

The signing of the MOU took place on 27 November 2019. This partnership aims to enable more sustainable business practices by the financial industry and tackle key challenges to address environmental, social, and governance (ESG) risks.

According to the Bank of Thailand, addressing ESG risks is integral to sustainable financing. Subsequently, this will help Thailands financial sector bolster its regulatory and industry cooperation to improve risk management practices and enhance governance.

The issuance of the Responsible Lending Guidelines by the Thai Bankers Association in 2019 under the Bank of Thailands leadership has already set a precedent, highlighting the importance of sustainable banking in translating the nations reform efforts into a competitive and resilient financial sector.

The Assistant Governor of the Bank of Thailands Financial Institutions Policy Group, Mrs. Nawaron Dejsuvan, said, "Thailand recognizes the importance of adopting ESG practices in the financial sector and has recently made significant progress including the launch of the Thai Bankers Association Sustainable Banking guidelines. However, more can and needs to be done to steer the Thai financial sector towards more sustainable practices.

As part of this collaboration, IFC will support the Bank of Thailand in developing a Sustainable Finance policy framework, which includes a sustainability roadmap and tools to help the banking sector improve ESG risk management practices.

Meanwhile, IFC Country Manager for Thailand Vikram Kumar said, "The Thai financial sector is a key contributor to the growth of regional economies. Sustainable finance by Thai banks will not only have an impact in Thailand, but also on neighboring markets.

"Together with the central bank, we will support the Thai banking sector to emerge as the regional sustainable finance leader, by sharing its capital and expertise with neighboring markets.

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