Thailand uses its Financial Strenght to Try and Address Climate Crisis

The financial and banking sectors are increasingly recognized as having a significant impact on the economy through their decisions to invest in and fund enterprises and the UN is assisting Thailand’s government in raising awareness of the need for sustainable finance.

Eric Usher, the head of the UN Environment Programme Finance Initiative, spoke with Srikanya Yathip, Secretary-General of the Thai Government Pension Fund (GPF), and Kattiya Indaravijaya, CEO of Kasikornbank for UN News ahead of an UN-backed event aimed at encouraging Thai finance leaders to adopt sustainable business practises.

Eric Usher stated that when the UN Environment Programme Finance Initiative began in 1992, it was a niche topic. It was one of the first partnerships with the global financial sector based on sustainable finance.

Since then, it’s been recognized that lending has a significant environmental impact: banks can choose whether or not to support clients that cut down trees, therefore their actions and policies have a significant environmental impact.

According to Srikanya Yathip, they hope their investment decisions will have a transformative impact. There will be no need to defend the environment or civilization if they can reconstruct the world sustainably.

She went on to clarify that as a pension fund and institutional investor, we are fortunate to be able to choose what and where we invest, and that we ensure that our business behaviour is aligned with societal goals while still seeking long-term financial gains. It’s all about doing well by doing well for them: social responsibility and long-term profit can coexist.

And, in light of the current scenario, with the immense pressures we are all under as a result of COVID-19, she said that if we want to safeguard our bottom line, we must also defend others.

This implies that we must consider all stakeholders, including customers, employees, suppliers, and the community. That may necessitate a trade-off between short-term discomfort and long-term reward.

There are two types of licences required in the banking business. The first is a banking licence, which authorises you to conduct business. The community must grant us a social licence, which we must earn. That means if the community cannot survive, even the bank won’t survive.

According to a recent poll, 74% of people do not want to promote products that are not environmentally friendly. This demonstrates that society is going in the direction of long-term growth. Financial sectors and banks can’t ignore this tendency if they want to stay relevant.

When it comes to sustainable development, there are two groups today. Once camp declares that the priority is to recover from the crisis, and that sustainability should be placed on hold. The other side claims that now is the time to invest wisely, respond to the climate problem, and transition to a carbon-free economy.

Thailand’s government is putting up a national master plan with the goal of achieving net-zero emissions. This master plan will be presented by the government during COP26, and it will have a significant impact on many businesses. A shift to more low-carbon power generation, as well as assistance for the electric vehicle industry and the circular economy, are among the suggested improvements.

By assisting their customers in conducting business in a more sustainable manner, Kasikornbank in Thailand is willing to contribute to net-zero and sustainable growth. They have the policies in place, as well as the desire to see it through.

Government Pension Fund, one of Thailand’s largest investors, is now the country’s only signatory to the Principles for Responsible Investment, which requires signatories to consider the environmental and societal ramifications of their decisions.

Kasikornbank, one of Thailand’s largest commercial banks, was the first to sign the United Nations Principles for Responsible Banking. Signatory banks have pledged to conduct business in accordance with the Paris Climate Agreement and the 2030 Agenda for Sustainable Development of the United Nations.

In September, a UN delegation led by Ms. Gita Sabharwal, the UN Resident Coordinator in Thailand, will co-host a high-level roundtable with Thai Finance Minister Apisak Tantivorawong, Ms. Yathip, and Ms. Indaravijaya to encourage Thai banks and investors to commit to responsible and sustainable business practices ahead of COP26, the UN climate change conference, to encourage Thai banks and investors to commit to responsible and sustainable business practices due to being held in November.

Photo Credit: https://news.un.org/en/story/2021/08/1096652