SEC promotes ESG bond issuance trend via hub

SEC promotes ESG bond issuance trend via hub

Environmental, social and governance (ESG) bonds have gained popularity with issuers and investors amid the economic slowdown, with the pandemic accelerating investment demand of bond issuance.

Securities and Exchange Commission (SEC) secretary-general Ruenvadee Suwanmongkol said ESG bonds have become more attractive as they represent companies' long-term business strength and direction.

Since 2018, the value of funds raised from ESG bonds through the Thai bond market is around 90 billion baht, including the latest 15-year green bond issuance worth 30 billion by the Finance Ministry to help finance coronavirus support measures.

The SEC will support companies intending to issue ESG bonds by coordinating with an external bond reviewer to evaluate bond issuance and contacting an international organisation that has a budget to support ESG bond issuance to reduce issuance cost, said Ms Ruenvadee.

Tris Rating is qualified as a Thailand-based reviewer for green bond issuance.

The SEC and the Thai Bond Market Association (TBMA) yesterday jointly launched the ESG Information Platform, a hub for ESG bonds aimed at supporting investors and issuers with ESG bond information.

She said the platform, created by TBMA from a platform developed by the Luxembourg Green Exchange, will be a tool to display ESG information to the public.

"ESG bond issuance should increase from now as investors have a better understanding of the bond features and global ESG trend," said Ms Ruenvadee.

The SEC will follow the global ESG trend by encouraging this type of bond issuance among market participants, she said.

For firms listed on the Stock Exchange of Thailand (SET), the market regulator will require them to conduct the "One Report", a disclosure on how companies advocate ESG-related responsibilities.

Such disclosure will be effective from 2021.

TBMA president Tada Phutthitada said investors are more interested in ESG bonds now, with demand in the domestic bond market continuing to increase.

PTT's ESG bond was the first distribution of green bonds to the public through a public offering, while other issuances were offered to foreign institutional investors, domestic institutional investors and high net worth investors.

Other SET-listed companies that raised funds through ESG bonds include B.Grimm Power Plc, Global Power Synergy, BTS Group Holdings Plc, TMB Bank, Bank of Ayudhya and Kasikornbank.

Mr Tada said there are at least two companies set to launch ESG bonds later this year.

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