Kasikornbank (KBank) has set a goal to expand the extension of sustainable financial facilities to 25 billion baht this year, doubling to 50 billion next year, aiming to become an Asean leader in the field of environment, social and governance (ESG) finance by 2030.
As of September this year, KBank granted loans to ESG projects worth 16 billion baht, representing 66.1% of its total sustainable financial facilities, which cover loans and funding for 2022.
The bank might miss its target this year, but the business strategy will continue, said co-president Krit Jitjang.
KBank is open to small-pocket customers accessing sustainable financial services, in addition to large corporations, he said.
The bank has lent to more than 500,000 smaller customers and targets increasing this customer segment to 600,000 next year, eventually reaching 1.9 million by 2025.
KBank, the nation's second-largest lender by total assets, prepared a budget of 200 billion baht for financing and investing in ESG-related projects.
With a clear strategy and practice in this area, the bank expects to become a leader among regional financial institutions in the ESG field, said Mr Krit.
He said the bank set up an ESG risk assessment procedure for several years and all project finance and commercial loans for mid-sized and large enterprises, a sum worth 343 billion baht, have been processed via this procedure.
KBank has launched several sustainable loan programmes to attract customers to adopt ESG principles, such as the SolarPlus project, which aims to encourage 500,000 households to install solar rooftops over the next five years.
The bank also implemented an electric vehicle (EV) project by launching a universal digital application and charging stations to facilitate EV users. KBank targets 88,000 app users in five years.
In addition, Mr Krit said the bank aims to decarbonise the loan portfolio of three business sectors comprising power generation, oil and gas, and coal, which represent 27% of the total loan portfolio at around 2 trillion baht.
He said businesses worldwide have embraced sustainability as consumers express their preference for ESG-related consumption.
Investors are using ESG risk as a key factor in their investment decisions, said Mr Krit.
Moreover, regulators both at home and abroad have implemented ESG-related measures that businesses must comply with.
Any businesses that fail to adjust now will incur higher costs later, whether in terms of investment or expenses for product and service development, which will inevitably jeopardise their competitive capabilities, he said.
However, firms that can efficiently align with this trend will benefit from abundant opportunities, said Mr Krit.