Funds mobilised by the issuance of environmental, social and governance (ESG) bonds in Thailand are expected to expand from the current outstanding value of more than 583 billion baht, according to the Thai Bond Market Association (ThaiBMA).
ThaiBMA president Somjin Sornpaisarn said the outstanding bonds are issued by six governmental organisations and 23 private firms. The figure is expected to increase based on the global ESG trend.
Last year, 211 billion baht worth of ESG bonds were issued, up 21% from 2021. Thailand's outstanding ESG bonds tally 502 billion baht, up 66% from the previous year.
ThaiBMA and the Capital Market Development Fund (CMDF), which is backing the ESG Bond Issuance Grant Scheme, a joint programme between the two agencies, plan to support the expenses incurred from auditing or deciding the credit ratings of sustainability bonds or ESG bonds.
ESG bonds cover green, social, sustainability and sustainability-linked bonds.
For ESG bonds with unlimited currency insurance, a maturity of one year or more and minimum funding of 100 million baht per issue, the CMDF supports actual expenses of up to 2 million baht per type of ESG bond. ESG bonds are eligible for support if they are issued between July 1, 2023 and Nov 30, 2024. Interested parties may contact ThaiBMA for more information.
The Securities and Exchange Commission (SEC) is supporting ESG bond issuance with a waiver of application and filing fees until May 31, 2025.
Many types of ESG bonds have previously raised funds in the Thai capital market, such as green bonds issued by GPSC Treasury Center Company Ltd, social bonds issued by Government Savings Bank, sustainability bonds issued by Government Housing Bank, and sustainability-linked bonds issued by BTS Group Holdings Plc.
The SEC said ESG financing is gaining popularity amid global awareness of climate change and sustainable development.
The public sector needs to buy more goods and services from businesses that are responsible to society and the environment, said the regulator. The business sector has started to adjust its production process towards more environmentally friendly products.
Thais are now demanding businesses use natural resources as efficiently as possible, and the government is expected to reduce its carbon footprint.
The government wants Thailand to achieve carbon neutrality by 2050, with net-zero greenhouse gas emissions by 2065.