Environmental, social and governance (ESG) factors profoundly influence both the global economy and society. To investigate the role of these factors, the Bangkok Post organised an annual conference titled "Greening The Future: ESG Leadership in the Sustainability Revolution", inviting business leaders from a diverse range of companies to share their insights on the topic.
CARBON CREDITS
Thailand should join other countries in Asean to consider setting a single standard on carbon credit trade, dubbed "Asean-VER," to support international campaigns to reduce carbon dioxide emissions in the business sector, said Chaiwat Kovavisarach, vice-chairman of the Federation of Thai Industries (FTI).
This effort can promote business sustainability in the industrial sector, a contributor to the Thai economy and a major source of carbon dioxide emissions, said Mr Chaiwat.
"The energy sector alone made up 70% of total greenhouse gas emissions in Thailand, amounting to 373 million tonnes of CO2 equivalent [MtCo2e] in 2019," he told the conference.
Thailand's greenhouse gas emissions increased to 464 MtCo2e in 2022.
One way to reduce CO2 emissions is to promote the carbon credit trade, said Mr Chaiwat.
Carbon credit trading allows companies to sell carbon credits from reduced emissions to other organisations that want to lower emissions, but are unable to reach their reduction targets.
The trade is certified by the Thailand Voluntary Emission Reduction Program (T-VER), initiated in 2014 by the Thailand Greenhouse Gas Management Organization, a public entity established to encourage both government agencies and companies to reduce their greenhouse gas emissions voluntarily.
"We are finding it difficult to negotiate with the EU to accept T-VER," he said, as the EU has its own carbon credit verification procedure.
"If Thailand and Asean countries decide on a single carbon credit verification standard, our standard will become more acceptable, giving us negotiating power with the EU."
An Asean-VER standard would be backed by a population of 600-700 million.
The FTI is promoting carbon credit trade among companies, facilitating transactions by setting up a carbon credit trade platform.
The federation is also encouraging its members across 46 industries to adopt bio-, circular and green (BCG) economic development strategies, which focus on using new technologies to add value to products, while minimising the environmental impact from manufacturing.
The production of sustainable aviation fuel (SAF) is a good example of the BCG concept, said Mr Chaiwat, also group chief executive and president of energy conglomerate Bangchak Corporation Plc.
Biofuel for aircraft, SAF can be produced from agricultural waste and used cooking oil.
This type of fuel produces up to 80% fewer greenhouse gas emissions than conventional jet fuel, according to media reports citing various research studies.
SAF involves an upcycling process of used vegetable oil to make an eco-friendly product.
"That's one stone throw killing three birds because SAF production meets the three core elements under BCG," he said.
Mr Cheng says sustainable development has attracted like-minded customers and suppliers. (Photo: Pattarapong Chatpattarasill)
SUSTAINABLE DEVELOPMENT
Delta Electronics (Thailand), the largest electronics manufacturer on the Stock Exchange of Thailand, has reaffirmed its sustainable commitments, noting sustainable development has driven its business growth and attracted like-minded customers and suppliers.
Speaking at the conference 2024, chief executive Victor Cheng said Delta's ESG commitments include achieving carbon neutrality by 2030 and net-zero emissions at all global operating sites by 2050.
The company vowed to use 100% renewable energy in all global operations by 2030, but it expects to achieve this milestone three years early by 2027, he said.
"Our mission is to provide innovative, clean and energy-efficient solutions for a better tomorrow, benefiting shareholders by offering good long-term returns from sustainable investment," said Mr Cheng.
For customers, Delta's sustainable approach results in value-added products, while suppliers benefit from competence in ESG and leading technological requirements, he said.
Mr Cheng said the company believes its sustainable practices lead to employee retention and staff well-being, while communities near its businesses can have sufficient resources and capabilities for maintain their standard of living.
"Sustainable development meets the needs of the present without compromising the ability of future generations to meet their needs," he said.
ESG principles are increasingly important, said Mr Cheng, noting 73% of global consumers are willing to pay more for sustainable products.
Six large industries are now affected by the European Union's Carbon Border Adjustment Mechanism (CBAM), with more expected by 2026, leading to tit-for-tat policies by other countries, he said.
CBAM is the EU's tool to put a fair price on the carbon emitted during the production of carbon-intensive goods that enter the European market, encouraging cleaner industrial production in non-EU countries.
Sustainable investments totalled US$41 trillion in 2022, up 25% from two years before.
"Delta believes in the principles of sustainable development, based on our success over 35 years in Thailand," Mr Cheng said.
"We believe our ethical and socially responsible business practices derived from sustainable development have enabled us to attract like-minded customers and partners, which represents our competitive edge."
Thailand's strategic location, disciplined workforce and pro-business policies have enabled the company's success, he said.
Mr Piti says companies need the right mindset, objective and impact. (Photo: Nutthawat Wichieanbut)
THREE CORE AREAS
For TMBThanachart Bank (ttb), ESG principles need to include business (B), leading to its concept of BESG under the bank's sustainable definition, said chief executive Piti Tantakasem.
Business operations typically contribute to wealth creation, GDP growth and enhanced customer convenience. However, such growth can also lead to issues such as inequality, pollution, global warming and household debt, according to Mr Piti.
In this context, he said businesses should balance the needs of the public and companies across three core areas -- the right mindset, the right objective and the right impact -- leading to a transition to sustainable business practices.
"To create business sustainability, business operators should start with the right mindset, which is essential for building genuine sustainability. This essentially means beginning with good governance," said Mr Piti.
He said good governance allows business operators to act with accountability and make ethical decisions. This foundation enables businesses to move towards the next step: setting the right objectives.
With the right objectives, operators can focus on social profit rather than solely company profit.
Under this "beyond profit" concept, businesses should maintain a "social licence" to operate, striving to create a better world while ensuring fair returns to stakeholders, said Mr Piti.
Focusing on the right mindset and right objectives leads businesses to achieve the right impact under this sustainability framework, he said.
This approach enables businesses to create positive impacts for relevant stakeholders while minimising negative environmental impacts, said Mr Piti.
Using these practices, ttb aims to drive real change and avoid greenwashing during the sustainability transition, he said.
NEW BUSINESS MODEL
Under its BESG business model, the bank has developed innovative financial services and products for all customer segments, aiding parties involved in the sustainability transition, Mr Piti said.
Ttb, the country's sixth-largest lender by total assets, has expanded its green and blue financial facilities to a value of 35.8 billion baht. The company is the first bank in Thailand to issue green and blue bonds and sustainability-linked loans.
Ttb also offers solar rooftop loans for small and medium-sized enterprise customers.
However, he said Thailand faces significant challenges related to household debt and social safety nets. The country's household debt is projected to reach 91.4% of GDP this year, or around 16.9 billion baht.
Roughly 61% of Thais lack insurance, 30% have no retirement savings, and 60% have savings of less than 200,000 baht.
In response to these challenges, ttb has implemented various tools and digital platforms to help individuals restructure their debt at lower interest rates, said Mr Piti.