The Stock Exchange of Thailand (SET) has joined hands with FTSE Russell, a global provider of benchmarks and index solutions, to lift sustainability assessments for Thai listed companies to meet international standards.
The partnership aims at providing a sustainability scoring framework that will enhance standards among listed companies in Thailand, according to the SET. FTSE Russell is a subsidiary of LSEG (London Stock Exchange Group), a global financial markets infrastructure and data provider.
Through the partnership, the SET will adopt a new scoring framework for environmental, social and governance (ESG) standards, using FTSE Russell's ESG Data Model, which will replace the current SET ESG Ratings from 2026.
To ensure all stakeholders' readiness for the new framework, the adoption will be initially implemented through a pilot phase during 2024-2025.
The move will help to align the Thai capital market with international best practices for sustainability disclosure and investing, said SET president Pakorn Peetathawatchai.
The SET ESG Ratings are currently voluntary for listed companies. The criteria and assessment process of the SET ESG Ratings are approved by the SET's Sustainable Investment Committee, which comprises various corporate governance and sustainability development experts.
Through FTSE Russell's ESG Data Model, eligible companies will have their sustainability efforts assessed through publicly available data, Mr Pakorn added.
This methodology is already used to evaluate more than 8,000 companies in 47 countries, helping them to build credibility, enhance transparency, and reduce the sustainability questionnaire fatigue for companies. Investors can also benchmark their results against both domestic and international peers using the same standards.
FTSE Russell products are used extensively by investors to comprehensively and transparently assess listed companies and their ESG operations against globally recognised standards. Approximately $15.9 trillion is benchmarked to FTSE Russell indexes.
"This partnership marks a significant milestone for the Thai capital market. It will encourage Thai listed companies to raise their sustainability practices to international levels and support investors in integrating ESG into their investment decisions, in line with sustainable investment trends," said Mr Pakorn.
The SET has planned and established a roadmap with relevant agencies to ensure a smooth transition to international ESG assessment standards, benefiting all parties, he noted.
Helena Fung, head of sustainable finance and investment APAC at LSEG, said that through this collaboration, Thai listed companies will be empowered to benchmark their ESG practices against international standards. It will also significantly elevate the profile of Thai companies in the international ESG discourse, making them more relevant to discerning global investors.