
On Jan 10, the World Meteorological Organization (WMO) announced that 2024 was the warmest year on record, likely the first year with a global mean temperature of more than 1C above the 1850-1900 average. Despite the alarming fact, the year 2025 is not off to a good start. The same week that WMO made that ominous announcement, JP Morgan became the sixth and latest bank in the United States to withdraw from the UN-backed Net Zero Banking Alliance (NZBA), following the earlier exits of Citigroup, Bank of America, Morgan Stanley, Wells Fargo, and Goldman Sachs -- all of which left since the start of last month.
The NZBA was launched in 2021 to bring together banks that commit to "aligning their lending, investment, and capital markets activities with net-zero greenhouse gas emissions by 2050", according to the NZBA website. Many climate activists see the exodus of six major US banks from NBZA as a forewarning of what will lie in store during Donald Trump's presidency -- President Trump on Monday signed an executive order directing the United States to again withdraw from the landmark Paris climate agreement, dealing a blow to worldwide efforts to combat global warming.
For climate-conscious investors, the main question now is whether this exodus is merely that, or a signal of a real retreat from long-term net-zero commitments that these banks announced earlier.
While the global situation is quite tumultuous, there are some interesting and useful developments at home in Thailand. Fair Finance Thailand (FFT), a coalition comprising one research company and four civil society organisations in Thailand that share a common goal of advocating for more sustainable banking practices, recently finished a case study on the comparison of climate change reports that six Thai commercial banks disclosed in 2024 in accordance with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
The TCFD is the most popular global standard for disclosing risks and opportunities related to climate change. In 2023, the Bank of Thailand issued a "Policy Statement Re: Internalising Environmental and Climate Change Aspects into Financial Institution Business", which recommends that Thai banks adopt the TCFD recommendations in their preparation and disclosure of climate-related information. More recently, in 2024, the IFRS Foundation took over the work of the TCFD and fully incorporated TCFD recommendations into its popular IFRS S2 standards, which are increasingly being integrated into mandatory disclosure requirements around the world.
Fair Finance Thailand's first assessment of six Thai banks' TCFD disclosures focused only on disclosure sufficiency, i.e. checking whether each bank discloses in accordance with each recommendation, but we can still glean some interesting observations from comparing their reports side by side. Overall, we found that the banks that publicly disclosed information according to the TCFD recommendations, ranked by the proportion of disclosures from highest to lowest, are as follows:
1. [tied] Siam Commercial Bank and Kasikornbank: Disclosed 39 out of the 60 recommended items (65.0%)
2. Bangkok Bank: Disclosed 32 items (53.3%)
3. TISCO Bank: Disclosed 31 items (51.7%)
4. TMBThanachart Bank: Disclosed 20 items (33.3%)
5. Government Savings Bank: Disclosed 14 items (23.3%)
TCFD recommendations encompassed four categories: governance, strategy, risk management, and metrics and targets. Some interesting disclosures are summarised below.
1. Governance
Among the six banks that published climate information in line with TCFD recommendations, most banks disclose the governance structure and frequency of meetings related to climate risks and opportunities at the board level or committees that report to the board. Some banks disclose more details; for example, Kasikornbank and Government Savings Bank (GSB) disclose that climate issues are integrated into their annual budgeting process and business planning. However, no bank has disclosed that the board or its committees use climate-related issues to monitor operations and assess performance outcomes.
2. Strategy
This is divided into three aspects: a) identifying climate-related risks and opportunities, categorised by short-term, medium-term, and long-term; b) identifying the impacts of climate-related risks and opportunities on business operations, strategies and financial planning; and c) identifying the flexibility of an organisation's strategy, considering future global warming scenarios and the 2C temperature-increase scenario.
The FFT's comparison of disclosures from the six banks revealed that most banks report the potential financial impacts on the bank over different time frames. All six banks present their analysis of both physical risks and transition risks and their climate risk management strategies. However, no bank has disclosed significant concentrations of credit exposure to carbon-related assets.
Regarding climate-related scenarios, most banks disclose explanations of the climate scenarios used and the timeframes considered for these scenarios. Among six banks, Kasikornbank is the only bank to disclose analysis results for more than one scenario: the Well-below 2 Degrees Celsius Scenario (WB2C) and the Net Zero Scenario (NZE), which it explains have impacts on three customer sectors: natural gas power plants, hydropower plants, and biomass power plants. For the physical risk analysis, the bank uses the carbon concentration pathway 2.6 and carbon concentration pathway 8.5 scenarios combined with 10-year historical flood data. The analysis revealed that flood levels do not significantly affect the value of the bank's assets or its clients' assets.
3. Risk Management
We found that four banks, namely Bangkok Bank, Kasikornbank, Siam Commercial Bank, and TISCO Bank, disclose their approach to identifying and assessing climate-related risks. Each bank describes the expected impacts of these risks and discloses the approaches to managing them within the TCFD's recommended timeframes: short-term, medium-term, and long-term.
4. Metrics and Targets
We found that all six banks announced targets for reducing scope 1 and 2 greenhouse gas emissions, although their targets vary. The two most ambitious Thai banks are Kasikornbank and Siam Commercial Bank, both of which set scope 1 and 2 net zero targets by 2030. TISCO Bank and Government Savings Bank set the corresponding net zero target by 2050. Bangkok Bank and TMBThanachart Bank have not yet declared a net zero target.
Like many other industries, scope 3 emissions constitute the bulk of banks' emissions since this category includes emissions from customers in the bank's loan and underwriting portfolio, i.e. "financed emissions". In this regard, only Kasikornbank, Siam Commercial Bank and TISCO Bank have announced plans to reduce their scope 3 emissions, with varying details: Siam Commercial Bank sets net zero in lending and investments by 2050, TISCO Bank sets net zero in financed portfolio by 2065, while Kasikornbank sets net zero in financed portfolio by 2065, adding that this is "in line with Thailand's aspirations" (referring to the country's net zero 2065 goal), and that it will "accelerate this journey where possible".
Regarding the disclosure of indicators related to climate risks in water resources, energy, and waste management, only Bangkok Bank, Kasikornbank, and TISCO Bank have disclosed indicator information on water and waste management. As for the disclosure of internal carbon pricing, which is crucial for decision-making on climate-related issues, we found that only SCBx, the parent company of Siam Commercial Bank, has disclosed this information: SCBx says it uses an estimated carbon price of 650 baht per tonne (derived from US$20) for internal operations.
No Thai bank has disclosed the following key information recommended by TCFD: Remuneration policies that tie significant climate-related issues to performance evaluation, indicators used to assess the impact of physical climate risks and transition risks on lending and other financial intermediary activities in the short, medium, and long term, and the volume and proportion of assets related to carbon emissions relative to total assets.
Sarinee Achavanuntakul is Head of Research at Fair Finance Thailand and Director of Climate Finance Network Thailand (CFNT). **Readers who are interested about the full case study of Thai banks' climate disclosures are invited to join Fair Finance Thailand's launch event on the morning of Feb 4 at the Bank of Thailand Learning Center (BOTLC). A registration link and eventual download link can be found on the FFT Facebook Page: https://www.facebook.com/FairFinanceThailand.