SET Mandates ESG: The New 'Path to Survival' for Thai Businesses
The Stock Exchange of Thailand adopts FTSE Russell standards and pushes for clean supply chains, warning that non-compliant assets risk being ‘forgotten’ by global capital
- The Stock Exchange of Thailand (SET) has declared ESG compliance a mandatory "path to survival" for Thai companies, warning that non-compliant assets risk being ignored by global capital.
- To enforce this, the SET will adopt the globally recognized FTSE Russell ESG criteria starting next year, replacing its internal rating system to align with international standards.
- A key focus of the mandate is the requirement for clean and traceable supply chains, which is now considered paramount for export-dependent businesses to remain competitive.
- Thai businesses face looming mandatory regulations on carbon emission disclosure, with failure to comply risking financial penalties such as increased taxation from jurisdictions like the EU.
The Stock Exchange of Thailand adopts FTSE Russell standards and pushes for clean supply chains, warning that non-compliant assets risk being ‘forgotten’ by global capital.
The Stock Exchange of Thailand (SET) has declared Environmental, Social, and Governance (ESG) compliance not just a choice but a "path to survival" for Thai companies seeking to compete and grow on the global stage.
SET president Asadej Kongsiri made the announcement at the Sustainability Forum 2026 on Thursday, emphasising that failure to adapt will see certain assets rendered "forgotten" by international investors. He noted that nearly all global funds now avoid sectors like coal.
To attract greater foreign capital and maintain competitiveness, the SET announced a major strategic shift:
Adopting Global Standards: The SET will transition from its internal rating system to the globally recognised FTSE Russell ESG criteria starting next year. This move is designed to ensure Thai standards are comparable to those of regional and international rivals.
Surging ESG Products: The Thai capital market is experiencing explosive growth in sustainable investment:
Sustainable Bonds: The outstanding value currently stands at a massive 900 billion baht, with demand frequently exceeding supply (e.g., Blue Bonds were oversubscribed by 2.5 times). This strong demand is helping green projects reduce their cost of funding.
Thai ESG Fund: Supported by government tax breaks, Assets Under Management (AUM) have reached 135.2 billion baht. Overall ESG funds in Thailand have grown nearly six-fold in the past year.
The Mandate for Clean Supply Chains
Asadej stressed that cheap costs are no longer enough; a 'clean' and traceable supply chain is now paramount for export-dependent Thai businesses to compete globally.
He warned that mandatory ESG regulations are looming, likely forcing businesses to count and disclose carbon emissions across their value chains.
Failure to comply risks incurring penalties, such as increased taxation from jurisdictions like the EU, ultimately harming competitiveness.
To facilitate compliance, the SET highlighted initiatives like the SET Carbon platform, which helps small and medium-sized enterprises (SMEs) simplify ESG reporting.
He cited Sri Trang Agro-Industry (STA), which uses an app to provide traceability for rubber, ensuring raw materials do not originate from deforested areas.
Future Opportunities and Market Confidence
The SET’s core mission also includes enhancing market confidence and creating new opportunities:
Trust and Confidence: The exchange is focusing on faster penalties for bad actors, adhering to the principle that "delay of justice equals no justice."
Investment Access: New initiatives include Bond Connect, making it easier for retail investors to access government savings bonds, and the AomWise App for long-term investing across various sustainable funds.
Success stories were highlighted, including SCBX, which aims to lend 200 billion baht for the low-carbon economy by 2030, and SCG, which targets 67% of its revenue from 'Green Choice' products by the same year.
