ESG and investments in the Thai stock market | The Nation
ESG, which stands for Environment, Social and Governance, is an important principle on how corporates can attain sustainable development. At present, the ESG approach is winning support from investors around the world. They are using ESG criteria for evaluating whether to invest in certain stocks and the ESG trend also has reached the Stock Exchange of Thailand (SET).
Both individual investors and institutional investors attach importance to sustainable investments or buying shares of corporations that follow the ESG principle in their operations.
Stock investors now attach importance to businesses that pay attention to three fields of responsibility:
Environment is a criterion for evaluating how a corporation shows responsibility towards the environment.
Social is a criterion for evaluating how a firm manages its relations and communications with its employees, suppliers, customers and stakeholders.
Governance is a criterion for evaluating good governance of a firm for the sake of efficiency, transparency and accountability and evaluating how the management takes into account the interests of stakeholders.
At present, the principle of sustainable investment is gaining popularity in the stock market. Several evaluating organisations have come up with sustainability indices to indicate whether and how much the companies in the stock market have implemented the ESG principle.
In Thailand, the SET has established Thailand Sustainability Investment or THSI index. Corporations that pass the ESG criteria will be listed in the THSI index.
In 2021, the SET announced the names of 145 THSI-listed firms, up from 124 companies in the previous year.
The 145 THSI-listed firms have a combined market capitalisation of 12.61 trillion baht as of July 7 2022, which accounts for 66 per cent of the overall value of the SET and the Market for Alternative Investment.
