Thailand weighs due-diligence law as OECD flags ESG gaps, export risks and procurement reform

Thailand is considering legislation requiring companies to identify and address environmental, labour and human-rights risks, according to the OECD Responsible Business Outlook 2026 and its regulators have already introduced ESG reporting, climate-disclosure reform and human-rights due-diligence training. 

According to a new OECD report, it, however, warns that corporate sustainability commitments worldwide are advancing far faster than their implementation.

The OECD Responsible Business Outlook 2026 identifies Thailand and Uzbekistan as countries considering due-diligence legislation. It provides no details about the form, timetable or agencies responsible for any Thai measure, meaning the initiative may still be at an early policy-development stage.

Due diligence in this context requires companies to identify, prevent and mitigate harmful impacts connected with their operations, products, services, supply chains and other business relationships. It also includes tracking results, communicating how impacts are handled and providing or supporting remedy where harm has occurred.

The potential policy shift comes as Thailand undergoes the technical phase of accession to the OECD, during which 26 committees are evaluating the alignment of Thai laws, policies and practices with the organisation’s standards. The issue has gained added significance as Thailand enters the technical phase of its OECD accession process. The country submitted its Initial Memorandum in December 2025, presenting a preliminary assessment of how its laws, policies and practices align with OECD standards.

Commitments widespread but implementation limited

The OECD’s inaugural global assessment reviewed public disclosures from the 10,000 largest listed companies, collectively accounting for 96% of global stock-market capitalisation.

It found that 69% had made a public commitment on at least one responsible-business issue, while 36% had adopted broader commitments covering several areas. Anti-corruption and greenhouse-gas emissions were the most commonly addressed subjects, followed by forced labour, child labour and human rights.

However, the analysis found a substantial difference between announcing policies and demonstrating action.

Company disclosures relating to policies and management systems represented about 45% of the practices considered by the OECD. Measures intended to address environmental or social impacts accounted for less than 20%.

 

The findings suggest that publishing an ESG policy, establishing board responsibility or setting a target does not necessarily show that risks have been identified and reduced in factories, farms, mines, contractors or communities.

Supplier policies rarely influence purchasing

The weakness is particularly evident in supply chains.

About half of the companies examined reported using environmental or social criteria when selecting suppliers. Fewer than 20%, however, reported evaluating supplier risks using those criteria.

Only one-quarter reported providing training or collaborating with suppliers to improve environmental and social performance. Just 7% disclosed that social supply-chain policies were integrated into purchasing practices, and only 3% reported evidence of improvements in supplier health and safety.

This distinction is important because purchasing departments can undermine sustainability policies through unrealistic prices, short lead times, sudden order changes or contractual terms that transfer costs and risks to smaller suppliers.

The OECD argues that responsible purchasing must therefore become part of commercial decision-making rather than remain solely the responsibility of sustainability departments.

Risks increase beyond direct suppliers

Companies also appear to have limited visibility beyond their immediate business partners.

Among a sample of about 450 large listed businesses, approximately 70% reported that social-audit programmes covered first-tier suppliers. Coverage fell to roughly 35% at the second and third tiers.

The OECD cited external research indicating that disruption and human-rights risks can become greater further upstream. Limiting checks to direct suppliers may therefore leave companies unaware of problems involving raw materials, subcontracted production or labour recruitment.

For Thailand, deeper supply-chain requirements could be particularly important to manufacturers and exporters integrated into multinational automotive, electronics, processed-food, seafood, garment and agricultural networks.

As Thailand is deeply integrated into international manufacturing and agricultural supply chains, overseas due-diligence requirements may be transmitted to Thai companies. Thai exporters may encounter the requirements indirectly when overseas customers are covered by foreign sustainability or due-diligence rules. Buyers may consequently request information on production sites, raw-material origins, labour recruitment, emissions, subcontractors and corrective action. The precise obligations will depend on the destination market, product and buyer.

Thai listed companies already face disclosure expectations

Thailand’s Securities and Exchange Commission already requires listed companies to report business and sustainability information through Form 56-1 One Report, including material environmental, social and governance issues throughout the value chain, including respect for human rights, labour treatment and responsible production and services.

The SEC has also published guidance and conducted workshops on human-rights due diligence for listed companies, covering policy commitments, risk identification, stakeholder engagement, supply chains, environmental impacts, labour rights, grievance mechanisms and remediation.

The SEC and Chulalongkorn University have organised Human Rights Due Diligence workshops under the “Business and Human Rights for Thai Capital Market Businesses” project.

A previous assessment published by the SEC and the World Bank found that 58% of the SET50 companies reviewed reported using human-rights due diligence, while 56% referred to the UN Guiding Principles on Business and Human Rights. The findings concerned disclosure among a selected group of large companies and should not be treated as representative of every Thai business.

The OECD report nevertheless raises a broader question for Thailand: whether disclosure and voluntary guidance are sufficient, or whether companies should be legally required to demonstrate how they identify and address significant risks.

Exporters face requirements beyond Thai law

Even without a domestic due-diligence statute, Thai businesses increasingly encounter such requirements through overseas customers and markets.

The OECD found that 84% of its member countries and 67% of all countries adhering to its multinational-enterprise guidelines had introduced due-diligence-related regulation by 2025. Countries with these requirements represent about 55% of global GDP.

The rules vary across jurisdictions and may require sustainability disclosures, specific due-diligence processes or proof that products are not linked to forced labour, deforestation or other prohibited practices.

This means Thai suppliers may be asked by foreign buyers to map their operations, provide worker and environmental data, investigate subcontractors and document corrective action as a condition of maintaining commercial relationships.

A Thai framework aligned with internationally recognised standards could give exporters a common baseline for responding to overseas buyers, reduce uncertainty over acceptable procedures and help companies prepare evidence before problems emerge. It could also strengthen confidence in Thai supply chains as international customers place greater weight on traceability and risk management.

However, the OECD warns that existing regulations sometimes differ in scope, design and terminology even when they share similar objectives. Companies may therefore have to respond to overlapping requests using different definitions, reporting formats and supplier thresholds.

For Thai small and medium-sized suppliers, the danger is that multiple customers could demand similar information in incompatible formats, increasing audit costs and administrative work without necessarily improving outcomes. Any Thai legislation would therefore need phased implementation, clear risk-based guidance, interoperable reporting systems and practical support for smaller businesses rather than simply transferring compliance obligations down the supply chain.

Government purchasing could reshape private markets

The OECD also identifies public procurement as one of the strongest tools governments can use to raise responsible-business standards across the wider economy.

Thirty-two countries adhering to the OECD Guidelines reported that environmental, labour or human-rights considerations had been incorporated into their procurement frameworks. In 2024, more than US$8.2 trillion in public purchasing took place in jurisdictions where due-diligence requirements applied directly or indirectly to public bodies.

Building on Thailand’s existing green-procurement initiatives, broader reform could make labour practices, human rights and supply-chain controls more important in decisions on government contracts. Beyond price and technical qualifications, bidders could be assessed on labour practices, environmental controls, supply-chain transparency and their ability to prevent or remedy harm.

Possible measures include supplier codes of conduct, risk-based screening for high-risk sectors, contractual duties to monitor subcontractors, worker grievance channels and corrective-action plans when violations are detected. State agencies could also require evidence that contractors have investigated serious risks rather than relying only on self-declarations.

However, the rules would need to be proportionate. Smaller Thai companies could be disadvantaged if compliance systems are too costly or complex, so phased implementation, standard reporting templates and technical support would be important to avoid concentrating public contracts among large firms alone.

State enterprises expected to lead

State-owned enterprises are another important part of the OECD framework.

The report found that listed state enterprises generally disclosed greater uptake of due-diligence practices than privately controlled companies in the same regions. Thailand’s state-enterprise performance framework already includes sustainability-related assessment, including eco-efficiency, providing a possible institutional base for stronger responsible-business expectations.

The State Enterprise Policy Office publishes material on Thailand’s State Enterprise Assessment Model and eco-efficiency assessments.

Applying stronger expectations to Thai state enterprises could have wide effects because of their roles in energy, finance, transport, infrastructure and other strategic sectors.

Beyond their own operations, state enterprises influence extensive networks of contractors and suppliers. Requiring them to apply responsible purchasing and due-diligence processes could spread higher standards throughout the domestic economy.

From reporting to measurable outcomes

The OECD recommends that governments ensure companies are both sufficiently incentivised and practically able to conduct outcome-oriented due diligence.

It calls for support to help companies investigate risks beyond direct suppliers, better indicators showing whether conditions improve, stronger evidence on the effectiveness of government policies and greater international coordination to prevent conflicting requirements.

The central challenge for Thailand would therefore be to avoid creating a system that produces more checklists and reports without changing business decisions.

A credible framework would need to connect board oversight with procurement, supplier contracts, worker and community engagement, grievance procedures, remediation and measurable improvements.

For businesses, that would make responsible conduct an operational and commercial function rather than an annual-report exercise.

For the government, it would make due diligence part of Thailand’s competitiveness, investment and OECD-alignment agenda rather than an isolated sustainability policy.

Source: OECD Responsible Business Outlook 2026, Thailand Corporate ESG Disclosure, SEC, SEC News, Green Public Procurement, sepo.go.th