Green finance no longer optional in climate transition, speakers warn

Green finance is emerging as one of the most important tools for building a sustainable future, as climate risks increasingly shape economic decisions, business strategy and capital flows, speakers at the seminar “Green Finance Pathway: Switzerland and Liechtenstein’s expertise for Thailand’s Sustainable Future” said on Thursday.

The seminar, held at the Eastin Grand Hotel Phayathai in Bangkok, was co-hosted by the Royal Thai Embassy in Bern and Chulalongkorn Business School.

Chulamanee Chartsuwan, adviser to the Ministry of Foreign Affairs, said the transition to a low-carbon and climate-resilient economy will require far more capital than governments can provide alone. “Climate change is no longer just an environmental issue; it is also a financial one,” she said.

Chulamanee said green finance should be regarded as “an integral component of sound financial management” because it improves risk management, channels capital into sustainable investment and helps strengthen the long-term stability of economies and financial markets. 

She said Thailand had already made progress through the Thailand Taxonomy and the growing issuance of green bonds and sustainability-linked bonds, reflecting the country’s effort to align financial flows with environmental and climate goals while pursuing economic growth alongside ESG principles.

For Tartat Mokkhamakkul, dean of Chulalongkorn Business School, green finance is no longer a side issue. “Sustainability is no longer a passing trend,” he said, adding that it has become a core driver of economic transformation.

In his view, green finance is helping reshape not only how economies grow, but also how risk is managed and how impact is created. He said sustainability must move beyond traditional CSR and be embedded in core business strategy, greener business models and long-term business transformation.

Keys to the green finance transition

Speakers in the panel discussion, “Innovative Financial Products & Emerging Trends in Green Finance”, said the transition would succeed only if it was backed by credible planning, meaningful incentives and practical support.

Erol Bilecen, head of sustainable finance at the Swiss Bankers Association, warned that delay could prove more expensive than action. “It is costly to do the transition, but it can be even costlier to continue doing what you do so far,” he said. 

He argued that companies need clear transition plans and milestones, while sustainability-linked bonds must be designed carefully so that incentives and penalties are strong enough to influence behaviour.

Bilecen also cautioned against viewing sustainability as a threat to the current economic system. Instead, he described it as “the logical step for the next development”, one that can open up new opportunities for growth. 

He pointed to the energy sector as an example, saying the transition is not limited to renewable generation but extends to grid upgrades, storage and new business models as consumers increasingly become producers of power as well.

Karin Boonlertvanich, executive vice president of Kasikorn Bank, said financing alone cannot drive the shift, especially for smaller businesses. “Financing is the last one,” he said, explaining that companies first need awareness, knowledge, workable solutions and tools to measure their carbon emissions. 

He said many SMEs want green loans but still do not know their emissions baseline or how much they plan to reduce it, making transition tools and technical guidance just as important as funding itself.

He added that the transition can create broader business value, not just marginally better funding terms. Kasikorn Bank, he said, had already extended 200 billion baht in support and aims to raise that to 500 billion baht over the next five years across large corporates, SMEs and retail clients. 

The goal, he said, is to help businesses become more efficient, more competitive and better prepared for a changing global economy.

Stefan Oehri, portfolio manager at LGT Capital Partners (Asia-Pacific), said the sustainable bond market had matured significantly, with stronger standards and more sophisticated investors. 

He said investors now “look beyond the labels” and want evidence that green and sustainability-linked instruments are delivering impact that is measurable and clearly observable. In his view, transition finance will only gain credibility if outcomes are transparent and real.

Pathway to a sustainable future

The pathway described by speakers was pragmatic rather than absolute. Oehri said the market is moving towards a more realistic and science-based approach, recognising that decarbonisation will not happen at the same speed in every sector. 

Heavy industries, for example, face a much harder path than consumer-facing sectors, meaning progress needs to be judged in context rather than through a one-size-fits-all model.

Karin said banks therefore need sector-by-sector “glide paths” to track how portfolio emissions fall year by year on the way to net zero by 2050. He said reducing carbon intensity does not necessarily mean cutting loan books, but shifting more lending towards greener activities over time.

He also argued that policy support should reward companies that are improving each year, rather than setting absolute hurdles that risk leaving many businesses behind.

Regulation was another key part of the pathway. Bilecen said long-term investments in renewable energy, storage and infrastructure require a reliable regulatory framework because projects such as power plants can run for 20 to 50 years. 

Karin added that policymakers need a wider mix of instruments, including bonds, bank loans, grants and blended finance, so that each transition project can be matched with the right kind of funding.

Overall, the seminar’s message was clear: green finance is no longer a niche ESG product or a branding exercise. It is becoming a central mechanism for mobilising capital, managing climate risk and helping economies move towards a more sustainable future. 

With clear standards, credible transition plans, better tools and supportive policy, speakers said green finance can turn climate ambition into practical economic progress.