Bank of Thailand lays foundation for sustainable finance, helping SMEs cope with ESG tariff walls
MacroRegulation
Vithai Ratanakorn, Governor of the Bank of Thailand, disclosed that the central bank is taking on a new role in shoring up the economy, beyond its main goal of safeguarding economic and financial stability. It will focus on driving capital allocation that leads to a quality economy, or Capital with Purpose, through three main areas: allocating capital to businesses with potential, allocating capital to create new opportunities from challenges, and reducing the flow of capital into the informal economy and corruption. At the same time, the Bank of Thailand views that increasingly stringent environmental measures and regulations in trading partner countries, which could become tariff walls and trade barriers for Thailand's export sector, are an urgent challenge requiring the rapid laying of foundations for a sustainable finance ecosystem, especially the creation of mechanisms to support transition finance so that small and medium-sized enterprises, or SMEs, can adapt, remain resilient, and compete on the world stage. The Bank of Thailand Governor also said that driving sustainability under the ESG framework must not be limited to the environmental dimension alone, but must also take into account the social and governance dimensions in a balanced way, in order to integrate sustainability into business growth and create shared value in the Thai economy in a truly meaningful way.
