Bank of Thailand launches initiative to promote green financing for SMEs

The Bank of Thailand (BoT) has announced a joint initiative with eight Thai banks to promote the creation of financial products that help smaller businesses become more sustainable.

Under the project, Bangkok Bank, Krungthai Bank, Bank of Ayudhya, Kasikornbank, Kiatnakin Phatra Bank, Thanachart Bank, Siam Commercial Bank and United Overseas Bank will work with the central bank, government agencies and other partners, according to a statement on the BoT website.

While large Thai companies are moving to behave more sustainably, “small and medium-sized enterprises (SMEs) are still much less aware of the need to adapt to the green economy than large companies,” BoT Governor Sethaput Suthiwartnarueput said at the “Financing the Transition” event hosted by the central bank on August 7.

Overall, Thai industry is “still heavily dependent on fossil fuels and uses old technologies that are not as environmentally friendly as they should be,” Sethaput said, not least in light of the country’s goal of zero greenhouse gas emissions by 2065.

The lack of tools to help SMEs in particular adapt “could affect their competitiveness in both the short and long term,” he added.

The event was attended by more than 600 representatives from the private sector, financial institutions, government agencies, regulators and international organizations.

The initiative is the latest in a series of initiatives launched by the BoT with the aim of supporting Thailand’s green transition. The BoT released the first version of its Thailand Taxonomy in June 2023 to help investors determine the environmental impact of potential investments.

Thailand’s taxonomy is one of a growing number of taxonomies being developed in Southeast Asia, a region that is contributing increasingly to global emissions due to its rapid industrialisation, making efforts to promote sustainable growth particularly important.