The Stock Exchange of Thailand, in partnership with the London Stock Exchange Group and FTSE Russell, has taken steps to enhance the sustainability assessment of Thai-listed companies to global benchmarks, which is expected to boost investor confidence and interest in the Thai market.
The Stock Exchange of Thailand, in collaboration with the London Stock Exchange Group (London Stock Exchange Group) by FTSE Russell, a world-class ESG assessor, aims to develop the potential of the Thai capital market by moving forward to upgrade the sustainability assessment of the SET ESG Ratings to international standards.
The focus is on the assessment of information publicly disclosed by listed companies, a methodology employed to evaluate over 8,000 securities globally. This approach aims to build confidence and attract investor interest, as well as to facilitate the comparison of assessment results with both domestic and international companies under uniform standards.
The listed companies are planning to initiate a pilot assessment project during the years 2024-2025. This project will serve as a preparatory phase before the comprehensive assessment and public announcement of their Environmental, Social, and Governance (ESG) scores, which is scheduled to commence from 2026 onwards. This strategic approach indicates a commitment to thorough evaluation and transparency in communicating their ESG performance to stakeholders and the public. It reflects a proactive stance towards sustainable and responsible business practices.
Mr. Pakorn Peetathawatchai, Director and Managing Director of the Stock Exchange of Thailand, revealed that the Stock Exchange of Thailand aims to develop the Thai capital market to be outstanding in terms of sustainability and internationally recognized. The Stock Exchange of Thailand has raised the intensity of the SET ESG Ratings assessment to international standards, increasing the attractiveness of Thai listed companies in the eyes of both domestic and international investors.
The Stock Exchange of Thailand has studied the ESG assessment approach for Thai listed companies since 2022 and has concluded with FTSE Russell (a subsidiary of the London Stock Exchange Group or LSEG), which is recognized by institutional investors and leading asset managers worldwide, with an asset value of up to 15.9 trillion US dollars referencing the FTSE index.
The current SET ESG Ratings assessment is voluntary, and listed companies must apply to participate in the assessment. The Stock Exchange of Thailand has a working group on sustainable investment, which consists of experts in corporate governance and sustainable development, to jointly consider the criteria and assessment process. Companies must pass both the assessment score and qualifications.
While the new assessment process by FTSE Russell will focus on assessment from information disclosed by the public companies, which is the same methodology used to assess more than 8,000 companies in 47 countries worldwide, in order to create credibility, enhance transparency of assessment, reduce the burden of answering the sustainability assessment of the companies and help the companies have an ESG framework in line with international standards.
At the same time, investors can compare the assessment results with both domestic and international companies using the same standards. In addition, FTSE Russell, which is under the London Stock Exchange Group, operates in accordance with the international Code of Conduct. The FTSE ESG Data Model is overseen by an independent committee consisting of the business sector, investors, NGOs and academics. The assessment approach and methodology therefore reflect the views of various stakeholders.
