The Securities and Exchange Commission (SEC) is intensifying efforts to align the country’s capital market with global sustainability standards, positioning environmental, social and governance (ESG) as a central pillar of its three-year strategic plan.
With the government committing to achieve national net zero emissions by 2050, the stock market regulator is laying the regulatory groundwork to push all listed companies towards standardised climate disclosure, transparent governance and credible transition strategies.
ELEVATING ESG DISCLOSURE
According to secretary-general Pornanong Budsaratrakool, the SEC views itself as both a system designer and an enabler, responsible for building a system that supports companies in transitioning towards low-carbon business models.
By 2031, all 800 listed companies on the Stock Exchange of Thailand (SET) are required to disclose ESG information, including greenhouse gas (GHG) reduction plans, in accordance with the IFRS Sustainability Disclosure Standards (IFRS S1 and S2).
Disclosure requirements will be phased in, starting with SET50 companies in 2027, followed by SET100 and the remaining listed firms, she said.
Applicants for initial public offerings on the Thai bourse will be required to report sustainability information from the outset.
To ease the transition, the SEC is working with Thailand’s Federation of Accounting Professions to publish Thai translations of the International Sustainability Standards Board standards, while collaborating with the UK Partnering for Accelerated Climate Transitions (UK PACT) to prepare practical implementation guidelines.
Funded by the UK government, UK PACT supports countries that strive to overcome barriers to clean growth and have high emissions reduction potential to accelerate their climate change mitigation efforts.
The regulator is also establishing a framework for independent verification of climate data, relying on roughly 30 accredited verifiers recognised by Thailand’s Greenhouse Gas Management Organization and other international bodies.
BUILDING ROBUST FINANCING
The SEC acknowledged the path to net zero requires substantial capital.
To facilitate long-term financing, the regulator aims to develop a market equipped with sustainable financial products, ranging from green bonds and sustainability-linked bonds (SLBs) to transition finance instruments that support hard-to-abate industries.
The SEC said Thailand has already made progress. Government-backed sovereign SLBs and an expanding universe of corporate green bonds, primarily from the power generation sector, have gained strong investor interest.
While green premiums (the additional cost of choosing an environmentally friendly product or service over a conventional one) are not yet consistent in the Thai market, the SEC has seen positive signals, including oversubscription rates for recent green issues, said Mrs Pornanong.
In addition, the Thai ESG mutual fund scheme offers tax incentives for retail investors, encouraging capital to flow into companies listed on Thailand’s ESG index.
This mechanism also incentivises listed firms to strengthen ESG performance to qualify for inclusion in ESG-focused portfolios.
STRENGTHS AND WEAKNESSES
She said Thai listed companies have significantly increased climate transparency, with GHG emission disclosures rising 30% in early 2025.
Earlier this year, the regulator made a significant update to its ESG product platform by incorporating detailed information on socially responsible investing (SRI) funds.
This enhancement facilitates access to sustainability-themed financial products, aiding investors in making informed decisions that align with their sustainability goals, said Mrs Pornanong.
The update to the platform enriches it with critical data on SRI funds, including for tax-advantaged products such as retirement mutual funds, super savings funds and Thai ESG Funds.
The platform now features key metrics such as assets under management, the number of funds, and the extent of asset management company participation, all updated daily to ensure timeliness and accuracy.
The SEC envisions its ESG product platform as a crucial tool for building investor confidence by providing reliable, transparent and comprehensive data on sustainability-focused financial products.
The country has a functioning ESG Data Portal, and via a partnership with the SET, the SEC plans to launch the SET Carbon Platform to help firms measure and manage carbon footprints.
“Demand for credit ratings has surged among Thai corporates, signalling higher awareness and alignment with global practices,” she said.
In terms of weaknesses and concerns, Mrs Pornanong said ESG progress in the capital market remains uneven.
“While environmental and social metrics are improving steadily, governance continues to be a key weakness,” she said.
“Retail investors remain focused on short-term returns, leaving ESG investment largely in the hands of institutional investors.”
The cost of compliance, especially third-party verification, remains a burden for small and mid-sized firms, despite being mostly one-time or front-loaded expenses, said Mrs Pornanong.
To address governance risks, the SEC plans to tighten rules on internal controls, related-party transactions, and insider trading safeguards.
New guidelines will require clearer codes of conduct, stronger monitoring systems, and stricter penalties for violations, such as front-running or trading during sensitive financial reporting periods, she said.
PREPARING FOR A NET-ZERO FUTURE
The upcoming sustainable finance roadmap is one of the SEC’s flagship initiatives, focusing on three major themes. The first is digital transformation to expand financial access and improve regulatory oversight.
The second theme is sustainability, including climate transition standards and anti-greenwashing frameworks.
The last is market competitiveness, with the goal of enhancing investor confidence and attracting long-term capital.
“The SEC is working with domestic and international partners to develop taxonomy guidelines, capacity-building programmes and anti-greenwashing controls,” said Mrs Pornanong.
“Training initiatives target analysts, asset managers, corporate boards, and sustainability officers to embed ESG evaluation into mainstream financial analysis.”
ESG UPGRADES
Regarding whether enhanced ESG disclosure could help revive foreign investor interest in the Thai equity market, she said it depends on broader dynamics.
“While Thailand’s market remains dominated by traditional industries, global investors increasingly target sectors such as renewable energy, infrastructure, and climate-aligned businesses,” said Mrs Pornanong.
“These are areas where Thai companies can remain competitive if they demonstrate credible climate strategies.”
She said retail investors may take longer to shift behaviour, as many continue to prioritise short-term returns and focus on governance scandals that periodically surface in the market.
While governance failures occur in a small minority of firms, strengthened regulatory frameworks should help address these concerns, said Mrs Pornanong.
A LONG JOURNEY
She said the SEC believes Thailand’s transition towards a sustainable capital market will depend on the strength of its foundation, including robust disclosure standards, credible verification, diverse green finance tools, and strong governance.
“The journey towards net zero will be long and shaped by economic and political challenges, but sustainability rests on three pillars: environment, social, and governance,” said Mrs Pornanong.
“Strengthening all three is essential if Thailand’s capital market is to remain competitive and sustainable in the long run.”
Provided by SyndiGate Media Inc. (Syndigate.info).
