CLOSE
icon Articles icon Is ESG Still Relevant? Why Thai Investors Should Pay Attention to This
icon BACK

Is ESG Still Relevant? Why Thai Investors Should Pay Attention to This

Image Source : https://pixabay.com/th/photos/หมนเวยนได-พลงงาน-สงแวดลอม-ลม-1989416/

The concept of sustainable organizational development, focusing on Environmental, Social, and Governance (ESG), has been widely discussed since 2006 when it was first introduced in the United Nations’ Principles for Responsible Investment (PRI). At its core, ESG emphasizes managing organizations with responsibility toward the environment, social impact, and transparency in governance.

ESG in 2024: What’s New?
Although ESG has been applied in organizations and industrial estates for many years, it has mostly been used as a tool for risk management and a criterion for investment support. However, due to the global focus on climate change, 2024 marks a shift toward more concrete actions based on ESG principles, including:
  • Implementation of laws, regulations, and requirements aligning with ESG principles. For example, the European Union has enacted the Corporate Sustainability Reporting Directive (CSRD), and the U.S. has introduced the Clean Competition Act and US-CBAM. Similarly, Thailand is expected to follow suit with similar laws and regulations for organizations and industrial estates.
  • Social policies focusing on diversity and equality, emphasizing human rights. Examples include non-discriminatory hiring practices based on gender, employment of the elderly, and hiring formerly incarcerated individuals.
  • Environmental efforts that go beyond reducing carbon emissions. These include promoting the use of alternative materials, recycling, and reusing natural resources to minimize environmental impact.

Why ESG Remains Crucial for Businesses
ESG continues to be vital for businesses of all kinds, especially with the increasing number of regulations and the growing importance of sustainability in global business practices. According to a survey, 49% of Generation Z (born between 1998–2022) prefer to support businesses emphasizing sustainability. Thus, companies need to adapt to stay competitive.

From the perspective of institutional and individual investors, ESG principles are becoming a key factor in investment decisions under the concept of “Who Cares, Earns.” Companies that invest in sustainability and prioritize environmental, social, and governance issues are more likely to receive support than those that do not embrace change.

Path to Achieving ESG Goals
To achieve ESG goals, businesses must advance all three pillars—environmental, social, and governance—simultaneously:

  • Environmental: Policies should aim to reduce environmental impacts in compliance with legal requirements, such as transitioning from fossil fuels to clean energy or establishing factories in eco-friendly industrial parks.
  • Social: Promote fairness in employment, improve the quality of life within organizations, and provide knowledge to local communities.
  • Governance: Ensure transparency in business operations by disclosing information to stakeholders and adhering to data protection laws.
ESG is an essential concept for Thai investors to consider, as it is not only a global trend but also improves a company’s image in terms of environmental preservation, equality, and transparency. For companies looking to begin their ESG journey, 304 Industrial Park offers a compelling starting point. With a focus on renewable energy, the industrial park collaborates with National Power Supply Public Company Limited (NPS), which operates solar floating power plants with a production capacity of up to 150 MW by 2024. Additionally, it houses Thailand’s largest biomass power plant, generating 398 MW from agricultural waste—aligning perfectly with ESG principles and contributing to a healthier planet.

Information Source: