Open details of Thailand Taxonomy Phase 1, piloting transportation and energy groups.

On December 26, 65, the Bank of Thailand (BoT) and the Securities and Exchange Commission (SEC) and related agencies jointly prepared grouping standards. Economic activities that take into account the environment (Thailand Taxonomy) with Climate Bonds Initiative. (CBI) as project advisor. and opened to listen to opinions on standards for grouping economic activities that take into account the environment (Thailand Taxonomy) Phase 1 from 26 Dec. 65 to 26 Jan. 66

Ms. Onsaran Manu-amorn, representative from Climate Bonds Initiatives. (CBI), revealed details of Thailand Taxonomy that Thailand Taxonomy is a central standard used to classify economic activities that are environmentally friendly in Thailand. Thailand Taxonomy will define the definition of words. Clearly explain conditions and indicators for each economic activity. To serve as a guide for all sectors to understand and evaluate together.

For the purpose of the Thailand Taxonomy, it consists of 6 objectives: (1) reducing climate change problems (2) adapting to climate change (3) sustainable use of water resources (4) sustainable use of resources and Adapting to the circular economy (5) Pollution prevention and control (6) Conservation of the biodiversity of the ecosystem

In preparing the Thailand Taxonomy, Phase 1 will begin with the environmental objective of reducing climate change problems. However, the activities that take place must not affect the remaining 5 objectives, while Thailand Taxonomy Phase 1 will cover the energy sector and transportation sector first. This is because it is an economic sector that plays an important role in the problem of climate change and emits a high proportion of greenhouse gases.

In terms of grouping various activities, they are divided into 3 levels (Traffic-Light System) which are green, yellow and red as follows.

Green means activities that reduce climate change problems by Net greenhouse gas emissions are close to or equal to zero today.

Yellow (amber) refers to activities that do not currently have net GHG emissions close to or equal to zero and are in the process of adjusting to reduce GHG emissions. At present, the problem can be reduced somewhat, but still Can be improved further

Red means activities that cannot be assessed as being friendly to net GHG reductions. and does not meet the conditions and indicators for activities at the green or yellow level

However, the use of Thailand Taxonomy will be voluntary. Various sectors can take advantage of Thailand Taxonomy as follows:

1. The business sector can plan adaptation by using Thailand Taxonomy as a reference in risk assessment and readiness in terms of greenhouse gas reduction. To plan business adjustment

2. The financial institution sector can refer to the Thailand Taxonomy in designing financial products and services that meet the needs of Thai business adaptation. including evaluation Risks in the loan portfolio have become more systematic.
3. The government sector can design measures and policies in a consistent direction, including setting policies or creating incentives to prepare the economic system to deal with climate change risks.

Miss Wipawin Phromboon, Senior Director Financial Institution Strategy Department The Bank of Thailand (BOT) revealed that the BoT expects financial institutions to use the Thailand Taxonomy as a reference in two dimensions: 2. Grouping customers into groups so that financial products can be designed to the point in order to Help support the transition to sustainability. 1. Used to assess environmental risks of financial institutions' loan portfolios.

“Using the Thailand Taxonomy in the financial sector, financial institutions must first have understanding and familiarity. The BoT will discuss preparations and timelines with financial institutions. Thailand Taxonomy Phase 1 will use with the energy transportation group before expanding to the manufacturing and agricultural sectors further.”

Mr. Thayakorn Chitkuldecha, Director of the Debt Securities Department The Securities and Exchange Commission (SEC) revealed that on the capital market side, the Thailand Taxonomy will be used as a guideline for issuers of sustainability debt instruments, which are currently mainly based on international standards. It will help reduce the cost of issuing debt instruments. Support the market to grow In addition, it will also become a tool for investors. It will help sustainability fund managers organize their portfolios to meet environmentally friendly needs. In the past, the SEC There are strategies that continuously push sustainability, such as Issuance of Green Bond and Social Bond criteria To promote the sustainable growth of the Thai capital market ecosystem.