ISSB standards and information disclosure to sustainably upgrade the Thai capital market

The SEC, as the regulatory agency for the Thai capital market, has been following up and taking action on the issue. “Sustainability Governance (ESG) Disclosure” Continuously, by requiring listed companies and companies that issue and offer securities to the public in Thailand, both SET and mai, to have a duty to disclose information about the business covering sustainability management according to the annual information form or annual report (Form 56-1 One Report) and the securities offering information form (Form 69-1) (collectively called "Form One Report"), which will help reflect the importance of doing business under good corporate governance, with responsibility towards society and the environment, which has been effective since 2565 and the past.

The SEC, together with partner agencies both domestically and internationally, has continuously communicated and created understanding among the business sector to integrate ESG issues into their operations. This is to enable the business sector to put these issues into practice and disclose information in a tangible manner.

In addition to disclosing sustainability information in the One Report format, the SEC also encourages listed companies to consider disclosing sustainability information based on reporting frameworks or international reporting standards, such as The Task Force on Climate-related Financial Disclosures (TCFD Standard) and the Global Reporting Initiative (GRI).

From monitoring, it was found that listed companies are aware of the importance of ESG and have increased their disclosure of information on sustainability management topics, especially large listed companies in SET50, most of which have disclosed information in accordance with international standards such as TCFD or GRI.

In the past, the SEC has continuously monitored trends and developments in sustainability disclosure at the international level. In June 2566, The International Sustainability Standards Board (ISSB), which is under the International Financial Reporting Standards (IFRS) Foundation, was established with the objective of creating sustainability reporting standards that are in line with the same global standards (Global Baseline). It has issued two sustainability disclosure standards for companies, namely:

           1. IFRS S1 It is a general requirement for financial disclosure of companies regarding sustainability, including opportunities and risks arising from ESG factors and 2. IFRS S2 It is a requirement for disclosure of information on opportunities and risks related to climate change (“ISSB”), which was later accepted by the International Organization of Securities Commissions (IOSCO) on 25 July 2566.

For the two ISSB standards, they are an extension of the TCFD and GRI standards, which will help businesses reduce the burden and confusion of reporting sustainability information according to various standards or frameworks to be in line with the same standards.

The main principles of IFRS S1 and IFRS S2 are to disclose risks and opportunities related to sustainability and climate that may have a material impact on the business opportunities, financial information of the entity, and ability to access sources of funds. The entity must specify the linkage of information and the impact on the financial statements related to disclosures under IFRS S1 and IFRS S2.

In addition to the benefits of reducing the burden of diverse reporting, disclosure of information
This ISSB standard also helps investors and stakeholders in the business value chain to have information that more clearly reflects and links ESG information with the business's financial information.

ซึ่ง This information will be a mirror that will helpReflects the company's potential to cope with risks and opportunities related to sustainability that may affectTo further enhance the competitiveness, profitability and sustainability of the business. And investors themselves can use the information to make comparisons and make investment decisions.

For the past work on the ISSB standard of Thailand, the SEC office, in cooperation with the Asian Development Bank (ADB) under the project “The technical in-depth analysis and comparison of current sustainability related disclosure requirements and international standards”, has hired experts to conduct a study and analysis of the differences between the One Report form currently in force and the ISSB standard, as well as to conduct a comparative study of sustainability disclosure practices at the international level.

From the preliminary study results of experts, it was found that the details that must be disclosed in the ISSB standard are mandatory and the details of the content that must be disclosed are more detailed than in the One Report. The additional parts of the ISSB standard will help make information on governance, risk management, strategies, indicators and goals related to sustainability, which cover climate, clearer and more comprehensive.

For the guidelines for disclosing sustainability information according to the ISSB standard abroad, it was found that many countries have already started issuing guidelines on the application of the ISSB standard. Most of them will initially be enforced during 2568-2570. This will be in the form of determining the business groups that must comply with the standard depending on the size of the business and setting various relaxation measures to raise the standard to comply with the ISSB standard.

In terms of upgrading the criteria related to the disclosure of sustainability information of listed companies in the Thai capital market, the SEC has opened for public hearings on “Guiding principles for enhancing sustainability disclosure according to the ISSB Roadmap” Went at the end of 2567.

According to the above principles, it is determined that Businesses that the SEC has determined have a duty to disclose sustainability information in accordance with the standards. ISSB uses a phrased-in approach and provides transition relief measures. This takes into account the context and readiness of Thai listed companies. And in order not to cause excessive burden or action (undue cost or effort)

Currently, the SEC is in the process of collecting and summarizing the results of the hearings to be used in preparing the draft announcements, forms and other related documents. In parallel, the SEC will organize training to build capacity for Thai listed companies and related persons to help enhance readiness and create correct knowledge and understanding in disclosing information according to the ISSB standard.

In addition, we will continuously monitor trends in sustainability disclosure at the international level to ensure that Thailand's sustainability disclosure is in line with and on par with international standards, helping to reduce the burden and ensure uniformity of sustainability-related disclosure, including climate-related, of listed companies in Thailand.

This will enhance the competitive potential of the business sector and benefit investors and stakeholders throughout the business value chain, providing them with sufficient and comparative information to support investment decisions, which will drive the Thai capital market sector to become a part of the mechanism towards true financial sustainability.