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Commitment
Materiality
The Bank is committed to adhering to the Sustainable Banking Guidelines for Responsible Lending established under the Memorandum of Understanding on cooperation between member banks of the Thai Bankers’ Association as supported by the Bank of Thailand. We have established a responsible lending policy which entails setting up an exclusion list of loan applicants or activities that the Bank does not provide credit support to, developing ESG risk management processes, and fostering effective ESG risk management in our lending process among executives and staff in relevant departments in order to prevent negative impacts on society, the environment and the Bank’s reputation.
To ensure efficiency and effectiveness in its responsible lending management, the Board of Directors is charged with the responsibility for formulating policy and strategies and monitoring responsible lending operations. The Corporate Governance Committee and the Risk Oversight Committee have the responsibility to provide necessary support to the Board of Directors while executives and staff in related departments are responsible for implementing policy and driving the Bank’s strategic operations. Furthermore, the Bank consults with external experts on key ESG risks and also provides opportunities for stakeholders to express their opinions on the potential ESG impacts of the Bank’s lending through its contact channels. Advice, comments and information received are used for reviewing and keeping the Bank’s policy, strategies and practices on responsible lending up-to-date while ensuring they adequately cover significant ESG risks. Framework for Credit Underwriting with ESG Risk Assessment We have established a business and personal loan approval framework that takes into account ESG issues. We have also developed ESG risk and impact assessment tools for credit officers to ensure that lending operations are in line with the Bank’s Responsible Lending Policy.
The definition of ESG factors that the Bank has used to support for business, project and personal loan approvals, in order to prevent risks and adverse impacts caused by the projects or activities that the Bank provided loans to:
Framework for Credit Underwriting with ESG Risk
Assessment We have established a business and personal loan approval framework that takes into account ESG issues. We have also developed ESG risk and impact assessment tools for credit officers to ensure that lending operations are in line with the Bank’s Responsible Lending Policy.
Details |
Outstanding Loan Balance as of 2022 Unit: Million Baht |
Corporate Customer |
|
Loans for Renewable Energy Loans for investment in the production and transmission of electricity from renewable energy sources such as solar power plants, wind power plants and hydropower plants. |
88,063 |
Loans for Electric Mass Transit System Projects |
16,573 |
Loans for Energy Conservation Loans for activities that fall under the Energy Conservation Promotion Act, such as renovating a building for energy conservation and improving production lines to reduce energy consumption. |
83 |
Loans Linked to Sustainability Performance Loans for businesses to develop and adapt to achieve their sustainability goals. In 2022, the Bank support an ESG-linked revolving credit facility to Indorama Ventures Public Company Limited. |
1,130 |
SME Customer |
|
Loans for Environmentally Friendly Business such as Bualung Green Loans, Bualuang Green Solar Energy Loans, Loans for Waste Management and Disposal Business, and Loans for Business Reuse and Recycling of Materials. |
1,122 |
Transformation Loans Loans for business to expand their capability through investment in three areas: Digital Technology, Green, and Innovation. |
337 |
Retail Customer |
|
The Bank started offering the Bualuang Poonphol Green Loans in November 2022. The loan is aimed to promote housing improvements by using clean and renewable energy innovations or universal designs for the elderly or disabled. |
Sustainable Bonds
The Bank plays an important role in funding sustainability activities of leading government and private organizations in Thailand by being a consultant, giving an advice relating to procedures and screening process for properties that can be used for funding the bonds that promote sustainability, including underwriting ESG bonds. In 2022, the Bank had a total value of ESG bonds underwriting of Baht 119,145 million.
Product |
Value Unit: Million Baht |
Standards |
Assessed and approved by |
Green Bonds |
|||
Green Debentures of Toyota Leasing (Thailand) Company Limited, No. 1/2022 |
2,000 |
ICMA-GBP |
Sustainalytics |
Green Debentures of IRPC Public Company Limited, No. 1/2022
|
750 |
ICMA-GBP, ASEAN-GBS |
DNV Business Assurance Australia Pty Ltd. |
Green Debentures of Global Power Synergy Public Company Limited, No. 1/2022 |
12,000 |
ICMA-GBP, ASEAN-GBS |
DNV Business Assurance Australia Pty Ltd. |
Green Debentures of Xayaburi Power Company Limited (XPCL), No.1/2022 |
8,395 |
ICMA-GBP, ASEAN-GBS |
DNV Business Assurance Australia Pty. Ltd. |
Sustainability Bonds |
|||
The Kingdom of Thailand’s Sustainability Bonds in the fiscal year 2022 |
65,000 |
ASEAN-ESG, ICMA-ESG, LMA-GLP |
Sustainalytics |
Sustainability-linked Bonds |
|||
Sustainability-Linked Bonds of BTS Group Holdings Public Company Limited, No.1/2022 and No. 2/2022 |
31,000 |
ICMA-SLBP |
DNV Business Assurance Australia Pty. Ltd. |
Remark:
Mutual Fund for Sustainability
The Bank has collaborated with the group’s asset management company to select and offer investment products in the form of mutual funds with ESG factors taken into consideration. In 2022, the Bank offered funds for sustainability promotion with net assets under management (AUM) worth Baht 14,344.11 million.
Funds
Investing Strategy
Details
AUM
Unit: Million Baht
ESG Integration
Invest in companies that participate in social responsibility in four areas: environmental, social, good governance and anti-corruption.
475.02
Bualuang Thai Equity CG Fund (B-THAICG),
Bualuang Siriphol Corporate Governance Fund (BSIRICG) and
Bualuang Siriphol Corporate Governance RMF (BSIRIRMF)
ESG Integration
Invest in companies with good corporate governance and are certified as member of the Thai Private Sector Collective Action Against Corruption (CAC). Good corporate governance may be considered from CG Scoring
by the Thai Institute of Directors or other related agencies.
7,476.25
Bualuang Sustainable Investing Portfolio (B-SIP),
Bualuang Sustainable Investing Portfolio RMF (B-SIPRMF) and
Bualuang Sustainable Investing Portfolio
Impact Investing
Invest in companies across the globe that are sustainably managed with concern for social and environmental impact in every step of the production of goods and services.
5,745.70
BCAP Clean Innovation Fund (BCAP-CLEAN)
Thematic Investing
Invest in securities or financial instruments of businesses benefitting from innovations that sustain the environment such as clean energy,
electric vehicles, circular economy and waste management, and energy storage.
647.13
All applications for project finance are carefully reviewed under the credit approval standards established by the Bank. We have set up a clear and transparent process, as well as a controlling and monitoring mechanism that is suitable for the level of risk. We have strict guidelines when it comes to projects that may have severe social and environmental impacts, such as mining, power plants, and infrastructure development. We apply the Equator Principles in the credit underwriting process. This requires Environmental and Social Due Diligence at the project level, while also taking information about greenhouse gas emissions Scope 1 and 2, certified domestic or international environmental and social management standards such as Environmental Management Systems ISO14001, and Occupational Health and Safety Management Systems ISO45001 or OHSAS18001, as well as information related to environmental and social risk and impact management of the projects into consideration before credit approval.
Examples of environmental and social risks and impacts taken into consideration
Environmental aspects |
|
Social aspects |
|
The Bank has categorized projects according to the level of environmental and social risks and impacts into three categories:
Risk Category |
Number of Projects |
Category A |
8 |
Category B |
19 |
Category C |
34 |
Total |
61 |
Outcome |
Number of Projects |
Approved |
61 |
Declined |
0 |