Home

The year 2023 saw substantial environmental degradation—natural disasters, threatened ecosystems, resource depletion, and pollution—an ever-growing challenge with widespread impacts on the environment, biodiversity, economic development, and human security, not to mention the other global complications of post-COVID recovery, monetary tightening, and geopolitical tensions.

As we navigated through the aforementioned issues, the magnitude of our endeavors was still manifest in how we empowered green transitions for both our customers and ourselves, thanks to Krungsri’s guiding light in the climate-positive journey, our third Medium-Term Business Plan (MTBP) spanning 2021-2023. Among our sustainable banking achievements under this MTBP, one milestone was that by the end of 2023, the size of our social and sustainable finance (SSF) portfolio had increased by 71 billion baht from the base year 2021, more than halfway to surpassing our bold target of 100 billion baht by 2030.

Transcending such quantitative success, our incorporation of ESG elements into operations and adherence to sustainable banking principles earned us the highest rating of AAA from the Stock Exchange of Thailand’s ‘SET ESG Ratings 2023’, which provides meaningful insights into our best practices pertaining to ESG excellence in governance, risk management, and disclosure, among others.

Aligning our actions with the ambitious goal outlined by the Krungsri Carbon Neutrality Vision to decarbonize our owned business operations by 2030, one of our key environmental endeavors in 2023 entailed the ‘Krungsri Race to Net Zero’ initiative. This call for innovative action consists of waste minimization and energy efficiency enhancement competitions, cementing a net-zero culture across Krungsri Group.

Equally important, another key milestone under the Krungsri Carbon Neutrality Vision is to decarbonize our financial services by 2050. Achieving such an ambitious target calls for making collaborative impacts with our customers; we cannot decarbonize our financial portfolio without our customers decarbonizing their business operations.

The year 2023 marked a year of substantial progress in our efforts to translate climate commitments into concrete actions to help the real sector transition toward a greener future with a wide array of climate finance. Reinforcing our commitment to ‘Be the most sustainable commercial bank in Thailand’, we have continued to not only maintain our prominent leadership position in the domestic capital and credit markets, but also introduced many ESG financial instrument ‘firsts’ to the market. In 2023, our notable trailblazing products included the issuance of Thailand’s first ‘green and blue’ bond at a total amount of USD 400 million (14,236 million baht) under a private placement to the International Finance Corporation (IFC).

The key objectives of this issuance are to further scale up our green financing portfolio while accelerating blue financing transactions for both Krungsri and Thailand at large. Having accumulated more than 30 ESG Thai baht bond and loan mandates from 2020-2023, we secured a position at the forefront of ESG bond underwriting with total bonds issuance of 78,551 million baht.

In excelling at our duties and accountability as a Domestic Systemically Important Bank (D-SIB), Krungsri strives to contribute to the establishment of a common standard for the country’s climate and environmental financial landscape. As one of the Thai Bankers’ Association’s Co-CEO sponsor banks for sustainability, we co-led the development of Thailand’s Industry Handbook for financial institutions issued in 2023, which lays the foundation for commercial banks to incorporate environmental and climate change aspects in banking operations.

As robust governance expedites environmental and social responsibility, Krungsri formulated the Policy for Sustainability Lending during the year to serve as the basic framework for commercial lending with emphasis on ESG risks, aiming to promote sustainability in the lending business and create positive societal impacts. The policy defines the nature and categories of transactions in credit underwriting as Prohibited Transactions, High-Caution Transactions, Closely Monitored Transactions, and Sustainable Finance, in order to formulate account strategies suiting the transactions’ respective ESG risk profiles.

In addition to environmental agendas, social imperatives are equally pressing. Krungsri Group has stipulated our complete Human Rights Due Diligence process by which human rights are integrated into the Bank’s risk assessment system and control mechanisms, as well as protecting human rights throughout our supply chain, in conformity with the United Nations Guiding Principles on Business and Human Rights (UNGPs).

Also on the social front, although COVID-19 has ebbed and the percentage of loans under our customer relief programs to total loans has decreased from 29 percent in 2020 to 6 percent at the end of 2023 as many debtors have already exited the programs, we are aware that some customers, particularly individuals and SMEs, require more time and resources to return to normality. Therefore, we have continued providing financial aid for such customers to ensure that they have access to appropriate and timely assistance while engaged in their recovery, thus leaving no one behind in the post-pandemic economy.

Our ESG synergies are not limited to within the financial ecosystem. In collaboration with the Mae Fah Luang Foundation, we planted 1,000 rai of community forests in the northern region under the guidelines prescribed by the Thailand Voluntary Emission Reduction Program (T-VER) of the Thailand Greenhouse Gas Management Organization (Public Organization). Carbon capture under the program will qualify as credits offsetting our organizational carbon footprint.

The year 2024 is the first year of our new MTBP covering 2024-2026. For this fourth MTBP, Krungsri has set our aspiration to ‘Be the leading sustainable and regional bank’ supported by leadership positions in ESG-linked businesses. To fulfill this aspiration, we have established sustainable growth, productivity and efficiency, and corporate transformation as our strategic pillars. Bearing sustainable growth in mind, we will promote the sustainable business model, creating value not only for our business, but also for our customers, employees, and shareholders, while committing to the betterment of the community and the environment.

Of particular note, Krungsri is articulating our Transition Plan to mitigate environmental and climate change risks in our portfolios, especially risks arising from the carbon-intensive energy sector. We will first focus on analyzing our portfolio of power generation businesses, then extend to other industries such as the transportation sector. Our Transition Plan aligns with the Thailand Taxonomy Phase 1 in which business activities are categorized into green, amber, and red, differentiating economic activities according to the intensity of their respective emissions.

By broadening our ESG offerings, exploring more ESG partnerships in 2024, and integrating environmental and climate change aspects into our business according to the Standard Practice of the Bank of Thailand, we are determined to deliver positive outcomes for our customer base, supply chain, and every other stakeholder group to reaffirm our spirit of ‘banking with purpose’.

The net-zero clock is ticking. We need to help accelerate our customers’ transitions hand-in-hand with ours in order to reach the sustainability goals together in time, ultimately facilitating Thailand’s steady shift into a low-carbon economy.