Sustainable financing: Unlocking Thailand’s net-zero pathway challenge

The urgency of tackling climate change and transitioning towards a sustainable future has drawn increased attention to the importance of sustainable financing in recent years. With every investment decision holding the potential to mould the fate of the planet, governments, corporations, and financial institutions are recognising the significance of funding environmentally friendly initiatives.

The push for a net-zero carbon economy is crucial, as approximately 50 gigatonnes of greenhouse gases are released into the atmosphere yearly. Approximately US$100 trillion in investments will be needed by 2050 to ensure the balance between annual emissions and removals is net zero.

This monumental challenge calls for collaboration and concerted efforts from diverse stakeholders – governments, regulators, financial institutions, investors, consumers and real economy participants – who together can redefine the future of our planet through sustainable financing.

Despite numerous ambitious goals declared by countries worldwide, a misalignment can often be observed between national commitments and the global net-zero emission pathway. This disparity threatens the actualisation of an environmentally sustainable future.

For countries like Thailand, sustainable development is imperative, with a commitment to reduce greenhouse gas emissions by 30 to 40% by 2030, reach carbon neutrality by 2050, and attain net-zero emissions by 2065.

Tan Choon Hin, President and CEO of UOB Thailand, believes it is crucial that we strike a balance between socioeconomic considerations and our net-zero aspirations in order to ensure a just and smooth transition to a greener future.

To achieve meaningful progress, governments and regulators must design robust policies and blueprints for sectorial decarbonisation. They hold the power to lay the groundwork for impactful policy changes that encourage demand for green products, nurture new markets focused on decarbonisation technologies, and facilitate the supply of green production resources.

Moreover, innovative financing models and incentives provided by governments can support climate technology frontrunners and generate a favourable environment for sustainable finance. In parallel, corporations and the private sector must make credible pledges to reduce their carbon footprints. Tan said…

“Large corporations, in particular, can leverage their influence by setting science-based net-zero targets and implementing action plans that align with government policies. They have the ability to inspire change throughout their value and supply chains.”

The financial sector plays a pivotal role in promoting sustainable finance and supporting the shift towards a low-carbon economy. Financial institutions can proactively manage climate risks, align financing and investment activities with net-zero objectives, and develop innovative financial solutions with tangible impacts on the real economy, reported Bangkok Post.

For instance, UOB has demonstrated its commitment to integrating sustainability into its core operations, providing sustainable products and services and upholding corporate responsibility. The bank has developed comprehensive Green Umbrella Frameworks, offering end-to-end financing solutions for various industries and aiding the transition to a sustainable future.

Unlocking sustainable financing is essential to achieving a greener future. With increasing momentum, particularly in countries such as Thailand and financial institutions championing impactful changes, it is time for all stakeholders to rally together, harness their collective potential, and work towards a more sustainable and inclusive future. Tan added…

“It is crucial that we strike a balance between socioeconomic considerations and our net-zero aspirations in order to ensure a just and smooth transition to a greener future.”