Criteria for Thailand Sustainability Investment to create investment opportunities in accordance with ESG principles

Criteria for Thailand Sustainability Investment to create investment opportunities according to ESG principles

          Thailand Sustainability Investment (THSI) includes the limited companies that have passed all three dimensions of assessment criteria of the Stock Exchange of Thailand and focus on the development toward steady and sustainable growth based on the Environmental, Social and Governance (ESG) Model, i.e., comprehensive risk management, readiness to cope with important changes, and adoption of innovation to drive their business by taking into account the stakeholders, society and the environment.

Sustainable Stock Selection Criteria

         The stocks of listed companies in the THSI list will be selected from listed companies that voluntarily participate in the sustainability assessment conducted by the Stock Exchange of Thailand. The assessment covers questions in the ESG dimensions. The assessment form will be reviewed by the SET on an annual basis to ensure compliance with the changing context and sustainability trends at both international and national levels.

         The companies in the THSI list must have a score of at least 50% in each of the ESG dimensions, or be listed as a member of the Dow Jones Sustainability Indices (DJSI), and must meet the specified criteria, such as the quality assessment of corporate governance reporting (CGR); the performance in terms of net profit and shareholders’ equity; the governance performance on issues related to the qualifications of listed companies; ESG impact; and non-C securities. A working group for sustainable investment has been formulated, consisting of experts in governance and sustainable development and in capital market agencies responsible for transparent screening and selection.

         The listed companies in the THIS list are considered to have the potential in integration of sustainability concepts into their business operations and preparedness for emerging risks. In addition, these companies also have clear operational guidelines to support and manage issues to demonstrate their ability to create business opportunities, and they show a readiness to deal with global trends.

         In addition, the SET has established the SETTHSI Index by selecting stocks from the THSI list of the latest year that have been traded on the SET exchange for at least 6 months with a market capitalization of at least 5,000 million baht, a free-float ratio of at least 20% of the paid-up capital, and trading volume of at least 0.5% of the registered shares of the company for not less than 9 out of 12 months.

Benefits of sustainability assessment

1.  The sustainability assessment form can be used as a tool for improving and developing business operations covering ESG dimensions in order to create opportunities and effectively manage risks in the operational process;

2.  The suggestions are provided to be used as a guideline to improve business management in response to relevant ESG dimensions;

3.  It will create opportunities for the company to attract attention from investors who have sustainable investment ideas;

4.  It will create incentives for other companies to further develop their organizations in accordance with sustainable business practices.