Thailand's Government Pension Fund’s (GPF) new guidelines for socially responsible investing has been signed by 32 institutional investors, who will be held more accountable if the companies they invest in breach laws and rules, according to a recent report in a local English language daily.
The Bangkok Post cites GPF Secretary General Vitai Ratanakorn as saying that signatories to the Collaborative Engagement and Negative List Guidelines for environmental, social and governance (ESG) will need to shun securities that breach Thailand’s securities legislation, or do not comply with ESG requirements.
Institutional investors that have signed on include Aberdeen Standard Investments, FWD Securities, Kasikorn Thai Securities and Prudential Life Assurance Securities.
Under the guidelines, these large investors will step in to coordinate with any listed company that commits a serious breach of the Securities Act to resolve the problem.
If the company fails to address the issue, the investors will avoid investing in it for three months, or until it solves the problem.
"The collaboration is expected to prompt listed companies to comply with laws and ESG practices," Mr. Vitai is quoted as saying in the August 16 news report.
Spokespersons for GPF did not immediately respond to questions from Asia Asset Management (AAM).
According to a fund manager at a European asset management firm in Thailand, the GPF’s move “clearly shows” the government's commitment to implementing ESG on a larger scale.
"I think the government sees that ESG practices can help the country to gain competitive edge. Thailand wants to be a regional ESG champion," the Bangkok-based fund manager tells AAM, speaking on condition of anonymity.
The GPF, a pension fund for government employees in Thailand, has over 943.29 billion baht (US$30.53 billion) of assets under management, according to its website.