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Thailand stock exchange head says “essential” to embrace ESG

Pakorn says reforms are required to ensure pension system is enhanced in terms of coverage, adequacy and sustainability
By Goh Thean Eu   
December 5, 2023

The head of Thailand’s stock exchange said it’s “essential” to embrace environmental, social and governance investing in order to contribute to “positive” social change.

According to Pakorn Peetathawatchai, president of the Stock Exchange of Thailand (SET), ESG investing “goes beyond the pursuit of financial returns to include a concept that recognises the interdependence between financial performance and societal well-being”.

“Investors actively contribute to positive change by allocating assets to companies committed to environmental stewardship, social responsibility, and strong governance,” he said in his keynote address at Asia Asset Management’s 14th annual Thailand roundtable on November 30.

He pointed out that the Thai bourse has been aggressively promoting its ESG data platform and ESG ratings. “These initiatives promote data transparency and strengthen links between investors and stakeholders, resulting in a more transparent and responsible investing environment.”

Meanwhile, Pakorn said Thailand’s shift towards an aged society will have its own unique challenges and opportunities, and that the Southeast Asian nation has to confront the issue with forethought and determination.

He highlighted three key areas to navigate the new “challenging” landscape.

The first is establishing new retirement planning strategies to ensure the financial well-being of the elderly as life expectancy rises and fertility rates fall.

“This scenario highlights the significance of establishing innovative solutions, such as post-retirement investing options, that are specifically geared to address the unique financial needs of an ageing population,” he said.

The second area he touched on was pension reform to enhance coverage, adequacy and sustainability.

“Our goal should be to design pension systems that are not only beneficial to present retirees, but also adaptive and resilient enough to meet the demands of future generations, ensuring their relevance and efficacy in an aged society,” he said.

The third key area involves navigating the new investment landscape.

“The uncertainty around ongoing interest rate hikes and a lengthy period of high interest rates offers unique problems, particularly for riskier assets. This scenario needs careful thought in the development of our retirement investing strategy,” Pakorn said.

The co-sponsors and co-hosts of the roundtable were the Association of Investment Management Companies, Association of Provident Funds, Thailand Capital Market Development Fund, and SET.

The associate sponsors were Australian asset manager Perpetual Group and Singapore’s UOB Asset Management.