Funding a sustainable revolution

The next phase of Thailand's system to identify economic activities by their environmental impact kicks off, writes Somruedi Banchongduang

- Somruedi Banchongduang

Thailand is transitioning to a sustainable economy, marked in part by the implementation of Thailand Taxonomy Phase 2 on May 27, 2025, which focuses on a sustainable finance framework.

The taxonomy initiative is based on a classification system designed to identify and categorise economic activities based on their environmental sustainability.

The project serves as a reference tool to guide investments, financial decisions and policy measures as Thailand seeks to achieve its climate goals, particularly reducing greenhouse gas (GHG) emissions and aligning with the Paris Agreement and the UN's Sustainable Development Goals.

Phase 2 expands the scope to cover the agriculture, manufacturing, construction and real estate, and waste management sectors, industries that are among the highest greenhouse gas emitters in the country.

Phase 1 was launched on June 30, 2023 and focused on the energy and transport sectors.

Initial consultations began in February 2024, followed by a public consultation period from Oct 28, 2024 to Jan 10, 2025.

Throughout this process, the Thailand Taxonomy Board received valuable feedback from a broad range of stakeholders, including government agencies, companies, civil society, academia, and international organisations.

The Thailand Taxonomy Board comprises representatives from the Department of Climate Change and Environment (DCCE), the Bank of Thailand, the Securities and Exchange Commission (SEC), the Stock Exchange of Thailand, and other relevant stakeholders from both the public and private sectors.

The board said most of the feedback supported the taxonomy in principle, with some suggestions to strengthen it such as incorporating additional environmental standards, certification schemes, and practices tailored to the Thai economic context for each sector.