Green finance takes centre stage

ESG bonds are on course to be worth more than 1 trillion baht in Thailand, reflecting rising market demand and increasing pressure from the government for more sustainable finance, writes Nuntawun Polkuamdee

- Nuntawun Polkuamdee

Thailand's environmental, social and governance (ESG) bond market has emerged as one of the fastest-growing segments of the country's capital market, reflecting a structural shift in how both the public and private sectors develop their long-term finance.

At the end of 2025, the outstanding value of ESG bonds reached 978 billion baht, placing the market within striking distance of the 1-trillion-baht milestone and accounting for 5.46% of the total Thai bond market, according to the Thai Bond Market Association (ThaiBMA).

From a modest beginning just six years earlier, Thailand's ESG bond market has expanded rapidly in scale, sophistication and issuer diversity. The transformation mirrors global trends in sustainable finance, but it is also shaped by Thailand's unique policy framework, investor base, and economic transition towards low-carbon and inclusive growth.

To predict market growth in the coming years, it is worth examining the past and present situation in detail, as well as potential future drivers of Thailand's ESG bonds. Key market developments are highlighted as we assess why ESG bonds are set to play an increasingly central role in Thailand's financial system.

FROM NICHE TO MAINSTREAM

According to ThaiBMA president Somjin Sornpaisarn, ESG bonds were first issued in 2019, with a total outstanding ESG bond amount of 23 billion baht. The market was largely experimental, driven by a small number of pioneering issuers testing investor appetite for green and sustainability-themed debt.

Early issuances focused primarily on green bonds to fund renewable energy projects, energy efficiency initiatives, and environmentally friendly infrastructure. These bonds aligned with Thailand's national energy transition goals and helped establish a foundation for ESG-labelled debt within the domestic bond market.