Such trend emphasizes the importance for business sectors to adapt their financing strategies to facilitate their business transformation, as financial institutions increasingly prioritize loans for green initiatives. ABeam Consulting notes that organizations across all sectors are shifting towards sustainable practices—not only in the energy sector but also in industries and services. This shift is particularly crucial for exporters facing stringent regulations such as the "Carbon Border Adjustment Mechanism (CBAM)." Implemented by both the European Union (EU-CBAM) and the United States (US-CBAM), these measures aim to promote sustainable economic growth and environmental stewardship among trading partners outside these regions. The implications extend throughout the supply chain, meaning that even businesses that do not export directly but serve as suppliers to exporters must also manage their greenhouse gas emissions. Additionally, businesses in the capital markets are increasingly relevant, as the concept of "sustainable business practices" or "ESG" (Environmental, Social, and Governance) is garnering significant attention from investors.
ABeam Consulting further elaborates that transitioning to sustainability, or GX, can start with three key strategies that businesses can adopt to enhance their competitive edge:
- Adopting Clean Energy Sources: Transitioning from traditional energy to renewable sources, such as solar power or wind energy.
- Improving Energy Efficiency: Implementing practices for efficient energy consumption, such as utilizing modern machinery with high energy-saving ratings or switching to LED lighting, which is both energy-efficient and environmentally friendly.
- Reducing Emissions: Upgrading machinery or production processes to decrease carbon emissions.
Businesses should prioritize building internal expertise and seeking current information and guidance from experts on GX initiatives to facilitate a swift and effective transition. Additionally, the government has introduced various measures to support GX activities, including tax incentives for businesses that adapt and innovate, as well as funding opportunities through banking products known as "Green Loans."
"Green Loan" is an essential tool used by the government to promote GX initiatives in the business sector, especially among SMEs, which constitute a significant portion of the economy. These loans provide critical funding to support this transformative process. What sets "Green Loans" apart from conventional business loans is their specific focus on projects that have positive environmental impacts. This includes financing for the purchase of new machinery or investments in energy-efficient technologies that aim to reduce greenhouse gas emissions. Over the past year, several commercial banks have launched "Green Loan" products with interest rates lower than those of standard business loans. The market for these products is expected to grow, with greater program coverage for a wider range of eligible projects that align with emerging GX activities driven by business impact.
While "Green Loans" are relatively new in Thailand, they represent a well-established global trend seen in various countries. This underscores that the financial sector, a cornerstone of capitalism, recognizes its crucial role in combating climate change. It is vital for Thailand to enhance awareness and foster collaboration among all stakeholders—including the government, regulatory agencies, financial markets, capital markets, and the private sector—to establish common standards. Together, they can propel efforts toward achieving carbon neutrality, or "Net Zero," by 2065.
Source: Phenomenal PR