Thailand’s central bank said on Tuesday (Aug 23) it plans to issue guidelines for banks to take account of environmental factors in the financial products and services they offer.

The guidelines, set to be released in the third quarter, will help the financial sector, businesses and the public sector transition to a green economy, the Bank of Thailand said in a statement.

At the beginning, there may not be rules on how banks will have to lend, but rather incentives for them, Assistant Governor Roong Mallikamas told a media briefing.

A system that defines and classifies economic activities based on their environmental impact will be completed by January, 2023, the BOT said.

Thailand’s economy is particularly vulnerable to climate change given more than a third of its workforce is in the agricultural sector, Governor Sethaput Suthiwartnarueput told the briefing.

Also, industries that account for more than 13 per cent of Thailand’s production do not currently take into account issues like carbon emissions, he added.

Those businesses could be affected by a carbon tariff system proposed by the European Union which discourages its members from moving production to countries without robust climate change policies, he said.

Source: Reuters