Thailand proposes compulsory ESG training

The country’s securities regulator aims to promote sustainable investment in Thailand.

Thailand’s Securities and Exchange Commission (SEC) has released a consultation last week about including an ESG training course as a requirement for investment professionals when they renew their licences.

The new regulation will cover fund managers; investment consultants, planners and analysts; derivatives investment managers; and agricultural commodity trading management officials, according to the regulator.

“The proposal aims to promote awareness of personnel in the capital market businesses on ESG principles, for the benefit of investors and the capital market,” the SEC said.

Currently, fund managers and derivatives investment managers are required to take a refresher course every two years. These courses include the Securities and Exchange Act or Derivatives Act, related regulations and ethics and standards of professional conduct, according to the SEC.

Under the proposed regulation, the refresher course requirement will add a fourth module, which is the “ESG course”.

Meanwhile, investment consultants, investment planners, investment analysts and agricultural commodity trading management officials, will be required to take at least three hours of an ESG refresher course, in addition to the ethics and regulations and other recognised courses they take every two years.

The sustainable funds market in Thailand remains small compared to the rest of Asia, with around $63m in assets accounting for just 0.2% of the total $25bn market in the region, according Morningstar’s third quarter sustainable fund flows report.

“ESG investing is still a new concept in Thailand, driven mainly by the Government Pension Fund, which has implemented ESG portfolios and developed ESG scoring tools,” Radiance Ang, Singapore-based research analyst at Cerulli Associates, said.

“It is heartening to know that the SEC is making efforts to educate investment professionals on this topic given the lack of awareness about the concept and confusion over various terminologies.

“However, the quality of the course must also be robust enough so that the advisers are well-equipped to educate their clients about the role of ESG in investments. Having said that, it would still be a long while before ESG investments gain ground and take off within the retail segment,” she said.

Like in other markets in Asia, some fund managers in Thailand have started rolling out new ESG products.

Latest ESG fund launches include Innotech Asset Management’s Sustainable Thai Equity Systematic Fund, according to the Morningstar report. The firm appointed Arabesque as the fund’s investment advisor, given its expertise in ESG, the report noted.

In August, UOB Asset Management in Thailand also rolled out a feeder fund that invests its assets into Rebeco’s Sustainable Global Stars Equities Fund.