Resident Coordinator's Remarks at the Sustainable Thailand 2021 conference

Remarks as delivered by UN Resident Coordinator in Thailand at the Sustainable Thailand 2021: Sustainable Investing, Sustainable Banking conference.

Your excellency, esteemed business and civil service leaders, colleagues and friends,

Thank you for the opportunity to address you today, where we have so much leadership gathered in one place.

First, let me take a moment to recognize how we got here. In recent decades, Thailand has been one of the world’s remarkable development stories. The number of people living in poverty has fallen from 67% of the population in the mid-1980s to only 8.8% in 2020.

The statistics come from the World Bank, but I am sure that many of you know this better than I, having watched this development trajectory change lives, in your communities and neighborhoods, workplaces and industries, and among friends and family.

Let’s also clearly acknowledge the challenges facing Thailand. I am pleased to see continued progress on the logistics of mass vaccinations, with full realization of the hard work and investment still needed for recovery.

That effort is integrally linked to green economic growth and employment recovery in 4.0 industries, in areas where jobs will still be there in the future. As an example of building forward better from the pandemic, how do we create more jobs in the provinces given the reverse migration that we have seen?

How do we finance economic growth and recovery, while remaining competitive globally and sustainable and resilient in the long term?

The answers to those questions are complex, but all rely on data-driven policy and sustainable investment. Admittedly, at present the current investor sentiment is cautious, with bank lending a barrier to scaling up sustainable financing. This will take a collaborative effort to foster confidence and expand the shared commitment to Thailand’s future.

As we discuss sustainable financing today, I want to address three interlinking themes. First, we all know that economic growth and sustainability are mutually interdependent. Second, innovative financing, including the key role for the private sector can and must drive forward the Sustainable Development Goals. And last, the UN is here, bringing unparalleled international expertise and global networks to support Thailand’s path forward.

For my first point, in my discussions with senior leaders in government and business, there is a clear recognition that the growth model of previous years is no longer an option. The toll taken on the environment and biodiversity in recent years is incurring increasing and unsupportable external costs.

Let’s take a step back – Thailand is not overly reliant on coal at present and should not be further investing in that area. While the focus in the medium term is on gas as a transition fuel, the country needs to continue to scale up renewable sources in its energy mix.

We know that Thailand has a per capita CO2 emission rate of nearly 4 tons. I believe this is our opportunity to showcase the power to transform and bend the CO2 curve to build forward sustainably.

As the COP26 summit on climate change approaches next month, we are further reminded of Thailand’s role both as a matter of national urgency and global responsibility.

The recent Intergovernmental Panel on Climate Change report clearly states that we will all be affected, not in the remote future but now in our own lifetimes and have a collective responsibility to act.

This is brought home in Thailand by extreme weather events, leading to recent floods and fires, and these changing conditions must be built into our development plans.

As Christine Lagarde, President of the European Central Bank recently made clear, climate change now affects all aspects of monetary and fiscal policy.

The 13th NESDP already lays the groundwork for the shift to the Bio-Circular Green economy, away from natural resource-intensive towards high value-added industries. As we have discussed with many of you in consultations, the Cooperation Framework guiding all the UN’s work in Thailand is aligned with and strongly supports these priorities.

So we know, that Thailand is already getting the policy framework right in many respects, including SDGs 12 and 13, respectively on responsible production and consumption and climate action.

That leads me to implementation.

As we work towards Thailand 4.0 and this more sustainable and inclusive future, green financing and private sector leadership are essential.

The view of sustainable financing as an extra or optional cost burden is something we can no longer afford. For an export-driven economy deeply integrated in global markets, Thailand’s business sector is long used to working with international standards and conventions.

More than that, sustainable investing is increasingly proven to be smart investing, with a recent IMF paper estimating that green multipliers on investment are 2 to 7 times larger than conventional multipliers, creating jobs and strengthening economies.

Sustainability increasingly equals profitability. An Oxford analysis of more than 200 studies has found overwhelmingly that good sustainability standards lower the cost of capital for companies, improves operational performance and also has a positive influence on share performance. Many businesses are moving on decarbonization simply because they see that this is the key commercial opportunity of our time.

The private sector, representing nine in ten jobs and nearly 90% of GDP, has undeniable leadership responsibility. Last year, high-level leaders of the Global Compact Network Thailand committed to investing about $40 billion to support progress towards the SDGs. Next month, the GCNT Forum is a major opportunity to further these commitments to reduce CO2 emissions in the “Race to Zero”.

Banks and investors are also beginning to apply sustainability principles to financial markets. Kasikorn Bank and GSB, representing 22% of the banking sector with combined assets of $200 billion, have already adopted the UN Principles for Responsible Banking.

I hope today’s discussion results in recognition that we need to improve in this area – globally, 40% of banks have signed up and we need to bring Thailand up to that standard.

Similarly, the Government Pension Fund has adopted environmental, social and corporate governance, or ESG, criteria across all investments, while leveraging the technical capacity of its investment teams to prepare models featuring ESG scores, placing it ahead of most countries in the Asia-Pacific region. This has enabled them to scale up investments in renewables alongside cleaner technologies.

We must continue to move beyond pilot schemes and take action to adopt UN principles into decision-making for the wider banking and investment industry. This transformation will be the engine of green growth, to further investment in rural Thailand, and to capitalize on opportunities rather than see them as setbacks.

We understand that improving the ecosystem of sustainable financing is a never-ending process. We also understand that each institution needs to move at its own pace to deliver on these principles as they learn and unlearn. It is also important for the private sector to give them time to think through the changes in business operations to make them sustainable.

If you lead and are visionary in this respect, the private sector will follow. The strategies that you adopt will set the framework for the economy as a whole.

Let’s get specific about the technical expertise, policy recommendations and international convening role that the UN brings to the table. These competencies are needed precisely because they complement Thailand’s own strengths, knowledge and human capital, enabling us to tackle challenges that are truly global in scale through strategies that are best suited for the context here.

In a recent discussion with a policy expert at the UN’s climate agency, I asked if there was one thing you could recommend to Thailand, what would it be?

The answer takes into account the obvious point that the industry is wary of taxes or mandatory caps because it could harm their competitiveness in the region.

The Paris Agreement provides the opportunity to use market-based instruments to increase ambitions in climate action. A number of countries in the region have already indicated their intention to use or explore market-based mechanisms to implement their nationally determined contributions.

Putting a price on carbon is an important regulatory measure to incentivize and support progress towards net-zero by mid-century, with increased innovation and investments in sustainable technologies. Linked with regional and bilateral market-based agreements across ASEAN, this will help Thailand to act as a frontrunner in the future low-carbon economy and support the achievement of national and international goals.

The Economic and Social Commission for Asia and the Pacific proposes a “build forward better” policy package focusing on strengthening climate and clean energy actions, as well as enhanced access to healthcare and social protection, and improving access to digital technologies. For Thailand, the policy package has the potential to reduce the number of poor by almost 600,000 people, increase output by 10%, and cut carbon emissions by about 27% by 2030.

I look forward to more conversations about how the UN is working with Government and the private sector, and how those partnerships can be expanded.

I have had the pleasure of speaking and working with many of you here today, particularly in recent consultations on the Cooperation Framework that guides the UN work and supports the NESDP. We all know the urgency and shared responsibility to achieve the economic transformation that Thailand needs, and we also know that we will only achieve those goals through innovative financing.

These are challenging times, and the shared commitment towards Thailand’s sustainable development and success is for me the greatest cause of optimism. I look forward to the hard work ahead as together we make those ambitions a reality.