Bank of Thailand calls for urgent increase in climate finance

The Bank of Thailand has called for urgent action to increase climate finance to support Thailand’s sustainable development goals.

Roong Mallikamas, BoT deputy governor, emphasised the significant gap between current climate finance and the estimated global needs during her keynote address at the Sustainability Forum 2025, hosted by Krungthepturakij on Tuesday.

Only $1.5 trillion was raised for climate initiatives in 2022, far short of the $7.4 trillion required annually, according to the Climate Policy Initiative, an independent advisory group. Roong said this shortfall poses a major challenge, particularly for developing countries like Thailand.

In her speech titled "Climate Finance toward SDGs", Roong said current climate financing is grossly inadequate to meet the demands of a rapidly changing climate.

Despite developed nations pledging increased climate funding at COP29 in Baku, Azerbaijan, earlier this month, the $300 billion annual target by 2035 remains far from sufficient – especially for developing nations like Thailand that face distinct climate vulnerabilities, Roong said.

"Thailand faces unique challenges in its transition to a sustainable economy. The country’s economy is heavily reliant on industries that are not environmentally friendly, and its vulnerability to climate change is significant. Additionally, small and medium-sized enterprises (SMEs) often lack the resources and knowledge to adapt to new environmental regulations," she noted. 

The BoT has implemented several measures to tackle these challenges.

It has issued policy guidelines encouraging financial institutions to integrate environmental considerations into their operations. Meanwhile, it has classified economic activities based on their environmental impact. 

The central bank has also joined with commercial banks to launch “Financing the Transition”, a project providing financial support to businesses transitioning to more sustainable practices.

Roong highlighted three lessons learned from the project:

• Awareness and risk assessment: Businesses, especially SMEs, need awareness of climate change risks so they can take steps to adapt.
• Bank support: Commercial banks have an important role to play in supporting businesses’ transition to sustainability by providing both financial and non-financial backing.
• Government and corporate collaboration: Government policies and support from large corporations are essential to create a conducive environment for businesses to adopt sustainable practices.

Roong concluded by emphasising that the BoT is promoting not just financial solutions, but also education and innovation as the pillars of a sustainable economic future.