Cabinet to consider new ESG fund’s regulations Tuesday

The Cabinet is scheduled to deliberate new regulations for Thailand ESG Fund (TESG fund) during its weekly meeting on Tuesday, a well-informed Government House source told The Nation.

The source said the new regulations of the TESG fund are aimed at using tax reduction measures to encourage investors to support listed firms or projects that demonstrate strong environmental, social and governance practices.

ESG funds align with the growing global trend towards sustainable investing and offer investors an opportunity to contribute to positive change while potentially earning returns.

The sources said the new TESG fund regulations are also aimed at encouraging members of the public to save for their retirement by investing in units of the fund.

Earlier, Deputy Prime Minister and Finance Minister Pichai Chunhavajira said he sent the matter to the Cabinet for approval several weeks ago.

Pichai said the Finance Ministry would set up a new TESG fund and it would be up to the fund manager whether to invest in bonds or in the stock market taking into account the best yields for investors.

According to Pichai, the key regulations of the new TESG fund would be:

- Investors can use the investment money to deduct the revenue that would be calculated for income tax. The deduction ceiling ratio is still capped at 30% of the revenue for calculating tax but the deductible amount will be raised from 100,000 baht to 300,000 baht.

- The length of investment units holding will be reduced from eight years to five years.

- The TESG fund must invest in firms which score more than 80% on the international trustworthiness level and which have earned ESG Bond and Green Token certifications from the Securities and Exchange Commission.