SET to adopt FTSE Russell’s ESG data model to boost sustainability practices
The Stock Exchange of Thailand (SET) on Wednesday announced its collaboration with FTSE Russell, a leading global provider of benchmarks and index solutions, to implement a new sustainability scoring framework for Thailand's listed companies.
FTSE Russell is a subsidiary of LSEG, a global provider of financial market infrastructure and data.
The partnership will see SET adopt FTSE Russell's environment, social, governance (ESG) data model, replacing the current SET ESG Ratings by 2026. To ensure stakeholder readiness, a pilot phase will run from 2024-2025. This move aims to align the Thai capital market with international best practices for sustainability disclosure and investing.
Currently, SET ESG Ratings are voluntary for listed companies and are based on questionnaire responses and qualification requirements.
These ratings are approved by SET's Sustainable Investment Committee. In contrast, FTSE Russell's ESG Data Model assesses sustainability efforts using publicly available data. This methodology is already used to evaluate more than 8,000 companies in 47 countries, allowing investors to benchmark results against domestic and international peers.
The FTSE ESG Data Model is overseen by an independent advisory committee representing diverse stakeholders.
SET president Pakorn Peetathawatchai said that this partnership marked a significant milestone for the Thai capital market.
"It would encourage Thai listed companies to raise their sustainability practices to international levels and support investors in integrating ESG into their investment decisions, in line with sustainable investment trends," he noted.
Helena Fung, head of Sustainable Finance and Investment APAC at LSEG, pointed out that Thai listed companies would be empowered to benchmark their ESG practices against international standards through this collaboration.
"It will also significantly elevate the profile of Thai companies in the international ESG discourse, making them more relevant to discerning global investors," she added.
To support the transition, SET and FTSE Russell will conduct capacity-building workshops for listed companies and investors. A seminar titled "The Next Step for SET ESG Ratings: Preparing for FTSE Russell ESG Assessment" has been planned. Additionally, a knowledge base of guidelines on FTSE Russell's ESG Data Model scoring methodology will be created in Thai and English.
FTSE Russell's products are used by investors for comprehensive and transparent ESG assessments. Approximately $US15.9 trillion (728 trillion baht) is benchmarked to FTSE Russell indices, underscoring the global impact of this partnership on Thailand's capital market sustainability efforts.
