Krungsri transforms green finance with ESG - pushing SMEs towards sustainability

Duangkamol Limpuangthip as Head of SME Banking Group, Bank of Ayudhya Public Company Limited, said at the Krungsri-MUFG ESG Symposium 2024, a seminar under the topic Transition in Action on the topic of transforming SMEs into green businesses, that a green business is a business that aims to reduce negative impact on the environment and promotes the sustainable use of resources. There is a clear and concrete strategy and goals, but most of the SME sector currently does not have much memory of it.

It is about to transition to a green business. Nowadays, there is a great need to enter the green business. Because environmental risks have an impact on Financial risks that will greatly affect SMEs or most businesses include:

1. Market risk

2. Credit risk

3. Liquidity risk

4. Operational risks

This is in line with the Thailand Taxonomy guidelines, grouping activities according to their level of sustainability, divided into green activities with net greenhouse gas emissions close to or equal to Current center, yellow, activities that are being adjusted to reduce greenhouse gas emissions, and red, activities that are clearly not environmentally friendly. unable to adapt This management approach will play a huge role in managing more and more businesses, including SMEs.

In addition, business opportunities that pay attention to ESG have a higher value. Increased profits, shorter payback period, which consumers are willing to pay more to buy products and services that are ESG-conscious, up to 90%. In the case of a product priced at 100 baht, they are willing to pay an additional 12.40 baht. Brands that express that Caring for the environment can increase consumer brand loyalty by more than 50% and will still show loyalty. Even though faced with additional costs in terms of price, opportunity cost, and effort, 72% bought the same brand even though the price was higher than the market price. 52% did not switch to another brand. Even though the offer is much better, 69% are interested in regularly participating in brand events.

Transforming into a green business

SMEs must have knowledge and understanding, with 74% of SMEs still lacking knowledge and understanding about ESG, with only 14% applying ESG. Businesses that want to adapt to green business have recommended steps towards green business.

1. Set organizational boundaries and carry out work. Establish a working group to identify sources of greenhouse gas emissions that can be included in Scoop.

2. Data collection and collection Collect electrical activity data water or energy

3. Calculating the amount of greenhouse gases Activity information

4. Summarizing results and reporting results Analysis of emissions sources Greenhouse gases from various activities Find management guidelines to reduce emissions.

5. Verification to obtain environmental label certification

Krungsri Bank supports businesses towards sustainability whether it is Finance for sustainability Environmental Sustainability loans for SMEs and promote the Krungsri ESG Awards and Krungsri ESG Academy projects as well as partners for the Ecosystem and ESG Community.

All of this is pushing SMEs to have access to green finance by using ESG as a goal and applying it to organizations and businesses, whether in various sectors, to be able to make a sustainable transition.