Thailand’s private sector at the centre of our shared net-zero ambitions and green growth

Asia is home to more than half the world’s population and is now responsible for more than half of global primary energy consumption. This remarkable shift was accelerated over the last three decades, as the region catalysed economic ambitions into accelerating growth. Rapid growth has seen Asia's emissions burden soar alongside its economic fortunes.

Thailand, as one of the largest economies in Southeast Asia, has contributed substantially to the region's growth and energy consumption. According to the International Energy Agency (IEA) Thailand's share of primary energy consumption in Southeast Asia accounts for approximately 20%, making the country the second-largest energy consumer in Asean after Indonesia, and the fourth-largest emitter of greenhouse gases (GHG) in the region. While Thailand’s GHG emissions per capita are slightly above the regional average, it remains lower than many Western countries.  

Thailand’s energy demand paints a telling picture of the impact of regional expansion in recent decades. Over the past decade, the country's primary energy demand has grown at an average annual rate of 3.2%, which is higher than the global average of 2.3%. Thailand is a country whose power is, quite literally, on the rise.

The pivotal role Thailand plays in global supply chains is a testament to the country's complex economic balance, creating a complex web of interregional embedded emissions. As a result, Thailand finds itself at the forefront of the global climate crisis, both as one of the most vital engines for global economic growth and as one of the most vulnerable countries to the impacts of unchecked emissions growth.

The world is already struggling to align with the necessary changes to achieve the vital 1.5°C Paris Agreement pathway—a fact laid out in stark words in the recent IPCC Sixth Assessment Report. The implications for Thailand on its current trajectory are extreme, with our research revealing that a severe increase of 3.2°C would take a toll on its agricultural and tourism sectors, which contribute to 8% and 18% of the country’s GDP respectively, and employing more than half of the workforce collectively. The economic impact stands alongside far-reaching social and health considerations.

Thai companies have a unique responsibility to accelerate change, but they also stand to reap enormous benefits from making lasting corporate climate action. The World Economic Forum’s whitepaper “Accelerating Asia’s Advantage: Your Guide to Corporate Climate Action” in collaboration with the Boston Consulting Group (BCG) and SAP explores this critical imperative for change, and the remarkable business benefits which could be unlocked across the country. 

The report shows that Asia could unlock 43% of the USD$10.1 trillion – a stunning $4.3 trillion – revenue opportunity available by 2030 from activities like the expansion of renewable power, energy efficiency in buildings, transportation and agriculture, as well as greater circularity in producing industries. The story of jobs growth is equally compelling, with more than half (58%) of the 395 million jobs required to service the opportunities situated in Asia. 

Big business brings big responsibilities for Thailand’s growth story

Thai companies have an essential role in realizing this opportunity and tackling overarching climate risks. They will need to implement processes to adapt to a warming world while mitigating the impacts of an expanding climate crisis.

The direction of travel is already apparent. The Science Based Targets initiative (SBTi) reveals that in 2019, net-zero pledges covered just 16% of the global economy. As we look at the landscape today, that figure has reached 90% of global GDP, reflecting a powerful transformation in global attitudes towards addressing climate change. However, as of April 2023, there were only 17 Thai companies that have made commitments to set science-based targets through SBTi and had them approved.

Like the nuanced challenges faced by nations across the region, there is no single response which is sufficient to holistically address the complex challenges corporations face. Companies will need to define and implement both adaptation and mitigation strategies formed around best-practice experience and a deep understanding of corporate climate action. 

Recognizing these complex challenges, the whitepaper presents a new Corporate Action Framework which outlines short, medium, and long-term best practices to steer a strategic journey for companies regardless of industry or size. The new report also provides clear case studies of Asian businesses who are driving tangible climate outcomes across key industries, including real estate, energy, transport, and agriculture. 

The approach incorporates the need for immediate action that prioritises climate action across the organisation. It seeks to enable transformation by mobilising an organisation and supporting the ecosystem to action change. Finally, it looks to unlock new growth in both existing and emerging value chains, empowering corporations across Thailand to capture their own share of the multibillion-dollar value unlocked by this vital transition. 

The report, and indeed the evidence, is clear— unmitigated climate change is the biggest threat of our generation to our companies, communities, and countries. Corporate inaction on climate has a negative business case while timely corporate climate action will yield tremendous growth opportunities. It’s time for Thai corporate leaders to make bold changes for the good of their business, the nation, and the region. 

Authors
•    Benjamin Fingerle, Managing Director and Partner, Boston Consulting Group
•    Paul Marriott, President, Asia-Pacific Japan, SAP