Fair Finance Thailand publishes its 5th policy assessment

30 March 2023

Fair Finance Thailand’s policy assessment 2023 examined the policies of 11 Thai financial institutions, including eight of Thailand's largest commercial banks and three state-owned specialized financial institutions. This is the fifth year that the Fair Finance Guide methodology has been applied to Thai banks across 8 categories using publicly available data from the banks.

The results of the Bank's 2023 Policy Assessment shows that many commercial banks have improved their credit policies and their exclusion lists are clearer every year. There is also a notable increased emphasis on businesses that have significantly impacted climate change, with announcements by  some that they will not provide financial support to coal-fired power generation and coal mining businesses, and the setting of clear targets to gradually reduce loans for existing coal-fired power plants and coal mines to zero by 2030.

Commercial banks have begun to intensify human rights practices. The methodology declares that banks should respect human rights in accordance with the United Nations Guiding Principles on Business and Human Rights. The United Nations Guiding Principles on Business and Human Rights (UNGP) covers KBank's business customers (i.e., they must respect human rights under the UNGP Guiding Principles), whereby KBank's business customers must have human rights remediation procedures available and operational complaint mechanisms that would allow individuals and communities that may be affected by investments should be established.

Meanwhile, state-owned banks and state-owned specialized financial institutions have made interesting developments. In particular, banks have been emphasizing issues around labor rights and gender equality, such as the announcement that KBank's customers must not only comply with labor standards in accordance with labor laws, but also comply with labor standards. However, in accordance with labor laws there must be a clear management system to monitor and correct such poor behavior. The announcement of a zero-tolerance policy in the workplace, including on verbal, physical and sexual harassment, as well as disclosure of gender pay gaps should also be enacted.

In the consumer protection category, Thai banks also scored quite high compared to other categories especially since the first year of the assessment. However, it should be noted that the evaluation criteria in this category does not cover much of the Bank's online banking services or mobile applications. Therefore, the score does not reflect whether Thai banks have adequate policies to deal with the problems faced by mobile or online banking users (as of the end of 2022, the Fair Finance Guide was in the process of updating the evaluation criteria in this category to cover more mobile and online banking services).

Download the report (in Thai) here.

To see the banks assessment scores go here.