Responsible Lending

The Bank integrates Environmental, Social and Responsibility (ESR) Policy into our Corporate and SME lending policy as the Bank recognizes the potential impacts on the economy, environment, and society as well as Bank’s reputation from our financing activities. The ESR Policy is in alignment with international standards such as Equator Principles and IFC standards.

The ESR Policy is established to ensure that:

  • Environmental and social risks are taken into consideration, properly assessed and managed within the Bank’s risk appetite;
  • The Bank does not deal with clients whose business activities do not comply with the principles set out in the Policy; and
  • All relevant staffs are equipped with good understanding and capabilities are built up to support the Bank’s ESR principles.


ESR Management Process


1. Screening transactions

Conduct a screening of the project against the Bank’s Exclusion List to ensure that the Bank will not involve in the prohibited businesses.

2. Environmental and social due diligence

The due diligence is performed through a site visit to engage with clients on the E&S risks. Clients are requested to complete the General and Specific Questionnaires targeting to establish understanding of the environmental and social risks. . The General Questionnaire is used to assess the environmental and social risks in general, depending on the nature of the activities and business while the Specific Questionnaire is used to assess the environmental and social risks on specific industries as stipulated. T he environmental and social risks should be considered on both client activities and financing purpose.

At this stage, the Bank reviews the project's compliance with applicable national environmental and social regulations and international standards and reviews environmental and social issues that may potentially arise to non-compliance.

3. Decision making process

The environmental and social risks assessment, completed prior to pursuing potential deals, is an integral part of credit approval process.  Upon completion of the General Questionnaire, a risk rating will be generated. All medium and high risk credit applications, evaluated from environmental and social risks assessment, without proper risk mitigation are not allowed to further proceed for credit approval.

4. Monitoring

The purpose of monitoring a client's environmental and social performance is to assess existing and emerging environmental and social risks associated with a client's operations during the transaction. Once a transaction has been approved, the Bank needs to monitor the client’s ongoing compliance with the environmental and social clauses stipulated in the legal agreement. As environmental and social risks or compliance status may change from the time of transaction approval, the monitoring process requires a periodic environmental and social review as part of annual credit review. Monitoring Checklist is used for this process.

Furthermore, the compliance with ESR Policy in the credit approval process is assessed when performing credit review by Independent Credit Review Function.

5. Reporting

The business units to report internally to senior management on the sustainability performance of clients in ESR portfolio. The business units should document all findings from the due diligence, which will be considered during the decision-making process before proceeding a transaction.

Periodic assessment on the environmental and social performance of transactions and measures taken to reduce environmental and social risks is reported to the management to give the Bank a better understanding of its overall exposure to environmental and social risk through its portfolio.


Environmental and social issues of concern Sector specific guideline Exclusion list
  • Environmental issues
  • Human and labor rights
  • Land acquisition and involuntary resettlement
  • Community health, safety and security
  • Indigenous people
  • Cultural heritage
  • Animal testing
  • Defense/controversial weapons
  • Fur
  • Genetic engineering
  • Forestry and plantations
  • Natural resources and chemicals
  • Production/trade in alcoholic beverages
  • Production/trade in tobacco
  • Production/trade in radioactive materials
  • Production/trade in or use of unbounded asbestos fibers
  • Drift net fishing
  • Gambling, casino and equivalent enterprises
  • Nuclear energy
  • Pornography
  • Trade in wildlife and/or wildlife products
  • Production or trade in any product or activity deemed illegal under Thai laws or regulations or international conventions and agreements, or subject to international bans, such as pharmaceuticals, pesticides / herbicides, ozone depleting substances, polychlorinated biphenyl (PCB), wildlife or products regulated under Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).
  • Weapons and munitions *
  • Alcoholic beverages, excluding beer and wine *
  • Tobacco *
  • Radioactive materials (excluding for the purchase of medical equipment, quality control equipment and any equipment where the Bank considers the radioactive source to be trivial and / or adequately shielded)
  • Unbounded asbestos fibers (excluding for the purchase and use of bounded asbestos cement sheeting where the asbestos content is less than 20%)
  • Drift net fishing in the marine environment using nets in excess of 2.5 kilometers in length.
  • Palm oil activity
  • Production or activities involving harmful or exploitative forms of forced labour / harmful child labour
  • Commercial logging operations for use in primary tropical moist forest
  • Production or trade in wood or other forestry products other than from sustainably managed forests

    Note: *This does not apply to clients who are not substantially involved in these activities. ‘Not substantially involved’ means that the activity concerned is ancillary to a client’s primary operations.


Environmental and social issues of concern

Environmental issues

  • Clients are required to comply at a minimum with national environment laws pertinent to the business in which they operate. The Bank should not provide funding /services to entities which do not comply with the local regulations unless there are evidences that they are undertaking to improve / rectify their facilities / activities to meet the local environmental standards and / or regulations.
  • For a transaction / engagement that may have an impact on the environment, the relevant Credit Approval Authority may decide on a case-by-case basis whether an environmental audit conducted by a third party is required. In such a case, financing will only be allowed when the results of the audit confirm compliance with applicable (local and / or international) regulations.
  • Using environmental responsibility of the clients as one of the facility granting criteria should bring businesses into looking beyond short-term gains and more into the long-term profits and sustainability of their businesses.

Human and labor rights

  • The Bank shall not provide any funding or services to clients whose activities involve human and /or labour rights abuses and / or where such violations exist or are evident in their operations. Assessment of a client’s business operating atmosphere and evidences of its ability and willingness to improve socio-environmental situations is a must.
  • Assessment of a company’s employment relationship can be done through a number of aspects, which include but are not limited to, the following:
    • Working conditions: good physical working conditions may include (where applicable) and adequate safety measures.
    • Terms of employment:  include wages and benefits, number of working hours, compensation for overtime, leave term for illness, maternity leave and / or holidays. The workers should also have equal opportunity and non-discrimination for their remunerations regardless of gender (equal pay for equal work) for full range of payments and benefits in the terms of employment. Under this aspect, the business should at a minimum meet the national labour laws.
    • Employment of forced labour or child labour: the business must not employ force, penalty, or abusive threats (physical and non-physical) on the workers. The business cannot employ children in economical unfair manners or in a condition that will likely be harmful to children in accordance to local laws.
    • Supply chain: the Bank should consider if there any evidence in supply chain that may be result of sub-standard labour practices.

Land acquisition and involuntary resettlement

  • If a client’s operations involve land acquisition and resettlement (physical and economic displacement), this should be carefully managed to prevent the likelihood of hardship and impoverishment for affected persons and communities.
  • Involuntary resettlement should be avoided or at least minimized. However, where it is unavoidable, appropriate measures to mitigate adverse impacts on displaced persons and host communities should be carefully planned and implemented with appropriate disclosure of information, consultation, and the informed participation of affected persons. This includes implementing the following actions:
    • Compensation and benefits for displaced persons: When displacement cannot be avoided, the client will offer displaced persons and communities compensation for loss of assets at full replacement cost and other assistance to help them improve or at least restore their standards of living or livelihoods.
    • Grievance mechanism: The client needs to ensure that a grievance mechanism is in place to receive and address specific concerns.
    • Social impact assessment, resettlement planning and implementation: Where involuntary resettlement is unavoidable, the client will conduct a census to identify the persons who will be displaced by the project, understand the likely impacts on the affected persons and community, develop entitlement framework and determine who will be eligible for compensation. Free, prior, and informed consent (FPIC) from affected people must be uphold.
    • Physical displacement: If people living on the site of a client’s operations must move to another location, the client will: i) offer displaced persons choices among feasible resettlement options, including adequate replacement housing or cash compensation; and ii) provide relocation assistance suited to the needs of each group of displaced persons, with particular attention paid to the needs of the poor and the vulnerable. New resettlement sites built for displaced persons will offer improved living conditions.
    • Economic displacement: If land acquisition for the client’s operations causes loss of income or livelihood, the client will promptly compensate these persons.
    • Government-managed resettlement: Where land acquisition and resettlement are the responsibility of the government, the client needs to collaborate with the responsible government agency to the extent permitted by the agency to achieve outcomes that are consistent with best international practice.

Community health, safety and security

  • It is also the client’s responsibility to avoid or minimize these risks and impacts that may arise from operations. This includes implementing the following actions:
    • Consultation and grievance channels
    • Infrastructure and equipment safety
    • Hazardous materials safety
    • Environmental and natural resource issues
    • Community exposure to disease
    • Increase in traffic
    • Emergency preparedness and response
    • Use of security personnel

Indigenous people

  • A client should ensure that during the course of operations, the identity, culture and natural resource-based livelihoods of Indigenous Peoples are respected and exposure to impoverishment and disease is prevented. This includes implementing the following actions:
    • Avoid or minimize adverse impacts
    • Free, prior, and informed consultation and consent
    • Sharing development benefits
    • Traditional or customary lands and minimize the impacts on these lands
    • Relocation of indigenous peoples must comply with best international standards in case relocation is unavoidable.

Cultural heritage

  • Consistent with the requirements of the Convention Concerning the Protection of the World Cultural and Natural Heritage, a client is required to avoid significant damage to cultural heritage due to their business activities.
  • Impacts on cultural heritage typically involve the following:
    • Chance finds. During the construction of a client’s facility(s), there may be physical impacts on previously unknown or undocumented resources that were fully or partially buried prior to the start of construction.
    • Incorporate community input from engagement and collaboration between clients and communities into the decision-making process.
    • Removal of cultural heritage should only be done if the client can demonstrate that the overall benefits of operations at a particular site outweigh the anticipated loss of cultural heritage.
    • Legally protected cultural heritage areas by promoting and enhancing the conservation of the area.
    • Use of cultural heritage by providing fair and equitable sharing of benefits from the commercialization of their cultural heritage.


Sector Specific Guideline

1. Animal testing
The Bank does not finance companies or organizations that involve either directly or indirectly in animal testing for ‘cosmetic purposes. However, the Bank allows financing for companies or organizations that involve in animal testing for medical purposes only, provided that the business is granted the required licenses / permits.

2. Defense/controversial weapons
In any case, the Bank will not engage with companies that itself directly involved in Controversial Weapons whereas having activities related to producing, designing, developing, testing, researching, modifying, upgrading, servicing, maintaining, sustaining, stockpiling, supporting, trading of, and providing training, or (brokering, shipping or advisory) services regarding Controversial Weapons or Key Components thereof.

The term Controversial Weapons includes i) anti-personnel landmines, ii) cluster weapons, iii) biological or chemical weapons, iv) depleted uranium or plutonium weapons, and v) nuclear weapons.

Key Components" are all kinds of materials, parts, and substances, (mechanic, electronic and digital) systems, devices, infrastructures, ancillary constructions (such as vehicles, vessels, aircrafts, carriers, missiles, launchers, and pods), services and programs, which can be considered dedicated to Controversial Weapons.

3. Fur
The Bank neither finances fur farms, the manufacturing nor trading of fur products in any case.  However, the Bank may finance a business with retail sales of fur products accounting for not more than 5% of its total sales provided that it operates the fur business in line with relevant local laws.

4. Genetic engineering
The Bank will finance entities that are involved either directly or indirectly in Genetic Engineering or Genetic Modification (GM) activities ONLY if the GM activities are performed on plants and / or animals BUT not on humans AND that the results or usage are proven not to be harmful to humankind nor used immorally.

5. Forestry and plantations
The Bank does not finance a transaction, which may have impacts on bio-diversity, the presence of unique eco-systems, the important function of the forest and the importance of the forest to the traditional local community and / or culture or tropical rainforest, nor does the Bank finance a transaction when such transaction / engagement / operation site / activity and / or plantation is located inside or overlapping with a national protected area.

6. Natural resources and chemicals
The natural resources and chemicals business in this Policy covers 3 sectors: 1) up- and downstream oil and gas activities; 2) exploration and development of mines, quarries, and / or processing of metallic and / or non-metallic minerals, etc.; and 3) chemical processing (e.g., dying of textiles) and development activities.

The Bank does not finance a transaction if the production / process and / or the natural resources and chemicals used / to be used in the proposed transaction / engagement have a negative impact on the environment or critical natural areas, UNLESS the methods used in each process meet at least the local industry standards, applicable environmental and social regulations and permit requirements in order to prevent and / or minimize any negative impacts.  If required by the industry standards or relevant regulations, an Environmental Impact Assessment (EIA) from a certified assessor must be provided, evidencing limited impact.

7. Production/trade in alcoholic beverages
The Bank does not finance an entity that involves in illegal production, trade or sale of alcoholic beverages, e.g. no license / illegal distillers, smuggled goods, companies involved in tax evasion. However, the Bank may do business with clients involved in the legal and socially responsible production, trade and sale of alcoholic beverages.

8. Production/trade in tobacco
The Bank does not finance illegal production, trade or sale of tobacco, e.g. smuggled goods, companies involved in tax evasion.   However, the Bank may do business with clients involved in the legal and socially responsible production, trade and sale of tobacco.

9. Production/trade in radioactive materials
The Bank does not finance any entity that involves in production and / or trade of radioactive materials.  However, this does not apply to the purchase of medical equipment, quality control (measurement) equipment and any equipment where the Bank considers the radioactive source to be trivial and / or adequately shielded.

10. Production/trade in or use of unbounded asbestos fibers
The Bank does not finance the production, trade, or usage of unbounded asbestos in any case.  However, the Bank can provide financing for the purchase and use of bounded asbestos cement sheeting where the asbestos content is less than 20%.

11. Drift net fishing
The Bank does not finance any business / transaction that employs drift net fishing that is longer than 2.5 kilometers.

100% of corporate and SME lending (including project finance) has been screened and complied with ESR Policy.


Green Bond

The Bank is the first Thai commercial bank to issue Green Bond with International Financial Corporation, a member of the World Bank Group (IFC) as sole investor. The proceeds raised from USD 60 million Green Bond (approximately THB 1.8 billion Baht), with a 7-year tenor, have been used exclusively to finance climate- smart projects, particularly renewable energy and energy efficiency projects, in line with the Bank’s green lending expansion plan. It will also provide an alternative source of long-term green finance in the country. Moreover, the Bank will also issue a second bond, raising USD 90 million from IFC, to support SME lending program and increase access to finance for Thailand’s SME, a key contributor to Thailand’s economy.



13.8% ESG based fixed income issued per total fixed income products issued in 2018 which accounted for green bond, SME bond, and other ESG based fixed income products


32,407 tonnes estimated GHG emission reduction per year from green bond