Pursuant to the SEC’s rules, all Thailand ESG Funds are required to invest in companies operating sustainably and receiving SET ESG Ratings as eligible assets* at an average proportion of at least 80 percent of the NAV during any financial year. This is part of the mechanism driving Thailand’s sustainable development. However, in any event that an asset management company considers that any company has inappropriate corporate governance practice despite having received SET ESG ratings, as required, the asset management company must exercise its fiduciary duty and not consider such company as eligible asset for ESG investment in the average proportion of 80 percent of the NAV. In any case, the remaining ESG investment must remain in compliance with SEC’s investment rules for Thailand ESG Funds.

In any event that an investee company is found to be lacking sustainability qualifications according to the rules governing Thailand ESG Funds, such investee company may remain in the Thailand ESG Fund portfolios as non-eligible assets at an average proportion of not more than 20 percent of the NAV during any financial year.  

At the end of May 2024, all Thailand ESG Funds have the collective NAV of 6,844 million baht. Of this, the investment value of EA shares totaled 24 million baht, accounting for 0.35 percent of the total NAV of all Thailand ESG Funds. The public can rest assured that all Thailand ESG Funds comply with the SEC’s investment rules regardless of EA shares not considered eligible assets for Thailand ESG Funds.  

For other mutual funds, the investment value in EA securities is equivalent to 0.06 percent of the total industry AUM. In all cases, asset management companies must exercise caution when considering appropriate investments. 

Mrs. Waratchya Srimachand, SEC Deputy Secretary-General, said: “Today, the Stock Exchange of Thailand (SET), by the Sustainable Investment Committee, has resolved to remove EA securities from the SET ESG Ratings List due to the company’s failure to meet the criteria. However, this will not affect investments of Thailand ESG Funds under the specified criteria. The SEC has been monitoring the situation and found that Thailand ESG Funds as well as other types of mutual funds have only a small proportion of investment in EA securities comparing to the AUM of the whole industry. But in any case, asset management companies must exercise discretion when selecting companies to invest, as deemed appropriate.” 

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Remarks: 
* The investment rules of Thailand ESG Funds require investment in assets issued by the Thai public sector or businesses established under Thai law, with an average investment proportion of at least 80 percent of the NAV during any financial year. Such eligible assets are: 
(1) Listed securities on the SET or the Market of Alternative Investment (mai), as follows:  
        (1.1) Being selected by the SET for outstanding aspects in Environment or ESG, and/or; 
        (1.2) Having disclosed information on greenhouse gas (GHGs) emission, the management plan, and the goal of GHGs emission reduction for Thailand, and having been reviewed by Carbon Footprint Reviewer, and/ or;   
(2) Green, Sustainability, and Sustainability-linked bonds * and/or
(3) Digital tokens for fundraising related to sustainability, which the SEC will further specify related regulations.