PPTV HD 36 had the opportunity to interview Dr Srikanya, GPF Secretary, who established the root of selecting environmental, social and governance (ESG) companies in GPF's 1.2 trillion baht portfolio.
Investing in ESG stocks or companies continues to be an investment topic attracting the attention of investors around the world as awareness of climate disasters increases the likelihood of high-risk crises. Which may have a greater impact on our world than we think, especially with regard to environmental and social changes. Many companies have adjusted their big goals to achieve greater business and societal sustainability.
Keep an eye on Thai ESG funds, which are expected to drive 20 billion baht into the Thai stock market.
Cabinet approves a 30% tax exemption on purchases of Thai ESG funds not exceeding 100,000 baht.
At the same time, more and more investors are using ESG criteria or factors to make investment decisions, or standard GPF-ESG criteria, along with business numbers that are considered fundamental factors. Help support long-term ROI (long-term return on investment) by focusing on financial returns while giving importance to creating good impacts on society. Achieving sustainable investment goals
Such as the Government Pension Fund (GPF), which includes important generals such as Dr. Srikanya Yatip, Secretary General, GPF. Who gave an interview to PPTV and clearly announced the point of applying
Investment cannot destroy the environment and only bring profits. Because in the end there will be no good investment because it will all be destroyed.
Therefore, GPF, as a large institutional investor you can see here. We believe that investing in this way will help create good financial returns for members in the long term. While maintaining a balance between maintaining capital security and generating returns from investments within acceptable risks. In addition to its positive effects on society and the environment
Balancing both ESG return and financial return to create a balanced return because the ESG return of some companies may be good today but the financial return may not be so good. But if we believe that the future will come and it is likely to be good, then we are also willing to invest like using electric power. The future will definitely come. We are ready to invest.
What are the indicators for selecting both stocks and bonds in a portfolio?
Dr. Srikanya Yatip, Secretary General, GPF. He said the GPF introduces ESG criteria and assessment results into the investment analysis and decision-making process as well as analyzing fundamental factors and financial positions of both domestic and foreign investments.
Starting with selecting the external managers who come in to manage the fund. The selection criteria for ESG issues are clearly defined. Following the selection of the External Fund Manager, the GPF will meet and discuss (engage) with the Executive Directors of the External Manager on ESG operational issues in order to catalyze and enhance the implementation of ESG practices in accordance with the Agreement and the GPF Framework. The performance of external fund managers will be taken into account as one of the issues in evaluating the performance of external managers.
However, as of today, 100% of the Government Pension Fund (GPF) portfolio is ESG since the end of 2022. The portfolio is valued at 1.2 trillion baht.
To look at GPF's ESG criteria (GPF-ESG Standard Criteria) in order to find combinations of securities to add to the portfolio, they are divided into 3 groups:
Level 1: Positive List
It refers to securities of companies that have fully complied with the GPF's standard ESG evaluation criteria or have performed better than the specified criteria. There is a future trend for operations that are compliant with or better than GPF's ESG benchmarks, and it is very likely that the securities of any company in this group will be selected by GPF for inclusion in an ESG-focused portfolio. (ESG).
Level 2
Refers to securities of companies that GPF has evaluated and found to pass GPF's ESG assessment criteria in important respects. There may be some inconsistent conditions but it is not important. There is a tendency to continually develop or improve processes that support responsible business behaviour. Which corporate securities in this group have a low-medium probability of being selected by GPF in the ESG-focused portfolio?
Level 3: Negative list
Refers to a business that GPF has assessed and found to not pass GPF's standard ESG assessment criteria in material respects, and the company is likely to conduct business and operate as it has always done, with no inclination to make changes to resolve the issue. Problem or prevent problems that create obstacles to being a responsible business operator.The securities of any company in this group do not have the opportunity to select a GPF in a portfolio fund focused on ESG.
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