The report finds that of the 35 Asean banks assessed, all are not responding fast enough to these threats, based on the level of ESG integration as measured by a framework covering six aspects: purpose, policies, processes, people, products and portfolio.

Humanity stands on the edge of a precipice with the Intergovernmental Panel on Climate Change (IPCC) report issued in 2018 saying that there were 12 years left to limit global warming to 1.5°C and prevent a climate crisis.

The number of heatwaves hitting Europe and Asia-Pacific in recent months is testament that climate change is already disrupting our daily lives and business operations. Unfortunately, the Asean economy remains highly dependent on fossil fuels, which contributes significantly to greenhouse gas emissions. 91 per cent of the banks assessed have continued to finance new coal-fired power plants and are therefore fuelling the fire.

Coal is not the only problem. Rampant deforestation has exacerbated climate change and caused biodiversity loss, which threatens food security by disrupting essential ecosystem services such as soil fertility maintenance and pollination. The recent IPCC special report on land use and climate emphasises that sustainable land management alongside rapid decarbonisation of the energy system are critical to meet the 1.5°C goal of the Paris Agreement. SUSBA finds that only 9 per cent of banks assessed have no-deforestation policies, despite being home to some of the world’s deforestation hot spots in Greater Mekong, Sumatra and Borneo.

Southeast Asia is suffering from manifestations of climate change in the form of water-related disasters – from crops and manufacturing facilities being destroyed by floods in Thailand, Malaysia’s water resources expected to be reduced by 20-25 per cent from 2025 to 2030, to major coastal cities such as Jakarta being susceptible to rising sea level. Asean banks remain highly exposed, with just 17 per cent recognising risks of water, while none requires clients to conduct water-risk assessments.

Regulators understand the threat to financial stability and are responding. By the end of the year, seven banking associations or regulators in Asean will have issued sustainable banking guidelines. The central banks of Malaysia, Singapore and Thailand have joined the Network for Greening the Financial System (NGFS), established to enhance the ability of the financial system to manage climate risks and mobilise capital for sustainable development. The NGFS is recommending central banks and supervisors to better integrate climate-related risks into financial stability monitoring. Banks will increasingly be expected to test their resilience of their loan books to climate risks and report the results to the regulators.

374 financial institutions representing US$118 trillion of assets have endorsed the Task Force on Climate-related Financial Disclosures (TCFD), which has specific recommendations for financial institutions on climate disclosures. Asean banks have not made much progress to meet these expectations, with only three banks developing a strategy to manage climate-related risks or conducting climate-risk assessment.

Investors are increasingly engaging with banks on their management of climate and environmental risks. Alistair Thompson, director of First State Investments (Singapore) said, “The WWF Sustainable Banking assessment has proven to be a valuable tool for us in Asean. It allows us to track where progress is being made, or not, and the areas in which investors like ourselves can push for improvement. We have used it to engage in areas such as Thermal Coal and Palm Oil.”

SUSBA finds that of the 35 banks assessed, four banks from Singapore and Thailand met half-way the standards set by the indicators while 51 per cent reached less than a quarter. However, there is still progress with 74 per cent of the banks making some improvement compared to last year. In particular, the three Singapore banks have demonstrated leadership by prohibiting the financing of new coal-fired power plants and implementing no deforestation commitments. The uneven playing field undermines the region’s response to these impending threats as unsustainable activities continue to be financed.

“The prosperity of Asean’s economies is underpinned by the bedrock of natural capital which provides climate and air quality regulation as well as food and freshwater production. These are the basic necessities for our societies to thrive. Asean’s economies are very much interdependent, which magnifies the effects of climate change and environmental destruction. To ensure that the people of ASEAN have a secure future, Asean banks must be the lifeblood of sustainable development,” said Jeanne Stampe, WWF’s head of Asia Sustainable Finance.

Asean banks are also leaving money on the table by not actively supporting the urgently needed transition to a low carbon and sustainable economy. A DBS and UNEPFI study estimated the demand for green investment to be US$3 trillion from 2016 to 2030 in sectors such as infrastructure, renewable energy, energy efficiency, food, agriculture and land use. 51 per cent of the banks that offer green financial products have mostly focused on renewable energy, there remains a huge financing gap in the other sectors.

Encouragingly, some banks understand that there is no time to lose and are laying the foundations for good governance of ESG issues. 57 per cent of Asean banks have senior management oversight of ESG issues, nearly half of which have additional responsibilities over climate-related risks and opportunities. However, this needs to be translated down to sector policies based on science-based standards to ensure robust management of material ESG risks. Resources such as Asia Sustainable Finance Initiative (ASFI), a multi-stakeholder platform, can support banks with cutting-edge sustainable finance tools and capacity building.

Financial institutions need to work together on a pre-competitive basis to create a resilient financial sector that can support the region’s sustainable development needs and boost livelihoods. The Association of Banks in Singapore (ABS) has been facilitating peer-to-peer learning in cooperation with WWF to catalyse the transition throughout Asean.

Ong-Ang Ai Boon, director of ABS, said, “Banks in Singapore have been advancing their ESG integration and capacity building efforts following the issuance of the ABS Responsible Finance Guidelines in 2015 and are continuing to improve their practices. We are glad this progress is reflected in the SUSBA results and look forward to continue sharing our experience with our counterparts in the region”.

Deputy Prime Minister and Commerce Minister Jurin Luxanavisit said Prime Minister Prayut Chan-o-cha chaired the meeting, at which it was forecast that 3.9 million members of rice-farming families would be registered for the programme.

Cabinet approval will soon be sought for the rice guarantees in five types, Jurin said:

•    Rice grown at 15 per cent humidity will be priced at Bt10,000 per tonne with an income guarantee of not more than 30 tonnes per household or not more than 40 rai.

•    Glutinous rice is guaranteed a price of Bt12,000 per tonne, for not more than 16 tonnes per household or not over 40 rai.

•    Jasmine rice has been guaranteed a price of Bt15,000, not exceeding 40 rai or 14 tonnes per household.

•    Fragrant rice will be assured Bt14,000 per tonne, not more than 40 rai or not over 16 tonnes.

•    Pathumthani fragrant rice has been guaranteed a price not exceeding Bt11,000, not more than 40 rai or not more than 25 tonnes.

The committee assigned the Bank of Agriculture and the Agricultural Cooperatives and Commerce Ministry to prepare the details and a formal budget in accordance with the Financial Discipline Act.

Growers must register with the ministry’s Agricultural Extension Department before October 31, except those in the South, who have until February 28.

The Finance Ministry has proposed measures to improve production, harvesting and quality that would see farmers receive Bt500 per tonne, limited to 20 rai each. The committee assigned Finance Minister Uttama Savanayana to discuss the programme with the Budget Bureau, Jurin said.

Thai Rice Exporters Association president Charoen Laothammatas called the price guarantee a short-term measure to ensure farmers have a stable income, but in the longer term, the association expects the government to improve the quality of seeds and support farmers in producing higher-quality crops, and to expand their overseas markets.

Thailand exports 300,000 tonnes of rice annually to Japan and on average 800,000 tonnes to Iraq and Iran. It also has a government-to-government contract with China to ship up to two million tonnes there. Already 1.7 million tonnes have been sent and the remainder will be delivered later this year.

Charoen said global rice production for 2018-2019 dropped by 760,000 tonnes – about 0.15 per cent – from 2017-2018.

The global export market declined 4.9 per cent between January and August, when Thailand shipped 5.27 million tonnes, down from 6.15 million tonnes or 22.4 per cent compared to the same period last year.

The value of exports in that same period this year was Bt88 billion, down nearly 17.1 per cent, he said.

Thailand ranked second in the world for rice exports in those eight months, behind India.

While global oil prices dampened exports of oil-related products, practical proactive export strategies are likely to balance negative impacts from the US-China trade dispute. In the first seven months of 2019, Thai exports contracted 1.9 percent.

Diversity of exports including agricultural and food products, lifestyle products related to tourism and rising industrial products appear likely to help Thai exports for the rest of 2019. Together with government stimulus packages in many countries, new export promotion schemes endorsed by a Joint Public and Private Consultative Committee on Commerce, would gradually boostThai exports in the fourth quarter of 2019.

Thai exports to most major trading partners markets, for example, US Japan Hong Kong, Taiwan, and China, include fresh, frozen, and processed fruits as well as automobiles. Exports to India remain robust but those to CLMV (Cambodia, Laos, Myanmar, and Vietnam) and ASEAN contracted because of oil and oil-related products.

Growth of agricultural and agro-industrial products returned to positive growth and stood at 1.4 per cent,” the ministry said. Top performers that still expanded favourably were fresh, frozen, and processed fruits (+26.1 per cent), rubber (+9.6 per cent), cassava products (+8.7 per cent), and fresh, frozen, and processed shrimps (+7.3 per cent).

Meanwhile, exports of some major products declined, for example, rice (-27.2 per cent), sugar (-25.4 per cent), and canned tuna (-13.6 per cent). In the first seven months of 2019, agricultural and agro-industrial products contracted 1.7 percent.

In contrast, industrial products remained positive for a second consecutive month. Top performers are gold (+406.9%), cosmetics, soaps, and skincare products (+17.0 per cent), and air-conditioners (+4.2 per cent). However, some industrial products decreased, for example, oil-related products (-14.2 per cent), computer and parts (-5.9%), automobiles and parts (-2.9 per cent). In the first seven months of 2019, industrial products contracted 1.4 percent.

Despite a variety of challenging factors in common with other export-oriented countries, many positive factors are likely to strengthen and improve Thai exports namely new rising -star products, the opportunity to substitute products subject to retaliatory measures in US and China markets, expansion of tourism related products, potential exports to new areas according to customized strategies, and new export promotion schemes underway endorsed by a Joint Public and Private Consultative Committee on Commerce. Last but not least, expansionary monetary policy would also diminish the baht-appreciation effect in the fourth quarter of the year 2019.

The department advisor of fiscal and financial system development, Yanee Sangsrichun, on Wednesday said that from October 1, 2018 through July 31, 2019, Bt2.2 trillion of the Bt2.52 trillion total fiscal budget for the year had been spent – about 87.01 per cent.

This can be separated out to the current expenditures worth Bt1.75 trillion, the investment budget worth Bt441.7 billion, as well as Bt297.02 billion for the budget for overlapping years, said Yanee, who is also spokesperson for the department.

The government has tried to speed up spending of the remaining budget for the remaining two months of the fiscal year, August and September, Yanee added.