Capital with Purpose: When Markets and Communities Grow Together
Updated: Oct 15
Published: 23 October 2026
Author: Dr. Kritsana Thiraphonphiphat Vice President of Social Value Thailand Association
As Sustainable Finance Grows, Who Actually Benefits?
Nearly one trillion baht demonstrates success in raising capital. But does it also demonstrate success in sustainable development?
Thailand’s ESG bond market grew from approximately THB 23 billion in 2019 to an outstanding value of around THB 978 billion at the end of 2025. This reflects the progress of Thailand’s capital market in connecting finance with environmental and social goals.
Yet growth in capital does not necessarily translate into growth in social value. The challenge is therefore not simply “How much capital have we raised?” but “Whose lives has that capital changed, how has it changed them, and can the outcomes be demonstrated?”
This is the central challenge of moving from capital mobilisation to genuine value creation, enabling capital markets to become a practical driver of sustainable development.
From Lending to Capital Markets: Sustainability Is Becoming Part of the Financial Framework
Understanding sustainable finance requires looking at both lending and capital raised through financial markets. In financial terms, money markets generally involve short-term funding, while capital markets involve equity and long-term debt instruments. Financial institutions provide both short-term and long-term loans. Advancing sustainability therefore involves multiple channels within the financial system.
For financial institutions and creditors, the Sustainable Banking Guidelines: Responsible Lending provide guidance on incorporating environmental, social, and governance (ESG) factors into lending policies and managing the impacts of lending. The Bank of Thailand has also issued policy guidance for financial institutions to integrate environmental and climate considerations systematically into their business operations.
At the product level, sustainability-linked loans connect a borrower’s sustainability indicators and targets with the financial terms of a loan. This requires indicators that are material to the business, appropriate targets, and monitoring processes consistent with the relevant principles.
For example, borrowers and lenders may agree to include greenhouse gas reduction targets or social targets relevant to the business in a loan agreement. The specific terms depend on the product and the individual agreement.
In capital markets, sustainability is advanced through both disclosure standards and investor action. Institutional investors, in particular, can establish investment selection policies, monitor performance, and communicate their expectations to investee companies. The Thai Securities and Exchange Commission’s Investment Governance Code for Institutional Investors (I Code) encourages investors to consider ESG alongside returns and risks and to engage with companies to address areas of concern.
These changing expectations require businesses to explain their sustainability goals, the progress they have made, and the evidence supporting their claims. These answers matter to both lending assessments and investment decisions.
Thailand’s Capital Market: From Developing Instruments to Delivering Sustainable
Outcomes
Over the years, Thailand’s capital market has steadily built its sustainability foundations through disclosure standards, ESG assessments, and financial product development.
Disclosure: The Securities and Exchange Commission has developed reporting principles based on the ISSB standards, IFRS S1 and IFRS S2, taking a climate-first approach and progressively expanding requirements according to companies’ readiness. The aim is to provide investors with better information for assessing business risks and opportunities.
ESG assessment: Assessing and disclosing performance helps companies identify areas for improvement and gives investors information to support investment selection. However, scores and ratings must be considered alongside the details of business practices and actual outcomes.
Financial products: Sustainability-focused bonds and funds create additional channels for connecting investment with business activity. Their value, however, depends on their objectives, conditions governing the use of funds, and verifiable evidence of progress.
These developments show that the task for Thailand’s capital market is not simply to offer more sustainability instruments, but to ensure that those instruments deliver tangible outcomes and create real value for the economy, society, and the environment.
Thailand Taxonomy: A Common Language for Businesses and Finance Providers
Another mechanism connecting lending and capital markets is the Thailand Taxonomy, a classification system for economic activities based on environmental criteria. It provides businesses, financial institutions, and investors with a shared reference for determining whether activities align with environmental goals.
For a business seeking finance to improve its production processes, the taxonomy helps clarify discussions with finance providers: which activities will be improved, what criteria must they meet, and what evidence is needed to demonstrate alignment?
Most activities use a classification system of green for activities aligned with environmental goals, amber for activities transitioning under specified conditions, and red for activities that are not aligned. Agriculture uses a practice-based approach. The framework also incorporates the principle of Do No Significant Harm to other environmental objectives and minimum social safeguards.
Published in May 2025, Thailand Taxonomy Phase 2 expanded coverage to agriculture, construction and real estate, manufacturing, and waste management, providing clearer reference points for transition in these sectors.
The taxonomy therefore helps answer “Do the financed activities meet environmental criteria?” Answering “How do those activities change people’s lives and communities?” still requires additional outcome data.
From Financial Risks to Understanding Real Impact
Sustainability assessment for financial decision-making focuses on “How do environmental and social factors affect the company?” Impact management must also ask “How does the company affect people, society, and the environment?”
Considering both perspectives helps reveal business resilience and responsibility towards stakeholders. For example, reducing water consumption may lower a factory’s costs and risks. An impact assessment must also examine whether surrounding communities benefit or continue to face difficulties accessing water.
Another important question is: who can actually access sustainable finance? If funding assessments require detailed, systematic information, small businesses, social enterprises, and upstream communities may need support in developing that information alongside opportunities to access finance.
If funding is concentrated among organisations already equipped to report, those most in need of opportunities may be the least able to access capital. Raising standards should therefore be accompanied by capacity development, enabling businesses to demonstrate their potential and outcomes credibly.
ISO/UNDP 53001: How Standardised Information Can Support Better Decisions
Lasting value comes from collaboration that turns finance into action.
ISO/UNDP 53001 is a management system standard supporting the Sustainable Development Goals (SDGs), launched by ISO and UNDP on 28 September 2026. It aims to help organisations connect the SDGs with governance, strategy, and operations while measuring progress, demonstrating accountability, and continually improving performance.
In the context of finance, this article sees its principal benefit as helping businesses operate more systematically and provide more credible information to creditors and investors.
Lenders must still assess repayment capacity, and investors must still evaluate returns and risks. However, clear goals, indicators, and evidence provide additional information for assessing a business’s sustainability progress and its alignment with lending conditions or investment policies.
For example, the statement “Our business helps increase community income” becomes more meaningful when the business can demonstrate which communities benefit, how income has changed from the baseline, how the data was collected, and how the findings are used to improve operations.
Applying the standard therefore offers businesses an opportunity to strengthen both management and data quality, enabling finance providers to make decisions based on clearer evidence and monitor progress over time.
When Collaboration Unlocks Value Beyond Capital
Creating lasting value requires connecting finance, knowledge, data, and stakeholder participation so that resource allocation leads to real change.
The first approach is blended finance, which combines development or concessional finance with commercial capital to help manage risks and improve access to investment for projects delivering social and environmental benefits.
The second is strengthening social enterprises through knowledge, networks, and business opportunities, alongside the ability to set goals and collect outcome data. This helps enterprises grow and communicate the value they create credibly.
The third is finance that reaches local communities and small-scale economic actors, through financial institutions and value chains that enable communities to help define goals, share their experiences of outcomes, and benefit fairly as partners in creating value.
When finance is connected with knowledge, credible data, trust, and collective action, the financial system can become a powerful driver of lasting economic and social value.
From Capital to Impact: Who Is Ready to Act?
Creating sustainable impact requires collaboration and shared responsibility. Companies must manage their impacts and produce credible information. Investors must use that information to select and monitor investments. Financial institutions must connect lending assessments with sustainability goals while supporting the readiness of small businesses and communities.
The central question is therefore not “Who has the most capital?” but “Who is ready to share risks, exchange knowledge, and work together to deliver outcomes for which we take collective responsibility?”
From Investment to a Shared Commitment to Change
Lasting value emerges when collaboration brings finance, knowledge, and evidence of outcomes together in practical action.
Social Value Thailand invites executives of listed companies, investors, and financial institutions to explore new perspectives on finance for impact and express their commitment through the Impact Together Compact, turning collaboration into action and tangible outcomes.
Be part of the change. Register for the event and express your commitment to the Impact Together Compact through the organisers’ channels.
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