Nearly 80% of Thai consumers surveyed said they have become more eco-friendly when purchasing products and services in the past six months, according to a PwC survey, underscoring the importance of integrating ESG into Thai businesses.
Chanchai Chaiprasit, CEO for PwC Thailand, said the pandemic has shifted consumer purchasing habits and behaviours to embrace ESG.
Conscientious consumers now demand that corporations adopt sustainability practices that provide benefits to the wider community. Specifically, they will support companies that integrate ESG concerns into their core business and advocate for solving environmental problems, he said.
"The pandemic has led to significant changes in the extent to which Thai consumers pay attention to what they consume, and what impact each product and service has on the environment," Chanchai said.
"This shift is driving manufacturers and entrepreneurs to integrate ESG into their business strategy to hasten their response to a rising trend of green living and sustainable consumption, which will have even greater influence on people's buying decisions," he added.
PwC's June 2021 Global Consumer Insights Pulse Survey, which canvassed 8,681 consumers across 22 countries and territories including Thailand, found that 76% of Thai consumers intentionally buy items with eco-friendly packaging or less packaging (compared with 74% surveyed in March).
Some 78% of home workers buy from companies that are conscious and supportive of protecting the environment (compared with 77% surveyed in March), while 79% choose products with a traceable and transparent region (compared with 77% surveyed in March).
"Today we see a growing trend of consumers becoming more eco-conscious: People are willing to pay for a product or service that has better quality and is better for the environment. This is much different from the past, when price was often the number one reason to buy or not to buy something," Chanchai said.
ESG investing in focus
Aside from consumers leading this behavioural change toward sustainability, Chanchai said that there's also an increased focus on ESG within the investment community.
Thailand Sustainability Investment (THSI) has gained traction over the past few years, particularly among institutional investors seeking to apply ESG principles in investment decisions.
According to Thai bourse data, the market value of SET THSI (SETTHSI) index as of 31 May 2021 stood at THB11.2tn, up 16% from THB9.8tn at the end of December 2020. That outperformed the broader Stock Exchange of Thailand's (SET) index, which gained 13% over the same period.
"Although ESG principles have been promoted for quite some time, their popularity among Thai companies has not yet been extraordinary compared with others in foreign markets.
"A handful of blue-chip companies are moving ahead in adopting sustainable practices and globally accepted sustainability reporting, but more companies need to be active in this area if we're going to raise the bar for corporate sustainability disclosure practices," Chanchai said.
Improvements in ESG reporting can have a material impact on businesses such as building brand, driving outperformance and attracting interest from fund managers, as public awareness of ESG will likely continue to increase over the coming period, he added.
US investors funnelled a record USD51.1bn into ESG funds in 2020, more than double the previous year, according to a recent news report citing Morningstar.
"COVID-19 has intensified interest in environmental and social issues, prompting country leaders and top companies around the world to take a stand against activities that contribute to climate change.
"It is time for Thai listed companies to integrate ESG into their corporate practices and be accountable for non-financial reporting in order to build meaningful trust with consumers, investors and society at large," Chanchai said.
Source: PwC Thailand