Thai SRI development roadmap meeting;  criteria establishment and indexes
At Securities and Exchange Commission, GPF Wireless Road. Bangkok
9:00 – 12:00 on 16 December, 2008

Executive Summary
The meeting among regulators, mutual fund managers and related institutions concluded the roadmap for SRI development in Thailand.  The new wave of Socially Responsible Investment (SRI) has been gaining popularity in most developed capital markets, the stock exchange of Thailand (SET) together with Stock Exchange Commission (SEC) are planning to launch Thailand’s SRI or CG indexes by 2010. However, at this initial stage, financial institutions interested in SRI will participate in the development of the common SRI criteria development adapted from the globally acceptable standard such as that of ISO and OECD guideline, DJSI and FTSE4Good criteria as well as GRI sustainability reporting guideline. This is also to encourage and prepare local listed companies to improve their social and environmental performance based on common benchmarks as well as enhance their understanding on CSR and ethical business concept before the launching of the actual SRI or CG index.

Participants
The meeting was attended by officials from the Stock Exchange of Thailand as well as the Stock Exchange Commission. Furthermore, the meeting is joined by representatives from varieties of asset management companies who are interested in setting up SRI funds in Thailand such as Ayudya Fund Management (AYF), Aberdeen Asset Management, Bualuang Securities (BBL Asset Management), One Asset Management, TMB Asset Management, Thanachart Securities, Financa Asset Management, MFC Fund, PrimaVest Asset Management, Phillip Asset Management etc. In addition, relevant organizations such as Sustainable Business Development Institute (SBDI), Association of Investment Management Companies (AIMC) and ChangeFusion are also present at the meeting.

 Key content and discussion

The meeting kicked started with the overview presentation of the SRI development by Mr. Sunit Shrestha, Managing Director of ChangeFusion Institute.  The presentation highlighted not only the development of SRI in the developed market but also the trend in Asia Pacific region such as in China, HongKong, India, Indonesia, Japan, Korea, Malaysia, Singapore and Taiwan. It also emphasized the direction which Thailand should follow in order to promote and move SRI forward.

Main discussion focused around the direction of SRI development in Thailand which can be categorized into 2 directions; SRI among the listed companies and Direct investment (community investing or social venture capital / private equity). Representatives from asset management communities have agreed that the main barriers to establishing SRI funds lie in the lack of standard criteria or social screening mechanism as well as the lack of the Indexes to track the performance of sustainability driven firms. Other issues discussed during the meeting involved the concerns expressed by SET regarding the implications of SRI index particularly on its commercial justification and reaction from the firms who are being excluded from the index. The appropriate criteria that fit the nature of the developing economy and the local firms are also being discussed at length.

Conclusion and Action plan

1.    All participants agreed on the development of social and environmental criteria guideline which will be adapted from globally acceptable standard such as ISO, OECD guideline and criteria applied by DJSI and FTSE4Good indexes. This guideline will also include simplified sustainability reporting method modified from standard reporting guideline such as GRI.

2.    The first draft of the criteria guideline will be developed by a working team with close consultation with the SEC and SET.  The working team consists of ChangeFusion’s staff and two key advisors are;
        Ms. Wiwan Tharahirunchote,
       Chairman of the Executive Board, Thai Financial Planner Association.
        Mrs. Voravan Tarapoom,
        Managing Director of BBL Asset Management and President of  
        Association of Investment Management Companies (AIMC)
    The draft criteria guideline will be discussed and adopt as working guideline among regulators and interested financial institutions.

3.  The next meeting is scheduled to be in mid January, 2009.