KBank Private Banking sends wake-up call on sustainable investment in Thailand Climate crisis solution investment is on the rise, with an estimated value of USD 5.5 trillion
KBank Private Banking sets to drive sustainable investment in Thailand, both in terms of process and goals. As the world is transitioning towards the new economy, investment communities will play a crucial role in supporting businesses that are environmentally and socially sustainable, particularly those with solutions for greenhouse gas emission reduction. It is estimated that USD 5.5 trillion or THB 173 trillion will be invested in related industries annually until 2030.
Mr. Jirawat Supornpaibul, Private Banking Group Head, KASIKORNBANK, said, “The economic model that focuses on growth generation, production and consumption through natural resource depletion has done considerable damages to the environment and the society. It is also the main cause of climate change. If carbon emission continued at a current rate until the end of this century, the estimated economic damage would amount to USD 550 trillion in net present value or over seven times of the world’s economy in 2019.”
Mr. Jirawat added, “The global economy is shifting towards the Sustainability Revolution and transitioning to the model that delivers growth and prosperity without leaving negative footprints on the environment, or the CLIC Economy (circular, lean, inclusive and clean). The Sustainability Revolution will create winners or businesses that embrace this concept and transform themselves. In contrast, those who deny these changes will become losers, which will eventually be disrupted by competitors, lose a license to operate, face consumer distrust, and lose competitive advantage.”
“The sustainability trend presents significant investment opportunities and is potentially the most substantial source of long-term returns. One sustainability aspect currently reshaping the investment landscape is Climate Transition. The climate crisis poses significant economic risks to companies that still rely on heavy industries while offers greener businesses unlimited growth opportunities. Moreover, the world’s common target of reducing carbon emission by 50% within 2030 means unparalleled investment opportunities in related industries, which are estimated at USD 5.5 trillion on an annual basis in the next ten years.”
To reach the goal of decreasing the average temperature rise requires both the clean technology development and the adaptation of economically critical but carbon-intensive industries to a more sustainable model. Driving the Sustainability Revolution is four catalysts: 1) policy changes that benefit greener businesses and hinder those with unsustainable practices via tightening regulations such as carbon credit, which results in higher operational cost, 2) consumers
who have become more aware of the urgency of the climate crisis and avoid purchasing non-environmentally-friendly goods, 3) technological advancements that make it more affordable and practical for businesses to earn profits as well as ensure sustainability, and 4) private capitals that can support companies with sustainability goals. Lombard Odier, Switzerland-based global private bank with over 220 years of experience and the strategic partner of KBank Private Banking, has identified two groups of businesses with high potential: 1) carbon-constrained world: solution providers around climate change, such as companies offering energy efficiency improvement software and electric vehicles, and 2) carbon-damaged world: companies specializing in products and services for an altered environment from climate change, such as those focusing on building more resilient infrastructure and those that monitor financial risks related to climate exposure.
“KBank Private Banking is committed to being a leader in sustainable investing through our comprehensive wealth management services. We aim to share with our clients global best practices in climate crisis solutions and provide them with international investment opportunities to support sustainable businesses. Previously, we have offered different funds under the sustainability theme, such as K-HIT and K-CHANGE. We will be introducing K Climate Transition, which invests in LO Funds – Climate Transition, (USD), I Class A. Thailand’s first and only fund under the climate transition theme, the fund is aimed at mitigating environmental issues and climate change impacts, all of which are related to daily lives and require urgent solutions while providing investors with opportunities for long-term returns from various companies worldwide. We believe that businesses that are environmentally and socially responsible have the potential to deliver better performance and are more sustainable than those who ignore this concept. The initial public offering (IPO) will be from 1 to 15 September 2020. Furthermore, we have also hosted a seminar 'Sustainability Revolution: A Call for Action,’ with the world-renown climate change advocate, Mr. Al Gore, the 45th Vice President of the United States and winner of the Nobel Peace Prize in 2007, sharing inspiration to drive the Sustainability Revolution in Thailand,” concluded Mr. Jirawat.