The ASEAN Economic Community (AEC) has been a catalyst for, and will continue to support, intra-regional investment. GPF has also organised a number of conferences and technical workshops and, in August 2019, GPF and 32 securities companies signed a collaborative agreement to engage and develop negative list guidelines as part of efforts on ESG (ThaiPBS World, 2019). This commitment now needs to be followed by swift action on RBC. GHG emissions and climate performance, should also be considered. Learnings from other sectors could also be useful. These concepts should not be understood to be equivalent to philanthropy (see OECD/OHCHR/ILO, 2019). Globally, construction ranks second only to domestic work for prevalence of forced labour, at 18% and 24% respectively (ILO and Walk Free Foundation, 2017). Furthermore, information from supply chain due diligence (e.g. The Guidance is a practical tool to implement the due diligence expectations as set out in the ILO, OECD and UN instruments. Notably, due consideration should be given to how RBC expectations can be reflected in the implementation of the Public Procurement and Supplies Management Act of 2017 and whether amendment is necessary. In its report to the UN General Assembly in 2018, the Working Group underlined that [t]he recently issued OECD Due Diligence Guidance [] provides a comprehensive practical tool for supporting implementation of human rights due diligence in line with the Guiding Principles, which is based on comprehensive multi-stakeholder inputs and dialogue. (UN, 2018). These impacts can also spill over and affect the perceptions of investors that are considering Thailand as an investment destination on its own. The Department also highlighted the ongoing efforts to include human rights defenders and media in the draft of the 4th National Human Rights Plan as a new target group for special protection and the establishment of a committee for developing and advancing measures in protecting human rights defenders at risk at the Ministry of Justice. Chapter 11 outlines the sectoral composition of Thai outward investment by type of investments (greenfield FDI vs. cross-border M&A). UN Guiding Principle 4 stipulates that states should take additional steps to protect against human rights abuses by business enterprises that are owned or controlled by the State, or that receive substantial support and services from State agencies such as export credit agencies and official investment insurance or guarantee agencies, including, where appropriate, by requiring human rights due diligence (UN, 2011). The guidance also addresses pricing, noting that The enterprise should develop pricing models that account for the cost of wages, benefits and investments in decent work. Surface water quality outside the OECD is expected to deteriorate in the coming decades, through nutrient flows from agriculture and poor wastewater treatment. Please select the WEB or READ option instead (if available). The consequences will be increased eutrophication, biodiversity loss and disease. Several objectives envisioned for the integrated ASEAN Economic Community will depend in large part on improving the business environment beyond investment liberalisation. For example, the recommendations outlined in the OECD paper on Responsible Business Conduct for Institutional Investors have been endorsed by leading investment managers5, pension funds,6 and recently referenced in an EU Regulation for Sustainable Disclosure, which calls on the EU institutional investors and other financial market participants to report on their due diligence processes. An RBC lens can help them to make more balanced decisions, while ensuring that they avoid creating further risks to people, planet and society or contribute to further destabilising supply chains down the line. Examples of RBC integration in key sustainable finance regulations, RBC referenced in international standards and initiatives on sustainable finance. Having an example from the region which considers RBC in the sector in a holistic way and aligned with international principles and standards can serve as a concrete example of how broader policy efforts on RBC can be implemented at the sector level. The Guardian (2019), Concrete: the most destructive material on Earth, 25 February 2019, https://www.theguardian.com/cities/2019/feb/25/concrete-the-most-destructive-material-on-earth. Government can also promote change by convening dialogues and peer learnings, which could feature examples of how contentious issues have been solved in other contexts. Five are listed on the Stock Exchange of Thailand. OECD (2017a), Investment Governance and the Integration of Environmental, Social and Governance Factors, www.oecd.org/finance/Investment-Governance-Integration-ESG-Factors.pdf, OECD (2017b) Responsible Business Conduct for Institutional Investors, http://mneguidelines.oecd.org/RBC-for-Institutional-Investors.pdf, OECD (2015), OECD Guidelines on Corporate Governance of State- Owned Enterprises, 2015 Edition, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264244160-en. Barry M. (2020) Shaping a sustainable post-COVID-19 world: five lessons for business, 27 March 2020, Ethical Corporation, http://www.ethicalcorp.com/shaping-sustainable-post-COVID-19-world-five-lessons-business?utm_campaign=ETH%2003APR20%20Newsletter%20Database&utm_medium=email&utm_source=Eloqua&elqTrackId=bc93f1101bc74ea380a342a7df89e199&elq=bb2b08a80eec4e58a8067731b9238d61&elqaid=52689&elqat=1&elqCampaignId=33277, Cappucci, M. T. (2017), The ESG Integration Paradox, Harvard Management Company, https://corpgov.law.harvard.edu/2017/07/26/the-esg-integration-paradox/, The Economist (2019), Sustainable and Actionable: A study of asset-owner priorities for ESG investing in Asia, The Economist Intelligence Unit, https://eiuperspectives.economist.com/sites/default/files/amundi_sustainable_and_actionable_0.pdf, EU (2019), Thailand: EU to broaden its engagement following elections, Press Release, 14 October 2019, https://www.consilium.europa.eu/en/press/press-releases/2019/10/14/thailand-eu-to-broaden-its-engagement-following-elections/. A 2016 report by the UN Working Group on Business and Human Rights examined the practices with respect to current RBC and business and human rights practices of SOEs and found that there is a general lack of attention to RBC issues and that policies, guidelines and good practices are lacking at both the international and national levels (UN, 2016). Similar findings are echoed in the ILO Endline research findings on fishers and seafood workers in Thailand, published in March 2020 in the context of the ILO Ship-to-Shore project. . This is of particular relevance to Thailand in the context of efforts to promote Thailand 4.0 and higher value-added industries. Declaration on Promoting and Enabling Responsible Business Conduct in The implementation of international RBC standards across sectors and not in silos will be important. EU (2016a), EU-Vietnam Free Trade Agreement: Agreed text as of January 2016, European Commission, http://trade.ec.europa.eu/doclib/press/index.cfm?id=1437 [Accessed 01 March 2016]. The Paris Agreement on climate change also underlines the critical role of business in tackling climate change, including through reducing greenhouse gas emissions and improving environmental performance. OECD (2020b), Global Financial Markets Policy Responses to COVID-19, https://read.oecd-ilibrary.org/view/?ref=127_127003-tvl9kqbfy9&title=Global-Financial-Markets-Policy-Responses-to-COVID-19, OECD (2020c), OECD Pilot Project on Responsible Agricultural Supply Chains in Southeast Asia: Baseline Report, http://mneguidelines.oecd.org/Pilot-on-Responsible-Agricultural-Supply-Chains-in-SEA-Baseline-Report.pdf, OECD (2019a), OECD Business and Finance Outlook 2019: Strengthening Trust in Business, OECD Publishing, Paris, https://doi.org/10.1787/af784794-en, OECD (2019b), Equity Market Review of Asia 2019, OECD Capital Market Series, http://www.oecd.org/daf/ca/oecd-equity-market-review-asia.htm, OECD (2019c), Responsible Business Conduct and the Sustainable Development Goals, https://mneguidelines.oecd.org/RBC-and-the-sustainable-development-goals.pdf, OECD (2019d), Better policies to improve the environmental performance of the agriculture sector, https://www.oecd.org/agriculture/topics/agriculture-and-the-environment/. Environmental and social risks and impacts are not only connected to low value-added industries. is the online library of the Organisation for Economic Cooperation and Development (OECD) featuring its books, papers, podcasts and statistics and is the knowledge base of OECD's analysis and data. Working Party on Responsible Business Conduct The role of OECD - ONE MP Increasingly strong political ties with China and concrete infrastructure development plans could help Thailand become a regional logistics hub and lower related costs. These different actions can likely be attributed to the fact that despite significant efforts by all stakeholders in Thailand in the sector, challenges persist and can also be exacerbated by the practices throughout the supply chain. One issue that warrants a specific mention, as also recognised in the Thai NAP, is the protection of human rights defenders. RBC means integrating and considering environmental and social issues within core business activities, including throughout the supply chain and business relationships. Labour measures used in the fisheries sector could be applied to other industrial sectors, such as agriculture and construction, which have a large number of migrant workers. Responsible Business Conduct for Institutional Investors and Due Diligence for Responsible Corporate Lending and Securities Underwriting 40 5. The Bank of Thailand in collaboration with the Thai Bankers Association has established the Sustainable Banking Guidelines on Responsible Lending in August 2019. Responsible business conduct in the financial sector - OECD.org We have launched work on due diligence in the financial sector, responsible agriculture investment, and on engagement with local communities in the extractive industries. Thai regulators may wish to assess and analyse to what degree the current framework allows for long-termism. Investment projects are mostly concentrated in mining and energy, the food industry, and in construction and real estate development projects. For example, the EU Free Trade Agreement (EU FTA) includes specific language on RBC, CSR and sustainable development, following dominant treaty practice globally in recent years. There have also been sector or thematic policy commitments. It is also important to highlight that labour issues also concern other sectors of the economy. The SEC has recommended that companies should follow the SETs 2012 Guidelines for Sustainability Reporting or international standards. For example, the EU trade strategy Trade for all: Towards a more responsible trade and investment policy uses RBC as a pillar. The OECD Guidelines for Multinational Enterprises are recommendations addressed by governments to multinational enterprises operating in or from adhering countries. Risk aversion in the financial markets due to COVID-19 has reached levels not seen since the global financial crisis. Thai Institute of Directors Association also promotes sustainability as part of its work programmes and promotion of good corporate governance and offers a Board of the Year Award with sustainability and stakeholder views included in the criteria. 5), which underlines co-operation efforts to ensure that SOEs observe internationally recognised standards of corporate governance (EU, 2016a). Environmental, Social, Governance (ESG) Integration - defined by the Principles for Responsible Investment as the explicit and systematic inclusion of ESG issues in investment analysis and investment decisions. ESG criteria may be used primarily to identify financial risks posed by real or potential ESG impacts. Joint Leaders Statement On The Regional Comprehensive Economic Partnership, 4 November 2019, https://www.sec.or.th/EN/Pages/News_Detail.aspx?SECID=7497&NewsNo=64&NewsYear=2019&Lang=EN, https://www.sec.or.th/cgthailand/EN/Pages/OVERVIEW/CGANDSUSTAINABLEBUSINESSDEVELOPMENT.aspx, https://www.sec.or.th/cgthailand/TH/Documents/Regulation/CGCode.pdf, https://www.sec.or.th/cgthailand/EN/Pages/RulesRegulation/ICodeII.aspx, https://www.set.or.th/sustainable_dev/en/sr/about/about_p1.html, https://aodproject.net/wp-content/uploads/2019/01/AODP-PensionsChangingClimate.pdf, www.ssga.com/investment-topics/environmental-social-governance/2018/04/esg-institutional-investor-survey.pdf, https://www.tba.or.th/wp-content/uploads/2019/08/Guidelines-ResponsibleLending.pdf, https://www.thaipbsworld.com/gpf-signs-collaborative-engagement-declaration-with-32-institutional-investors/, https://www.gov.uk/government/publications/uk-ncp-initial-assessment-complaint-from-idi-ec-and-licadho-against-bonsucro-ltd/initial-assessment-by-the-uk-national-contact-point-for-the-oecd-guidelines-for-multinational-enterprises-complaint-from-idi-ec-and-licadho-against, https://ap.ohchr.org/documents/dpage_e.aspx?si=A/73/163, https://documents-dds-ny.un.org/doc/UNDOC/GEN/G16/091/71/PDF/G1609171.pdf?OpenElement, www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_ EN.pdf, https://www.unglobalcompact.org/engage-locally/asia/thailand, https://www.ohchr.org/documents/Publications/TheOtherInfrastructureGap_FullLength.pdf, https://www.ohchr.org/EN/NewsEvents/Pages/DisplayNews.aspx?NewsID=22915&LangID=E, https://www.ohchr.org/EN/NewsEvents/Pages/DisplayNews.aspx?NewsID=23095&LangID=E, https://www.ohchr.org/_layouts/15/WopiFrame.aspx?sourcedoc=/Documents/Issues/FAssociation/InfoNoteSLAPPsFoAA.docx&action=default&DefaultItemOpen=1, https://www.state.gov/wp-content/uploads/2019/06/2019-Trafficking-in-Persons-Report.pdf, https://ustr.gov/about-us/policy-offices/press-office/press-releases/2019/october/ustr-announces-gsp-enforcement, https://susba.org/pdfs/report-2019-compressed.pdf, https://www.bloomberg.com/news/articles/2020-03-31/esg-stock-resilance-is-paving-the-way-for-a-surge-in-popularity, https://www.bloomberg.com/news/articles/2020-03-13/older-esg-funds-outperform-their-newer-rivals-in-market-tumult?sref=winqcnxe, https://www.morningstar.com/articles/972475/sustainable-equity-funds-are-outperforming-in-bear-market, https://investorsforhumanrights.org/sites/default/files/attachments/2019-04/IAHR_Making%20Finance%20Work%20for%20People%20and%20Planet_FINAL.pdf, https://www.imvoconvenanten.nl/pensioenfondsen?sc_lang=en, https://data.consilium.europa.eu/doc/document/ST-7571-2019-ADD-1/en/pdf, http://www.oecd.org/governance/public-procurement/procurement-and-rbc/, https://www.manilatimes.net/2018/08/03/opinion/analysis/asias-evolving-free-trade-deal-may-not-benefit-workers/426159/426159/. Responsible Investing - often used as a catch all term that may encompass various strategies which take into account environmental and social issues in the context of investment decision making.
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