Page 272 - Social Enterprise A New Business Paradigm for Thailand

Higher yields and quality increased the growers’ incomes, the environmental impact of farms shrank,
and Nestlé’s reliable supply of good coffee grew significantly. Shared value was created.

Shared value could reshape capitalism and its relationship to society. It could also drive the next
wave of innovation and productivity growth in the global economy as it opens managers’ eyes to
immense human needs that must be met, large new markets to be served, and the internal costs of
social deficits, as well as the competitive advantages available from addressing them. But our
understanding of shared value is still in its genesis. Attaining it will require managers to develop new
skills and knowledge and governments to learn how to regulate in ways that enable shared value,
rather than work against it.

Source: Porter, Michael E., and Mark R. Kramer. "Creating Shared Value." Harvard Business Review 89, nos. 1-
2 (January–February 2011): 62–77. Retrieved January 20, 2025, from
https://www.hbs.edu/faculty/Pages/item.aspx?num=39071

In 2021, environmental, social, and governance (ESG) issues, initially introduced by investors as
criteria for making informed investment decisions, were elevated to a new level through formal
regulation. The European Union’s Sustainable Finance Disclosure Regulation (SFDR) now
requires financial product issuers that meet certain thresholds to disclose sustainability-related
information to investors. This regulation took effect in 2023. In response, the Thaipat Institute
proposed that one of the major shifts expected in 2024 would be a growing emphasis on ESG
among businesses that actively manage their social and environmental impacts. These
companies are expected to integrate ESG as a driver of business strategy, not only to create

value for stakeholders and improve productivity and growth, but also to enhance the long-term
value of the enterprise in ways aligned with investor expectations. This evolving perspective is
being referred to as the License to Earn, the implicit permission for companies to reap returns
by doing business responsibly with respect to ESG. (See Box 9.3.) A recent study by Ubonwan
and Boontham (2023) found that since 2001, when ESG principles and corporate governance
standards were first applied to companies listed on the Stock Exchange of Thailand, through the
launch of the Corporate Governance Report of Thai Listed Companies (CGR), the prominence

and development of ESG have steadily advanced. According to the Stock Exchange of Thailand’s
2023 annual report, 692 listed companies, representing 76% of all publicly listed firms, disclosed
ESG data through the ESG Data Platform, which users can access via the SETSMART system.
Looking specifically at companies that met the criteria for sustainable stocks since 2015, the
inaugural year of the Thailand Sustainability Investment (THSI) list, which includes firms
recognized for sustainable business practices that integrate environmental care, social
responsibility, and good governance (ESG), only 51 companies qualified at the outset,
representing just 7.05% of listed companies. By 2024, however, that number had grown to 193
companies, or 24.4% of all listed firms (based on a total of 790 companies on both the SET and
MAI as of March 31, 2023). In less than a decade, the number of listed companies meeting

sustainable investment criteria has nearly quadrupled.

The 2024 sustainability assessment also found that most companies have improved both their
ESG performance and disclosure, particularly in areas such as environmental policy, initiatives
to reduce electricity and energy consumption, water conservation, efficient waste management,

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