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Thailand requires listed companies to report CSR activities
Publication Date : 10-02-2013
From freebies and cheap one-sided programmes, corporate social responsibility activities in Thailand are rising to the next level. Formerly a part of public relations operations, companies are now required to be more committed and accountable about the true benefits of their activities, chiefly through systematic reporting.
Starting next year, all listed companies will be required to come up with detailed reports of what they are doing.
"To encourage listed companies to recognise CSR more, the SEC [Securities and Exchange Commission] is planning to make it mandatory for firms to disclose their CSR operations on form 56-1 and their annual report," said SEC assistant secretary-general Waratchya Srimachand, at last week's event to announce the CSR and Sustainability plan for 2013.
"Any firms planning to issue new securities will have to disclose on form 69-1 whether they have operated as per SET's 2012 document on CSR practices regarding stakeholders, the economy, the society, and the environment. The disclosure will provide key information to investors for their decisions. The regulation is expected to be effective from January 1, 2014 onwards," Waratchya added.
Warachya said listed companies were a key mechanism to drive the country's economy, and that SEC supports those developing businesses using CSR principles with sustainability to comply with international standards. These firms would be models for other companies and help meet the demand of investors worldwide who tend to overweight companies operating under CSR principles.
In doing so, the SEC has teamed up with Corporate Social Responsibility Institute (CSRI), under the Stock Exchange of Thailand (SET), and with the Thaipat Institute. Their 2013 CSR and sustainability plan is shaped towards the second era of sustainable development by focusing on "disclosure" and "openness" to meet expectations of society broadly.
The second era of development has been developed from the previous one, which was implemented over the last 20 years by focusing on development in each segment relatively independent of the other parts.
The aim is to cut the limitations of the previous model by taking a holistic approach, emphasising interaction between dimensions at all levels.
Sustainable Development 2.0 is part of the UN post-2015 vision, requiring "inclusive, people-centered, sustainable global development", in line with its millennium development goal. The development agenda will depend, critically, on effective governance capacities to ensure people's rights to health and education.
SET executive vice president and director of CSRI, Bordin Unakul, said that the popularity of sustainable development has driven society to focus on development from a holistic point of view, considering the economy, society, and environment as they interact with one another during the developmental process.
This holistic approach is becoming the world's main CSR direction, used as a development framework at the national and organisational levels.
"SET emphasises building the foundation for sustainable development of the capital market, society and the country. Thus, we have built CSRI to be a core institution in developing expertise and enhancing business operations with social responsibility to create sustainable value for organisations, stakeholders and society as a whole. CSRI's 2013 core plan is to encourage listed companies to do Corporate Sustainability Reporting.
Last year, CSRI distributed a handbook on sustainability reporting based on Global Reporting Initiatives [GRI]. In addition, training and seminars will be offered throughout the year," said Bordin.
"Investors have placed importance on listed companies operating with social and environmental responsibility, following good corporate governance principles. Sustainability reporting, following GRI, is an important key to help investors get accurate and clear information regarding a company's CSR strategy and operations for investment decision. The reporting is a key tool to give an evaluation of the company, enabling its management and operational officers to know what working processes should be improved for increased efficiency and growth with sustainability," he added.
SET will also create the SET Sustainability Index (SET SI) to enhance and improve listed companies' social responsibility operations towards encouraging the sustainability of the organisation and development.
Pipat Yodprudtikan, director of Thaipat Institute, noted that the driving force for Thai corporates among large-sized companies would be influenced by the sustainable development framework. This is a result of the Rio+20 meeting in the middle of last year when it was proposed to change the framework by considering economic, social, and environmental issues as a whole from 2015 onwards.
The corporate CSR principle, supporting the second era of sustainable development concept, emphasises "disclosure" and "openness" to meet the broad-based expectations of society by considering all stakeholders.
One of the concrete happenings is to encourage the corporate sector, especially large-sized listed companies, to have Corporate Sustainability Reporting, Pipat added.
In addition, the corporate sector initiated sustainable business operations by considering grass roots communities, called inclusive businesses. These create jobs for local people with less income, giving opportunities to community members to deliver, distribute, sell, and service business chains, developing and delivering products and services. This is in line with their buying power and enables them to access products and services to develop their quality of life.
"Sustainable Development 2.0" is based on three pillars - human rights, equality and sustainability. In the 1.0 version, the focus was placed on the growing ageing society across the world, plus the fact that a growing population requires a huge increase in agricultural production and that the world can't sustain if human activity, which threatens the Earth's carrying capacity, remains unchanged.
In the second era, companies are encouraged to appoint chief sustainability officers. Around the globe, more and more companies admitted that "sustainability" has appeared on their organisation's management agenda.