At its core, the insurance business is about managing risks, including those related to environmental, social and governance (ESG) factors. As sustainability requirements change the business landscape, insurers are increasingly realising the importance of integrating the ESG agenda into their corporate strategies.
To address growing awareness of climate change risks and heightened expectations from regulators, insurers are directing larger portions of their portfolios towards low-carbon businesses, renewable energy projects and sustainable infrastructure.
This shift underscores the industry’s recognition that sustainability is no longer optional, but rather a fundamental driver of resilience and competitiveness. ESG-focused investments, particularly green bonds, are rapidly gaining momentum in the insurance sector as companies seek to balance financial performance with long-term sustainable growth.
“Government policy has been supportive, encouraging companies to integrate ESG into their investment strategies,” said Somporn Suebthawilkul, president of the Thai General Insurance Association.
Every year, the association places ESG at the centre of its agenda, and insurers are launching more products that support green energy and reduce reliance on fossil fuels, he said.
Mr Somporn, also chief executive of Dhipaya Group Holdings, said insurers play a dual role of responsible investors and as organisations embedding ESG principles in their operations.
At Dhipaya Insurance, this includes measures to conserve energy, manage environmental impact within the organisation and channel capital into businesses that prioritise sustainability.
“We live in a generation that must deal with the consequences of past inaction on the environment,” he said. “If businesses ignore ESG, they will all face serious challenges in the future.”
SUSTAINABILITY COMMITMENTS
Other leading insurers are also stepping up their sustainability commitments. Amorn Thongthew, managing director of Viriyah Insurance, said the company has long emphasised the social and governance aspects of ESG, particularly in serving customers fairly and ensuring strict compliance with regulations.
However, he acknowledged that environmental initiatives have been more limited.
“From 2026, we plan to bring in experts to help us develop a carbon reduction roadmap,” said Mr Amorn.
Viriyah already adjusted its investment portfolio to prioritise green assets and avoid high-carbon industries.
“Sustainability is central to our investment approach,” he said.
“We believe government incentives will increasingly support low-carbon businesses, creating new opportunities for insurers to expand green investment.”
The shift towards ESG investment is about both compliance and long-term resilience. As climate-related risks intensify, insurers are positioning themselves to manage liabilities, protect policyholders and contribute to the transition to a low-carbon economy, said Mr Amorn.
Industry leaders agree sustainable finance is no longer a matter of corporate image. Rather, it is essential for protecting future generations and ensuring the long-term stability of Thailand’s insurance sector.
The demand for green bonds has risen sharply as issuers recognise insurers’ growing appetite for sustainable assets.
“The response has been positive and the returns have improved,” said Mr Somporn.
LONG-TERM VISION
At BKI Holdings (BKIH), a listed company that earned the top “AAA” rating in the Stock Exchange of Thailand’s ESG ratings for two consecutive years during 2023-24, ESG is more than just a framework — it is a core value embedded in both its business operations and investment strategies.
The recognition underscores the company’s strong commitment to sustainability, positioning BKIH as one of Thailand’s leading insurers under subsidiary Bangkok Insurance, driving responsible growth and long-term value creation.
Apisit Anantanatarat, chief executive of BKIH, said ESG is at the heart of the company’s long-term strategy, with a roadmap of 3-5 years developed to significantly expand exposure to green bonds, sustainable equities and environmentally friendly projects.
This direction reflects not only the company’s internal priorities, but also growing investor expectations and evolving regulatory frameworks, said Mr Apisit, noting the Office of the Insurance Commission (OIC) is preparing to take a more active role in shaping industry guidelines.
He said ESG integration has shifted from a trend to a necessity. Beyond compliance with the OIC’s regulations on investment activities, BKIH embedded ESG principles in its investment policy because it realises the strategy can drive growth, said Mr Apisit.
“The company emphasises not only financial returns, but also a positive impact on stakeholders, society and the environment. This dual focus will strengthen resilience and deliver sustainable growth in the long term,” he said.
While ESG defines Bangkok Insurance’s long-term vision, the company also recognises the importance of prudent short-term portfolio management.
Over the next 1-3 years, the company plans to strengthen asset liability management, balancing investments against insurance claim obligations.
Mr Apisit said key strategies include diversifying across bonds, deposits, equities and other approved instruments to manage volatility; prioritising short-term Bank of Thailand bonds and corporate bonds with maturities of under three years to align with expected liabilities; and monitoring key economic indicators, such as interest rate trends and global market volatility, to adjust strategies promptly.
Although the outlook for equities remains uncertain due to the global economic slowdown and market turbulence, the company continues to favour long-term investments in fundamentally strong businesses with ethical management practices.
ESG-ORIENTED PORTFOLIO
As of June 30, 2025, investments in BKIH’s portfolio include equities listed on the SET ESG Index, green bonds and shares in non-listed companies with environmentally friendly operations.
One notable example is Bangkok Insurance’s stake in BAFS Pipeline Transportation Ltd (BPT), a subsidiary of Bangkok Aviation Fuel Services. BPT is expanding the oil pipeline system to northern Thailand, enhancing energy security while reducing reliance on truck-based fuel transport.
The project delivers multiple benefits including safer logistics, reduced traffic congestion, lower emissions and significant cuts in greenhouse gas output, all of which support Thailand’s climate agenda, said Mr Apisit.
He said BKIH adheres to the Investment Governance Code, which it formally adopted in August 2017. This framework ensures that directors, executives and staff involved in investment management follow responsible practices.
The firm’s investment governance policy requires rigorous oversight of investment decisions, active participation in shareholder meetings and stewardship aimed at improving governance at investee companies.
By embedding ESG in its governance structure, Bangkok Insurance aims to generate long-term shareholder value while reinforcing its credibility as a responsible institutional investor.
GREEN BONDS
Demand for green and sustainable assets has grown quickly in recent years, driven by stakeholders that are widening their focus beyond pure financial returns and towards broader sustainability goals.
Issuing green bonds allows insurers to access a new investor base that might not have been available otherwise.
Another benefit of green bonds is the likelihood they will enhance a company’s public image through its green credentials.
Insurers issuing green bonds have large retail operations and are keen to improve their brands’ perception and goodwill, said Mr Apisit.
BKIH has a strong interest in green bonds, including those that finance renewable energy projects, he said.
Mr Apisit said while such instruments may yield slightly lower returns than conventional corporate bonds, management views them as essential for building a sustainable future.
By channelling capital into companies actively addressing environmental and social challenges, Bangkok Insurance supports their ability to compete in global markets where ESG credentials are increasingly scrutinised, he said.
MEETING EXPECTATIONS
With ESG disclosure under greater scrutiny from both regulators and investors, Bangkok Insurance has stepped up its transparency efforts to meet investors’ expectations, said Mr Apisit.
The company publishes detailed ESG-related information in its annual reports and pledged to comply with any new disclosure requirements authorities may introduce.
Internally, the company made ESG training mandatory for all employees, embedding sustainability awareness in corporate culture and ensuring the entire organisation works towards shared ESG objectives.
Looking ahead, Bangkok Insurance identified three benefits of its ESG strategy. The first is strengthening long-term returns by mitigating investment risks linked to climate change and governance failures.
The second is enhancing competitiveness by aligning with global standards and regulatory requirements. The third is supporting Thailand’s capital markets by broadening the supply of high-quality ESG investment instruments.
The OIC announced it expects to introduce new rules, likely effective in 2026, to expand the scope of permissible investments for insurers, particularly in ESG-aligned assets.
These rules will establish minimum standards for ESG policies and disclosures, ensuring insurers take measurable steps towards sustainable finance, noted the regulator.
This policy framework could significantly reshape insurance investment in Thailand by encouraging ESG-aligned investment vehicles and requiring greater disclosure, accelerating the sector’s transition towards sustainable finance, according to the OIC.
For insurers such as Bangkok Insurance, this would mean stricter compliance rules yet greater opportunities to lead in renewable energy financing, sustainable infrastructure and climate risk mitigation, said Mr Apisit.
SECTOR IN TRANSITION
Bangkok Insurance’s multi-year ESG strategy reflects the broader transformation underway in Thailand’s insurance industry. From green bonds to infrastructure projects, insurers are embedding sustainability in both portfolios and operations.
This approach aligns with global trends, as insurers worldwide recognise that climate change, social responsibility and governance standards directly affect financial resilience.
As regulatory standards rise and investor expectations evolve, companies that adapt quickly will not only safeguard financial performance, but also play a vital role in shaping a sustainable future.
By integrating ESG into every aspect of their strategy, from investment frameworks to organisational culture, Thai insurers are positioning themselves as long-term stewards of both capital and society.
With new OIC rules coming in 2026, executives say Thailand’s insurance sector will likely face a more demanding and rewarding landscape for ESG investment.
Those that embrace the challenge stand to gain both a competitive advantage and a lasting legacy: helping the nation transition to a low-carbon economy while delivering value to policyholders, shareholders and future generations alike.