Krungsri, Thai Union, and i-Tail Launch ESG-Linked Foreign Exchange (FX) Program to Drive Global Sustainability

Bank of Ayudhya Public Company Limited (Krungsri) has joined forces with Thai Union Group PCL, a global leader in the seafood industry, and i-Tail Corporation PCL, a top global pet food manufacturer, to announce a major collaboration: the launch of the ESG-Linked Foreign Exchange (FX) program. This financial innovation integrates Environmental, Social, and Governance (ESG) principles into foreign currency exchange transactions, underscoring the three organizations’ commitment to sustainable finance and supporting Thailand’s sustainability goals.

The ESG-Linked FX program represents a significant advancement in traditional foreign exchange risk management. By linking financial terms, such as hedging costs, to the achievement of sustainability targets, the program provides tangible incentives for businesses to prioritize ESG practices. Customers who meet their pre-defined ESG goals will be eligible for financial benefits, including reduced hedging costs, encouraging broader adoption of sustainable business practices.

Krungsri has integrated Sustainability Key Performance Indicators (KPIs) and Sustainability Performance Targets (SPTs) from Thai Union’s Sustainability-Linked Financing Framework into foreign exchange hedging transactions. These KPIs and SPTs will be rigorously evaluated and verified by independent third-party experts to ensure alignment with international standards and maintain transparency. This strategic integration of sustainability factors into financial strategies enhances foreign exchange risk management effectiveness and reduces costs associated with international transactions.

Hirotaka Kuroki, Head of Global Markets at Krungsri, expressed his enthusiasm for the collaboration: “Krungsri is delighted to partner with Thai Union and i-Tail on this ESG-Linked FX program. As a financial institution deeply committed to driving sustainable finance, we recognize the growing demand for ESG-focused financial products. Following the launch of our ESG-Linked Derivatives earlier this year, this ESG-Linked FX program marks another milestone in our journey to integrate sustainability into traditional financial services. By incorporating ESG considerations into foreign exchange transactions, we’re empowering our clients to achieve their sustainability objectives while optimizing their financial performance.”  

Prakob Phiencharoen, Head of Corporate and Investment Banking at Krungsri, added: “Krungsri and Thai Union have a strong track record of successful collaborations in sustainability initiatives, including the landmark Blue Finance program. Building on this foundation, the ESG-Linked FX program further solidifies our commitment to driving innovation in sustainable finance and reinforces Krungsri’s leadership position in this space. We are dedicated to supporting our clients in achieving their sustainability ambitions.”

Thai Union Group, highlighted the importance of sustainability to the company’s overall strategy: “Sustainability is at the core of Thai Union and i-Tail’s operations, driven by our ‘Healthy Living, Healthy Oceans’ vision and the SeaChange®2030 strategy. We strive to make a positive impact on the industry, our people, and the planet. This partnership with Krungsri demonstrates our unwavering commitment to integrating sustainability into all aspects of our business. By linking our financial strategies to ESG outcomes, we’re strengthening our competitive edge and fostering a more sustainable future.

The ESG-Linked FX program represents a significant step forward for Thai businesses seeking to align their financial practices with sustainability goals. In the context of global economic uncertainties and climate change challenges, this program not only reduces financial costs for ESG-conscious companies but also cultivates a robust sustainability ecosystem. By encouraging businesses to prioritize responsible practices and sustainable growth, Krungsri, Thai Union, and i-Tail are setting a new standard for corporate leadership in Thailand and beyond.

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