Government Savings Bank (GSB) plans to phase out lending money to fossil fuel power generation businesses, with no new loans to be granted to coal-fired power plants from this year.
The effort aims to slash the bank's indirect emissions of 1.68 million tonnes of carbon dioxide equivalent (tCO2e) by 2050.
The quantity, also referred to as Scope 3 emissions, represents most of the state-owned bank's total carbon dioxide emissions, which total 1.72 million tCO2e.
Scope 3 emissions refer to GSB's operations that indirectly add greenhouse gases to the atmosphere through its loans granted to fossil fuel-based businesses, including fossil-fired power plants.
GSB also emits carbon dioxide daily through its oil usage (Scope 1 emissions) and electricity usage (Scope 2 emissions), which make up 0.89% and 1.87% of total CO2 emissions.
"We will completely steer away from the coal-fired power generation business," said Vitai Ratanakorn, president of GSB.
This business will be added to what the bank calls an "exclusion list", which refers to businesses the bank will avoid.
There will be no outstanding loans for coal-fired power plants by 2030, said Mr Vitai.
Other types of loans given to businesses, including petrol stations and gas-based power generation, are still important to keep the economy going.
"If we completely don't grant loans to these businesses, the country may be affected," he said.
GSB needs to take part of the profit from extending loans to business related to infrastructure development to support its plan to help other businesses which are also its customers, said Mr Vitai.
"What we can do is to find ways to gradually reduce loans granted to fossil fuel-related businesses," he said.
The bank has set a target to have loans for the clean power business make up 35% of total loans in the electricity generation category by 2030.
It aims to increase the proportion to 60% within 2040.
This action plan is expected to help GSB achieve its net-zero target, a balance between greenhouse gas emissions and absorption by 2050, which is faster than the government's timeframe.
Former prime minister Prayut Chan-o-cha announced at the 26th UN Climate Change Conference in Glasgow in 2021 that Thailand would be more aggressive in addressing climate change, striving to reach a net-zero target by 2065.
Mr Vitai said around 10% of 1.72 million tCO2e will be absorbed by the GSB's afforestation project. The bank intends to grow trees covering 50,000 rai of land within 2033.
Under its plan to reduce Scope 1 and 2 emissions, GSB is installing rooftop solar panels at its branches, with the number set to increase to 900 within 2025, up from 300 this year.
There are currently 1,050 branches nationwide.
GSB will also replace all of its oil-powered cars in Bangkok with electric vehicles within the next three years.
The bank is using environment, social and governance (ESG) scoring by reducing interest rates and increasing loans granted to companies adopting ESG principles.
