The Asia-Pacific Economic Cooperation (Apec) summit offered a glimpse into how countries plan to deal with uncertainties post-pandemic as well as the Thai government's push towards a new economic model.
Prime Minister Prayut Chan-o-cha urged 21 Apec leaders to embrace the bio-, circular and green (BCG) economic development model, which shares the same aim as the UN's campaign for sustainability.
The BCG model comprises the bio-economy, which involves the production of renewable biological resources and the conversion of these resources into value-added products; a circular economy, which is based on an upcycling process to add value to unwanted materials, making them usable again; and a green economy that tries to keep the economy, society and the environment in balance, leading to sustainable development.
Thai business leaders are exploring opportunities in a BCG-driven economy, while admitting many challenges need to be overcome.
Government support
The Thai Hotels Association (THA) is calling on all stakeholders in the tourism industry to take part in the BCG model.
For example, hoteliers need to reduce waste and waste water, while travel agencies should design sustainable journeys for their customers and opt for accommodation in green hotels, said THA president Marisa Sukosol Nunbhakdi.
"We can contribute a lot to BCG because the tourism segment must be sustainable," she said. "This could be an opportunity for Thailand to position itself as a green destination."
THA has been working on sustainability with partners such as the Tourism Authority of Thailand, the Thai Chamber of Commerce and the Natural Resources and Environment Ministry.
Hotels need more government support in terms of procurement to support them becoming "green hotels", said Mrs Marisa.
"There needs to be a demand first. Then the supply will follow," she said.
Most independent travellers still do not consider sustainability as their main priority in choosing accommodation, said Mrs Marisa.
She said the government should consider solutions, such as providing tax incentives for hotels that pursue reduced energy usage, co-investment in energy-saving devices, and subsidising THA to provide training for hotelier members on sustainability.
THA has been campaigning among its hotel members to reduce carbon emissions by reducing general waste, food waste and energy in the first phase, said Mrs Marisa.
She said the BCG model requires technology and innovations, and there is still a gap in accessing the knowledge and funding for these tools.
Hotels focusing on reducing energy consumption and using renewable energy would ensure cost savings in the long run, said Mrs Marisa.
Banks offering green loans is a positive sign of support for the BCG model, she said.
"As we transition from the pandemic and face external economic risks, there are still challenges for operators to manage these risks and control costs in adopting BCG policies," said Mrs Marisa.
Cleaner industries
The Federation of Thai Industries (FTI) is looking forward to the growth of environmentally friendly and value-added businesses, especially those in the energy sector, as BCG takes centre stage in the manufacturing arena.
New industries that adopt technological innovations are likely to enjoy pleasant business prospects using the BCG concept, said Kriengkrai Thiennukul, chairman of the FTI.
The federation hatched a plan to support the bio-economy by launching "Smart Agriculture Industry", which aims to add value to farm produce and improve the local economy, he said.
Some companies already developed a circular economic model. Millcon Steel uses iron slag, an unwanted byproduct from steel manufacturing, to reinforce roads. It also uses slag to make concrete blocks.
In terms of green economic development, an "Eco-Factory" project was launched to encourage factory owners to use more clean energy and develop energy storage systems to serve as a back-up power source for electricity produced by intermittent renewable energy sources such as the solar, according to the FTI.
"The Thai manufacturing sector needs to increase its competitiveness and step up efforts to attain business sustainability," said Mr Kriengkrai.
SET-listed energy conglomerate Bangchak Corporation is directing its business trajectory towards clean energy.
The company plans to focus on projects related to electric vehicles (EVs), including the development of EV charging facilities to support BCG economic development, said Gloyta Nathalang, executive vice-president for corporate branding, communication and sustainability activation.
Global Green Chemicals Plc (GGC), a biochemical arm of PTT Global Chemical Plc, is adding value to its bio-based products by developing a range of new products, including biofuel for aircrafts.
The move is in line with the government's promotion of the bio-economy under the BCG umbrella.
Piroj Samutthananont, managing director of GGC, said the plan to produce biofuel for aircrafts comes as fossil fuel-derived jet fuel may face a ban or high tax rates in the future for flights to and from Europe.
The company currently makes biofuels for cars, which is part of efforts to help Thailand become less dependent on oil and reduce carbon dioxide emissions.
Their products include sugar-derived ethanol, which is used to mix with gasoline, and palm oil-derived methyl ester, which can be blended with diesel to make biodiesel.
GGC is located in the Nakhon Sawan Bio Complex (NBC), located on 2,000 rai in the Takhli district of Nakhon Sawan province.
NBC wants to target high-tech biochemical industries, including biopharmaceutical development.
The NBC's first-phase development includes a sugar cane crushing unit with a daily capacity of 24,000 tonnes; an ethanol production plant with a daily capacity of 600,000 litres; a biomass power plant with 85 megawatts of capacity; and steam generation of 475 tonnes per hour.
New marketing tools
Courier service Kerry Express (Thailand) Plc regards the concepts of ESG (environmental, social, and corporate governance) and the BCG economic model as necessary in a new economy.
Kerry chief executive Alex Ng said businesses from the old economy should not underestimate the costs and efforts to deliver such mandates, which requires considerable investment.
The company initiated an R&D task force focusing on eco-friendly and green engagement, working with parent firm SF Holding in China to pursue it, he said.
"We can speak more confidently about BCG when the technology becomes more mature and affordable," said Mr Ng.
"We are starting global sourcing to find appropriate solutions, not only from Thailand but from everywhere."
Jirachai Tangkijngamwong, R&D and marketing director of Deesawat Industries Co, a wood-based furniture maker, said the government proposed the BCG model to push all parties in the same direction.
BCG and sustainability are global trends and Thailand can use them to differentiate its products, he said.
"No country has become a leader in BCG or sustainability yet," said Mr Jirachai.
"If we can establish our position in this field, it will build trust and credibility."
Deesawat, a pioneer in wood furniture production and export, has received customer requests from overseas for sustainability-linked products. The company expects this trend will become a mandate or standard in the future, he said.
"Sustainability is now a new marketing tool," said Mr Jirachai.
"If we ignore it or are unprepared for it, when the time comes we could lose out."
The government should better communicate with the public about the BCG model because the majority of people still do not understand it, he said.
Local administrative organisations need to understand the model and transfer such knowledge to local communities, said Mr Jirachai.
"When people understand the model, they can make up their own minds on whether they will embrace BCG or not," he said.
Deesawat can design products made from agricultural or industrial waste, differentiating its goods from competitors, said Mr Jirachai.
"Instead of asking how we can benefit from sustainability, we should ask what we stand to lose by not pursuing it," he said.
BCG products must not be more expensive than traditional items to create momentum among users, said Mr Jirachai.
Success stories necessary
Sanan Angubolkul, chairman of the Thai Chamber of Commerce, acknowledged most people have little understanding about BCG economic development.
The private sector hopes the Apec 2022 meetings will become a venue to inform many portions of Thai society and Asia about the BCG development model.
According to Mr Sanan, a better understanding of BCG and sustainable development needs to be promoted not only among large businesses and industries, but also among small and medium-sized enterprises (SMEs) because environmental protection and green product requirements are included in some international trade measures and new free trade agreements.
He said it is essential for the government to cooperate with the private sector to create a business prototype that applies BCG and becomes successful so that other companies can follow the model.
The chamber established the Circular Economy Academy for Entrepreneurs and Consumers in partnership with the University of the Thai Chamber of Commerce to enhance the competitiveness of Thai businesses, in response to the country's BCG economy development policy.
Chaichan Chareonsuk, president of the Thai National Shippers' Council, said the government needs to offer financial support and funding, especially to SMEs that want to transform their production process to become green factories, while spending more on R&D as well as promotion of establishing product design and development centres and green industrial estates.
Business sustainability
Many companies support ESG practices, which share similar goals to BCG economic development, with both moving towards a goal of sustainability.
ESG is a set of standards adopted by investors and companies that support businesses that care for the environment and people, as well as promote good governance.
During August and September, Deloitte Thailand surveyed corporate executives from 106 companies in the country to determine how business landscapes are being transformed by environmental and social concerns.
Most business leaders prioritise awareness of ESG in the organisation and integrate ESG practices into corporate strategy, according to Deloitte's Thailand ESG and Sustainability Survey Report 2022.
Some 85% of respondents in the finance and accounting field agreed that sustainability plays an increasingly important role for corporate finance.
The majority of respondents prioritise their role in reporting on sustainability key performance indicators (KPIs) or metrics as part of a standard cycle.
Roughly 19% see finance as a driver to define and meet sustainability targets, according to the survey.
Unlisted companies also aim for sustainability goals to be fully integrated into the enterprise performance management process, according to Deloitte.
The pollster found 51% of respondents report on ESG management approaches and KPIs as part of their reporting cycle.
However, a quarter of respondents collected ESG data, but did not disclose it to the public.
The survey found the lack of technology for effective data collection, lack of talent and skills within the organisation, and unavailability of data as the main gaps respondents identified as limiting efficient reporting on sustainability.
