Taskforce on Nature-related Financial Disclosures (TNFD) maturity in the Thai Financial Sector EP.1 (1/2)

Introduction: Climate change and degradation of nature – a clear and present threat

Climate change and the degradation of natural environments present significant challenges and risks to both society and businesses worldwide. Proactive management strategies are essential to address these issues and mitigate their impacts effectively.

According to the World Economic Forum’s (WEF) annual risk report, climate change, along with nature and biodiversity-related concerns, consistently rank among the top five long-term global risks.

The figure shows the world’s top five long-term risks

^{Sources: WEF Global Risk Report 2025[1]}

Many businesses already recognise that managing sustainability-related risks is crucial for their resilience and long-term survival. According to PwC’s ‘28th Annual Global CEO Survey - Asia Pacific: Reinvention in motion^[2]’, a significant 85% of CEOs in the region have initiated climate-friendly investments in the past year. Among these leaders, 39% have reported an increase in revenue, while 34% have encountered cost pressures.

In the Asia-Pacific region, investors are increasingly recognising the urgency of identifying and addressing nature-related risks as an essential part of risk management. This focus is highlighted in the joint report by PwC and the Asia Investor Group on Climate Change titled PwC and the Asia Investor Group on Climate Change (AIGCC) "Nature at a Tipping Point^[3]’. The report reveals that of the 20 individual sectors analysed, nine sectors with a higher dependency on nature contribute to 20% of gross value added (GVA) in the Asia Pacific. Of these nine most dependent sectors, agriculture, construction, food and beverage, and tobacco collectively account for 72% of the GVA in this segment (See Figure 1 and Figure 2).

Figure 1: Asia Pacific 2022 GVA by level of direct nature dependency

^{Note: Asia Pacific territories covered: Australia, China, Hong Kong SAR, India, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore, South Korea, Thailand, Taiwan, Vietnam.
Sources: EXIOBASE, ENCORE database, PwC analysis.}

Figure 2: Sector share of total GVA for global and Asia Pacific level, and their direct nature dependency

^{Notes: 1) Asia Pacific territories covered: Australia, China, Hong Kong SAR, India, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore, South Korea, Thailand, Taiwan, Vietnam; 2) Sectors in Figure 2 exclude other unassigned WEF industry sectors.
Sources: EXIOBASE, ENCORE database, PwC analysis.}

Economic and financial risks may arise from our dependence on nature and ecosystem services if the degradation of natural environments and its impacts on economic stakeholders aren’t sufficiently integrated into strategic, risk management and capital allocation decisions.

PwC’s analysis from the same report, indicates that 58% of the market capitalisation of Asia Pacific stock exchanges, totalling some USD17tn, involves companies significantly reliant on natural ecosystems. This dependency on nature is also visible at the individual territory level. In Thailand, the Stock Exchange of Thailand (SET)’s total market capitalisation exceeds USD366m in sectors that have a high to moderate reliance on nature, accounting for 61% of the exchange’s overall value^[3].
 

Please stay tuned for the next episode, where we will share more about sustainability reporting in Thailand’s financial sector.
 

References:
_{[1] The World Economic Forum (2025). Global Risk Report 2025.
[2] PwC and the Asia Investor Group on Climate Change (AIGCC) "Nature at a Tipping Point.
[3] The Securities and Exchange Commission, Thailand (2024). Public consultation on ISSB road map.}

Authors:

Chayathorn Chanruangvanich
Partner, Sustainability Advisory Services, PwC Thailand

Perpetua George
Director, Asia Pacific Sustainability, Nature & Biodiversity, PwC Malaysia