Elevating Large-Scale Projects Finance Credit Assessment through the Equator Principles (EPs)
Siam Commercial Bank has strengthened the assessment of large-scale project financing by adopting the Equator Principles (EPs), a globally recognized environmental and social risk management framework applied by more than 129 leading financial institutions worldwide. The application of the EPs enhances transparency, consistency, and auditability in the credit assessment process, while reinforcing stakeholder confidence that the Bank duly considers community and environmental impacts alongside sustainable business growth. SCB is the first and only financial institution in Thailand to become a member of the Equator Principles Association (EPA), having joined in 2022.
Since joining the Association, the Bank has assessed over 101 projects under the EPs framework, enabling more accurate project risk screening and categorization, establishing appropriate governance frameworks for high-risk projects with systematic management systems and impact prevention/mitigation measures, as well as remedial action plans when impacts occur. Implementation of the EPs not only mitigates the Bank's legal and reputational risks but also enhances long-term credit portfolio quality, supports more prudent credit decision-making, and demonstrates the Bank's concrete commitment to driving responsible and sustainable investment. SCB's governance framework encompasses seven core processes:
1
Define Policy & Governance
Establish the EPs framework and internal guidelines within the Bank
2
Initial Eligibility Screening
Screen projects prior to credit consideration
3
Project Categorization
Classify projects as Category A / B / C based on level of environmental and social risk and impact
4
Compliance Review
Environmental and social assessment by an independent expert for high-risk projects
5
Credit Approval
Specify covenants and conditions that the client must comply with throughout the loan term
6
Ongoing Monitoring
Conducted in collaboration with an independent expert for high-risk projects
7
Report to EP Association
Annual public disclosure to ensure transparency and accountability


Journey Towards Responsible Lending and ESG Risk Integration

2017
Initial Integration
SCB initiated Responsible Lending by adopting internationally recognized frameworks for analyzing and managing environmental and social risks — including the Equator Principles and the International Finance Corporation (IFC) Performance Standards — and applied them appropriately to Project Finance assessments.

2018
Policy Foundation
SCB revised its Credit Policy Guides by defining an Exclusion List of activities the Bank will not support, and establishing Sector-Specific Guides to ensure that projects receiving financial support have appropriate management plans to mitigate negative social and environmental impacts in a fair and systematic manner.
 SCB Responsible Lending Process 
 Exclusion List – Responsible Lending 
 Sector-Specific Lending Guidelines 

2019
Industry Collaboration
🤝 13 August — Signed MOU Supporting Responsible Lending
SCB co-signed a Memorandum of Understanding on Sustainable Banking — specifically covering Responsible Lending — at the Bangkok Sustainable Banking Forum 2019, a collaborative initiative between the Bank of Thailand, the Thai Bankers' Association, and member commercial banks.

2021
Commitment to Global Frameworks
🌐 27 September — Declared Support for PRB and PRI Principles
SCB joined the "Statement of Commitment for Sustainable Thailand 2021," pledging to adopt the Principles for Responsible Banking (PRB) of the UNEP Finance Initiative as a foundation for developing the Bank's management practices in line with international standards.

2022
Scaling to International Standards
⭐ 31 January — Joined Equator Principles Association as Thailand's First Member Bank
SCB became the first Thai bank to join the Equator Principles (EP) Association and implemented the EPs framework to develop an environmental and social risk management system for Project Finance, in support of the Sustainable Development Goals (SDGs) and the Paris Agreement on Climate Change.
Statement on Fossil Fuel Financing Policy Announced
SCB established its Statement on Fossil Fuel Financing, covering two key industries: Coal, and Unconventional Oil & Gas Financing — contributing to carbon reduction efforts and supporting the transition toward Net Zero.
 Statement on Fossil Fuel Financing 

100%
Full Coverage of All Project Finance Loans
Every Project Finance transaction undergoes environmental and social risk assessment under the EPs framework

Project Finance Case Studies
Project 1
5-Star Hotel Development
5-Star Hotel · Chinatown District · 11 Floors + 4 Basement Levels · 351 Rooms
🔍 Impact Assessment
•Construction may generate environmental and community impacts including noise, vibration, dust, and wastewater affecting neighboring communities
•Operational impacts from guest activities including greenhouse gas emissions from electricity consumption, water resource usage, solid waste, and wastewater generation
⚙️ Management Approach
•Environmental covenants embedded in the loan agreement, requiring the project to obtain an Environmental Impact Assessment (EIA) approval and operate in accordance with an expert-reviewed Environmental and Social Management Plan
•Mandatory periodic progress reports on compliance with environmental and social measures to identify issues, obstacles, and corrective actions
Project 2
Condominium Development
Condominium · Samsen Road, Chao Phraya Riverside · 5 Buildings · 1,414 Units
🔍 Impact Assessment
•Construction may generate environmental and community impacts including noise, vibration, dust, and wastewater affecting neighboring communities
•Operational impacts from residents including greenhouse gas emissions from electricity consumption, water resource usage, solid waste, and wastewater generation
⚙️ Management Approach
•Environmental covenants embedded in the loan agreement, requiring the project to obtain an EIA approval and operate in accordance with an expert-reviewed Environmental and Social Management Plan
•Mandatory periodic progress reports on compliance with environmental and social measures to identify issues, obstacles, and corrective actions
Project 3
Industrial Waste to Energy
Industrial Waste to Energy · 9.9 MW · Kaeng Khoi Industrial Estate, Saraburi Province
🔍 Impact Assessment
•Greenhouse gas emissions are generated through the combustion of industrial waste; however, compared with landfilling or open burning, the project creates Avoided Emissions resulting in a net reduction of GHG output
•Potential impacts on air quality, waste residue management, water quality, as well as noise and odor
⚙️ Management Approach
•Assessed against international standards including ADB Safeguard, AIIB ESF, IFC Performance Standards, Equator Principles, World Bank EHS Guidelines, and EU Air Quality Standards
•An independent environmental and social consultant engaged to analyze, advise, and monitor compliance
•Pollution control systems designed using Best Available Technology in accordance with WBG EHS Guidelines, with regular monitoring of pollutant emissions required
•Community engagement and stakeholder consultation plan developed, with a Community Development Fund established to share benefits with neighboring communities