Net Zero in Financed Emissions
Thailand has advanced the net zero greenhouse gas emissions target from 2065 to 2050, underscoring the critical role of the financial sector in systematically supporting emissions reductions across businesses and industries. This aligns with the SCBX Group's approach of continuously driving its climate mission and making history as the first Thai financial institution to receive short-term greenhouse gas reduction target validation from the Science Based Targets initiative (SBTi), covering direct greenhouse gas emissions (Scope 1), indirect emissions from energy use (Scope 2), and indirect emissions throughout the organization's value chain (Scope 3) in Category 15, which relates to lending and investment activities, with details as follows:
Sector / Asset ClassApproachScopeTarget
Electricity generation project finance and corporate loansSectoral Decarbonization Approach (SDA)Scope 1+2Reduce CO₂ emissions to 0.19 tCO₂e/MWh by 2030 from a 2021 base year
Corporate loans to the commercial real estate sector and other long-term loansImplied Temperature Rise (ITR)Scope 1+2Align portfolio temperature score by loan value from 2.84°C in 2021 to 2.35°C by 2028
Scope 1+2+3Align portfolio temperature score by loan value from 3.13°C in 2021 to 2.71°C by 2028
Methodology for Setting and Monitoring Progress Toward Net Zero Goals for Loan Portfolio
Sectoral Decarbonization Approach: SDA
SDA
A physical emissions intensity metric measured in tons of carbon dioxide equivalent per megawatt-hour of electricity generated (tCO₂e/MWh).
Target · Scope 1+2
Reduce to 0.19 tCO₂e/MWh by 2030
From 2021 base year (0.39 tCO₂e/MWh) → 2024 performance: 0.348 tCO₂e/MWh
Implied Temperature Rise: ITR
ITR
A metric developed through collaboration between CDP and the World Wide Fund for Nature (WWF) and recognized by the Science Based Targets initiative (SBTi). It enables financial institutions to assess the temperature alignment of their lending portfolios against the global ambition to limit warming to 1.5°C. This assesses clients' temperature levels based on their commitment* to reduce greenhouse gas emissions in order to evaluate alignment with the pathway of global temperature increase in degrees Celsius.
Scope 1+2 — Commercial real estate & long-term loans
2.84°C (2021) → 2.35°C by 2028
ขอบเขต 1+2+3
3.13°C (2021) → 2.71°C by 2028
*Depends on several factors, including industry classification, target type, emissions scope coverage, ambition level, target year, and progress toward achieving the stated targets.
Sector Decarbonization Strategy

The Sector Decarbonization Strategy represents a key management approach adopted by Siam Commercial Bank to support the achievement of its Net Zero target by 2050. SCB focuses on five high-emitting sectors within the portfolio: power generation, fossil fuels, commercial real estate, chemicals, and automotive. The strategy delivers sector-specific management approaches that address the unique challenges and opportunities of each business group through collaboration with clients, industry leaders or experts, and relevant stakeholders. In addition, the Bank incorporates the Thailand Taxonomy to inform credit conditions and financing decisions, prioritizing commercially available technologies and promoting the advancement of the circular economy. Through these measures, the Bank aims to enhance the effectiveness of emissions reduction efforts and accelerate the transition toward a low-carbon economy.

Decarbonization Strategy for the Power Generation Sector

The power generation sector represents one of the most significant contributors to greenhouse gas emissions within the Bank's loan portfolio, accounting for approximately 54% of total financed emissions in 2024 and estimated to be the same level for 2025, which will be officially disclosed in SCBX Climate Report. Given the sector's critical role in supporting long-term economic growth and electricity demand, SCB places strong emphasis on establishing sector-specific climate strategies and targets for its power portfolio.

SCB's approach is aligned with internationally recognized standards for financial institutions under the Science Based Targets initiative (SBTi). Emissions reduction performance is measured using the Sectoral Decarbonization Approach (SDA), based on the IEA Net Zero Emissions by 2050 (IEA NZE) scenario, ensuring alignment with credible global decarbonization pathways.

Action for Transition

The Bank translates its strategy into implementation through four key actions:

Action 1
Coal Phase-Out Policy
SCB refrains from providing new or expansion of existing coal-fired power plant projects. For existing coal-fired power projects, current outstanding exposures are managed in accordance with contractual terms, with the expectation that such exposures will gradually decline in line with project lifecycles.
Action 2
Scaling Clean Energy Portfolio
SCB increases capital allocation to renewable energy projects, including solar power, wind power, energy storage systems (ESS), and smart grids, reinforcing its leading role in the clean energy market.
Action 3
Innovative Transition Finance Solutions
SCB deploys instruments such as Sustainability-Linked Loans (SLLs) and tailored financing structures designed to support clients' specific transition plans, facilitating measurable decarbonization outcomes.
Action 4
Proactive Engagement and Ecosystem Development
SCB works closely with clients, regulators, and relevant stakeholders to promote knowledge exchange on energy transition and to support the development of an enabling ecosystem for investment in clean technologies.

Driven by consistent strategy execution, SCB has successfully aligned the emission intensity of the power sector lending portfolio with its near-term decarbonization pathway. In 2024, the portfolio's carbon intensity was recorded at 0.348 tCO₂e/MWh, a significant reduction from the 0.39 tCO₂e/MWh baseline in 2021. Data for 2025 is currently in the final stages of preparation and is expected to remain consistent with our near-term targets. Detailed findings will be disclosed in the SCBX Climate Report, reflecting our systematic and continuous progress in managing the transition of our power generation portfolio.

Concurrently, SCB maintains its leadership in clean energy lending support. Since 2011, the Bank has continuously extended clean energy credit facilities to both existing and new clients, totaling approximately 223,000 million baht. In 2025, clean energy loans accounted for approximately 64% of the total power generation sector loan portfolio, establishing a critical foundation for driving long-term emission intensity reduction in the power generation sector loan portfolio.

Nevertheless, achieving the emission reduction targets for the power generation sector loan portfolio remains subject to external factors beyond the Bank's direct control. In particular, national energy policy direction and implementation timelines, such as the Power Development Plan (PDP), the country's Nationally Determined Contribution (NDC) targets, and related government support measures, significantly influence the scale of supply and growth of clean energy projects.

In addition, structural factors such as technology readiness, energy and electricity pricing, grid infrastructure capacity, and the need to maintain system reliability to support economic growth also influence the overall energy mix and emissions intensity of the power sector. These considerations may affect the Bank's ability to reduce portfolio emissions intensity in line with its long-term target pathway.

Decarbonization Strategy for Other Key Industry Sectors through Implied Temperature Rise (ITR)

Beyond the power generation sector, SCB manages greenhouse gas reduction across other key segments of the loan portfolio by setting near-term targets under the Implied Temperature Rise (ITR) methodology, with a target year of 2028. SCB focuses on controlling portfolio temperature alignment across four priority sectors that are either hard-to-abate or represent significant portfolio exposure: fossil fuels, commercial real estate (hospitality), industrial chemicals and raw materials, and automotive.

To drive these objectives, SCB integrates four key mechanisms into its core operating processes. These mechanisms are designed to reduce portfolio temperature pressure and facilitate an effective and orderly transition:

1
Elevating Strategic Collaboration with Clients
SCB supports clients in establishing clear greenhouse gas reduction targets that align with global temperature reduction goals.
2
Capital Allocation to Sustainability Leaders
SCB prioritizes financial incentives and capital support for clients demonstrating lower implied temperature levels, reinforcing the competitiveness of businesses with strong environmental performance and accelerating capital reallocation toward sustainability leaders.
3
Screening New Business Partners
SCB prioritizes the selection of new clients whose vision and business approaches align with the transition to a low-carbon economy, utilizing implied temperature criteria as one of the assessment metrics.
4
Portfolio Management and Rebalancing toward Sustainability
SCB manages portfolio structure to align with the direction of transition to a low-carbon economy, placing emphasis on clients with clear environmental targets.ำ
Strategies and Transition Challenges
Industry Sector
Fossil Fuels
Strategy

 Declaration of Intent : Non-provision of financial support for the following projects:

a. New or expansion of existing projects including : coal mining projects, coal-fired power plant projects, and dedicated infrastructure for the above coal mining or coal-fired power plant projects.

b. New, existing or expansion of existing unconventional oil & gas projects, : such as exploration and production of oil, natural gas, and liquefied natural gas from the following sources: 
    – Arctic oil and gas reserves 
    – Tar sands 
    – Ultra-deep-water oil and gas 
    – Shale oil and gas fields with formal approval for development after 2021


 Elevating Corporate Client Targets :

Supporting large corporate clients to establish more ambitious greenhouse gas reduction targets through various activities, including improving energy efficiency and reducing the proportion of revenue from coal business.


 Supporting Innovation :

Engages in knowledge exchange on emerging low-carbon technologies and business opportunities, such as Carbon Capture, Utilization and Storage (CCUS) and biofuels.


 Transition Partnership :

Providing knowledge to all client groups, including oil operators, retailers, and service stations, in adapting to sustainable business.

Challenges

Price Volatility : Energy cost fluctuations during the transition to renewable energy.

Technology Constraints : High costs and early-stage development of technologies such as green hydrogen and Carbon Capture Utilization and Storage (CCUS).

Policy Uncertainty : Awaiting clarity on laws, policies, and government support mechanisms that promote greenhouse gas emission reductions, such as the Climate Change Act, carbon tax system, and emissions trading system.

Industry Sector
Commercial Real Estate (Hospitality)
Strategy

 Green Building Standards :

Supporting loans for construction or renovation of buildings according to international and national standards related to Green Building Certification, such as LEED, EDGE, and TREES.


 Green Operations Standards :

Driving operational hotels to obtain global sustainability standards for Green Operating Certification, such as Global Sustainable Tourism Council (GSTC) and GSTC-recognized standards (e.g., EarthCheck, Green Hotel Plus).


 Diverse Financial Solutions :

Supporting through financial solutions, including Dedicated Purpose Financing (Use of Proceeds) and Sustainability-Linked Loans (SLLs).

Challenges

Energy Transition Gap : Most greenhouse gas emissions still originate from electricity generated from fossil fuels, an external factor requiring parallel transformation of the country's energy structure.

SME Constraints : Small operators still lack capital, knowledge, and access to low-carbon technology.

Industry Sector
Industrial Chemicals & Raw Materials
Strategy

 Performance-Linked Financing :

Supports corporate clients through Sustainability-Linked Loans tied to emissions reduction and energy efficiency indicators.


 Collaborative Networks :

Facilitates knowledge sharing on relevant technologies and policies while building partnerships to enhance client transition readiness.


 Policy Advocacy and Ecosystem Development :

Collaborating with the government to promote investment in clean technology, such as recycling ecosystems and clean technologies like CCUS technology, synthetic chemicals, and hydrogen energy.

Challenges

SME Constraints : Small operators still lack capital, knowledge, and access to low-carbon technology.

Cost and Technology : Investment in clean technology and infrastructure remains expensive, and new technologies are still under commercial development awaiting government policy clarity.

Industry Sector
Automotive
Strategy

 EV Value Chain Support (Grow Green) :

Expands financing across the electric vehicle (EV) ecosystem, from manufacturers and parts suppliers to charging infrastructure and related businesses.


 Transition Financing for Internal Combustion Engine (ICE) Groups :

Provides transition loans to clients in the conventional automotive supply chain with credible plans to shift toward next-generation vehicle technologies.


 Building a Strong Ecosystem :

Collaborating with the Electric Vehicle Association of Thailand and partners to build the electric vehicle ecosystem through knowledge provision and loan support to high-potential operators across various sectors, from electric vehicle manufacturers, parts manufacturers, electric charging station service providers, to other related operators, to drive widespread electric vehicle adoption.


 Selective Brand Support :

Supports retail and corporate customers choosing reputable EV brands to balance sustainability promotion with prudent credit risk management.

Challenges

Small Parts Manufacturer Constraints : Small parts manufacturers still lack capital and technology for production process adaptation, which may impact long-term competitiveness and export capability.

New Market Volatility : The electric vehicle industry ecosystem still faces uncertainty from price wars, resale price volatility, and hidden costs such as high insurance premiums.