Bangkok, The SEC confirms that the investment of all Thai Sustainable Mutual Funds (Thai ESG Mutual Funds) still meets the investment diversification criteria. The investment proportion in shares of Energy Absolute Public Company Limited (EA), whose executives were accused, is only 0.35 percent of the net asset value (NAV) of all Thai ESG Mutual Funds. According to the Securities and Exchange Commission (SEC) criteria, Thai ESG mutual funds must invest in businesses that operate sustainably, including receiving good SET ESG ratings (eligible assets)* in an average proportion of no less than 80 percent of NAV per fiscal year to serve as a mechanism to drive sustainable development in Thailand. In the event that an asset management company sees that a company has inappropriate governance, even if that company receives SET ESG ratings according to the specified criteria, the asset management company is required to exercise fiduciary duty in considering not to include investment in such company as eligible asse ts that must be invested in an average of no less than 80 percent of NAV per fiscal year, while the remaining investment must still comply with the specified investment ratio. However, in the case that the invested company lacks the sustainability characteristics as specified by the Thai ESG fund criteria, the fund can still invest, on average, not exceeding 20% ??of the NAV per accounting year, which is considered non-eligible assets. As of the end of May 2024, Thai ESG mutual funds had a total NAV of 6,844 million baht, with an investment in EA shares of 24 million baht, accounting for only 0.35 percent of the total NAV. Therefore, it is certain that all Thai ESG mutual funds can invest according to the specified criteria, even if investment in EA shares is not included as eligible assets. For other mutual funds, the investment value in EA Company's securities is 0.06 percent of NAV, including the industry. The fund management company has a duty to exercise caution in considering investment as appropriat e. Ms. Waratchaya Srimachan, Deputy Secretary-General of the SEC, said that according to the resolution of the Stock Exchange of Thailand, by the Working Group on Sustainable Investment, to remove EA companies from the list of sustainable stocks, SET ESG Ratings, due to lack of qualifications according to the SET ESG Ratings criteria, effective from July 15, 2024, this will not affect the investment of Thai ESG funds in accordance with the specified criteria. From the monitoring of the SEC, it was found that Thai ESG mutual funds and other mutual funds have a small proportion of investment in EA companies compared to the industry. Therefore, the asset management company has a duty to exercise caution in considering investment as appropriate. For the investment criteria of Thai ESG mutual funds in the eligible assets section, it is stipulated that the investment must be in assets issued by the Thai government sector or businesses established under Thai law, as follows: On average, for the fiscal year, it mus t not be less than 80 percent of the fund's net asset value (NAV); (1) Stocks listed on the Stock Exchange of Thailand (SET) and the Market for Alternative Investment (mai) with the following characteristics: (1.1) Selected by the SET as having outstanding environmental (environment) or sustainability (ESG) aspects, and/or (1.2) Disclosure of greenhouse gas emission data, management plans, and target setting to achieve Thailand's greenhouse gas emission reduction targets, which have been verified for carbon footprint preparation by the auditor, and/or (2) Debt instruments that comply with the offering criteria for debt instruments related to sustainability*, and/or (3) Digital tokens for fundraising related to sustainability with standards similar to such debt instruments, and as the SEC will further announce. Source: Thai News Agency