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Private philanthropic fund initiated for CSR

The Nation, July 23, 2015 – After the THAIPAT Institute, a public-interest organisation, recently gave a Thai debut to the concept of "philanthropic investment" - a CSR initiative on the basis of win-win situations - six pioneering enterprises have joined forces in funding the initiative with combined start-up finance of Bt120 million.

Under the plan, the fund will invest in listed securities on the institute's ESG 100 list, for environmental, social and governance securities.

Profits are expected to be no lower than what are offered by traditional investments, which means investors will earn regular returns for their choices of CSR activities.

The six founding partners are BTS Group Holdings, Minor Group, LPN Development, Khon Kaen Sugar Industry, Nam Seng Insurance, and Tisco Financial Group, with each company investing Bt20 million.

Oranuch Apisaksirikul, president of Tisco Group, said the company had applied for approval from the Securities and Exchange Commission to establish such a fund, which it hopes to launch next month.

In addition to joining the investment, Tisco Group is a manager of the fund.

Tisco believes the company will be able to put its expertise to good use and allow the philanthropic-investment fund to reap good returns.

Investors have evidently gained a 24-per-cent return on investments in ESG securities elsewhere over the past five years, she said.

Philanthropic investments have been going on in other countries for quite a long time, so it is good that such a concept has now materialised in a tangible form in Thailand, she added.

Profits from its investments will go to Tisco's CSR activities, which usually focus on the promotion of financial literacy because Thais in general still have a low level of financial knowledge, she explained.

Meanwhile, Anat Arbhabhirama, executive director of BTS Group Holdings, said the project would enable the participating enterprises to organise their CSR activities sustainably, while his company also recognised that ESG investments had been growing significantly across the world.

As to the return on investment, BTS Group Holdings will use the profits to fund the "Happiness Station by BTS Group Members" programme, a core part of the firm's CSR activities.

THAIPAT Institute director Pipat Yodprudtikan said the institute had organised a series of roadshows to introduce the initiative because it was a new investment concept in Thailand.

There has been a good response among enterprises in various sectors, he said.

Besides the major private firms, foundations and family businesses are also potential partners in the fund, which in the first year of operation is expected to have total funding of around Bt1 billion.

Until now, social contributions through CSR activities have usually been made in the form of donations or grants in terms of corporate philanthropy.

However, while such giving of money or supplies paves the way for organisations to engage target communities or stakeholders in the short run, or for a certain period of time, it is not suitable as a long-term approach that requires no budgetary limit, said Pipat.

"Philanthropic investments are about investing money or assets for the purpose of generating returns that can be used to help society in the areas of education, public health, occupational development, environmental conservation, and more.

"Through such investments, the start-up fund or assets will remain intact. So, they are different from direct philanthropy or traditional donations of money and supplies to society," he explained.