Story: Natee Thongchan, Innovative Climate Risk Financing for the Agricultural Sector in the ASEAN Region Project (AgriCRF)
Ubon Ratchathani,– GIZ, through the Innovative Climate Risk Financing for the Agricultural Sector in the ASEAN Region Project (AgriCRF), in collaboration with Bank of Agriculture and Agricultural Cooperatives (BAAC), has piloted the ‘ESG Risk Radar’ assessment tool for enhancing agri-financial sustainability.
Developed by GIZ in collaboration with German Sparkassenstiftung for International Cooperation (DSIK), ESG Risk Radar is a tool for environmental, social and governance (ESG) risk assessment. Since July 2024, AgriCRF project staff have been working with a BAAC team of executives to study the feasibility of implementing ESG Risk Radar. The tool has been tailored to suit BAAC’s risk and credit assessment policy and the objectives of providing financial assistance to farmers, farmer associations and agricultural cooperatives that conduct agriculture and other agriculture-related business. The first trial period was piloted in Muang district, Chiang Rai province in April 2025, and later in Muang district, Ubon Ratchathani province in May and November 2025. The pilot phase comprised training on the fundamental ESG Risk Radar tool, risk assessment and data collection from clients using the ESG Due Diligence Checklist. A total of 71 BAAC loan officers in the two pilot provinces were trained and more than 750 risk assessment samples collected.
Julian Tost, Project Director, GIZ Thailand, said: “Climate change continues to pose a serious risk to the agricultural sector and financial institutions like BAAC. Hence, we have been working in collaboration with DSIK and BAAC to design the ESG Risk Radar tool, which is suitable for BAAC’s needs while equipping the capacity of farmers and the agricultural sector in Thailand to prepare for any unforeseeable challenges in the future.”
The AgriCRF Project Director said ESG Risk Radar required two levels of implementation. For the policymaking level, the project team worked with a BAAC team of executives to plan and develop the ESG Risk Radar assessment tool. For the operational level, BAAC provincial loan officers had training on how to use the tool for collecting data from smallholder farmer clients for ESG risk assessment.
The uniqueness of the ESG Risk Radar tool is the ability to clearly analyse and showcase ESG risk based on client feedback. Such results enable the bank to effectively plan for risk and credit assessment and strategise financial packages that will support their clients in reducing climate risk and becoming more financially resilient.
After completion of the pilot phase, BAAC client development officers in Chiang Rai further implemented ESG Risk Radar with their clients. However, it is still necessary for BAAC to conduct ESG risk assessment with different types of clients in individual areas to improve the effectiveness and efficiency of the tool.
Ultimately, ESG Risk Radar is not just a checklist; it is a forward-looking tool that supports BAAC’s mission of serving Thailand’s farmers while promoting a more resilient and sustainable loan portfolio,” Mr Tost said.
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