ThaiNGO

TITLE: Development of an Environmental and Social Risk Management (ESRM) Tool for Banks and Financial Institutions in Thailand

CONTRACT TYPE: Fixed Price Contract

DURATION: AUGUST 2026 – JUNE 2027 (with possible extension)

The Asia Foundation (TAF), through the Mekong Safeguards program supported by the Australian Government through Mekong-Australia Partnership (MAP), is seeking an experienced and qualified consultant, organization, or research institute (the Contractor) to develop sector-specific environmental and social risk management (ESRM) tools for banks and financial institutions in Thailand. The assignment is structured in three sequential phases: (i) a diagnostic assessment of current ESRM practices, capacity, and maturity across participating banks; (ii) development of a common, industry-level ESRM framework establishing the policy architecture, risk categorisation approach, and sector-specific risk considerations for energy, transport, and water infrastructure lending; and (iii) translation of that framework into a detailed Environmental and Social Management System (ESMS) with one or two selected member banks, embedding environmental and social (E&S) assessment into each stage of the credit process. The framework and the ESMS will be calibrated to Thailand's regulatory context and to international and regional standards, including the IFC Performance Standards, the Asian Development Bank’s (ADB’s) ESF, the Thailand Taxonomy, and the ASEAN Taxonomy, with gender equality, disability, and social inclusion (GEDSI) considerations embedded throughout.

BACKGROUND

Infrastructure development in the Mekong subregion is expanding rapidly, particularly in the energy, transport, and water sectors. Financial institutions play a critical role in shaping the environmental and social (E&S) outcomes of these investments, yet ESRM practices among banks in subregion remain uneven. Three key challenges constrain effective risk management: weak and fragmented enforcement of E&S regulations; inadequate due diligence within banks, including overreliance on client-led environmental and social impact assessments (ESIAs); and the lack of systematic integration of GEDSI into banking operations. These gaps undermine banks' ability to fully assess the social risks and potential exclusionary impacts of infrastructure finance. In Thailand, capacity varies widely across the sector: some banks have established sustainability functions and published E&S commitments, while others are at an earlier stage of developing E&S risk processes. A common framework must therefore be workable across this range.

Under Activity 3.1.1 of the Mekong Safeguards program, TAF is working with partner organisations to strengthen the capacity of banks in Thailand to adopt practical, sector-specific ESRM systems in infrastructure finance. The assignment distinguishes two layers: an ESRM framework, which sets the policy architecture, risk categorisation approach, and sector-specific risk considerations to be adopted at industry level; and an Environmental and Social Management System (ESMS), which translates that framework into the procedures, tools, and decision points applied at each stage of an individual bank's credit process. The intent is not to create a new standalone guideline, but to translate existing international and regional frameworks into a practical, country-relevant tool. The work also builds on existing industry initiatives, such as the Responsible Lending Framework, and the ESG Declaration led by the Thai Bankers' Association. This assignment covers the diagnostic assessment, the development of the industry-level framework, and its translation into a working ESMS with one or two member banks, which together will serve as the foundation for institutionalising ESRM across partner financial institutions.

OBJECTIVES

The objective of this project is to strengthen the capacity of banks and financial institutions in Thailand to identify, assess, and manage environmental and social risks in infrastructure finance. Specifically, the project aims to:

• Establish an evidence-based understanding of current ESRM practices and gaps among participating banks;
• Establish a common, industry-level ESRM framework for infrastructure lending that aligns with regional and international E&S safeguards framework;
• Demonstrate, with one or two selected member banks, how that framework translates into a working ESMS embedded in the credit process; and
• Ensure that gender equality, disability, and social inclusion (GEDSI) considerations are embedded in how banks assess and manage risk.

SCOPE OF WORK

The Contractor will provide technical analysis, framework development, and implementation support across the three phases set out below, working in close coordination with TAF, the partner association, and the ESRM working group comprising representatives of financial institutions. The phases are sequential, and each builds on the deliverables accepted under the preceding phase.

Phase 1: Diagnostic Assessment of ESRM Practices and Capacity in Participating Banks

The Contractor will:

• Map current ESRM practice in participating banks across two layers: the policy layer (E&S commitments, exclusion lists, governance, roles, and escalation to credit decision-making authorities); and the credit-process layer (the decision points at which E&S considerations enter credit assessment and approval, how findings are reflected in credit memoranda and risk ratings, and the extent to which E&S requirements are translated into loan conditions, covenants, and monitoring obligations).
• Benchmark these practices against Thailand's regulatory and industry context, including central bank guidance, the Thailand Taxonomy, and the Sustainable Banking Guidelines, Responsible Lending Framework, and ESG Declaration, and against international and regional standards, with specific attention to how gendered social risks and impacts on women, people with disability, and other marginalised groups are identified and addressed.
• Assess the relative maturity and capacity of participating banks, distinguishing institutions with established E&S risk functions from those at an earlier stage, and identify implementation and resourcing constraints that the Phase 2 framework will need to accommodate.
• Propose criteria and a shortlist for selecting the bank(s) to participate in Phase 3, based on institutional readiness, willingness to commit staff time and internal data, and infrastructure lending exposure in the energy, transport, and water sectors.

Phase 2: Development of a Common, Industry-Level ESRM Framework

The Contractor will:

• Based on the diagnostic findings, develop common bank-wide ESRM framework setting out the policy architecture that participating banks are expected to adopt, including the scope and commitments of an E&S policy, governance arrangements and accountabilities, treatment of excluded activities, and the basis on which E&S risk is escalated to credit decision-making authorities.
• Define an E&S risk categorisation methodology that is proportionate to risk level, transaction characteristics, materiality, and bank capacity, together with sector-specific risk considerations for the energy, transport, and water sectors, and set out the framework's expectations on where banks may rely on, verify, or supplement client-led environmental and social impact assessments (ESIAs).
• Integrate  GEDSI through material social risk pathways, including screening questions that identify gendered livelihood impacts, displacement risks, and systemic barriers to meaningful participation in financed projects for marginalised groups.
• Facilitate validation workshop(s) with the ESRM working group, partner association(s), and TAF to test and refine the draft framework, and finalise it incorporating feedback.

Phase 3: Development of a Bank-Level ESMS with Selected Member Bank(s)

The Contractor will:

• Working with one or two selected member banks, translate the industry-level ESRM framework into a detailed ESMS covering each stage of the credit process, from origination through credit assessment, approval, loan documentation, disbursement, and portfolio monitoring.
• Develop the operational instruments required to apply the ESMS, including but not limited to:
  • E&S screening and risk categorisation forms;
  • sector-specific due diligence checklists for the energy, transport, and water sectors;
  • the E&S section of the credit memorandum, and sign-off requirements by risk category;
  • an Environmental and Social Action Plan (ESAP) template, together with model E&S covenant and condition-precedent language for loan documentation; and
  • monitoring, reporting, and escalation tools for use over the loan tenor.
• Test the ESMS instruments against a limited number of recent or illustrative transactions, as agreed with the participating bank(s) and subject to confidentiality arrangements, and refine the instruments on the basis of the results.
• Facilitate a validation session with the participating bank(s) and finalise the ESMS package, including recommendations for institutionalising the ESMS within the bank's enterprise risk management framework, extending it to other member banks, and inputs to the design of the capacity-building program for member banks.

DELIVERABLES, TIMELINE, PAYMENTS

*Phased engagement and TAF's right to conclude the assignment after Phase 2

TAF reserves the right to conclude the assignment at the end of Phase 2. The activation of Phase 3 will be confirmed in writing by TAF following satisfactory completion of Phase 2, subject to programme priorities, availability of funds, and the outcome of the diagnostic and framework work. Where TAF elects not to proceed with Phase 3, payment will be limited to deliverables accepted up to and including Deliverable 6 (the Final Industry-Level ESRM Framework), representing 60% of contract value, and no further fees or claims will be payable in respect of Phase 3. Deliverables 8–10 in the table above are contingent on TAF's activation of Phase 3. TAF will confirm activation or non-activation of Phase 3 in writing within 90 days of acceptance of Deliverable 6. Phase 3 pricing set out in the Contractor's financial proposal shall be held firm for six months from the date of acceptance of Deliverable 6; thereafter, Phase 3 pricing may be revised by mutual agreement.

Financial Proposals

Firms should propose team composition and level of effort appropriate to the scope; Phase 3 will be confirmed at the point of Phase 3 activation (see the phased engagement clause above). All financial proposals should be inclusive of professional fees, applicable taxes, and allowable reimbursable expenses. In line with the deliverable payment schedule and the phased engagement clause above, proposals should show the Phase 3 (Deliverables 7–9) price as a distinct sub-total, so that Phase 1–2 and Phase 3 costs are separately identifiable.

Expected Outcome

The outputs of this assignment will provide an evidence-based baseline of ESRM practices and capacity among participating banks in Thailand, a common industry-level ESRM framework for infrastructure lending, and a demonstrated bank-level ESMS showing how that framework operates in practice within the credit process. Together these will form the foundation for institutionalising ESRM within partner financial institutions, delivering targeted capacity building for member banks, and strengthening responsible infrastructure lending and sustainable finance practices in Thailand and, through the Mekong Safeguards program, the wider subregion.

QUALIFICATIONS

• Substantial professional experience in environmental and social risk management, sustainable finance, or infrastructure finance, including direct engagement with commercial banks or development finance institutions.
• Demonstrated experience designing or implementing ESRM/ESMS frameworks within commercial banks, development finance institutions, or other financial institutions.
• Demonstrated experience developing bank-facing E&S transaction tools — screening and categorisation, due-diligence checklists, ESAP templates, and covenant/monitoring provisions.
• Practical understanding of credit processes, including origination, credit analysis, approval, loan documentation, covenants, and portfolio monitoring.
• Strong knowledge of international E&S standards in particular the IFC Performance Standards, ADB’s ESF and Equator Principles and their practical application to infrastructure finance.
• Experience in the energy, transport, and/or water infrastructure sectors in Southeast Asia.
• Experience conducting institutional diagnostics and stakeholder consultations with financial institutions.
• Demonstrated capability to integrate gender equality, disability inclusion, and broader social risk considerations into E&S risk assessment and management.

SUBMISSION REQUIREMENT

Interested contractors must submit a letter of interest, CV or company profile by August 21, 2026. Please submit all application documents to: mekong.safeguards@asiafoundation.org 

Email subject line: Application – ESRM Consultant