Drawing on case studies of two controversial hydropower projects in Laos financed by Thai banks, this report points to weaknesses in the Thai Banks’ considerations of environmental and social risks. The report outlines why Thai Banks must integrate Environmental Social and Governance (ESG) risks into their lending decisions and conduct human rights due diligence in line with international standards. By doing so, Thai banks can better identify, prevent and mitigate adverse impacts, and minimise reputational, legal and financial risks from their lending.
The first section of the report outlines ESG risks and impacts of hydropower projects and responsibilities and commitments of financial institutions, drawing on relevant international and national standards and guidelines. The second section examines the Xayaburi and Xe Pian-Xe Namnoy dams in Laos, describing their environmental and social risks and impacts, and the Thai banks’ roles and responsibilities. The last section makes recommendations on how Thai banks can more meaningfully integrate ESG risks into their policies and practices.