PwC’s latest “ESG Awareness in Eurasia 2024” survey reveals a growing commitment to Environmental, Social, and Governance (ESG) practices across the region. Out of the 120 companies surveyed in Kazakhstan, Uzbekistan, and Mongolia, 62% have high-level ESG strategies, an increase from 45% 3 years ago.

Also, 85% of the companies agree that ESG trends will remain relevant in the region despite a lack of expertise, clarity of regulations, and budgetary resources.

Kazakhstan, however, stands out for its proactive approach. Last year, it introduced a strategic guide to achieving carbon neutrality by 2060, aligning with the Paris Agreement. Building on previous initiatives, like the “Taxonomy of Green Projects,” which classifies activities, assets, and projects eligible for green bonds and loan issuance, Kazakhstan is leading Eurasia in sustainable development.

These efforts have driven local organizations to pioneer ESG practices. According to the survey, 80% of Kazakh companies either have a fully established ESG management system or, at the very least, have environmental and social policies guiding their operations – the highest percentage in the region.

Additionally, around 70% of these organizations participate in the UN Global Compact, the world’s largest corporate sustainability initiative.

Kazakhstan’s decree on carbon neutrality extends across diverse industries, ensuring all key sectors have sustainable roadmaps for decarbonization. The manufacturing sector, for instance, is shifting toward alternative building materials and embracing new production technologies to minimize waste and energy consumption.

In the energy sector, the country aims to generate 50% of its power from alternative and renewable sources by 2050. Meanwhile, the agricultural industry is focused on sustainable practices, including forest management, reforestation, and improved livestock management techniques.

Among the standout sectors is Kazakhstan’s financial sector, which will be required to make ESG disclosures mandatory starting from the 2024 reporting year. Green financing, or support for environment-friendly investments, plays a central role in Kazakhstan’s carbon neutrality plan.

A key player in Kazakhstan’s green financing sector is Astana International Financial Centre. Founded in 2018, AIFC continues to lead crucial infrastructure development projects to advance green finance initiatives in the country. One in particular is the AIFC’s Green Finance Center which offers support to issuers, investors, and stakeholders involved in trading green bonds on the Astana International Exchange. The center is also expanding its resource capacity, aiming to become a hub of green finance across Eurasia.

As part of this effort, the Green Finance Center actively tracks green projects in Kazakhstan, helping international investors identify opportunities. It also hosts workshops and seminars to promote green finance literacy and is building a local green bond pool to attract a broader investor base.

In addition, the Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market will soon release a guide on environmental and social risk management for financial institutions. This guide will provide a legal framework for integrating environmental, social and climate risk assessment into the credit risk management process of financial organizations.

Kazakhstan’s continued commitment to transitioning to a green economy aligns with the United Nations’ Sustainable Development Goals. By embracing forward-thinking policies and driving green finance, the country is positioning itself as a sustainability leader in Central Asia, setting a precedent for the region’s journey toward a more sustainable future.