The sustainable finance market needs incentives for growth

The sustainable finance market needs incentives for growth

The eighth meeting of the Council for Sustainable Development and ESG under the Presidium of the Atameken NCE was held in Astana, where key regulatory representatives discussed barriers and incentives for the development of the sustainable finance market, as well as the dynamics of “green” and social projects in the loan portfolios of financial institutions.

Yulia Yakupbayeva, Chairman of the Council for Sustainable Development and ESG, stressed that clear business incentives are needed for the effective development of sustainable finance.

“Today, companies are ready to implement ESG standards, but without specific support measures – tax incentives, subsidies and encouragement for companies to prepare ESG reports – this process will be slow. We need to create conditions under which sustainable investments will become not just a regulatory norm, but also a real economic advantage for businesses,”  – Yulia Yakupbayeva said.

Yulia Yakupbaeva stressed the importance of using ESG metrics and industry specifics as part of strengthening measures to reduce the resource intensity of the economy and support domestic producers, as well as the need to encourage ESG leaders from different sectors of the economy.

Sholpan Ainabayeva, Chairman of the Board of Directors of SkyBridge Invest JSC, focused on creating favorable conditions for ESG investments: “Creating favorable conditions for ESG investments is not so much an environmental issue as an issue of the competitiveness of our economy. It is necessary to improve the regulatory framework, introduce tax incentives and subsidies for sustainable projects, as well as develop the infrastructure for the preparation and certification of ESG projects,” – Sholpan Ainabayeva emphasized.

Ms. Ainabayeva was supported by representatives of EY Alexey Antonov and Kamila Salikhbayeva. They noted the importance of expanding the sustainable financing market and improving the stock market infrastructure to attract investors. They emphasized the need to raise awareness among market participants through ESG training programs and encourage the preparation of ESG reports.

Dina Zhanadil, Managing Director of Development Bank of Kazakhstan JSC, noted that financial institutions are ready to support ESG initiatives, but additional financing is required to scale them up.

“We see a growing business interest in green bonds and sustainable
bonds, but it is important to ensure access to concessional financing.
Attracting funds from international climate funds, such as the Green Climate Fund, will significantly expand opportunities for the implementation of sustainable projects in Kazakhstan,”  – Ms. Zhanadil said.

According to experts, the above measures will help attract capital to key sectors such as industry, energy, and construction.

Maria Khadzhiyeva , Deputy Chairman of the Board of the Agency for Regulation and Development of the Financial Market, spoke about regulatory initiatives aimed at supporting sustainable financing. “Starting in 2025, mandatory disclosure of ESG information will be introduced for banks. This will increase transparency and trust in sustainable financing. In addition, we are working on creating a climate risk stress testing system and developing a methodology for assessing the carbon footprint of loan portfolios,”  – Ms. Khadzhiyeva said.

During the meeting, recommendations were developed on the creation of a unified center for monitoring sustainable development, accelerated adoption of the social taxonomy and encouraging the practice of preparing ESG reports by companies. These measures are aimed at stimulating sustainable financing and integrating ESG principles into the business practices of Kazakhstani companies.

Following the meeting, it was decided to hold an additional discussion on the draft Voluntary National Review on Sustainable Development Goals (SDGs) with the participation of representatives of business, government agencies and the expert community. A request has also been sent to the authorized body on the assignment of a responsible state body for accounting and statistics on “green” loans and projects. In the near future, standard ESG risk management policies will be discussed with financial institutions, the expert community and the International Center for Green Technologies.

The Council for Sustainable Development and the ESG will continue to work on the development of sustainable financing tools, improvement
of the regulatory framework and implementation of the best international practices in Kazakhstan.