Central Asia has emerged as a region where sustainable development and the ESG (Environmental, Social, and Governance) agenda are not merely trends but are entrenched as long-term strategic priorities at the highest levels. Countries in the region are actively implementing international non-financial reporting standards, thereby enhancing their appeal to global markets for international investments and contracts.

 

Market Developments:

 

• Non-financial reporting is mandatory for banks seeking international financing from development institutions and funds, serving as a primary driver for the proliferation of such reporting.
• Many Central Asian companies aim to list on stock exchanges where non-financial reporting is obligatory.
• Non-financial reporting is associated with a high-level reputation in Central Asian markets.
• The region is transitioning from the widely used GRI standards to ISSB standards, emphasizing ROI and risks.
• ESG ratings, such as those from Sustainable Fitch, continue to significantly influence credit ratings.

At HPBS, as consultants serving clients in Central Asia, we observe a rapidly growing demand for ESG specialists. Central Asia is not merely catching up with global trends—it is crafting its own models that blend local specifics with investor requirements.

 

 

Country-Specific ESG Developments:

 

While Central Asia's journey in this direction began relatively recently, all five countries—Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan, and Turkmenistan—have identified sustainable development as a strategic priority and committed to achieving the 17 UN Sustainable Development Goals by 2030.

 

Kazakhstan:

 

• Since 2013, Kazakhstan has been implementing the Concept for Transition to a "Green Economy."
• In 2021, the Environmental Code was updated, and the Corporate and Social Governance Code was adopted.
• Goals include achieving carbon neutrality by 2060 and 30% renewable energy in the energy balance by 2030.
• Companies listed on the KASE exchange are required to disclose ESG information.
• In 2021, a National Green Taxonomy was adopted, and in 2023, the regulator (ARRFR) approved an ESG Roadmap, mandating financial organizations to disclose ESG data in annual reports starting in 2024.
• These steps are directly linked to the Carbon Neutrality Strategy until 2060, signed by President Tokayev.
• Kazakhstan also became the first in the CIS to issue sustainable development Eurobonds in 2024, requiring strict adherence to international reporting standards.

 

Uzbekistan:

 

• In 2023, Uzbekistan approved a National Green Taxonomy.
• In May 2024, the country conducted its second issuance of sovereign SDG bonds worth $640 million.
• These initiatives are supported by President Mirziyoyev's decree "On Transition to a 'Green' Economy by 2030," emphasizing transparency in ESG disclosures.
• Uzbekistan is actively developing renewable energy, aiming for 40% renewables by 2030.
• The Strategy for Transition to a Green Economy (2019–2030) and the "New Uzbekistan" program (2022–2026) have been adopted.
• A system of green certificates and emissions monitoring is being developed.
• The banking sector is actively implementing ESG principles and offering green loans, especially for renewable energy projects.

 

Kyrgyzstan:

 

• In 2023, the National Bank implemented ESG risk recommendations, requiring banks to conduct stress testing and disclose data.
• The first issuance of gender bonds in 2022 signaled to businesses that non-financial reporting is now critical for financing access.
• Kyrgyzstan focuses on water resource management and hydropower.
• A new Water Code was adopted at the end of 2024.
• A sustainable business program is being implemented until 2026.
• ESG policy is in its early stages.

 

Tajikistan:

 

• In 2024, Tajikistan issued its first corporate green bonds with IFC support.
• The country emphasizes sustainable agriculture and natural resource management, especially in mountainous areas.
• The Green Economy Strategy until 2027 includes 11 priorities (energy efficiency, ecotourism, waste management, etc.).
• The country relies on international support but has already reached a moderate level in ESG implementation.

 

Turkmenistan:

 

• Turkmenistan has initiated dialogue with the Green Climate Fund.
• The country is modernizing its oil and gas sector and developing renewable energy sources.
• Measures have been taken to reduce the carbon footprint, but the country is still in the early stages of ESG development and requires legislative framework enhancement.

Thus, Kazakhstan and Uzbekistan are leaders in ESG transformation in terms of pace and scale. The other countries are at various stages of development, adapting ESG to their resources and national goals.

 

 

Commonalities Among These Countries:

A strong alignment with global standards:

 

1. Joining NGFS (Network for Greening the Financial System) and SBFN (Sustainable Banking and Finance Network):

 

• NGFS is an international network of central banks and supervisory authorities aiming to develop a sustainable financial system and combat climate risks.
• Membership implies support for the global climate agenda, commitment to considering climate and environmental risks in regulation and supervision, participation in experience sharing, methodologies, analytics, and the use of NGFS recommendations for climate stress testing and ESG information disclosure.

 

2. Implementing GIP (Green Investment Principles):

 

• GIP is an international initiative created by China in collaboration with global partners, including the City of London, UNDP, and financial institutions, aiming to implement sustainable and "green" approaches in investments related to infrastructure projects under the Belt and Road Initiative (BRI).

 

3. Utilizing TCFD (Task Force on Climate-related Financial Disclosures) and ISSB (International Sustainability Standards Board) methodologies:

 

• TCFD is a task force established by the Financial Stability Board (FSB) to develop recommendations for disclosing climate risks that may affect businesses.
• ISSB is an international board under the IFRS Foundation responsible for developing unified sustainability reporting standards.

 

 

As experts consulting clients from Central Asia, we observe a rapid increase in demand for ESG specialists. Central Asia is not merely catching up with global trends—it is creating its own models that combine local specifics with investor requirements.

HPBS provides ESG reporting services for companies across various industries in the Central Asian and Mongolian markets. Schedule a free consultation with us at info@hpbs.uz; we will help you navigate reporting requirements.

Anna Zavaleeva, Andrey Sidorenko