Starting mid-2027, banks in Kazakhstan will be required to strengthen their sustainable development (ESG) standards: establish dedicated units, train employees, and prepare ESG reports. The main costs for banks will involve building a methodological framework, collecting analytics, and hiring environmental specialists, reports infohub.kz.
ESG (Environmental, Social, and Governance) is a set of standards addressing environmental, social responsibility, and corporate governance issues. The environmental dimension includes caring for the environment, reducing carbon emissions, conserving resources, and recycling waste. Social responsibility entails safe working conditions, fair wages and employee support, inclusivity, and philanthropy. Corporate governance means honest and transparent management, anti-corruption efforts, transparency of operations, and protection of shareholder rights.
Adopting ESG standards demonstrates a company's commitment to sustainable development, transparency, and responsible risk management. This enhances investment appeal, reduces operational risks, and improves market reputation.
Typically, this is a voluntary decision. However, the Telegram channel "Ruchnaya Ekonomika" reports that in recent years, ESG disclosure for financial institutions in Kazakhstan has gradually become mandatory. And from mid-2027, banks will be required to strengthen such standards, leading to higher costs.
"Banks will be required to create units or hire sustainable development staff to implement ESG practices, develop relevant documents, train employees on sustainable development, environmental and social risks, and coordinate the preparation of ESG reports," the source notes.
According to the source, Lyazzat Satiyeva, chair of the board of Eurasian Bank, noted that the main costs for banks in strengthening ESG requirements will arise from building a methodological framework, collecting analytical information, including hiring environmental specialists and consulting. However, she does not believe that the increase in such ESG-related expenses can be passed on to credit products for the public.
"We do not consider these expenses as a factor that by itself should lead to higher borrowing costs. The loan rate is formed based on a whole set of factors, so it would be incorrect to speak of a direct impact of banks' ESG implementation costs on borrowing costs," said Lyazzat Satiyeva.
In other words, the requirement to strengthen the approach to implementing ESG principles may lead to increased costs for second-tier banks. However, this should not affect borrowing costs to compensate for them.