The rating agency Sustainable Fitch for the first time assessed the sustainability of the activities of Development Bank of Kazakhstan JSC (a subsidiary of Baiterek NMH JSC, hereinafter referred to as DBK, Bank) with an ESG rating of «3» and an overall score of 60, which indicates a high rating among financial institutions in Kazakhstan. The ESG rating reflects the focus of the Bank's business and strategy on the socio-economic development of Kazakhstan, the Bank's professional corporate governance practices and its work to integrate ESG criteria into its financial activities and the activities of its borrowers.
The agency's report notes that the Bank's ESG rating reflects its initiatives and actions in the field of sustainable development. In accordance with the Bank’s new long-term strategy for 2024-2033, the strategic direction «Sustainable Development» has been defined, within the framework of which the strategic KPI «ESG rating» is included. The presence of an ESG rating is one of the indicators of attractiveness for investors, including those focused on financing projects that have a positive impact on the environment.
The agency notes that the ESG rating is positively influenced by DBK’s financing of projects in the field of renewable energy, which account for 6% of the total volume of loans to clients at the end of 2022, as well as the desire to increase the volume of «green» projects, including renewable energy sources, in the future to at least 10% in the structure of the portfolio of financed projects annually.
In addition, in 2023, the Bank, together with the Asian Development Bank, developed a Roadmap for the implementation of ESG principles in the medium term.
On March 29 of this year, the Bank issued the first «green» bonds on the Kazakhstan Stock Exchange (KASE) in the amount of 10 billion tenge. The Bank's debut green bond issue received a second-party opinion from the AIFC Green Finance Centre. Also, as part of the implementation of the ESG Roadmap, the Bank will continue to work on issuing «green» bonds, the proceeds of which will be used to finance projects in the field of renewable energy.
The ESG rating was also positively supported by the disclosure of information in the 2022 Annual Report on greenhouse gas emissions of the Bank (Scope 1 and 2) and its borrowers (Scope 3), as well as the dynamics of reduction of electricity, heat and water consumption and solid waste generation. The Bank developed a «Green Office» concept that shows the Bank's targets for reducing its environmental impact, which also had a positive effect on the ESG rating result.
At the same time, Sustainable Fitch positively assessed both the Bank's social and corporate governance indicators. Thus, the Bank actively participates in sponsorship and charity activities, promoting youth initiatives, sporting events and financing healthcare projects. In addition, the Bank conducts quarterly customer satisfaction surveys, the results of which are published on the corporate website. The Bank is characterized by an inclusive and gender-equal composition of employees and management, the presence of internal audit and risk management functions and the presence of independent directors on the Bank's Board of Directors, which was also positively noted by the agency.
