Approach to managing environmental impact
Our strategic vision focuses on the implementation of three priorities: resource conservation, decarbonisation and green finance. These strategic objectives are implemented at the portfolio company level. We analyse the progress of their implementation on an annual basis when summarising the results of the Development Plan.
We invest in reducing environmental impact through the development of innovative solutions, implementation of advanced technologies and modernisation of production assets of portfolio companies. We develop international partnerships to attract international investment and best international practices.
Given the specific nature of the business, the Fund ensures the environmental impact management at the level of portfolio companies. Our representatives on the Boards of Directors of portfolio companies participate in approval of environmental policies, defining key objectives, programmes and KPIs. Companies in industrial sectors with significant environmental impacts have built environmental management systems based on ISO 14001 standard, they assess environmental risks, implement industrial environmental control programmes, monitor and assess environmental quality and comply with environmental laws and regulations.
Dialogue with stakeholders
We understand the importance of maintaining an open dialogue with key stakeholders on environmental issues. Dialogues are built at the level of our portfolio companies through press conferences and round tables on topical environmental issues. This enables us to monitor the effectiveness of decisions and measures taken and to update environmental risks.
At the level of the Fund, we build dialogue with stakeholders at various international platforms that discuss issues of national, regional and global scale. For example, the Fund's management takes part in the annual UN Climate Change Conference (COP), which brings together world leaders and organisations interested in sustainable development. As part of the COP, we negotiate with potential strategic partners and conclude co-operation agreements aimed at supporting Kazakhstan's climate transition and the development of a green economy.
In addition, the Fund and its portfolio companies have feedback mechanisms in place. Any interested person can anonymously report environmental concerns or suggestions through secure lines on our website or the websites of our portfolio companies.
Investments in environmental protection
Investments and expenditures on environmental protection, KZT billion
| Indicator | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| Implementation of technologies | 5.1 | 1.1 | 7.9 | 4.6 |
| Forest-climatic projects | 0.1 | 0.2 | 0.9 | 0.03 |
| Energy efficiency | 4.3 | 2.6 | 4.2 | 3.2 |
| Research and development | 0.7 | 0.9 | 0.9 | 2.1 |
| Others | 25.9 | 31.9 | 47.0 | 40.5 |
| Total | 36.1 | 36.7 | 60.9 | 50.4 |
* Excluding emission fees and taxes. Emission fees and taxes do not relate to environmental expenditures. See Annex 12. ESG Data for more details.
Over the past four years, total investments in environmental protection totalled KZT 184.1 billion, including about KZT 51 billion in 2024. In particular, portfolio companies invested KZT 2.2 billion in automation of environmental monitoring systems, KZT 2.1 billion was directed to research and development in the field of innovative projects for transition to a green economy. We used the rest of the funds to improve technological processes, upgrade equipment, etc.
Our approach to climate risk management
Climate change is among the key global challenges that have a direct impact on the activities of the Fund and its portfolio companies operating in virtually all sectors of Kazakhstan's economy. In the context of the national goal of achieving carbon neutrality by 2060, we pursue a gradual and balanced energy transition strategy aimed at reducing our carbon footprint without disrupting energy and economic stability.
Following the Task Force on Climate-related Financial Disclosures (TCFD) methodology, we look at climate through the lens of both climate risks (physical and transient) and climate opportunities that can enhance the competitiveness of the Fund and its portfolio companies.
We drive the implementation of strategic climate initiatives in our portfolio companies:
- Forming a unified concept of sustainable development and ESG standards;
- Establishing key performance indicators (KPIs) for climate;
- Ensuring coordination and monitoring of the implementation of decarbonisation programmes and roadmaps;
- Supporting the adoption of clean technology and green investments in portfolio companies.
Climate risk management
Sole Shareholder (Government of the Republic of Kazakhstan)
Approves the Development Plan, including Strategic Goals, Objectives and KAPs.
Board of Directors of the Fund
Provides strategic leadership on sustainable development and the climate agenda.
Approves the Low Carbon Development Concept.
Approves policies, sets climate goals for the Fund.
Approves non-financial reporting, including climate risk disclosure.
Monitors the implementation of the Development Plan, important industry initiatives and objectives, including achievement of key ESG indicators.
Reviews information on the progress of major investment projects.
Makes decisions on financing socially significant and (or) industrial-innovative projects initiated by the Government of the Republic of Kazakhstan.
Makes decisions on the social responsibility of the Fund Group.
Committees of the Board of Directors of the Fund
Make recommendations to the Board of Directors on the most complex and significant economic, environmental and social issues.
Strategy Committee: considers issues of strategic planning, including the Fund’s Development Plan for a 10-year period and the Fund’s Action Plan for a 5-year period; issues of investment activities of the Fund’s Group.
Audit Committee: oversees sustainability risks, the quality of non-financial information and reporting, compliance with corporate governance principles and legislation, and the independence of external and internal audit.
Nomination and Remuneration Committee: provides recommendations and forms proposals on the issues of attracting qualified specialists to the Board of Directors, the Management Board, the Corporate Secretary, and the Ombudsman.
Board of Directors of the Fund
Manages the day-to-day management of the Fund’s activities, including sustainable development issues.
Provides control and monitoring of activities on strategic development directions, programmes, activities, monitoring of implementation of sustainable development goals, approval of significant topics.
Reports quarterly to the Board of Directors on key initiatives, risks and major investment projects.
The executive employees of the Fund responsible for economic issues, sustainable development are members of the Management Board.
Sustainable Development Committee of the Fund’s Board of Directors
Defines priorities, goals and principles of sustainable development.
Develops and coordinates environmental, social responsibility and corporate governance programmes.
Analyses significant sustainability risks, including climate risks.
Monitors the implementation of decarbonisation programmes and ESG initiatives in portfolio companies.
Informs the Board of progress and the need for corrective action.
Portfolio companies
Develop and implement strategies, programmes or roadmaps for decarbonisation and sustainable development, in line with the Fund’s objectives and policies.
Set key climate performance indicators (KPIs) for senior management, including targets for renewable energy share, greenhouse gas emission reductions and energy efficiency programmes.
Implement projects to reduce carbon footprint: development of renewable energy (RES), reduction of methane emissions (OGMP 2.0), reduction of flaring, introduction of carbon capture and storage (CCUS) technologies.
Ensure monitoring and reporting on the implementation of sustainable development plans, including disclosure of climate risks and opportunities.
There are committees under the Boards of Directors to oversee sustainable development issues, such as the Committee of the Board of Directors of JSC NC KazMunayGas on safety, labour and environment protection and sustainable development; in JSC NC Kazakhstan Temir Zholy in 2023 the Committee on Strategy and Sustainable Development under the Board of Directors was established; in JSC NAC Kazatomprom there is also a Committee on Strategy and Sustainable Development.
Participate in the Fund’s corporate programmes on decarbonisation, RES development initiatives, energy efficiency and climate change mitigation.
Key Climate Risks and Impacts
In line with TCFD recommendations, we categorise risks into physical risks (related to climate manifestations) and transitional risks (related to societal and market responses to climate change).
Type of climate risk
(extreme weather events: hurricanes, floods, droughts)
| Potential implications for business | Samruk-Kazyna's responses and projects | Metrics, targets and facts for 2024 |
|---|---|---|
|
Damage to critical infrastructure, including TPPs, gas pipelines, and transport routes. Increased repair and restoration costs, disruptions in energy supply and logistics. |
Strengthening physical protection of infrastructure; mandatory insurance of critical assets; introduction of backup power supply; fire and rescue drills. |
In 2024, a project to strengthen the engineering protection of the Atyrau Refinery and KazMunayGas facilities in the western regions was implemented. Development of measures to prepare for spring floods and prevent flooding of vulnerable areas (road washout, damage to power lines, flooding of wells). Environmental risk insurance. Insurance of organisations’ property against damage (accidental loss, loss or damage) as a result of accidental and unforeseen direct physical impact. KEGOC checks the risks of hurricanes, ice, increasing the insurance coverage of power lines. |
(long-term climate change: decreasing water levels in the Caspian Sea and rivers)
| Potential implications for business | Samruk-Kazyna's responses and projects | Metrics, targets and facts for 2024 |
|---|---|---|
|
Reduced oil and gas production, increased costs of water supply and treatment; possible tightening of water consumption regulation. |
Implementation of the TAZALYQ
project (improving the efficiency
of wastewater treatment at Atyrau
Refinery). |
Investments in water efficiency exceeded KZT 145.4 billion (including investments in the seawater desalination plant project and in the implementation of the TAZALYQ project). In 2024, the share of water reuse at the Fund’s key enterprises is increased by 7%. In green hydrogen, the development of the Surface Water Atlas of Western Kazakhstan was finalised to assess the water supply potential of RES-based electrolysis. Kazatomprom has introduced mandatory testing of water availability during the development of new fields to avoid the risk of water shortages. In 2024, Kazakhtelecom assessed climate risks according to the leading international methodologies IPCC SSP and IEA NZE-2050. In turn, KazMunayGas is implementing a financial model to take into account the growth of carbon price and decrease in oil demand in case of a global energy transition. |
(tightening of carbon regulation, introduction of carbon tax and CBAM mechanism)
| Potential implications for business | Samruk-Kazyna's responses and projects | Metrics, targets and facts for 2024 |
|---|---|---|
|
Additional costs, reduced competitiveness of Kazakhstani exports in external markets, especially in the EU and China. |
Low Carbon Vision 2060. Integrating a carbon price into investment models. Inventory of greenhouse gas emissions. Realisation of a portfolio of offset projects; issuance of green bonds. Implementation of carbon footprint disclosure practices in accordance with the requirements of the CDP and TCFD in portfolio companies. Use of the offset mechanism. Portfolio of forest-Climatic projects (6 projects for 11,000 hectares). Implementation of a methane management system. |
Reduction of CO₂ emissions (Scope 1 + Scope 2): Target: -10% by 2032 from 2021 levels (carbon footprint of 72.2 million tonnes in 2021). “Green” funding: Objective: to build a portfolio of offset projects for 5.8 million tonnes of CO₂-eq. by 2032, and to continue issuing green bonds. Monitoring: amount of funds raised, project statuses, compliance with Green Bond Principles (ICMA). By 2024, the Fund’s offset portfolio of 489,700 tonnes CO2-eq. In 2024, NC KazMunayGas JSC sent to UNEP its first methane emissions inventory report prepared as part of its participation in the Oil&Gas Methane Partnership 2.0 (OGMP 2.0). JSC NC QazaqGaz and Carbon Limits have entered into a memorandum that provides for the development of a methane emissions reduction strategy and assistance in OGMP 2.0 reporting. Useful gas utilisation is over 98% and flaring has been reduced by 89% since 2017. KMG’s Low Carbon Development Programme has a target to reduce methane emissions by 32% by 2031 and 98% by 2060. Target: no more than 0.3% leakage (per OGMP 2.0) in the oil and gas sector. Implementation of the project on creation of a green zone around Pavlodar city on the area of 1.600 hectares has started. Acquisition of I-REC (International Renewable Energy Certificate) certificates. In 2024, KazMunayGas purchased 10,000 units of certificates for 10 million MWh, which corresponds to the average annual electricity consumption of its Corporate Centre. NAC Kazatomprom JSC acquired I-REC certificates, which allowed reducing indirect GHG emissions (Scope 2) in 2024 by 18.4% compared to 2023. Offset portfolio of the Fund expanded to 489,700 tonnes of CO₂-eq. In 2021, debut placement of green bonds on MFCA in the amount of KZT 18.4 billion. |
(obsolescence of traditional carbon-intensive technologies, necessity of transition to BAT and RES)
| Potential implications for business | Samruk-Kazyna's responses and projects | Metrics, targets and facts for 2024 |
|---|---|---|
|
Reduced demand for coal and oil, shortage of resources and energy carriers, technological lag. |
Development of renewable energy sources. Pilot projects on hydrogen energy and CCUS (carbon capture and storage); introduction of methane management (OGMP 2.0). Localisation of wind turbine production. Clean coal technologies. Realisation of Smart Grid. 500 MW of load-following capacity. Conversion of Almaty CHPPs to gas. Design is underway for wind farms in Karaganda region – together with Power China and Energy China, Ulytau region – CNPC and Almaty region – Power China. Thus, from 2024 to 2032, 6.3 GW of RES facilities, including hydropower plants, are planned to be commissioned. |
The Fund’s portfolio includes 8 RES and low-carbon generation projects with a total capacity of 6.3 GW. The share of “clean” energy (RES and HPPs) in electricity generation in 2024 was 18%. Target: 26% by 2032. Target: reduce energy intensity by 10 % by 2027 (from 2021). In each of the PC sectors, energy intensity is being reduced. For more details, see the Energy Intensity 2021–2024 table. The concept of the CCUS project with a capacity of 10,000–20,000 tonnes of CO₂ per year at the Prorva group of fields of EmbaMunaiGas JSC was developed. The portfolio of the Samgau Centre for Scientific and Technological Initiatives includes 24 projects with a total value of KZT 6.6 billion in the uranium mining, oil, energy, gas industries, as well as in the chemical industry and mechanical engineering. |
(reduced demand for fossil fuels, changes in consumer preferences)
| Potential implications for business | Samruk-Kazyna's responses and projects | Metrics, targets and facts for 2024 |
|---|---|---|
|
Loss of revenues in the oil and gas and coal segments; need to develop new competences and markets. |
Development of new markets (hydrogen, SAF), Innovation (R&D): introduction of hydrogen technologies, carbon dioxide capture technologies (CCUS), Financing and implementation of R&D programme. Development of “clean” technologies systematic energy transition based on a balance between energy and environmental security. |
A study on the potential of SAF production in Kazakhstan was carried out. Export markets for hydrogen fuel are being developed. Investments in R&D on green technologies in 2024 totalled KZT 1.2 billion. |
(negative social perception of the energy transition (5 singleindustry towns and about 40,000 employees depend on the country’s coal industry), increased investor and public demands for ESG)
| Potential implications for business | Samruk-Kazyna's responses and projects | Metrics, targets and facts for 2024 |
|---|---|---|
|
Difficulties in attracting investments, deterioration of ratings |
Increased transparency of ESG reporting on TCFD and CDP; international co-operation (OGMP 2.0). Ensuring a fair energy transition with social support for the regions. |
In 2024, the portfolio companies were rated by Sustainalytics, S&P and CDP at the level of companies in their industries. Public consultations and social programmes were conducted in single-industry towns (Ekibastuz, Temirtau). Participation in international initiatives (OGMP 2.0, CDP). |