As part of the Green Growth Forum, on June 28, 2022, a panel session “Transition to a Social Taxonomy in Kazakhstan” was held, where the proposed draft Taxonomy of Social Projects for ESG Finance Markets was discussed, Delovoy Kazakhstan reports.
The central topic of discussion was the draft of Social Taxonomy (classifier of social projects) for Kazakhstan, developed and presented by the AIFC Green Finance Centre to promote the further development of the sustainable financing market. Social taxonomies, following green taxonomies, have become the next frontier in the classification of sustainable projects for funding, with the leading role of the European Union. The global social bond market has grown 5 times over the past two years, including due to the pandemic, and reaches $867 billion.
Managing Director of the AIFC Green Finance Centre Aigul Kussaliyeva, who presented the draft of Social Taxonomy for Kazakhstan, emphasized that taxonomies of sustainable finance are an important element of the sustainable finance ecosystem, preventing social washing and attempts to camouflage responsible investment. Unification with international standards will make it possible to recode social policy into a language understandable to the investment community. The introduction of social financing criteria, such as social bonds and loans, in particular, will give impetus to the development of PPP bonds, the debut issue of which at the AIFC is expected this year.
The keynote speakers of the session, opened with a welcoming speech by the First Vice Minister of National Economy of the Republic of Kazakhstan, Timur Zhaksylykov, also included Yasmine Pagni, a representative of the European Investment Bank and a member of the EU Sustainable Finance Platform Subgroup on Social Taxonomy, Eric Dzhambulov, Department Director of the Ministry of National Economy of the Republic of Kazakhstan, Rozani Osman from the World Bank Group, Christoph B. Nedopil Wang, Director of the Centre for Green Finance and Development, Fudan University. They spoke about the issues of developing social taxonomies faced by countries that have already taken the first steps (the EU) or are planning to do so, like Kazakhstan.
Having studied the draft Social Taxonomy for Kazakhstan, international experts agreed that the document will create an understandable "coordinate system" for capital market participants, which will describe priority socially oriented activities, and the state will receive an additional tool to attract private investment in the field of social support, where there is a "chronic lack" of budget funding. The representative of Kazakhstan's Ministry of National Economy, Eric Dzhambulov, spoke about the Government’s normative work in the field of supporting social entrepreneurship, as well as the Ministry's readiness to work in cooperation with the AIFC on approaches to refining the social taxonomy. This will include the creation of a working group and the necessary consultation process to adopt the required amendments to the current regulations to make it possible.
The document will be further developed with the Ministry of National Economy of the Republic of Kazakhstan and other interested state bodies and stakeholders for submission to the Government for approval following the example of green taxonomy.
