Otbasy Bank JSC considers climate change a strategically significant factor that can impact financial stability, the business model, and development priorities. ESG-related matters are an integral part of the Bank’s Development Strategy for 2024–2033. Strategic Key Performance Indicators (KPIs) encompass not only operational and financial indicators but also sustainability targets, particularly those related to climate. The following climate-related KPIs have been established:

1. Reduction of GHG emissions (Scope 1 and Scope 2) from the Bank’s operations by 5 % by 2026 and by 10 % by 2033, compared to the baseline year of 2023;
2. Installation of automatic lighting control systems (motion sensors) in the Bank’s Central Office in 2025, in 10 branches in 2026, and in 20 branches in 2027;
3. Tree planting targets: 150 trees in 2024, 250 trees in 2025, and 350 trees in 2026;
4. Annual reduction of paper consumption by 5 % during 2024–2026.

The Bank’s environmental and climate-related goals are aimed at:

Environmental protection, including the sustainable use of resources and reduction of the Bank’s impact on global climate change;

Compliance with all applicable legal and other requirements adopted by the Bank;

Implementation of environmentally friendly, energy- and resource-efficient technologies.

Special attention is given to the development of a green mortgage portfolio, including support for energy-efficient construction projects and the introduction of sustainable housing standards. The Bank aligns its activities with the Taxonomy of Green Projects of the Republic of Kazakhstan and the national Strategy for Carbon Neutrality by 2060. The implementation of climate initiatives is embedded within the broader ESG agenda of the Bank, including collaboration with international partners and a commitment to greater transparency.

In the reporting year, the following initiatives were carried out as part of ESG integration into the Bank’s core processes:

1. A Sustainable Development Office was established within the Department of Planning and Strategic Analysis. Its primary function is to implement and coordinate sustainability and ESG-related matters;
2. A number of internal documents were developed or updated to reflect evolving ESG standards. These include: the Social Bond Policy, Methodology for Assessing the Compliance of New Lending Programs with Sustainability Principles, Policy on Reducing Environmental and Climate Impact, Human Rights Policy, and others;
3. For the first time, the Bank received an ESG rating from Sustainable Fitch, international rating agency: Rating Level – 3, ESG Score – 55;
4. A fully operational section dedicated to sustainability was launched on the Bank’s corporate website to enhance disclosure quality;
5. In cooperation with an external expert organization, the Bank developed a methodological approach for the quantitative assessment of Scope 3 emissions, including financed emissions;
6. Together with international consultants, the Bank conducted a comprehensive climate-related risk and opportunity assessment, covering both physical risks (such as floods, inundations, and landslides) and transition risks (including regulatory changes in energy efficiency standards, market demand transformation, and evolving construction requirements). Based on this analysis, priority climate factors were identified, scenario assumptions were developed, and impact timeframes were defined (short-term, medium-term, and long-term), enabling the initiation of climate integration into strategic and budget planning processes.

Thus, climate-related risks and opportunities are becoming an essential part of the strategic development model of Otbasy Bank JSC. This creates a resilient foundation for adapting to evolving conditions, meeting regulatory requirements, and positioning the Bank sustainably in the low-carbon economy of the future.

Risk Management

The implementation of a climate-related risk assessment system at Otbasy Bank JSC represents a key milestone in adapting to current regulatory requirements, international standards, and the growing impact of climate-related factors on financial stability.

In 2024, as part of a systematic approach to managing climate-related risks, the Bank, in collaboration with international consultants, undertook the following initiatives:

1. Developed a methodology for climate-related risk assessment;
2. Conducted an analysis of the credit portfolio’s exposure to climate-related risks;
3. Developed a roadmap for implementing climate-related risk assessment.

As part of its ongoing efforts to integrate ESG components into its risk management system, in 2024 the Bank identified material physical and transitional climate-related risks. These include the increased frequency and impact of adverse climate events and the strengthening of national regulatory policies that may lead to tighter energy efficiency requirements in the construction sector.