Legal Framework of Sustainable Finance

Since sustainable investments gaining momentum, there is a widely perceived need for
greater certainty on the
environmental sustainability of different types of investments and economic activities.
In response, a number of
jurisdictions, including Kazakhstan have started to legislate to create official
definitions of sustainable finance and
to develop sustainable (green) finance taxonomies.

A taxonomy of green (sustainable) projects as a classification is needed to provide a
common understanding and approach
to the identification, development and financing of green (sustainable) projects, as
well as to increase investor
confidence and prevent “green camouflage” – a situation where projects without
environmental benefits are labelled as
“green”.

The taxonomy also provides a framework for disclosure and reporting, as well as for the
use of economic incentives such
as interest rate subsidies and guarantees. More precise and consistent definitions of
which investments are “green” and
“sustainable” could facilitate investment by giving confidence and assurance to
investors. Other potential benefits
include easier tracking of sustainable finance flows to be able to measure them or to
take a policy action such as
setting incentives.

In 2021, the Green Finance Centre has developed the Green Finance Taxonomy that sets
criteria for projects eligible for
green financing. The Green Finance Taxonomy was adopted by the Decree of the Government
of the Republic of Kazakhstan
(put a link to taxonomy https://adilet.zan.kz/rus/docs/P2100000996)