Environmental, social and governance issues are turning out to be top priority ones in making investment decisions nowadays. Consequently, regulators of stock/securities markets and stock exchanges prioritize ESG topics. In the face of global initiatives, it has become clear that ESG regulatory landscape development correlates with the growth of Kazakhstan’s capital market as well.
Along with the remarkable development of the international sustainable finance market during 2021-2022, The Astana International Exchange (AIX) has also observed a higher demand for responsible investment instruments. As the sustainable finance market has and will continue to evolve, driven by market and regulatory demands, we have decided to introduce the new ESG-Labelled Bonds structure that will help our issuers in raising investments for their sustainability-linked projects.
In 2020 the range of responsible financing products on the AIX has been expanded by introducing a new chapter to the AIX Business Rules on issuance and listing of ESG-Labelled Bonds using “open architecture” structure. This structure gives flexibility to issuers to attract responsible financing for their sustainability-linked projects through a wider range of instruments under internationally recognized standards. The ESG-Labelled Bonds may include social, sustainable bonds and others, such as blue bonds, transition bonds and sustainability-linked bonds on the AIX.
The business requests new products that are not limited to green bonds. Ongoing development of ESG segment on the AIX will allow issuers and investors to expand their funding opportunities for sustainable projects and improve performance in a mid-term and a long-term period with regard to the energy transition and climate agenda, as well as to create a maneuver for attracting sustainable investments through other instruments, which are widely represented in developed markets.
The AIX has been building an attractive environment for foreign and local businesses by embracing best practices in capital markets. In less than five years, the AIX has attracted more than $356 million of equity and $2.4 billion of debt capital. The jurisdiction based on the principles of English law has become an effective tool in ensuring transparent and fair legal protection and contributes to the perception of AIX and Kazakhstan as a favorable place for doing business, including the opportunities in the ESG space.