Freedom and Principles of Sustainable Development: Our Social and Environmental Projects

About 5 years ago we listed our shares on NASDAQ, and in doing so we took on the responsibility of being a publicly traded and highly transparent company. Ongoing compliance and transparency takes a constant commitment to the work required, and in my opinion we manage this process successfully. We adhere to similar commitments in the field of sustainable development. Being a signatory to the UN Global Compact, and one of the largest supporters of the ESG agenda in the financial sector of Kazakhstan and the entire region, is an extremely important component of our business.

Our ESG efforts continue, and in May of this year I became the chair of the UN Global Compact Consultative Committee in Central Asia. Established to find effective solutions for transborder issues related to water management, environment, hunger and poverty, as well as infrastructural problems, energy and food security, Freedom Holding Corp. joined the UN Global Compact in 2023.

The UN Global Compact is a non-binding United Nations pact adopted in 2000 to get businesses and firms worldwide to adopt sustainable and socially responsible policies.

The initiative includes ten primary principles in four areas: human rights, labor, environment and anti-corruption. By following these principles, the participants of the Global Compact can synchronize their activities, stay focused on the social agenda and create a more inclusive and sustainable global economy.

In other words, thousands of big and small companies, representing different industries and countries, have united to address global challenges and improve the world.

Of course, words are just words until you act on them. Over the past couple of years alone, Freedom Holding Corp. has allocated about $33.8 million for projects aimed at sustainable development goals. Moreover, we have donated more than $54.1 million to update infrastructure throughout Kazakhstan, improve educational and health care systems, support sports, and promote many other important initiatives that increase the quality of life of our fellow compatriots. We also promote the principles of a green economy and plan to invest significant cash resources in sustainable financial instruments and projects by 2027.

Furthermore, for more than twelve months now we have been implementing a massive internal ESG transformation of our company. We want to integrate ESG principles into our corporate environment and become a regional leader in the sphere of sustainable development.

In late 2023, Freedom Holding Corp. published its first Sustainability Report as the company continues to follow ESG standards in the universe of environmental protection, ethical treatment of employees and clients, transparency in business operations and active participation in charitable initiatives.

Practical implementation of these principles allows us to go beyond the framework of just charity or environmental activities. We are reaching toward fundamental changes, and this non-financial information has already become an integral part of our financial reporting as required by the U.S. Securities and Exchange Commission for publicly traded companies. Moreover, we have chosen to develop a digital financial ecosystem that also helps us comply with the overall ESG agenda by cutting our consumption of natural resources and reducing our carbon footprint.

We could have probably stopped here and rested on our laurels. However, with several colleagues from Kazakhstan and Uzbekistan, we have decided to go one step further and join the Consultative Committee. The number of members of the UN Global Compact in Kazakhstan, Uzbekistan, Kyrgyzstan and Tajikistan has risen from 55 to 112 over the past several months, and in my new role as the Committee’s chair, I hope my experience and commitment will continue this important work make a difference.

I am glad that Kazakhstan has a chance to be one of the regional players who leads the way for various businesses. I am convinced that in the end, we will develop a collective response to complex and tragic events such as the floods we dealt with recently. This will also help private and public sectors in our region improve their response to risks and vulnerabilities and provide more effective relief for people in need.

In August 2023, we created the Freedom Shapagat Corporate Fund, which is currently responsible for coordinating the company’s charity and sponsorship activities related to sustainable development.

This spring, the Fund came up with one of its most interesting ideas in the world of environmental protection. The idea is to collect plastic and aluminum containers for their proper disposal and recycling with the help of reverse vending machines called “Fandomats.” We launched the first such Fandomat installation in Almaty, and we expect the Fund will aid in installing 100 additional Fandomats in Almaty’s and Astana’s most crowded areas. This project is not just about the separation and collection of waste; for us, it is about forming an ecologically advanced culture with good habits where we reduce waste and encourage responsible consumption and a transition to a circular economy.

Of course, I understand that along with education and provocation, financial resources and incentives are needed to promote this agenda. That is why anyone who inserts used bottles or cans into our Fandomats will be collecting real money in a Freedom Bank account that they can choose to donate or simply save. As our Fandomat experience continues, I expect that we will constantly be modifying and improving the process, but from my perspective, the important part of any new initiative is taking action, and I’m very pleased that we have done so.