On February 8, Kazatomprom announced that it had been assigned a ‘B’ climate rating in the ‘Climate Change’ category by the international Carbon Disclosure Project (CDP), which tracks greenhouse gas emissions data disclosure. This article explains what this rating means, why it is important, and what climate ratings other Kazakhstani companies have received.
Kazatomprom participated in the CDP project for the first time and voluntarily disclosed its environmental data for 2022, including greenhouse gas emissions. The ‘B’ rating it received is above the average market ratings of ‘C’ for the Asia region and ‘B-‘ for the ‘Metals Processing’ sector. Other companies such as QazaqGaz, KAZ Minerals, KazMunayGas, Samruk-Energo also shared their 2022 environmental data with CDP and received climate ratings.
The CDP sends questionnaires to major companies worldwide and assigns ratings from ‘F’ to ‘A’ across four categories: ‘Climate Change,’ ‘Water Security,’ ‘Forests,’ and ‘Plastic Use.’ Disclosure of such information is voluntary, as it is not mandated by regulation.
Companies that do not respond to the CDP’s request are given an ‘F’ rating. For example, Freedom Holding and Tengizchevroil received this rating, but CDP clarifies that it indicates a lack of response from the company, not necessarily issues with sustainable development.
Among Kazakhstani companies, Kazatomprom has the highest rating of ‘B’ in the ‘Climate Change’ category. KazMunayGas received ‘C’ ratings in three categories (‘Climate Change,’ ‘Water Security,’ and ‘Forests’), and KAZ Minerals received ‘C’ ratings in ‘Climate Change’ and ‘Water Security.’
The CDP considers multiple factors when assessing a company, so the amount of carbon dioxide emissions does not directly correlate with the assigned rating. For the reporting year 2022, the most polluting Kazakhstani companies that received ratings were Samruk-Energo, KazMunayGas, and QazaqGaz, with direct carbon dioxide emissions of 33 million, 8.1 million, and 5.1 million metric tons, respectively. Although QazaqGaz had fewer emissions than KMG, it received a worse climate rating (‘C’ for KMG, ‘D’ for QazaqGaz). KAZ Minerals emitted 580,000 metric tons, and Kazatomprom emitted 97,000 metric tons of carbon dioxide, according to their CDP questionnaires.
Kazatomprom stated that after receiving a CDP rating, the company is sent a brief confidential report, which includes information about the average ratings of peer companies in the industry and region. These average market values are not accessible to regular registered users on the CDP website.
CDP believes that the ratings also help companies track their progress towards sustainability, as success cannot be determined without a measure.
The CDP questionnaire is aligned with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and is used by companies on a voluntary basis. Other sustainability initiatives like the Global Reporting Initiative (GRI), Climate Disclosure Standards Board (CDSB), and Sustainability Accounting Standards Board (SASB) also follow TCFD recommendations but provide their separate ESG disclosure standards.
This results in investors being unable to compare seemingly identical metrics among companies using different standards. CDP serves as a unified platform where such information is collected and structured.
“CDP was created to standardize and centralize greenhouse gas emissions reporting so that we can keep a global account. This data is crucial for coordinating climate change mitigation efforts and increasing their effectiveness. For the organization itself (the surveyed company), it is an opportunity to confirm its achievements and show that it is ready to contribute to solving one of the main global problems,” comments Vasily Kalabin, an expert in sustainable development and ESG.
The CDP website allows full access to companies’ responses to the CDP questions and direct analysis of the emissions data. The questionnaire also provides access to verifying documents from regulators and third-party organizations about each company’s greenhouse gas emissions (in Kazakhstan, verification is performed by Eurasian GHG Management in Shchuchinsk).
Vasily Kalabin notes that CDP is not very popular among Kazakhstani companies. He explains that there are rating organizations that provide a comprehensive ESG assessment, which is often more in demand than CDP. These include Sustainalytics, MSCI, and S&P Global ESG Score, among others. Such ratings are highly sought after by investors, which is why many companies in Kazakhstan and abroad seek to obtain them today.
Kalabin points out that foreign investors and regulators are the main drivers of the sustainable development agenda, and that Kazakhstani companies listed on foreign stock exchanges, such as Kaspi.kz, Halyk Bank, KazMunayGas, and Kazatomprom, have these ratings.
Subsidiaries of the National Welfare Fund “Samruk-Kazyna” also receive such ratings by the fund’s mandate. As an example, Kalabin mentions QazaqGaz, which was rated by Sustainalytics at 19.2 points last December, indicating low risks. There is no data for Air Astana, which recently conducted an IPO, including on the London Stock Exchange, in either Sustainalytics or CDP systems.
Kazatomprom commented that “the practice of disclosing information through CDP is welcomed in the global markets for the company’s products.” Therefore, the national atomic company plans to mention its ‘B’ CDP rating in its public materials “to enhance its investment attractiveness and stakeholder engagement.”
