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ESG07.09.2022

ESG - TIME TO CHANGE

According to the report by the Central Asian Institute of Environmental Studies, “under pressure from changes in stakeholder preferences and increased regulation in the field of social and environmental sustainability and corporate governance, in 2020-2021, the world’s leading banks and financial groups have dramatically increased attention to the implementation of ESG at the corporate level and appropriate transformation of their long-term business models. There is a tendency for them to take on various voluntary commitments related to ESG and the UN Sustainable Development Goals.”

In January, Klaus Schwab, a founder and the president of the World Economic Forum in Davos, published an article on the necessity to rethink global management. The pandemic gave "first fiddle" to the need for quick anti-crisis solutions, with numerous risks and a short-sighted perspective. The lockdown on a global scale has shown both universal economic dependence and the desire to hide inside borders and solve problems locally and alone. However, global management 4.0 is not simply a novelty; it is a necessity to remove the Covid filter from processes and policies.


The recipe for solving the current problems is set out in the UN Sustainable Development Goals and their detailing by direction through ESG management standards, where E is environmental, S is social and G is corporate governance. Seventeen sustainable development goals were developed by the UN back in 2015. Each sector was worked out in the order and sequence of the intensity of its impact on society and the environment. Financial institutions received a roadmap and ESG guidelines from the UN experts by the end of July 2019 in the form of 6 "Principles of Responsible Banking”: Compliance with external requirements, Impact assessment, Working with clients, Working with shareholders, Setting goals, and Transparency and accountability. In fact, many of the principles of ESG and "responsible banking" are already present in our lives, and at the constitutional and legislative levels.


Health insurance, social benefits and compensation, labour holidays, normalization of the workload - all these are S and G standards that are already implemented. But this is the basis, and sustainable development implies a constant progressive improvement in conditions. The main advantage of ESG practice is that it is natural for any structure that wants to grow and develop. The inefficiency of a purely expansive approach is already clear and felt by everyone. Companies have realised that ESG is beneficial in practice, primarily at the social and corporate levels. Take the criterion of age, for example. In our bank, the age range is from 17 to 67 years according to the latest data.
What does this mean for the company? Directions where involvement in the permanent technological revolution is important are naturally led by yesterday's students - they are a part of this technological culture and are as organic as possible to it. Areas that require analysis and forecasting are natural for professionals over 50 - there is peace and there is experience, these are managers and strategy managers. They are united by middle-aged employees; they are managers and managers at tactical level. The balance of this system is maintained both at the level of material and career incentives, and at the level of opportunities for professional growth. These are the corporate ethics that the company follows without any "pressure". Trainings, bonuses, rewards, career growth. The training department of our bank regularly conducts sessions on the need for advanced training programmes for a particular department.


There is an internal educational portal where you can choose a course for yourself to fill in some gaps. This is how the corporate component works inside - and for us it is natural, to pull up our employee on some points - it is easier and more profitable than to take a ready-made candidate from outside. Gender criterion: according to the statistics of the Department of Human Capital Development, the spread is 64% of women, 36% of men. And this is not a specially sustained proportion; it was formed from the policy of hiring professionals first and foremost, and age, gender or nationality do not play a role when considering an applicant for a vacancy. The responsibility of business for sustainable development involves helping the younger generation to find employment and internships. And this is where we have also started to move according to internal necessity.
Jusan Singularity School is a project where we teach students and young professionals in order for them to later become our employees. We do not just help young people, we train specialists! We pump the social component through our employees: the corporate culture encourages volunteering, there are competitions for the most active branches in terms of social support, for curating local educational and charitable projects...
The analysis of the internal structure and activities led us to the decision on the systematic implementation of ESG, because these principles are not just a requirement for us, but a natural and logical next step in development. Of course, there is still a lot to be done before fully merging with the philosophy of sustainable development. For example, a new global world trend, the desire for a "zero carbon footprint" for Kazakhstan, in terms of the specifics of the economy, is probably the most difficult. Theorists of sustainable development assign the main role to financial institutions here because a green economy requires large cash injections. In addition to restructuring production models, a worldview restructuring is required, and our thinking is still “oil”.


But in the “green” direction itself, there are plenty of opportunities for the development of small and medium-sized businesses that the bank can support, for example, eco-farming and eco-tourism – this is both fashionable and in line with a development agenda. However, the JUSAN ecosystem itself, the digitalization of banking services, is also an implementation of the E-principle. Currently, we are updating data on the need for structural innovations and transformations, analysing data from a survey of bank employees, the main areas of activity of clients on credit lines in order to follow the main principle of sustainable development, and this is compliant with the current economic situation, the public agenda, the market and the country as a whole.

 

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