TheSustainable Post

Fintech Powerhouse Freedom Holding Corp. Leads in Sustainable Finance and ESG Innovation

(Freedom Holding, IPO, source: trade-leader)

In the pursuit of a sustainable future, the role of financial technology (fintech) cannot be understated. As the world grapples with the challenges posed by climate change, the need for innovative solutions in climate finance and the integration of Environmental, Social, and Governance (ESG) principles has never been more urgent. Freedom Holding Corp’s recent initiatives highlight how fintech can drive the sustainable transition.

Integrating ESG into Business Practices

Timur Turlov, the CEO of Freedom Holding Corp, encapsulated this philosophy by stating, "Because a business with a responsible attitude towards society, which builds and permanently increases its social capital, is definitely better positioned to navigate economic turbulence." This approach underscores the company's strategy of leveraging social capital to enhance resilience and adaptability in volatile economic environments. This in turn sees Freedom exist as a trusted partner to companies from its headquarters in Kazakhstan, to as far afield as its operation in the US.

(Timur Turlov, CEO of Freedom Finance, source: cyrpus-mail)

Commitment to the UN Global Compact

A significant milestone in Freedom Holding Corp’s sustainability journey was joining the UN Global Compact. This global initiative encourages businesses worldwide to adopt sustainable and socially responsible policies. By becoming a participant, Freedom Holding Corp commits to aligning its strategies and operations with universal principles on human rights, labour, environment, and anti-corruption.

The Imperative of Climate Finance

Climate finance is critical to achieving a low-carbon economy. It involves the mobilization of funds to support projects and initiatives aimed at reducing greenhouse gas emissions and adapting to the impacts of climate change. Freedom Holding Corp's approach exemplifies how private sector investment can bridge the funding gap in climate finance. The company’s investments in green projects across Central Asia and Eastern Europe highlight the pivotal role of private capital in driving sustainable development.

The report showcases Freedom Holding’s ambitious plan to invest over USD 452 million (KZT 200 billion) in sustainable finance instruments and ESG-aligned projects. This substantial commitment underscores the company's role in promoting green finance and fostering sustainable economic growth in the regions it operates.

Leveraging Innovative Technology

Innovation is at the heart of Freedom Holding Corp’s strategy. The company harnesses advanced technologies to enhance operational efficiency and sustainability. From using advanced analytics and digital platforms to streamline investment processes to employing blockchain for secure and transparent transactions, Freedom Holding Corp demonstrates the transformative potential of technology in the financial sector.

One of the key areas where technology plays a crucial role is in renewable energy. By investing in innovative technologies that improve energy efficiency and reduce environmental impact, Freedom Holding Corp not only supports the transition to a sustainable energy system but also sets a benchmark for other financial institutions. For example, the report details the company’s support for cutting-edge solar technology projects that increase energy output while reducing costs.

Additionally, Freedom Bank took a leadership position in digital mortgages by being one of the first providers in Kazakhstan to offer such a service, followed by auto and small and medium business lending in a similar format. Their insurance organizations have environmental insurance products, and Freedom Pay is the largest domestic non-bank payment fintech service. The creation of digital service systems that consolidate various online services is part of their broader strategy to enhance service efficiency and customer convenience.

Commitment to Public Transparency

In 2019, Freedom Holding Corp.’s shares began trading on Nasdaq, the world’s most technologically advanced stock exchange, marking the company’s commitment to being a public and transparent entity. This step not only increases the company's accountability but also aligns it with global standards of corporate governance and transparency.

Social and Environmental Initiatives

Freedom Holding Corp’s commitment to ESG principles is also reflected in its various social and environmental initiatives. For example, during the reporting period, Freedom Finance JSC began financing the Vision Zero social project for over USD 126,700 (KZT 56 million), aimed at achieving zero tolerance for road deaths. Other notable projects include the installation of 100 reverse vending machines for recycling plastic bottles and aluminium cans, planting 77 frost-resistant Sakura seedlings, and providing USD 230,800 (KZT 102 million) for safety and environmental sustainability projects in various regions.

Future Outlook

Looking ahead, Freedom Holding Corp continues to advocate for climate-conscious business practices. The company plans to actively participate in discussions on promoting climate-conscious business at events such as COP29 in Azerbaijan, emphasizing the growing importance of ESG in shaping the future of business and society.

The journey towards a sustainable future requires a multifaceted approach where fintech is a critical component. Freedom Holding Corp.’s efforts provide a roadmap for how financial institutions can integrate ESG principles and leverage technology to drive the sustainable transition. As the world continues to face the pressing challenges of climate change, it is clear that fintech is an essential element that is needed at the heart of this transformative journey.

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