Sustainability Report: E Aspect

Kazakhtelecom JSC regards climate change as one of the key challenges, as well as an important opportunity to transform its business model and enhance resilience. In the context of the global transition to a low-carbon economy, the Company strives to make a meaningful contribution to Kazakhstan’s climate goals and its international commitments under the Paris Agreement.

In 2023, the Company planned a set of initiatives aimed at improving the corporate climate risk management system in line with the TCFD recommendations. A significant portion of these initiatives was implemented in 2024.

The Company continued implementation of its 2022–2032 Low-Carbon Development Program and integrated elements of climate analysis into strategic and investment planning processes. During the reporting period, an in-depth climate analysis was conducted covering the Company’s operations and infrastructure. This included the identification of transition and physical climate risks and the assessment of their potential impact on key business processes in accordance with international TCFD guidance. In 2024, responsibility for managing climate risks was formally assigned to a member of the Management Board.

Board Oversight

The Board of Directors exercises top-level oversight of climate-related matters through the Audit and Sustainability Committee. Within its mandate, the Board reviews climate-related issues during the approval of strategic plans, investment programs, annual budgets, as well as during the assessment of major infrastructure projects and transactions. Climate matters are reported to the Board at least once a year. The agenda includes monitoring implementation of the Low-Carbon Development Program, progress toward emission reduction targets, resilience to physical climate risks, and opportunities in digital products and services.

Climate risk management is outlined in the Regulation on the Audit and Sustainability Committee under the Board of Directors. The Committee reviews issues related to low-carbon development, carbon footprint management, and potential risks and constraints associated with the global climate agenda. It also monitors the quality of non-financial reporting and oversees the implementation of relevant ESG initiatives.

In 2024, the Board of Directors continued to strengthen climate-related expertise, including through ESG sessions with independent experts and discussions on climate impact scenarios affecting long-term business sustainability.

Role of Executive Management

Operational management of the climate agenda is carried out at the executive level. Within the Company structure, coordination of climate matters is entrusted to the Sustainable Development Department, in close cooperation with departments for technical operations, capital construction, energy, and risk management. Designated employees are responsible for assessing climate risks, developing and implementing adaptation measures, and monitoring progress toward climate targets. These individuals and committee heads regularly report to the Management Board and, when necessary, present information to the Board of Directors.

Management is informed on climate issues based on internal monitoring results, external analytical reviews, data on energy efficiency and emissions, and climate models and scenarios. Reporting is integrated into the unified ESG analytics system and verified prior to inclusion in the Company’s annual reports for stakeholders.

Internal climate governance mechanisms include regular cross-functional meetings, integration of climate aspects into investment and project committees, and risk and opportunity assessments during the development of new initiatives.

In 2024, Kazakhtelecom JSC conducted a comprehensive assessment of climate risks and opportunities, encompassing both physical and transition-related factors, as well as potential value creation pathways in a changing climate. The analysis was based on international methodologies, including Intergovernmental Panel on Climate Change (IPCC) scenarios, McKinsey and S&P Global analytical tools, and took into account Kazakhstan’s climate specifics and the telecommunications sector’s characteristics.

The assessment utilized four climate development scenarios: RCP 2.6, RCP 4.5, RCP 8.5 (IPCC), and NZE2050, which reflects global efforts to achieve carbon neutrality. Internally, the Company interpreted these scenarios as optimistic, baseline, and pessimistic cases, enabling a comprehensive analysis of climate factor impacts on operational resilience, cost structure, profitability, and investment appeal.

The Company employed a structured and scientifically grounded approach to identifying and assessing climate risks, aligned with international TCFD recommendations, as well as IPCC methodologies, guidance from the European Bank for Reconstruction and Development (EBRD), and the Network for Greening the Financial System (NGFS).

The assessment covers both transition risks (regulatory changes, market and technological shifts, investor ESG expectations) and physical risks (extreme weather events, overheating, floods, power supply disruptions). The analysis considers the geographic distribution and climate vulnerability of Company assets.

Climate risk identification and assessment involved the following elements:

1. Stage one: Assessment of external climate and economic environment:

• Historical and current climate trends (temperature, precipitation, wind loads);
• Dynamics of global and regional climate factors;
• ключевые демографические, технологические, политико-правовые и экономические драйверы;
• Potential changes in supply chains, service demand, and consumer behavior.

Following scenario analysis, an assessment was conducted on potential impacts to the Company’s business model, key assets, and financial performance. The approach included both qualitative and quantitative elements, such as spatial vulnerability analysis, scenario evaluation, and financial modeling based on current climate and economic data.

To assess physical risks, 25 key infrastructure sites were selected, including data centers in major cities and regional centers across Kazakhstan. These sites represented three segments of the value chain:

• Infrastructure,
• Operation,
• Business processes.

Georeferenced climate data was used by region to account for projected changes in precipitation, temperature, wind loads, and other parameters.

Transition risks were assessed with a focus on potential legislative changes, decarbonization policies, market expectations, and technological developments. Their impact on cost structure and investment plans was considered.

For each climate risk, scale and likelihood of impact were determined, taking into account the scenario, site sensitivity, and reliance on external resources. The model factored in potential increases in electricity costs, need for facility modernization, and adaptation-related expenditures.

As a result, priority zones and assets most vulnerable to climate impacts were identified–primarily those located in the southern regions of Kazakhstan, where risks of overheating and energy disruptions are expected to rise.

Kazakhtelecom JSC prioritizes accurate accounting and comprehensive analysis of greenhouse gas (GHG) emissions, considering them a crucial element in assessing the climate impact of its operations. To achieve its decarbonization and sustainable development goals, the Company has implemented a systematic approach to carbon emissions monitoring and management. Regular monitoring and transparent reporting enable the Company to track performance trends, identify patterns in a timely manner, and make well-informed management decisions aimed at reducing environmental impact.

To ensure the accuracy of its calculations, the Company adheres to internationally recognized standards, enabling a more comprehensive accounting of emissions. Scope 1 emissions are calculated in accordance with the Methodology for Calculating Emissions and Removals of Greenhouse Gases, approved by Order No. 9 of the Minister of Ecology and Natural Resources of the Republic of Kazakhstan dated January 17, 2023.

Scope 2 emissions are calculated in accordance with Order No. 260 of the Acting Minister of Ecology, Geology and Natural Resources of the Republic of Kazakhstan dated July 19, 2021, “On approval of the list of benchmarks in regulated sectors of the economy.”

In 2021, Kazakhtelecom JSC conducted a baseline inventory of greenhouse gas emissions across its key structural units covering the entire territory of Kazakhstan. The inventory included the following branches:

• Corporate Business Division
• Retail Business Division
• “Network Division” Association
• Information Technology Division

In 2024, the total volume of GHG emissions (Scope 1 + Scope 2) amounted to 208,436 tons of CO₂-eq., which is 7.3% lower than the 2023 level (224,857 tons of CO₂-eq.).

Key changes:

• Scope 1 (Direct emissions) increased from 24,319 tons to 25,787 tons of CO₂-eq. (+6.0%). Carbon dioxide (CO₂) continued to represent the majority share — 25,246 tons. Minor increases were also recorded for methane (CH₄) — from 201 to 212 tons, and nitrous oxide (N₂O) — from 321 to 329 tons.

Kazakhtelecom JSC systematically works to improve the energy efficiency of its data centers (DCs), recognizing their critical role in supporting the country’s digital infrastructure. A top priority is reducing specific energy consumption while increasing computing capacity and system reliability.

To improve energy efficiency, the Company plans to modernize its DCs, including the installation of new equipment and capacity expansion within existing facilities. Particular attention is paid to the summer season, when the load on cooling systems increases — this period requires enhanced energy efficiency and system reliability to maintain stable IT infrastructure operations.

From 2021 to 2023, the total energy consumption of data centers demonstrated a steady decrease — in 2023, consumption dropped by 8.2% compared to 2021. However, despite the positive trend in energy consumption, the share of renewable energy sources (RES) in the energy mix remains at 0%. This indicates potential for transitioning to more sustainable energy sources and the opportunity to integrate renewable solutions into the data center energy supply architecture.

Kazakhtelecom JSC is considering a phased transition to RES as part of its medium-term climate strategy. This would help reduce the Company’s carbon footprint and enhance the resilience of its digital infrastructure.

The Company views its current performance indicators as benchmarks for further development. Its climate strategy includes plans to expand energy efficiency programs, implement innovative technological solutions, and reduce carbon intensity over the long term.

Kazakhtelecom JSC sets clear and measurable climate targets aimed at reducing its carbon footprint, increasing energy efficiency, and transitioning to sustainable energy sources. These targets are aligned with international best practices and Kazakhstan’s national climate goals and cover both the short- and long-term horizons. They are based on GHG emission calculations across Scopes 1, 2, and, in the future, Scope 3.

Long-term target:

• Achieve carbon neutrality by 2060, in line with the national decarbonization strategy of the Republic of Kazakhstan.

Mid-term targets (by 2032):

• Reduce Scope 1 and Scope 2 GHG emissions by 13% compared to the 2021 baseline.
• Reduce imported electricity consumption by an average of 1.5–2% annually.
• Reduce imported thermal energy consumption by an average of 1% annually.