Critical Minerals and ESG: Balancing Opportunity and Responsibility

ENSOR was honored to take part in the Uzbekistan International Mining Forum (UIMF 2025) in Tashkent. Victor Davydov, ENSOR's co-founder and environmental and social consulting director participated in the session “Metals of the Technological Revolution: Critical Minerals,” presenting on “Critical ESG Requirements for the Critical Minerals Sector: Aligning Uzbekistan’s Mining & Metals Operations with Global ESG Expectations for Capital Raising.”

Victor's key message was: Critical minerals are essential for modern economies but their extraction and processing come with significant ESG risks. Poor management of these risks can limit access to global markets and capital. Strong ESG performance, on the other hand, can open doors to investment and sustainable growth.

He covered the following themes:

🔹 Key ESG risks and impacts for critical minerals sector specific for Uzbekistan;

🔹 The differences in ESG expectations across main destinations for critical minerals exports;

🔹 How the EU Critical Raw Materials Act (CRMA) is reshaping supply-chain transparency, circularity, and sustainability certification;

🔹 The growing importance of international standards and schemes such as IRMA and CMSI

🔹 The role and ESG expectations of international financial institutions

Drawing on ENSOR’s consulting experience, Victor shared insights into existing regulatory gaps with critical ESG requirements of international standards (such as 59 critical requirements of IRMA standard) and practical steps for companies seeking to attract responsible finance and expand into export markets.

Grateful to the UIMF organizers, colleagues, and participants for an inspiring exchange of ideas and a shared vision of responsible growth.

Biodiversity: A New International Standard ISO 17298

On October 7, 2025, the International Organization for Standardization (ISO) introduced in Rwanda the first global standard dedicated to biodiversity management — ISO 17298 “Biodiversity in the strategy and operations of organizations.”

Why It Matters

According to the World Economic Forum (WEF), biodiversity loss and ecosystem degradation rank among the top five global risks in terms of both likelihood and impact.

More than USD 44 trillion of global economic value — over half of the world’s GDP — is moderately or highly dependent on nature.

Biodiversity is not only an environmental issue but also a financial and economic resilience factor: the decline of natural capital directly affects supply chains, resource costs, investment flows, and social stability.

What the New Standard Offers

ISO 17298 provides a unified framework to help organizations:

• systematically assess their impacts on nature and ecosystem services
• integrate biodiversity management into strategy, operations, and supply chains
• build transparent reporting and communication processes
• prepare for emerging disclosure requirements, including TNFD and GRI frameworks

Key Benefits for Business

The standard applies to all types of organizations — from SMEs to large corporations, public institutions, and cities.

Its main benefits include:

• alignment with current international biodiversity and disclosure frameworks
• reduced environmental and reputational risks, increased operational resilience
• improved access to green finance and stronger investor confidence
• enhanced transparency and efficiency of conservation activities
• strengthened institutional capacity in ESG and sustainable development

How ENSOR Can Help

ENSOR supports organizations in integrating biodiversity considerations into strategy and management through:

• assessment of biodiversity status and ecosystem services
• analysis of impacts and dependencies, including supply-chain linkages
• evaluation of compliance with national and international standards (ISO, TNFD, GRI, IFC PS6, EBRD ESR6)
• risk and opportunity analysis based on the TNFD LEAP approach (Locate – Evaluate – Assess – Prepare);
• preparation of corporate sustainability reports and strategic documentation
• development of policies, plans, and programs for biodiversity management
• training and advisory services on biodiversity and ecosystem-related risk management

Victor Davydov, E&S Consulting Director of ENSOR, took the stage at the MINEX Central Asia Forum held in Tashkent on June 24–25, 2025.

His presentation, titled “Development and Implementation of Efficient Environmental and Social Management Systems (ESMS) in Mining & Metals Companies,” focused on practical strategies and proven methodologies for embedding sustainable practices into core business operations.

Highlights from the presentation included:

🔸 Integration of ESMS into mining project lifecycles

🔸 Alignment with lenders' E&S requirements and international ESG benchmarks

🔸 Real-world case studies showcasing tangible results and lessons learned

Victor’s insights emphasized the growing importance of ESG accountability and the critical role of structured, adaptable ESMS in driving responsible resource development.

Also, during the Minex Forum, ENSOR and Uzbekistan Technological Metals Complex (TMK) have signed a Memorandum of Understanding (MoU) aimed at development of cooperation in the following areas:

🔸 consulting on the implementation of ESG practices in the organization's activities;

🔸 holding joint training events and seminars;

🔸 joint participation in industry and thematic events;

🔸 sharing experiences and best practices

On April 9–10, the 15th MINEX - Mining and Exploration Forum was held in Astana.

Our directors for environmental and social consulting Alexandra Leman and Victor Davydov represented ENSOR at the event.

Alexandra Leman delivered a presentation related to understanding of the key sustainability related impacts, risks and opportunities for the mining and metals sector in Kazakhstan.

The mining and metals industry is one of the main sectors in which ENSOR has deep and proven experience in supporting numerous national and international clients in addressing the various environmental and social challenges and opportunities they face. We support our clients at every stage of the project life cycle, from exploration to closure.

We would like to thank organizers for the excellent organization of the Forum and for the provided opportunity for networking with our clients, partners and friends.

During Q1 2025, a series of online trainings on the development of environmental, social and governance (ESG) practices in the Republic of Tajikistan was completed.

The series of online trainings was conducted with the support of the Ministry of Economic Development and Trade of the Republic of Tajikistan and the International Finance Corporation.

The trainings were conducted to raise awareness of representatives of government organizations, the private and quasi-public sector, business associations, and experts from the professional community on the development of environmental, social and governance (ESG) practices in Tajikistan, as well as the tasks of implementing the Draft document "Procedure for Disclosing Environmental, Social and Governance (ESG) Practices of the Republic of Tajikistan" (Procedure for ESG disclosure) developed in pursuance of the "Green Economy Development Strategy for 2023-2037".

The series of trainings consisted of topics covering the goals and objectives of applying the Procedure for Disclosing ESG Information by reporting companies.

The trainings were conducted by regional experts from international consulting organizations - IFC partners.

ENSOR held two two-hour online webinars on best practices for managing environmental and social factors.

The webinars were led by Alexandra Leman, Director of Environmental and Social Consulting, and Nadezhda Petukhova, Senior Consultant on Social Issues. During the webinars, ENSOR experts covered the following topics:

• Understanding E and S factors and their applicability to the activities of companies in various sectors of the economy,

• General requirements for the environmental and social management system in an organization,

• Review of risks, impacts and opportunities associated with environmental and social factors in the activities of organizations,

• Review of key metrics of the national disclosure standard for companies on accounting for environmental, social and governance factors in order to increase investment attractiveness and prepare non-financial reporting.

ENSOR experts shared with the audience practices for effective management of environmental and social factors in various sectors and organizations, and also answered questions from the audience.

ENSOR notes the high level of interest and involvement of the participants and thanks the International Finance Corporation and the Ministry of Economic Development and Trade of the Republic of Tajikistan for the opportunity to share our expertise

On 30 December 2024, the Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market took a major step forward in developing corporate governance of credit and financial organizations and enhancing risk control in the country's banking system. The National Bank of the Republic of Kazakhstan introduced amendments in their Resolutions of July 28, 2017, No. 136, and November 12, 2019, No. 188 which include the following innovations:

Resolution No. 188 has been supplemented with amendments concerning reputational, compliance, and credit risks. One of the key innovations is the definition of ESG risks, that include environmental, social, and corporate governance risks.

From 2025 onward, all second-tier banks are required to develop:

The Bank's Management Board monitors the timeliness and accuracy of disclosure of the information on sustainable development (ESG).

The asset classification system by credit risk level now includes an assessment of environmental and social risks of operations. The development of an environmental and social risk management system (ESRMS) is becoming mandatory, which should include:

Another important change is related to stress testing. According to the updated regulations, banks are required to conduct stress tests at least once every six months and include scenarios related to environmental and social threats in their forecasts.

Banks should establish a separate department responsible for implementation of ESG practices. If establishing a separate department is not practicable, the bank should appoint a responsible person for sustainable development, supervised by a member of the bank's Management Board and/or Chief Sustainability Officer.

The department/responsible authorized person shall perform the following functions:

The bank shall disclose information on sustainable development (ESG) by including it in the annual report and/or publishing a separate report on sustainable development. The report shall be published annually by July 30^th of the year following the reporting year when preparing the annual report and by August 30^th of the year following the reporting year when preparing a separate report. The report shall include quantitative information on the reporting year and two previous years (starting from January 1, 2027).

Resolution No. 136 has been supplemented with a clause regulating the grievance registration process. The bank is obliged to provide functionality allowing clients to easily submit grievances, including via a mobile application.

According to Resolution No. 188, the Bank's Management Board is responsible for developing an internal procedure for handling the clients’ grievances related to the banking services.

The above-mentioned legislative innovations constitute a significant step for the Republic of Kazakhstan to improve practices of risk management in banking activities taking into account ESG factors. It should be noted that the Republic of Kazakhstan is the first country in Central Asia, where these requirements are now enshrined in legislation. Implementation of the requirements will require certain efforts from the banks of the RoK, however, if the process of internal changes is successfully implemented, the banks will be able to gain additional benefits, for example, easier access to loans from international financial institutions, such as the European Bank for Reconstruction and Development (EBRD), International Finance Corporation (IFC), Asian Development Bank (ADB) and others.

ENSOR has extensive experience and expertise in providing support to the banking sector in implementing ESG practices, including environmental and social risk management. We would be pleased to assist banks of the RoK in complying with the new legislative requirements in the area of ESG compliance.

Circular Economy: New ISO 59000 Series Standards

The concept of a circular economy is currently not only actively discussed by the world public and the scientific community, but is also gradually being implemented by companies and states around the world. This concept is directly related to the implementation of the UN 2030 Agenda for Sustainable Development and the UN SDGs, including the goal of transitioning to sustainable consumption and production patterns. At the same time, until recently, no single standard was developed that would include the definition of all key terms, mechanisms and approaches for introducing a circular economy at different organizational levels.

In May 2024, after five years of development, the International Organization for Standardization (ISO), in collaboration with experts from 75 countries, published three ISO 59000 series of standards. These standards provide a powerful toolkit for implementing circular economy ideas, offering a unified approach to its definition and principles. They are designed for use by organizations of any type and size - from private companies to government organizations and non-profit organizations. It is important to note that the standards are consistent with existing international regulatory requirements in the field of sustainable development and the circular economy (EU Action Plan for the Circular Economy, 2020; UK Environment Law, 2021; etc.), and also easily integrate with existing management systems (ISO 14001, 9001, etc.).

The three new ISO standards are:

1. ISO 59004: Vocabulary, principles and implementation guidance. The standard establishes terminology, vision and principles, and provides general guidance for implementing a circular economy in any type of organization.

2. ISO 59010: Guidelines for transforming business models and value networks. This standard complements ISO 59004 and is a more business-oriented document with a focus on the transition from traditional linear business models to circular ones at the organizational and inter-organizational levels.

3. ISO 59020: Performance measurement and evaluation. ISO 59020 provides a framework for measuring and assessing the effectiveness of efforts to move towards a circular model. It provides clear guidelines for data collection, lists evaluation indicators, and proposes calculation methods. This document also serves as a basis for the development of more detailed assessment standards suitable for individual economic sectors. Based on this standard, organizations will be able to more easily assess the effectiveness of their efforts to transition to a circular economy, identify areas of growth, make informed decisions, quantify progress and clearly demonstrate results to stakeholders.

Why should businesses pay attention to these standards?

The circular economy is not just a sustainable development fad, but a paradigm shift that could reshape the entire global economy in the coming decades. But the introduction of the principles of a circular economy into existing business processes is a process of many years of transformation, affecting all aspects of the company’s activities. Therefore, it is now important for businesses to pay attention to the development of this area. This will help you not only adapt to upcoming changes, but also take a proactive position, get ahead of your competitors and become a leader in your industry.

The benefits also include:

● Reducing waste, developing more efficient methods of production and consumption, and as a result increasing economic efficiency and reducing costs;

● Increasing resilience to resource scarcity and other environmental, social and economic risks;

● Improved reputation and relationships with stakeholders.

● Contribution to achieving global sustainable development goals

● Assistance in the implementation of national environmental programs

Thus, analyzing risks and prospects, as well as introducing the principles of a circular economy into business processes, will help take the necessary measures for the successful development and protection of business in the face of tightening legislation, changing demand and growing resource shortages in the future.

ENSOR can help your company on this difficult but very important path, namely:

● Conduct an audit of current business processes and identify risks and opportunities for developing the principles of circular economy in the organization

● Implement the principles of circular economy in accordance with the requirements of ISO 59004 and ISO 59010 standards in the company’s activities

● Develop a sustainable development strategy, including one consistent with the concept of a circular economy

● Assess and assist in optimizing supply chains based on circular economy principles

● Develop educational programs and conduct trainings for company management on the approach to the circular economy

● Assess the level and prepare a report on aspects of the company’s activities in implementing the principles of the circular economy in accordance with the ISO 59020 standard for disclosure to stakeholders

ENSOR was pleased to take part in the XIV Mining and Geological Forum MINEX Kazakhstan, which was held on April 17-18, 2024 in Astana.

The forum was organized around the central theme of “Sustainable development of the mining industry for the benefit of society and the environment.” The forum and exhibition brought together more than 1,500 specialists and investors in the mining industry.

ENSOR was represented at the forum by Director of Environmental and Social Consulting Victor Davydov, who took part in the session “Best Sustainable Development Practices in Action.” Victor spoke about the benefits and challenges of implementing international standards for responsible mining by mining and metals companies in Kazakhstan and, as an example, spoke in detail about the IRMA standard.

The mining and metals industry is one of the main sectors in which ENSOR has deep and proven experience in supporting numerous national and international clients in addressing the various environmental and social challenges and opportunities they face. We support our clients at every stage of the project life cycle, from exploration to closure.

We are pleased to announce that ENSOR Manageent Consultants LLP has become a member of the Kazakhstan Chamber of Mines

The Kazakhstan Chamber of Mines was established in March 2023 to represent the interests of mineral explorers, developers and producers in Kazakhstan. The Chamber is committed to promoting responsible mining practices, advocating for a favorable investment climate, and fostering collaboration within the industry to promote the long-term prosperity of Kazakhstan. The founders include both Kazakh and international exploration companies, including representatives of companies whose shares are listed on the London and Canadian stock exchanges.

ENSOR is very pleased to be working with leading organizations in the mining sector and looks forward to collaborating, sharing experiences and supporting sustainable and responsible mining practices across Kazakhstan.

ENSOR specialists conducted a series of trainings on environmental and social risk management for employees of JSCB Uzpromstroybank (SQB)

The trainings were held as part of one of the stages of technical support to SQB Bank to improve the environmental and social risk management system provided by the European Bank for Reconstruction and Development (EBRD). ENSOR acted as a consultant to the Bank to refine the existing system for managing environmental and social risks of financed projects to ensure its compliance with the requirements of the EBRD, IFC and ADB.

The ENSOR Environmental and Social team conducted a series of trainings for Bank employees, including:

• Training for the Bank's senior management to raise awareness of EBRD, IFC and ADB environmental and social requirements, providing a high-level overview of the updated environmental and social risk management framework
• Conducting introductory training for employees of the Risk Management Department and other Bank employees at the head office and branches on the new requirements of the environmental and social risk management system and how to use updated tools and procedures
• Conducting a series of specialized trainings for employees of the Risk Management Department on social aspects, including issues such as forced relocation and economic displacement, labor relations, and community safety. Training in the use of various environmental and social risk management tools developed by ENSOR, such as screening and categorization, project evaluation, with a focus on social issues
• Jointly with representatives of the risk management department, visiting the sites of three Bank financed projects to conduct a comprehensive environmental and social risk assessment using developed tools

Based on the results of the trainings, the needs for further training and capacity building of Bank employees were also assessed.

ENSOR has completed an independent assessment of the Company’s readiness for auditing under the IRMA standard and the current level of compliance with this standard

As part of the project, a group of ENSOR specialists in the field of environmental protection, labor protection, industrial safety and social aspects had completed the following tasks:

• Analyzed the Company’s self-assessment in accordance with the IRMA standard and assess the sufficiency of the provided answers/justifications and accompanying supporting documentation.
• Provided recommendations for the provision of additional responses/justifications and supporting documentation to ensure that maximum completeness of information required for the audit is available.
• Conducted a preliminary assessment of compliance of part of the Company's mining assets with the requirements of the IRMA Standard by analyzing the information provided as part of the self-assessment and random visits to mining assets.
• Prepared a report on the preliminary assessment of compliance in relation to part of the Company's mining assets with the requirements of the IRMA Standard.
• Developed a Corrective Action Plan to improve current practices to achieve a specified level of compliance with the IRMA Standard.

As part of the assessment, ENSOR specialists:

• Conducted a desk analysis of documentation (more than 1 thousand documents)
• Conducted visits to 8 mines in two regions of the Russian Federation
• Conducted more than 60 interviews with representatives of the Company and external stakeholders (Company employees, representatives of indigenous minorities, local residents living near the Company’s facilities, administrations of the cities where the Company operates, representatives of non-profit organizations, etc.)
• Prepared a detailed report justifying the assessment result, as well as a detailed action plan to eliminate identified non-compliances with the IRMA standard
• Conducted a presentation of the assessment results to management

Vice President for Investor Relations and Sustainable Development of Norilsk Nickel Vladimir Zhukov commented: “Norilsk Nickel sets itself the task of complying with the best global practices in the field of sustainable development. The Responsible Mining Initiative is one of the most widely accepted and rigorous standards in our industry. The desire to meet this standard is consistent with our ambitions to be a global industry leader, including in the field of sustainable development, and to maintain our competitive advantages in the market. The request from buyers of Norilsk Nickel products for sustainable metal production reflects their desire for a green and clean planet. By improving its activities in the field of sustainable development, the company is solving a number of important tasks for itself in the field of social responsibility, ecology, increasing the level of industrial safety and labor protection, and improving the quality of life of local communities in the regions where it operates."

Details in the official press release: Nornickel completed self-assessment for IRMA certification - News and releases - Nornickel

On October 21, in Almaty, with the support of ENSOR, a round table was held, where, together with representatives of the European Bank for Reconstruction and Development (EBRD) and the Asian Development Bank (ADB), the public and environmentalists, a number of aspects of the project “Modernization of Almaty CHPP-2 with minimizing the impact on the environment” were discussed "

According to Alexandra Leman, Director of Environmental and Social Consulting, the round table was held as part of mandatory international banking procedures for project approval. At the event, the public was provided with information on the current status of the Almaty CHPP-2 modernization project in terms of: assessing the impacts on the environmental environment and social sphere; previously identified impacts and measures planned to minimize these impacts; results of an analysis of the project’s compliance with the requirements of potential project lenders - the EBRD and ADB. The discussions also provided information on the further steps of impact assessment, the availability of developed documents in electronic and printed form, as well as ways to submit questions and proposals related to the development and implementation of the CHPP-2 modernization project.

Regarding the environmental component, it was noted that the project complies with the most stringent requirements of the Republic of Kazakhstan and the European Union, which will allow:

• reduce emissions of harmful substances by 93%;
• exclude from the emissions of suspended particles and sulfur oxides, the formation and disposal of ash and slag waste;
• ensure silent operation of the units.

Taken together, this will reduce the station’s area of influence on the environment and residents of the Almaty agglomeration.

A separate topic of discussion was the issue of tariff setting. The general opinion is that the conversion of CHPP-2 to gas will lead to an increase in tariffs, at least due to the replacement of coal with gas. But, as noted during the discussion, it is assumed that the tariff of AlES JSC, the owner of Almaty CHPP-2, will be comparable to the tariff of Almatyteplokommunenergo, the second supplier of thermal energy in Almaty.

The project attaches particular importance to social issues, including retraining and employment of personnel in other subsidiaries of Samruk-Energy JSC and enterprises in Almaty. Other options are also being considered to ensure employment of CHPP-2 workers. According to plant employees, work has already begun this year to train personnel to study the equipment of combined cycle gas turbine units (CCGTs).

The project “Modernization of Almaty CHPP-2 with minimization of environmental impact” involves the construction of a new station using gas turbine technologies with a capacity of up to 600 MW at the site of Almaty CHPP-2. The deadline for full commissioning is December 2026. The goal of the project: to reduce the negative environmental impact of the station on the environmental situation in Almaty by converting it to natural gas combustion, as well as to provide consumers of Almaty and the Almaty region with a reliable and uninterrupted supply of heat and electricity in accordance with load schedules. Almaty CHPP-2 named after. A. Zhakutov is part of the structure of Almaty Electric Power Plants JSC.