Climate change

Being the largest fixed telephony operator in Kazakhstan, the leader in providing telecommunications services, as well as one of the largest operators of the national data transmission network, Kazakhtelecom JSC supports Kazakhstan’s participation in the global GHG emission reduction targets. The Company is actively applying and introducing sustainability principles in its business model. One of the areas of Kazakhtelecom JSC’s Strategy is improvement in the field of sustainable development. The strategic objective of Kazakhtelecom JSC is to reduce GHG emissions by 13% by 2032 compared to the base year 2021, with a further goal to achieve carbon neutrality by 2060. In 2022, Kazakhtelecom JSC carried out active work contributing to the achievement of national and international climate change targets.

Within the framework of managing greenhouse gas emissions, the Company has the following internal documents:

• Low-carbon development program of Kazakhtelecom JSC for 2022-2032;
• Guidelines for monitoring and reporting on greenhouse gas emissions and energy flows.

In December 2022, the Company developed and approved a Low-Carbon Development Program for 2022-2032 aimed at reducing greenhouse gas emissions, which involves all General Directors of the Company’s branches. The implementation of this Program is supervised by the Chief Director for Strategic Management. The program includes key measures and initiatives to achieve the strategic goal of reducing energy consumption by 2% per year, increasing the Company’s investment appeal and shareholder value, and reducing the Company’s carbon footprint by 13% by 2032. Four key areas of low-carbon development were identified in the preparation of the LCDP:

• alternative energy;
• resource saving and energy efficiency;
• compensatory measures;
• monitoring and management of greenhouse gas issues.

Under the LCDP, the Company plans to build a corporate system to monitor, report and manage GHG emissions. The Company intends to take an annual inventory of GHG emission sources, disclose, calculate, and verify greenhouse gas emissions in accordance with an international reporting standard — the IPCC guidelines.

The current base year is 2021, due to the Company’s initial inventory and quantification of GHG emissions. To achieve the goals of low-carbon development, the Company is developing a corporate document to unify reporting requirements for energy and greenhouse gas emission streams.

¹¹ The assessment of GHG emissions in 2020 was not carried out. The Base Year for emissions calculations is 2021.

The Company has no GHG emissions from biomass combustion and decomposition. Calculation of GHG emissions of Scope 1 was based on the IPCC guidelines using individual fuel densities. GHG Scope 2 emissions were calculated based on an approved list of benchmarks in regulated economic sectors. At the end of 2022, Kazakhtelecom JSC’s total GHG emissions were 232,567 tons of СО₂-eq. (Scopes 1 and 2), 8.5% below the 2021 level. The volumes of direct (Scope 1) and indirect energy emissions (Scope 2) decreased by 1.9% and 9.4%, respectively. The year-on-year decrease is due to the switchover of users from copper to fiber-optic lines, which made it possible to optimize the costs of maintaining the access network infrastructure and station equipment, to dismantle ATU, MSA, DSLAM, including freeing up buildings and premises that consume electric power, to replace fluorescent lamps with LED ones and a number of other energy efficiency measures, which the Company plans to implement one by one until 2032. In 2022 there was a 14% reduction in carbon intensity compared to 2021.

In 2023 it is planned to carry out measures to increase the consumption of energy resources from low-carbon energy sources:

1. Continued implementation of initiatives in the field of low-carbon development — the transition to the use of low-carbon energy sources in Kostanay region (gas);
2. Reducing the consumption of fossil fuels in stationary and mobile sources;
3. Implementation of Kazakhtelecom JSC LCDP measures for 2022-2032 (https://telecom.kz/ru/pages/13683/172516);

In 2022, the Company developed the Energy Registry and the Greenhouse Gas Registry, which include structural data on primary production facilities that consume energy resources. The registry includes the following measures to build a system for monitoring and reporting on energy flows:

• internal quality control procedures in the Company (regular certification and accreditation of operating personnel, verification of the correctness of measurement results as part of operator control, control over compliance with and use of approved calculation methods);
• regular maintenance, calibration and verification of measuring equipment for monitoring in accordance with the manufacturer’s instructions and existing enterprise practices;
• cross-checking primary and secondary data;
• regular training and retraining of personnel;
• internal and external audits.

¹² Values for 2021 differ from those presented in IAR 2021 due to refinement of the calculation. Total FER consumption increased by 41,892 GJ.

In Kazakhtelecom JSC, transition to resource-saving technologies and improvement of energy efficiency is one of the key areas. The Company develops measures to minimize consumption of imported electricity, heat and fuel resources while operating its own power generating facilities.

In 2022, total fuel consumption was 419,034 GJ, down 1.8% from 2021. The main sources of energy are gasoline and diesel fuel. The Company uses autonomous heating systems at 248 properties, including diesel heating (at 103 properties), gas heating (at 103 properties), and solid fuel heating (at 39 properties, including electric boilers at 28 properties). The company is reducing the number of heating systems using diesel fuel (108 facilities in 2021), which reduces overall air emissions. Burning natural gas generates less carbon dioxide than burning coal and diesel fuel, so it has less impact on the environment.

In 2022, electricity consumption was 622,298 GJ, a 13% decrease from last year because of the deduplication project and the replacement of copper networks with modern fiber-optic lines. As a result, most of the power-consuming equipment was decommissioned and the administrative buildings that consume power for lighting were freed up.

The dynamics of specific energy consumption shows a stable decrease. In the reporting period it was 9%.

In 2022, the total reduction in energy consumption was 8,386 GJ due to the implementation of LCDP measures. As a result, 113,442 subscribers were switched from copper to fiber optic communications and 11,575 fluorescent lamps were replaced with LED ones.

In subsequent years the Company plans to gradually convert heating systems to gas, which is one of its priority tasks. The Company’s subdivisions regularly carry out activities that are focused on ensuring rational use of heat and power resources.

The following energy efficiency measures are planned for 2023:

1. Elimination of heat losses by insulating buildings and structures as part of measures to prepare the Company’s facilities for the heating season.
2. Carrying out maintenance of autonomous heating systems.
3. Switching to LED lamps.
4. Installation of motion/presence sensors for the lighting system.
5. Setting personal computers to hibernate when not in use for more than two hours and installing software to automatically shut down personal computers.
6. Continued deduplication project and replacement of copper networks with modern fiber optic technology.
7. Conducting a mandatory energy audit.