Gobi JSC and ADB Partner to Boost Sustainable Cashmere Production in Mongolia
In November 2023, Gobi Joint Stock Company (JSC) and the Asian Development Bank (ADB) signed a $30 million sustainability-linked loan to support Mongolia's cashmere value chain. This initiative aims to ensure stable incomes for herders and industry employees while promoting sustainable pasture management.
Gobi JSC, Mongolia’s largest cashmere producer, has been working to improve its sustainability practices in response to environmental challenges like climate change and overgrazing. With herders facing increased heatwaves, droughts, and dzuds (harsh winters), Gobi sought to address these issues while supporting the livelihoods of Mongolian herders and improving the sustainability of the cashmere supply chain.
To tackle these challenges, Gobi JSC, in partnership with ADB, secured a $30 million sustainability-linked loan to increase direct procurement of raw cashmere from herders and enhance cashmere processing operations. ADB also provided a $1 million technical assistance grant aimed at improving pasture and herd management and training herders in climate-resilient practices. The loan incentivizes Gobi to achieve specific sustainability goals, including emissions reductions, water conservation, and empowering women in the industry.
The partnership is expected to benefit 1,200 herders and 1,300 employees, providing them with reliable incomes and technical support. At least 200 herders, including 80 women, will receive training in sustainable pasture management and financial literacy. The initiative will also drive the processing of more finished cashmere products within Mongolia, increasing foreign currency revenue. Gobi's commitment to gender equity will see half of new operational staff being women, and more opportunities for female herders.
The collaboration between Gobi JSC and ADB underscores the effectiveness of sustainability-linked loans in driving environmental and social improvements. It highlights the value of comprehensive support, not only through financial aid but also through capacity-building initiatives such as technical training for herders in sustainable practices. Additionally, integrating gender equity into the project shows the importance of addressing social challenges alongside environmental ones, ensuring that both men and women benefit equally from industry advancements and sustainable development.
This collaboration sets a strong example of how targeted financial support and sustainable practices can strengthen industries while addressing climate change and social challenges.
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