Your Mongolian customer or buyer is asking for ESG information. Here is what the regulatory environment requires — and what international buyers need from you.
Mongolia is a significant producer of coal, copper, gold, and cashmere, with mining accounting for approximately 25% of GDP and over 80% of export earnings. Mongolia's Financial Regulatory Commission (FRC) has introduced sustainability reporting requirements for listed companies on the Mongolian Stock Exchange (MSE). Mongolia's critical minerals — particularly copper from the Oyu Tolgoi mine (one of the world's largest copper-gold deposits) — are increasingly important for the global energy transition. International mining companies operating in Mongolia are subject to EU CSRD, CSDDD, and the EU Battery Regulation's supply chain due diligence requirements. Mongolia's cashmere sector faces buyer sustainability requirements from international fashion brands.
Key regulations in Mongolia — ESG Supplier Guide
Mongolia FRC — Sustainability Reporting for Listed Companies
Mongolia's Financial Regulatory Commission (FRC) requires listed companies on the Mongolian Stock Exchange (MSE) to publish sustainability reports aligned with GRI Standards. The framework covers environmental performance, social performance, and governance. Mongolia's capital market is developing, and the primary ESG compliance pressure on Mongolian companies comes from international buyer requirements, development finance institution conditions, and the ESG requirements of international mining company partners.
EU Battery Regulation — Copper Due Diligence
Mongolia's Oyu Tolgoi copper-gold mine — operated by Rio Tinto's Turquoise Hill Resources — is one of the world's largest copper deposits. The EU Battery Regulation requires due diligence on copper supply chains for battery manufacturers. International buyers of Mongolian copper must conduct OECD-aligned due diligence covering environmental management, community rights, and labour practices. The Oyu Tolgoi project has faced community relations challenges and has been subject to IFC Performance Standards compliance reviews.
EU CSDDD — Corporate Sustainability Due Diligence Directive
EU companies sourcing from Mongolia — particularly in copper, gold, coal, and cashmere — will be required under CSDDD to conduct human rights and environmental due diligence. Mongolian suppliers will receive questionnaires on labour practices, environmental management, community rights, and anti-corruption compliance. The mining sector faces particular scrutiny given its environmental and social impacts.
Mongolia NDC and Climate Policy
Mongolia has submitted an NDC to the UNFCCC committing to a 22.7% GHG emissions reduction by 2030. Mongolia is highly vulnerable to climate change — extreme winter weather events (dzud) are increasing in frequency and severity, threatening Mongolia's pastoral nomadic communities and livestock sector. Companies operating in Mongolia should assess climate physical risks in their operations and supply chains.
What this means for you as a supplier
Mongolian mining companies and their suppliers face ESG requirements from international buyers driven by the EU Battery Regulation, CSDDD, and investor ESG requirements. Copper and gold producers must prepare for OECD-aligned due diligence assessments covering environmental management, community rights, and labour practices. Cashmere producers and exporters face buyer sustainability questionnaires on animal welfare, land degradation, and herder livelihoods. All Mongolian companies seeking international financing should prepare for IFC Performance Standards or Equator Principles compliance assessments.
Key dates
2025 (ongoing)
EU Battery Regulation due diligence — copper supply chain due diligence requirements active for EU battery manufacturers
July 2029
CSDDD Phase 1 — largest EU companies must conduct supply chain due diligence including Mongolian suppliers
Oyu Tolgoi: the world's largest undeveloped copper deposit
The Oyu Tolgoi copper-gold mine in Mongolia's South Gobi Desert is one of the world's largest copper deposits, with an estimated 80 billion pounds of copper and 35 million ounces of gold. The underground expansion — one of the largest mining projects in the world — reached first production in 2023. Rio Tinto (through Turquoise Hill Resources) operates the mine in partnership with the Mongolian government. The project has been subject to significant ESG scrutiny, including IFC Performance Standards compliance reviews, community relations challenges with local herder communities, and water use concerns in an arid environment. International buyers of Mongolian copper must conduct due diligence on Oyu Tolgoi's ESG performance. Rio Tinto publishes annual ESG reports on Oyu Tolgoi's performance against IFC Performance Standards.
Cashmere: sustainable sourcing for luxury fashion
Mongolia produces approximately 40% of the world's cashmere, making it the world's second-largest cashmere producer after China. Mongolian cashmere is prized by luxury fashion brands for its quality. The cashmere sector faces ESG challenges including: land degradation from overgrazing (Mongolia's grasslands are under severe pressure from increasing goat populations), climate change impacts on pastoral communities, and animal welfare. International luxury fashion brands sourcing Mongolian cashmere are subject to CSDDD due diligence requirements and investor ESG expectations. The Sustainable Fibre Alliance (SFA) operates a cashmere certification programme in Mongolia that covers land management, animal welfare, and herder livelihoods. Mongolian cashmere producers and exporters should engage with SFA certification to demonstrate sustainable sourcing to international buyers.
Last reviewed: April 2026. This guide is for general information only and does not constitute legal advice. Regulations change — verify current requirements with a qualified adviser.
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