Enhancing Sustainable Cashmere Production in Mongolia How can Mongolia’s iconic cashmere not only be known for its quality and durability, but also as a new reference for high sustainability standards? Building on the success of the STeP EcoLab project, the newly launched follow-up sets out to scale fair, circular, and climate-smart solutions across the cashmere sector—protecting livelihoods and landscapes alike. In April 2025, partners from across the Mongolian cashmere sector gathered to mark the launch of STeP EcoLab Mongolia II, a new EU-funded project that builds on the achievements of its predecessor. The event brought together herder associations, industry leaders, policymakers, certification bodies, and sustainability experts to align on a shared vision: making Mongolia’s iconic cashmere both circular and socially just. The cashmere sector is one of Mongolia’s most important industries, providing income to around one-third of the population, especially in rural areas. At the same time, the sector faces major sustainability challenges. Desertification has already affected over 77% of the country’s land, driven in part by overgrazing and climate change*. While global demand for cashmere continues to rise, the economic benefits are unevenly distributed and ecological costs often externalised. The STeP Ecolab Mongolia II project aims to tackle this dual challenge by building on the groundwork laid by STeP EcoLab Mongolia I. Among its major achievements were the introduction of international sustainability standards to selected companies and the co-development of a sector-wide voluntary agreement and accompanying roadmap, setting out shared sustainability commitments across the value chain. In a landmark step, this agreement was later adopted into Mongolian law, creating a lasting policy framework to support the sector’s transformation. The new project takes these efforts further by integrating additional levers for transformation: fair pricing models, circular product innovation, and strengthened positioning towards European markets. Key activities include: Updating and refining the sectoral roadmap in collaboration with stakeholders Supporting companies in the adoption of sustainability certification Introducing and piloting fair pricing mechanisms to improve livelihoods and resilience Co-developing circular business models and product innovations Enhancing communication of sustainability performance to international buyers and consumers As a long-standing transformation partner in the Mongolian cashmere sector, the CSCP will contribute its expertise in participatory strategy development, sustainable value chains, co-creation for circular economy, and sustainability communication. These elements are not only crucial for creating lasting change, they also help ensure that transformation is co-owned by those who shape the future of Mongolian cashmere every day. The project consortium includes the National Federation of Pasture User Groups (NFPUG), the Mongolian Sustainable Finance Association (MSFA), the Mongolian Wool and Cashmere Association (MWCA), and international certification organisations. The Mongolian Ministry of Light Industry also supports the project to ensure alignment with national development goals. The project is led by AVSF Mongolia and funded by the European Commission through its SWITCH-Asia programme. For further questions, please contact Pawel Zylka. *UNDP 2024