Azerbaijan's CBA outlines strategic directions on sustainability

The Central Bank of Azerbaijan (CBA) has identified five strategic directions related to sustainable finance, CBA Governor Taleh Kazimov said in an article published in the Central Banking online journal, Report informs.

The directions are as follows:

- Promote expanded cooperation with international partners to strengthen and enhance institutional capacity in Azerbaijan's financial sector;

- Introduce and develop green financial products such as sovereign green bonds and green insurance to finance environmentally friendly projects and support sustainable public and private investments;

- Implement a comprehensive sustainability reporting framework to increase transparency, ensure environmental, social, and governance (ESG) accountability, and strengthen investor confidence;

- Integrate ESG considerations and climate risk factors into banking regulation, applying advanced tools such as an ESG risk radar to facilitate identification and management of systemic risks;

- Expand cooperation among institutions and countries to promote effective analysis of climate risks.

Kazimov stressed that the challenges posed by climate change are global in nature and require a multifaceted approach: "Therefore, information exchange and joint action are not only useful but necessary."

He added that the CBA is fully committed to playing a leading role in the development of a sustainable financial system.

"Through its initiatives, strong partnerships, and commitment to sustainability, the CBA aims not only to contribute to the green transformation but also to support and advance global climate action efforts. The CBA is determined to foster innovation in green finance, mitigate systemic risks arising from climate change, and build a future where economic prosperity and environmental sustainability coexist," the governor noted.