CBA: Azerbaijan launches major reforms to build sustainable finance ecosystem

The Central Bank of Azerbaijan (CBA) has begun implementing large‑scale reforms aimed at fostering a strong sustainable finance ecosystem, in line with its roadmap on sustainable finance, CBA Governor Taleh Kazimov said in an article published by the Central Banking online journal, Report informs.

The governor explained that sustainable finance principles are a set of guiding principles that provide a comprehensive framework for financial institutions regarding corporate governance, strategic planning, and risk management, as well as being designed to support sustainable practices.

"Guidelines on environmental risk management in banks. These guidelines serve to integrate climate‑related risks into core decision‑making processes such as credit assessment, investment choices, and operational strategies. This ensures that ecological factors are prioritized in banking operations.

Green taxonomy. This taxonomy plays a critical role in establishing a clear understanding and consensus on what is meant by green infrastructure. Based on the detailed Green Taxonomy prepared by the CBA in 2024, ten sector‑specific green activities and their criteria have been identified. This facilitates access to concessional financing for projects that promote sustainability and environmental responsibility.

Guidelines on green and sustainability‑linked loans. These guidelines were developed to align lending practices with international standards such as the green credit principles, with the aim of increasing transparency and trust among stakeholders.

These fundamental initiatives lay the foundation for the emerging innovative green finance market in Azerbaijan."