Recognizing the implications of climate change for the financial sector, the Central Bank of Azerbaijan has started to develop a strategy, while important work lays ahead towards achieving the objective of greening the financial sector.
Report informs, citing the study of the World Bank, that the strategy which CBA is currently developing would set out the overarching objectives of sustainable finance development aligned with the country’s vision for economic development until 2030.
According to the bank, it would include action plans to embed principles of sustainable finance in the financial sector, including banking, insurance, and capital markets, and take advantage of the opportunity to develop products and service and improve intermediation.
"Great emphasis is placed on stakeholder engagement, both in the public and private sectors. In February 2022, CBA also became the newest member of the Sustainable Banking and Finance Network, which is a platform for knowledge sharing and capacity building on sustainable finance for financial sector regulators and industry associations across emerging markets, with 70 member institutions from 47 countries," the bank says.
It believes that in addition to the role of commercial financial institutions and the central bank as regulator/supervisor, Azerbaijan also has major government programs supporting access to finance, which could be aligned with climate and environmental objectives. The main agencies include the Azerbaijan Mortgage and Credit Guarantee Fund (AMCGF), the Entrepreneurship Development Fund (EDF) and the Agrarian Credit and Development Agency (ACDA).
"Coordination among the institutions on emerging priorities is critical for meeting the national commitments to the United Nations’ 2030 Agenda for Sustainable Development," the bank says.