Jeff Taylor: Azerbaijan has taken the most important step to incorporate sustainability considerations within law

Sustainable procurement plays an important role in promoting environmental and social responsibility improvements. Azerbaijan is also making efforts in this direction. Deepening cooperation with ADB on this issue will support these efforts and move further towards sustainable development.

In an interview with Report, ADB’s Deputy Director General and Chief Procurement Officer of Procurement, Portfolio and Financial Management Department Jeff Taylor spoke about ways to improve the situation in this area, the impact of sustainable procurement on Nationally Determined Contributions (NDCs) to the climate agenda, and the bank’s plans to support various initiatives, etc.

What is the current level of sustainable procurement practice in Azerbaijan and how can the situation be improved?

Well, I think Azerbaijan has taken all of the right steps in terms of its new procurement law. It looks at environmental and social and sustainable procurement. And sustainable procurement is an extremely broad subject.

It can incorporate governance, it can incorporate economic considerations, social and of course, very importantly, environmental. ADB will be looking for the opportunities to work and support these programs where it's aligned with our project financing and our activities. And that could be around more sustainable buildings, construction materials and so forth.

Every country is taking a different approach with different priorities depending on their geography and economic circumstance. But I think Azerbaijan has taken the most important step, which is to incorporate sustainability considerations within national regulation and law. And that provides a very good foundation going forward in terms of the way we can support environmental considerations, social considerations and so forth within both the ADB finance portfolio and in support of the government's own reforms.

And are there any support or incentives for companies applying sustainable procurement practices in Azerbaijan?

We do intend to introduce those. I will give the example of Green cement. Green cement is low carbon, lower carbon than traditional cement. And we have been piloting this in India in an ADB finance project.

It is dependent on the market being able to respond to that requirement. And we did a deep dive into the Indian market and concluded that it was manufacturers who were able to respond. But one of the areas and ways we can support that is to provide an advantage in an evaluation process for a contractor that offers greener or more environmentally friendly materials.

Could you please elaborate on how sustainable procurement can be a key element to achieve NDC national contributions?

Okay, well, using the example of green cement, and I believe shortly there may be some global standards established for green cement. If that cement is used, the carbon offset or carbon saving could potentially be counted into the NDC, the national contribution. The mechanisms for measurement are not really my area of expertise.

Procurement is, and there are many opportunities in procurement to actually reduce the carbon footprint both in the way and the materials used in construction and also the performance of the asset. Another example would be energy efficient pumps, for example, or led light street lighting and examples like that that I believe could be considered towards nationally determined contributions.

In which specific areas is the Asian Development Bank going to collaborate with Azerbaijan?

We will have to be responsive to Azerbaijan's interests as its own programme has to be aligned to Azerbaijan, rather than imposed by ADB, with ADB saying, you must do this, I must do that. That doesn't work, because sustainability is such a broad subject and there needs to be national ownership.

But the areas that I'm particularly interested in, because we do finance a lot of construction, is construction. How do we lessen the impact and the carbon produced through the construction process? So that will be one area. Another area that I'm particularly interested in working with all of our clients on is introducing it into regulation standards and so forth.

And as I said at the beginning of the interview, Azerbaijan has already taken the most important step of actually providing a regulatory framework within which to work for itself that ADB can support. But construction materials is from the procurement process side. It is the area of greatest interest.

If we look at the heavy industries around construction, asphalt, cement, steel, aluminum, it makes up 30 40% of global emissions. Even if it's a small reduction in those heavy industries, it has a very significant impact.

Could you elaborate a little bit about what you were saying previously that ADB has conducted diagnosis in Azerbaijan and sustainable procurement?

Yes, we have. We've done this for all 41 of our borrowing countries. We've looked across the regulatory framework and found, for example, in Azerbaijan, it's procurement performance. We are in the process of agreeing with each of our client countries that we have actually presented an accurate picture.

So far, of the 41 countries, ten have said, yes, we have. We are currently discussing this with Azerbaijan because we want to make sure that we reflect that our diagnostic is accurately reflecting the state of play in Azerbaijan, because we are in Manila and yes, we do have offices there, but we need to make sure that the diagnostic has reached the right conclusion.