Azerbaijan to develop concept of concessions over application of ESG standards in banks

The implementation of environmental, social and governance (ESG) standards in the banking sector of Azerbaijan may be possible by 2026, Huseyn Huseynov, head of the Department of Sustainable Development and Social Policy of the Ministry of Economy, Secretary of the National Coordination Council for Sustainable Development, told Report.

Huseynov noted that the process of applying ESG standards is new to Azerbaijan: “The banking sector should be fully prepared for the application of ESG standards so that a concept of concessions to be applied in this direction is developed.”

He noted that in 2018, inflows to funds applying ESG practices were $5 billion, and in 2022 this indicator already increased to $70 billion: “This helps global companies earn between $25-30 billion in net profit based on the first quarter of 2022. These numbers are quite encouraging. Our main goal is to stimulate the application of ESG standards in the banking sector of Azerbaijan to increase access to credit resources on more favorable terms for companies that use friendly technologies in environmental protection.”