CBA: Sustainable finance taxonomies became important tools for achieving environmental goals

Against the backdrop of the global fight against climate change, sustainable finance taxonomies have become an important tool for aligning investments with environmental and social goals, Azerbaijani Central Bank (CBA) Governor Taleh Kazimov said, Report informs.

"These taxonomies help investors, companies, and other stakeholders make informed decisions about how to allocate capital for climate activities. They define how activities meet sustainability criteria," he said. .

According to Kazimov, the CBA proposes to adapt national and regional taxonomies to standards developed by international organizations, including the World Bank Group and the International Monetary Fund, in order to implement a practical and widely recognized approach to sustainable finance.

"Although many countries have already adopted sustainable finance taxonomies, the lack of consistency between legal frameworks creates certain difficulties. The chairman emphasized that the emergence of different standards leads to inconsistencies in the investment environment and hinders the creation of a globally recognized asset class. To remove these barriers, a unified global approach is needed. Such an approach, encompassing universal principles, definitions, and indicators, will ensure an effective flow of climate finance and better financial conditions for issuers," said the CBA chairman.