BAKU: The Central Bank of Azerbaijan is poised to implement a comprehensive sustainable financing plan targeted at enhancing the operational standards of financial institutions by the end of this year, announced Director General Shahin Mahmudzade during a forum on “Green finance and sustainable development.”

According to Trend News Agency, Mahmudzade outlined the Central Bank’s strategic approach, which is segmented into four principal directions. The first focuses on the capacity building within the financial sector, emphasizing the importance of skilled human resources for advancing sustainable finance initiatives. Mahmudzade noted that several training programs have been introduced since the start of the year to elevate the expertise of financial specialists.

The second direction addresses the elimination of regulatory gaps through the development and adaptation of new rules and laws tailored to the local market’s needs. The third strategic direction involves the creation of a taxonomy, a classification
system essential for the green finance sector. Mahmudzade revealed that this taxonomy project is nearing completion, significantly expedited to align with the goals of COP29, with an ambitious timeline of just six months.

The fourth and final direction focuses on enhancing transparency. Mahmudzade explained that while financial institutions have partially met the Environmental, Social, and Governance (ESG) requirements, a significant challenge remains in elevating public awareness about these practices. In response, the Central Bank has unveiled its inaugural sustainable finance plan and is in the process of developing framework conditions for local financial institutions to disclose their sustainable finance engagements.

The implementation of these comprehensive measures is expected to be completed by year-end, setting a significant milestone in Azerbaijan’s journey towards sustainable financial practices.