Transition To Sustainable Dev't Requires ESG Criteria Integration To Banking Institutions' Strategies - Official

(MENAFN- Trend News Agency) BAKU, Azerbaijan, October 3. Transition to sustainable development requires an innovative approach and integration of ESG criteria (environmental, social, and corporate governance) into the strategies and business models of banking institutions, the chairperson of the Central Bank of Azerbaijan Taleh Kazimov said at a roundtable discussion on "Creating the Highway for Private Finance" at ADA University within the framework of "Climate Action Week", Trend reports.

“The finance industry plays a key role in supporting sustainable development, and today we are here to discuss how private finance can contribute to this process. The issue of sustainable finance is relevant both nationally and globally. We are at an important juncture: on the one hand, we have a responsibility to support economic growth, and on the other hand, our responsibility is to protect the environment. This creates additional challenges for the financial sector and the Central Bank, as it is necessary to take into account climate risks and ensure financial stability,” he said.

He noted that in 2023 the Central Bank of Azerbaijan approved a new system of regulation of the financial sector, one of the key elements of which was the introduction of green financial taxonomy.

“We developed this mechanism to align the activities of financial institutions with international standards. This year we introduced new requirements for banks to manage climate risks and incorporate sustainable development principles into their corporate governance and financial strategies. The Central Bank of Azerbaijan is actively working to support innovation in the financial sector, creating conditions for the successful transition of the economy to sustainable development models not only in Azerbaijan but also internationally,” Kazimov added.

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