CBA head highly evaluates private sector's role in sustainable economic transformation

Chairman of the Central Bank of Azerbaijan (CBA), Taleh Kazimov, underscored that transitioning to "green growth" is the primary objective of the financial sector's development strategy at the “Raising Ambition, Enabling Action: COP29 Sustainable Business Forum” event, Azernews reports.

"The private sector as well as all other sectors should engage in the green economy transformation, requiring proper regulation, in particular, it is necessary to identify potential risks and conflicts,” he emphasised.

According to him, now the global economy, like the economy of Azerbaijan, is faced with problems associated with climate change, the consequences of which must be eliminated.

"The fight against climate change stands as one of Azerbaijan's strategic goals. Like other nations, Azerbaijan grapples with climate-related challenges. This year holds particular significance for us, as hosting the 29th session of the Conference of the Parties to the UN Framework Convention on Climate Change (COP29) underscores our commitment," T. Kazimov emphasised.

He also mentioned that the CBA is taking measures to stimulate green financing and strengthen the bank's participation in regulating energy efficiency initiatives.

Additionally, he mentioned the preparation of a strategic roadmap for sustainable finance by the Central Bank of Azerbaijan (CBA), along with the formulation of the country's sustainable financial taxonomy. Kazimov added that the World Bank (WB) is providing support for the development of the taxonomy.

Along with the public sector, the private sector should play a leading role in the trend of adapting to new challenges and the sustainable transformation of national economies and financial systems, said Taleh Kazimov.

He emphasised that, on one hand, the private sector must swiftly adapt its business models to climate change, while on the other hand, it can influence consumer behaviour by offering sustainable products and services.

"In order to attain the objectives set for the transformation of the national economy, the effectiveness of regulatory bodies is crucial. This effectiveness relies on the promotion and regulatory functions mirroring leading international practices across various sectors of the economy, including the financial sector".

He also mentioned that in Azerbaijan, there are plans for a gradual implementation of a sustainable financial transition, achieved through deepening financial markets and enhancing the capabilities of existing financial institutions.

T. Kazimov highlighted that the Central Bank has revised the corporate governance standards for banks, insurance, and investment companies: "Under these standards, financial institutions are required to consider environmental, social, and governance factors to ensure long-term sustainability."