© Hikmat Gafarzada
The Central Bank of Azerbaijan (CBA) released its global green taxonomy roadmap during Cop29 in an attempt to align taxonomies around the world and help increase financial capital for the transition in alignment with the Paris Agreement.
The roadmap was released on Thursday in partnership with several UN and global development groups, including the International Finance Corporation (IFC) and the Sustainable Banking and Finance Network.
Taleh Kazimov, governor of the CBA, stated: “Looking beyond Cop29, the central bank envisions a proactive role in implementing this roadmap. We are committed to leading the implementation process and monitoring the progress. Together with strategic partners, we will strive to coordinate all efforts for the implementation of the roadmap.”
The framework is designed to help improve the cross-border compatibility of sustainable finance taxonomies and allocate capital more efficiently.
“Aligning green taxonomies will create a more efficient global market for sustainable finance, allowing capital to flow freely to where it’s needed most and benefiting both developed and emerging markets,” said Makhtar Diop, managing director at IFC.
The roadmap identifies three technical elements to focus on including:
- core taxonomy activities, particularly for emerging markets and developing economies. This includes exploring shared classification systems such as the international standard industrial classification, and recommendations for a tiered approach based on market maturity and national pathways;
- drafting a standardised approach to taxonomy principles, such as ESG;
- and developing guidelines to define and support financing transition activities, based on the G20 transition finance framework. For example, this could include using taxonomy criteria to set targets for transition and investment plans, or using a traffic light system like the one used by the Association of Southeast Asian Nations (Asean) taxonomy board.
Also at Cop29, the CBA announced it would green 10% of its loan portfolios over the next six years. The central bank is also considering greening its monetary policy and introducing a mandatory green insurance project, according to media reports.
Earlier this month, the CBA adopted its own green taxonomy, which includes a classification system for different activities and criteria across different sectors. The taxonomy is designed to help facilitate a green transition and attract more investments in green projects.
This page was last updated November 19, 2024
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Moriah Costa is the Editor-in-Chief of Green Central Banking and has over a decade of experience writing about banking and finance. She is an award-winning American journalist based in Paris and has written for major international publications, including Reuters, The Guardian, and S&P Global. Having grown up in water-stressed Arizona, she has always had a strong interest in bringing awareness to climate and environmental issues.
