Azerbaijan, set to host the 2024 United Nations Climate Change Conference (COP29), is gearing up to launch a groundbreaking set of standards aimed at guiding sustainable investment across the globe. Central Bank Governor Taleh Kazimov announced on Friday that more than 100 countries have collaborated to develop these unified taxonomy principles, marking a significant step towards simplifying green finance.
Climate finance taxonomies serve as critical tools for ensuring that investments contribute effectively to the reduction of emissions. However, the existing multitude of differing rule books has led to confusion among investors. While the European Union has established one of the most comprehensive frameworks, a unified taxonomy endorsed by the United Nations could potentially achieve even broader international acceptance.
Governor Kazimov emphasized the collaborative effort behind the new principles. “We have developed new unified taxonomy principles together with 110 countries,” he stated during a news conference. “These principles will be applied to develop national taxonomies, simplifying the process of issuing green loans.”
Azerbaijan will host COP29 from November 11 to 22, 2024. On November 14, the nation plans to announce the amount of funds it will allocate for green projects through 2030. Zakir Nuriyev, head of the Association of Banks of Azerbaijan, hinted that this figure could match the total loan portfolio of Azerbaijani banks, which exceeds $15 billion.
In addition to setting new standards for sustainable financing, Governor Kazimov revealed that the Central Bank is considering the introduction of Islamic financial instruments, such as sukuk bonds. “We are preparing the necessary legislation and analyzing the market to assess demand,” he noted, indicating a move to diversify financial offerings and attract a broader range of investors.
Azerbaijan’s initiative reflects a growing recognition of the need for unified global standards in green finance. As the world grapples with the challenges of climate change, the upcoming COP29 in Baku is poised to serve as a pivotal platform for driving international collaboration and investment in sustainable development.
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Azerbaijan aims to launch green investment rule book at COP29
cgtn.com
