IFC ESG Advisory Program in Europe and Central Asia organized a two-day online workshop on ESG Risk Management and ESG Disclosure for financial institutions from Azerbaijan and Georgia

On May 29-30, 2024, the IFC ESG Advisory Program in Europe and Central Asia (the Program), in collaboration with the Central Bank of the Azerbaijan Republic (CBAR) and the National Bank of Georgia (NBG), and with support of the Azerbaijan Banks Association (ABA) and the Banking Association of Georgia (BAG) organized a two-day online workshop on ESG Risk Management and ESG Disclosure for financial institutions from Azerbaijan and Georgia. The workshop was a great example of regional knowledge sharing and public-private partnership, which is paramount to successfully achieving sustainability goals.

In terms of integrating ESG standards into codes and regulations, Georgia is a clear leader in the region.  NBG made Georgia the first country in the region to enroll as a Sustainable Banking and Finance Network (SBFN) member that started its sustainable finance journey from scratch and is one of the top performers.  According to the 2024 SBFN Global Progress Brief, Georgia has reached the “Maturing Stage” in the SBFN Progression Matrix – one of only six SBFN member countries to have done so.  Since engaging with the Program, NBG has adopted seven regulatory documents, including the Corporate Governance (CG) Codes for Commercial Banks and for Issuers of Public Securities; ESG Reporting and Disclosure Principles; an ESG Scorecard to monitor the implementation of the CG Code for Commercial Banks and ESG Risk Management Guidelines.

NBG has an increased role in SBFN and other international initiatives; for example, it is a co-chair of SBFN’s Data and Disclosure Working Group (DDWG), and it represents SBFN in the GRI Sector Standard Project for Financial Services. NBG’s SBFN membership and the visibility of its activity and success led BAG to join SBFN.  Subsequently, BAG started awareness-raising and capacity-building activities by launching an ESG curriculum for banks (developed with the support of the Program), which has been delivered on a commercial basis to banks and other interested stakeholders. Most importantly, NBG's ESG and SF work has established a solid ESG foundation for Georgia’s financial sector, with some of Georgia’s banks and companies changing their ESG practices, resulting in increased sustainable lending and bond issuance.

Azerbaijan is also very active in promoting the SF and ESG agenda, especially considering the COP 29 to be held in Baku on November 11-22, 2024. There are three SBFN members from Azerbaijan: CBAR (2022), ABA, and Azerbaijan Microfinance Association (AMFA) (2023). CBAR adopted its Sustainable Finance Roadmap in February 2023 and has been actively working with the Program and SBFN since then. This included a few awareness-raising events for local stakeholders, knowledge-sharing workshops for CBAR, a study tour of CBAR staff to NBG in Georgia, and review/providing comments by the Program and the SBFN team on the regulations developed by the CBAR, such as SF Guidelines for Financial Institutions. The Integrated Environmental, Social, and Governance Program in Georgia is implemented in partnership with the State Secretariat for Economic Affairs of Switzerland (SECO).