Banks in Azerbaijan to assess ESG risks

The Board of the Central Bank of Azerbaijan (CBA) has amended the "Corporate Governance Standards for Banks," Report informs.

The corresponding decision was signed by Aliyar Mammadyarov, first deputy chairman of the CBA.

According to the amendments, banks are required to analyze and assess the current and potential impact of environmental, social, and governance (ESG) factors on their activities and operating environment in the short, medium, and long terms. Banks should also define a clear division of responsibilities and authorities within their organizational structure for managing ESG risks and opportunities and integrate them into the risk management system.

Furthermore, the fiduciary duties of banks' supervisory boards have been expanded.

From now on, the supervisory board should define a clear division of responsibilities and authorities between its committees, the management board, and relevant structural units for managing ESG risks and opportunities, and oversee this process.