Regulatory Alerts2025-02-19
Guidelines on Green and Sustainability-Linked Loans
The Central Bank of the Republic of Azerbaijan has issued these guidelines to establish a comprehensive regulatory framework for green and sustainability-linked loans, mandating credit institutions to implement internal governance structures, predefined Key Performance Indicators (KPIs), and Sustainability Performance Targets (SPTs). The document requires rigorous verification through self-certification, external reviews, or independent third-party certifications to prevent greenwashing and aligns loan classifications with the national Green Taxonomy and international GLP and SLLP standards. Furthermore, it mandates transparent reporting aligned with GRI and IFRS frameworks while linking loan pricing adjustments to borrower achievement of SPTs, thereby incentivizing sustainable financing and capacity building across the Azerbaijani banking sector.