February 11, 2026, Baku: Amendments to several regulatory acts covering the banking sector, as decided by the Management Board of the Central Bank of the Republic of Azerbaijan, entered into force on February 9, 2026.

These amendments made to strengthen the regulatory framework in the field of sustainability and green finance aim to expand the application of the environmental, social and governance (ESG) approach in banks, integrate climate and other ESG factors into bank governance and risk management systems, as well as strengthen transparency and market discipline in financial markets.

The amendments to the Corporate Governance Standards in Banks ensure clear definitions of authority and responsibility divisions within banks, the formation of functional divisions for managing climate and other ESG risks and opportunities, and the consideration of ESG criteria within internal governance mechanisms and bank policy documents. Additionally, requirements have been added for integrating ESG factors into internal audit and remuneration policies, as well as disclosing qualitative and quantitative data on sustainability indicators. The first sustainability data report will be carried out in 2026, with the relevant data to be disclosed in the first quarter of 2027.

The amendments to the Regulation for Credit Risk Management in Banks expand the existing framework for credit risk management and establish internal policies and rules for banks to manage their sustainable loan portfolios. The amendments include the assessment and monitoring of sustainable loans, the introduction of appropriate supporting and assessment documents to increase transparency and accountability, the formulation of a process for determining key performance indicators and key sustainability targets for loans related to sustainability, and the establishment of criteria for green activities.

These changes are important for institutionalizing the ESG approach in the banking sector, integrating ESG risks into risk management systems, and forming a transparent, responsible financial ecosystem.

The amendments made to the regulatory acts can be found via the following link:

https://e-qanun.az/framework/61171