A briefing was held on the content of the national ESG standard and its benefits for businesses.
On November 4, a briefing on the newly adopted national standard for Environmental, Social, and Corporate Governance (ESG) was held at the "Baku SME House," organized by the Small and Medium Business Development Agency (SMBDA).
The Director General of the Azerbaijan Institute of Standardization (AZ STANDART), operating under the State Service for Antimonopoly and Consumer Market Control, Ilham Bayramov, and the First Deputy Chairman of the Board of SMBDA, Natig Hasanov, provided detailed information to media representatives about the content of the national ESG standard and its benefits for businesses. It was noted that the national ESG standard was developed on the initiative of SMBDA based on the recommendations of the International Organization for Standardization (ISO) and was recently adopted by the Azerbaijan Institute of Standardization. The state standard “AZS IWA 48:2024 - Framework for the Application of Environmental, Social, and Corporate Governance (ESG) Principles” is considered one of the first practices accepted in the respective field. The new state standard provides a framework to support sustainable development and promote social responsibility in the modern business environment by implementing ESG principles in enterprises and organizations.
The purpose of the standard, developed based on international experience, is to assist enterprises and organizations in formulating and implementing ESG strategies. The application of this standard will have a positive impact by supporting sustainable development in the public and private sectors, increasing customer satisfaction, reducing risks, and enhancing social responsibility. The application of the standard is voluntary.
Compliance with ESG principles by businesses enables the optimization of business processes, reduction of production costs, enhancement of competitiveness, increase in export potential, and, most notably, the attraction of foreign investments. Investors prioritize the implementation of ESG principles when making investment decisions. In this regard, the standard will guide businesses on how ESG principles can be applied in business processes and demonstrate the steps they need to take.
The briefing also provided information on the efforts undertaken to implement ESG principles in Azerbaijan. It was noted that to promote ESG more broadly in the country, align the efforts of the public and private sectors, and establish and implement a conceptual framework, an ESG subgroup was created in 2022 within the "Corporate Governance, Investments, and Corporate Social Responsibility" working group of the Commission on Business Environment and International Rankings. This subgroup is chaired by KOBIA and includes representatives from approximately 30 entities and organizations from the public, private, and civil sectors. During the past period, a Strategic Vision document for the medium term was developed to ensure systematic activities in the ESG field. Roadmaps for stimulating and promoting the application of ESG principles were approved. As part of these roadmaps, the current state of ESG in the country was analyzed, surveys were conducted, and international practices were studied. Additionally, the regulatory and legal frameworks related to various elements of ESG, as well as existing and newly introduced norms and rules, were reviewed. It was emphasized that declaring 2024 as the "Year of Solidarity for a Green World" in Azerbaijan and hosting prestigious events such as COP29 in the country will significantly contribute to the expanded implementation of ESG principles under the newly adopted state standard.
In the end, questions from media representatives were answered.
