Azerbaijan, as host of the 2024 United Nations Climate Change Conference (COP29), will launch a set of standards agreed upon by more than 100 countries to guide sustainable investment, the country's central bank governor announced on Friday.

Climate finance taxonomies are essential for ensuring investments effectively reduce emissions; however, investors are concerned that the multitude of differing rule books causes confusion. The 27-member European Union has delivered one of the most significant frameworks, but a UN taxonomy could garner even wider support.

"We have developed new unified taxonomy principles together with 110 countries. These principles will be applied to develop national taxonomies, simplifying the process of issuing green loans," Central Bank Governor Taleh Kazimov said at a news conference on Friday.

Azerbaijan will host COP29 from November 11 to 22. Kazimov stated that Azerbaijan will announce the amount of funds allocated for green projects through 2030 on November 14.

Zakir Nuriyev, head of the Association of Banks of Azerbaijan, indicated that this figure would correspond to the total loan portfolio of Azerbaijani banks, which exceeds $15 billion.

In addition to the rules on sustainable financing, Governor Kazimov noted that the Central Bank is considering introducing Islamic sukuk bonds, which are Islamic financial certificates. He mentioned that legislation is being prepared, and the bank is analyzing the market to assess demand.

(Cover: A sign for COP29 on display at Baku Olympic Stadium in Baku, Azerbaijan, October 23, 2024. /CFP)