1. Priorities and roadmaps

There are a number of initiatives aimed at implementing ESG principles in the Socio-Economic Development Strategy of the Republic of Azerbaijan for 2022–2026.
The issues mentioned are described as follows:

• Implementation of the "green energy zone" concept in the liberated territories
  By expanding the use of environmentally friendly and economically efficient renewable energy sources, a continuous increase in the share of the liberated territories in total output, exports and employment is envisaged.
• Implementation of the strategic framework for the "Green Growth Country"
  In order to ensure sustainable and sustainable use of natural resources, a system for efficient waste management will be developed, the hydrometeorological observation and environmental monitoring system will be modernized, real steps will be taken to protect biodiversity, and the protection of greenery will be strengthened. As a result, it is planned to increase the share of greenery in the total area of the country from 12% to 12.3%, reduce the share of unusable land from 25% to 15%, and increase the supply of drinking water to the population from 70% to 85% and the supply of irrigation water from 80% to 90%.

Within the framework of "Azerbaijan 2030: National Priorities for Socio-Economic Development", approved by the Decree of the President of the Republic of Azerbaijan dated February 2, 2021, the priority "Clean environment and green growth country" has been identified.
According to this priority, along with the country's economic development, it is planned to implement measures such as improving the environment, rapidly restoring and increasing greenery, and ensuring the efficient use of water resources and sustainable energy sources.
The Central Bank of the Republic of Azerbaijan (CBA)'s "Roadmap for Sustainable Finance: 2023-2026" (Roadmap) reflects measures to implement ESG principles and transform financial markets into sustainable finance.
Such measures include the following:

• Work is underway to increase the awareness and capacity of financial institutions on sustainable finance.
• ESG principles were integrated into the “Corporate Governance Standards in Banks” by the decision of the CBA Board of Directors dated August 28, 2023. Accordingly, banks must take into account ESG factors that have or may have a significant impact on their operations in their business strategy and financial and non-financial risks that include ESG factors in the risk assessment process in order to ensure their long-term sustainability.
• In order to conduct an assessment of climate change and environmental risks, initial indicative data on the awareness of financial institutions (banks, insurance companies and investment companies) on sustainable finance and ESG factors were collected. According to the survey results, financial institutions expect the impacts of ESG risks to be low in the short term, and in the medium and long term, the impacts will gradually migrate to the medium and high risk zone. At the same time, the survey results indicate that financial institutions have begun to assess the impact of ESG risks on their activities, as well as to implement projects in accordance with the principles of sustainable finance. Such measures may include crediting for the installation of solar panels and the purchase of hybrid cars, and, in general, taking ESG principles into account in the process of making credit decisions. The survey results will be published on the official website of the Central Bank.
• An Expert Group has been formed with the involvement of relevant government agencies and financial institutions to coordinate the implementation of the roadmap with relevant parties, as well as the preparation of a sustainable finance taxonomy.
• Work continues on forming a legal framework for green bonds.

Development Strategy of Azerbaijani Youth in 2015-2025
It aims to ensure the intellectual, physical and spiritual development of young people and their active participation in the socio-economic, socio-political and cultural life of the country.

2. ESG-related incentives and concessions

• The import and sale of hybrid cars with a production date of less than 3 years and an engine capacity of no more than 2,500 cubic centimeters will be exempt from VAT for a period of 3 years starting from January 1, 2022.
• If the production date of passenger cars imported to the Republic of Azerbaijan is more than 7 years, excise duty is calculated by applying a coefficient of 1.2 for gasoline-engine passenger cars and 1.5 for diesel-engine passenger cars to the amount calculated in accordance with Articles 190.4.1 and 190.4.1-3 of the Tax Code.
• According to Article 164.1.39 of the Tax Code, the import of buses powered by compressed gas designed to carry more than 10 people, including the driver, is exempt from VAT for a period of 5 years from January 1, 2020; according to Article 164.1.41, the import and sale of cars powered only by electric engines; according to Article 164.1.41-1, the import and sale of hybrid cars with a production date of 3 years and an engine capacity of no more than 2,500 cubic centimeters; as well as, according to Article 164.1.41-2, the import and sale of second and third level electric energy chargers for cars powered by electric engines are exempt from VAT for a period of 3 years from January 1, 2022.
• By Resolution No. 411 of the Cabinet of Ministers of the Republic of Azerbaijan dated November 11, 2022, “On Amendments to the Commodity Nomenclature of Foreign Economic Activity of the Republic of Azerbaijan, Rates of Import Customs Duties and Rates of Export Customs Duties”, the existing 15% import duty on electric-only passenger cars up to 3 years after the date of factory release was reduced to 0%, as well as the import duty rate on second and third level electric energy chargers for electric vehicles was also reduced from 5% to 0%.
• In order to reduce carbon emissions in the country and stimulate environmentally friendly vehicles, amendments to the Tax Code, which came into force in 2022, have added provisions to calculate excise duty on passenger cars imported to the Republic of Azerbaijan with a production date of more than 7 years, by applying a coefficient of 1.2 to gasoline-engine passenger cars and 1.5 to diesel-engine passenger cars to the amount calculated in accordance with Articles 190.4.1 and 190.4.1-3 of the Tax Code.
• By Resolution No. 94 of the Cabinet of Ministers dated 29.03.2023, the import of passenger cars over 10 years old (except for rare passenger cars and passenger cars temporarily imported into the customs territory) into the territory of the Republic of Azerbaijan has been restricted.
• The list of economic activity areas where investment is being carried out, approved by Decree No. 1913 of the President of the Republic of Azerbaijan dated December 20, 2022, includes energy production from renewable energy sources.
• According to the Tax Code, entrepreneurs who have received an investment promotion document are exempted from profit (income) tax in the amount of 50 percent of the profit (income) on the relevant project for a period of 7 years from the date of receipt of the document, from the full amount of property and land tax, and from VAT on imported machinery, technological equipment and facilities.
• Income from the transmission of electricity generated by an active consumer belonging to the population group up to 150 kW (including 150 kW) from renewable energy sources to the electricity supply network is also exempt from personal income tax.
• The Law of the Republic of Azerbaijan “On the Rights of Persons with Disabilities” establishes the right of persons with disabilities to engage in labor activities on an equal basis with other persons. Any discrimination based on disability in labor relations, as well as restrictions on the labor rights of persons with disabilities in relation to other employees in collective and labor contracts, is prohibited. Refusal to conclude an employment contract with them, to promote them at work, to terminate an employment contract with them, and to transfer them to another job without their consent due to their disability are not allowed. Workplaces must be accessible to persons with disabilities and adapted for their use.
• The Law “ On Employment ” establishes quotas in enterprises and organizations. This quota is a set of jobs applied by employers to provide employment to job seekers and unemployed persons in special need of social protection. These persons include persons with disabilities, members of martyrs' families, young people under the age of 20, single and large parents raising minor children, parents raising children with disabilities under the age of 18, persons who are less than two years away from retirement age, persons released from prison, and former internally displaced persons.
• According to the " Labor Code ", shortened working hours may be established for individual categories of employees, taking into account their age, health, working conditions, characteristics of the labor function, and other circumstances. 
• A probationary period is not set for persons under the age of 18 at the time of concluding an employment contract, pregnant women and women with children under the age of three, as well as men raising children under the age of three alone, and other categories. 
• Employees who were injured or disabled in military operations for the defense of the homeland, freedom and territorial integrity, employees who were awarded state awards and honorary titles for their bravery during the defense of the independence and territorial integrity of Azerbaijan, pregnant women, women on social leave for their child under the age of three and who have worked in the relevant position for less than a year after the end of that leave, employees under the age of 18, and a number of other categories of employees  are not subject to certification.
• During leave, concessions are also applied to a number of categories of employees  . Employees working in underground work, working in harmful and difficult working conditions, as well as those whose work function is associated with high sensitivity, excitement, mental and physical stress, are granted additional leave depending on the working conditions and the characteristics of the work function. The duration of additional leave, depending on the working conditions and the characteristics of the work function, must not be less than 6 calendar days.
• Micro, small and medium-sized entrepreneurs  can obtain a number of tax benefits by creating an SME cluster. 
• For a period of 7 years from the date of inclusion in the relevant register, the SME cluster company is exempt from land and property tax on profits, land used in the SME cluster activities, and VAT on the import of technological equipment and facilities. A person who is a participant in the SME cluster is exempt from profit or income tax on the portion of the profit or income earned on the goods supplied under a contract concluded with the SME cluster company that is directed towards capital expenditures for a period of 7 years.
• Residents of industrial parks are exempt from customs duties, profit, land and property taxes for 10 years on imported machinery, technological equipment and facilities  .
• In accordance with the Tax Code of the Republic of Azerbaijan  (Article 164.1.16.), the import of machinery, technological equipment and devices imported by residents of industrial parks on the basis of an appropriate supporting document for the purpose of construction of production areas in the industrial park, carrying out scientific research and experimental design work, and production is exempt from VAT for a period of 10 years from the date of registration of the resident in the industrial park.
• In accordance with the Law of the Republic of Azerbaijan on Customs Tariff  (Article 20.0.19.), the import of machinery, technological equipment and devices imported by residents of industrial parks on the basis of an appropriate supporting document for the purpose of construction of production areas in the industrial park, carrying out scientific research and experimental design work, and production is exempt from customs duties for a period of 10 years from the date of registration of the resident in the industrial park.
• According to the Tax Code  , persons who, as residents of a technology park, carry out system integration, software development and production activities outside the technology park are exempted from income (profit), property and land taxes, dividends, and VAT on the import of machinery, technological equipment and devices for a period of 10 years starting from the reporting year of their registration. Tax breaks for the above-mentioned persons apply to their activities both in the technology park and outside the technology park.
• According to the Tax Code  , income tax on the monthly income of individuals employed by entities engaged in system integration, software development and production will be withheld at a rate of 0 percent for a period of 3 years from 01.01.2023 for monthly income up to 8,000 manats, 5 percent for income exceeding 8,000 manats, and 5 percent of monthly income from 01.01.2026 for a period of 7 years.
• According to the Law " On Social Insurance ", foreigners and stateless persons involved for the purposes of that activity by a resident of a technology park (including persons carrying out system integration, software development and development activities), its contractor, and a subcontractor who has entered into a direct contract with the contractor are exempted from paying mandatory state social insurance contributions for a period of 10 years from January 1, 2023. With the exception of foreigners and stateless persons, residents of the technology park (including persons carrying out system integration, software development and development activities), their contractors and subcontractors who have concluded a direct contract with the contractor, as well as individuals involved by these persons for the purposes of that activity, will be required to pay mandatory state social insurance contributions for a period of 10 years from January 1, 2023, depending on their choice, in the amount of four times the minimum monthly wage or on income from hired work in accordance with the procedure specified in the current Law (Articles 14.3 and 14.4).

3. ESG-related guidelines and portals

• UN Global Compact
  This initiative of the United Nations invites businesses to operate in accordance with ESG principles and provides them with various guidelines to achieve their sustainability goals.
• B Lab
  Known for its B Corp certification, B Lab helps businesses operate in an ESG-compliant manner and assesses them for their social and environmental impacts.
• CDP (Carbon Disclosure Project)
  CDP is a global platform for collecting and disclosing data on climate change, water and forest conservation.
• Lythouse, known for its ESG consulting services, has examples and recommendations for companies to prepare ESG reports and collect data on its online platform.
• The Task Force on Climate-related Financial Disclosures (TCFD)
  provides a widely used framework and recommendations for disclosing the financial impact of climate risks. Guidance for assessing the financial impacts of climate change on businesses is available on this platform.
• The Sustainability Consortium (TSC)
  develops ESG product and supply chain sustainability standards and guidelines. The TSC has a variety of resources on ESG standards, as well as practical approaches to sustainability.
• The Principles for Responsible Investment (PRI)
  provides investment guidance that is consistent with ESG principles and helps investors develop appropriate ESG strategies. The PRI provides guidance and sample reports on ESG investments.
• World Resources Institute (WRI)
  provides guidance and information on climate, energy, water resources and other ESG topics. WRI has reports and guidance for optimizing and analyzing resources on ESG.

4. ESG forums and conferences

• ESG Global Forum
  Global events and forums are marked to discuss the latest developments and trends in the field of ESG.
• Sustainability Week by The Economist
  marked international events and discussions related to ESG, sustainable development, and corporate social responsibility.
• Baku Energy Forum
  discusses issues such as renewable energy sources, reducing the carbon footprint in the energy sector, clean energy technologies, and the ESG aspects of these technologies.
• PRI (Principles for Responsible Investment) Annual Conference
  discusses the assessment of ESG risks, financial sustainability, climate change, and corporate social responsibility in investment decisions.
• The Greenbuild International Conference and Expo
  discusses the application of ESG in the construction sector, the construction of ecological buildings, energy efficiency, and waste management.