The Central Bank of Armenia (CBA) introduced a National Sustainable Finance Roadmap in October 2023, underlining a strategic commitment to sustainability in the financial sector through four key pillars. Governor Martin Galstyan emphasized the pivotal role of sustainable finance in supporting Armenia’s economic growth, reducing environmental pressures, and enhancing social and governance factors. Acknowledging positive momentum from commercial banks, there’s a realization that the entire financial system must contribute to steering the country towards sustainable growth.
The call for a sustainable finance framework addresses a substantial funding gap for sustainable development. Challenges include complexities in estimating the funding shortfall due to taxonomy, methodology, and data issues. Addressing this, the roadmap outlines a blueprint for the CBA’s expectations, emphasizing the incorporation of environmental, climate, social, and governance risks by Financial Market Participants (FMPs) into their core processes.
The roadmap’s four pillars—MOBILIZE sustainable finance and funding, ENHANCE Markets, EMBED Sustainable Finance, and BUILD awareness, capacity, and knowledge—capture key initiatives for achieving sustainable finance objectives.
MOBILIZE focuses on facilitating capital flow aligned with low-carbon ambitions, introducing innovative financial instruments like Green, Blue, Social, Sustainability, and Sustainability-linked loans and bonds. ENHANCE Markets aims to create a Central Sustainable Finance Database and design progress tracking frameworks. EMBED Sustainable Finance concentrates on establishing a robust supervisory framework within the CBA, guiding FMPs in integrating ESG factors. The fourth pillar, BUILD awareness, capacity, and knowledge, focuses on raising awareness and enhancing knowledge on sustainability risks and opportunities.
Collectively, the roadmap and its pillars signify a comprehensive approach, ensuring ESG considerations are at the core of financial decision-making. The CBA encourages financial market participants to actively engage in this journey, reflecting Armenia’s commitment to sustainable practices. For further details, access the document here.