Azerbaijan Caspian Shipping Company partners with EBRD, EY to strengthen climate governance

Spokesman for the Azerbaijan Caspian Shipping Company (ASCO) Mehman Mehdiyev has said that the ASCO, in collaboration with the European Bank for Reconstruction and Development (EBRD) and Ernst & Young (EY), reviewed the results of the assessment of the Corporate Climate Governance Facility.

“This initiative is part of the Azerbaijan Caspian Shipping Company's ongoing efforts to integrate climate considerations into its corporate governance and operations,” Mehdiyev told Caliber.Az.

Discussions included the identification of climate risks and opportunities, as well as the necessary governance measures to address them. Detailed insights into these climate-related governance strategies and the roadmap for sustainable financing were also presented.

One of the key areas discussed was the alignment of ASCO’s practices with the International Financial Reporting Standards (IFRS) S1 and S2. IFRS S1 covers the disclosure of financial aspects of sustainability, while IFRS S2 addresses climate-related information. The meeting explored the future implementation of these standards and their potential role in shaping ASCO’s approach to climate governance. 

As part of the project, EBRD will assist ASCO in developing a comprehensive plan for incorporating climate-related aspects into corporate governance and ensuring that the company’s activities are in line with the Paris Agreement's climate goals. Additionally, the project includes the creation of a Sustainability-Linked Financing Framework (SLFF). This framework will enable ASCO to secure sustainability-linked loans (SLLs) and issue sustainability-linked bonds (SLBs), providing the company with further avenues to raise funds while promoting its environmental objectives. 

The Azerbaijan Caspian Shipping Closed Joint-Stock Company (ASCO) was established through the merger of Azerbaijan's two largest maritime fleets—the Azerbaijan State Caspian Sea Shipping Company and the Caspian Sea Oil Fleet of the State Oil Company of Azerbaijan Republic (SOCAR). 

This merger aimed to streamline the management of state-owned shipping companies, boost the competitiveness of Azerbaijan’s maritime industry, and enhance the country’s domestic and international transportation capabilities. Azerbaijan became a member of the EBRD in 1992. Since then, the bank has played a significant role in supporting Azerbaijan's economic transition and development. 

The EBRD’s activities in the country have focused on a range of sectors, including energy, transport, infrastructure, and banking. The bank has provided financing for various large-scale projects, including those aimed at improving Azerbaijan's energy sector, diversifying its economy, and advancing sustainable development practices.

Ernst & Young (EY) is a global leader in professional services, providing assurance, tax, transaction, and advisory services to businesses, governments, and non-profit organisations. EY has been active in Azerbaijan for many years, offering its extensive range of services to support the country's business and economic growth. As Azerbaijan has developed into an important energy hub, particularly due to its oil and gas resources, EY has played a significant role in advising both local and international companies in the energy, infrastructure, finance, and manufacturing sectors.

By Naila Huseynova