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Advancing small business sustainability in Azerbaijan 31.07.25

Orkhan Mammadov, Chairman of the Management Board at the Small and Medium Business Development Agency of Azerbaijan (KOBİA)

KOBİA collaborates with the International Trade Centre (ITC) to empower small businesses for green and resilient futures

Small and medium-sized enterprises (SMEs) have huge untapped potential when it comes to contributing to the green economy. While climate initiatives have been historically concentrated in large corporations, SMEs—representing about 90% of all businesses worldwide—have often been overlooked due to their individual smaller size. Yet, given their factual collective emissions, SMEs clearly play a critical role in reaching global sustainability goals.

Furthermore, SMEs account for 70% of global employment. This means that, in addition to adopting resource-efficient and environmentally friendly practices, SMEs can also contribute to environmental protection by fostering a culture of responsible consumption among individuals.

The green transition

The green transition is not an easy process, especially for SMEs. Typical common challenges include a lack of knowledge, insufficient capacity, and limited access to financial resources. Addressing these global challenges requires the global efforts of all SME stakeholders across the whole ecosystem where SMEs are set to navigate.

The Government of Azerbaijan clearly understands and supports the development of green issues in its agenda. 2024 was declared the "Green World Solidarity Year" in our country and the 29th Conference of the Parties to the UN Climate Change Conference (COP29) was held in Azerbaijan, too.

At COP29, the Small and Medium Business Development Agency (KOBİA) of the Republic of Azerbaijan announced a global initiative – the Baku Climate Coalition for SMEs’ Green Transition –, which manifested itself in the form of a joint declaration. This Declaration emphasizes the indispensable role of SMEs in building green economies, developing innovative climate solutions, and their potential to lead in green entrepreneurship when properly supported.

The Declaration calls on institutional actors and individuals to join forces in helping SMEs to cope with the challenges brought by the climate change and their green transformation. In addition, it proposes establishing Green SME Resource Centers—institutional platforms that would serve as national focal points in each country to raise awareness and facilitate access to technology, know-how, and financing for net zero goals.

KOBİA’s cooperation with ITC

KOBİA is a driver for advancing the global sustainability agenda, particularly through its growing cooperation with international organizations like the International Trade Centre (ITC). Rooted in a shared commitment to inclusive and sustainable trade-led growth, this collaboration underscores the potential of joint efforts in empowering SMEs for green and resilient futures.

Ever since the Joint Declaration on the Baku Climate Coalition for SME’s Green Transition was officially launched and signed on 3 November, 2024 by ITC, the Brazilian Micro and Small Business Support Service SEBRAE and the UN Climate Change High-Level Champion for COP29 and KOBİA, 10 national and nine international organizations, including the Asian Development Bank, the World Climate Foundation, the International Network for Small and Medium Enterprises INSME and the national agencies responsible for SMEs in Belarus, Kazakhstan, Türkiye, Viet Nam, and Moldova, have added their signatures to the Declaration.

The initiative, launched during Azerbaijan’s COP29 presidency, mobilizes public and private actors to invest in green business models, climate technologies, and Environmental, Social, and Governance (ESG) compliance mechanisms tailored to SMEs.

ITC’s participation in preceding discussions elevated global attention to the challenges and solutions available to emerging-market SMEs navigating sustainability demands.

Practical tools and necessary standards

KOBİA is spearheading efforts to embed ESG standards within Azerbaijan’s SME landscape. Through strategic programmes, policy advocacy, and stakeholder engagement, the agency is equipping SMEs with the tools to integrate sustainability principles into their operations.

KOBİA has also championed three recent initiatives in Azerbaijan: a unified ESG platform, the national ESG standard and the Green Business Management standard.

This ESG HUB will serve as a resource center combining comprehensive ESG-related information and materials, attracting foreign investors, offering professional ESG services, and providing access to experienced experts.

KOBİA also contributes to fostering green transition globally by joining the UN Global Compact. We will continue to contribute to the UN Global Compact’s global sustainable development strategy by aligning our strategy and activities with the principles of the UN Sustainable Development Goals.

The cooperation between KOBİA and ITC reflects a mutual dedication to transforming global trade into a lever for climate resilience, inclusion, and economic growth. As COP29 shines a spotlight on climate action, our joint efforts stand as a model of how institutional collaboration can drive scalable impact in the SME sector — one green enterprise at a time.

https://www.intracen.org/news-and-events/news/advancing-small-business-sustainability-in-azerbaijan