A Word From Executive Director of AmCham Dear members, Welcome to IMPACT's 28th edition, which is devoted to promotion of Sustainable Development Goals. From the st Issue 28 early 21 century, we all remember the launch of Millennium Development Goals, which mobilized the UN and the countries to focus on social and economic prosperity in the Credits world and to harmonize goals under common messages. As of 2016, the UN made a step further - towards sustainable AmCham Executive Director: development goals. That uncovers 17 areas! Natavan Mammadova These are ambitious goals for serving in depth for people on the ground. Achieving for such goals require strong Editor: leadership on the global level – carried out by the UN, and commitment on national level – to be implemented by respective governments. In Azerbaijan, there is a Aykhan Nasibli harmony between Sustainable Development Goals and the overall strategy of the Government of Azerbaijan, clearly observed in such state programs and documents Articles contributed by: as the Strategic Development Road Map on perspectives of national economy, Fariz Ismailzade Vision 2020, Social-Economic Development of the Regions for 2014-2018 and Elvin Hajiyev others. All of them aim to contribute to common target. During the “post-oil and gas Fuad Allahverdiyev era”, the implemented actions are expected to bring further prosperity and access to global markets. Thus, synergy between global goals and national commitment are Elnur Eyvazov real signals for achieving sustainable development goals. Ziya Ibrahimov AmCham Azerbaijan members are proud of contributing to sustainable development Rena Tahirova in Azerbaijan. It is not only vision, but a real goal, achieved results and plans for Ali Verdiyev future. Respective articles within this edition cover a small piece of the members’ Nadezhda Ovsiannikova contribution. At the same time, CSR Committee of AmCham composed of Alla Garagashli representatives from member companies and being the only CSR platform in the country invests high energy and resources to promote sustainable development Stuart Kerr Naismith and shared values principles and engage all the members with projects and ideas Elshad Farzaliyev, Idil Isheri coinciding with the national and global agendas. With sustainable development in mind, AmCham Azerbaijan wishes you all the very Advertisers: best in 2018 with fruitful business and personal achievements. Azerfon Happy New Year, Happy Solidarity Day of World Azerbaijanis! Mozaik Printing Turkish Airlines Best regards, Natavan Mammadova BP Coca Cola Ekvita Editor’s Comment HORECA Dear friends and members, Congratulations with the new edition of IMPACT Azerbaijan SKN Electrical Services magazine – devoted to Sustainable Development Goals! ITECA This a topic, which is touching to the mind and heart of dif- ferent stakeholders – from international organizations to gov- Publisher: ernments, from private sector to community leaders. And the American Chamber of Commerce reason is obvious – to enhance services provided to people in Azerbaijan and to improve situations which are embedding human be- ings. This edition is developed with vision and outlook of dif- ferent sides. At the same time, experts among the AmCham Tel: (+994 12) 497 13 33 member companies have published their articles in different Fax: (+994 12) 497 10 91 topics targeting sustainable development. I am sure you will find the content inter- www.amcham.az esting and valuable for your business. www.impact.az Herein, I should also indicate that IMPACT Azerbaijan magazine could not be real- ized without contribution of advertisement providers, including BP, Azerfon, Mozaik Advertising opportunities: Printing, Turkish Airlines, Coca Cola, Ekvita, Horeca and SKN Electrical Services. We are sure that the companies receive deep value from the advertisement and we Please contact the Editor at highly appreciate for this cooperation. [email protected] It should be also mentioned that over the last years, IMPACT Azerbaijan magazine kept its leading position not only in front of the business community of the country, The articles in IMPACT Azerbaijan but at the same time governmental institutions, non-governmental organizations express the opinions of the authors and mass media. This was thanks to YOU – contribution from expert community of and do not necessarily reflect the AmCham members and the readers. At this stage, I wish you happy holidays and have a nice winter! position of the American Chamber of Commerce in Azerbaijan Best wishes, Aykhan Nasibli contents IN FOCUS 4 26 Special Interview with United Nations Sustainable Development and Resident Coordinator and Resident Contribution in JTI Format Representative of UNDP in Azerbaijan, Mr. Ghulam Isaczai Ali Verdiyev. Corporate Affairs & 10 Communications Manager, JTI Azerbaijan SDGs and Role of Universities 28 Utilizing Sustainability in Business Fariz Ismailzade. Vice Rector, ADA University Operations and Community in Large

11 Nadezhda Ovsiannikova. Head of Corporate Why Does Sustainability Matter? Affairs, Carlsberg Azerbaijan

30 Providing Solid Platform for Quality Education and Gender Equality Elvin Hajiyev. Co-founder,Technol 14 High Technologies as the Key Factor for Alla Garagashli. Content Writer, WoWoman Sustainable Development AMCHAM AZERBAIJAN Fuad Allahverdiyev. CEO, Azertelecom 34 About Us 18 Social Entrepreneurship as a Necessity for Innovation and Sustainable Development 36 Elnur Eyvazov Business Events Senior Legal Advisor, Capital Legal Services

20 Tasks and Targets Set by Humanity For 43 the Next Decade: Ensuring Responsible Consumption and Production Balance Committee Highlights

Ziya Ibrahimov Partner, Baker Tilly Azerbaijan 48 AmCham Legal Update 23 Corporate Social Responsibility During the Global Crisis: 54 Social Events Identify Priorities and Act Together 56 Member News & Events Rena Tahirova. Head of Marketing, Communication and CSR Holcim Azerbaijan 60 M2M Discount Program

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Special Interview with United Nations Resident Coordinator and Resident Representative of UNDP in Azerbaijan, Mr. Ghulam Isaczai and developing the capacity of the Azerbaijan Rehabilitation and Reconstruction Agency (ARRA) and established a mine clearance agency (ANAMA), which continues to operate suc- cessfully. In the late 1990s, the United Nations began helping Azer- baijan in building state institutions and enhancing the coun- try’s economic opportunities. The UN Agencies contributed towards the introduction of information communication tech- nologies, protecting the environment, and addressing drug abuse and trafficking. Emphasis was placed on improving education and health systems, increasing HIV/AIDS aware- ness, improving family planning, carrying out population cen- sus, strengthening the national NGO sector and promoting the national culture. In the early 2000s, UN Agencies worked together with the international development community to support the gov- ernment in its fight against poverty through the design and implementation of the country’s first national poverty reduc- tion strategy. Between 2000 and 2014, the UN System as- sisted the government to achieve the Millennium Develop- ment Goals (MDGs). The result was that extreme poverty was eradicated and the level of absolute poverty decreased from What were some of the key achievements and successes 49% to 5%. Moreover, school enrollment rates reached 99.8- of the United Nations Office in Azerbaijan over the span 100% and progress was made on gender equality and wom- of 25 years? en’s empowerment. Under-five mortality was reduced from Azerbaijan has been part of the UN community since 1992, 28 per 1000 live births to 12.8, infant and maternal mortality marking this year 25 years of its journey towards building a were significantly reduced. Furthermore, significant progress stronger democracy and lasting cooperation with the global was achieved towards environmental sustainability. During institution. Earlier in November, the United Nations Office in 2000-2014, in line with the 2015 Agenda and the Millennium Baku commemorated the 25th year anniversary of Azerbai- Development Goals, the United Nations, in tandem with other jan’s accession to the United Nations as well as the establish- international development organizations, have helped the ment of the UN Office in the capital Baku. Government of Azerbaijan to design poverty reduction strate- Over these years, the United Nations has provided substan- gies and action plans. tial support to the Government of Azerbaijan to strengthen Consequently, progress made by Azerbaijan towards the institutional capacities aimed at fostering good governance, Millennium Development Goals was largely positive. Gen- economic growth and delivery of basic services to citizens. der gaps in primary and secondary education have dropped In the early 1990s, UN Agencies have been extensively in- considerably in comparison with previous years. Access to volved in the provision of humanitarian assistance to Azer- clean water has tangibly improved. Remarkable gains have baijan. Collectively, they provided food, shelter and other been made in halting the spread of tuberculosis and malaria non-food items and health services, including immunization in the country. During this period, the healthcare system in to the internally displaced and refugee population affected by Azerbaijan saw visible progress in all areas, although prob- the Nagorno-Karabakh conflict. UN Agencies also assisted lems remain in some areas, including maternal health and the Government in post-conflict rehabilitation by funding child nutrition.

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Azerbaijan has adopted a national strategic development commitment of the country’s leadership and government by concept popularly known as Vision 2020. In keeping with its establishing the National Coordination Council for Sustain- commitment to fostering environmental sustainability and in able Development (NCCSD) in 2016. The United Nations accordance with Vision 2020, the country has made steady agencies in Azerbaijan has been providing technical assis- progress in protecting its biodiversity resources through dou- tance to the NCCSD for the nationalization of the 2030 Agen- bling the size of protected areas. Additionally, Azerbaijan has da and coordination of national efforts in achieving the SDGs joined a number of international environmental conventions within the remaining 13 years of its lifespan. The key element and ratified environmental laws and policies. of the UN strategy is called “Mainstreaming, Acceleration and While Azerbaijan’s needs are changing rapidly, the UN sys- Policy Support” (MAPS). Designed to assist the country in pri- tem in Azerbaijan will continue working closely with the gov- oritizing the goals and targets, MAPS will also identify policy ernment and support the country as it plays an important role interventions that would help accelerate the achievement of in the United Nations and globally. In particular, we stand the SDGs. ready to support Azerbaijan as it develops its plans for mak- More specifically, these 17 Global Goals are reflected in the ing the achievement of the SDGs a reality. chart below. The main programming framework for all UN activities in Azer- baijan is the UN-Azerbaijan Partnership Framework (UNAPF) SUSTAINABLE DEVELOPMENT GOALS signed between UN and the Azerbaijani Ministry of Economy Goal 1. End poverty in all its forms everywhere in 2016. The UNAPF is the United Nations’ strategic response Goal 2. End hunger, achieve food security and im- to development needs in Azerbaijan as enshrined in the Vi- proved nutrition and promote sustainable agri- sion 2020 and the 2030 Agenda. The Framework is effective culture from 2016 through 2020. Goal 3. Ensure healthy lives and promote well-being for all at all ages Which priority areas within UN Sustainable Development Goal 4. Ensure inclusive and equitable quality educa- Goals are important for Azerbaijan? tion and promote lifelong learning opportunities Following the adoption of the 2030 Agenda in 2015 by 193 for all countries, including Azerbaijan, the UN system in Azerbaijan Goal 5. Achieve gender equality and empower all wom- has been supporting the Government towards the achieve- en and girls ment of the Sustainable Development Goals and its accom- Goal 6. Ensure availability and sustainable manage- panying targets. In this regard, we commend the political ment of water and sanitation for all

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Goal 7. Ensure access to affordable, reliable, sustain- able and modern energy for all Goal 8. Promote sustained, inclusive and sustainable economic growth, full and productive employ- ment and decent work for all Goal 9. Build resilient infrastructure, promote inclusive and sustainable industrialization and foster in- novation Goal 10. Reduce inequality within and among countries Goal 11. Make cities and human settlements inclusive, safe, resilient and sustainable Goal 12. Ensure sustainable consumption and produc- tion patterns Goal 13. Take urgent action to combat climate change and its impacts* Goal 14. Conserve and sustainably use the oceans, These include: seas and marine resources for sustainable de- 1. Promoting sustainable and inclusive economic develop- velopment ment Goal 15. Protect, restore and promote sustainable use 2. Strengthening institutional capacities, and of terrestrial ecosystems, sustainably manage 3. Improving environmental management and resilience to forests, combat desertification, and halt and hazards and disasters reverse land degradation and halt biodiversity Currently, UNDP is providing assistance to the government in loss its efforts to prioritize the SDGs and come up with a national Goal 16. Promote peaceful and inclusive societies for strategy for achievement of the SDGs. sustainable development, provide access to Since 1992, the United Nations Development Program in justice for all and build effective, accountable Azerbaijan has contributed to socio-economic development and inclusive institutions at all levels of the country through a number of ways. For instance, UNDP Goal 17. Strengthen the means of implementation and supported capacity-building and skill development of the tour- revitalize the Global Partnership for Sustain- ism industry and has contributed to national efforts to reduce able Development youth and women unemployment through business start-up programs for women with disabilities and mine victims in rural * Acknowledging that the United Nations Framework Con- areas. The UNDP Country Program Document, which in a vention on Climate Change is the primary international, in- broad sense guides the UNDP programs, is to continue sup- tergovernmental forum for negotiating the global response to climate change. porting government efforts in priority areas. More specifically, our development assistance to Azerbaijan will be centered on the elimination of regional disparities in work opportunities What priority areas within SDGs are mainly supported by and support for increased women participation in the labor UNDP in Azerbaijan? market, including in rural areas of Azerbaijan, all of which As the lead UN development agency, UNDP is uniquely contribute to achieving the SDGs. placed to help countries achieve the SDGs through its ac- tivities and presence across 170 countries and territories with What are some of the areas, on which the Azerbaijani Azerbaijan being one of them. government should put a strong emphasis? UNDP’s work focuses on poverty reduction, good gover- Considering Azerbaijan’s overdependence on oil and gas nance and peace-building, climate change and disaster man- revenues, which is subject to international market volatility, agement, as well as economic development. UNDP provides diversification of the economy should be given priority. I am support to governments to integrate the SDGs into their na- pleased to witness that over the past two years, the Govern- tional development plans and policies. This work is already ment has developed a new economic roadmap towards diver- underway, as we support many countries in accelerating sification of the economy particularly focusing on agriculture progress achieved under the Millennium Development Goals. and tourism sectors. In doing so, it is important for Azerbaijan In Azerbaijan, UNDP’s program of work is outlined in its to move away from short-run policy considerations towards- “Country Program Document 2016-2020” and is a result of more firmly defined long-term policy objectives, with increas- close consultation with the Government. The new UNDP ing investment in social and environment sectors. This will Country Program Document contributes to three out of five help Azerbaijan achieve the SDGs comfortably within its fif- UNAPF outcomes and is aligned with the Vision 2020 Docu- teen-year timeframe. In this regard, I would like to highlight a ment and the SDGs. few areas for further development.

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A move towards a Green Economy. While the Government Gender mainstreaming should be placed at the forefront of all has set a firm commitment to promoting greener growth, envi- policy considerations. National strategies and policy enforce- ronmental and social consideration would require much more ment methodologies can benefit to a great extent from the explicit articulation in policy documents as well as budgetary inclusion of gender aspects in the employment, education, processes. healthcare sectors, as well as in the policy discourse around equal access to resources. Growth and job markets. Azerbaijan has made consider- able progress in achieving the sustainable development Goal Leaving no one behind. One of the key principles of the 8, especially towards the implementation of targets 8.2 (eco- 2030 Agenda is the concept of leaving no one behind. There- nomic productivity), 8.5 (global resource efficiency) and 8.6 fore our efforts should be increased towards a more bal- (youth unemployment). We observe positive developments anced spatial development, where economic inequalities are unfolding in a number of areas. More specifically, the national reduced, all forms of poverty eradicated, and people have employment strategy and amendments to the Labor Code equal access to social services. A wide range of vulnerable and the Law on Employment are underway. A self-employ- social groups, including women, youth, IDPs and all refugees ment program has been implemented in the last two years. should be given more visible priority within the national devel- The President has recently approved the national Action Plan opment policy frameworks.

In which areas Azerbaijani best practices can be consid- ered a model for other developing countries to adopt? Within a relatively short period of time, Azerbaijan has dem- onstrated enormous economic progress and capacities in various sectors that can be easily replicated in other de- veloping countries. Two experiences that are part of these success stories and can be exported to other countries are Azerbaijan’s National Mine Action Agency (ANAMA) and e- governance. Throughout the years, UNDP has supported ANAMA as a self- reliant institution to deal effectively with Azerbaijan’s landmine problems. Consequently, ANAMA succeeded in attracting in- ternational donors from Europe, Asia and across the Ameri- cas to its local programs in Azerbaijan. Demining activities in the country have seen substantial support from Germany, Norway, Japan, Canada and the United States of America. The European Union has recently joined efforts to support on the prevention of informal employment. Overall, Azerbai- ANAMA’s mine clearance initiatives across the country. jan will benefit from establishing clear development plans and As a result, ANAMA has grown from a novice to a fully ma- strategies on the enforcement of labor rights and inclusivity of ture institution capable of engaging in international mine ac- the employment concept in general. These efforts will have tion activities. an immediate positive impact on Azerbaijan’s implementation Since its establishment, ANAMA has provided assistance to of SDGs 1 (on well-being), 10 (on inequalities), and 12 (on national mine action programs in other countries. It has pro- sustainable consumption and production). Emphasis should also be placed on enhancing capacity building of public em- ployment service. Finally, we are happy to see that the Gov- ernment has started undertaking systemic reforms of voca- tional education and training to further boost socio-economic growth, employability and overall human capital development in Azerbaijan. UN Agencies, like UNDP and ILO, have been supporting and will continue to support the Ministry of Labor in these efforts.

Gender mainstreaming. From the UN’s point of view, gen- der-sensitive policy making is the way forward for a prosper society. We also outline this concept in all our policy recom- mendations to the Azerbaijani Government. Gender is a glob- al SDGs accelerator; therefore, Azerbaijan should continue to pursue the attainment of SDG 5 in a more systemic manner.

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vided training to the Georgia National Army unit charged with It is noteworthy that Azerbaijani President, H.E. Ilham Aliyev mine action, and to a Turkish consortium clearing a border has recently referred to ASAN as the national brand of Azer- crossing with Syria. A partnership with the national mine ac- baijan, “an intellectual product” that the country intends to tion agency in Afghanistan is launched to support Afghani- broadly export to other countries. The ASAN Service has al- stan in developing local capabilities to take over mine clear- ready signed a number of agreements with several countries, ance tasks, which at the moment are administered solely by where ASAN centers will be established. The Government international organizations. Currently, UNDP is supporting of Azerbaijan anticipates close cooperation with the African ANAMA’s certification process so that it could successfully Union to share the Azerbaijani best practices and lessons compete in international bidding competitions for demining learnt from ASAN with African countries. contracts in other countries. In recognition of Azerbaijani Government’s demonstrated commitment to improving transparency and professional competence of civil service provider, the country received the prestigious United Nations Public Service Award in 2015.

How do you see the potential for energy efficiency in Azerbaijan? There is a great potential in this country for harnessing its Energy Efficiency (EE) portfolio that will have long-term impli- cations for sustainable development and environment. In this regard, I would like to specifically emphasize the importance of energy efficient buildings for Azerbaijan. Azerbaijan can fundamentally benefit from improving the energy utilization ef- ficiency in buildings by promoting energy conserving architec- tural designs and enhancing the efficiency in the operation of existing buildings. By investing in alternative energy sources Another solid example of Azerbaijan sharing its expertise with and energy efficient infrastructure, Azerbaijan could in fact other countries would be in the area of e-governance. prolong the life of its carbon-based resources in the long run. To increase efficiency, transparency and data availability in The conception of green buildings requires the application of the public sector, the Government of Azerbaijan has spear- energy efficiency technologies, systems, and practices in the headed an ‘e-governance’ program that promotes a wider first place. In this regard, energy efficient windows, floor heat- use of ICT tools for development. UNDP has played a vital ing systems, energy efficient ventilation systems, decorative role in strengthening Azerbaijan’s ICT capacity and helping to facade cover layer, heating isolation systems and solar power design competitive, transparent and accountable public sys- systems should be given a careful consideration. tems that use online platforms. To name a few, the introduc- UNDP has exceptional expertise in fostering green economy tion of merit-based recruitment into the civil service, the auto- and energy efficiency and has been closely working with mation of business operations of the State Social Protection the State Oil Company (SOCAR) on a number of initiatives Fund, as well as customs clearance and risk management system, the launch of a unified population database are some of the many exemplary achievements in this area. To a great degree, Azerbaijan scores well on international ratings for promoting an enabling environment for ICT. With the establishment of state-of-the-art ASAN Service Centers, Azerbaijan has boosted its reputation as an Information So- ciety and has introduced to the rest of the world a successful model for public service delivery. Designed as a national hub for interactions between the state and society, ASAN centers operate various branches of government services in a coordinated manner making it as simplistic and user-friendly as possible for the general public to approach. Highly competent, knowledgeable and client- oriented public servants perform customer relations as they offer the so-called “one-stop shop” framework to those who need to access public services. Azerbaijan currently holds leading positions in the application of ICT innovations to improve the effectiveness and efficiency of public services among the CIS and European countries.

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aimed at enhancing Azerbaijan’s energy security and sustain- ability. We will continue to support the Government efforts in strengthening national capacity building and innovation in the architectural and construction sectors in order to implement Azerbaijan’s energy sustainability plans.

How do you see the next level of cooperation between business associations and UN bodies? Commitment to achieving the 2030 Agenda and its accompa- nying Sustainable Development Goals call for action from all sectors. This includes partnership with not only governments but also with civil society, academia, business associations and the private sector. Business associations like the AmCham can play an impor- tant role in linking the UN with the private sector in Azerbai- jan. The SDGs are an ambitious agenda, which requires the aims to accelerate progress towards the Sustainable Develop- necessary resources, innovation capacity and partnerships ment Goals (SDGs) by challenging companies to develop in- to drive implementation and business association and the pri- clusive business models that engage people at the base of the vate sector can play an important part in this. economic pyramid (BoP) – people with less than US$10 per To advance the work and role of the private sector in develop- day in purchasing power as consumers, producers, suppliers, ment, UNDP partnered with the Government of Turkey to es- distributors of goods and services and employees. tablish the Istanbul International Center for Private Sector in Development (IICPSD) in 2011. The Istanbul Center advises governments on how to mobilize private capital and works with businesses to contribute to the SDGs through their op- Our guest’s biography erations. We see a clear business case for the private sector Mr. Ghulam M. Isaczai is the UN Resident Coordinator and UNDP Resident Representative for the Republic of to invest in SDG implementation. Azerbaijan as of April, 2016. Mr. Isaczai brings over 22 years By developing new offerings of products and services, meet of work experience in international development, humanitarian the demands of the base of the pyramid (making people with emergencies and post conflict recovery with the United Nations less than US $ 10 per day in purchasing power have access to system and international NGOs in Asia and the Middle East. He markets) and by investing in sustainable approaches in areas previously served as the UN Resident Coordinator and UNDP/ such as agriculture, cities, energy and health, new economic UNFPA Resident Representative for the Democratic People's opportunities of up to US $ 12 trillion could be generated. Republic of Korea (2013- 2015) and Senior Advisor and Country One way to contribute to the SDG achievements would be Director ad interim for UNDP Tajikistan. for Azerbaijani companies to join the Business Call to Action Prior to that, Mr. Isaczai was Director of Development Division (BCtA) platform. Launched at the United Nations in 2008, BCtA at United Nations Volunteers (UNV) in Bonn, Germany (2008- 2013) and Deputy Resident Representative with UNDP- Nepal (2005-2008). From 2003 to 2005, he served as Senior Program Advisor for the Disarmament, Demobilization and Reintegration Program under UNDP and the UN Assistance Mission for Afghanistan (UNAMA). Mr. Isaczai was Assistant Resident Representative and Head of Governance Portfolio in Yemen (2001-2003) and Senior Program Officer with the Office of the U.N. Special Coordinator for the Middle East (UNSCO), Syria (2000-2001). He worked with the U.N. Office of the Humanitarian Coordinator for Iraq (UNOCHI) in Baghdad and the Kurdish region of Iraq (1997- 1999). Before joining the UN system, Mr. Isaczai worked with the private sector in the United States (1993-1995) and held positions with international NGOs such as Save the Children (USA), Freedom Medicine and Swedish Committee for Afghanistan (1986-1990). Mr. Isaczai holds an M.A. in Public International Law from the Fletcher School of Law and Diplomacy in Massachusetts, USA and a BSc in Business Administration, from the Midland University in Nebraska, USA.

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SDGs and Role of Universities

Fariz Ismailzade about environment, about people around them and work hard Vice Rector, ADA University to eliminate societal problems. Instilling in young minds the sense of active citizenships and social responsibility is of ut- most importance these days, due to the increasing pressures on the planet’s resources by rising demands of consumerism. Without changing our attitudes, our lifestyles, our habits and our culture, we will not be able to save our planet. It is for these reasons that young students at ADA University from In today’s fast changing pace of life, when everything around the very first day engage in social projects, trying to help their us, including technologies, industries, societal norms are neighbours, clean parks, plant trees, save water, electric- shifting dramatically and in an accelerated speed, one often ity, fight racism, discrimination, develop friendships across asks a question: what should be the role of universities in this cultures and strengthen peace. Only with such responsible changing environment? How should we continue to prepare citizens, the international community and the UN will be able best generation of specialists? How should be contribute to to effectively implement sustainable development goals and the societal change? build better future for the mankind. While universities have been traditionally viewed as epicen- tres and cradles of knowledge and skills, today’s universities are also a platform for a broader societal dialogue. This dia- logue is important in order to bring together all stakeholders, including policy makers, opinion leaders, business sector, NGOs, media, youth and many others. Without this common and inclusive approach, we will not be able to engage and impact important issues on a positive and effective manner. Increasingly, universities are drawn into public policy making process. Research and advocacy role of universities on such critical issues as health and human services, environmental protection, urban and community development, gender is- sues, poverty reduction and many others is visible and rec- ognized all over the world. Best research and best practices turn into best policy case studies. Universities engage in inno- Author’s biography vation and transform our economies. Universities drive tech- Mr. Fariz Ismailzade is Vice Rector for External, Government nologies change and thus transform cities, countries and na- and Student affairs at the ADA University (since 2011). He has tions. As universities engage more and more with the private joined to ADA in 2006 and worked in the positions of Director sector, opportunities emerge for public-private partnership for of Executive Execution (2006-2010) and Executive Dean (2010- the solution of societal problems. 2011). We at ADA University, try to follow these patterns by engag- Mr. Ismailzade has done research at the Center for Strategic ing in policy research, community outreach and advocacy. and International Studies (CSIS) in Washington, D.C and Examples of such programs would be hosting a policy work- Embassy of Azerbaijan in the US. His research interests shop on accessibility of public roads for disable persons in include political affairs in the Caucasus and Central Asia, partnership with UNICEF, researching on agricultural oppor- energy security, and development. He has presented papers tunities for small farmers, developing office of disabilities for at the symposiums at Heritage Foundation, MGIMO, Columbia staff, faculty and students, building first green campus with University, Stanford University, Fletcher School of Law and renewable energy entering classrooms every day, planting Diplomacy, UCLA, Vienna Diplomatic Academy as well as at trees in partnership with Coca-Cola, helping children with dis- international conferences such as Association for Study of Nationalities (ASN), Wilton Park Conferences, Middle East abilities and without parents and many other projects. Studies Association (MESA), German Marshall Fund and NATO No matter how many community and policy activities we do, Advanced Research Workshop. Fariz Ismailzade is currently at the end of the day, universities are there to cultivate talents, pursuing Doctoral Degree at Maastricht School of Management. young minds and raise adequate and well-prepared citizens. He holds Executive MBA from IE Business School (Spain) and The word “citizen” sounds in this context much better than the Masters Degree in Social and Economic Development from word “professional”. Yes, we do want smart graduates, who Washington University in St. Louis, and a BA in Political Science are able to find jobs and build successful careers. But more from Western University in Baku with one-year interim studies at so we want responsible citizens, who care about this planet, Wesleyan University in Connecticut.

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Why Does Sustainability Matter?

Elvin Hajiyev What is wrong with the environment? Co-founder,Technol We have been using fossil fuels (coal, oil and natural gas mainly) in order to keep our economies moving. These fos- sil fuels create a significant amount of greenhouse gases (GHGs) that impacts climate functionality. GHGs, such as carbon dioxide (CO2) and methane, are molecular combina- tion of gases that traps the heat in the atmosphere and keep With the beginning of the first industrial revolution in the late it for longer periods. In natural cases, when the sunlight hits 18th century, humanity opened the doors of a new era of tech- the earth’s surface, its UV lights reflects back to the atmo- nology, science and development. We became able to cure sphere, which is the essential source of light and heat for our deadly diseases, land on the moon and fight with big prob- planet. Without GHGs the Earth’s surface would be below -10 lems, such as, poverty and hunger. Yet, no one could esti- celsius, which is not suitable for life to exist (currently it is 15 mate the price that we might need to pay for this achievement c.). However, when we emit an excessive amount of GHGs to - destroying the planet itself. There is 7 billion people living the atmosphere through human activities, the problem begins on our planet at this moment who are in need of work, food, there. According to scientific researches, the acceptable level housing and consumer based products every day. It is esti- of CO2 in the atmosphere is 320 ppm (particle per million). mated that this number will increase to 9 billion by 2050.1 How However, as of 2012, this level has long reached to 400 ppm do we keep and develop the so far achieved modern progress already. It is expected to rise over 700 ppm by the end of the of humanity, and yet preserve the social and environmental century. The atmosphere needs more than 100 years (as- balance? Even though there is no one exact answer to this suming no extra emission) to clean itself.3 important question, sustainable development has been seen Excessive emission of GHGs causes the rise of temperature as the major cure for economic and environmental cancer of in the atmosphere which accelerates melting of glaciers and our time. In 1987, United Nations Brundtland Commission de- ice sheets around the globe, and that forces sea level to in- fined sustainable development as “meeting the needs of the crease. Studies show that the Global Mean Sea Level (GMSL) present without compromising the ability of future generations has risen by 10 to 20 centimeters over in the past century. to meet their own needs.”2 We cannot build a future relying on However, over the past 20 years, the annual sea level rise sources that are finite, toxic, risky and expensive. Sustainable has been 3.2 millimeters, roughly twice the average speed of development can provide us with better alternatives. In order the preceding 80 years.4 In return, the rise of sea level causes to answer how sustainability can help us, it is essential to floods, large storms and agricultural soil contamination, ruin understand why we need this help. the habitat of animals and people near coastal areas. As a matter of fact, 40% world’s population live around the coastal 1. The Endless City The Urban Age Project by the London School of Economics and Deutche Bank’s Alfred Herrhausen Society, 2010. 3. Helm and Hepburn, The Economics and Politics of Climate Change, 2011 2. UN, Brundtland Commission, 1987 4. National Geographic, Sea Level Rise

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water to produce 1 litre of Coca-Cola. The textile industry in India uses over 1 billion litre of water every day for production. 9.4 million tons of water is used to irrigate the world’s golf courses.6 On the other hand, according to the World Health Organization, more than 800 million people do not have ac- cess to basic drinking-water service, causing millions of glob- al death due to water related issues.7 2.3 billion people in the world do not have a decent toilet. The list can go on very long, these are only a few examples in order to explain why we need sustainable development. Solution: how sustainability can help us? There is a significant amount of empirical data, researches areas.1 When storms and floods occur, their work and living and studies proving that sustainable development can help spaces get hurt, creating a significant amount of financial and us to fix environmental problems and also create alternative social costs. Recent frequent storms in the Caribbean and solutions for economic, social and cultural issues. Alterna- American coasts prove the urgency of the situation. tive and renewable energy sources (solar, wind and biomass On the other hand, oceans are the biggest absorbers of mostly) are probably best examples of sustainable develop- GHGs in the atmosphere. They absorb 80% of the heat on ment. For example, on April 30, Germany has reached a new the atmosphere. This effect reduces the amount of oxygen in national record for renewable energy use, producing 85% of the water and heavily affects the life of coral reefs that are the all electricity from renewable energy sources. Experts claim main source of food supply for 50% of fish in oceans. When that by the year of 2030, more than 90% of electricity will the corals die, fish population start to decline and perish.2 be produced from renewable sources in Germany.8 In 2016, This fish population is a major source of food and income for 54% of Sweden’s power came from clean energy sources. millions of people that live in the coastal areas. Losing their The country aims to become 100% fossil-free in the next 25 social and economic space, those people will need to migrate years.In 2015, Denmark produced 140% of its electricity from new places to survive. Global Warming is not only the issue wind power alone and exported the rest of the power to Ger- of environment, but also a global security. many, Sweden and Norway.9 United Kingdom has reached Air pollution is another problem that GHGs create. Heavy a record level of nearly 30% clean power production in the concentration of toxic gases in the atmosphere create serious 2017, wind power leading the way.10 health problems for people, including lung and heart prob- In addition, developing nations have also joined the rally to- lem, such as asthma, irritation of the nose, eyes and throat, wards clean energy. Morocco is an inspiring case study on breathing difficulties and heart attacks. Beijing is one of the this matter. In 2007, less than 10% of power was produced best examples for this case. On high-pollution days people from renewable energy. With high governmental initiative, this are not advised to step outside and cover their mouth with number increased to 30% in 2015. At the same year, Moroc- masks for protection. Acid rains, formed primarily by sulfur co has built the largest concentrated solar power plant (CSP) oxides and nitrogen oxides released into the atmosphere by in Africa, and became the world’s leading country in the CSP the burning of fossil fuels, create a serious threat to the tree investment. The country will increase its clean energy capac- and water bodies by acidifying them. It also damages build- ity to 43% by 2025 by solar power alone.11 Private compa- ings by speeding the decay of stones, ruining the heritage nies like Tesla also play significant role in this technological and history of cultures.3 developments. Before, it was a problem to store the power Unfortunately, the problem does not end with climate only. gathered from renewable sources. With the new Tesla battery Deforestation and agriculture play a big role in this process. it has become to store the gathered sunlight energy and use it Increasing number of people creates larger demands for food even at nights, 100% clean and secure. supplies. For this reason, large portions of forests, including Another important example for sustainable approach is re- Rainforests and Amazons (lungs of our planet), are widely cut cycling business. Each year, more than 500,000,000 tons for growing palm trees and animal feed such as corn, soya of papers are produced globally. 93% of these produced pa- and etc. According to UN Food and Agriculture Organization pers come from trees. It takes 5 litres of water to produce (FAO), 7.3 million hectares (size of Panama country) of for- ests are destroyed each year to make the land available for 6. waterinfo.org/waterfacts 4 7. WHO, Drinking Water Facts. other uses. MIT studies show that 69% of world’s freshwater 8. Steven Hanley, Germany Breaks a Solar Record, https://cleantechnica.com/2017/05/08/germany- are used for agricultural purposes.5 It takes 3 litres of fresh breaks-solar-record-gets-85-electricity-renewables/ 9. Alexandra Sims, Sweden on Target to Run entirely on Renewable Energy by 2040, http://www. 1. http://www.un.org/esa/sustdev/natlinfo/indicators/methodology_sheets/oceans_seas_coasts/ independent.co.uk/news/world/europe/sweden-renewable-energy-target-2040-country-on-track- pop_coastal_areas.pdf a7381686.html 2. EPA, Climate Change Indicators: Ocean Heat 10. Ian Johnston, http://www.independent.co.uk/news/business/news/renewable-energy-electricity- 3. WHO, Outdoor Air Quality and Health, 2016 new-record-uk-wind-solar-a7972266.html 4. FAO, State of the World Forests 2012 11. Adnan Zamin, Morocco: The Renewable Energy Success Story of This Year’s Climate Conference 5. MIT, The Future of Global Water Stress: An Integrated Assessment, 2014. Host, www.huffingtonpost.com

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one piece of A4 paper. U.S. offices alone use 12.1 trillion This is what sustainability is about: do not eliminate the prob- sheets of papers every year. Despite the increased use of lem, but find ways to fix them with clean and secure ways. digital communication, the global demand for paper use is expected to double by 2030. On the other side, every tree produces enough oxygen for 3 people to breathe. Millions of Conclusion: Now What? trees around the world are wasted just for papers. However, Clean energy and recycling are only two examples of sus- by recycling 1 ton of paper we can save around 2500 litre of tainable development. Giving examples for all of them would oil, 26,500 liters of water and 17 trees.12 This way, we can require much larger space and time. However, in order for it to answer the demand for paper use and also save more trees work effectively, a collective action is required in global scale. and use less water reserves. Climate change is not the problem of one or two countries, it Plastic is another most widely used material for food, drinks, is the tragedy of commons. Political disagreements, such as commercial and industrial purposes. 300 million tons of failed Kyoto Protocol signed in 1997, only delays the process. plastics are produced each year globally. Made of oil, how- Is “polluter” the producer or consumer? The U.S. blaming ever, this cheap and abundant product takes 700 years to China for production, and China blaming the U.S. consum- break-down in nature. Nevertheless, it does not decompose ers for buying those goods caused big debates regarding the completely, it breaks down to tiny toxic particles that ruin the achievement of sustainability goals. Fortunately, Paris Agree- soil, land and sea. Ten percent of total produced plastic are ment in 2016 managed to ratify 196 countries (despite presi- dumped into the oceans alone. That is 700 billion plastic bot- dent Trump’s withdrawal plans) to take action towards climate tles along with small materials. Clearly, this material toxify the by keeping the global temperature rise below 2 degrees cel- waters and create a big threat to marine life. Less than 10% of sius in this century (reaching pre-industrial levels). It is very used plastic is recycled. However, recycling one ton of plastic likely that we will witness radical policy changes towards car- can save us the equivalent of 3800 to 7500 litres gasoline. bon footprints reduction and evolution of new technologies One ton of plastic is around 25,000 plastic bottles.13 that can help us to fix the problems. Nonetheless, it all comes Recycled materials are not only good for environment, but down to individual actions to make big changes. Saving en- they also provide economic benefits. Since recycled, these ergy and water, eating healthy and organic, recycling and materials are sold for cheaper prices in the market. Recycling learning not to waste can be the beginning steps to start with. can be applied for electronics, glass, textile, metal, wood and We should all change our habits in our daily lives in order to many other materials. Collected waste can also be burned make the real impact. in special plants to generate electricity. Balakhany waste-to- energy plant built in Baku, Azerbaijan is a great example of Author’s biography it. The plant is built on 20 hectares of area and capable of Mr. Elvin Hajiyev is the Co-founder of Technol LLC since 2016, collecting and burning 500,000 tons of waste per year. Of this the first engine oil producing company of Azerbaijan. He started waste, it can produce more than 231,5 million kWh/year.14 entrepreneurial career in 2013 at Babylon Group (in capacity of founder) that still operates in F&B area. Mr. Hajiyev holds MSc in Sustainable Urban Development, from Oxford University 12. Papers Come From Trees, http://www.theworldcounts.com/stories/Paper-Waste-Facts 13. What Happens to Plastic When You Throw Away, http://www.theworldcounts.com/stories/Plastic- (U.K) and BA in Political Science from George Washington Waste-Facts University (Washington D.C.). 14. http://tamizshahar.az/en/waste-to-energy-plant/

13 in focus

High Technologies as the Key Factor for Sustainable Development

Fuad Allahverdiyev etc. via wired and wireless digital communication means. In- CEO, Azertelecom ternet of Things and M2M infrastructure development will lead to the transition to higher technological phase. New ICT trends enable new opportunities for global development New trends of information and communication technologies High technologies have an important role in sustainable de- development ultimately reveal new targets and horizons for velopment of society and government, and in the progress global sustainable development. The innovative projects to towards the new targets. Sustainable development and its enhance Internet service to every point of the world, signifi- targets-related issues are on the focus of the world commu- cant role of ICT in green economy building, gradual change nity, as well as the United Nations, the European Union, the from exhaustible resources to inexhaustible resources, use Organization of Islamic Cooperation, the Commonwealth of of 5G technology, use of artificial intelligence in the medicine Independent States and other reputable organizations. Also, and broad use of the mentioned in USA, developed European the revolutionary innovations with regard to application of in- countries and China which are considered as a huge techno- novative technologies regularly occur in several developed logical development centers, are certainly proof of that. countries, which are the member states of the mentioned or- It should be noted that investment is one of the important ganizations. The speed of technological development is more points in order to ensure today’s ICT development and bring- accelerated in the light of global internet expansion and forms ing innovations to society, thus, sustainable development. new conceptual theories and approaches. Systematic and successive execution of investment both by the government and the private entities might ultimately lead New development trends: IoT and M2M to acceleration of technological development, emergence of Transition to a new and higher phases in information and new technologies and start-ups, successful start-up busi- communication technologies development is now one of the nesses and its contribution to sustainable development. ICT main targets of sustainable development. And ICT develop- investment and technology development are also important to ment contribution stems from mainly new trends. Since the achieve targets, such as, poverty reduction, universal primary early 21st century, the technological development and digi- education, reduction of child mortality, ensuring environmen- tal communication have taken a step towards its completely tal sustainability, AIDS, protection against malaria and other new era and here we should specifically mention the term diseases. These problems are considered to be important of “Internet of Things” (IoT), firstly used by Kevin Ashton, a also by the United Nations. British technology pioneer in 1999, as well as the Machine-to- Achieving sustainable development is closely linked to In- Machine (M2M) concept. These concepts have an important ternet access of each individual, availability of mobile tech- effect on citizens’, generally different society’s life facilitation nologies, e-banking, medicine, e-commerce. According to the and on stable and sustainable development. “ICT Facts and Figures 2017” made by the International Tele- Currently, the Internet of Things (IoT) which allows objects to communication Union, the United Nations specialized agency be controlled remotely is used in many countries, the num- for information and communication technologies (ICT), 80% ber of related smart management systems is increasing daily. Studies show that in the next 3 years the Internet of Things (IoT) industry will achieve more than USD 6 trillion. It’s pre- dicted that by 2020 more than half of total IoT investment will be allocated to the application development. According to the estimations by experts, in 2020 the Internet of Things will cover 30 billion of objects globally and technological devel- opment will progress towards this direction in the upcoming decade. Besides, Machine-to-Machine - M2M technology is expected to be enhanced and huge ecosystem development is accord- ingly predicted. M2M concept enables great opportunities in telemedicine, transport, robotics, remote control, logistics,

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economy of the Republic of Azerbaijan, establishment of knowledge-based economy and this will undoubtedly be en- hanced in the future. According to the International Telecom- munication Union, at the moment our country is on 65th place in terms of ICT development and in this rating Azerbaijan is a leading country among the Southern Caucasian countries. Indeed, this became possible due to the steps towards ICT development, adoption of different State Programs. In re- cent years, important events have been organized in order to achieve ICT and constant development in our country. As a result, the economic sustainability has been enhanced, infor- mation technologies have penetrated into every field. “Strate- gic Road Map for development of telecommunication and in- of youth population in 104 countries use the Internet, i.e. are formation technologies” approved by the Decree of President online. In developed countries, 94% of young people aged Ilham Aliyev dated December 6, 2016 highlight the key ICT 15-24 use the Internet. This figure is 67% in developing coun- principles and directions for 2020, 2025 and further years. tries and only 30% in Least Developed Countries. Out of 830 The implementation of such complex program will ensure million young people who are online, 320 million (39%) are in sustainable development in the future. All these measures will China and India. According to the International Telecommuni- enable our country to be among the leading countries in ICT cation Union (ITU), by 2020 the world internet access will get sphere and use innovations in different fields of society, as 20% high and reach to 60% and cover 4.1 billion people. To well as adequately respond to current and future challenges. compare, these figures were in a level of 43%, i.e. 3.2 billion In conclusion, it should be said that the new approaches in people in 2015, and only 1% in 1995. ICT sphere will definitely change the world, society, our life and ultimately lead to sustainable development and progress According to another report “Digital in 2017 Global Overview”: in all fields. Herein, the most important thing is the readiness • Nearly half of the world population uses smart phones of social institutions and humanity in general to move towards • 2\3 of the world population uses mobile phone these goals and be a part of positive changes to come. • Half of the world’s web traffic now comes from mobile phones References: • Half of all mobile connections around the world are now 1. “Strategic Road Map for development of telecommunication and information tech- ‘broadband’ nologies” (Approved by decree of the President of the Republic of Azerbaijan, HE Ilham Aliyev, on 06 December 2016). 2. International Telecommunication Union. “ICT Facts and Figures 2017 Report”. July, Today ICT development, global increase in Internet access, 2017. use of new technological tools and platforms by the world 3. ”Digital in 2017 Global Overview Report”. 24 January, 2017. population significantly influence to the global problem solu- tion which would ultimately lead to continuous development. Cooperation as a way to achieve the targets It should be stated that the way towards sustainable develop- ment also goes through cooperation between different insti- tutions. At the moment close and effective cooperation are necessary factors to establish stress-resistant economy and constant development. Information technologies are almost key drivers of this development. Certainly, this trend will also Author’s biography continue in the future and in the upcoming 10-20 years close Mr. Fuad Allahverdiyev is CEO of "Azertelecom" LLC, the cooperation between the institutions using advanced informa- national backbone internet operator connecting Azerbaijan to tion and communication technologies within different fields of the international Internet network. He is broadly experienced in society and social institutions will become both a necessary the telecommunication sector. Mr. Allahverdiyev is an author factor and a demand. This cooperation will ultimately lead of different ICT start-ups and one of the founders of several to important outcomes for sustainable development of any successful business entities. He was Director in various country, as well as, humanity. companies, including “Caspian Telecom”, “Aile TV”, “Aile Information and communication technologies have also sig- NET”, “CONNECT” operating in telecommunication sector nificant role in sustainable development of our country. New of Azerbaijan. Fuad Allahverdiyev carries "MBA Executive" technologies have an important role in strengthening the program from Moscow State University named after M.V. Lomonosov and Applied Math from Baku State University.

15 in focus

A UNDP Perspective The oil and gas industry as the catalyzer for Sustainable Development Goals

This article is an extract from a joint work by UNDP, IFC and and gas activities (exploration, development, production, shut IPIECA and was originally published in Mapping the Oil and down or decommissioning), and the input received from local Gas Industry to the Sustainable Development Goals: An At- communities and other stakeholders through formal dialogue las. To access the full text of the article, please go to and engagement. http://www.ipieca.org/media/3093/mapping_og_to_sdg_at- Nevertheless, for companies seeking to align their operations las_lr_2017.pdf with, and enhance contributions to, the SDGs, the goals relat- ing to affordable and reliable energy (SDG7); climate action The Sustainable Development Goals (SDGs) form part of and life on land and in water (SDGs 13, 14 and 15); economic ‘Transforming our world: the 2030 Agenda for Sustainable development and innovation (SDGs 8 and 9); and health and Development’ adopted in September 2015 by the 193 United access to clean water (SDGs 3 and 6) are areas where the Nations Member States. industry typically can make important contributions. The SDGs represent the world’s comprehensive plan of ac- There are opportunities to integrate SDGs into core business tion for social inclusion, environmental sustainability and eco- activities of oil and gas companies. Integration requires a nomic development. shared understanding by all stakeholders of how the SDGs Achieving the SDGs by the target of 2030 will require unprec- can create value and align with the business goals of the edented cooperation and collaboration among governments, company. Companies can operationalize the SDGs in their non-governmental organizations, development partners, the core business practices by incorporating them into corporate private sector and communities. While governments have the systems, policies, standards and processes. Companies will primary responsibility to prioritize and implement approaches find through their own and others’ experiences that integrat- to meeting the SDGs, the private sector and civil society will ing the SDGs into their business can bring greater efficien- play a critical role in the implementation of national plans. In- cies, cost savings and competitiveness, and can enhance the deed, governments are likely to rely to a high degree on busi- oil and gas industry’s social license to operate. nesses and investors in support of delivery. Oil and gas companies can benefit from collaborating with The oil and gas sector is an important global industry and it stakeholders to broaden their impact and enhance their ability can have both positive and negative impacts on a range of to leverage additional resources to achieve the SDGs. areas covered by the SDGs. The oil and gas industry has the Achieving sustainable development requires multi-sectoral potential to contribute to all 17 SDGs. and multi-disciplinary approaches and many of the challeng- With careful planning and implementation, the oil and gas es the SDGs address are beyond an individual company’s industry has the opportunity to contribute across all SDGs, capabilities or control. either by enhancing its positive contributions or by avoiding To realize the full potential to contribute to the achievement or mitigating negative impacts. Overall, oil and gas produc- of the goals, oil and gas companies should engage in mean- tion can foster economic and social development by provid- ingful multi-stakeholder dialogue with relevant actors locally ing access to affordable energy, opportunities for decent em- and nationally to identify joint SDG priorities and collectively ployment, business and skills development, increased fiscal define potential coordinated responses to the SDGs in the revenues, and improved infrastructure. However, oil and gas local context. development has historically contributed to some of the chal- The oil and gas industry is working to be part of the solution, lenges that the SDGs seek to address—climate change and helping to ensure benefits both for today and for future gen- environmental degradation, population displacement, eco- erations, while supporting efforts to reduce negative impacts. nomic and social inequality, armed conflicts, gender-based The industry’s vast global footprint presents an opportunity to violence, tax evasion and corruption, increasedrisk of certain have a meaningful and sustainable impact on the attainment health problems, and the violation of human rights. In recent of the SDGs, while playing an important role in providing the decades, the industry has made advances in avoiding, miti- energy that is essential for the growth of strong economies. gating and managing such impacts and risks. The overarching aim for businesses in the context of sustain- able development should be to do business responsibly—to How can companies integrate the SDGs contribute to society, minimize risks and to do no harm. As into core business? companies embark on aligning with and addressing the SDGs, The breadth of the SDGs envisions that, to be sustainable each will need to do its own individual analysis to understand in the long term, industry’s engagement with the SDGs will how its business can make an impact. A company’s specific need to extend beyond its social investments and corporate roles and contributions will depend on the local social, politi- philanthropy. It will require strong corporate leadership, and cal and economic context, the resource itself, the phase of oil the wider involvement of all employees.

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Integration requires a shared understanding by all stakehold- ferent impacts on different SDGs. Identifying the social, ers of how the SDGs can create value and align with the busi- economic and environmental baselines of the local area ness goals of the company. It also presents an opportunity for and the potential impacts of operations will inform en- the industry to demonstrate the good practices which already gagement, contribution and mitigation measures. Other contribute to one or several of the goals. Done well, integrat- baseline assessments include human rights, health, life- ing the SDGs can support the social license to operate, and cycle assessments and landscape scale plans. enhance global recognition. • Risk and opportunity assessments and planning pro- Oil and gas companies can help operationalize the SDGs in cesses - Risk assessments are crucial to identifying and their core business practices by incorporating them into their predicting potential risks and implementing preventative corporate systems, policies and processes, including: measures. There are opportunities for SDGs to be incor- • Company policies, standards and management systems porated into companies’ risk assessment procedures. - Company governance and management systems, stan- • Dialogue and engagement with communities, govern- dards and strategies that address areas such as envi- ments and other stakeholders - Proactive engagement ronment, health and safety, compliance, anti-bribery, and consultation with stakeholders, including local com- gender, and supply and procurement can be used to munities, Indigenous Peoples, local and national govern- set goals and monitor progress towards integrating the ments and civil society are vital to establishing and main- SDGs into business. Over time, the industry has used taining trust, understanding concerns and perspectives, lessons learned across all geographies to develop good and securing and maintaining a company’s social license practice, and introduced standards and practices that, in to operate. This approach is mutually beneficial to both many places, go beyond regulatory requirements. oil and gas companies and their stakeholders. • Reporting - In order to enhance stakeholder understand- • Research and development - Technology could be a ing of company contributions towards the SDGs, com- significant enabler towards achieving the SDGs. Com- panies can mapand report on them in their sustainability panies can consider the potential beneficial impacts of disclosures. technologies which they have under development, and • Project due diligence - Different projects will have dif- which could accelerate progress on the 2030 Agenda.

17 in focus

Social Entrepreneurship as a Necessity for Innovation and Sustainable Development Elnur Eyvazov Why Social Entrepreneurship is Relevant Senior Legal Advisor, Capital Legal Services to Business? Businesses that are able to enhance their net positive contri- butions to society are more likely to earn the trust of various stakeholders and secure their rights and opportunity to oper- ate in society. Social entrepreneurship can provide companies with a lot of Essence of Social Entrepreneurship business development opportunities in new market segments, Global challenges and communities’ social problems, such especially in the CIS region and other developing countries. as, climate change, lack of drinkable water, quality food short- The relatively low purchasing power of low-income consum- ages, unemployment, access to energy, health and education ers makes it harder for businesses to achieve profit margins. are really business opportunities in disguise. And it is social However, forward-looking companies view their market-build- entrepreneurs who are best placed to seek out these oppor- ing and business development efforts in this segment as a tunities and drive change from the scratch. form of long-term investment. In doing so, businesses can Social entrepreneurship uses innovative, practical, sustain- gain insights on unique needs and preferences of these cus- able, market-based approaches to benefit society in general, tomers and innovate to make product lines more affordable and low-income or underserved populations in particular. It can provide opportunity for low-income people to participate in varies business projects and improve their leaving and so- cial conditions, especially in the CIS region and Azerbaijan, where there is an existing legal framework to encourage this enterprise. At the same time, social entrepreneurship can provide ben- efits to the companies that include not only just financial re- turns, but also improvements to long-term competitiveness, including access to new markets or consumers, strengthened supply chains and talent retention. It should be mentioned that social entrepreneurs are similar to start-up entrepreneurs. However, unlike start-up entrepreneurs, social entrepreneurs work within a large corporations developing business initia- and relevant. For example, market-facing companies from tives that have social conscience to boot. sectors such as healthcare or consumer goods have em- Social entrepreneurship is not a CSR as it means that busi- braced business growth through innovations in products, ser- nesses try to convert the world’s big social and environmental vices or distribution channels targeting underserved consum- problems into market opportunities and gaining tangible busi- ers. In addition to enhancing the quality of life of low-income ness benefits aligned with the company’s innovation agenda customers, such innovations can also present opportunities and business strategy. To convert social problems into mar- to promote micro-entrepreneurship, enhance incomes and ket opportunities, companies use their core for-profit assets, long-term competitiveness. such as human capital, value chains, technology or distribu- Social entrepreneurship can allow businesses to ensure the tion systems and these projects are managed from within a stability of access to raw materials. Many supply chains, par- firm’s core operations or business units. ticularly those in the agriculture, food and consumer goods industries, are laced with intermediaries, all of whom take a share of the price paid by the consumer. The threat of a re- gional or global agricultural product and food shortage, for in- stance, usually prompt many agricultural and food manufac- turers to partner with social enterprises, such as Kennemer Foods in the Philippines or Nestlé in Kenia, to help farmers increase crop productivity. Extreme weather is another driver of supply volatility. Diversification of and investment into a supplier base can create direct and trusted relationships with farmers, which help maintain stability in supplies and prices

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company should invest in start-ups that are strongly aligned with the company’s business strategy or operating in adjacent markets. As Morgan Stanley’s case also illustrates, targeted investments into social entrepreneurs can generate new busi- ness opportunities for the company. In conclusion, social entrepreneurship is one of the essen- tial ways for sustainable development of economic and so- cial conditions of any country as it uses innovative, practical, sustainable, market-based approaches to benefit society in general, and low-income or underserved populations in par- in the face of extreme weather events. The second strategic ticular. Also, social entrepreneurship provides benefits to the benefit revolves around improving the quality of raw mate- companies that include not only just financial returns but also rials, which supports a company’s ability to achieve a price improvements to long-term competitiveness, including ac- premium while strengthening consumer loyalty. cess to new markets or consumers. Social entrepreneurship activities can help companies with attracting and retaining talent and increasing levels of diver- sity in the workforce. This can significantly reduce turnover costs, increase strict complains with labor and human rights laws, and can present a significant social innovation oppor- tunity for businesses as talent diversification results in more innovative product generation ideas. A growing number of investors and even foreign direct invest- ments are including social and environmental considerations into their performance metrics and investment decisions. For instance, according to the Global Sustainable Investment Re- view 2014, the share of sustainable assets within all profes- Author’s biography sionally managed assets globally grew from 21.5% in 2012 to Mr. Elnur Eyvazov is a Professor of Business Law and 30.2% in 2014. For the first time, the 2015 Harvard Business Business Ethics at ADA University Business School. He is also Review ranking of the top 100 performing CEOs in the world a Director of the Office of Diversity and Equal Opportunities at – a measure aimed at evaluating long-term performance – ADA University. Also, Mr. Eyvazov is a Senior Legal Advisor weighted social and environmental performance at 20% of with Capital Legal Services. the overall score. In the long term, social and environmental Professor Elnur Eyvazov is an expert in business law, issues become financial issues. investments, business ethics, and finance. He received his Finally, finance can be a key tool for a company to engage LL.B degree from the Law Faculty of Baku State University and in social innovation. Companies can grow social enterprises master degree in International Commercial Law from the Law by managing impact investment funds or incubators. In ad- Faculty of Cambridge University. Mr. Eyvazov is also a graduate dition to generating financial returns, such investments can of Law faculty of Oxford University where he got his MJuris/M. offer a pipeline of ideas to support a company’s innovation Phil degree in financial, banking and corporate finance law. Mr. agenda and can become future partners, or even future cus- Eyvazov also attended Columbia University School of Law on tomers. To benefit the most from its impact investments, a a Fulbright Fellowship where he obtained MCL degree in Law and Finance. Mr. Eyvazov carries strong international professional experience. While in Oxford, Mr. Eyvazov had his Vocational Scheme Program with Clifford Chance LL.P in London. Mr. Eyvazov worked as a Legal Adviser for New World Frontiers, Co., Ltd. and he advised the company on various business projects. He worked in the Legal Department of BP as a legal advisor where he provided advice in connection with the BP’s exploration and production/upstream and midstream projects in Azerbaijan. Professor Eyvazov practiced law and finance as a summer associate at JP Morgan & Co, Investment Bank, Legal and Compliance in New York. While at JP Morgan, he provided legal and investment advice in connection with regulatory, compliance, structured finance, capital markets, M&A and other investment banking activities of the investment bank. Professor Eyvazov also has a considerable experience in disability rights law.

19 in focus

Tasks and Targets Set by Humanity For the Next Decade: Ensuring Responsible Consumption and Production Balance

Ziya Ibrahimov Issues, such as, increasing economic competitiveness and Partner, Baker Tilly Azerbaijan reducing poverty are targets of other SDGs which should also be considered when applying this SDG. The idea of “achieving better results with fewer assets” is the central idea during the creation of sustainable consumption and production balance. In this way, new concepts are put forward as an indicator of welfare for humanity and the level of welfare doesn’t only consists of irresponsible consumption The outbreak of industrial development from the beginning and material elements: it is a transformation of welfare into a of the last century and use of natural resources by human concept for achieving prosperity in the sense of a more re- beings during the last hundred years have led to a number sponsible approach to the environment and to other human of complications besides human evolution in the 21st cen- beings. Even during planning of economic activity and offer- tury. As a result, international community and leading coun- ing a new product or service to the market, the basic concept tries have begun looking for solutions to the problems that must not merely consist of creating a demand and offering the have become more and more global within the framework products and services to the market in accordance with this of the United Nations (UN). Although, building of economics requirement, but it is more adequate to make sure that these on capital and market relations is considered to be perfect products and services satisfy the needs of all human beings among the existing approaches, the result of such approach and analyze the level of “welfare” comparatively with the level is the emergence of constantly consuming society, constant of its harmful impact on the environment during its econom- differences between the economic well-being of individuals, ic life. Traditionally, if the value of enterprise in the financial increased levels of production to meet the elevated consump- language is presented as a concluding value in terms of dis- tion and ultimately, the declining pattern of natural resources counting its potential for cash flows, it is more appropriate to and the aggressive struggle of the countries around these re- carry out a “positive welfare” project in a new sense. In such serves, levels of production and domestic waste thrown into context, during analysis and discount of economic dividends the world ocean alerts us about the scale of the problem. It is created by the projects and enterprises, one should consider no coincidence that as a result of long-term discussions and the level of contribution to the development of these projects. studies, the areas in which the changes contributing to the Execution of responsible consumption and production bal- overall development of humanity in the next decades have ance goal causes departure of some stakeholders from tra- been defined. On 25 September 2015, various countries ditional concepts. First of all, these are economic entities, came to consensus with 17 principles called as the UN Sus- such as companies, enterprises, consumers and later those tainable Development Goals (SDGs). This article will uncover responsible for the provision of laws and regulations in the one of them – importance of ensuring responsible consump- tion and production balance. As we know, UN SDGs are intended for achieving a turning point in critical areas by acting more responsibly with our planet, thereby changing the current situation. In this sense, ensuring responsible consumption and production balance makes it possible to reduce consumption levels to more logi- cal and responsible levels, and to balance the level of con- sumption and production. This is the promotion of the idea of effective use of the natural resources and energy sources, building sustainable infrastructure, increasing the number of environmentally friendly workplaces compared to traditional workplaces and ultimately improving the quality of life for the entire humanity. Implementation of this goal also contributes to the overall development and leads to a decline in econom- ic, social and environmental costs for the future generations.

20 Issue 28 in focus

on the Antarctic glaciers. Apparently, humanity needs to maintain an entire ecosystem with just about 0.5% of ex- isting water resources; • As known, the river and lake basins are freshwater res- ervoirs and natural cleaners of dirty water. But these stations are no longer capable to restore the volume of water which people are inflicting; • About 1 billion people living in different countries do not have access to freshwater basins at all; • Another problem is irresponsible use of water resources which is the phenomenon called “water stress” in sci- ence. Water stress is the result of two mechanisms, physical water shortage and economic water scarcity.

Questions that are relevant to energy issues are following: • While pursuing a policy of technological advancement and energy efficiency, it is important to note that energy consumption in the OSCE states alone in 2020 will in- crease by 35% compared to 2002. Although the trans- portation sector takes the first place in this indicator, the next place is energy consumed by commercial and household subjects; • Similarly, 32% increase of private vehicles is expected in the world by 2020. The distance traveled by these ve- broader sense, analytical agencies, academicians, retailers, hicles is 40% higher than it was at the beginning of the mass media and non-governmental organizations. century. The total distance traveled by air transport has During implementation of this goal, it is important to have a tripled in comparison with the same period; higher level of coordination and systematic approach among • Households account for 21% of global energy consump- each element of the supply chain, from the manufacturer to tion and 23% of carbon dioxide emissions into the atmo- the requesting party. In this sense, the continuous improve- sphere; ment of consumers, raising the level of education among • Only 20% of the energy consumed by 2013 was provided them, encouraging the principles of sustainable consumption through alternative and renewable sources. and lifestyle, setting up sub-standards on SDG and presen- The main goal in addressing these issues is to involve public tation of these indicators on product labels, improvement of opinion in a more serious manner and in coordinated imple- public procurement process for more sustainable and bal- mentation of the steps, which are necessary to be taken. In anced consumption and others must be mentioned. this sense, it is important to carry out the work in the follow- A number of facts have been explored by the UN (http://www. ing areas when implementing responsible consumption and un.org/sustainabledevelopment), which demonstrate the production balance: need of execution of this goal as soon as possible. Among • Creating an initial framework program covering a 10-year these facts: • Annually, approximately 33% of the total production or 1.3 billion tons of product are destroyed in the warehous- es of consumers or retailers specialized in sales, as a result of an unsatisfactory transport and harvesting sys- tem; • If the world’s population shifts to consumption patterns with less energy-intensive lamps, this can result in an en- ergy saving equivalent to about 120 billion USD per year; • If the global population growth rate and current living conditions remain steady, then by 2050, resources re- quired to feed the world’s 9.6 billion population should be three times of Earth’s resources. • Other facts show that we have to be more responsive to the world water consumption: • Only 3% of all available water resources on our planet are fresh water resources. 83.3% of this is concentrated

21 cycle for balancing production and consumption levels with the leadership of developed countries; • Ensure sustainable management of natural resources and sustainable production management practices dur- ing the period up to 2030; • Reduction of per capita food loss ratio by at least 50% until 2030, minimize food losses in consumer, retail and manufacturing sectors, as well as in the harvesting chain; • Preventing the release of such substances into water, air and soil to maximize productivity in the management of chemicals and various types of industrial waste in accor- dance with international agreements and frameworks, as well as reduce human and environmental health; • Preventing industrial and domestic waste generation by applying principles, such as, reduction of production vol- umes, reuse and recycling; • Development of policies for sustainable development of large and transnational companies and submitting reports on these principles during the annual reporting period; • Development of public procurement practices in accor- dance with the principles of sustainability, national poli- cies and priorities; • Providing information to people about the sustainable de- velopment and living in harmony with nature; • Supporting developing countries in research and sci- entific studies to conform for sustainable development principles and responsible consumption and production balance; • Establishment of effective monitoring tools to measure the impacts resulting from the implementation of this goal and the creation of jobs highlighting the priority of green and ecological products; • Re-analyzing and adapting national economies, tax leg- islation, environmental legislation on use of more efficient energy, more responsive consumption, less environmen- tal pollution and new levels of welfare. Finally, it is important to note that “responsible consumption”, “green production processes”, “environmentally balanced re- lationships” and similar trends should be developed rapidly. Thus, it will result in new green evolution after industrial de- velopment and transforming into a process bringing greater benefits first to humanity and then to the nature and the en- vironment. Author’s biography Mr. Ziya Ibrahimov is managing partner at Baker Tilly Azerbaijan LLC and is experienced in assurance and attest engagements, as well as business valuation and real estate appraisals. Ziya has graduated from the Midwestern State University Graduate School (Texas, USA) with MBA degree in 2002. In March 2007, he became a member of internationally recognized accounting association ACCA. From 2003 to 2007, Ziya has participated in