TITLE: IMPROVING MECHANISMS FOR FINANCING ESG-BASED INVESTMENTS IN THE BANKING SECTOR OF UZBEKISTAN

Abstract

In the context of global economic transformation, the integration of Environmental, Social, and Governance (ESG) principles has emerged as a fundamental requirement for financial stability and international competitiveness. This research examines the structural and functional mechanisms of ESG-based investment financing within the commercial banking sector of Uzbekistan. As the nation intensifies its transition toward a "Green Economy," financial institutions are tasked with aligning their lending portfolios with sustainable development goals. Through a comprehensive analysis of current regulatory frameworks and the adoption of "Green" banking products, this study evaluates the readiness of the domestic banking sector to implement international sustainability standards. The research identifies critical bottlenecks, such as the lack of a comprehensive national ESG taxonomy, insufficient technical expertise in environmental risk assessment, and limited domestic demand for sustainable financial instruments. The findings propose a systemic model for enhancing ESG financing, emphasizing the development of green bond frameworks, the institutionalization of ESG risk management systems, and the implementation of standardized sustainability reporting. Ultimately, this paper provides strategic recommendations for the Central Bank and commercial lenders to foster a more resilient, transparent, and climate-aligned financial ecosystem in Uzbekistan.