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If your agent runs on an Azure AKS cluster, you can leverage the following method to assign an Azure AD identity to your env zero deployments.

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Using workload identity

You can associate an IAM role with a Kubernetes Service Account (KSA). The KSA that will be used by env zero is the default KSA under the env0-agent namespace. You’ll need to follow the Azure guide - Deploy and configure workload identity on an Azure Kubernetes Service (AKS) cluster . The SERVICE_ACCOUNT_NAMESPACE will be env0-agent and the SERVICE_ACCOUNT_NAME will be default. If you override these parameters in your installation, please make sure to use the correct values, i.e. pass the correct name of the service account to deploymentJobServiceAccountName within the agent’s helm values. Now, in order for the pods to use the identity, they should be labeled with azure.workload.identity/use: "true". To achieve this, you need to add into the podAdditionalLabels field of your agent’s helm values those field and value. e.g.
values.customer.yaml
"podAdditionalLabels": 
  "azure.workload.identity/use": "\"true\""

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Configuring Terraform Provider to use an AKS workload identity

Follow this official azurerm provider guide - terraform registry documentation.

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Configuring Azure Backend to use an AKS workload identity

When configuring the Azure Backend, you need to make sure that the Client ID, Tenant ID, and OIDC are configured. You have to make sure to have the backend is configured as using OIDC, and with the OIDC token taken from the AZURE_FEDERATED_TOKEN_FILE The are a couple of ways to do that:
  1. In the backend configuration itself, make sure to set the following values:
terraform {
  backend "azurerm" {
    resource_group_name  = "StorageAccount-ResourceGroup"          							# Can be passed via `-backend-config=`"resource_group_name=<resource group name>"` in the `init` command.
    storage_account_name = "abcd1234"                              							# Can be passed via `-backend-config=`"storage_account_name=<storage account name>"` in the `init` command.
    container_name       = "tfstate"                               							# Can be passed via `-backend-config=`"container_name=<container name>"` in the `init` command.
    key                  = "prod.terraform.tfstate"                							# Can be passed via `-backend-config=`"key=<blob key name>"` in the `init` command.
    use_oidc             = true                                    							# Can also be set via `ARM_USE_OIDC` environment variable.
    oidc_token_file_path = "/var/run/secrets/azure/tokens/azure-identity-token" # Should be set to the value of AZURE_FEDERATED_TOKEN_FILE, usually "/var/run/secrets/azure/tokens/azure-identity-token"
    client_id            = "00000000-0000-0000-0000-000000000000"               # Can also be set via `ARM_CLIENT_ID` environment variable.
    subscription_id      = "00000000-0000-0000-0000-000000000000"  						  # Can also be set via `ARM_SUBSCRIPTION_ID` environment variable.
    tenant_id            = "00000000-0000-0000-0000-000000000000"  						  # Can also be set via `ARM_TENANT_ID` environment variable.
  }
}
  1. Use environment variables to set ARM_CLIENT_IDto the client ID, ARM_TENANT_ID to the tenant ID, ARM_USE_OIDC to true, and ARM_OIDC_TOKEN_FILE_PATH to the value of AZURE_FEDERATED_TOKEN_FILE (usually “/var/run/secrets/azure/tokens/azure-identity-token”)
Follow the official azure backend guide - azure backend documentation
You must set oidc_token_file_pathhe official guide does not mention it, but if you do not provide the OIDC token explicitly, then the backend will ignore the use_oidc configuration. Unlike the azurerm Terraform Provider, which automatically picks up the token from AZURE_FEDERATED_TOKEN_FILE

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Access Key Vault secrets

If accessing sensitive values stored in Azure Key Vault is required during your deployments, you should also accomplish this optional step from the AKS guide - Grant permissions to access Azure Key Vault

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Verifying the cluster is configured properly

Once the cluster is configured for using the workload identity, you can run this command from a pod on it to validate all the correct parameters are exported correctly: az login --service-principal -u $AZURE_CLIENT_ID -t $AZURE_TENANT_ID --federated-token $(cat $AZURE_FEDERATED_TOKEN_FILE). The pod will need the correct labels for the namespace, service account, and azure.workload.identity/use: "true". If the command ran without error, you may also check the Key Vault access with the following command az keyvault secret list --vault-name <YOUR VALUT NAME>