The State Bank of Pakistan, on Wednesday, launched the Environmental and Social Risk Management (ESRM) Implementation Manual for banks and development finance institutions (DFIs) to promote green banking in the country.
The manual was launched by Governor State Bank Jameel Ahmed in the inaugural session of Sustainable Banking Conference, organised here by SBP in collaboration with IFC, a member of the World Bank Group.
The objective of the conference was to create critically needed awareness related to climate change and sustainability within the financial sector and to launch the ESRM Implementation Manual.
Governor SBP in his keynote address remarked that ESRM manual was a procedural guide for the banks and DFIs to establish their environmental social risk management systems, as per SBP’s Green Banking Guidelines (GBGs). Further, he highlighted that the conference was an effort to spread awareness on the impact of climate change and environmental degradation on the financial sector of Pakistan and a step towards SBP’s endeavor to reduce the vulnerability of financial sector from such risks.
Pakistan is one of the most vulnerable countries to the impacts of climate change as we have witnessed during the recent floods; therefore, it is critical time for Pakistan’s financial sector to become sensitive to financial consequences arising from environmental and social risks, he added.
SBP has also undertaken certain initiatives like Green Banking Guidelines and Financing Scheme for Renewable Energy to ingrain sustainability considerations into the financial sector as per international best practices, the SBP governor noted. He encouraged the entire banking industry to take full benefit of the manual to establish their ESRM systems and procedures and assured that the central bank would keep on providing necessary support and guidance at every stage of ESRM implementation.
IFC Regional Director for Pakistan, Afghanistan and Middle East Khawaja Aftab Ahmed, termed launch of ESRM manual as a significant step towards promoting sustainable banking practices in Pakistan.
He added that the manual can help the banking industry better manage environmental and social risks throughout their lending practices, and subsequently enable a green and inclusive economic recovery at a critical time.
The conference was attended by IFC Country Manager Zeeshan Ahmed Sheikh, Consul General of Japan in Karachi Toshio Odagiri, Chairperson, PSX Board Dr. Shamshad Akhtar, IFC Senior Policy Adviser Yaseen Anwar and other high profile dignitaries besides presidents and CEOs of banks and DFIs, senior officials from Pakistan Banks Association, Sindh Environmental Protection Agency and other relevant stakeholders.
The conference also included two high-level panel discussions on important topics including ESG integration in financial sector, climate finance risk and climate disclosures wherein.