Pakistan’s Banks Lag in Climate Financing, New Report Reveals

KARACHI: A recent assessment reveals that major commercial banks in Pakistan are falling short in their sustainability commitments, particularly regarding climate change and biodiversity. The report, titled the 2025 Benchmark of Bank Sustainability Policies in Pakistan, was released by Fair Finance Pakistan (FFP) during the World Bank-IMF Annual Meetings in Bangkok.

The assessment, conducted in collaboration with Lahore University of Management Sciences (LUMS) and Profundo, evaluated seven banks, including Habib Bank Ltd (HBL), United Bank Ltd (UBL), and Standard Chartered Pakistan. It found that only 13.8% of policies related to climate change and 26.8% for biodiversity were positively covered in financing projects. In contrast, 75.4% of the policy elements concerning the banks’ own operations received a positive score.

This lack of attention to climate-related financing poses significant risks not only to the environment but also to the economic stability of the country. With climate change increasingly impacting various sectors, the findings highlight the urgent need for banks to integrate sustainability into their lending practices to support a greener economy.

As discussions around climate finance gain momentum, stakeholders are calling for enhanced regulatory frameworks and incentives to encourage banks to adopt more robust sustainability policies. The upcoming meetings of financial institutions may provide a platform for addressing these critical issues.