SBP Governor Urges Climate Finance to Safeguard Vulnerable Communities

KARACHI: State Bank of Pakistan (SBP) Governor Jameel Ahmad emphasized the critical link between climate change and financial exclusion during the opening session of a four-day joint learning program in Islamabad on Tuesday. He highlighted that the most vulnerable communities, including smallholder farmers and low-income households, are disproportionately affected by climate shocks while lacking access to essential financial services.

Ahmad pointed out that these groups are often the least equipped with insurance or savings, making them particularly susceptible to the adverse effects of climate change. He stressed that climate finance should extend beyond merely supporting green investments; it must also empower communities to anticipate risks, build resilience, and adapt effectively to changing environmental conditions.

Reflecting on the devastating floods of 2022, which inflicted nearly $15 billion in physical damage and an equal amount in economic losses, Ahmad noted that over 30 million people were affected, with 2.2 million homes damaged. This stark reality underscores the urgent need for targeted financial solutions to protect vulnerable populations from future climate-related disasters.

As financial inclusion in Pakistan reaches 71%, with a narrowing gender gap of 27%, Ahmad announced that the country is sharing its Green Taxonomy and climate risk framework with regulators across the Alliance for Financial Inclusion network. This initiative aims to enhance collaborative efforts in addressing climate finance challenges.