Habib Bank Limited (HBL), one of Pakistan’s prominent private-sector commercial banks, has taken a significant step towards promoting sustainable agriculture in the country by announcing the establishment of an agriculture-specialized company called HBL Zarai.
The bank recently obtained permission from the State Bank of Pakistan (SBP) for this initiative and is awaiting approval from the Securities and Exchange Commission of Pakistan (SECP) to officially launch the subsidiary.
While HBL will continue to provide agriculture financing, the subsidiary, HBL Zarai, will focus on offering non-financial services to small and medium-sized farmers. These services include setting up storage facilities for surplus outputs, supplying agricultural inputs such as seeds and fertilizers, promoting water conservation practices, and providing market intelligence to help farmers secure better prices for their crops and livestock.
Muhammad Aurangzeb, President & CEO of HBL, emphasized that HBL Zarai is not a corporate social responsibility (CSR) project. The subsidiary will charge for the services it provides, allowing farmers to have greater control over their produce by storing it and selling it when prices are favorable.
Aurangzeb highlighted the importance of the dairy and livestock sector within agriculture, which constitutes around 60% of the industry but has been overlooked in terms of financing. He noted that corporate entities, including banks, insurance firms, fertiliser manufacturers, and food companies, are collaborating to support and enhance the agriculture sector.
In a commitment to environmental protection, HBL announced that it will no longer finance coal-based projects and will instead focus on renewable energy initiatives such as wind, solar, and hydel projects.
The bank has developed its own green taxonomy (GT) to direct capital flows towards green projects aimed at climate change mitigation, adaptation, pollution prevention, resource efficiency, and ecosystem conservation.
HBL aims to achieve net-zero carbon emissions by 2030.Regarding corporate social responsibility, HBL has contributed over Rs4 billion in the past decade to support social uplift projects in Pakistan, with over Rs580 million contributed in 2022 alone.?