According to a press release on Wednesday, the governor of the State Bank of Pakistan (SBP), Jameel Ahmad, has released the Environmental and Social Risk Management (ESRM) Implementation Manual for banks and development financing institutions (DFIs).
At a Sustainable Banking Conference organised in conjunction with the International Finance Corporation, the SBP governor debuted the guidebook (IFC). While delivering the keynote address, the SBP governor remarked that the manual has been launched as part of the central bankÂ’s ongoing efforts to promote green banking in Pakistan.
“The ESRM manual is a procedural guide for the banks/DFIs to establish their environmental and social risk management systems, as advised in the SBP’s Green Banking Guidelines (GBGs),” he said.
He emphasized that the conference was an effort to raise awareness about the effects of climate change and environmental degradation on Pakistan’s financial sector and a step in the direction of the SBP’s goal to lessen the financial industry’s exposure to such risks.
He continued by saying that Pakistan is among the nations most susceptible to the effects of climate change, as the nation has learned during the recent floods. “Therefore, it is critical for Pakistan’s financial sector to become sensitive to financial consequences arising from environmental and social risks,”
As the financial system’s responsible regulator, the SBP has also launched a number of programmes including the Green Banking Guidelines and Financing Scheme for Renewable Energy to instil sustainability principles within the financial industry in accordance with global best practices.
The governor of the SBP urged the whole banking sector to fully utilize the handbook in order to set up their ESRM systems and processes.
The State Bank produced the Green Banking Guidelines (GBGs) for Pakistan’s financial industry in 2017 and has been a trailblazer in including environmental risks into overall credit evaluation. Establishing a minimal standard was intended to ensure fair competition in the financial industry and to advance a long-term business strategy in Pakistan.