Banks ignore climate in project financing

Dawn reported that Pakistan's large commercial banks have advanced only modestly in applying sustainability pledges to the borrowers and schemes they fund. A benchmark from Fair Finance Pakistan, unveiled during the World Bank-IMF meetings in Bangkok, assessed seven lenders and placed climate change and biodiversity at the bottom. Policies offering a positive stance toward financed borrowers reached 13.8 per cent on climate and 26.8pc on biodiversity.

The seven banks assessed were Habib Bank, United Bank, MCB Bank, National Bank of Pakistan, Meezan Bank, Allied Bank and Standard Chartered Pakistan. Policy items covering their own operations scored positively in 75.4pc of cases, versus 23.1pc for the firms and undertakings they lend to. Standard Chartered Pakistan led on climate with 3.63 out of 10, while Allied Bank had the top overall score at 41.05pc of the maximum and no bank exceeded 42pc.

The State Bank of Pakistan is advancing a Green Taxonomy and climate-related financial-risk framework, and its banking policy head said lenders are moving from voluntary pledges toward implementation over the next three years. The report recommends tougher borrower obligations, independent monitoring, more portfolio-level disclosure and steadier environmental and social checks when banks appraise loans. It also cautions that the study judges published policies on their depth and breadth, not on actual environmental or social results.