SBP stresses climate finance must go beyond green investments

November 03, 2026 (MLN): The State Bank of Pakistan (SBP) has said climate finance must do more than support green investments and should also help communities anticipate risks, build resilience and adapt to a changing climate, as it launched a four-day joint learning program with the Alliance for Financial Inclusion (AFI) on inclusive green finance policy implementation in Islamabad.

The program aims to help participating regulators move from policy commitments to real-world implementation, and is being held in Pakistan for the first time, said a press release issued.

SBP Governor Jameel Ahmad inaugurated the program, which brings together 38 AFI network participants from central banks and financial regulators of 24 countries across four continents.

Aban Haq, Director Strategy, Member Engagement and Evaluation at AFI, and Lasse Melgaard, Operations Manager at the World Bank, also addressed the inaugural session.

They stressed the importance of knowledge-sharing platforms for showcasing innovative country experiences and spreading good practices in inclusive and sustainable green finance.

Lasse Melgaard appreciated the platform created by SBP and AFI for peer learning, collaboration and exchange of implementation experiences among AFI member institutions.

In his keynote address, the governor said climate change and financial exclusion are deeply interconnected.

He said smallholder farmers, micro and small enterprises and low-income households are the most exposed to climate shocks, yet the least likely to have insurance, savings or access to formal finance.

He pointed to Pakistan’s experience in the devastating 2022 floods, which caused nearly $15bn in physical damage and a further $15bn in economic losses, affected more than 30mn people and damaged 2.2mn homes.

He said this shows why financial systems must be both green and inclusive.

He noted that financial inclusion in Pakistan has reached 71%, the gender gap has narrowed to 27%, and Pakistan is sharing its Green Taxonomy and climate risk framework with peer regulators across the AFI network.

The governor outlined SBP’s regulatory framework, which includes the Green Banking Guidelines (2017), the Environmental and Social Risk Management Framework (2022), the Pakistan Green Taxonomy, regulations on climate-related financial risks, and the Climate Stress Testing Guidelines (December 2025).

On women’s financial inclusion, he highlighted the Pakistan Women Inclusive Finance Program, supported by the Asian Development Bank. He also noted that Pakistan joined the Women Entrepreneurs Finance Code in 2025, with SBP serving as the anchor institution for the financial industry.

He outlined Pakistan’s work under AFI’s four pillars of Promotion, Provision, Protection and Prevention.

Under these, the Green Taxonomy provides a science-based classification of green activities, targeted financing schemes channel credit to underserved segments, women-focused programs strengthen financial resilience, and climate risk regulations and stress testing help financial institutions prepare for potential shocks.

He said participants will exchange experiences over the coming days on operationalising green finance, supporting climate-smart agriculture and addressing implementation challenges, including gender-related barriers.

He said the success of any policy framework is ultimately measured by its implementation and its impact on people’s lives.

The governor thanked AFI for the partnership and expressed hope that the program will build stronger peer networks and continued knowledge exchange across jurisdictions.

The release said the program reflects SBP’s commitment to inclusive and sustainable finance through practical policy implementation and international cooperation, and is expected to foster lasting institutional linkages and contribute to a shared vision of a more inclusive, climate-resilient and sustainable financial future.

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