SBP deputy governor asks banks/DFIs to adopt sustainable banking practices
KARACHI (92 News) – State Bank of Pakistan (SBP) Deputy Governor Saeed Ahmad chaired a meeting to initiate Baseline Survey on Environmental and Social Risk Management (ESRM) in Pakistan being conducted by International Finance Corporation in collaboration with SBP.
According to a press release, the deputy governor emphasized that environmental and social parameters are significant sources of credit, liability and may seriously affect economic performance and long term sustainability of a financial institution, if not properly and timely managed.
He said that green and sustainable banking may support government in its efforts to overcome current electricity shortfall and help increase economic productivity. The ESRM survey is being conducted in 17 countries. SBP has partnered with IFC for completion of survey in Pakistan. The results of the survey will provide insights to SBP for streamlining its regulatory and developmental initiatives for encouraging incorporation of environmental and social considerations in banking practices and products.
Saeed Ahmad informed the participants that SBP has taken up green and sustainable banking as a special developmental area for promotion of environment and social considerations in the banking practices. He said that SBP has recently joined Sustainable Banking Network, is also exploring the possibility of issuing green banking guidelines including environmental risk management practices for the banks and Development Finance Institutions (DFIs).
The deputy governor appreciated the Environmental and Social Risk Management Guidelines prepared by Pakistan Banks Association (PBA) in 2010 and emphasized that Banks/DFIs may build on its initial spadework to develop their internal ESRM systems and adopt sustainable banking practices.
He said that SBP has also taken a number of initiatives for promotion of infrastructure financing of banks and reiterated commitment of SBP to provide necessary support for promotion of green banking. He apprised the participants that SBP is working with a number of multilateral agencies to undertake joint initiatives on improving financing to energy efficiency and renewable energy projects.