'Climate finance must go beyond green investment'

KARACHI: State Bank of Pakistan (SBP) Governor Jameel Ahmad has said that climate change and financial exclusion are deeply interconnected, and the people most exposed to climate shocks are smallholder farmers, micro and small enterprises, and low-income households. "They are also the least likely to have insurance, savings, or access to formal finance. Climate finance must do more than support green investments. It must also help communities anticipate risks, build resilience, and adapt to a changing climate," he said. Jameel Ahmad inaugurated a four-day SBP and Alliance for Financial Inclusion (AFI) Joint Learning Programme on Inclusive Green Finance Policy Implementation in Islamabad. The programme brings together 38 international participants of the AFI network, representing central banks and financial regulators of 24 countries from four continents, to move from policy commitments to real-world implementation. In his address, the central bank governor pointed to Pakistan's experience during the devastating floods of 2022. The deluge caused physical damage of nearly $15 billion and economic losses of another $15 billion. It affected more than 30 million people and damaged 2.2 million homes. He said this showed why financial systems must be both green and inclusive. Highlighting Pakistan's progress, he noted that financial inclusion had reached 71%, the gender gap narrowed to 27%, and Pakistan was sharing its Green Taxonomy and climate risk framework with peer regulators across the AFI network. The governor highlighted SBP's progressive regulatory framework, which included the Green Banking Guidelines (2017), the Environmental and Social Risk Management Framework (2022), the Pakistan Green Taxonomy, and regulations on climate-related financial risks, along with the Climate Stress Testing Guidelines (December 2025). On the initiatives taken to promote women's financial inclusion, he highlighted the Pakistan Women Inclusive Finance Programme, supported by the Asian Development Bank. He noted that Pakistan joined the Women Entrepreneurs Finance Code in 2025, with the SBP serving as the anchor institution for the financial industry. The governor also outlined Pakistan's work under the AFI's four pillars of promotion, provision, protection, and prevention. The Green Taxonomy provides a science-based classification of green activities, while targeted financing schemes channel credit to underserved segments.