Climate Change and Financial Exclusion deeply interconnected: SBP Governor
ISLAMABAD (Staff Report): Governor of the State Bank of Pakistan (SBP) Jameel Ahmad has said that climate change and financial exclusion are deeply interconnected, stressing that climate finance must not only support green investments but also help vulnerable communities build resilience.
He was inaugurating the four-day SBP and Alliance for Financial Inclusion (AFI) Joint Learning Program on Inclusive Green Finance Policy Implementation in Islamabad. The program, being held for the first time in Pakistan, brings together 38 international participants from the AFI network, representing central banks and financial regulators of 24 countries from four continents.
In his keynote address, Governor Jameel Ahmad said those 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.
Citing Pakistan’s experience during the devastating floods of 2022, the Governor said the floods caused nearly US$15 billion in physical damage and a further US$15 billion in economic losses. They affected more than 30 million people and damaged 2.2 million homes, showing why financial systems must be both green and inclusive.
Highlighting Pakistan’s progress, he said financial inclusion has reached 71 percent while the gender gap in financial access has narrowed to 27 percent. He added that Pakistan is sharing its Green Taxonomy and climate risk framework with peer regulators across the AFI network.
The Governor highlighted SBP’s progressive regulatory framework which includes 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 issued in December 2025.
On women’s financial inclusion, he highlighted the Pakistan Women Inclusive Finance Program supported by the Asian Development Bank. He 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. The Green Taxonomy provides a science-based classification of green activities, while targeted financing schemes channel credit to underserved segments. Women-focused programs strengthen financial resilience, while climate risk regulations and stress testing help financial institutions prepare for potential shocks.
“The success of any policy framework is ultimately measured by its implementation and its impact on people’s lives,” the Governor remarked.
He said participants will exchange experiences over the coming days on operationalizing green finance, supporting climate-smart agriculture, and addressing implementation challenges, including gender-related barriers.
He thanked AFI for its partnership and expressed hope that the program would foster stronger peer networks and continued knowledge exchange across jurisdictions.
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 in showcasing innovative country experiences and disseminating good practices in inclusive and sustainable green finance. Melgaard appreciated the platform created by SBP and AFI for peer learning and collaboration.
The joint learning program reflects SBP’s commitment to promoting inclusive and sustainable finance through practical policy implementation and international cooperation.