Pakistan is among the most climate-vulnerable countries. Consequently, its financial sector faces increasing exposure to physical and transition risks.
2. Recognizing the potential impact of climate change on financial sector's resilience and soundness, State Bank of Pakistan (SBP) is issuing the Regulatory Framework for Effective Management of Climate-related Financial Risks. The framework aims to ensure that Financial Institutions (FIs) effectively identify the climate risk drivers and integrate climate-related financial risk considerations into their governance, business strategy, and risk management frameworks.
3. All FIs shall ensure the compliance to the framework by June 30, 2029. For the purpose, FIs are required to submit, board-approved, time-bound implementation plans and targets to SBP by September 30, 2026. The implementation plans shall, at minimum, include the following, along with timelines:
- Establishment of governance structure;
- Development/updates of relevant policies, and procedures;
- Integration into existing risk management & stress testing frameworks;
- Capacity building of relevant staff including the board and senior management.
4. To ensure effective implementation of the framework, SBP will facilitate through trainings, awareness sessions, and other support measures.