ISLAMABAD: Deputy Governor of the State Bank of Pakistan (SBP) Saleem Ullah has said Pakistan will require a huge financing to cut greenhouse gas emissions by 2035, an amount beyond its capacity without support from multilateral and bilateral partners.
He made these remarks while addressing the Breathe Pakistan International Climate Change Conference 2026, organised by a media group.
He noted that even though Pakistan contributes less than one percent to global greenhouse gas (GHG) emissions, it has committed to reducing its emissions by 50 percent by 2035.
He added that achieving this target would require huge funds in financing. “This is a huge amount, and the overall plan for mobilising these funds is still largely missing,” he observed. He stressed the need for a comprehensive, consultative plan involving all relevant stakeholders, including banks, financial institutions, international donors, and other multilateral and bilateral partners.
Saleem Ullah said the central bank is ensuring that banks and financial institutions understand this huge risk and challenge. He said the central bank is working to ascertain how much financing it could generate from the domestic market and other indigenous resources, and how much it requires from donor agencies like the World Bank, Asian Development Bank, Asian Infrastructure Investment Bank, and Islamic Development Bank, etc. He said for this consultative plan with local financial institutions and international donor agencies should be in place.
He said Pakistan is among the world’s most climate-vulnerable countries with very limited financial resources to cope with this existential challenge, and it is not an isolated environmental issue. Saleem Ullah said it is a cross-cutting national emergency that cuts across every sector of the economy and society. The recurring floods, droughts, and extreme weather conditions are having very strong and huge implications on the agriculture sector, on water resources, and on infrastructure. The deputy governor said heat waves are intensifying with temperatures exceeding 50 degrees in some regions and cities; it is no longer a rare event, it is becoming an emerging norm.
He said the 2022 floods displaced over 33 million people and caused direct losses of more than USD 15 billion, and if the indirect losses were included, they exceeded USD 28 billion. He further said that even the losses in 2025, though they remained relatively contained, also displaced millions of people and caused huge disturbance and misery to the citizenry. He said the climate risk is projected to cause annual losses of 18 to 20 percent of GDP by 2050 if we don’t build resilience and capacity to cope with these challenges. Given these challenges, you could see there is a lack of concern towards this existential risk.
The deputy governor said that to overcome the challenges of climate change, the central bank has been taking initiatives of for the last 10 years. He said the SBP journey started in 2017 when it issued the Green Banking Guidelines. In 2022, it developed the Environmental and Social Risk Management Framework in collaboration with IFC.
The most important initiative we started in 2023 and completed in 2025 is the development of the Pakistan Green Taxonomy. The taxonomy provides scientifically approved benchmarks to identify which projects are green, in transition, or red, preventing greenwashing. By 2024, globally, overall green financing will have surpassed USD 2 trillion.
He said the central bank already launched green bonds in the domestic market. Now, as a next step, the SBP is kickstarting a pilot programme by the 15th of this month with six selected banks to adopt and implement this strategy. He hoped that within 6 months, the central bank would complete the pilot, identifying data gaps and developing templates for all banks to assess their portfolios. Of the 50 percent emission reduction commitment in our Nationally Determined Contributions NDCs, 17 percent is unconditional (using internal resources), while 33 percent is contingent upon grants and concessional funding from international partners.
Copyright Business Recorder, 2026
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