Risk mitigation policies of banks ‘lack transparency’

The policies of Pakistani commercial banks regarding the environment, social and governance (ESG) risk mitigation lack transparency and lack a tangible action plan, according to Fair Finance Pakistan. In a press release, the Pakistan chapter of Fair Finance International (FFI) — a civil society coalition campaigning for responsible banking practice — said financial institutions “are evolving” to meet ESG challenges, but their policies “remain silent on the scope and measures” to limit related risks based on the standards defined by the Fair Finance Guide International (FFGI) methodology. “Pakistani commercial banks have gaps in content and scope of policy commitments in their internal operations and the companies they invest in or finance,” the press release added. It is said that financial institutions must make their policies and due diligence protocols public for the sake of transparency.