Pakistani Banks Ignore Climate Change and Human Rights When Lending Money

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Pakistani banks have poor policy commitments towards climate change, human rights, gender equality, and labor rights, and none discloses policies on nature and tax when lending money to businesses.

Senator Farhatullah Babar expressed these concerns at the launch event of the report “Benchmarking the sustainability policies of banks in Pakistan” by Fair Finance Pakistan.

The report probed policies of Habib Bank Limited (HBL), Allied Bank Limited (ABL), National Bank of Pakistan Limited (NBP), Meezan Bank Limited (MBL), and MCB Bank Limited (MCB) in areas including climate change, corruption, gender equality, human rights, labor rights, nature, arms, tax, transparency and accountability, and financial consumer protection.

Banks scored lowly in terms of financial consumer protection (4.62/10), corruption (3.18/10), gender equality (1.48/10), and transparency and accountability (1.08/10). The overall average score for the top five banks was less than one out of ten, indicating a lack of public policies on the majority of the sustainability benchmarks.

The top five commercial banks’ zero scores on nature and tax indicated that neither the regulator nor the banks cared about the benchmarks. Finance must be repurposed to meet society’s concerns, and efforts must be redoubled to ensure clean air, clean water, and a habitable earth for future generations, Fair Finance Pakistan Country Program Lead Asim Jaffry said while addressing the launch event.

The five banks received an average score of 0.5 for tackling climate change on a scale of 0 to 10, with zero being the least desired approach. These banks have not made any climate policy based on the Paris Agreement.

Additionally, no bank declared human rights policies on investment or funding. According to the survey, Pakistan’s top five commercial banks scored less than one out of ten on labor rights policies. Also, no bank in the survey has any public labor rights standards. Interstingly, HBL, MBL, ABL, MCB, and NBP all scored zero on nature and arms.

No bank shared details on how they were working towards equal participation and access to senior positions for women. None of them showed how they used a gender perspective in lending money.

Lastly, five banks displayed low tax policy commitments. HBL, MCB, ABL, and MBL have global operations but have not revealed any information on their profits, revenues, subsidies, or taxes overseas.

None of the banks specified transparency and accountability practices and scored a lowly 2/10. According to the survey, HBL, MBL, ABL, MCB, and NBP lacked risk control and came up short in terms of grievance mechanism documentation.

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