Fair Finance Asia II - Sida - Pakistan The Fair Finance Asia Program (FFA) envisages to reduce the negative impact of national and cross-border bank investments in Asia on human rights, the environment and climate change, and to increase adequate financial services for pro-poor, inclusive economic development. The goal is to establish a sustainable financial sector in Asia, with financial sector institutions operating at national and regional level being more transparent and accountable and adhering to Economic, Social and Governance (ESG)-criteria. FFA is funded by Sida.

Established in 2021, the Fair Finance Pakistan is a Coalition of 16 civil society organisations with expertise in finance, advocacy, and research, mostly based in urban areas with an easy accessibility to financial institutions. Fair Finance Pakistanthrough its campaigning and advocacy efforts has mobilized citizens, predominantly through digital spaces, to advocate for positivechange for marginalized communities, particularly those who have incurred environmental degradation due to for example coal mines. During the first two years, FFP’s main focus remained on media and policy circles where a full digital campaign was launched to engage policy makers. Private sector engagement was another success for FFP where a JointCommunique was signed with the Rawalpindi Chamber of Commerce and Industry (RCCI) during a FinTech Conference, and which was later tabled to the Prime Minister of Pakistan.

In Pakistan, this project is led by Indus Consortium (IC), which envisions a democratic and equitable society where all citizens enjoy equal economic, cultural and political rights. Indus Consortium works for local communities to enhance their resilience and participation in development.

Building on its work with the financial sector, Fair Finance Pakistan sees three major opportunities for phase 2. These are:

1. The current Green Banking Guidelines issued by the State Bank of Pakistan have two major gaps, a.  these are voluntarily guidelines and do not mandate the banks to implement b. no mechanism is defined to ensure the guidelines are inbuilt within the banking system and translate into banks’ reporting system on ESG. There is a greater need to move towards compliance. Here, we see an opportunity to capacitate the Regulator State Bank of Pakistan through knowledge brokering to make following the Green Banking Guidelines a mandatory policy for commercial banks with strong enforcement, especially for project financing and promote Pakistan’s transition towards a just and climate-resilient economy. There is another untapped opportunity to work with the State Bank of Pakistan to revise the social and governance framework in the ESG criteria and ensure its compliance at the strategic, portfolio and transaction level.
2. Actionon State Bank of Pakistan’s Banking on Equality Policy where the Regulator has attempted to bind the banking sector to bring gender equality within their operations and investment level and which is aimed at reducing the gender gap in financial inclusion, is missing.  Fair Finance Pakistan sees great potential to work with the Regulator to expand the policy as an action plan, with mandatory compliance to the principles contained within, and key milestones outlined for all banks.
3. Current Chinese investments in Pakistan under the One Belt One Road initiative provides viable opportunity to review, assess and analyse these investments with the lens of human rights, country’s capacity to repay the debt and potential environmental risks. This knowledge will feedinto knowledge for national institutions to relook their business models.

For Phase 2, Fair Finance Pakistan will be focusing on the following areas:
• Continue existing work to integrate ESG at strategic, portfolio and transaction level with commercial banks ofPakistan.
• Continue advocacy for inclusive financing to ensure that State Bank’s Equality Policy translates into action by commercial banks in Pakistan.
• FFP will capacitate coalition members and external stakeholders, State Bank ofPakistan, the Securities <(>&<)> Exchange Commission of Pakistan in the areas of Taxonomy, ESG, Inclusive Financing, and broader debate of Fossil Fuel.
• Campaign for increased awareness and amplify citizens‘ voice