Sustainable Fitch praises Pakistan's green financing model

Sustainable Fitch has issued a Second-Party Opinion (SPO) on Pakistan’s sustainable financing framework, rating it as “excellent” and fully aligned with major international standards for green and social financing.

According to Sustainable Fitch, Pakistan’s framework meets the criteria set out by the International Capital Market Association’s (ICMA) Green Bond Principles, Social Bond Principles, and Sustainability Bond Guidelines.

The framework governs the issuance of the country’s sustainability bonds and loans, designed to fund or refinance projects across nine green categories—including renewable energy, energy efficiency, clean transportation, and climate change adaptation—and six social categories such as affordable housing and basic infrastructure.

Sustainable Fitch noted that many of the green projects show clear environmental benefits and are aligned with global taxonomies. The social initiatives are expected to target vulnerable communities, based on Pakistan’s national multidimensional poverty index.

With a population of 236 million by the end of 2024, Pakistan’s economy reached a GDP of $338 billion, growing by 2.52% in the fiscal year ending June 2024. The country’s economy is primarily service-driven, followed by agriculture and industry.

Climate change remains a key threat, with the framework’s climate adaptation plans expected to build resilience—particularly in the Indus River Basin, which supports 90% of the population and irrigates 80% of the country’s farmland.

Sustainable Fitch also expects that investments in renewable energy, efficiency, and clean transport will help Pakistan meet its nationally determined contribution goals. These include a 15% reduction in emissions by 2030 from 2015 levels, with a further 35% reduction dependent on international support.

Sustainable Fitch provides global assessments of environmental, social, and governance performance across all asset classes. Its SPOs and ratings aim to support informed financial decision-making and sustainable investment strategies.