LocationsSocially Responsible Investing in Pakistan
By Obaid Rehman | AGM - Marketing & Communications Pakistan Stock Exchange
The PKR 30 billion Sovereign Domestic Green Sukuk by the Government, listed on the Pakistan Stock Exchange, was oversubscribed 5.4 times, reflecting strong investor confidence in sustainable development.
The sun sets over Karachi’s Empress Market, painting the sky in hues of orange and pink. Sahar, a 58-year-old school teacher, navigates the bustling stalls where vendors shout over piles of mangoes and children dart with kites. A young girl at a spice cart counts change confidently, reminding Sahar of her childhood selling bangles to support her family. Now, with a decent investment portfolio, she dreams of a Pakistan where this girl owns a shop, where villages shine with solar light, and markets hum without fear of floods. Responsible investing, Sahar learns, can turn her dreams into reality—growing her savings while nurturing the environment, uplifting communities, and championing ethical businesses. Through environmental, social and governance (ESG) principles, Sahar joins a movement that is crafting a brighter Pakistan, with the Pakistan Stock Exchange (PSX) as its canvas.
In her classroom, Sahar hears tales of loss—the floods in Sindh destroyed a student’s family farm, echoing Pakistan’s fifth rank on the Global Climate Risk Index. Determined to act, she aims to invest in renewable energy companies that aim to bring solar panels to rural and urban homes. On a visit to her village, she met Hameed, a farmer whose solar-powered pump, funded by a solar startup company, saved his wheat crop. “These solar panels gave us hope,” he said, his eyes gleaming. The government’s goal of 60 percent clean energy and reducing emissions by 15 percent, according to the Paris Agreement till 2030, fuels Sahar’s optimism, though only 1.3 percent of bank loans to private sector currently back renewable energy projects. The State Bank of Pakistan is pushing change with Green Banking Guidelines, ensuring banks prioritize eco-friendly projects over projects like coal plants. Sahar’s investments support climate-smart farming initiatives, helping farmers like Hameed sow seeds for a greener tomorrow.
Sahar’s students inspire her social mission. She sees girls like her niece, Amna who drop out to work, reflecting Pakistan’s Gender Gap, as it ranks 148 out of 148 countries. The Labor Force Survey 2020-21 showed that female participation stood at 15.5 percent. With 22 million children aged 5 to 16 out-of-school, as per UNICEF Pakistan Report 2023. Education is a fight worth winning. Sahar also learns about startups like Sehat Kahani, connecting rural women to doctors via mobile apps. Her neighbor, Rubina, a nurse, now earns extra through Sehat Kahani, saving for her son’s textbooks. “I feel like I’m building his future,” Rubina shared over tea. Microfinance firms, serving over 8 million borrowers, offer loans for schooling and solar stoves, empowering women like Sahar’s cousin, Sana, who opened a tailoring shop in Lahore with a loan from a Microfinance bank. Sahar’s portfolio and investors who support sustainable investment open doors for students like Amna.
Trust is Sahar’s foundation, but gender diversity is a challenge. Out of the registered directors in the databank of the Pakistan Institute of Corporate Governance, only 893 females, representing 15.5 percent, are registered as independent directors. This is despite the Securities and Exchange Commission of Pakistan (SECP) mandating at least one female director on each board since 2020. Corruption, with Pakistan at 135 out of 180 on Transparency International’s 2024 rankings, troubles her, yet hope rises. During an initial public offering listing event at the trading hall of PSX, an investor praised transparent audits, a sign of progress. SECP’s revised Corporate Governance Code tightens rules, and PSX’s ESG reporting push, backed by listed companies, reassures Sahar her investments are ethical.
PSX is the storyteller of this transformation. Its ESG Task Force helps businesses share sustainability efforts, guided by SECP’s ESG Reporting Guidelines. As a member of the UN Sustainable Stock Exchanges Initiative, PSX sets a global standard. Her heart leaps at the news that the Government of Pakistan has launched its first domestic Green Sukuk, set to raise PKR 30 billion for climate-friendly projects under the Sustainable Investment Sukuk Framework. Later, when she learned that the PKR 31.99 billion Sovereign Domestic Green Sukuk, listed on the Pakistan Stock Exchange, was oversubscribed 5.4 times, reflecting strong investor confidence in sustainable development, she felt overjoyed because she knew that there were many others like her who are taking sustainability very seriously. Sahar imagines building dams, hydropower energy fueling markets, and flood-safe schools. Her savings, with Government of Pakistan’s vision and investors’ support, is fueling a green wave.
Meanwhile, communities are writing their chapters. Many companies listed at PSX have now started publishing ESG reports and providing gender diversity and pay gap numbers. Startups like Oraan are also empowering women with financial tools. Sahar’s friend, Noor, a teacher, uses Oraan to save for her daughter’s college, and her smile is radiant. Telenor Pakistan connects rural villages, boosting local businesses through initiatives like the Broadband for Sustainable Development program, the Khushaal Watan platform, and the Khushaal Aangan service. Universities spark ESG ideas, and a pandemic-era tree-planting project gave jobs to youth in Sahar’s neighborhood. The National Electric Power Regulatory Authority’s net metering policy powers homes with solar and climate finance units in Sindh and Punjab, inspiring Sahar’s dream of sustainable cities.
However, challenges still linger. Due to loose oversight, some firms may overhype ESG efforts, a trick called greenwashing. Carbon markets for forestry lag and economic turbulence with a wavering currency test investor confidence. But Sahar sees these as stepping stones. Stronger rules, a budding carbon market and financial commitment are on the horizon. Her investments are threads in a vibrant tapestry, weaving a hopeful Pakistan.
Sahar’s savings grow, but her true joy is her students’ dreams—a Pakistan of clean energy, open schools, gender diversity and trusted markets. Responsible investing is her quill, and PSX calls every Pakistani to join the tale. From Karachi’s markets to Punjab’s fields, a sustainable future is rising. Join Sahar, pick up your pen, and let’s write a prosperous Pakistan through responsible green investments, one step at a time.