Karachi: WWF-Pakistan and the State Bank of Pakistan have introduced the SME Green Transition Toolkit for the Textile Sector, aimed at aiding financial institutions in supporting textile businesses to adopt cleaner and more resource-efficient operations. The initiative seeks to align the sector with evolving global environmental standards and enhance its competitiveness.
According to WWF-Pakistan, the toolkit, developed in collaboration with the State Bank's SME, Housing & Sustainable Finance Department, offers banks a practical application of the Pakistan Green Taxonomy (PGT). It assists in assessing Weighted Average Carbon Intensity and Specific Energy Consumption and identifies potential green interventions like solar energy and waste heat recovery. An Excel-based tool accompanies the guide to develop viable financing plans.
Deputy Governor of the State Bank of Pakistan, Mr. Saleem Ullah, emphasized the significance of the textile sector, which contributes 8.5% to GDP and employs 40% of the labor force. The toolkit is seen as vital for maintaining competitiveness by enhancing energy efficiency and reducing water use. Mr. Saleem Ullah noted that the toolkit provides a practical approach for linking environmental improvements with business competitiveness.
Director General of WWF-Pakistan, Hammad Naqi Khan, highlighted the partnership's success and expressed intentions to explore a Green Textile Transition Finance Facility with SBP and other partners. This facility would use concessional credit and risk-sharing to convert the Pakistan Green Taxonomy into actionable loans for SMEs.
The toolkit introduces a common methodology for taxonomy-aligned assessments in textile-sector lending, aiming to bolster international competitiveness while supporting broader sustainable finance goals. The launch event included government, financial, and development sector representatives and featured a technical walkthrough of the toolkit. Banks are expected to start piloting the toolkit with textile clients, with further training planned for broader adoption.