KARACHI, Pakistan — WWF-Pakistan and the State Bank of Pakistan (SBP) have introduced a new financing toolkit to help banks support small and medium-sized textile enterprises (SMEs) in adopting environmentally sustainable production practices.
Developed by WWF-Pakistan in collaboration with SBP’s SME, Housing & Sustainable Finance Department, the SME Green Transition Toolkit translates the Pakistan Green Taxonomy (PGT) into a practical framework for evaluating textile businesses and identifying suitable financing opportunities.
The resource enables financial institutions to assess weighted average carbon intensity (WACI) and specific energy consumption (SEC), while identifying potential investments in solar power, waste heat recovery and cleaner fuels. An accompanying Excel-based tool is designed to help banks develop financing plans tailored to businesses’ transition requirements.
Speaking at the launch, SBP Deputy Governor Saleem Ullah highlighted the importance of textile SMEs to Pakistan’s export economy and wider manufacturing supply chains. He noted that improvements in energy efficiency, water conservation and cleaner production could help businesses reduce operating costs, strengthen financial resilience and maintain access to international markets.
“For banks, whose largest sectoral exposure is textile, this green transition is key to safeguarding portfolio quality”, Saleem Ullah said and added that the SME Green Transition Toolkit offers a practical starting point for linking these environmental improvements with business competitiveness and viable financing opportunities”.
WWF-Pakistan Director General Hammad Naqi Khan described the initiative as a collaborative effort demonstrating the potential of partnerships between financial regulators and environmental organisations.
“Our next step is to move from framework to financing: with SBP, banks and development partners, we will explore a Green Textile Transition Finance Facility, using concessional credit and risk-sharing to turn the Pakistan Green Taxonomy into real loans for textile SMEs and reaching upstream to sustainable cotton,” he added.
Banks to Pilot Textile Green Transition Framework
The toolkit establishes a common methodology for financial institutions to incorporate taxonomy-aligned environmental assessments into lending decisions. By connecting sustainability improvements with accessible financing options, the initiative aims to strengthen the international competitiveness of Pakistan’s textile industry.
The launch brought together government officials, financial institutions and development partners, alongside a technical demonstration of the framework. Banks are expected to pilot the toolkit with textile clients, supported by further guidance and training to encourage wider adoption.
The initiative marks a practical step towards accelerating textile green transition efforts by helping SMEs identify environmental improvements and access financing to implement them.
