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Environmental Social Governance

Environmental, Social and Governance Scores from LSEG

PSX Primer on Environmental, Social and Governance (ESG) Reporting Guidance for Companies

ESG Primer Launch PSX Presentation

ESG – An Introduction

ESG stands for Environmental, Social, and Governance. While each of the three disciplines has its own set of standards and practices, together they indicate an organization’s dedication to achieving the greater good for the environment, society and the organisation itself. Investors, customers, employees, and other stakeholders are turning up the pressure on companies to reduce the environmental impact of their business and be more transparent about ESG reporting.

Today’s ESG programs look at business practices across the enterprise to ensure that what the business says in terms of following Environment, Social & Governance standards, it is actually doing so as well. There are important components within each ESG discipline:

Pakistan is ranked eighth on global climate vulnerability index. It is well acknowledged that major action is required from the developed countries, and this has been witnessed during the COP26 in Glasgow this year where the US and China have announced an agreement to ramp up their cooperative climate ambitions to commit themselves to net zero emissions.

Frontier states like Pakistan need to be not only playing a strong advocacy role in multilateral tracks but Pakistan’s industrial and financial sectors need to play a significant role to support initiatives to strengthen their national initiatives as well.

There is a need to promote ESG’s significance, relevance and benefits as a tool for attracting long term domestic and international capital flows as well as changing the quality of investment, better managing company activities to ensure the environmental friendliness, promoting social safeguards and company governance – all of which are mandated by PSX & Pakistan Institute of Corporate Governance (PICG). Pakistan presents a positive investment opportunity to capture this global investment in ESG. In terms of developing an ESG Index, the international established models can be replicated here in Pakistan.

Scope & Relevance

Pakistan is ranked eighth internationally for countries most impacted by Climate Change. It is expected to encounter a 1.4-3.7 degree Celsius temperature increase by 2060.

Moreover, Pakistan’s poverty rate increased to 31% by 2018. World Bank Report reflects that at least two-third of Pakistan’s population is made up of people from vulnerable groups like women, children and differently-abled people. Governmental departments and bodies are set in place to cater to such vulnerable social groups. Compliance with the project, regulations and guidelines of these key institutions is not only important for ESG reporting but the depth and scope of such initiatives is another indicator of how ESG concerns and policy have taken center stage in legislative effort as well.

ESG reporting is beneficial to the company in domains like:

Managing Business Risk

Securing Capital & Responsible Investment

Innovation and Business Development

Business Efficiency

Social license to operate

Increasing brand value and reputation

Environmental criteria focus on the company’s impact on the planet. In addition to climate-change initiatives, this category includes energy usage, pollution outputs, water management, and other environmental impacts.

  • Renewable fuels

  • Greenhouse gas (GHG) emissions

  • Energy efficiency

  • Climate risk

  • Water management

  • Recycling processes

  • Emergency preparedness

The social element of ESG focuses on the way the company treats people. It includes the relationships that organizations have with their workforces, the societies in which they operate, and the current political atmosphere including diversity, equity and inclusion, health and safety, labor management, data privacy, and community relations.

  • Health and safety

  • Working conditions

  • Employee benefits

  • Diversity and inclusion

  • Human rights

  • Impact on local communities

The governance aspect refers to a set of organizational practices, controls, and procedures used to make effective decisions, remain compliant, and meet stakeholder demands, including fraud, anti-bribery and corruption, security, financial performance, business ethics, and internal audit, as well as executive leadership and pay.

  • Ethical standards

  • Board diversity and governance

  • Stakeholder engagement

  • Shareholders rights

  • Pay for performance

ESG Taskfrce

The ESG Task force is an initiative led by Dr. Shamshad Akhtar and co-founded by Pakistan Stock Exchange and the Pakistan Institute of Corporate Governance under an MoU. The initiative is supported by KPMG Pakistan as lead Knowledge Partner.

The objective of the Task Force formed on ESG is to develop and launch a coherent, systematic and realistic framework backed by regulations and tools, instruments and incentives to encourage companies and financial institutions to voluntarily adopt ESG standards and guidelines.

Prime responsibility of ESG Task Force caters to

Building strong understanding of ESG and its merits while launching strong advocacy of ESG as an investment with high returns, increasing the quality of business outcomes, ensuring promotion of environment friendly frameworks, social practices and values and uplift the governance of corporates.

Adopting best practice ESG standards

Examining Pakistani companies that have embraced sustainability

Defining what is suitable and doable over short and medium term in integrating ESG

Members of ESG Task Force & Advisors

Core Group

Dr. Shamshad Akhtar


Pakistan Stock Exchange

Mr. Farrukh H. Khan


Pakistan Stock Exchange

Mr. Memosh Khawaja

President & CEO

Pakistan Institute of Corporate Governance

Mr. Rana Nadeem Akhtar


KPMG Pakistan

Ms. Raeda Latif

Head of Marketing and Business Development

Pakistan Stock Exchange

Dr. Fakhara Rizwan

Company Secretary and Head of Legal & Corporate Affairs

Pakistan Stock Exchange

Mr. Hassan Raza

Regional Head & Head of Product Management & Research.

Pakistan Stock Exchange

Dr. Mian Farooq Haq

Director, Infrastructure, Housing & SME Finance Department (IH & SMEFD)

State Bank of Pakistan

Mr. Aman Ghanchi

Executive Director Legal and Company Secretary


Mr. Assad Hameed Khan

CEO/Head of ACCA Pakistan


Ms. Ayla Majid

Head of Advisory Portfolio KMR Chartered Accountants


Dr. Abrar Saeed Chaudhury

Senior Partner


Dr. Sana Tauseef

Associate Professor & Chairperson

IBA Karachi

Mr. Faisal Rabbani

Chief Risk Officer

Bank Alfalah

Ms. Faryal Ahmad Faheem

Deputy CEO


Mr. Hussain Hassan Ali

General Manager Strategy and Business Development

Engro Pakistan

Ms. Laila Bhatia Bawany

GC, CS, Head of Corporate Communication, and Public Affairs - ICI Pakistan


Ms. Maheen Rahman



Mr. Mohammad Shoaib

Founding CEO of Al Meezan Investment Management Ltd


Mr. Mohammad Yaseen Arif


Mr. Mudassir Nabi

Chief Green Banking Officer


Brig Irfan Khan (Retd)

Company Secretary


Mr. Muhammad Tahir Hussain



Ms. Musarat Jabeen

Executive Director


Mr. Saleem Ullah

Executive Director

State Bank of Pakistan

Mr. Samar Abbas

Chief Marketing and Sales Officer


Ms. Shafaq Azim

Manager Advisory Services

Pakistan Institute of Corporate Governance

Mr. Shahzeb Irshad

VP Platform and Partnership

ESG Tree

Mr. Syed Imran Rizvi

Head of Corporate Affairs (Shares & Dividends)


Mr. Yousaf Hussain

President and CEO

Faysal Bank

Mr. Zahid Mubarik



Ms. Zohra Sarwar Khan

Joint Director


Technical Experts

Ali Farid Khwaja

Chair KASB Securities Oxford Frontier Capital

Salman Ahmed

Fidelity International

Cedric Rimaud



Engro Corporation

Bank Alfalah

Attock Refinery Limited

Indus Motor Company Limited

ICI Pakistan Limited

Fauji Fertilizer Company Limited

Fauji Fertilizer Company Limited


Engro Corporation

Bank Alfalah

Attock Refinery Limited

Indus Motor Company Limited

ICI Pakistan Limited

Fauji Fertilizer Company Limited

Fauji Fertilizer Company Limited