ISLAMABAD: The government has urged the microfinance institutions (MFI) to integrate environmental, social, and governance (ESG) principles in their functions to help mitigate the impact of serious risks, including climate change.

With a gross loan portfolio of Rs546 billion, these institutions provide essential financial support to millions of citizens who are economically vulnerable.

These views were expressed by Prime Minister Coordinator on Climate Change and Environmental Coordination Romina Khurshid Alam on Tuesday during a workshop hosted by Zero Point Partners for Mobilink Bank in Islamabad.

She said that a significant portion of microfinance borrowers worl( in sectorshighly exposed to climate risks, such as agriculture and small-scale manufacturing.

`Integrating ESG practices can help MFIs assess and mitigate these risks, ensuring long-term viability for borrowers,` she added.

According to a statement, Ms Alam further said the integration of ESG practices can result in a triple win reducing risk, attracting investment, and driving innovation for long-term sustainability.

She highlighted that the Ministry of Climate Change is committed to sustainable development, balancing environmental protection with economic growth.

Initiatives like the National Climate Change Policy and National Adaptation Plan are aimed at reducing the environmental impact and building resilience, she added.