Pakistan Stock Exchange (PSX) has launched a public consultation on its proposed PSX Sustainability Index (PSI), a landmark initiative aimed at advancing sustainable finance and Environmental, Social, and Governance (ESG) practices in Pakistan’s capital markets.
PSX released a Concept Paper outlining the framework for the country’s first Sustainability Index, which is designed to identify and measure the performance of listed companies that effectively integrate financially material environmental, social, and governance risks and opportunities into their business strategies.
Speaking on the initiative, PSX Chief Executive Officer Farrukh Sabzwari said that ESG considerations have become increasingly central to capital markets worldwide, influencing company valuations, capital allocation, and long-term risk assessment.
“The PSX Sustainability Index represents our commitment to providing Pakistan’s capital markets with a credible, transparent, and internationally comparable benchmark that recognizes companies not only performing well today but also building resilience for the future,” he stated.
According to the Concept Paper, the PSI will function as a total-return performance benchmark using a rigorous, materiality-adjusted scoring methodology across Environmental, Social, and Governance pillars. The framework incorporates sector-specific weighting, ensuring companies are evaluated based on the sustainability risks and opportunities most relevant to their respective industries rather than a uniform set of criteria.
The proposed index is expected to benefit listed companies seeking greater recognition and access to responsible investment, while also providing asset managers, institutional investors, and market participants with a reliable benchmark for developing ESG-focused investment products.
PSX emphasized that broad stakeholder engagement is essential to ensure the index reflects the realities of Pakistan’s corporate sector, supports the current level of sustainability disclosures, and establishes a practical pathway for continuous improvement across industries.
The Exchange has invited stakeholders to submit written comments on the Concept Paper by July 17, 2026, as part of the consultation process before finalizing the country’s inaugural Sustainability Index.
