Karachi: Pakistan Stock Exchange Limited (PSX) has introduced a Concept Paper on the PSX Sustainability Index (PSI), a proposed benchmark aimed at assessing the performance of listed companies that incorporate environmental, social, and governance (ESG) risks and opportunities into their business strategies. According to Pakistan Stock Exchange Limited, the PSI is intended to serve as a tool for recognizing companies that not only succeed in the present but also build resilience for future performance.

Farrukh Sabzwari, Chief Executive Officer of PSX, highlighted the growing importance of ESG in capital markets, noting that it is central to company valuation, capital allocation, and risk pricing. The PSX Sustainability Index seeks to provide a credible and transparent benchmark for identifying companies that adhere to sustainable business practices.

The PSI is structured as a total-return performance benchmark, utilizing a materiality-adjusted scoring system across ESG pillars. It incorporates sector-specific factor weights to ensure companies are evaluated based on financially relevant risks and opportunities specific to their industries.

The proposed index is significant for listed companies aiming for recognition and access to responsible capital, asset managers and institutional investors developing ESG-aligned products, and investors interested in companies with sustainable models. PSX emphasizes the importance of broad market consultation to develop an index that reflects Pakistan's corporate landscape and supports sustainable growth across all sectors.

Stakeholders are encouraged to submit comments by July 17, 2026, via email. The Concept Paper is accessible on the PSX website.