Minimum Social Safeguards (MSS) ensure that the eligible activity or project do not cause social harm, with the criteria applied at the entity level. In the PGT, MSS are designed to ensure that entities aiming to demonstrate Taxonomy alignment of economic activities adhere to a minimum set of social norms. This is achieved through the assessment of social risks and ensuring compliance with social safeguards such as labour rights, community impacts, and other human rights considerations in project assessments.
The MSS criteria of the Taxonomy necessitate compliance with Pakistan’s laws and regulations, as well as certain international standards that are widely recognized by the global capital markets. The following criteria support adherence to each of the safeguards associated with various social pillars deemed relevant when conducting a social risk analysis. It is recommended that projects validate and monitor these criteria throughout the implementation phase. Depending on the project’s scale, these criteria should be supplemented with additional impact analysis. For instance, large-scale projects may require enhanced safeguards for communities and ethnic groups through consultation frameworks and participatory mechanisms to ensure effective participation and impact mitigation. Compliance with MSS is mandatory for all projects seeking alignment with the Pakistan Green Taxonomy.
The following table provides guidance on:
Entities are required to ensure the enforcement of mandatory human rights due diligence and impact assessments at every stage of project design, implementation, and evaluation. This is to ensure that all investments align with international human rights standards and do not exacerbate inequalities or social harms.
| Social core pillars | Criteria | Relevant National and International Operational and Human Rights Standards or Regulations (non exhaustive list) |
Example of Key Performance Indicators (KPI) (Non-exhaustive list based on: ESRM by SBP, SECP ESG disclosure guidelines, Basel Principles, SASB, IFRS – GRI) |
|---|---|---|---|
| Good corporate governance | • The entity responsible for development of the project or activity has a corporate governance policy, that includes environmental and social aspects. |
• Companies Act, 2017 • Securities Act, 2015 • Listed companies (Code of Corporate Governance) Regulations, 2019 • Guidelines on Environmental, Social and Governance Disclosures for Listed Companies, 2023 developed by SECP (Social category: global health & safety) • Annexes A, D, and E of the Environmental and Social Risk Management Implementation Manual developed by the State Bank of Pakistan. • Environmental and Social Due Diligence Risk Assessment Tool developed by SBP • Public Sector Companies (Corporate Governance) Rules, 2013 • Pakistan Stock Exchange Listing Rules • IFC Performance Standard 1: Assessment and Management of Environmental and Social Risks and Impacts. • OECD Principles of Corporate Governance • International Financial Reporting Standards • Basel III Banking Regulations |
• Does the entity have a robust/ or adequate Environmental and Social Management system? • Does the entity have policies for climate and social risk assessment? • Number of legal issues associated with the entity’s E&S performance • Number of operations that local stakeholder grievances, media coverage, or nongovernmental organizations campaigns have affected over environmental and social (E&S) issues • Does the entity publish a sustainability report? • Does the entity provide sustainability data in line with any sustainability reporting frameworks? Key SDG Targets: • SDG 16: 16.6 Develop effective, accountable and transparent institutions at all levels. • SDG 16: 16.7 Ensure responsive, inclusive, participatory and representative decision-making at all levels |
| Occupational health & safety |
• The entity responsible for developing the project or activity has a workplace health and safety policy and reports on work-related illnesses and injuries • The entity responsible for developing the project or activity does not have any occupational health and safety concern or have mitigated them adequately. |
• Occupational Safety and Health Code of Practice for the Construction Sector of Pakistan (OSH-CSP-2024), which is based on the ILO Code of Practice. • Safety and Health in Construction - 2022 • Annexes A, D, and E of the Environmental and Social Risk Management Implementation Manual developed by the State Bank of Pakistan. • Environmental and Social Due Diligence Risk Assessment Tool developed by SBP • Guidelines on ESG Disclosures for Listed Companies, 2023 developed by SECP (Social category: global health and safety) |
• Does the entity follow an occupational health or global health & safety policy? • Description of efforts to assess, monitor, and reduce exposure of employees and contract workers to long-term (chronic) health risks • Hazard identification, risk assessment, and incident identification; occupational health services; employee participation; Workers training on occupational health and safety; Promotion of employees health; Prevention and mitigation of occupational health and safety impacts, directly linked to the company through its business relationships; Worker covered by occupational health and safety management system; employees protected against work-related injuries and ill health. • Percentage of frequency of injury events relative to total workforce time Key SDG Targets: • SDG 3.9 Mortality from environmental pollution: Reduce the number of deaths and illnesses from hazardous chemicals and air, water and soil pollution and contamination • SDG 8.8 Protect labour rights and promote safe and secure working environments of all employees, including migrant workers, particularly women migrants, and those in precarious. |
| Labour and working conditions |
• The entity responsible for developing a project or activity provides fair and responsible remuneration to all its employees and reports on labour practices, including for people employed under collective agreements |
• The Industrial Relations Act, 2012 • International Labour Organization (ILO) Convention 107 (1957) (ratified by Pakistan) • ILO Convention 100 (Equal Remuneration) – Ratified in 2001 • C087 - Freedom of Association and Protection of the Right to Organize Convention, 1948 (No. 87) • C011 - Right of Association (Agriculture) Convention, 1921 (No. 11) • Annex A, D, and E of the Environmental and Social Risk Management Implementation Manual developed by the State Bank of Pakistan. • Environmental and Social Due Diligence (ESDD) Risk Assessment Tool developed by SBP • Guidelines on ESG Disclosures for Listed Companies, 2023 developed by SECP (Social category: Employee Turnover) • IFC Performance Standard 2: Labour and working conditions |
• Number of legal challenges or episodes of labour unrest or negative media coverage or protest from activist for poor working conditions. • Description of how the entity manages freedom of association and collective bargaining. • Description of how the entity manages labour/management relations in compliance with key national and international human rights conventions or standards. Key SDG Targets: • SDG 8.8 Protect labour rights and promote safe and secure working environments of all workers, including migrant workers, particularly women migrants, and those in precarious. |
| Community engagement |
• The entity responsible for developing a project or activity has a community engagement strategy, that has been developed in consultation with the local community, and has established processes to manage risks and opportunities associated with community rights and interests including community health and safety. • There is no evidence of issues that may create nuisance/accidents/injuries to the local community with the project that cannot be mitigated. • All projects or activities are community-centered and context-specific, championing community-led, local solutions and needs. • All economic activities include transfer of technology and knowledge to local communities and relevant stakeholders wherever applicable. • The entity responsible for developing the project or activity must ensure formal Civil Society Organization engagement mechanisms to align investment strategies with community needs and strengthen governance, accountability, transparency, and decision-making, when applicable. |
• Annex A, D, and E of the Environmental and Social Risk Management Implementation Manual developed by the State Bank of Pakistan. • Environmental and Social Due Diligence Risk Assessment Tool developed by SBP • UN Convention on Civil and Political Rights and UN Convention on Economic, Social and Cultural Rights (ratified by Pakistan) • IFC Performance Standard 4: Community health, safety, and security • Environmental Impact Assessments require public hearings before large-scale development projects are approved. |
• Percentage of operations with implemented local community engagement, impact assessments, and/or development programs. • Percentage of operations with significant actual and potential negative impacts on local communities. • Description of how stakeholders, including the local community, are consulted or engaged on all relevant issues (such as rehabilitation, compensation, and their expectations, as the case may be) Key SDG Targets: • SDG 11.a Support positive economic, social and environmental links between urban, peri-urban and rural areas by strengthening national and regional development planning. |
| Indigenous and Tribal Communities | • The entity responsible for developing a project or activity shall conduct due diligence and implement community engagement processes such as Free, Prior and Informed Consent (FPIC), or equivalent process for Indigenous People, marginalized groups, and affected local communities, before any development projects are approved and implemented, if applicable (e.g., for aspects such as human rights, indigenous rights, operation in areas of conflict). |
• C107 - Indigenous and Tribal Populations Convention, 1957 (No. 107) (ratified by Pakistan) • Annex A, D, and E of the Environmental and Social Risk Management Implementation Manual developed by the State Bank of Pakistan. • Environmental and Social Due Diligence Risk Assessment Tool developed by SBP • Free, Prior, and Informed Consent: FPIC is a specific right for Indigenous Peoples as recognized in the United Nations Declaration on the Rights of Indigenous Peoples. Applicable to projects that may affect local communities. • United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) – 2007 • Convention on Biological Diversity – 1992 (Pakistan is a party to this convention) • UN Convention on Civil and Political Rights and UN Convention on Economic, Social and Cultural Rights (ratified by Pakistan) • IFC Performance Standard 7: Indigenous peoples |
• Percentage of (1) proved and (2) probable reserves in or near indigenous land. • Evidence that the project/activity developers consults/engages with the stakeholders including indigenous people on all relevant issues (such as rehabilitation, compensation, their expectations as the case may be) • Number of signed binding agreements specifying commitments, rights and benefits with the Indigenous and Tribal Communities. • Number of mechanisms for the community to supervise the execution of the agreement. • Number of penalties for Free, Prior, and Informed Consent Failure. Key SDG Targets: • SDG 11.4: Strengthen efforts to protect and safeguard the world’s cultural and natural heritage |
| Gender equality | • The entity responsible for developing a project or activity has designed, implemented and communicated a diversity policy to promote gender inclusion at all employee levels and that is applied to all projects that the entity develops. |
• The Workmen's Compensation Act, 1923 • Convention on the Elimination of All Forms of Discrimination Against Women– 1996 • C018 - Workmen's Compensation (Occupational Diseases) Convention, 1925 (No. 18) • C019 - Equality of Treatment (Accident Compensation) Convention, 1925 (No. 19) • C118 - Equality of Treatment (Social Security) Convention, 1962 (No. 118) • Articles 25, 34 and 37 of the Constitution of Pakistan • National Commission on the Status of Women– 2000 • Women Protection Act – 2006 • Protection Against Harassment of Women at Workplace Act – 2010 • A, D, and E of the Environmental and Social Risk Management Implementation Manual developed by the State Bank of Pakistan. • Guidelines on ESG Disclosures for Listed Companies, 2023 developed by SECP (Social category: Gender Diversity) |
• Percentage Total enterprise headcount held by men and women • Percentage of women in project leadership roles (e.g., managers, decision-makers). • Percentage of women in project workforce (compared to men). • Percentage of women-led businesses or organizations involved in the project. • Percentage of women and marginalized gender groups consulted during project planning. Key SDG Targets: • SDG 5: Achieve gender equality and empower all women and girls. |
| Land acquisition & involuntary resettlement |
• The entity responsible for developing the project or activity must ensure that projects do not displace of vulnerable communities • The entity responsible for developing a project or activity ensures the establishment of consultation and grievance mechanisms for ensuring citizen participation, conflict resolution, and accountability. • If the project requires total or partial resettlement of populations, the entity has a resettlement plan that addresses community needs and complies with national and international legal frameworks, providing compensation to affected people for loss of assets at full replacement cost. |
• Land Acquisition Act, 1894 (LAA 1894) • Punjab Land Revenue Act, 1967 • Sindh Revenue Act, 1967 • Balochistan Revenue Act, 1967 • Khyber Pakhtunkhwa Revenue Act, 1967 • National Resettlement Policy (Draft, 2002) (Not yet fully adopted) • Pakistan Environmental Protection Act, 1997 environmental impact assessment for large projects • Annex A, D, and E of the Environmental and Social Risk Management Implementation Manual developed by the State Bank of Pakistan. • Performance Standard 5: Land acquisition and involuntary resettlement • World Bank Operational Policy4.12 – Involuntary Resettlement • UN Basic Principles on Evictions (2007) |
• Percentage of land acquisitions completed in accordance with national laws and international standards • Percentage of land acquisitions that involved meaningful consultation with affected communities. • Percentage of people who were able to continue their traditional land use or cultural practices. • Number of disputes or grievances raised and resolved related to land acquisition. • Percentage of land acquisitions conducted through voluntary agreements versus involuntary resettlement. • Percentage of displaced persons who received alternative land or housing of equal or better value. • Satisfaction levels of affected communities regarding compensation and resettlement. Key SDG Targets: • SDG 1.4.2 – Proportion of total adult population with secure land tenure rights. • SDG 5.a.1 – Proportion of total agricultural population with ownership or rights over agricultural land, by sex. • SDG 5.a.2 – Legal frameworks to protect women’s land rights |
| Cultural heritage protection |
• The entity responsible for a development of a project or activity ensures that the project does not affect cultural heritage sites. If applicable conduct a cultural heritage impact assessment is conducted. There are special exclusions for World Heritage Sites that UNESCO has designated. • If the project involves use of knowledge, innovations or practices of local communities for commercial purposes, it shall conduct a consultation process with such communities, document it and ensure fair and equitable sharing of benefits from commercialization. |
• Annex A, D, and E of the Environmental and Social Risk Management Implementation Manual developed by the State Bank of Pakistan. • Antiquities Act, 1975 (Main Law for Cultural Heritage Protection) • The Punjab Heritage Act, 2005 • The Sindh Cultural Heritage (Preservation) Act, 1994 • Khyber Pakhtunkhwa Antiquities Act, 2016 • Gilgit-Baltistan Antiquities Act, 2016 • UNESCO 1972 World Heritage Convention • UNESCO 2003 Convention for the Safeguarding of Intangible Cultural Heritage • IFC Performance Standard 8: Cultural heritage |
• Percentage of projects conducting cultural heritage impact assessments (CHIA) before development. • Percentage of cultural heritage sites legally designated and protected in the project area. • Percentage of identified heritage sites that have received conservation measures. Key SDG Targets: • SDG 11.4: Strengthen efforts to protect and safeguard the world’s cultural and natural heritage. |
| Non-discrimination, diversity & equal opportunity | • The entity responsible for the development of a project or activity has implemented and communicated a diversity policy to ensure that every employee is treated equally and has equal opportunities without discrimination. | • C111 - Discrimination (Employment and Occupation) Convention, 1958 (No. 111) |
• Number of formal non-discrimination and equal opportunity policies in the entity. • Percentage of leadership/executive positions held by diverse groups. • Percentage of projects within the company complying with national and international non-discrimination laws • Number of complaints related to workplace discrimination and their resolution rate • Percentage of employees with disabilities hired in the entity/project. Key SDG Targets: • SDG 16.b. Promote and enforce non-discriminatory laws and policies for sustainable development. |
| Modern Slavery (forced labour, bonded labour, child labour, human trafficking, and domestic servitude) | • The entity responsible for the development of a project or activity must report on the risks of modern slavery in its operations and supply chains including reporting on entities directly owned and entities owned or controlled by those entities. The entity must have an anti-slavery policy for all of its operations. |
• Guidelines on Environmental, Social And Governance Disclosures for Listed Companies, 2023 developed by SECP (Social category: Child & Forced Labor) • C182 - Worst Forms of Child Labour Convention, 1999 (No. 182) • Article 11, 37 of the Constitution of Pakistan • Bonded Labour System (Abolition) Act, 1992 • Prevention of Trafficking in Persons Act, 2018 • Employment of Children Act, 1991 • Punjab Prohibition of Child Labor at Brick Kilns Act, 2016 • C029 - Forced Labour Convention, 1930 (No. 29) • C105 - Abolition of Forced Labour Convention, 1957 (No. 105) • C138 - Minimum Age, 1973 (No. 105) |
• Percentage of suppliers and contractors complying with anti-slavery laws. • Number of labour rights violations reported and addressed (e.g., unpaid wages, passport confiscation, restricted movement) • Percentage of workers below legal working age in project operations or supply chains. Key SDG Targets: • SDG 8.7. Take immediate and effective action to eradicate forced labour, end modern slavery and human trafficking and secure the prohibition and elimination of the worst forms of child labour, including recruitment and use of child soldiers, and by 2025 end child labour in all its forms. |