Page 12 - CMA Journal (Nov-Dec 2025)

Exclusive Interview

Third, climate considerations must be embedded in textiles its key export, even small carbon-related cost
corporate governance and board-level decision-making. increases could erode competitiveness in a highly
Climate risk is now a financial and strategic risk. price-sensitive sector.
International guidance, including OECD frameworks and
Pakistan is especially vulnerable due to structural issues:
the IFC’s progression matrix and climate tip sheets,
steadily rising industrial emissions driven by increased
provides boards with tools to integrate climate into
coal use, the often-overlooked problem of imported or
corporate purpose, strategy, risk management, and
“embedded” carbon in raw materials and intermediate
performance monitoring. The IFC guidance specifically
inputs. Together, these trends heighten Pakistan’s
helps boards identify, track, and respond to climate-related
exposure to future CBAM costs, threaten export market
risks and opportunities, ensuring climate action is treated
access, and risk misalignment with its international
as a driver of long-term value, not a side issue.
climate commitments unless urgently addressed.
Fourth, Pakistan’s Green Taxonomy is a game-changer
ICMA: Floods, air pollution and water contamination
for credible corporate climate action. Green Taxonomy
are urgent—what practical strategies can address
will create a common sustainability language—a
these crises together?
“dictionary for sustainability”—for businesses, financiers,
and policymakers. It will allow clear classification of Sherry Rehman: Floods, air pollution, and water
economic activities, budget tagging and tracking, contamination are not separate crises in Pakistan; they
transparent reporting, accountability, and differentiation are different symptoms of the same structural failures in
between green, transition (amber), and high-carbon planning, governance, and environmental management.
(red) activities. Addressing them together requires hard choices,
enforceable standards, and people-centred solutions,
This framework ensures sustainability is measurable,
not isolated fixes.
comparable, and enforceable, not a tick-box exercise.
The State Bank of Pakistan, working with the World Bank, First, Pakistan must end unsafe construction and enforce
has confirmed that Pakistan’s taxonomy is globally climate-resilient land-use planning. The catastrophic
aligned, joining 50 countries worldwide, including 14 in 2022 floods exposed how fragile and poorly located
Asia, that have adopted similar systems. This initiative structures collapsed within moments. A hotel was
was approved in July 2025. washed away in seconds, raising the fundamental ques-
tion of why construction was ever permitted on flood-
Fifth, businesses must address pollution, waste, and
plains and stormwater paths. Alarmingly, similar failures
energy challenges together. With the Indus River now
reappeared during the 2025 floods, showing that lessons
the second most polluted river in the world, and with no
were not institutionalised. Pakistan cannot continue
reliable data on waste dumping, corporate responsibility
building on floodplains, nullahs, and natural drainage
becomes unavoidable. Investment in low-cost incentives
corridors. Strong, climate-resilient infrastructure and
for plastic reduction, waste-to-energy technologies, and
strict zoning enforcement are non-negotiable. This is not
resource recovery systems is essential.
about halting development, but about ending the
Finally, large corporations must use their influence to dangerous normalisation of risk that repeatedly turns
shape behaviour and culture. It is the responsibility of rainfall into disaster.
major companies to use their high-budget advertising
Second, nature-based solutions must be community-
and outreach platforms to promote green consumption,
owned, not contractor-driven. Nature-based projects
carbon neutrality, environmental literacy, gender
only endure when local people are recognised as
inclusion, and a culture of conservation. This form of
custodians, not passive beneficiaries. The mangrove
leadership integrates sustainability into everyday choices
restoration in Keti Bunder succeeded because fishing
and aligns corporate power with the public good.
families and coastal communities were empowered to
In short, when businesses align with Pakistan’s NDCs, govern access, monitor tidal flows, and maintain restored
adopt Green Taxonomy, integrate climate governance at delta creeks. Similarly, community-led watershed
board level, and invest in clean energy, circular economy, restoration in mountainous regions—terraces, springs,
and resilient systems, they protect their future while and forest cover—stabilises slopes and reduces flood risk
delivering real, lasting benefits to local communities. in ways no short-term contractor can replicate. Local
However, the EU’s Carbon Border Adjustment Mechanism ownership is not charity. It is the only model that survives
(CBAM), which prices the carbon content of imports to political change, funding cycles, and climate uncertainty.
prevent carbon leakage and support the EU’s 2050 Communities are agile and responsive if they have basic
net-zero goal, poses a growing challenge for Pakistan, development needs addressed, such as sanitation and
particularly as textiles are expected to be included from waste management, which remain under-addressed and
2030. With the EU as Pakistan’s largest export market and under-financed in Pakistan’s urban centres.

10 ICMA’s Chartered Management Accountant, Nov-Dec 2025