Page 25 - CMA Journal (Nov-Dec 2025)

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The Green Climate Fund (GCF) and voluntary carbon Coordination. Another way to mobilize sustainable finance,
markets are two international sources of climate financing induce new investment opportunities and expand
that Pakistan can mobilize through the NGT (UNDP, 2025). transparency is through the MRV system, despite data
Enhanced alignment between carbon market norms and limitations, capacity constraints and regulatory overlaps. If
taxonomy criteria can draw foreign direct investment in Pakistan wants to make a paradigm shift into a green
sustainable agriculture and renewable energy. Moreover, economy, there is a need to enhance governance, digital
new opportunities for transparency and traceability are infrastructure and partnerships with the private sector.
presented by the digitalization of reporting systems and the
use of blockchain-based MRV technologies. References
Hereafter, the increasing convergence of sustainable finance • Asian Development Bank (ADB). (2024). Green Finance and Carbon Market
Integration in Asia: Policy Perspectives. Manila: ADB Publications.
and carbon trading holds great potential for Pakistan’s green
• Intergovernmental Panel on Climate Change (IPCC). (2024). Climate Change
economic transformation and climate resilience even while 2024: Synthesis Report of the Sixth Assessment Cycle. Geneva: IPCC Secretariat.
institutional and capability gaps still exist.
• Ministry of Climate Change & Environmental Coordination (MoCC&EC). (2024).
Pakistan Carbon Market Readiness Roadmap. Government of Pakistan,
Policy Recommendations and the Islamabad.
Way Forward • Ministry of Climate Change & Environmental Coordination (MoCC&EC). (2025).
Institutional Framework for Carbon Market Governance in Pakistan. Islamabad:
A strategic policy roadmap that incorporates institutional Government of Pakistan.
capacity, private sector involvement and regulatory clarity is • Ministry of Climate Change & Environmental Coordination (MoCC&EC). (2025).
necessary to operationalize Pakistan’s National Green Roadmap for National Carbon Market Readiness in Pakistan. Islamabad:
Government of Pakistan.
Taxonomy and guarantee carbon market readiness. To
• Securities and Exchange Commission of Pakistan (SECP). (2024). ESG Disclosure
oversee implementation and address regulatory overlap,
Guidelines for Listed Companies. Islamabad: SECP.
the government should first create a National Sustainable
• Securities and Exchange Commission of Pakistan (SECP). (2024). Corporate
Finance Council (NSFC), a cross-institutional coordination Sustainability Reporting and ESG Integration Guidelines. Islamabad: SECP.
body comprising the State Bank, SECP and the Ministry of • State Bank of Pakistan (SBP). (2024). National Green Taxonomy –
Climate Change and Environmental Coordination (MoCC & Implementation Framework. Karachi: SBP & Securities and Exchange
EC, 2025). Secondly, improving transparency, traceability Commission of Pakistan.
and verification of green investments and carbon credits • State Bank of Pakistan (SBP). (2024). Green Banking and National Taxonomy
Implementation Circular. Karachi: SBP.
requires the connection of digital MRV systems with climate
data repositories. To encourage private sector participation, • State Bank of Pakistan (SBP). (2024). Implementation Challenges in Green
Taxonomy Adoption. Karachi: SBP Research Bulletin.
the SBP and SECP should provide taxonomy-aligned
• State Bank of Pakistan (SBP). (2024). Policy Framework for Sustainable Banking
financial products such as carbon credit-backed assets,
and Green Taxonomy Implementation. Karachi: SBP.
green bonds and loans tied to sustainability (SBP, 2024).
• United Nations Development Programme (UNDP). (2024). Enhancing
Thirdly, Pakistan needs to fund programs that increase the Sustainable Finance Ecosystems in Developing Economies. New York: UNDP.
ability of financial institutions, regulators and businesses to • United Nations Development Programme (UNDP). (2025). Integrating
comprehend carbon accounting techniques, ESG Sustainable Finance and Carbon Pricing Mechanisms in Emerging Economies.
disclosures and green classification criteria. Collaborations New York: UNDP.
with the World Bank, IFC and UNDP can improve financial • United Nations Development Programme (UNDP). (2025). Institutional
flows and technical know-how (UNDP, 2025). Readiness for Carbon Market Development in Emerging Economies. New York:
UNDP.
Finally, to enhance public, corporate and investors’ • United Nations Development Programme (UNDP). (2025). Leveraging Carbon
understanding of the financial possibilities of sustainable Markets for Sustainable Finance in Asia-Pacific. Bangkok: UNDP Regional
Bureau.
finance, a robust communication plan is required. Pakistan
will be positioned as a regional leader in green growth and • World Bank. (2024). Building Capacity for Green Taxonomy and Carbon Trading
Systems in South Asia. Washington, D.C.: The World Bank Group.
climate resilient development if the NGT and carbon
• World Bank. (2025). Climate Finance and Carbon Market Readiness in
markets are in line with its Vision 2030, SDG commitments
Developing Countries: Progress and Challenges. Washington, D.C.: The World
and Nationally Determined Contributions (NDCs). Bank Group.
• United Nations Environment Programme (UNEP). (2024). Global Green Finance
Conclusion of the Study Progress Report 2024. Nairobi: UNEP Finance Initiative.
Nations have been forced to realign their financial systems • Government of Pakistan. (2024). Pakistan Vision 2030 and SDG Implementation
Framework. Islamabad: Planning Commission.
toward sustainability and low carbon development due to
the increasing urgency of climate change. An important
step in bringing the financial sector into line with About the Author: The writer is a Fellow Member of ICMA and
environmental and climatic goals is Pakistan’s National Senior Instructor at the Government College of Commerce, Multan.
With over 20 years of experience in management accounting,
Green Taxonomy (NGT). The conceptual underpinnings,
institutional functions and policy processes that connect corporate finance, and taxation, he has taught at various
universities and professional institutes across Pakistan. He
the NGT with carbon market preparedness are examined in previously worked as Assistant Manager Accounts at Orient Group
this study, with a focus on the coherence between of Companies and is currently a faculty member at ICMA’s Multan
frameworks for carbon pricing and green finance and campus while pursuing a PhD. He has authored over nine
integrating environmental standards into financial publications in national refereed journals and conferences on
regulation, such as the State Bank of Pakistan, SECP and management, leadership, corporate finance, and governance.
Ministry of Climate Change and Environmental
ICMA’s Chartered Management Accountant, Nov-Dec 2025