Page 36 - CMA Journal (May-June 2025)

Focus Section

Data analysis employed thematic coding to identify climate finance often involves complex procedures.
common challenges and patterns. Triangulation of Currency devaluation increases the cost of importing
multiple data sources enhanced the research’s validity clean technologies. Venture capital for cleantech
and reliability. startups is limited. Government subsidies for
renewable energy are inadequate and inconsistent.
Major Challenges to Business Sustainability
5. Corruption and Governance Issues - Corruption
1. Energy Crisis and Infrastructure Deficits - Pakistan
affects environmental clearances and regulatory
faces severe energy shortages that affect industrial
compliance. Rent-seeking behavior distorts market
operations. Load shedding and power outages
mechanisms for sustainable technologies. Weak
disrupt production schedules and increase costs.
governance structures undermine environmental
Unreliable electricity supply forces businesses to rely
institutions. Political instability creates uncertainty
on expensive diesel generators, which increases
for long-term investments. Patronage networks favor
both carbon emissions and operational expenses.
traditional industries over clean technologies.
Industrial areas lack adequate infrastructure for
Transparency in environmental decision-making
waste management. Transportation networks are
remains limited. Contract enforcement for
underdeveloped, increasing logistics costs. Internet
environmental services is unreliable. These
connectivity remains poor in many industrial zones.
governance challenges deter foreign investment in
These infrastructure gaps hinder the adoption of
sustainable projects.
modern sustainable technologies.
6. Limited Technical Capacity and Skills Gap - The
2. Water Scarcity and Environmental Degradation -
Pakistani workforce lacks skills in clean technologies
Pakistan ranks among the most water-stressed
and sustainability management. Universities offer
countries globally. Industrial water consumption
limited programs in environmental engineering and
competes with agricultural and domestic needs.
renewable energy. Professional training in
Groundwater depletion threatens long-term
sustainability reporting and management is scarce.
business operations. Deteriorating water quality
Research and development capabilities in clean
affects manufacturing processes. Air pollution in
technologies are underdeveloped. Technology
major cities creates health risks for workers. Soil
transfer mechanisms from developed countries are
contamination from industrial waste affects
inadequate. Local manufacturing capacity for
agricultural productivity. Climate change is causing
renewable energy equipment is limited. Innovation
more frequent floods and droughts. These
ecosystems for sustainable technologies are still
environmental challenges increase operational risks
nascent. Brain drain affects the availability of skilled
for businesses.
environmental professionals.
3. Regulatory and Policy Challenges - Environmental
7. Market and Consumer Awareness Challenges -
regulations exist but enforcement remains weak.
Consumer awareness about sustainable products
Multiple agencies oversee environmental
remains low. Price sensitivity limits demand for
compliance, creating confusion. Bureaucratic
environmentally friendly products. Green marketing
procedures delay project approvals and
and certification systems are underdeveloped.
implementation. Policy frameworks change
Supply chains lack transparency regarding
frequently, affecting long-term planning. Standards
sustainability practices. Procurement policies do not
for environmental reporting are not standardized.
prioritize sustainable products. Corporate
Penalties for non-compliance are often insufficient
sustainability reporting is not widely practiced.
to deter violations. Green building codes and energy
Stakeholder engagement in sustainability initiatives
efficiency standards are underdeveloped.
is limited. Media coverage of environmental issues
International sustainability reporting frameworks are
focuses more on crises than on solutions.
not mandatory.
8. Sectoral Challenges
4. Financial Constraints and Limited Access to Green
Finance - Pakistani capital markets lack dedicated  Manufacturing Sector: Energy-intensive pro-
green bonds and sustainability financing options. cesses increase carbon footprints. Outdated
Commercial banks have limited expertise in technologies require significant upgrade
evaluating green projects. High interest rates make investments. Chemical and textile industries face
long-term sustainability investments uneconomical. serious water pollution challenges. Concerns
Small and medium enterprises face particular over export competitiveness often limit
difficulties accessing green finance. International investments in environmental sustainability.
34 ICMA’s Chartered Management Accountant, May-June 2025