Page 42 - CMA Journal (Nov-Dec 2025)

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Similarly, machine-learning algorithms can forecast how reforms in Pakistan. With further development, AI
a company is likely to perform in the future regarding technologies can enhance transparency and data
climate metrics based on past data. Comparing corporate accuracy while tracking processes in real time. AI may
claims with actual performance concerning play a key role in Pakistan's effort to shift toward a
environmental improvements can verify their validity by sustainable economy by making corporate sustainability
examining trends in energy consumption, carbon claims credible and supported by reliable data.
emissions, and waste management. Such abilities enable
Regulatory agencies, investors, and businesses in
investors and regulators to establish the legitimate core
Pakistan must work together to create a conducive
of sustainability assertions and hold accountable environment for AI-based ESG monitoring, including
organizations that may engage in greenwashing. investment in AI infrastructure, enhancement of
Blockchain technology is another important tool with the information quality, and establishment of rules for
potential to provide a decentralized and unalterable AI-based sustainability monitoring. With the right
ledger for tracking ESG data. Such technologies help investment and regulatory measures, AI can be
companies confirm the validity of their sustainability effectively used to help Pakistan green its economy and
claims, thereby preventing data distortion or achieve its climate-related goals. Artificial intelligence
manipulation. Within the realm of Pakistan's ESG reforms, can provide powerful tools in fighting greenwashing and
blockchain can be utilized to build a transparent system enhance the credibility of ESG reforms in Pakistan's
where all stakeholders, including regulators, investors, economy.
and consumers, can access verified data on a
Through implementation of AI technologies, including
corporation's environmental performance.
NLP, machine learning, blockchain, and real-time
Real-time environmental practice monitoring can also be monitoring systems, businesses and regulators will gain
implemented using AI. Internet of Things (IoT) sensors, more accurate insights into corporate sustainability
when integrated with AI, can track a company's activities. Nevertheless, successful implementation
consumption of energy or carbon emissions in real time. depends on overcoming challenges related to data
Such audits, enabled by AI, can evaluate a firm's availability, technological infrastructure, and public trust.
environmental impact to ensure it aligns with the Addressing these challenges will make AI an essential
company's claims, allowing timely intervention by enabler in Pakistan's transformation toward a more
relevant regulators. sustainable and environmentally responsible economy.
While there is huge potential for AI, its use in Pakistan's References
climate finance and ESG reforms is limited by a number of
challenges. The lack of reliable and comprehensive data • Bahoo, S., Cucculelli, M., & Qamar, D. (2023). Artificial intelligence and corporate
innovation: A review and research agenda. Technological Forecasting and
is a significant obstacle to the successful deployment of Social Change, 188, 122264. https://doi.org/10.1016/j.techfore.2022.122264
AI. Poorly developed big data collection and reporting • Dempere, J., Alamash, E., & Mattos, P. (2024). Unveiling the truth: Greenwashing
systems within Pakistani businesses may prevent AI in sustainable finance. Frontiers in Sustainability, 5.
https://doi.org/10.3389/frsus.2024.1362051
systems from adequately assessing claims regarding
• Forliano, C., Battisti, E., De Bernardi, P., & Kliestik, T. (2025). Mapping the
sustainable development. Standardized data formats are
greenwashing research landscape: A theoretical and field analysis. Review of
also required to allow for cross-sector and cross-industry Managerial Science, 19(11), 3407–3456.
analysis using AI models. Moreover, deployment of AI https://doi.org/10.1007/s11846-025-00856-3
solutions requires sophisticated technological • Islam, H. (2025). Nexus of economic, social, and environmental factors on
sustainable development goals: The moderating role of technological
infrastructure, which is not yet widely available in
advancement and green innovation. Innovation and Green Development, 4(1),
Pakistan. Therefore, introducing AI into ESG monitoring 100183. https://doi.org/10.1016/j.igd.2024.100183
requires the development of high-performance • John, H. B., Agrawal, M., Nema, P., Hasan, A., Rakhra, I. K., & Singh, A. (2025).
computing capacity and effective regulatory frameworks Green growth: A bibliometric analysis of digital innovation and Sustainable
Development Goals (SDGs). Journal of Innovation and Entrepreneurship, 14(1),
to manage AI-driven solutions ethically and efficiently. 15. https://doi.org/10.1186/s13731-025-00473-0
Furthermore, ESG legislation in Pakistan is still in its • Poiriazi, E., Zournatzidou, G., Konteos, G., & Sariannidis, N. (2025). Analyzing the
infancy, and the institutional framework needs further Interconnection Between Environmental, Social, and Governance (ESG) Criteria
and Corporate Corruption: Revealing the Significant Impact of Greenwashing.
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Skilled experts are needed to interpret AI outputs in the
About the Author: Dr. Muhammad Haroon Rasheed is a Lecturer
context of ESG reforms, and public confidence in such (Commerce) at Malik Firoz Khan Noon Business School, University of
technologies is vital for their acceptance. Given the Sargodha. His academic journey up until his postdoctoral research
potential lack of trust toward new technologies in at the College of Economics and Management, Nanjing University of
developing and conservative societies like Pakistan, it is Aeronautics and Astronautics, China, has been focused on Financial
imperative to develop confidence in the accuracy of AI to Markets. Particularly, his research interests lie in exploring the
verify sustainability claims. dynamics of financial decision-making through the lens of
behavioral finance. Additionally, he also holds the status of Affiliate
In conclusion, AI is bound to play a positive role in Financial Accountant (AFA) from ICMA.
curbing greenwashing in climate finance and ESG
ICMA’s Chartered Management Accountant, Nov-Dec 2025