Page 43 - CMA Journal (May-June 2025)

Focus Section

The resource recovery model applies well to the Ultimately, the circular economy offers a pathway toward
construction and packaging industries, which generate industrial resilience, inclusive growth, and long-term
large volumes of waste—including cement, steel, and sustainability¹5.
polymers—that can be reused as industrial inputs. While
less common, Product-Service Systems (PSS) present Policy-Level and Structural Challenges
valuable opportunities for the heavy equipment and for Industries
appliance sectors, allowing for leasing or usage-based 1) Policy-Level: The environmental laws in Pakistan are
services that reduce production demands and extend still disjointed and place more emphasis on
product lifespans.
controlling pollution and its consequences than
Finally, exchange models—commonly seen in global resource effectiveness and circular design.
transport and hospitality sectors—could inspire Subsequently, despite establishing the National
innovations in industrial logistics or the shared use of Resource Efficiency and Circular Economy Policy
manufacturing facilities in SME-equipped regions of (2021), there is still a low level of implementation,
Pakistan. By adopting and operationalizing these CBMs, and the range of measurable goals and enforcement
Pakistan’s industrial sector can advance toward greater strategies is minimal. More importantly, there is a
economic competitiveness and environmental lack of the Extended Producer Responsibility (EPR)
sustainability, in alignment with its Sustainable law; the producers are not responsible regarding the
Development Goals (SDGs) and broader ambitions post-consumer cycle of their goods. In contrast with
within the circular economy. 13,14 numerous OECD nations, little financial or fiscal
stimulus exists on the part of the state to enhance
Implications for SDGs circular practices to be adopted in Pakistan. Most
industrial policies do not have green tax reliefs,
The shift to a circular economy offers a transformative
low-interest loans, or subsidies to produce
opportunity for Pakistan’s industrial sector, aligning it
sustainably. As a result, businesses have little
more closely with the broader objectives of the United
incentive to develop refined products, take-back
Nations Sustainable Development Goals (SDGs). Key
sites, and include recovered materials in supply
industries—particularly textiles, plastics, construction, and
chains. Waste pickers, scrap dealers, and small-scale
agriculture—are simultaneously contributing to
processors in Pakistan's informal recycling sector are
economic growth and environmental degradation. By
critical for material recovery 16,17 .
implementing circular business models, these sectors can
strategically address environmental concerns, improve Nevertheless, the sector is unlawful and unofficially
resource efficiency, and enhance global competitiveness. backed. The formal industries are usually slow in
moving toward collaboration, a factor attributed to
From an economic perspective, adopting circular
the issues of quality assurance and traceability. Due
strategies such as reuse, recycling, and product life
to this breakdown, the potential is lost, and wasted
extension helps industries reduce dependency on costly
effort is repeated between formal and informal
raw materials. These practices lower production and waste
economies.
treatment costs while opening new revenue streams
through refurbished products, leasing systems, and the 2) Structural-Level: The industrial zones of Pakistan
reuse of by-products as raw materials. Such measures are usually supported by old infrastructure, which is
directly contribute to SDG 8 (Decent Work and Economic not recommended to aid the use of circular
Growth) by promoting green entrepreneurship and operations like recovery of materials, segregation of
creating employment opportunities in repair, waste, or production in a chain. The lack of
remanufacturing, and recycling sectors. centralized recycling facilities, reverse logistics
systems, or eco-industrial parks, essential to
Furthermore, circular models significantly reduce
effectively cycling resources, can also be noted. Due
pollution, carbon emissions, and waste, contributing to
to this, industrial waste (particularly textile, plastics,
SDG 13 (Climate Action) and SDG 12 (Responsible
and construction) is usually dumped in landfills or
Consumption and Production). Integrating eco-design,
dealt with informally. A large pool of companies,
digital traceability, and sustainable materials into
including small and medium enterprises (SMEs),
innovation efforts supports SDG 9 (Industry,
remain ignorant of the circular economy concept. In
Innovation, and Infrastructure). By embracing circular
a 2023 survey by the Sustainable Development
economy principles, Pakistani industries can better
Policy Institute (SDPI), 60% of manufacturing
comply with emerging international sustainability
companies did not know circular models' economic
standards and become proactive contributors to both
or environmental rewards.
national development and the global 2030 Agenda.
ICMA’s Chartered Management Accountant, May-June 2025 41