Page 43 - CMA Journal (Nov-Dec 2025)

Focus Section
Bridging Policy and Practice in Pakistan’s

Climate Finance and Green Taxonomy

1. Climate Risk and Financing define environ-
Imperatives in Pakistan mentally sustainabe
economic activities in
Pakistan has been among the top ten most the form of the PGT,
climate-vulnerable countries globally in the past decade. with assistance from
The catastrophic floods of 2022 alone brought losses the World Bank, creat-
with an economic cost of USD 30 billion and more than ing a significant point
33 million people to display the dire and repetitive effects of reference for inves-
1
of disasters caused by climate change. Even the tors and regulators
long-term Climate Risk Index showed that Pakistan is one and helping prevent
of the 20 most affected states in the global south. The greenwashing. The
2
magnitude of climate finance needs in the country is fact that NCFS is
immense, with an approximate cost of USD 200 billion to practically congruent
ensure that its Nationally Determined Contributions with the PGT, which
(NDCs) are implemented, and around USD 348 billion is could establish the Dr. Azeema Begum
required to be achieved for climate-resilient standards of environ- Assistant Manager
development by the year 2030. 1 mental integrity, (Research and Publications)
at Saviours, Karachi

notwithstanding the structural
and institutional bottlenecks that
impede the complete operation-
alization of the PGT criteria,
leaves a substantial gap between
policy design and the quantifi-
able impact of investments. 3,4
2. NCFS and PGT Synergy
and Conceptual
Alignment
National Climate Finance
Strategy (NCFS)
Figure 1: Climate Risk Index (1995-2024)
A systematic approach of the
NCFS is based on three pillars, namely Domestic Resource
To make their way towards climate-compatible develop- Mobilization, International Climate Finance, and
ment, Pakistan has embraced two critical instruments, Innovative Financial Instruments, which provide the
including the National Climate Finance Strategy (NCFS), means to channel funds to the priority areas identified in
which was implemented at the UN climate change the Nationally Determined Contributions (NDCs),
Conference of the Parties (COP) 29, in Baku, Azerbaijan, in including renewable energy development, Electric
November 2024, and the Pakistan Green Taxonomy vehicle (EV) transition, resilient agriculture, and water
(PGT), announced in 2025. The NCFS is the blueprint for infrastructure. The prominent strategic components of
financing, where a plan to mobilize funds across the the NCFS highlight alignment with the government and
public, private, and international sectors is defined in the incorporation of climate finance into state budgets,
order to mitigate and adapt to achieve the vision of indicating a plan to integrate climate requirements into
Climate Resilience in Pakistan 2050. At the same time, a the national financial system. 3
technically and science-based system was developed to

ICMA’s Chartered Management Accountant, Nov-Dec 2025 41