Page 48 - CMA Journal (Nov-Dec 2025)

Focus Section

Whether we believe in climate change or not, ESGs Institute of Corporate Governance (PICG) to develop ESG
transparency is now a business requirement and a key standards. The strategy included a practical framework
factor for business survival. ESG-related goals, actions, supported by regulatory enactments.
and reporting serve as an important performance
In 2022, the Securities and Exchange Commission of
evaluation tool for corporate entities, making them
Pakistan (SECP) introduced the following ESG regulatory
relatively more socially responsible organizations.
road-map.
ESG Adoption in Developed Countries
In 2023, the Securities and Exchange Commission of
Developed countries have started implementing legal Pakistan (SECP) issued Sustainability Disclosure Guidelines
frameworks to ensure adoption and achievement of ESG relating to ESG for listed companies in Pakistan. It also
goals by the corporate sector. Two leading examples are provided detailed key ESG performance metrics for each of
the USA and the UK: the three core areas.
Country Regulatory / Policy Framework Corporate Examples Governance
United U.S. Securi es and Exchange Commission Microso has set the target to Execu ve compensa on
States (SEC), requires listed companies to achieve carbon net zero by 2030. linked to ESG;
disclose climate-related risks,
greenhouse gas emissions, and Apple has set goal of 100% renewable Independent boards and
sustainability governance structures energy for opera ons, ethical supply audit commi ees ensure
chains and board-level oversight of transparency and
ESG goals. accountability

United The UK Corporate Governance Code (by Unilever is pioneer in integra ng Board diversity and
Kingdom the Financial Repor ng Council) sustainability into its core strategy stakeholder inclusion are
emphasizes long-term sustainability, through the Unilever Sustainable central principles
stakeholder engagement and board Living Plan.
diversity. Climate related Repor ng has
been made compulsory for large BP (Bri sh Petroleum) is transi oning
companies since 2022. towards renewable energy and
se ng net-zero targets by 2050.

Current Landscape in Pakistan
Pakistan is a signatory to the SDG goals and
targets.
In 2016, the Parliament approved the national
development agenda. Vision 2025 was
initiated to ensure implementation of SDG
initiatives.

In 2017, the State Bank of Pakistan (SBP) issued
its Green Banking Guidelines (GBG) to
encourage banks and financial institutions to
adopt environmentally friendly practices. Source: SECP
These guidelines are designed to integrate
environmental and social risk management into the
banking sector, promoting sustainable financing and Challenges to ESG adoption in Pakistan
investment in eco-friendly projects. The biggest challenge to industry-level ESG adoption in

In 2021, Pakistan introduced updated Nationally Pakistan is the slow pace of practical implementation and
Determined Contributions (NDC), forming a the resulting lack of corporate engagement.
comprehensive strategy and action plan to reduce Entrepreneurs generally focus on profit-making, placing
greenhouse gas (GHG) emissions. Initiatives like the Ten little or no emphasis on social responsibility due to a lack
Billion Trees Tsunami Project (TBTTP) are part of this of a long-term approach toward developing a
strategy. sustainable society. Business owners and shareholders
often avoid costs associated with ESG audits and
In 2021, a task force was formed by the Pakistan Stock maintaining relevant data for monitoring and control.
Exchange (PSX) in collaboration with the Pakistan
46 ICMA’s Chartered Management Accountant, Nov-Dec 2025