Page 51 - CMA Journal (Nov-Dec 2025)

Focus Section

The most viable sector for climate blended finance is the The implementation of these business ideologies relies
renewable energy sector in Pakistan. The path towards a upon the holistic integration of ESG (Environmental,
60% share of renewable energy in the country’s energy Social, and Governance) in core business operations.
mix has opened up numerous green financing Aligning the organization’s vision and objectives with the
opportunities in the form of energy generation, grid ESG compass ensures the creation of a synergistic blend
modernization, battery storage, and transmission between the organization’s economic and environmental
upgrades. Similarly, climate adaptation and resilience and social objectives. Green Banking can facilitate the
projects require large-scale investments which can be development of Pakistan’s green and sustainable
supported through climate blended finance initiatives. economic development by local banks partnering with
Funding climate-resilient housing, flood management, Multilateral Development Banks (MDBs), donor agencies,
water storage, and coastal protection is considered a and philanthropic organizations to fund various mega
high-risk and low-return investment by private sector projects. Development of a consolidated national
entities. Grant-based first-loss capital or impact financing blended finance facility or platform hosted by the
can be utilized to reduce the private investor’s risk and Ministry of Finance with donor seed capital and MDB
attract the required capital in these critical areas. participation is also necessary for the acceleration of
Pakistan’s agriculture sector is the backbone of the climate blended finance adoption. Growing climate
country’s economy. Ensuring adequate financing for change impacts, rising investment and infrastructure
climate-smart agricultural projects can ensure the gaps, and the low level of green capabilities in the local
economic, social, and environmental sustainability of the business market make climate blended finance a
country’s economy. Climate Blended Finance can be necessity for Pakistan’s sustainable development journey.
targeted towards cold-chain logistics development, drip The next decade is a window of opportunity: with
irrigation systems, vertical farming infrastructure, and coordinated donor support, MDB leadership, a
drought-resistant seed development. Blended credit consolidated national blended facility, and a pipeline of
lines, supported by donor guarantees and technical bankable green projects, Pakistan can turn concessional
assistance, can also play an important role in including capital into sustained private investment, economic
the country’s Small & Medium Enterprises (SMEs) sector resilience, and climate-smart growth. Through
in the country’s green equation. Following the model synergizing the expertise of different economic sectors
being used in the MENA region, Pakistan can utilize and industry players, Pakistan can combat the climate
blended finance for the development of Green Cities and change crisis while simultaneously ensuring an
climate-resilient and adaptive infrastructures. Powered economically viable growth trajectory for the industry.
by renewable energy sources and housed in green
construction, these cities can consist of urban flood Bibliography
protection, climate-resilient drainage, and energy- Akhtar, S., & Khawaja, M. (2025). UN Common Country Analysis (CCA) 2024 update:
efficient housing. Climate financing and policy recommendations – Policy Brief. Islamabad: United
Nations Pakistan. Retrieved from https://pakistan.un.org/sites/default/files/
It is important to understand that the effective and 2025-03/CCA%202024%20update_UN%20Pakistan_climate%20financing_CLEAN_
efficient adoption of climate blended finance depends ed_26feb25_.pdf
on the assurance of additionality, transparency and Convergence. (2025). State of Climate Blended Finance. Convergence. Retrieved from
https://www.convergence.finance/api/file/d268a5fd17cf1a58ad85606f3ae9a472:32
accountability, local market development, and the
2b90c85cbe8a1a6fae415e6ce6d027d64821d73b499598649800c32910c91d879ae39
presence of strong environmental and social safeguards. f4d25db2297c557f2a95886ab36e24b37b260148c6649fa3965532a936b4c39eb06dd
The attractiveness of this financial tool is intricately 037700edc29ec4f84602f5b99f05cd09ddf0d6f4a
linked with the presence of quantifiable and measurable Finance Division. (2025). Sustainable Financing Framework. Government of
Pakistan, Finance Division. Retrieved from https://www.finance.gov.pk/
economic, social, and environmental returns for
dpco/SFF_2025.pdf
investors. Transparency and accountability is one of the
IFC. (2024, December 5). IFC to Help Finance First Sustainable Aviation Fuel Facility in
most important pillars in the successful implementation Pakistan and Broader Region. Retrieved from International Finance Corporation:
of any business ideology, and climate blended finance is https://www.ifc.org/en/pressroom/2024/ifc-to-help-finance-first-sustainable-aviatio
n-fuel-facility-in-pakistan-and-broader-region1?utm
no different. The IFRS S1 & S2 Sustainability Disclosure
scp. (2024). Climate Change in Pakistan: Facts and Figures. Supreme Court of
Standards provide guidance. IFRS S1 (General
Pakistan. Retrieved from https://scp.gov.pk/Conference2024/
Requirements for Disclosure of Sustainability-related downloads/Climate_Chage_in_Pakistan.pdf
Financial Information) and IFRS S2 (Climate-related
Disclosures) have been designed to provide investors About the Author: Dr. Syed Asim Ali Bukhari is currently working
with confidence that the financed projects are delivering as Senior Vice President / Unit Head – ESG, Policy, and Risk Analytics
meaningful and intended social and environmental Division, Risk Management Group, at The Bank of Punjab, Pakistan.
He has a PhD in Green Banking - Governance and Risk Management
results along with economic returns.
from Universiti Sains Malaysia and has obtained a Professional
The adoption of IFRS S1 & S2 in Pakistan is an important Certification in Green and Sustainable Finance from the Chartered
step in the acceptance of climate blended finance. The Banker Institute, UK. His academic expertise is complemented by
Securities and Exchange Commission of Pakistan (SECP) over 20 years of diverse professional experience. He is an expert in
has mandated the adoption of IFRS S1 & S2 for listed Green Banking, ESG, Green & Sustainable Financing, Environmental
companies and SECP-licensed non-listed Public Interest & Social Risk Management (ESRM) Framework, UN-SDGs, IFRS S1 &
Companies through a phased approach. S2, and Climate Smart Agriculture.
ICMA’s Chartered Management Accountant, Nov-Dec 2025 49