Page 58 - CMA Journal (Nov-Dec 2025)

Focus Section

• Export earnings are near USD 40.7 billion, with a Steps Forward
large share coming from textiles and food products,
while imports remain considerably higher, 1) Regulatory Guidelines and ESG Platforms: The
highlighting trade imbalance pressures on the Securities and Exchange Commission of Pakistan
economy. Both external and domestic debt continue (SECP) hosts a collaborative ESG platform and
to be pressing constraints, significantly influencing periodically issues voluntary disclosure guidelines,
fiscal policy and corporate financing decisions. providing a foundation for improved data availability
and transparency.
• Pakistan also ranks low on environmental, social, and
(Source: https://www.secp.gov.pk/document/secp-esg-
governance indices, as reflected in poor air quality in
disclosure-guidelines-for-listed-companies/)
major cities, water scarcity issues, and overall
institutional effectiveness, all of which highlight
2) Capacity Building and Industry Initiatives: Indus-
sustainability concerns.
try collaborations, such as ESG training programs
In an economy characterized by these facts and figures, initiated by WWF-Pakistan, help build corporate
ESG reporting is not a luxury; rather, it is a necessity for capacity in sustainability reporting through work-
building resilience against uncertain factors, expanding shops and events that emphasize the importance of
market reach, and maintaining competitiveness in the ESG factors.
long run.
3) Alignment with Global Standards: The phased
ESG Reporting in Pakistan: Challenges implementation of IFRS Sustainability Disclosure
and Way Forward
Standards (IFRS S1 & S2) demonstrates Pakistan’s
Key Challenges commitment to global ESG best practices, though
transitional challenges remain.
1) Data Limitations: ESG reporting relies heavily on
robust data, which many organizations often lack. Conclusion
Organizations in Pakistan typically depend on
manual tracking, decentralized records, and weak ESG reporting in Pakistan is at a critical stage, representing
verification systems. As a result, ESG disclosures are both a strategic opportunity and a complex challenge. For
often inconsistent or unreliable. private sector organizations, improving awareness of ESG
factors, strengthening data systems, and enhancing
2) Short-Term Economic Focus: The macroeconomic
governance frameworks are essential. For regulators and
landscape of Pakistan, characterized by trade
policymakers, synchronized standards, effective
imbalances, inflation pressures, and high debt
implementation mechanisms, and capacity-building
servicing demands, often leads organizations to
initiatives will determine whether ESG moves from
prioritize short-term profitability over long-term
aspirational statements to measurable impact.
investments in sustainability.
By understanding and addressing these critical challenges,
3) Limited Awareness: For many Pakistani firms,
organizations in Pakistan can enhance credibility,
particularly small and medium enterprises, ESG
compliance is often seen as corporate philanthropy strengthen investor confidence, and support sustainable
or CSR rather than a strategic risk management economic progress—shaping the competitive business
activity. Without proper awareness, companies landscape of the future.
struggle to understand why ESG reporting and
compliance matter beyond basic regulatory About the Author: Mr. Shakil Khawaja is an Associate Member of
requirements. ICMA and a Chartered Global Management Accountant (CIMA, UK),
currently serving as Deputy Chief Manager Finance at Sui Southern
4) Lack of Standardized ESG Frameworks: Another Gas Company Ltd. (SSGCL). With over 22 years of experience in
Accounting and Finance across Industrial, Engineering, and Utility
challenge is the absence of comprehensive,
sectors, he previously held senior roles at Siemens Pakistan,
mandatory ESG standards at the national level. While
managing multi-billion-rupee infrastructure projects and SAP ERP
regulators such as SECP have issued voluntary implementations. He is also a professional writer, award-winning
disclosure guidelines (Source: https://www.secp.gov. international speaker, corporate trainer, and YouTuber, combining
pk/document/secp-esg-disclosure-guidelines-for-liste financial expertise with strong communication skills.
d-companies/) a unified enforcement mechanism is
still developing, leading to variations in how
disclosures are prepared and interpreted.
56 ICMA’s Chartered Management Accountant, Nov-Dec 2025