Page 67 - CMA Journal (Nov-Dec 2025)

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The main idea is to provide funding for climate-friendly from renewable sources and the remainder from fossil
projects like renewable energy, reforesting, drip fuels. Solar generation has grown rapidly over the last
irrigation, waste management, and climate-damaged three years, rising from just 4% of total generation in
recovery by encouraging private investment and raising 2021 to 25% in 2025, and is expected to reach 50% by the
funds through taxes, issuance of green bonds and loans, end of 2026 due to strong demand. This fast transition to
along with international partnerships like the Green affordable renewable energy will not only have
Climate Fund, IMF, and World Bank. To brave climate far-reaching positive environmental impacts but also
change, Pakistan needs between USD 200 billion and alleviate economic pressures, particularly high energy
USD 350 billion by 2030, but could invest about USD 4 costs affecting trade and industry.
billion during 2021. The annual requirement is from USD Energy Efficiency and Conservation
40 billion to USD 50 billion for the purpose.
Energy efficiency and conservation are increasingly
Finances for Greening Pakistan Economy important for Pakistan’s sustainable development. There
Pakistan is enhancing its financial systems to support the are two ways to achieve energy sufficiency: producing
Green Pakistan initiative. In November 2023, the Climate more energy through cost-effective means, and using
Finance Wing was established within the Ministry of existing energy more efficiently. To support this, the
Climate Change and Environmental Coordination to National Energy Efficiency and Conservation Authority
manage climate finance through both international and was established in 2016 with the mission to save energy.
local financial institutions, ensuring effective The Authority works closely with all stakeholders,
implementation of Green Pakistan Projects. In line with especially the Ministry of Science and Technology and
Pakistan’s Nationally Determined Contributions under appliance manufacturers, to ensure the availability of
the Paris Agreement, the Ministry of Finance is targeting high-quality, energy-efficient products. It also promotes
a 50% reduction in air pollution by 2030 through the public awareness of energy-saving practices, such as
issuance of bonds and sukuks. using LED lighting, smart thermostats, highly efficient
appliances, turning off fans and lights, air-drying clothes,
SDG Investments - The Ministry of Finance, in and using cold water.
collaboration with UNDP and recognizing the UN’s 17
Sustainable Development Goals, has planned climate- ESG Adoption and Corporate Governance
related investments through several initiatives: Violation of legal and ethical responsibilities of the
• Green Banking – The State Bank of Pakistan has corporate sector, over time, has reached a level where
issued guidelines promoting green banking, many nations have had to initiate guidelines,
encouraging credit facilities for projects that reduce regulations, and compliance measures, with
environmental hazards. non-conformity inviting punitive actions. ESG adoption
is vital, as companies that manage risks related to
• Climate Finance Framework – The government is climate change enjoy better consumer and investor
developing financing schemes to ensure that climate
attraction and avoid regulatory actions. The Securities
funds are primarily directed toward priority sectors, and Exchange Commission of Pakistan has issued
including power, agriculture, and manufacturing.
regulations and guidelines in this regard, where
• Green Sukuk – Pakistan issued its first green sukuk, companies are required to adhere to such instructions,
worth Rs. 30 billion, to fund clean energy projects. and their Boards must include diverse independent
directors, ensure transparency, and provide proper
• International Collaborations – Pakistan has
disclosure about their performance and ESG initiatives.
partnered with Canada for technology exchange in In this way, companies not only fulfill their
agriculture and with the Global Green Growth
responsibilities to consumers, stakeholders, and society
Institute for carbon credit schemes.
as a whole, but also bring efficiency and sustainability to
Renewable Energy themselves.
Pakistan is endowed with diverse renewable energy Decarbonizing Industry – It is vital to minimize
resources, including wind, solar, hydro, and tidal power. greenhouse gas emissions, which are the primary cause
The country enjoys abundant sunshine throughout the of air pollution and climate change. This would be a
game-changer on many fronts, such as:
year and significant wind potential, particularly at Jhimpir,
Sindh, estimated at 50,000 MW—exceeding the country’s Controlling climate change
current total energy demand. With over 7,000 glaciers, Reducing the cost of production by shifting to cheap and
Pakistan has the largest number of glaciers outside the clean renewable energies, bringing economic growth by
polar regions, providing an important source of energy
being competitive in international markets, improving
and water supply. Additionally, its coastline stretches over the environment and public health, and ultimately
1,100 KM, offering regular tidal energy potential.
achieving sustainable growth are all interconnected
The country’s installed electricity generation capacity objectives that demonstrate the multifaceted benefits of
currently stands at 46,000 MW, with nearly 50% produced transitioning to a green and sustainable economy.
ICMA’s Chartered Management Accountant, Nov-Dec 2025