Page 72 - CMA Journal (Nov-Dec 2025)

Focus Section

Role of SBP and ESG in Green Finance planning through green buildings, urban green spaces
like parks, afforestation projects like Changa Manga in
The State Bank of Pakistan (SBP) plays a significant role in Kasur, Punjab, and flood-resistant roads and housing for
green finance. SBP has issued guidelines encouraging rural areas prone to flooding.
banks to integrate environmental and social risk
management into lending decisions. They have also Climate Monitoring and Research
integrated Climate Risk Management, requiring banks to
identify and manage climate-related financial risks, such Climate monitoring is a critical part of the future, and
as exposure to floods, droughts, or carbon-intensive improving it can greatly impact Pakistan. It would allow
sectors. SBP supports green projects through proactive disaster management before events occur.
concessional refinancing facilities, such as renewable Although challenging, this can be implemented using
energy and energy efficiency schemes. ESG reforms also Pakistan's current resources, with satellite monitoring
hold a major role in green finance by and AI to predict weather accurately. Pakistan should
requiring or encouraging listed
companies to disclose environmental,
social, and governance performance.
This helps define what qualifies as
“green” economic activities, prevents
greenwashing, guides investors, and
regulates the issuance of green bonds
and green sukuk to finance
climate-friendly projects. Together,
SBP and SECP help mobilize climate
finance, reduce financial risk, and
green Pakistan’s economy.
Renewable Energy and Clean
Technology
Pakistan has excelled in renewable energy technologies, establish research labs and agencies with proper funding
with solar panels, windmills, dams, and biomass energy to develop expertise in climate equipment, allowing it to
widely in use. This creates potential for a future where match knowledge levels of first-world countries.
Pakistan relies on cleaner energy, reducing carbon
emissions from major industries. Pakistan should reduce Conclusion
dependence on fossil fuels and shift towards clean
“Greening” Pakistan should be the first priority of the
transport, including electrification of public transport
government. By working with industries that currently
and implementation of EV charging infrastructure. This
harm the climate, Pakistan can achieve economic growth
will benefit both the environment and the economy by
while improving the environment. This approach could
reducing fuel imports. Current energy-efficient and smart
boost tourism, increase GDP, and improve the country's
technologies are outdated, and Pakistan should
overall image. With support from SECP and ESG reforms,
transition to modern, energy-efficient architecture, such
industries are expected to adopt cleaner fuel sources and
as buildings with integrated solar panels, and adopt
become more environmentally responsible by 2030. If
industrial equipment that is fully electric or fuel-efficient
these plans succeed, Pakistan could be comparable to
to reduce carbon emissions and energy costs.
first-world countries, providing a sustainable and greener
Climate-Smart Agriculture and Green future for all.
Infrastructure
About the Author: Sajjad Usman, ACMA and CIMA (Finalist), is an
Considering agriculture is a main part of Pakistan's Associate Member of ICMA and a finance and compliance
professional with over 18 years of experience across REIT
economy, there should be a step to make it more efficient
management, oil & gas, manufacturing, and FMCG sectors. He is
rather than relying on decades-old methods. Pakistan currently Manager Compliance at Arif Habib Dolmen REIT
could implement precision farming, using AI and sensors Management Limited, with expertise in regulatory compliance,
to monitor plant growth and health to maximize output. corporate governance, AML/CFT frameworks, and SECP
High-yield variety (HYV) seeds exist, but Pakistan should regulations. He holds an MBA from the University of Gloucestershire
also develop climate-resistant seeds to withstand floods (UK) and an MA in Economics, combining strong analytical skills
with a strategic mindset to support governance, compliance, and
and heatwaves. Most importantly, Pakistan should move
sustainable growth.
towards green architecture, integrating nature into urban
70 ICMA’s Chartered Management Accountant, Nov-Dec 2025