Page 79 - CMA Journal (Nov-Dec 2025)

Focus Section

At the same time, Swedish regulators and market increased its pledges to multilateral climate funds such as
participants emphasize robust ESG reporting and the Green Climate Fund, where it doubled its contribution
corporate governance frameworks aligned with EU to support mitigation and adaptation efforts in
sustainable finance standards, which improve developing countries, signaling strong commitment to
transparency and strengthen investor confidence in global climate action and finance mobilization.
sustainability performance, while financial institutions
continue to expand green-financing products that Switzerland – Carbon
integrate environmental and social impact Tax, Emissions Trading &
considerations into capital allocation. ESG Reporting
Finland – EU ESG Alignment Switzerland’s Federal CO2 Act combines a broad carbon
& Nordic Sustainable Finance tax with an emissions trading scheme that incentivizes
Cooperation emissions-reductions across sectors while reinvesting
revenue in climate protection, innovation, and
Finland aligns its financial regulation with European low-carbon technologies to support both mitigation and
sustainable finance standards, including EU taxonomy adaptation efforts. Complementing its domestic climate
alignment and enhanced ESG disclosure requirements, to policies, Swiss regulatory reforms are expanding
harmonize climate risk reporting and unlock private corporate sustainability reporting obligations to align
capital for sustainable projects, while Finnish financial with global ESG standards, requiring large companies,
institutions and regulators increasingly integrate ESG banks, and insurers to disclose climate-related risks and
criteria into risk assessment and reporting to support impacts, thereby enhancing transparency for investors
climate-aligned investment. The country channels and stakeholders. On the international front, Switzerland
significant climate finance through bilateral and continues to contribute to global climate finance
multilateral mechanisms — contributing to instruments initiatives, including a pledge of CHF 135 million (about
like the Inter-American Development Bank’s NDC USD 148 million) to the Green Climate Fund for the four
Pipeline Accelerator trust fund to support years replenishment period, supporting mitigation and
climate-aligned infrastructure and sustainability resiliency-focused projects in developing countries.
planning and through domestic blended finance
initiatives with partners such as the International Finance Carbon Markets and ESG for Climate
Corporation to catalyze private investment in low-carbon
and resilience-focused sectors. Finland also plays an Action in Pakistan
active role in regional climate cooperation via institutions
such as the Nordic Development Fund (NDF), a joint Pakistan’s carbon market, operational under policy
Nordic climate and development finance institution that guidelines of Article 6 of the Paris Agreement, represents
provides concessional financing and partnerships to a pivotal step in aligning national climate action with
support mitigation and adaptation projects in broader environmental finance and sustainability
low-income countries, reflecting broader Nordic reforms. Projects that reduce or remove greenhouse gas
collaboration to mobilize climate finance and knowledge emissions can generate tradable carbon credits, creating
sharing for impactful climate action. new avenues for climate finance while supporting
Pakistan’s climate commitments. This development
Denmark – Carbon Pricing, comes at a time when global confidence in carbon
Green Bonds & Climate credits is under scrutiny due to documented governance,
transparency, and social inclusion failures in some
Investment Vehicles
voluntary markets. Weak monitoring, poor baseline
Denmark has implemented carbon pricing and tax setting, and exclusion of local stakeholders
mechanisms to incentivize emissions-reductions across internationally have highlighted risks of “phantom”
key sectors such as energy and transport, with ongoing credits- certificates that do not reflect real emission-
reforms that include broad environmental fiscal tools and reductions, undermining climate integrity and investor
proposed carbon taxes designed to support the transition trust. These concerns are directly relevant as Pakistan
to cleaner technologies and help meet its climate targets. designs its own market mechanisms, emphasizing
Simultaneously, the country has advanced green bond integrity, transparency, and robust governance to ensure
issuance aligned with European Green Bond standards, real climate impacts and sustainable outcomes.
using proceeds to finance renewable energy, sustainable
transport, and nature restoration projects that channel In Pakistan, tradable carbon credits can be generated
public and private capital toward climate-positive under compliance mechanisms aligned with Paris
outcomes while reinforcing transparency and impact Agreement cooperation (Article 6.2 and 6.4) and
reporting frameworks. Denmark also plays an active role voluntary crediting systems.
in international climate finance, having significantly

ICMA’s Chartered Management Accountant, Nov-Dec 2025 77