Page 81 - CMA Journal (Nov-Dec 2025)

Focus Section

ICMA Proposed Measures for Carbon world’s most climate affected countries, yet its ability to
respond is constrained by institutional, financial, and
Market and Panda Bonds in Pakistan market level limitations rather than by a lack of intent or
ICMA proposes a set of practical, market-oriented policy vision.
policies to strengthen Pakistan’s carbon market and Recent reforms, ranging from updated NDCs and climate
sustainable finance ecosystem. These proposals draw on finance strategies to green sukuk issuance and emerging
ICMA’s core strengths in accounting, costing, assurance, carbon market guidelines, signal important progress.
and governance to enhance market integrity, investor However, global experience clearly shows that climate
confidence, and project bankability. The objective is to ambition delivers results only when supported by
position carbon markets and instruments such as Panda credible markets, enforceable governance, and finance
and green bonds as credible tools for mobilizing guided by integrity. Without robust MRV, Measurement,
long-term climate finance in Pakistan. ICMA presents the Reporting, and Verification systems, legal clarity, and
following measures to strengthen Pakistan’s carbon professional standards, carbon markets risk becoming
market and sustainable finance ecosystem, leveraging its symbolic instruments rather than reliable sources of
expertise in accounting, costing, assurance, and climate finance and resilience.
governance to enhance market integrity, investor In this context, the role of professional institutions such
confidence, and project bankability:
as ICMA becomes critical. By embedding sound
1) Carbon Market Standards accounting, costing, assurance, and governance
frameworks into carbon markets, sustainable bonds, and
• Establish standardized carbon accounting, costing,
and pricing frameworks to guide Pakistani industries ESG practices, Pakistan can close the credibility gap that
and carbon projects. often deters long term investors. Well structured carbon
• Publish sector specific carbon readiness and markets and instruments such as Panda and green bonds
abatement cost toolkits to support high-quality can then evolve from pilot initiatives into scalable
project development. financing channels aligned with both national
development priorities and global climate standards.
2) Sustainable Bond Development
Ultimately, Pakistan’s pathway forward lies in shifting
• ICMA members could serve on the board or be from fragmented responses to a climate finance
consulted to ensure professional oversight and ecosystem guided by integrity and supported by
credibility in green project costing and bond functional markets. If executed with transparency,
proceeds tracking. coordination, and accountability, climate finance can
• Build issuer capacity through targeted training on move beyond rhetoric to deliver measurable reductions
bond preparation, disclosure, and post issuance in emissions, resilient infrastructure, and tangible
impact reporting. benefits for communities most exposed to climate risk.
3) ESG Integration The decisive question is no longer whether Pakistan
needs climate finance but whether it can build the
• Develop practical ESG cost and performance institutional and market foundations required to make
measurement standards to convert disclosures into that finance effective, credible, and transformative.
decision useful financial data.
• Issue ESG assurance and internal audit guidelines for References
corporates and financial institutions. https://epd.punjab.gov.pk/system/files/3.1%20Restructuring%20Report.pdf
• Promote ESG linked lending, procurement, and https://www.theenergymix.com/china-races-ahead-on-sustainable-finance/
investment screening frameworks based on interna- https://www.climatebonds.net/news-events/blog/turning-point-japans-green-transf
tionally proposed metrics. ormation
4. Institutional and Government Support https://www.esgtoday.com/japan-launches-inaugural-11-billion-climate-transition-
bond-offering/#:~:text=The%20government%20of%20Japan%20announced,major
• Act as a technical partner to government and %20improvements%20in%20energy%20efficiency.
regulators on carbon markets, climate finance https://www.nccs.gov.sg/singapores-climate-action/mitigation-efforts/carbontax/
instruments, and ESG frameworks. https://www.mas.gov.sg/news/media-releases/2025/gip-achieves-first-close-with-us
d510-million-in-committed-capital
• Facilitate public private platforms to develop
https://www.eda.admin.ch/countries/ireland/en/home/news/news.html/content/ed
bankable climate and carbon project pipelines.
a/en/meta/news/2024/4/10/100665
• Deliver capacity building programs for provincial
https://transparency.org.pk/PUBLICATION/Addressing-Governance-Gaps-and-Safeg
institutions on carbon revenue accounting, MRV uarding-Against-Integrity-Risks.pdf
oversight, and fiscal reporting. https://www.pakenvironment.org/newsletters/could-voluntary-carbon-credits-be-a-
200-million-industry-for-pakistan/#:~:text=Unfortunately%2C%20Pakistan%20has
Conclusion %20made%20limited,energy%20and%20waste%20management%20sectors.
https://irm.edu.pk/pakistans-climate-change-paradox-vulnerability-responsibility-a
Pakistan’s climate challenge is no longer a future risk. It is nd-internal-action/
a present and escalating reality marked by extreme https://ccpi.org/country/pak/
vulnerability, repeated economic shocks, and deep social https://mocc.gov.pk/
costs, despite the country’s minimal contribution to
global emissions. The evidence presented in this article (This article is prepared by Dr. Maiyra Ahmed, Assistant Director,
R&P, under the guidance of Shahid Anwar, Senior Director R&P)
underscores a central paradox. Pakistan ranks among the
ICMA’s Chartered Management Accountant, Nov-Dec 2025 79