Pakistan’s vulnerability to climate change is undeniable. Despite contributing less than 1% of global greenhouse gas emissions, the country is among the most climate-vulnerable nations. Rising temperatures, unpredictable rainfall patterns, and devastating floods have caused extensive damage to infrastructure, disrupted agricultural productivity, and threatened millions of lives. This is not just an environmental challenge—it is a socio-economic crisis that requires an immediate and effective climate action roadmap.
The urgency for coordinated efforts has never been greater. Pakistan has made commendable strides by participating in global climate frameworks, aligning with the Paris Agreement, and recently announcing its Green Taxonomy and Carbon Trade Market Policy Guidelines. While these initiatives offer a framework for sustainable development, their success depends on translating these commitments into tangible outcomes through collaboration between the public and private sectors.
One of the most promising pathways lies in public-private partnerships (PPPs). With government resources stretched thin, PPPs can be a game-changer, providing access to climate funding, scaling up innovative solutions, and accelerating progress toward Pakistan’s Nationally Determined Contributions (NDCs). Pakistan has committed to a 50% reduction in projected greenhouse gas emissions by 2030, with 60% renewable energy in the power sector and 30% of new vehicles sold being electric by 2030 as key targets. Achieving these ambitious goals requires private sector engagement through sector-specific emission reduction targets, green financing instruments, and tax incentives that align business operations with national climate objectives. Encouraging voluntary climate disclosure frameworks, such as the Securities and Exchange Commission of Pakistan’s (SECP) ESG disclosure guidelines, can enhance corporate accountability, while mobilizing private capital through initiatives like the Overseas Investors Chamber of Commerce and Industry’s (OICCI) climate-focused dialogues can facilitate investments in net-zero projects. Additionally, supporting climate-focused startups through programs like the Green Climate Fund’s $15 million investment in Pakistan’s venture capital sector can drive innovation, and large corporations can integrate sustainability into their corporate social responsibility (CSR) activities, such as reforestation, and environmental conservation projects. By effectively implementing these strategies, Pakistan can bridge the gap between policy commitments and real-world impact, unlocking the full potential of the private sector in driving sustainable, climate-resilient growth. Globally, 41% of NDCs rely on private sector participation, yet in Pakistan, private sector investment in climate initiatives remains at a mere 0.5% of GDP. This is a significant missed opportunity that must be addressed to unlock the full potential of the corporate sector in driving climate action.
The private sector is key to building climate-resilient infrastructure, investing in renewables, and promoting nature-based solutions. Collaboration in these areas bridges the climate finance gap and unlocks economic opportunities. Integrating climate adaptation enhances disaster resilience through early warning systems and resilient urban planning. Investments in flood-resistant infrastructure, drought-resistant agriculture, and smart water management can significantly mitigate climate risks. Technology-driven early warning systems, such as real-time weather monitoring and AI-based disaster prediction models, can help mitigate the impact of extreme weather events. Furthermore, sustainable urban planning—including green building designs, climate-smart transportation, and improved drainage systems—is essential for protecting rapidly growing cities from climate-related hazards. To facilitate these investments, the government must create an enabling environment for PPPs by offering clear incentives, ensuring regulatory transparency, and fostering robust governance frameworks that attract long-term private sector participation in climate adaptation initiatives.
At the 3rd Pakistan Climate Conference 2025, organized by the Overseas Investors Chamber of Commerce and Industry (OICCI), business leaders came together with policymakers and climate experts to address the critical need for corporate participation in climate action. The conference emphasized the corporate sector’s role in building a more climate-resilient Pakistan through decarbonization, circular economy practices, and sustainable innovation. Industries are increasingly adopting resource efficiency strategies, such as energy-efficient manufacturing processes, water conservation technologies, and sustainable supply chain management, to minimize environmental impact. Industrial recycling initiatives, including waste segregation, material recovery, and repurposing industrial by-products, are gaining traction, helping reduce landfill waste and promote circularity in production cycles. Additionally, waste-to-energy projects, such as biogas plants, incineration-to-electricity facilities, and solar-powered desalination units, are being explored as viable solutions to generate clean energy from industrial and municipal waste. These efforts demonstrate a growing commitment from the private sector to actively support national climate goals and integrate sustainability into their business models, paving the way for a greener and more resilient economy.
Expanding renewable energy is central to Pakistan's climate strategy, yet only 7% of its energy mix comes from renewables, with 41% reliant on fossil fuels. Scaling up solar, wind, and hydropower is crucial for cutting emissions, enhancing energy security, and creating green jobs. Private sector investment can accelerate this transition, unlocking significant economic benefits. A World Bank study estimates that renewable energy projects could generate over 327,000 jobs in Pakistan by 2030, supporting inclusive growth. Additionally, the World Bank has pledged $20 billion over the next decade to support clean energy, climate resilience, and private-sector development. The private sector's involvement in renewable energy not only aids in achieving national climate goals but also presents significant investment potential. By investing in renewables, businesses can drive sustainable growth while strengthening Pakistan’s climate resilience.
Similarly, climate-smart agriculture is no longer an option—it is essential. With 40% of Pakistan’s workforce dependent on agriculture, erratic weather patterns and water scarcity pose existential threats. Drought-resistant crops, efficient irrigation systems, and methane reduction initiatives can help protect rural livelihoods and ensure food security. These innovations require investment, and the corporate sector can support their development and adoption.
Securing adequate climate finance remains one of Pakistan’s biggest challenges, with an estimated funding gap of $348 billion by 2030. The recently launched National Climate Finance Strategy (NCFS) provides a structured framework to mobilize both domestic and international resources, aligning with global initiatives such as the New Collective Quantified Goal (NCQG) on climate finance. To attract investments, Pakistan is expanding its financing tools, including the establishment of a carbon trading market under the Carbon Trade Policy, which enables monetization of carbon offsets while protecting natural ecosystems. Projects like the Delta Blue Carbon initiative, which restores mangroves while generating carbon credits, showcase the country’s potential in leveraging nature-based solutions for climate financing. Additionally, the government is exploring green bonds, with ongoing negotiations for Panda bond issuance worth $200-250 million, backed by the Asian Infrastructure Investment Bank (AIIB) to support eco-friendly projects. Blended finance mechanisms, combining public and private investments, are also being explored to de-risk and encourage corporate participation in climate projects.
Beyond clean energy and agriculture, building climate resilience also requires robust infrastructure that can withstand extreme weather events. Flood-resistant housing, climate-proof transportation systems, and early warning mechanisms are essential for disaster preparedness. Here too, public-private collaboration can make a substantial impact. Companies can offer innovative engineering solutions and real-time monitoring systems while working with communities to strengthen disaster resilience. Notable examples of successful carbon offset projects in Pakistan include the Billion Tree Tsunami, which restored 350,000 hectares of forests and degraded land in Khyber Pakhtunkhwa, surpassing its Bonn Challenge commitment. These initiatives demonstrate the potential for impactful climate action through coordinated efforts between government entities and private organizations.
Now is the time for Pakistan to lead by example—advocating for equitable climate finance, ensuring fair trade policies, and fostering meaningful international partnerships. By working together, the public and private sectors can transform Pakistan’s vulnerabilities into strengths, turning country into a model of climate resilience and sustainable development.
The time to act is not tomorrow—it is today.
Sakina Chakera is an analyst and research lead at the Overseas Investors Chamber of Commerce & Industry
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