Pakistan needs $566b to meet climate targets

OICCI session highlights role of green finance and ESG disclosures

KARACHI:

Pakistan will need a staggering $565.7 billion in investment to meet its Nationally Determined Contributions (NDC) 3.0 climate commitments by 2035, it was revealed during a session on the Pakistan Green Taxonomy (PGT) and ESG Disclosure Guidelines hosted by the Overseas Investors Chamber of Commerce and Industry (OICCI).

According to a statement issued on Wednesday, the session was highlighted the critical role of sustainable finance and transparent ESG reporting in attracting investment required to strengthen Pakistan's climate resilience.

The discussion was held against the backdrop of the Securities and Exchange Commission of Pakistan (SECP)'s issuance of revised ESG Disclosure Guidelines for listed companies, formally aligning them with the PGT. The move aims to strengthen sustainability reporting, improve transparency, and support Pakistan's climate transition and environmental commitments.

Speakers noted that Pakistan's NDC 3.0 targets include a 17% unconditional and 33% conditional reduction in greenhouse gas emissions, a 30% increase in electric vehicle adoption, and a transition to 60% renewable energy. Achieving these targets will depend heavily on mobilising green-aligned investment, making the PGT and robust ESG disclosure practices essential for directing capital towards sustainable projects.

The PGT, launched by the State Bank of Pakistan (SBP) in 2024, provides a classification system to identify activities contributing to environmental objectives such as climate change mitigation, sustainable water use, ecosystem protection, pollution prevention, circular economy practices, and land management. Complementing this framework, the ESG Disclosure Guidelines will gradually transition to mandatory reporting between 2029 and 2031 and establish standardised metrics for financial and non-financial sustainability reporting.

The session was conducted by Farrukh Rehman, an expert on climate regulatory compliance, who said the integration of the PGT into ESG reporting provides businesses with a clear roadmap to align operations with national climate objectives and attract sustainable investment.