ACCA calls for stronger climate investment in Pakistan

ISLAMABAD, November 4, (Daily Global South)– Pakistan needs greater investment in renewable energy, stronger sustainability disclosures and climate-resilient business practices to support its economic recovery and energy transition, according to a new report by the Association of Chartered Certified Accountants (ACCA).

The report, titled Asia Pacific Builds a Sustainable Future: Resilience in Economy, Environment and Society, highlights the growing adoption of sustainability reporting standards across Asia Pacific, while stressing that businesses and policymakers must translate sustainability commitments into economic resilience, investment and long-term business value.

According to the research, more than 80% of ASEAN economies, measured by GDP, have adopted or plan to adopt standards issued by the International Sustainability Standards Board (ISSB). Including the Chinese mainland, economies that have adopted these standards represent approximately US$60 trillion, equivalent to 47% of global GDP.

The findings hold particular significance for Pakistan, where economic recovery and the transition towards cleaner energy are increasingly linked to climate resilience and sustainable investment.

Pakistan’s economy recorded growth of 3.65% in FY2025-26, according to updated national accounts estimates, while its installed electricity generation capacity reached 49,651 megawatts (MW), including 7,319 MW from solar net metering.

The growing contribution of distributed solar energy reflects the country’s shift towards renewable sources. However, the transition faces challenges, including financing constraints, grid integration, energy storage, project bankability and limited institutional capacity.

Pakistan also remains highly vulnerable to climate-related threats, including floods, extreme heat, water stress and glacial melt, which pose risks to agriculture, infrastructure, livelihoods and economic stability.

The ACCA report emphasizes that decarbonisation extends beyond reducing carbon emissions. It is also essential for strengthening energy security and economic resilience by helping businesses and governments manage fossil-fuel price volatility, geopolitical disruptions and supply-chain risks.

Renewable energy generation and storage, therefore, need to be treated as strategic economic priorities, supported by investment and financing mechanisms that make projects commercially viable.

Sharath Martin, Senior Policy Consultant at ACCA Asia Pacific, said businesses need to view sustainability reporting as a tool for strengthening resilience rather than merely fulfilling regulatory requirements.

“What we heard consistently in our roundtables is that the narrative needs to change. This isn’t about disclosures per se, this is about making businesses more resilient. The same is true of decarbonisation. It cuts emissions, but it also protects businesses and economies from fossil fuel price volatility, rising costs and supply shocks,” he said.

The report also highlights the importance of sustainability disclosures in attracting investment and maintaining access to international markets.

Pakistan has taken steps in this direction through the Securities and Exchange Commission of Pakistan’s (SECP) phased adoption of IFRS Sustainability Disclosure Standards and the subsequent introduction of ESG disclosure guidelines.

Water scarcity and extreme heat are identified as among the most significant economic risks of the century. According to the report, water- and heat-related risks could reduce GDP by 10-15% in lower-income countries by 2050 if left unaddressed.

It further notes that floods accounted for more than half of the 7.2 billion people affected by disasters across Asia Pacific between 1970 and 2024.

Helen Brand OBE, Chief Executive of ACCA, said Asia Pacific was developing the framework for sustainability reporting faster than any other region, but cautioned that adopting reporting standards alone would not deliver decarbonisation or resolve wider sustainability challenges.

The report calls on businesses to incorporate climate- and nature-related risks into corporate strategies, budgets and investment decisions. It also urges policymakers to mobilise capital, strengthen reporting and assurance capabilities, and accelerate investment in renewable energy.

For Pakistan, the findings underline the importance of aligning its energy transition, financial sector reforms and climate policies with long-term economic resilience and sustainable development.