Pakistan has approved its first-ever Green Taxonomy, a framework supported by the World Bank to guide investment in climate-friendly sectors and strengthen the country’s resilience against climate change.
The taxonomy, developed by the Ministry of Climate Change in collaboration with the Ministry of Finance and the State Bank of Pakistan, defines clear criteria for identifying “green” activities. By offering clarity to financial markets, the initiative is expected to unlock new streams of climate finance, encourage private sector participation, and steer funds towards renewable energy, low-carbon transport, water management, and disaster resilience projects.
The approval comes at a critical time when Pakistan is facing heavy rains and floods that have hit crops and reduced sugarcane yields. Officials argue that the taxonomy will help the financial sector prioritize investments that address climate risks while also contributing to long-term economic stability.
The Climate Change Division highlighted that the framework was finalized after an extensive consultative process involving ministries, provincial governments, regulators, and technical experts. The Economic Coordination Committee (ECC) has formally endorsed the taxonomy, enabling its rollout across sectors.
Experts believe the Pakistan Green Taxonomy will boost investor confidence and place the country on the map as an attractive destination for sustainable finance.
