Pakistan needs around $566bn to meet climate targets by 2035

January 14, 2026 (MLN):  Pakistan will require an estimated $565.7 billion in investment by 2035 to meet its updated climate commitments under Nationally Determined Contributions (NDC) 3.0.

The estimate showed the scale of financing needed to cut greenhouse gas emissions, expand renewable energy, and strengthen climate resilience in one of the world’s most climate-vulnerable countries.

The figures were shared during a session hosted by the Overseas Investors Chamber of Commerce and Industry (OICCI), as per press release issued.

The discussion focused on how the Pakistan Green Taxonomy (PGT) and enhanced ESG disclosure frameworks can help channel domestic and foreign capital toward climate-aligned projects.

The session was held against the backdrop of the Securities and Exchange Commission of Pakistan (SECP) aligning its revised ESG Disclosure Guidelines with the Pakistan Green Taxonomy.

The alignment is aimed at improving sustainability reporting and investor transparency across listed companies.

Under NDC 3.0, Pakistan has committed to 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 in the national energy mix.

Achieving these targets will depend largely on access to green finance, concessional funding, and private sector participation.

The Pakistan Green Taxonomy, introduced by the State Bank of Pakistan in 2024, provides a classification framework to identify economic activities that contribute to environmental objectives.

These include climate mitigation, sustainable water use, ecosystem protection, pollution control, circular economy practices, and land management.

The taxonomy is intended to guide banks, investors, and corporates in aligning financing decisions with climate goals.

Alongside this, the ESG Disclosure Guidelines set standardized metrics for financial and non-financial reporting.

While currently voluntary, the framework is expected to transition toward mandatory compliance between 2029 and 2031, increasing reporting requirements for listed companies and improving comparability for investors.

The alignment with the green taxonomy and credible ESG reporting could improve Pakistan’s access to international climate finance, lower funding costs for compliant firms, and enhance investor confidence at a time when global capital is increasingly tied to sustainability criteria.

The discussion also covered technical aspects of taxonomy alignment, including substantial contribution thresholds, do-no-significant-harm principles, and minimum social safeguards, as well as reporting standards such as GRI, ISSB, and TCFD.

These frameworks are seen as critical for ensuring consistency, reducing greenwashing risks, and positioning Pakistan’s corporate sector within global sustainable finance markets.

For Pakistan’s capital markets and banking sector, the $565.7bn figure highlights both a major financing gap and a potential opportunity, as climate-linked investment becomes an increasingly important driver of long-term economic and market growth.

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