Govt to launch World Bank-backed Pakistan Green Taxonomy to boost investment in climate resilience

Pakistan is set to launch the Pakistan Green Taxonomy, a new initiative designed to attract investment in climate resilience and sustainable growth. Supported by the World Bank, the Green Taxonomy aims to provide a structured framework for identifying and prioritizing green activities and investments, The Express Tribune reported. 

The Ministry of Climate Change and Environmental Coordination developed the Green Taxonomy with the cooperation of the Ministry of Finance, the State Bank of Pakistan, and the World Bank. 

The final draft was circulated to various ministries and departments, including the Ministry of Planning, Ministry of Industries, Ministry of Communications, and others, before being presented to the Economic Coordination Committee (ECC). The ECC, after reviewing the proposal, gave its approval, paving the way for its formal implementation. 

The initiative will help policymakers, banks, financial institutions, and investors align with Pakistan’s environmental and climate goals. It will also provide a clear classification for green activities, ensuring transparency in green investments and financial products.

In the wake of severe weather conditions, including heavy rainfall and floods in various regions, the country has faced significant challenges, including reduced sugar production due to changing weather patterns. The Green Taxonomy is seen as a step toward mitigating such risks by focusing on investments that promote environmental sustainability.

The Pakistan Green Taxonomy aims to unlock private finance, especially from commercial banks, for projects focused on climate risk mitigation and adaptation. It is expected to help steer capital towards sectors critical for Pakistan’s sustainable economic growth, including renewable energy, climate-resilient infrastructure, and environmental protection.