Pakistan is entering a new phase of economic modernization, climate-aligned policy planning, and transparent digital finance frameworks. This direction became clearer after Finance Minister Senator Muhammad Aurangzeb met a high-level delegation led by Jean Bouquot, President of the International Federation of Accountants (IFAC), where both sides discussed sustainability, SME reforms, digital finance regulations, and global accounting standards.

The meeting highlighted Pakistan’s accelerated push toward green finance, climate resilience, responsible digital asset regulation, and improved SME reporting frameworks—all aimed at creating a documented, stable, and forward-looking national economy.

Climate Change Is Now an Economic Emergency for Pakistan

Climate change is no longer just an environmental debate—it is now a major economic threat. The Finance Minister warned that recent floods alone may reduce Pakistan’s GDP by almost 0.5%, proving that climate risks directly impact national development.

Why Climate Change Matters for Pakistan’s Economy

Pakistan is one of the most climate-vulnerable countries, facing:

Recurring floods
Rapid glacial melting
Heatwaves and drought cycles
Disrupted agricultural productivity
Infrastructure damage worth billions

The Minister stressed that green finance must become a central part of Pakistan’s monetary and fiscal planning. He emphasized:

Climate-aligned financial systems
Green taxonomy for investment decisions
Stronger sustainability reporting for businesses
Environmental risk assessments in lending

These reforms aim to help Pakistan attract international green funding while ensuring long-term resilience.

Pakistan Accelerates Work on Green Taxonomy and Sustainability Disclosures

Pakistan is now aligning its financial system with global climate-finance standards. According to the Minister:

Key Steps Underway

Pakistan is creating its national green taxonomy, identifying which sectors and projects qualify as climate-friendly.
Sustainability disclosures for businesses are being rolled out in phases.
Financial frameworks are being redesigned so banks, insurers, and capital markets can measure climate risks.
International climate reporting frameworks are being incorporated into Pakistan’s corporate governance structure.

This shift will help investors distinguish between sustainable and harmful economic activities—a key requirement for global investors and climate-finance institutions.

Digital Assets Regulation: Pakistan Introduces Licensing-Based Virtual Asset System

Another major part of the discussion was Pakistan’s progress on digital finance, especially the regulation of virtual assets, crypto activities, and digital transactions.

New Digital Governance Reforms Announced

The Minister briefed the delegation on:

Pakistan Virtual Asset Regulatory Authority (PVARA)
A new Crypto Council
Licensing system based on KYC (Know Your Customer) and AML/CFT (Anti-Money Laundering/Counter-Terror Financing) regulations
Transparent digital-asset reporting requirements

The goal is not to ban digital assets but to bring them into a secure, documented, and regulated framework while protecting consumers from scams, frauds, and illegal trading platforms.

This is part of the government’s broader effort to integrate digital innovation into the economy without compromising financial security.

SME Reforms: Helping Small Businesses Enter the Documented Economy

The Minister highlighted one of Pakistan’s long-standing economic challenges: weak SME financial reporting systems. Small and medium enterprises contribute significantly to Pakistan’s economy yet remain poorly documented, under-regulated, and financially underserved.

Challenges Faced by Pakistani SMEs

No standardized financial reporting
Limited understanding of tax laws
Manual bookkeeping
Weak digital literacy
Difficulty accessing bank loans
Lack of audits or documented financial history

Government’s Focus on SME Modernization

The Finance Minister emphasized:

Coordinated institutional support
Digital accounting systems for small businesses
Training programs for SME financial managers
Standardized reporting frameworks
Integration into Pakistan’s tax and banking systems

These steps will help SMEs:

Access financing
Improve export competitiveness
Comply with regulations
Become part of Pakistan’s formal economy

Modernizing SME reporting is essential for strengthening Pakistan’s industrial and export clusters.

IFAC’s Global Agenda: Sustainability, Audit Ethics, AI, and Public Sector Reform

Jean Bouquot, President of IFAC, shared insights on global trends shaping the accounting profession.

Key International Priorities

Sustainability reporting and non-financial disclosures
Audit ethics and accountability
Training accountants on AI integration
Modernizing public-sector reporting
Expanding non-financial assurance services

He stressed that global demand for sustainability assurance is growing rapidly. Countries now require reliable verification of climate impact, environmental footprints, and social governance metrics.

Bouquot appreciated Pakistan’s efforts to align with the IOSCO principles, IFRS, and other international standards.

Pakistan Advances Public Sector Financial Reforms

Pakistan is undergoing a major transformation in public-sector accounting, shifting from cash-based accounting to accrual-based IPSAS, which is globally recognized.

Auditor General’s Briefing

Auditor General Maqbool Ahmad Gondal informed the delegation that:

Pakistan is implementing new ERP-based systems across departments.
The government plans to introduce end-to-end electronic payments and receipts this fiscal year.
This shift will improve transparency, reduce leakages, and create real-time financial visibility.

Accrual-based accounting will make Pakistan’s public sector more transparent, efficient, and aligned with international standards.

SECP’s Update: Strong Regulatory Alignment and Sustainability Reporting

SECP Chairman Akif Saeed provided another important update.

Major Reforms Underway

Regulatory alignment with IOSCO’s global standards
Reforms in insurance, pension systems, and capital markets
Gradual introduction of sustainability disclosures
Ensuring both listed and unlisted companies follow IFRS
Strengthening compliance and corporate governance

These steps are essential for boosting investor confidence and improving Pakistan’s rankings in global financial governance.

Regional Cooperation, AI Training, and Future Trends

Representatives from SAFA and ICMAP discussed:

Regional cooperation in financial education
Enhancing accountants’ training through AI tools
Strengthening the profession’s ability to produce reliable sustainability assurance
Pakistan’s improving economic direction

The delegation appreciated Pakistan’s commitment to modernization and reform despite economic challenges.

Pakistan’s Vision: A Sustainable, Digitally Regulated, and Globally Integrated Economy

In closing, Finance Minister Muhammad Aurangzeb thanked the delegation and reaffirmed Pakistan’s commitment to:

Strengthening global partnerships
Accelerating sustainability reforms
Supporting SMEs through documentation and training
Ensuring responsible digital finance governance
Improving public-sector transparency
Promoting international accounting alignment

This meeting signals Pakistan’s shift toward green, transparent, and tech-driven economic governance—a direction essential for long-term stability and global integration.

Conclusion

Pakistan is taking bold steps to modernize its economy by embracing green finance, improving SME documentation, regulating digital assets, and aligning with global accounting standards. These reforms will help Pakistan build resilience against climate risks, attract foreign investors, support small businesses, digitize financial governance, and strengthen public-sector transparency.

The Finance Minister’s meeting with IFAC leadership reflects a strong commitment to moving Pakistan toward a sustainable, accountable, and future-ready economic model.

Frequently Asked Questions (FAQs)

1. What is green finance and why is Pakistan focusing on it?

Green finance refers to investments and financial activities that support environmentally friendly and climate-resilient projects. Pakistan is focusing on green finance because climate change—especially floods—is causing major economic losses.

2. What new steps has Pakistan taken to regulate digital assets and crypto?

Pakistan has created the Pakistan Virtual Asset Regulatory Authority (PVARA) and a new Crypto Council to introduce licensing, KYC, AML, and strict monitoring to ensure safe and transparent digital-asset use.

3. How will SME reforms benefit small businesses in Pakistan?

SME reforms will help small businesses improve financial reporting, access bank loans, use digital accounting systems, and become part of the documented economy, which increases growth and stability.

4. What role is SECP playing in sustainability and financial reforms?

SECP is aligning Pakistan’s regulations with global IOSCO standards, adopting IFRS fully, reforming insurance and pensions, and rolling out sustainability disclosures for both listed and unlisted companies.

5. How will Pakistan’s shift to accrual-based IPSAS improve public finance?

The shift to accrual-based IPSAS and ERP systems will increase government transparency, reduce financial leakages, enable real-time data, and bring Pakistan’s public sector in line with international standards.

Pakistan Strengthens Green Finance, SME Reforms, and Digital Governance — Finance Minister’s Key Meeting with Global Accounting Leaders

Climate Change Is Now an Economic Emergency for Pakistan

Why Climate Change Matters for Pakistan’s Economy