Recognizing the profound influence of Environmental, Social, and Governance (ESG) factors on investor confidence, financial stability, and long-term business success.
The Securities and Exchange Commission of Pakistan (SECP) is taking decisive action to embed Environmental, Social, and Governance (ESG) considerations into Pakistan’s regulatory framework. Recognizing the critical impact of ESG factors on investor confidence, financial stability, and long-term business success, SECP is aligning with key stakeholders, including the Institute of Chartered Accountants of Pakistan (ICAP), Pakistan Stock Exchange (PSX) and the State Bank of Pakistan, to drive transformative change.
Building on the ESG roadmap issued in June 2022 and the International Sustainability Standards Board’s (ISSB) publication of IFRS S1: General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2: Climate-related Disclosures in June 2023, SECP is setting a new benchmark for transparency and accountability in sustainability reporting.
In collaboration with ICAP and other stakeholders, SECP has finalized a comprehensive phased implementation plan, outlined in its December 31, 2024 Order. This mandates the adoption of sustainability disclosure requirements in three clearly defined stages:
Phase I: Effective from July 1, 2025
Phase II: Effective from July 1, 2026
Phase III: Effective from July 2027
The Sustainability Report is required to comply with Section 232 of the Companies Act, 2017. From the second reporting year onward, auditors must ensure these disclosures align with International Standards on Auditing.
This decisive initiative underscores SECP’s unwavering commitment to embedding sustainability at the core of Pakistan’s corporate governance framework. By establishing these robust standards, SECP leads the charge toward a transparent, resilient, and forward-looking financial ecosystem.
#sustainability #ICAP #IFRS #SECP #PSX
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