Desk Notes | Manāra Policy & Practice | March 2026
Pakistan crossed a quiet but consequential threshold on December 31, 2024. The Securities and Exchange Commission of Pakistan formally mandated the phased adoption of IFRS S1 and IFRS S2, the International Sustainability Standards Board's disclosure standards covering sustainability-related financial risks and climate-related risks respectively. The first phase came into effect for the largest listed and public interest companies from July 1, 2025. Subsequent phases extend the requirement to large companies from July 2026, and to remaining listed entities and unlisted public interest companies from July 2027.Pakistan is not alone in this move. As of late 2025, seventeen jurisdictions had finalised decisions adopting the ISSB Standards, with an additional sixteen in the process of developing final regulations, together representing a significant and accelerating share of global capital markets. Pakistan's adoption places it in the company of jurisdictions actively aligning their financial systems with investor-grade sustainability norms. That is, by any measure, a meaningful policy signal.The commentary that followed this regulatory milestone was largely, and reasonably, focused on large listed companies. The SECP has introduced ESG disclosure guidelines, launched the ESG Sustain platform to centralise relevant resources and corporate disclosures, and initiated stakeholder engagement efforts including industry surveys and capacity-building outreach focused on the adoption of IFRS sustainability standards. These are the right first moves for a new regulatory regime. But they leave a critical question almost entirely unasked.What does this mean for the enterprises that exist below the listing threshold, and well outside the frame of Pakistan's formal capital markets, but that development finance organisations, impact investors, and international donors are actively trying to bring into the economic mainstream?
The architecture of IFRS S1 and S2 was designed with large, publicly accountable entities in mind. The standards assume the existence of cross-functional teams with expertise at the intersection of finance, climate science, and governance. The preparation of IFRS-aligned sustainability disclosures necessitates cross-functional expertise particularly at the intersection of finance, climate science, and ESG risk management, and achieving alignment often requires considerable investment in IT systems, data analytics platforms, external assurance services, and third-party consultancy support. For resource-constrained firms, these upfront costs may be prohibitive.For Pakistan's large conglomerates and multinationals, this is a challenge that capacity building, external consultancy, and phased timelines can address. But the challenge at the other end of the enterprise spectrum is different in kind, not just degree.Pakistan's social and growth enterprise ecosystem, the small and growing businesses (SGBs), women-led ventures, green economy startups, and community enterprises that incubators, accelerators, and patient capital providers work with every day, operates in a different financial reality. These enterprises typically carry no formal sustainability reporting infrastructure at all. Many do not have audited financial statements. Their impact is real, often measurable in the communities they serve, but it is not reported in any standardised way. In Pakistan, the general perception among business practitioners remains that corporate responsibility relates primarily to altruism or philanthropic activities, rather than to structured frameworks with measurable outcomes. For enterprises at the SGB tier, even this voluntary impulse toward impact disclosure is rarely translated into any form that an institutional investor or development finance organisation can act on.This matters because the regulatory momentum now underway is not neutral in its effects. As ESG-aligned disclosure becomes standard practice for listed companies, and as institutional investors increasingly screen their portfolios against these standards, the gap between enterprises that can speak the language of impact measurement and those that cannot will widen. The enterprises on the wrong side of that gap will find themselves progressively invisible to the capital flows that could most benefit them.
The timing of Pakistan's ESG mandate coincides with a period of significant stress in the country's startup and enterprise financing ecosystem. Pakistan's total disclosed equity funding fell to just USD 22.5 million in 2024, down from USD 75.8 million in 2023, representing a drop of over 70% and the lowest level since 2018. All-women founding teams received zero funding, a complete reversal from 2023. Angel and accelerator participation shrank to just 6% of deals, reflecting a more risk-averse environment.These numbers describe the formal venture-tracked ecosystem. The story below that threshold, among the social and growth enterprises that operate outside venture radar entirely, is less documented but no less consequential. Pakistan's population of 241.5 million, 65% of whom are under 30, provides a strong demographic dividend for innovation, and the digital economy could generate Rs 9.7 trillion in value by 2030, but unlocking this potential requires targeted support for women entrepreneurs, improved infrastructure, and harmonised regulatory frameworks.Impact investors operating in this space, providing patient capital to enterprises that the formal VC ecosystem will not touch, are precisely the actors who need reliable, comparable impact data from the enterprises they support. Without it, they cannot report credibly to their own donors and development partners. Without credible reporting, they cannot mobilise additional capital. The chain of accountability that makes impact investing viable depends, at every link, on enterprises being able to articulate and document their social and environmental performance.Pakistan's new ESG disclosure regime creates an opening, and a pressure, to close this gap. But closing it requires more than extending reporting obligations downward through the enterprise size spectrum. It requires building the analytical infrastructure, the frameworks, the tools, and the institutional capacity, that would allow SGBs to engage with impact measurement in ways that are proportionate to their scale and genuinely useful to the actors around them.
Three gaps in particular deserve attention, and are receiving very little of it.The first is the question of corporate capital flows into Pakistan's social and growth enterprise ecosystem. Pakistan's large corporations and family conglomerates spend considerable sums on CSR and community investment. But very little of this is channelled into structured investment in social enterprises or SGBs. Most of it flows through philanthropic channels, event sponsorships, or incubation partnerships that function more as visibility exercises than genuine investment relationships. As mandatory ESG reporting raises the stakes for how corporate impact is measured and disclosed, there is an opportunity, and arguably a commercial incentive, for Pakistan's private sector to redirect some of this expenditure toward forms of engagement that generate measurable, reportable, and investable outcomes. Nobody has mapped this landscape or articulated this opportunity in any systematic way.The second gap is on the demand side of the impact investment equation. Pakistan's incubators, accelerators, and development finance organisations frequently describe an investment readiness problem among the enterprises they support. But investment readiness is rarely defined consistently, and the structural factors that produce it, or prevent it, have not been rigorously examined for Pakistan's specific context. Women-led enterprises, green economy ventures, and enterprises in conflict-affected or geographically marginalised regions face barriers to investment readiness that are qualitatively different from those faced by urban tech startups. Mapping these barriers, and identifying what interventions can most efficiently address them, is analytically tractable through desk-based research and has not been done.The third gap relates to impact measurement itself. Pakistan now has dozens of incubation and acceleration programmes, most of them donor-funded or government-linked, and most of them making impact claims to their principals. But there is no published comparative analysis of the measurement frameworks these programmes use, whether their outputs are comparable, or whether the impact claims they make hold up to any form of external scrutiny. As international development finance becomes more selective, and as ESG-aligned disclosure becomes standard practice upstream, this measurement gap will have direct consequences for how Pakistan's incubation ecosystem is funded and evaluated.
This piece is the first of a series of analytical interventions Manāra is developing under its Growth and Innovation Ecosystems workstream, at the intersection of enterprise development, ESG transition, and impact capital in Pakistan.Over the coming months, Manāra will be examining three connected lines of inquiry. The first is a mapping of how Pakistan's private sector currently channels corporate capital toward social and growth enterprises, and what the SECP's new disclosure regime means for how this engagement is structured, measured, and reported. The second is an investment readiness assessment examining the structural barriers that prevent Pakistan's social, green, and women-led enterprises from accessing patient capital, with a focus on the sub-threshold segment that existing ecosystem reports consistently undercount. The third is a comparative review of social impact measurement frameworks in use across Pakistan's incubation and acceleration landscape, with the aim of identifying where coherence is possible and what a more institutionally grounded approach might look like.These are not exclusively academic questions. They carry direct implications for how development finance organisations design their programming, how corporate actors structure their ESG strategies, and how policymakers calibrate the regulatory environment for enterprise development. Manāra welcomes engagement from practitioners, investors, policymakers, and researchers who are working on any of these questions.
These are the questions driving Manāra's work in this space. They are not rhetorical. We are actively pursuing answers to each of them, and we expect those answers to be partial, contested, and worth arguing about. On the ESG transition and enterprise development:
On corporate capital and social impact:
On investment readiness and the demand side of impact capital:
On impact measurement across Pakistan's incubation ecosystem:
Desk Notes is, by design, exploratory. We write to think out loud, not only to conclude. If you are working on any of these questions, if you disagree with the framing, if you have data or experience that challenges the picture we have drawn here, we want to hear from you. Reach us at manara.policy@gmail.com