ISLAMABAD: Pakistan’s Clean Environment Fund (CEF), created to finance green projects and support sustainable development, has remained inactive for nearly a decade. The fund’s prolonged dormancy has sparked serious concerns about the government’s commitment to environmental protection and climate action.
An official audit of the Pakistan Environmental Protection Agency (Pak-EPA) for FY2023–24 revealed that the fund, incorporated in May 2015 under Section 42 of the Companies Ordinance, has failed to meet its objectives. The report confirmed that no significant operations, board meetings, or financial statements have been conducted since its creation.
Governance and Legal Violations
The audit noted that mandatory Annual General Meetings (AGMs) were never held, violating Section 132(1) of the Companies Act 2017. This failure could result in penalties from the Securities and Exchange Commission of Pakistan (SECP). Additionally, management did not prepare annual financial statements under Section 223, a serious breach of corporate accountability.
The CEF Board, legally authorized to manage the fund’s operations, has remained inactive for years. It holds the authority to establish committees and implement policies for environmental protection but has not fulfilled its mandate.
Institutional Delays and Weak Oversight
In response, Pak-EPA stated that the Ministry of Climate Change and Environmental Coordination is responsible for nominating board members and has delayed the process. The Ministry recently approved a plan to hold a board meeting, but preparations remain incomplete. Auditors rejected this explanation, calling it unsatisfactory and highlighting that prolonged inaction has severely weakened Pakistan’s environmental governance.
Between October 2024 and January 2025, several reminders were sent to convene Departmental Accounts Committee (DAC) meetings, yet no response was received. The audit urged the government to immediately revive the Clean Environment Fund to restore transparency, support regulatory actions, and resume stalled environmental projects.
Environmental Challenges Mount as Action Stalls
Pakistan’s environmental sector faces increasing strain from climate-induced disasters, including floods, deforestation, and persistent smog. However, financial and institutional paralysis has crippled the country’s ability to execute policies effectively. Environmental experts warn that the dormant CEF reflects Pakistan’s broader failure to transform climate pledges into meaningful action, even as global funding for developing nations continues to grow.
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