Pakistan’s Clean Environment Fund is Inactive for Nearly a Decade

Pakistan’s Clean Environment Fund (CEF), set up to finance green projects and support sustainable development, has remained non-functional for nearly a decade, raising alarm over the government’s commitment to environmental protection. 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 audit found that no major operations, board meetings, or financial statements have been conducted since its inception. The report notes that mandatory Annual General Meetings (AGMs) were never held, violating Section 132(1) of the Companies Act 2017.  This lapse could attract penalties from the Securities and Exchange Commission of Pakistan (SECP).  The management also failed to prepare annual financial statements as required under Section 223 of the same Act — a serious breach that raises questions about governance and accountability. The CEF Board, legally empowered to manage the fund’s affairs, remains inactive, despite clear authority to form committees and take policy measures for environmental protection.  In its defense, Pak-EPA claimed that the Ministry of Climate Change and Environmental Coordination is responsible for board nominations and has been delaying the process. While the Ministry recently approved a plan to hold a board meeting, preparations remain incomplete. Auditors, however, rejected this justification, calling it unsatisfactory and warning that years of inactivity have undermined Pakistan’s environmental performance.  The report added that multiple reminders to convene Departmental Accounts Committee (DAC) meetings, sent between October 2024 and January 2025, went unanswered. The audit urged the government to immediately operationalize the Clean Environment Fund to restore transparency, support regulatory action, and revive stalled environmental projects. Pakistan’s environmental sector has been under increasing pressure amid climate-induced floods, smog crises, and deforestation, yet financial and institutional paralysis has crippled policy execution.  Environmental experts say the dormant CEF symbolizes Pakistan’s broader failure to translate climate commitments into real action, even as global funding opportunities for developing nations continue to expand.