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Fostering Green Finance for Sustainable Development: A Focus on Textile and Leather Small Medium Enterprises in Pakistan

Author

Listed:
  • Love Kumar

    (Soil, Water and Ecosystem Sciences Department, IFAS West Florida Research and Education Center, University of Florida, 5988 Highway 90, Building 4900, Milton, FL 32583, USA)

  • Farah Nadeem

    (World Wide Fund for Nature-Pakistan (WWF-Pakistan), WWF-Pakistan Office, inside Ali Institute of Education, Ferozepur Road, Lahore 54600, Punjab, Pakistan)

  • Maggie Sloan

    (Adelphi Consult GmbH, 10559 Berlin, Germany)

  • Jonas Restle-Steinert

    (Adelphi Consult GmbH, 10559 Berlin, Germany)

  • Matthew J. Deitch

    (Soil, Water and Ecosystem Sciences Department, IFAS West Florida Research and Education Center, University of Florida, 5988 Highway 90, Building 4900, Milton, FL 32583, USA)

  • Sohail Ali Naqvi

    (World Wide Fund for Nature-Pakistan (WWF-Pakistan), WWF-Pakistan Office, inside Ali Institute of Education, Ferozepur Road, Lahore 54600, Punjab, Pakistan)

  • Avinash Kumar

    (Department of Chemistry and Biochemistry, Florida Atlantic University, 777 Glades Road, Boca Raton, FL 33431, USA)

  • Claudio Sassanelli

    (Department of Mechanics, Mathematics and Management, Politecnico di Bari, Via Orabona 4, 70125 Bari, Italy)

Abstract

The green financing landscape in Pakistan is evolving, which signifies the need for a comprehensive gap analysis that examines the present status and constraints in supporting green finance in the country. Textile and leather industries are key sectors in Pakistan’s economy and rely heavily on small and medium enterprises (SMEs). Excessive resource use and inadequate environmental management methods pose a significant danger to the sectors’ long-term viability and account for an extreme relevance to the embracement of the circular economy paradigm. Green finance aims to ensure that economic process, safeguarding the environment, and maintaining environmental integrity all grow together. This research used a literature review and interview-based methodology (in which we interviewed more than 20 people representing SME operators, government officials, and banking staff) to examine SME finance, green banking, and demand and supply side constraints to cleaner/sustainable manufacturing in Pakistan’s leather and textile sectors. The research findings show that policy uncertainty and financial short-termism are economic impediments and obstacles that constitute a path-dependent, lock-in, non-linear mechanism. This study found a lack of tailored business advisory and financing for SMEs to learn about and invest in sustainable consumption and production (SCP). Furthermore, many banks in Pakistan also show a strong commitment to the expansion of the State Bank of Pakistan’s Green Banking Guidelines (GBGs). The results also highlight the high value of government assistance for businesses participating in green initiatives and incentives for banking institutions and private limited companies to support and invest in green practices.

Suggested Citation

  • Love Kumar & Farah Nadeem & Maggie Sloan & Jonas Restle-Steinert & Matthew J. Deitch & Sohail Ali Naqvi & Avinash Kumar & Claudio Sassanelli, 2022. "Fostering Green Finance for Sustainable Development: A Focus on Textile and Leather Small Medium Enterprises in Pakistan," Sustainability, MDPI, vol. 14(19), pages 1-24, September.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:19:p:11908-:d:921098
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    References listed on IDEAS

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    2. Ghulam Mustafa & Saqib Hussain, 2023. "What are the Factors Making Pakistan’s Exports Stagnant? Insight from Literature Review," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 62(3), pages 449-460.
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    4. Yuanyuan Li & Yindan Zhang & Yasir Ahmed Solangi, 2023. "Assessing ESG Factors and Policies of Green Finance Investment Decisions for Sustainable Development in China Using the Fuzzy AHP and Fuzzy DEMATEL," Sustainability, MDPI, vol. 15(21), pages 1-23, October.

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