If you run a factory in Karachi, Lahore, Faisalabad, or Sialkot, chances are a buyer, bank, or investor has already asked you about your ESG numbers. Maybe it was a European buyer asking for your emissions data. Maybe it was a bank asking about your governance structure before approving a loan. Either way, ESG reporting in Pakistan is no longer a topic you can ignore and hope it goes away.
The Securities and Exchange Commission of Pakistan has been building out a full ESG regulatory framework since 2022, and manufacturers, both listed and private, are increasingly expected to understand where they stand. This guide breaks down what SECP actually requires today, what is still voluntary, and what Pakistani factory owners and facility managers need to do to get ahead of it.
By the end of this guide, you will know exactly which SECP guidelines apply to your business, how they connect to global standards like IFRS S1 and S2, and what practical steps to take first.
1. Why SECP ESG Guidelines Matter for Pakistani Manufacturers Right Now
Export orders, bank financing, and investor interest are all starting to carry ESG conditions attached. Textile exporters selling into the EU are being asked for carbon and labor data as part of buyer audits. Local banks are beginning to factor sustainability practices into corporate lending decisions. Even domestic investors are paying closer attention to how a company treats its workers and manages its environmental footprint.
Pakistan is also one of the most climate vulnerable countries in the world, which has pushed the government to commit to Nationally Determined Contributions under its climate agreements. SECP’s ESG push is part of how that national commitment trickles down into corporate obligations.
For manufacturers specifically, energy consumption, emissions, and worker safety sit right at the center of ESG scoring. That means the same energy and facility data you already track for cost control can double up as ESG reporting material, if it is captured correctly.
2. What Are the SECP ESG Disclosure Guidelines
The SECP ESG Disclosure Guidelines were issued for listed companies as part of the Commission’s broader ESG Regulatory Roadmap, first introduced in June 2022. The guidelines were developed with input from an ESG Task Force that included the Pakistan Stock Exchange, the Pakistan Institute of Corporate Governance, and KPMG Pakistan.
The guidelines cover three pillars. Environmental disclosures look at climate impact, greenhouse gas emissions, and energy consumption. Social disclosures cover gender diversity, non discrimination policies, and health and safety measures. Governance disclosures cover board diversity, executive compensation, and overall corporate governance structure.
Daitan Solutions works with manufacturers across Pakistan who are trying to make sense of exactly this kind of data, particularly on the energy and emissions side, where accurate facility level numbers matter most.
3. Timeline: How Pakistan’s ESG Regulatory Roadmap Developed
SECP’s ESG journey did not happen overnight. The regulatory roadmap was introduced in June 2022, laying out the Commission’s intention to build a full sustainability disclosure framework for the corporate sector.
- 2022: SECP launches its ESG Regulatory Roadmap and forms an ESG Task Force with PSX, PICG, and KPMG
- 2023: SECP publishes the first ESG Disclosure Guidelines for listed companies, voluntary in nature
- 2024 and after: SECP adopts IFRS S1 and S2 Sustainability Disclosure Standards for companies listed on PSX
- 2026: SECP expands the framework further, including a Green Taxonomy, an ESG Sustain reporting platform, and the country’s first ESG Mutual Funds Framework
The direction of travel is clear. What started as a voluntary guideline in 2023 is steadily becoming a more structured and, in parts, mandatory disclosure regime.
4. Are SECP ESG Guidelines Mandatory or Voluntary
This is the question most factory owners ask first, and the honest answer is that it depends on which part of the framework you are looking at. The original 2023 ESG Disclosure Guidelines are voluntary. Companies are encouraged, not legally required, to publish ESG disclosures under that specific document.
The IFRS S1 and S2 Sustainability Disclosure Standards are a different story. SECP has moved to require these for companies listed on the Pakistan Stock Exchange, which makes that layer of reporting mandatory for listed entities rather than optional.
Private manufacturers are not yet directly required to file either one. That said, early signals from SECP and industry bodies suggest the framework could extend to large private companies in future phases, so waiting until it becomes mandatory is a risky strategy if you export or plan to raise financing.
5. Who Needs to Comply: Listed vs Private Manufacturers
Listed manufacturing companies on the Pakistan Stock Exchange are the primary audience for SECP’s ESG framework today. If your company is listed, you should already be reviewing both the voluntary ESG Disclosure Guidelines and the mandatory IFRS S1 and S2 requirements.
Private limited manufacturers are not currently bound by SECP’s ESG rules directly. However, plenty of private factories in Pakistan are already collecting ESG style data because their export buyers, financing banks, or parent companies require it. In practice, many private manufacturers end up reporting ESG information anyway, just through a different channel than SECP.
If your factory falls under either category, the smartest move is to start building your data collection habits now rather than scrambling once a mandate lands.
6. The Three Pillars: Environmental, Social, and Governance Metrics Explained
SECP’s guidelines break ESG into three pillars, and manufacturers tend to interact with all three differently depending on their operations.
Environmental
Covers climate change impact, greenhouse gas emissions across your operations, energy consumption patterns, water use, and waste management. For a factory, this is usually the heaviest lift because it requires consistent, facility level metering rather than annual estimates.
Social
Covers gender diversity in your workforce, non discrimination policies, employee health and safety records, and community engagement. Factory floor safety incidents and worker demographics both fall here.
Governance
Covers board composition and diversity, executive compensation structures, and how transparently the company is run. This pillar is less about your factory floor and more about how your company is governed at the top.
7. Environmental Disclosures Manufacturers Must Track
For most Pakistani manufacturers, the environmental pillar is where real operational work begins. SECP’s guidance points to a few core categories that keep showing up across the framework.
- Scope 1 emissions from fuel combustion and on site processes
- Scope 2 emissions from purchased electricity
- Total energy consumption, broken down by source where possible
- Water withdrawal and consumption
- Waste generated and how it is disposed of or recycled
- Climate related risks that could affect operations, such as flooding or heat stress on equipment
SECP has also been developing draft additions to the guidelines that map specific climate mitigation and adaptation activities by sector, including manufacturing categories like cement. Companies undertaking projects such as efficient water use or renewable energy installation are encouraged to report that activity under these expanded sections.
8. Social Disclosures: Gender Diversity, Health and Safety, Labor Practices
On the social side, SECP’s guidelines ask companies to report on workforce composition, including gender representation at different levels of the organization. Health and safety metrics, such as incident rates and safety training coverage, also fall under this pillar.
For factory owners, this usually means pulling data you may already have in HR and safety records, just formatted in a way that lines up with ESG reporting expectations rather than internal use only.
9. Governance Disclosures: Board Diversity, Executive Compensation, Ethics
Governance disclosures focus on the structure and accountability of company leadership. This includes board diversity, how executive pay is determined, whether there are formal ethics and anti corruption policies, and how transparently financial and operational decisions are made.
This pillar tends to be the least operationally demanding for a factory manager, since it is largely a corporate documentation exercise handled at the company secretary or board level.
10. How SECP Guidelines Align With IFRS S1 and S2 Standards
SECP designed its ESG Disclosure Guidelines to align with globally recognized frameworks, particularly the IFRS S1 and S2 Sustainability Disclosure Standards issued by the International Accounting Standards Board. IFRS S1 covers general sustainability related disclosures, while IFRS S2 focuses specifically on climate related disclosures.
The practical effect is that a Pakistani manufacturer preparing ESG data for SECP is largely building toward the same data set that global buyers and investors expect under IFRS S1 and S2. That overlap is useful. Data collected once can usually serve both purposes.
11. SECP ESG Guidelines vs IFRS S1 and S2: A Side by Side Comparison
The table below breaks down how the two frameworks differ in scope and obligation.
| Aspect | SECP ESG Disclosure Guidelines | IFRS S1 and S2 Standards |
| Status | Voluntary | Mandatory for PSX listed companies |
| Scope | Environmental, Social, Governance | General sustainability (S1) and climate specific (S2) |
| Who it applies to | Listed companies, encouraged for others | Companies listed on Pakistan Stock Exchange |
| Origin | SECP, developed with PSX, PICG, KPMG | International Accounting Standards Board |
| Reporting format | Standalone report, annual report, or website | Integrated into financial and sustainability reporting |
| Support available locally | SECP ESG Sustain platform, Daitan Solutions data and monitoring support | Same underlying data, reported under global standard |
12. Reporting Formats: Standalone Report, Annual Report Integration, or Website Disclosure
SECP gives companies flexibility in how they present ESG disclosures. You can publish a dedicated sustainability report, fold ESG data into your existing annual report, or publish the information directly on your company website.
For most mid sized Pakistani manufacturers, integrating ESG data into the annual report tends to be the simplest starting point, since it does not require building an entirely new reporting document from scratch. Larger exporters with more mature ESG programs often move toward a standalone sustainability report once their data collection is solid.
13. Common ESG Reporting Mistakes Pakistani Manufacturers Make
- Treating ESG as a once a year paperwork exercise instead of continuous data collection
- Estimating energy and emissions numbers instead of metering them
- Missing Scope 2 emissions because purchased electricity is not tracked separately from on site generation
- No clear owner for ESG data inside the company, so numbers come from different departments each year
- Copying global ESG templates that do not reflect Pakistan specific risks like flooding, heat stress, or grid instability
Getting the data collection process right the first time saves a lot of rework later, especially once ESG reporting becomes more closely scrutinized by buyers, banks, and regulators.
14. How IoT and Energy Monitoring Data Feed Into ESG Reports
The single biggest bottleneck for most Pakistani factories trying to comply with SECP’s environmental pillar is not knowing their own numbers. Energy consumption, emissions, and water use are often estimated from utility bills rather than measured at the equipment level.
This is where real time monitoring changes the picture. An IoT based energy management system captures electricity, gas, water, and steam consumption continuously, at the machine or production line level, rather than as one blended monthly bill. That level of detail is exactly what SECP’s environmental disclosures and IFRS S2 climate reporting are asking for.
| Approach | Manual Tracking | Daitan Energy Monitoring Platform |
| Data granularity | Monthly utility bill totals | Real time, machine level data |
| Emissions calculation | Manual, estimate based | Automated from live consumption data |
| Audit readiness | Difficult to verify historical numbers | Automated reports every 10 days, with full history |
| Reporting time required | Weeks of manual data pulling | Dashboards ready for direct export |
Facility managers who already use Daitan’s energy monitoring dashboards find that most of their environmental ESG data is sitting there already, just waiting to be pulled into a report.
15. Cost and Resource Planning for ESG Compliance
There is no fixed SECP fee for ESG reporting since the current guidelines are voluntary, but building the underlying data capability does have a real cost. Based on typical market rates in Pakistan, an initial ESG readiness assessment from a consulting firm can run anywhere from Rs. 3 Lakh to Rs. 8 Lakh depending on company size. Ongoing energy monitoring and data platforms, like the kind used for utility tracking, are usually a smaller recurring cost once installed, and they double up for cost control purposes beyond just ESG reporting.
Book a free consultation with Daitan Solutions if you want a realistic estimate for your specific facility before committing to a full ESG program.
The smartest budgeting approach is to treat ESG data infrastructure as a dual purpose investment. The same energy monitoring setup that helps you cut utility costs is the exact data source that satisfies your environmental disclosure requirements.
16. Steps to Prepare Your Factory for ESG Reporting
- Assign a single internal owner for ESG data, even if it is a part time responsibility to start
- Install or upgrade metering so energy, water, and emissions data is captured at the facility or line level, not just from monthly bills
- Review SECP’s ESG Disclosure Guidelines and IFRS S1 and S2 to see which categories apply to your company
- Pull existing HR and safety data into a format that matches the social pillar’s expectations
- Decide your reporting format early, whether that is a standalone report, an annual report section, or a website disclosure
- Get a detailed cost assessment before committing budget to consultants or software
A few questions worth asking before you commit to any ESG data provider: does the platform capture data at the equipment level or only from utility bills, can it generate audit ready historical reports, and does it integrate with your existing facility management systems. Getting clear answers to these three questions before signing anything will save you from a costly redo later.
17. How Daitan Solutions Helps Manufacturers With ESG Data and Compliance
Daitan Solutions works with factory owners and facility managers across Pakistan to build the energy and emissions data foundation that ESG reporting depends on. Our energy management system continuously collects real time data on electricity, gas, water, and steam consumption, and presents it through dashboards that are built for both cost control and compliance reporting.
Our team has worked with 50 plus facilities across Pakistan, helping factory owners move from rough utility bill estimates to accurate, auditable energy data. Whether you are a listed manufacturer preparing for IFRS S2 climate disclosures or a private exporter responding to buyer ESG audits, our platform gives you the underlying numbers without the manual guesswork.
Let us help you map out your energy savings and your ESG data readiness at the same time. Get a detailed cost assessment and see exactly where your factory stands today.
Final Thoughts
SECP’s ESG framework in Pakistan is moving from voluntary guidance toward a more structured, and in places mandatory, disclosure regime. Listed manufacturers are already expected to align with IFRS S1 and S2, and private manufacturers are increasingly being pulled in through buyer and bank requirements even without a direct SECP mandate.
The manufacturers who will handle this transition smoothly are the ones who start treating energy, emissions, and safety data as something to be measured continuously, not estimated once a year. If you want to see how our energy management platform fits into your ESG reporting plan, our related guides on energy audit costs for Pakistani factories and real time utility monitoring are good next reads.
Book a free consultation with Daitan Solutions to start mapping your ESG data readiness today.