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.

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The choice of cleaner production practices within the supply chain can improve the textile industry's environmental, financial, and operational advantages. The objective of this study is to evaluate smart environmental management practices (SEMPs) for minimizing the pollution load (energy waste, water consumption, wastewater generation, and chemical waste) within the supply chain in five textile production units of Lahore, Faisalabad (Punjab), and Karachi (Sindh) in Pakistan and to assist and get comprehensive knowledge on resource saving through cleaner production techniques. A multi-criteria decisionmaking method was used to identify the possibilities and use for cleaner production and SEMPs. A total of 36 SEMPs have been recorded with three benchmarking levels based on investment and business priority: i) low/no-cost high return, ii) high-cost high return, and iii) medium-cost medium return. After an initial assessment, SEMPs were implemented and post-assessments were conducted after gap of months. It was found that about 1.3 million m 3 of water was saved which constituted up 21% of the total water consumption. Moreover, 34,600 tons of chemicals and 1,441,500 kWh energy were also saved. This resource saving also helped industries save 0.792 million USD. Using the SEMPs proposed in this article, the annual GHG emission was significantly reduced for industries where the potential varied from 200 to 8,500 tons of CO 2 for different industries.

The current industrial and economic activities in Sindh Province, Pakistan, polluted the region's water, air, soil, and marine resources. However, there is a rising demand for eco-friendly production, and it is important to develop new policies and tools to combat environmental degradation and enhance economic development. Cleaner Production (CP) provides opportunities to address many of these issues. Employed method for this study was based on three approaches: a literature review and stakeholder mapping; a collection of data and information from key stakeholders through focal group discussions, consultative workshops, and one-on-one meetings; and analysis and synthesis of data that were gathered from different sources. The analysis of collected information provides an overview of CP strategies moving forward. Participant workshops gave in-depth information on policy implementation, technological impediments to methods that have been employed elsewhere, and needed capacity building as well as financial consequences of policy implementation. Through increasing financial resources and institutional resources, the expansion of CP will help to replace the conventional methods of waste treatment with an eco-efficiency approach to preventing pollution at the source, thus reducing the need for expensive pollution control and management costs for environmental compliance. Experiences, achievements, and implementation pitfalls from this study can provide a lesson to other developing countries to improve their economic and environmental sustainability.