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SAZH-TAF Report on FDI

Social - Environment

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One factor which is often ignored when it comes to foreign investment is its relation and impact on the environment. Historically, corporations have played a massive role in causing mass pollution, oil spillage and the release of greenhouse gases etc., in their host country. However, through our interviews, we found out that with increasing awareness and climate change discourse coming to the forefront, corporations have been making active efforts to ensure that they comply with the environmental laws of their host country. In today’s world, big international corporations would not want to be involved in an environmental damage controversy and hence take active efforts to avoid a PR problem.


Speaking on the Environmental laws, experts for the development sector explained that foreign investors are quite concerned when it comes to adhering to environmental protection laws. They are sensitive to the industry’s set-up with their investment and ensure they are not damaging the natural resources. Now when foreign investors enter into a new market, the business sector has to consider these points before making a business package to offer to the world.



If we look at the example of Sialkot, which is one of the manufacturing hubs of our country, our members added that they have taken it on themselves to ensure efficiency and are no longer relying on the government. From the perspective of investors, it is highly profitable. However, if you look at it from the perspective of sustainable development, their industrial waste flows into the green fields with mass level environmental damage being done by the industries. Hence, a robust environmental policy with enforcement is necessary to balance the interests of the private sector, to whom profit is the only concern.

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