Assessing whether South Africa should adopt mandatory corporate sustainability reporting

The South African Department of Trade, Industry and Competition (the dtic) engaged Genesis Analytics to conduct a comprehensive Regulatory Impact Assessment (RIA) on the adoption of the International Sustainability Standards Board (ISSB) Sustainability Disclosure Standards in South Africa.

The ISSB Standards, developed under the International Financial Reporting Standards (IFRS) Foundation, comprise IFRS S1 (general sustainability-related disclosures) and IFRS S2 (climate-related disclosures). These standards aim to establish a global baseline for consistent, investor-focused sustainability reporting.

The RIA sought to evaluate the implications of adopting these standards in South Africa, focusing on their interaction with existing statutory and voluntary frameworks, the readiness of South African companies and regulators, and potential economic and administrative impacts.

The project encompassed:

• A baseline assessment of the current sustainability reporting landscape in South Africa, drawing on international benchmarking, desktop research, and analysis of disclosure practices across sectors and company sizes;
  
  

• Extensive stakeholder engagement, including interviews with representatives from government, regulators, industry bodies, civil society, and the private sector;
  
  

A national market sentiment and readiness survey, distributed to South African companies in partnership with the Companies and Intellectual Property Commission (CIPC) and Alexforbes; 

• An assessment of reporting costs for different categories of companies, including once-off setup and recurring costs, based on survey data and stakeholder input; and
  
  

• A comparative review of ISSB adoption approaches published by other jurisdictions with respect to entity scoping, implementation phasing, assurance, and institutional arrangements.
  
  

The RIA was designed to support evidence-based policy-making by providing the South African Government with a clear understanding of the potential costs, benefits, and institutional implications of adopting the ISSB Standards. The process was guided by international best practice in regulatory impact assessment and was informed by a detailed multi-criteria analysis framework.