Adopting globally accepted sustainability reporting standards could result in South African businesses unlocking access to new opportunities for investment and growth.
Johannesburg, South Africa – As the sustainability reporting landscape continues to evolve, the way in which businesses define long-term value and measure success is also undergoing a profound transformation. Financial performance alone is no longer the sole benchmark of business success—today, effective corporate reporting, with a particular focus on sustainability, has become essential in guiding strategic decision-making and driving meaningful impact.
In PwC’s ‘Are you reporting for a sustainable future? South Africa’s perspective on the changing global landscape’ publication, we examine the benefits of transparent sustainability reporting and key considerations for reporters looking into adopting or aligning with the International Sustainability Standards Board (ISSB) standards in South Africa.
"Although the path towards adopting the ISSB standards in South Africa has not yet been clearly set out, it’s important for entities to be aware of and keep up to date with developments. Proactive engagement now will not only ensure that entities are prepared but also unlock the full value of sustainability reporting — even in the absence of regulation."
Findings in PwC's 2024 Voice of the Consumer Survey reveal that 93% of consumers said that they are experiencing firsthand the disruptive effects of climate change in their daily lives. This is notably higher than the global average of 85%. In addition, based on PwC's 2024 Global Investor Survey, 72% of investors view a company’s ability to manage sustainability-related risks and opportunities as an important factor in investment decision-making. Businesses therefore have an opportunity to better connect with their investors and eco-conscious consumers by providing information about their sustainability-related initiatives. In doing so, they not only support informed consumer choices but also create value through meaningful transformation.
The adoption of the ISSB standards as a strategic business opportunity
One of the most significant developments in global sustainability reporting has been the release of IFRS S1, ‘General requirements for disclosure of sustainability-related financial information’ and IFRS S2, ‘Climate-related disclosures’ by the ISSB in June 2023. These standards, effective for annual periods starting January 2024 (subject to local territory adoption), set the foundation for consistent, transparent, and comparable sustainability disclosures.
"South African businesses are facing growing discussions about the adoption of these global standards, with some debating whether the ISSB standards should serve as a baseline for sustainability reporting in the country. The challenge lies in aligning these global standards with local frameworks, like the King IV Report on Corporate Governance™. However, local adoption of the ISSB standards could provide South African businesses with improved access to international capital markets, investment and unlock capital flows."
When embarking on their sustainability reporting journey, even if considering voluntarily adopting the ISSB Standards, businesses can consider the following guidelines:
Confirming governance structure(s) for sustainability reporting monitoring and oversight: In many instances there are governance structures in place with respect to the responsibility and oversight of sustainability-related matters. Businesses can consider whether there is a need for a separate committee or defining new responsibilities for an existing committee and understanding the skills and knowledge that is required.
Assessing whether sustainability and sustainability reporting is aligned with the overall business strategy: Develop a clear and complete understanding of sustainability information publicly reported by your company, whatever the channel of communication. Assess whether this is aligned with the overall business strategy and/or if enhancements are required to the information currently disclosed.
Develop a full understanding of global and local regulation: As the sustainability reporting landscape continues to evolve both locally and abroad, it is important to keep abreast of developments and the potential impacts.
Set roles and responsibilities for a quality and robust reporting process: Compared to financial reporting, sustainability reporting has the added complexity of data having to be obtained from a wide range of sources both within and outside an organisation. It is therefore important to understand the disclosure requirements of the applicable sustainability reporting frameworks, and what information is needed to satisfy the requirements.
Determine whether, and which, external assurance is needed for your reporting: While assurance over sustainability reporting is currently not mandated/regulated in South Africa, it is important to consider assurance beyond regulation. Assurance allows businesses to build credibility with stakeholders, remain competitive, mitigate reputational risks or address concerns about greenwashing.
Where assurance is required, ensure a realistic and achievable path is defined: Assess the current maturity of your sustainability reporting process and set a timeline to progress towards your target over an appropriate number of reporting cycles.
To provide sustained value for clients, businesses need to start navigating the dynamic sustainability reporting landscape. By embracing and taking early and deliberate steps to strengthen governance, align sustainability with business strategy and build robust reporting processes, South African organisations can move beyond compliance, creating momentum for continued business success.
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Are you reporting for a sustainable future? South Africa’s perspective on the changing global landscape
