Climate-resilient investment framework
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Individual Reform: Climate-resilient investment framework 2026 - 2027

Mandatory task force on climate-rated financial disclosures (TCFD) reporting

No data available for the deliverable: Mandatory task force on climate-rated financial disclosures (TCFD) reporting

No data available for the deliverable: Mandatory task force on climate-rated financial disclosures (TCFD) reporting

No data available for the deliverable: Mandatory task force on climate-rated financial disclosures (TCFD) reporting

No data available for the deliverable: Mandatory task force on climate-rated financial disclosures (TCFD) reporting

No data available for the deliverable: Mandatory task force on climate-rated financial disclosures (TCFD) reporting

Summary

South Africa's climate-resilient investment framework provides policy guidance, incentives for green finance and a taxonomy for sustainable investment, with pilots under way and integration into fiscal planning. Banks are required to comply by 2026 and insurers by 2027. A pilot programme with 12 institutions was completed in November 2024.

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Is it working?

The reform is progressing, with strong policy support and industry buy-in, but requires further scaling and integration. The green bond market is expanding, and the taxonomy is expected to become a standard for investment classification. Its full impact will only be clear only after broader rollout.

Actions

The framework is in its early stages, with positive industry feedback and growing adoption.

Are there plans?

A green finance taxonomy pilot was launched in Q1 2025, with industry engagement and reporting frameworks in development.

Is it on the agenda?

Climate finance is a National Treasury and FSCA priority, reflected in the 2025 Budget and regulatory strategy, and is part of the SARB roadmap 2024.

Goals

To mobilise investment in climate-resilient projects and green finance, supporting South Africa’s climate commitments and economic sustainability.

References

Departments / Govt Institutions

Financial Sector Conduct Authority (FSCA) National Treasury South African Reserve Bank (SARB)

Summary

South Africa's climate-resilient investment framework provides policy guidance, incentives for green finance and a taxonomy for sustainable investment, with pilots under way and integration into fiscal planning. Banks are required to comply by 2026 and insurers by 2027. Guidance for climate risk reporting is active. Mandatory disclosures are being phased in, with industry resilience benchmarks set for 2026.

Canvas not supported.

Is it working?

The reform is progressing, with strong policy support and industry buy-in, but requires further scaling and integration. The green bond market is expanding and the taxonomy is expected to become a standard for investment classification. Its full impact will be clear only after broader rollout. Minimum standards are being achieved sector-wide but some institutions are yet to achieve full compliance.

Actions

The framework is in its early stages, with positive industry feedback and growing adoption. Mandatory disclosures are operational and climate reporting coverage is expanding.

Are there plans?

A green finance taxonomy pilot was launched in Q1 2025, with industry engagement and reporting frameworks in development. TCFD guidance is being published, implementation workshops are being held and there are ongoing policy reviews.

Is it on the agenda?

Climate finance is a National Treasury and FSCA priority, reflected in the 2025 Budget and regulatory strategy, and is part of the SARB roadmap 2024. The SARB/FSCA Cabinet workplan is being complemented by national stakeholder group consults quarterly.

Goals

To mobilise investment in climate-resilient projects and green finance, supporting South Africa’s climate commitments and economic sustainability. The objective is to align financial disclosure, portfolio stress-testing with climate risk.

References

Departments / Govt Institutions

Financial Sector Conduct Authority (FSCA) National Treasury South African Reserve Bank (SARB)

Summary

SARB, the FSCA and National Treasury lead a task force that has issued guidance for climate‑risk reporting and TCFD‑aligned disclosures for major institutions, with mandatory disclosures being phased in. Budget Review 2026 notes that minimum disclosure standards are now largely in place, and it announces that National Treasury will publish a consultation paper in 2026 on transition planning by financial institutions, while advancing carbon‑tax increases and carbon‑credit‑market reforms (including the CCCDM pilot) to support climate‑finance mobilisation.
The key deliverables are full implementation of climate‑risk disclosure guidance across major institutions, establishment and monitoring of resilience benchmarks into 2026 and development of expectations for credible transition plans, informed by Treasury’s forthcoming consultation paper, which will be integrated into supervisory frameworks over time.

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Is it working?

Minimum disclosure standards are now broadly in place, improving transparency and enabling better assessment of climate‑related risks and opportunities. The next test is whether institutions translate these disclosures into concrete portfolio and lending adjustments backed by credible transition plans and whether supervisors are prepared to act where practices fall short.

Actions

Guidance on climate‑risk reporting has been issued, implementation workshops held and initial reporting cycles begun. Budget Review 2026 confirms further assessments of climate‑risk practices and sets out the CCCDM pilot and carbon‑tax trajectory as complementary tools for mobilising climate finance and improving market data.

Are there plans?

There are plans to deepen climate‑risk supervision, refine disclosure requirements, publish and consult on the transition‑planning paper in 2026 and link findings to future supervisory expectations and potential prudential or conduct adjustments.

Is it on the agenda?

Climate‑risk resilience and climate finance are prominent themes in Budget Review 2026’s financial sector and infrastructure investment chapters, and remain priorities in SARB and FSCA workplans and in the broader just energy transition agenda.

Goals

To mobilise investment in climate-resilient projects and green finance, supporting South Africa’s climate commitments and economic sustainability. The objective is to align financial disclosure and portfolio stress-testing with climate risk.

References

Departments / Govt Institutions

Financial Sector Conduct Authority (FSCA) National Treasury South African Reserve Bank (SARB)

Summary

Climate change creates real financial risks for banks, insurers and investors. Physical risks include damage to property from floods and droughts. Transition risks include assets losing value as the world moves to cleaner energy. South Africa's financial regulators are aligning with international frameworks - particularly the Task Force on Climate-related Financial Disclosures (TCFD) and the international IFRS Sustainability Standards (IFRS S1 and IFRS S2) - to ensure financial institutions measure and disclose these risks transparently. The FSCA's April 2026 Sustainable Finance Update Report confirms a clear move towards mandatory climate disclosure for listed financial entities.

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Is it working?

The FSCA's 2026 report is the clearest signal yet that climate risk disclosure is moving from encouraged to required. South Africa is now treating ESG data quality as a conduct risk issue, meaning financial institutions will be supervised for the quality of their climate disclosures, not just whether they make them. However, mandatory ISSB-aligned reporting has not formally commenced yet - a voluntary adoption period precedes the mandatory phase. Capacity gaps persist at smaller institutions.

Actions

The FSCA Sustainable Finance Update Report 2026 was published April 2026, following the PA's climate guidance for banks and insurers having been issued in 2024. Furthermore, the voluntary disclosure period is active and the JSE ISSB-aligned voluntary guidance has been updated while the mandatory framework for listed entities is in development.

Are there plans?

A voluntary disclosure period is under way, to be followed by mandatory requirements. Draft mandatory disclosure framework for listed entities is in development.

Is it on the agenda?

Yes. Climate disclosure is an active priority in SARB, FSCA and National Treasury strategies, with quarterly stakeholder engagement.

Goals

To ensure South African financial institutions identify, measure, disclose and manage the financial risks posed by climate change (both the physical risks from extreme weather events and the transition risks from moving to a lower-carbon economy) using internationally recognised disclosure standards.

References

Departments / Govt Institutions

Financial Sector Conduct Authority (FSCA) National Treasury South African Reserve Bank (SARB)

Analyst: Tinashe Kambadza
Status: In progress
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