Is it working?

The reform is making good progress. The FSCA's April 2026 Sustainable Finance Update Report signals a clear shift from voluntary guidance to enforceable conduct regulation. ESG data quality is now being treated as a core supervision matter, not a peripheral reporting exercise. The FSCA's move towards mandatory IFRS S2-aligned climate disclosure is a material policy escalation. However, mandatory disclosure has not yet formally commenced for the broader private sector. A voluntary adoption period precedes the legal requirement. Capacity gaps persist at smaller financial institutions.

Actions

The taxonomy is in use in the market with the FSCA Sustainable Finance Update Report 2026 having been published. FSCA also published a discussion paper on ESG Rating Services and Data Providers in April 2026. In addition, the JSE has updated voluntary ISSB-aligned guidance and the mandatory disclosure framework for listed entities is in development.

Are there plans?

The long-term implementation plan is in place, with annual taxonomy reviews and ongoing stakeholder engagement. A voluntary disclosure period will precede mandatory requirements, allowing institutions to build reporting capacity.

Is it on the agenda?

Yes. National Treasury, SARB and FSCA all include green finance taxonomy as a priority in their official sector workstreams.

Goals

To create a standardised national classification system defining which economic activities and investments qualify as "green" (environmentally sustainable). This will enable investors, companies and regulators to consistently measure, report and verify green credentials and help South Africa mobilise private capital for the transition to a lower-carbon economy.

References

• Reference Link One
• Reference Link Two
• Reference Link Three

Departments / Govt Institutions

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