JOHANNESBURG – In an unprecedented move, the Financial Sector Conduct Authority (FSCA) has announced its Statement on Sustainable Finance and Programme of Work, aiming to cultivate a fair, efficient, and resilient financial system that bolsters inclusive and sustainable economic growth in South Africa.
Keeping in step with South Africa’s national climate obligations, the FSCA is determined to contribute to the nation’s objective of achieving carbon neutrality by 2050. As a market conduct regulator, the Authority has pledged to play a transformational role in assuring that South Africa’s financial system supports the country’s climate and broader sustainability goals.
Unathi Kamlana, FSCA Commissioner, emphasized the crucial role of the financial sector in supporting sustainable outcomes, including the mitigation of climate change’s impact on economic growth and development. “South Africa has a commendable history of ensuring that organisations are responsive to their environmental and social context. The FSCA recognises the pivotal role the financial sector can and should continue to play in driving public entities and businesses towards sustainability.”
The FSCA’s approach to sustainability is two-pronged. Internally, sustainability has been adopted as a core value, reflecting an intentional commitment to embed sustainability into business operations and organisational culture. The Authority aims to meet the needs of the present without jeopardising the ability of future generations to meet their own needs.
Externally, as a market conduct regulator, the FSCA is dedicated to promoting an innovative, inclusive, and sustainable financial system. The Authority intends to lead a transformation in ensuring that South Africa’s financial system aligns with the country’s sustainability goals, through its customer protection and market integrity mandates.
The FSCA has announced that it will evaluate its regulatory and supervisory frameworks to ensure effective management of financial risks and opportunities from sustainability. The goal is to integrate these considerations into mainstream financial decision making, thereby promoting investor and customer confidence and trust.
To actualize these objectives, the FSCA has established a Programme of Work for sustainable finance, structured around five pillars: Taxonomy, Disclosure, Reporting and Assurance, Market Development, Active Ownership, and Empowering Retail Investors and Consumers.
Each pillar is designed to meet specific sustainability objectives, ranging from the alignment of corporate disclosure and financial reporting requirements to developing marketable securities for retirement funds and collective investment schemes. The FSCA will also focus on empowering retail consumers to navigate the sustainable finance market effectively and safely, helping to mitigate the risk of greenwashing and impact-washing.
The FSCA’s Programme of Work is still under development, with public workshops and stakeholder engagements planned over the coming months. The Authority is set to publish a final Sustainable Finance Roadmap later this year as an immediate output of these engagements.
The FSCA’s commitment to sustainability and its detailed Programme of Work are encouraging steps towards ensuring that South Africa’s financial sector aligns with the nation’s climate and sustainability goals. It underscores the pivotal role of the financial sector in promoting sustainable outcomes and driving economic growth and development in a way that does not compromise the future.
