According to a publication of Squire Patton Boggs-ESG Laws Across the World Global – July 2023. “ESG regulations are government standards for ESG-related actions, reporting or disclosures. While the ESG space is mostly unregulated, various legal requirements have already passed in some jurisdictions, with the EU leading in this regard, but implemented at different paces. Some businesses may already be undertaking ESG reporting and disclosures, depending on their size and industry.”
In South Africa whilst only the JSE, the Pension Fund Regulations and the Public Investment Corporation Act (TerraLex Cross-Border Guide to ESG and Sustainable Finance), require certain compliance or reporting on ESG, regulation is not as stringent as in the EU and other non-EU jurisdictions. However, it is inevitable that stringent EU style ESG regulation is imminent in South Africa.
It is therefore critical for both listed and non-listed companies to elevate ESG from a mere risk management tool. ESG must be at the centre of every company strategy. It is also the precursor to obtaining and sustaining the social licence to operate for any company. This duty rests on Boards of Directors in guiding corporate strategy.