In an era when climate risk is as material as credit risk, stock exchanges are rewriting the rulebook for corporate transparency.
And in Africa, the Johannesburg Stock Exchange (JSE) is leading that charge. Its Sustainability and Climate Disclosure Guidance, first launched in 2022 and refined through 2025, is a roadmap pushing corporate South Africa toward real, measurable sustainability.
From Vision to Mandate: The Road to Climate Accountability
The JSE’s journey to climate leadership mirrors South Africa’s own energy crossroads, a coal-heavy economy under pressure to decarbonise while sustaining growth.
In June 2022, the JSE rolled out its first Sustainability and Climate Disclosure Guidance, a voluntary but highly influential framework modelled on global best practices like the Task Force on Climate-related Financial Disclosures (TCFD).
Its goal: help companies produce “decision-useful” ESG information for investors without overwhelming them with technical language or bureaucracy.
By 2025, that foundation had evolved into a far more advanced system. The JSE updated its guidelines to fully align with the International Sustainability Standards Board’s (ISSB) IFRS S1 (general sustainability) and S2 (climate-specific) standards, finalised globally in mid-2023.
The latest update, which was unveiled in January 2025, incorporates:
- Temporary exemptions from Scope 3 emissions disclosures (for indirect supply chain emissions) during the first year.
- Guidance on biodiversity, water, and nature risks, drawing from the Taskforce on Nature-related Financial Disclosures (TNFD).
- Harmonisation with local regulatory frameworks, including the FSCA’s 2024 Sustainable Finance Roadmap and the Prudential Authority’s climate stress-testing guidelines.
All signs point toward mandatory disclosure by 2026, aligning South Africa with global sustainability leaders.
What Companies Must (and Should) Disclose
The JSE’s framework centres on four pillars directly adapted from the TCFD that guide companies through climate reporting:
- Governance:
How boards and executives oversee climate risk, including dedicated sustainability or ESG committees. - Strategy:
Climate scenarios (e.g., 1.5°C vs. 4°C futures), their impact on business models, and resilience planning. - Risk Management:
Integration of climate risk into enterprise-wide systems, covering both physical (drought, flooding) and transition (policy or market) risks. - Metrics and Targets:
Quantified data on Scope 1 and 2 emissions, energy intensity, and progress toward net-zero goals.
While still technically voluntary, the direction is clear: these disclosures will soon form part of mandatory integrated reporting, reinforced by the Companies Amendment Bill (2024), which now mandates social and ethics committees and executive pay transparency.
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Why the JSE Is World-Leading
Compared globally, the JSE’s framework punches well above its weight.
- Hong Kong’s HKEX made IFRS S2-based climate reporting mandatory in 2025.
- The London Stock Exchange will phase in similar requirements under its UK Sustainability Disclosure Standards by 2026.
- The NYSE/SEC climate rules remain narrower and only limited to Scope 1 and 2 emissions if material.
What makes the JSE unique is its early adoption and its contextual relevance for emerging markets. It’s the first exchange in the Global South to release a comprehensive TCFD-aligned guide (2022), blending global rigour with Africa-specific realities from water stress to just energy transition finance.
A 2025 report by the World Federation of Exchanges highlighted the JSE as a “benchmark model” for developing economies, calling its approach “a pragmatic bridge between ambition and achievability.”
Beyond Compliance: Real Impact on Corporate Behaviour
Regulation only matters if it changes how companies behave, and here, the results speak volumes.
A 2025 analysis of JSE Top 40 integrated reports found that post-2022, sustainability disclosures shifted decisively from risk management to value creation.
Mining and banking sectors now report on climate opportunities such as renewable investments, carbon markets, and green financing rather than simply listing threats.
Examples:
- Anglo American has embedded climate targets across its operations, reducing CO₂ intensity by 27% since 2022, supported by JSE disclosure alignment.
- Standard Bank issued over $2.3 billion in green and sustainability-linked bonds between 2023 and 2025, tied to the same reporting frameworks.
Academic studies from Wits Business School and Stellenbosch University show firms adopting JSE-aligned ESG metrics outperforming peers by up to 5% annually in shareholder returns.
Enhanced disclosure has also improved stock price stability, making ESG transparency a competitive advantage rather than a compliance cost.
The JSE isn’t leaving smaller firms behind, either. Through training webinars, templates, and XBRL-based tools, it’s helping SMEs report effectively without ballooning costs, which is a key step toward equitable transition.
Challenges and Risks
- Data collection costs remain high for smaller issuers.
- Verification gaps and greenwashing risks persist without third-party audits.
- The complexity of Scope 3 emissions could still overwhelm mid-tier firms.
Yet, as the FSCA and National Treasury push for harmonised standards, these hurdles are shrinking. With incentives like tax relief for certified green bonds and the Climate Change Act’s carbon pricing framework, companies now have a clear financial reason to comply.
The Bigger Picture: Africa’s Climate Capital Hub
In 2025, South Africa isn’t just reacting to global standards but setting them.
The JSE’s climate disclosure regime fits in with a national vision: to transform the country into Africa’s sustainable finance hub, channelling both domestic and international climate capital.
By integrating climate transparency, impact finance, and innovation (like tokenised green bonds via JSE Private Placements), the exchange is turning sustainability into a market opportunity.
Ronnie Paul is a seasoned writer and analyst with a prolific portfolio of over 1,000 published articles, specialising in fintech, cryptocurrency, climate change, and digital finance at Africa Digest News.
