JSE publishes its first guidance on sustainability and climate disclosures
The South African Institute of Chartered Accountants (SAICA) welcomes the release of the Johannesburg Stock Exchange’s (JSE) Sustainability Disclosure Guidance on Tuesday 14 June 2022.
Milton Segal, Executive Director for Standards at SAICA, acknowledges that this is an important step towards obtaining a more consistent approach in the way listed entities should consider reporting their relevant sustainability information.
The guidance sources its content from the likes of the Global Reporting Initiative, the Task Force Climate- Related Financial Disclosures and the International Sustainability Standards Board (ISSB). It also takes cognisance of the different viewpoints of the ISSB which focuses to a greater degree on impact materiality and the impact of sustainability on the organisation’s capacity to create value and cash flows over time as opposed to the impact that the organisation has on its environment. The JSE recognises merit in both approaches, depending on whom the report is aimed at. This allows the guidance to synchronise with international variations and it is closer in line with that of the European Financial Reporting Advisory Group.
Furthermore, the guidance seeks to point out where convergence across standards is happening and point out options for the market and create awareness of the variations between the international standards and guidance setters.
SAICA fully acknowledges that the sustainability reporting environment is one that is developing at a rapid pace and commends the JSE for its agility in taking cognisance of the climate related exposure draft released by the ISSB in March 2022.
SAICA acknowledges and supports the message that the JSE delivered in its address; that climate change does not equate to Environmental, Social and Governance (ESG) and that, particularly in the South African context, the entire ESG ecosystem needs to be a focus area for corporates, not merely climate alone.
The JSE guidance draws on international best practice from both the United States and United Kingdom and promotes disclosure of the ‘living wage’ metric. South Africa is one of the most unequal societies globally and therefore this is particularly relevant in the local context.
Segal wishes to reinforce that the guidance will serve as a tool; it is not the end of the process. While the guidance illustrates the type of information that should be disclosed from both a quantitative and qualitative perspective, the real work will lie in entities operationalising sustainability into its day-to-day activities and its strategy, in order to create a more sustainable society that will then be reported on. Therefore, the ultimate objective is not disclosure, but rather a more sustainable corporate ecosystem.
About SAICA
The South African Institute of Chartered Accountants (SAICA), South Africa’s pre-eminent accountancy body, is widely recognised as one of the world’s leading accounting institutes. The Institute provides a wide range of support services to more than 50 000 members and associates who are chartered accountants (CAs[SA]), as well as associate general accountants (AGAs[SA]) and accounting technicians (ATs[SA]), who hold positions as CEOs, MDs, board directors, business owners, chief financial officers, auditors and leaders in every sphere of commerce and industry, and who play a significant role in the nation’s highly dynamic business sector and economic development.
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