While most South African companies support mandatory sustainability reporting, only a small percentage believe they are ready to comply. This disconnect highlights the urgent need for a phased, locally tailored approach to implementation.
This is one of the key findings from the Sustainability Reporting Market Sentiment Survey, led by Alexforbes in collaboration with the Companies and Intellectual Property Commission (CIPC), an agency of the Department of Trade, Industry and Competition (DTIC). The survey assessed market sentiment, understanding, adoption, readiness, and cost considerations associated with sustainability reporting in South Africa.
The Headline Results Report was launched on 22 July at an event co-hosted by Alexforbes and the Institute of Directors South Africa. Representatives from the CIPC and the Financial Sector Conduct Authority were also in attendance.
Survey participants represented a broad cross-section of the South African market, with listed companies making up 46.8% of the sample – many of them large-cap firms with a market capitalisation above R30 billion.
Advocate Rory Voller, Commissioner of the CIPC, said: “This report offers important insights for policymakers, regulators, reporting entities, and stakeholders seeking to understand and support the evolution of sustainability reporting. We invite all readers to consider these findings as part of a wider national conversation about how South Africa can strengthen transparency, protect investor interests, and align reporting practices with sustainable development priorities.”
High voluntary uptake, but significant implementation challenges
The survey found that 68.8% of respondents report on some aspect of sustainability, even though only 38.7% are required to do so. This reflects a strong level of voluntary disclosure. The top motivators for sustainability reporting were domestic regulatory requirements (29.4%) and investor or financial stakeholder expectations (28.7%), with other influences including parent company obligations and international regulation.
King IV emerged as the most widely used reporting framework – in line with its status as a requirement for listed companies – followed by the King IV-endorsed Integrated Reporting Framework, the United Nations Sustainable Development Goals, and the Global Reporting Initiative.
A smaller group of respondents indicated they are beginning to align with the International Sustainability Standards Board’s new global sustainability standards, with 17.9% using IFRS S1 and 16% using IFRS S2.
There was strong support for the value of sustainability reporting:
- 4% of participants agreed it enhances transparency and accountability.
- 8% believed it improves access to capital.
Despite this, only 28.4% of respondents considered themselves ready to comply with potential mandatory disclosures, pointing to a clear need for readiness support and capacity-building across the market.
Respondents overwhelmingly agreed that any move towards mandatory reporting should be phased, proportional, and tailored to the South African context. Many called for the roll-out to begin with entities of systemic importance or public accountability, such as large retirement funds and major unlisted companies.
Call for support and skills development
Participants highlighted several barriers to effective implementation, including resource constraints, the difficulty in collecting data, the complexity of current sustainability standards, a shortage of expertise, and costs.
There was broad agreement that the government and regulators must play an enabling role. A majority (56.1%) said the provision of clear guidance and support should be the top priority, followed by training and skills development (51.4%).
Lee Swan, Alexforbes’ head of sustainability, said: “Our launch event was a great success and well received. We plan to issue additional supplementary reports to deepen the insights and impact. We look forward to continuing our engagement with stakeholders through webinars and bespoke events.”
Momentum builds with regulatory co-operation
Shortly after the report launch, the FSCA and the International Finance Corporation (IFC) – a member of the World Bank Group – issued a joint statement on 23 July announcing a co-operation agreement. The agreement is aimed at developing sustainability and climate reporting regulations aligned with the ISSB standards.
Read: SA edges closer to mandatory sustainability reporting under global ISSB standards
Carina Wessels, Alexforbes chief GRC officer and executive: impact advisory, commented: “We are exceptionally pleased that the insights gathered through this survey have helped inform the regulatory impact assessment commissioned by the DTIC, in considering whether and how mandatory sustainability reporting should be introduced in South Africa.
“We also believe the insights will support the FSCA and IFC in executing their co-operation agreement and assist other regulators in shaping policy decisions. Alexforbes Impact Advisory remains committed to contributing meaningfully to this important dialogue.”
The 2025 Headline Results Report of the National Sustainability Reporting Sentiment Survey for South Africa is available on the Alexforbes website.
