ESRM in South Africa
In South Africa, the sustainable finance agenda is well established with E&S risk management compliance and reporting guidelines in place, which have been published by regulators and industry associations. As societies expectations increase of the role the financial sector plays in promoting good E&S risk management practices amongst clients, the South African ESRM program seeks to support financial institution to enhance their environmental and social risk management systems and disclosure practices.
The ESRM Program in South Africa is supporting regulators, financial institutions and broader stakeholders to broaden the application of environmental and social risk management to all relevant financial products by developing disclosure requirements, as well enhancing the environmental and social risk management skills and resources in the market.
South Africa is one of the most carbon intensive economies in the world. It has sound environmental legislation aimed at achieving sustainable development and the conservation and management of the country’s rich natural resources, including laws that support public participation, impact assessment and environmental management.
As a developing country, South Africa’s infrastructure and society are especially vulnerable to the impacts of climate change and the financial sector has an important role to play in supporting a just transition to a low carbon economy.
Despite the strength of the sector, financial institutions face a broad range of challenges in South Africa, including high levels of unemployment, ageing infrastructure, electricity shortages and one of the world’s highest GINI coefficients.