JSE hones in on ESG disclosure practices

Africa's largest stock exchange, the JSE, has recently released comprehensive guidance to assist listed companies in their sustainability reporting practices. The guidance, developed by Shameela Soobramoney, Chief of Sustainability Officer at the JSC, aims to address the increasing investor and stakeholder interest in sustainability issues. The framework focuses on providing clarity and direction for companies navigating the complex landscape of sustainability reporting. The guidance is divided into two key components - a broad sustainability disclosure guidance covering environmental, social, and governance issues, and a detailed climate change disclosure guidance. The decision to offer specific guidance on climate change reflects the urgency and importance of addressing this critical sustainability issue. One of the key themes of the guidance is the adoption of globally recognized frameworks, such as the Task Force on Climate-related Financial Disclosures (TCFD), to ensure consistency and comparability in reporting. The TCFD framework emphasizes four key areas - strategy, governance, risk management, and metrics and targets. Companies are encouraged to align their climate strategies with global best practices, integrate climate-related considerations into their governance structures, identify and manage climate risks and opportunities, and set clear targets and metrics for reducing emissions. The intention of the guidance is primarily educational, aimed at helping companies of all levels of sustainability maturity understand the importance of disclosure and begin the process of integrating sustainability into their business practices. While the guidance currently does not include compliance requirements or evaluation mechanisms, the JSC may consider future initiatives to track and assess companies' disclosure practices. The JSE's commitment to sustainability is further evidenced by its Responsible Investment Index series, developed in partnership with FTSE. The index assesses listed companies based on their ESG (Environmental, Social, and Governance) performance. Notably, JSE-listed companies have been recognized for their advanced corporate governance practices and strong commitment to sustainability, with the JSE ranking in the top five globally for sustainability disclosure practices. Overall, the JSE's ESG guidance represents a significant step towards promoting transparency, accountability, and sustainability within the South African business community. By equipping companies with the tools and knowledge to effectively report on their sustainability practices, the JSE is paving the way for a more sustainable and responsible corporate landscape in Africa.