The JSE has joined the Race to Zero Partner Initiative through the Net Zero Financial Service Providers Alliance (NZFSPA), and the Glasgow Financial Alliance for Net Zero (GFANZ) to promote and champion sustainability measures within South Africa, and internationally,  and has committed to supporting net zero by 2050.  These alliances encourage the financial sector to align with a target to limit the rise in global temperatures to 1.5 ^oC and use their respective mandates in achieving this goal. 

“The JSE recognises its role in guiding and supporting listed companies to acknowledge climate change as one of the most pressing sustainability risks. The urgent social needs of our country mean that we must holistically integrate environmental, social and governance (ESG) considerations into investment and financial decision making,” says JSE Group CEO, Dr Leila Fourie. 

The alignment of the climate change pillar of the FTSE/Russell ESG rating model, which underpins the FTSE/JSE Responsible Investment Indices, to the Transition Pathway Initiative (TPI) will enable a more meaningful climate change ratings and hence improved information for investors and other stakeholders. The JSE has long been committed to supporting sustainable development and was among the first emerging markets in the world to have a dedicated Sustainability Segment to support the issuance of green, social and sustainability bonds. Pending regulatory approval, the JSE will soon be launching Transition Bonds and Sustainability-linked bonds which support the funding of sustainability outcomes supportive of a path to net zero. In addition to this, the JSE in partnership with FTSE Russell, offers ESG data and ratings for listed companies.  

“The Race to Zero Partner Initiative, the GFANZ and NZFSA lay the foundation for bespoke metrics and support mechanisms which enable asset owners, managers, issuers and market participants to adequately assess climate risks over time and track the progression towards achieving net zero by 2050,” says Fourie. 

National commitments to supporting the NDCs and South Africa’s 2050 net zero target 

The JSE is pleased to announce that it is in the advanced stages of developing a guidance document for listed companies on climate risk disclosure premised on the Taskforce for Climate-related Financial Disclosure (TCFD) framework and based on the Sustainable Stock Exchange Initiative’s Climate Disclosure Model Guidance. This document will be accompanied by a broader sustainability disclosure guidance which will assist the market in integrating ESG factors into disclosures and investment decision making, with due consideration for the relevance to the local context. Further updates on the publication of these guidelines will follow in due course.  

“The Financial Sector Climate Risk Forum’s (FSCRF) Sustainable Finance Working Group, which is convened by National Treasury and chaired by the JSE, is taking a climate first approach to developing a sustainable finance roadmap for the country, including perspectives on the Just Transition,” concludes Fourie. 

South Africa’s Nationally Determined Contribution (NDC) represents one of the pathways towards achieving the country’s net zero GHG (greenhouse gas) emission target by 2050 and is based on the principle of common but differentiated responsibility. The JSE is actively identifying key levers that will support a reduction in GHG emission in line with the revised NDC, and the Race to Zero – allowing market participants to actively contribute to such progression by 2025, 2030 and ultimately 2050.