National Treasury has invited financial institutions, businesses, regulators, industry associations, civil society organisations, academics and members of the public to comment on the proposals.
The consultation paper seeks to establish practical and proportionate guidance for banks, insurers, asset managers and other investors responding to climate-related risks and opportunities.
The proposed Climate Transition Planning and Disclosure Framework would align financial institutions’ strategies with SA’s transition towards a low-emission and climate-resilient economy.
The framework recognises that the transition must address emissions reduction, climate adaptation and the need to protect workers and communities affected by economic change.
SA’s annual investment requirements for climate mitigation, adaptation and a just transition are estimated to average 4.4% of gross domestic product until 2050.
National Treasury said financial institutions had an important role in directing capital towards investments supporting those objectives.
Effective planning would also require credible transition plans from businesses operating in the real economy.
Banks and investors depend on reliable corporate information to assess climate-related risks, evaluate investment opportunities and make informed financing decisions.
The consultation paper identifies coherent public policy, economy-wide incentives, standardised data and appropriate regulatory guidance as necessary conditions for successful implementation.
The proposals cover three areas.
The first explains how transition plans could help institutions manage climate risks and opportunities while aligning with international standards and emerging practices.
The second assesses the SA financial system’s exposure to climate risks and opportunities and considers the sector’s current readiness to develop transition plans.
The third proposes national design principles, minimum features and conditions for implementing financial-sector transition planning and disclosure.
National Treasury said the framework should reflect SA’s economic conditions, development priorities and sector-specific realities rather than applying international standards without local adaptation.
Public consultation is intended to determine whether the proposals are practical and responsive to the country’s circumstances.
The framework ultimately seeks to improve the consistency and quality of climate transition plans while linking institutional strategies and financing decisions to national development goals.
National Treasury said stronger transition planning could help the financial sector mobilise investment, improve climate-risk management and support a just and resilient economic transition.
–ChannelAfrica–
