National Treasury publishes updated Technical Paper on Financing a Sustainable Economy

On 15 October 2021, South Africa’s National Treasury announced publication of the Updated Technical Paper on Financing a Sustainable Economy.

Download the announcement and documents on the National Treasury website here.

Documents also available via the following links:

National Treasury also announced their membership of the IFC-supported Sustainable Banking and Finance Network to support global efforts towards accelerating sustainable financing and the development of international standards.

About South Africa’s Sustainable Finance Initiative

In January 2017,  National Treasury convened a Working Group of financial sector regulatory agencies and industry associations to develop a framework document on sustainable finance.

This followed a roundtable event in June 2016 involving around 50 stakeholders from National Treasury, the Reserve Bank, FSB (now FSCA), Department of Environmental Affairs (now DEFF), the JSE, and industry associations from banking, pensions, asset management, and insurance to assess current voluntary practices in South Africa.

On 15 May 2020, drawing on the Working Group’s inputs, National Treasury published a Technical Paper for public comment on “Financing a Sustainable Economy”. Download the 2020 draft Technical Paper.

The draft paper encouraged voluntary sustainable finance initiatives and further stakeholder engagement to strengthen sustainable finance in South Africa.

Additional Working Groups were subsequently established under the Climate Risk Forum Steering Committee, chaired by National Treasury and hosted by Banking Association South Africa. The Working Groups set out to support implementation of the following key recommendations:

  1. Develop a Green Finance Taxonomy and governance framework
  2. Co-develop technical guidance, standards and norms for all financial institutions including: E&S risk management, the use of science based methodologies /target setting, etc. and disclosures as per the Task Force on Climate-related Financial Disclosures (TCFD)
  3. Develop a benchmark climate risk scenario for use in stress tests by the sector
  4. Build sector capacity and competency for good climate risk governance, management and disclosure across the sector and the implementing arms of government.

The Technical Paper was developed by a Working Group consisting of representatives from the following organisations:

  • National Treasury (Chair)
  • South African Reserve Bank
  • Financial Sector Conduct Authority (FSCA)
  • Prudential Authority (PA)
  • Department of Environment Affairs (DEA)
  • The South African Insurance Association (SAIA)
  • The Banking Association of South Africa (BASA)
  • The Association for Saving and Investment South Africa (ASISA)
  • The Johannesburg Stock Exchange (JSE)
  • Batseta – Council for Retirement Funds of South Africa

The initiative was supported by IFC, part of the World Bank Group, in partnership with SECO (Swiss State Secretariat for
Economic Affairs) and Sida (Swedish International Development Cooperation Agency).