South Africa

South Africa has strengthened its green economy governance through the Climate Change Act (2024), which provides a legally binding framework for national and sectoral emission targets and the mandatory carbon budgeting system for large emitters. The Just Energy Transition Investment Plan (2023–2027) acts as a multi-sectoral green economy plan focusing on decarbonisation, new economic opportunities and social resilience, with a net zero vision by 2050. There are additional instruments in place like the South African Green Finance Taxonomy and the Green Hydrogen Guideline. However, the national framework is fragmented with no single "National Green Economy Plan" document, and there has been criticism of the country's NDC ambition.

South Africa has a strong, voluntary-based approach to inclusive corporate governance with clear guidance on ESG, gender diversity, and stakeholder engagement. The King Code is South Africa's principles-based corporate governance framework, developed by the Institute of Directors in South Africa. While voluntary, it is widely adopted and often incorporated into Johannesburg Stock Exchange listing requirements, making it mandatory for listed companies. Its latest iteration, King IV, emphasizes "apply and explain" for accountability and promotes ethical leadership and inclusive stakeholder engagement. The King V draft, released in 2025, further strengthens its focus on sustainability and stakeholder inclusivity. The Companies Amendment Act of 2025 enhances disclosure requirements for remuneration and extends the period for holding directors accountable. The Employment Equity Amendment Act, from 2025, allows the Minister of Employment and Labour to set targets for different sectors to ensure equitable representation based on race and gender, although the targets are not mandatory for all sectors. South Africa does not have legal quotas for women on corporate boards.

The National Economic Development and Labour Council is the central body for social dialogue, ensuring that labor perspectives are included in policy-making.

South Africa's Socio-Economic Impact Assessment System mandates that all draft policies and regulations submitted to the Cabinet must include an impact assessment. Thiese assessments include economic inclusion and a minimum consideration of effects on women, youth and the poor/black people. The Department of Women, Youth and Persons with Disabilities is charged with the mission to champion the participation and inclusion of these groups in policymaking, and its 2025/26 strategic priorities emphasize gender, youth and disability groups. Consultation processes are in place, through mechanisms like the National Economic Development and Labour Council and public hearings.

However, the application of these systems are somewhat partial and inconsistent. Civil society groups highlight systematic exclusion in high-level dialogues, and consultation is often perceived as a "box-ticking exercise" rather than a meaningful participatory process.

There is also a Public Participation Framework for the Legislative Sector, mandating public comment, hearings, outreach and minimum standards for legislative consultation. Parliamentary bills often undergo public consultation processes, for instance, in 2025 the Portfolio Committee on Planning, Monitoring and Evaluation held consultations on the National State Enterprises Bill.

The country's statistical body, Statistics South Africa, continues to lead the advancement of environmental and ecosystem accounts under the National Natural Capital Accounting Strategy (a 10-year strategy launched in 2021). There is a technical work on a component of wealth accounting. However, while Stats SA's new Strategic Plan (2025/2026–2029/2030) emphasizes the need for insightful data for evidence-based planning and monitoring progress on the National Development Plan and Sustainable Development Goals, and the international 2025 System of National Accounts has introduced new chapters on well-being and sustainability (including guidance on human capital and net income measures), South Africa has not moved from its natural capital accounts to focus on a national wealth framework.

South Africa's Sustainable Finance Initiative is the core of this policy. The National Green Finance Taxonomy serves as a classification system that defines which assets and projects can be considered "green." This taxonomy has been expanded and is now a critical tool for guiding public and private capital. On banking, the South African Reserve Bank (SARB) conducted in 2024 its first Climate Risk Stress Test to evaluate the resilience of systemic banks to physical and transition risks. A key finding was the significant exposure of bank loan books to climate-related risks. Building on this, the SARB has announced that it will extend climate stress testing to the insurance sector in 2025.

South Africa has made progress in sustainable finance through the National Treasury’s Sustainable Finance Technical Paper (2021), which outlines a roadmap for integrating ESG risks into financial regulation. The Carbon Tax Act (2019) remains in force, covering Scope 1 emissions and expanding gradually. The Green Finance Taxonomy, developed with IFC and the National Business Initiative, was finalized in 2022 and is being piloted by financial institutions. However, no mandatory climate-related stress testing is in place, and monetary policy tools remain disengaged from climate goals.

South Africa integrates sustainability chapters in key agreements (EU–SADC EPA; UK–SACUM EPA) and has strong domestic enablers like a carbon pricing regime (Carbon Tax, in force since 2019) moving into Phase 2 with mandatory carbon budgets under the Climate Change Act (2024), and a national green finance taxonomy. It has also reformed ISDS by terminating many legacy BITs and relying on the Protection of Investment Act. No evidence that South Africa’s trade agreements liberalise environmental goods & services (EGS) in a targeted way, align/recognise carbon-pricing systems or taxonomies, or embed CBDR-linked market-access exemptions.

South Africa implements a national carbon tax under the Carbon Tax Act (2019), which covers many emission sources and has recently been strengthened. The country also recently passed the Climate Change Act of 2024, which formally enables the setting of carbon budgets for high-emitting entities, and the government has published draft regulations for mandatory carbon budgeting and mitigation planning for large emitters. Phase 1 of the Carbon Tax ended in 2025, with the rate having increased. However, generous tax-free allowances (up to 95% in Phase 1) meant the effective tax rate remained very low, limiting its initial impact on emissions. The Climate Change Act of 2024 now provides the legal basis for the mandatory Carbon Budgeting system. The draft regulations for mandatory carbon budgets and mitigation plans are set to begin in 2026. This mandatory system will allocate five-year carbon budgets to significant emitters. The planned Phase 2 of the Carbon Tax (starting 2026) will involve a substantial increase in the headline tax rate and a gradual reduction in tax-free allowances, significantly strengthening the price signal. South Africa’s Nationally Determined Contribution is rated as "Almost sufficient" but its current policies and actions remain "Insufficient" for a 1.5°C pathway, suggesting the current framework is more aligned with a 2°C target rather than 1.5°C, pending the full, stringent implementation of Phase 2 and the mandatory carbon budgets. The framework is national and covers most sectors, with exemptions/allowances being phased out.

South Africa’s National Climate Change Response Policy and Low Emissions Development Strategy (LEDS) provide sectoral frameworks for energy, transport, agriculture, and waste. The Presidential Climate Commission (PCC) coordinates cross-sectoral planning and just transition dialogues. Sectoral decarbonization pathways have been developed for electricity, coal, and transport, with stakeholder engagement. However, integration and monitoring vary, and implementation is uneven across provinces.

South Africa's approach to the circular economy is solid and key legislation is already in place. The 2020 National Waste Management Strategy and the 2021 EPR regulations (expanded since 2023) represent a move away from a linear "take-make-dispose" model. The EPR regulations legally mandate producers of packaging, electrical and electronic equipment and lighting to take responsibility for their products' entire life cycle. As of 2025, several producer responsibility organisations are already exceeding their recycling targets for specific waste streams like liquid board packaging and PET bottles.

The South African government also promotes circularity through public procurement with the National Treasury's Circular Procurement Framework that guides state departments and public enterprises to consider the environmental impact and life-cycle costs of goods and services.

The country has not established a clear, economy-wide target for a Circular Material Use Rate (CMUR).

South Africa's Green Transport Strategy (GTS) 2018-2050 is the long-term policy for the country's green mobility agenda. It sets a vision to significantly reduce GHG emissions from the transport sector and promotes a shift toward cleaner technologies and public transport. This strategy is supported by the National Transport Master Plan (NATMAP) 2050, which provides a framework for a more sustainable, integrated transport system.The government's EV White Paper provides a clear roadmap for the EV ecosystem. In 2025, South Africa introduced a significant tax incentive for manufacturers, allowing a 150% tax deduction on new investments in EV production.This policy is a powerful signal to the automotive industry to transition from internal combustion engines to EVs. While private vehicle import duties on EVs remain higher than on traditional cars, the focus on local production is a key part of the government's green industrialization strategy, which is also supported by the Just Energy Transition Partnership. City-level public transport electrification is moving (120 e-buses in Cape Town by end 2025) while the public charging network continues to expand.

However, no national 2030 targets exist for electrified public transport or freight, consumer EV incentives are not yet in force, and private-vehicle environmental standards remain weak.

South Africa’s Integrated Resource Plan (IRP 2019) remains the central planning document, targeting 17.8 GW of renewables by 2030. The REIPPPP has resumed with Bid Window 6 and 7, adding over 5 GW of solar and wind since 2022. Embedded generation has expanded following regulatory reforms allowing private generation up to 100 MW without licensing. However, coal remains dominant, and grid constraints and Eskom’s financial instability hinder full implementation.

The Presidential Employment Stimulus continues to support green job creation, with over 100,000 jobs linked to conservation, land restoration, and climate resilience. The Just Transition Framework includes employment planning for coal regions, and the Green Jobs Report (2023) by the PCC outlines pathways for inclusive employment. However, there is no unified national green jobs strategy, and informal workers remain underrepresented.

The Presidential Climate Commission adopted the Just Transition Framework in 2022, which serves as the national guidance document. This framework is explicitly designed to address the country's triple challenges of poverty, unemployment and inequality by focusing on distributive, restorative and procedural justice. This national framework has been translated into a financial plan: the Just Energy Transition Investment Plan (JET-IP) for 2023–2027. The JET-IP, approved in November 2023, sets an initial mobilisation of over $11.6 billion in international funding. The plan is structured in specific portfolios and priorities, like Electricity Infrastructure, Mpumalanga Just Transition (addressing the most affected coal region), New Energy Vehicles, or Green Hydrogen. Local-level dialogues across all nine provinces have been critical in embedding local priorities, including concerns of informal workers, into the broader framework. The Climate Change Act of 2024 further solidifies the legal and policy foundation for these transition efforts, includes provisions recognizing just transition and decent work, and codifies functions for the Presidential Climate Commission to oversee social and climate justice elements in transition.

The country's National Integrated Small Enterprise Development Strategic Framework (2022-2032) is the overarching national plan for MSME support. A key development is the launch of the Green Outcomes Fund, which is an initiative that provides targeted financial support to green and sustainable businesses. As of 2025, the GOF has mobilized a significant amount of capital, incentivizing local fund managers to invest in MSMEs that deliver measurable "green outcomes" .

Furthermore, the government, through its Department of Forestry, Fisheries and the Environment, has launched new initiatives to accelerate the green economy. These measures directly benefit green MSMEs by reducing regulatory hurdles and creating new market opportunities. In February 2025, the South African government published a MSMEs and Co-operatives Funding Policy, providing a framework for financial and non-financial support to MSMEs

In terms of social enterprise, South Africa has a legal framework that provides for legal recognition, even if there isn't a distinct legal form.

South Africa’s Working for Water, Working for Wetlands, and Working for Energy programmes continue to provide nature-based employment for vulnerable groups. The Social Relief of Distress Grant, introduced during COVID-19, has been extended and digitized. While there are pilot discussions on basic income support, no universal basic income scheme has been launched. Social protection remains focused on traditional grants, with limited innovation linked to green economy participation.

Following the adoption of GBF in 2022, South Africa adopted the White Paper on Conservation and Sustainable Use of South Africa's Biological Resources in 2023, a GBF-aligned policy document. The Department of Forestry, Fisheries and the Environment has been engaged in unpacking national targets (including submitting national targets ahead of COP16 in 2024) as a basis for updating its NBSAP and develop a National Biodiversity Finance Plan, both of which scheduled for 2025. The government has published an Implementation Plan for the 30x30 target (aligned with the 2023 White Paper) and has committed to the GBF's goal of protecting 30% of land and ocean by 2030. South Africa has already expanded its Marine Protected Areas from 0.4% to 5.4% of its Exclusive Economic Zone and aims for a national target of 20% marine protection by 2030 (10% from Marine Protected Areas and 5% from Other Effective Area-based Conservation Measures). Furthermore, South Africa is actively connecting conservation to the blue and green economy through its Operation Phakisa: Oceans Economy programme, and has recently launched the National Coastal Management Programme 2025-2030 and the Climate Change Coastal Adaptation Response Plan in 2025 to address coastal vulnerability and pollution.

The South Africa's National Strategy for Natural Capital Accounting, a 10-year plan, is being implemented through the developing and updating of a wide range of accounts, with the Statistics South Africa and the South African National Biodiversity Institute leading the work. As of 2025, they have expanded upon their initial accounts for water, energy, fisheries and minerals to include biodiversity-based tourism. The Strategy is designed to inform planning and decision-making. In terms of governance, while an independent body is not in place, there exists a multi-stakeholder Natural Capital Accounts Advisory Group which includes representatives from government, academia and the private sector.

South Africa's policy framework for sustainable agriculture is a mix of national plans and ministerial directives. The Department of Agriculture's Strategic Plan for 2025-2030 outlines key priorities, including increased production, food security, and a more resilient agricultural sector. This plan references the need for climate adaptation, digital innovation, and collaboration to build a sustainable and competitive sector.

To address food waste, the Draft Strategy for Reducing Food Losses and Waste sets out a roadmap with the goal of halving food waste by 2030, in line with SDG 12.3. It outlines five strategic pillars, including circular economy principles, collaboration, and infrastructure development. While it would mean a strong commitment, it remains a draft as of August 2025.

South Africa has not made major changes to phase out harmful agricultural subsidies. While there are efforts to promote climate-smart agriculture, these are often project-based funding rather than a national policy framework. The country is also working on a new Preservation and Development of Agricultural Land Bill, which aims to promote agro-ecology and regenerative practices.

South Africa still shows partial reforms and limited new finance for nature restoration. The Carbon Tax has been increasedin 2025, but the last assessment shows that the revenue generated is not generally earmarked for natural conservation or restoration projects. The country is actively developing new nature finance instruments and regulatory frameworks like the Green Finance Taxonomy (a pilot is underway, expected mid-2025), and the Biodiversity Finance Plan offers a roadmap to scale biodiversity finance and prioritize funding mechanisms. The Biodiversity Finance Initiative (BIOFIN) is implementing some solutions like the establishment of biodiversity offset banking and a wildlife sector certification scheme. In 2025, the government has renewed its promotion of biodiversity management agreements tied to tax incentives for threatened species, encouraging landowners to engage in conservation practices.

South Africa’s post-pandemic recovery efforts include some green stimulus elements and a narrative around greening the economy. The Economic Reconstruction & Recovery Plan (2020) includes interventions in energy, infrastructure, water, agriculture and environmental restoration. Nonetheless, the green components are not dominant. Many recovery or stimulus funds continue to flow toward general infrastructure and non-green sectors. Some stimulus did not attach strong environmental or just transition conditionality. The Just Energy Transition Partnership with its accompanying Investment Plan serves as the long-term framework driving green policy, spanning 2023–2027. It is explicitly designed to accelerate the decarbonisation of the electricity system and develop new economic opportunities, all while ensuring a just transition for workers and communities affected by the shift away from coal. Priority portfolios include Electricity Infrastructure, New Energy Vehicles and Green Hydrogen projects. A Climate Change Bill was introduced in 2024 to promote an integrated national approach toward a low-emission economy and set adaptation targets.