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(Virtual Showroom) For the past decade, climate compliance in South African industry has been seen as a box-ticking exercise with only the Tier 1 companies going above and beyond what is required by law. The likes of Anglo, Sasol, Sappi, and other listed companies, are the only ones who have both the capacity and motive to set up specialised[RA1] sustainability functions, develop transition strategies, and set decarbonisation targets - they are the ones typically in the global spotlight. The lower tier industrial players, rather justifiably, treat it as a compliance exercise and leave it at that. Their reports get filed, returns submitted and carbon tax (if any) gets paid, and the operation moves on. This approach has been adequate given the regulations have been rather permissive and the financial implications modest. It no longer is. Three recent changes have moved climate action from a documentation exercise to an integral part of strategic decision-making for businesses.
The first change is legal. The Climate Change Act, Act 22 of 2024, commenced in Q1 2025 and establishes a framework for two major instruments – Sector Emissions Targets (SETs), carbon budgets [RA2] and mandatory greenhouse gas (GHG) mitigation plans. The draft Carbon Budget and Mitigation Plan Regulations and accompanying Technical Guidelines point to a proposed reporting threshold of 30 000 tCO₂e per[RA3] year for listed activities. If finalised in this form, this threshold will catch many mid-tier industrial operators who previously did not need to report off guard. The Act also brings about punitive measures for non-compliance, making it a criminal offence to fail to submit these mitigation plans. Most importantly, these punitive measures can include a fine or imprisonment meaning they could be attached to a natural person, not just the company[RA4] . While it’s unlikely that CEOs will be thrown in jail for this, it is evidence of how serious the DFFE is on ensuring adherence to the new regulations.
