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CIPC: Sustainability reporting survey / Regulatory Impact Assessment (RIA)
- 05 February 2025
- CIPC
- South African Accounting Academy
Summary:
The Companies and Intellectual Property Commission (CIPC) has informed customers of a market survey to assess, among other things, the sustainability reporting landscape in South Africa and the value proposition for potentially making sustainability reporting mandatory, subject to policy imperatives.
Article:
Following the launch of the Sustainability Disclosure Standards, IFRS S1 and IFRS S2, by the International Sustainability Standards Board (ISSB) in June 2023, the CIPC hosted a Sustainability Reporting Breakfast Roundtable in September 2023, followed by a series of market-centric and regulator-focused roundtables and stakeholder consultations. Some of the major outcomes of the aforementioned activities included a decision by the CIPC to conduct a market survey to assess, among other things, the sustainability reporting landscape in South Africa and the value proposition for potentially making sustainability reporting mandatory, subject to policy imperatives. The said decision was conceived as part of the considerations under Section 188 (1) and (3) of the Companies Act 71 of 2008 (as amended).
The survey, inter alia, seeks to gather market feedback in the areas of sustainability reporting sentiment, practices, current application, readiness, assurance and costs and benefits. The CIPC collaborated with Alexforbes, as an independent party, to facilitate this research.
In parallel and as part of departmental co-ordination and collaboration, the Department of Trade, Industry and Competition (‘the dtic’) requested CIPC to join a Steering Committee formulated to oversee a Regulatory Impact Assessment (RIA) on adopting specifically the ISSB Sustainability Disclosure Standards in South Africa. Genesis Analytics was appointed by the dtic as the service provider to conduct the RIA.
In order to avoid duplication of effort (the market having to respond to two different, but similar surveys), harmonise approaches and optimise resources; CIPC, the dtic and Alexforbes, in the spirit of collaboration, have joined hands to develop and distribute the contemplated market survey. In light of the RIA process, the said survey has been fused with the activities of the RIA process under the auspices of the dtic and will be distributed and managed by Alexforbes and its distribution partners, namely the JSE Limited, the Institute of Directors South Africa, the National Business Initiative and Paragon Impact. In addition to the survey, Genesis Analytics will also perform further research activities and conduct various interviews as part of the broader RIA process.
The survey and RIA will contribute towards the development of a policy and legislative position on sustainability-related disclosures in terms of the Companies Act 71 of 2008 (as amended). The RIA process, being an activity informed by the official national policy development framework, should be given the requisite attention. Thus, customers, especially those who are subject to a mandatory audit under Regulation 28 of the Companies Regulations, 2011; are hereby encouraged to fully and actively participate in the survey.
A link to the survey can also be found under the “XBRL Programme” page on our website (www.cipc.co.za). Queries and comments should be directed to [email protected].
To take the survey, please use https://forms.office.com/r/9ESqSxFWwe
Click here to download Notice 6 of 2025:
Relevance to Auditors, Independent Reviewers & Accountants:
- The Companies Act is yet another piece of legislation that your clients must comply with, and which you must assess compliance with. If they don’t comply with the relevant laws and regulations, you have certain reporting obligations in terms of NOCLAR (NOn-Compliance with Laws And Regulations) – this could include reporting to management, qualifying your audit opinion, reporting a Reportable Irregularity, etc.
- As an auditor, independent reviewer and accountant, you also need to monitor your client’s compliance with the Companies Act and all relevant notices/enforcements/practice notes issued by CIPC as the regulator.
- Where you perform these compliance tasks on behalf of your client, you need to ensure that you comply with all relevant notices/enforcements/practice notes issued by CIPC as the regulator.
- Company Secretarial staff play a critical role in bridging the gap between entities and CIPC. As legislation, regulations and tax law are continuously changing and evolving, it is of utmost importance for companies and company secretarial practitioners to keep abreast of such changes in so that companies continue to meet their compliance obligations.
Relevance to Your Clients:
- An entity (company or close corporation) has a duty to comply with the Companies Act, and all relevant notices/enforcements/practice notes issued by CIPC as the regulator.