Guide to CIPC ESG Reporting Preparation in 2024
ESG has emerged as a pressing global concern, with both jurisdictions and companies facing growing pressure to transparently report their environmental, social, and governance impacts within their communities. This issue also holds significant national importance, as the government seeks to ensure corporate accountability in reporting while fostering a proactive culture of transparency.
The CIPC is actively involved in overseeing compliance with IFRS standards. With the launch of new IFRS standards for sustainability reporting, the International Sustainability Standards Board (ISSB) aims to begin preparations for integrating the ESG taxonomy into CIPC’s existing base National Green Finance taxonomy. This update will include ESG taxonomy elements, providing a valuable resource for various reporting entities.
With the integration of ESG standards into the taxonomy, South African companies are advised to prepare and file ESG reports with CIPC in the fourth fiscal quarter (Q4) 2023.
IFRS S1 – Sustainability Related Financial Disclosure Information
IFRS S2 – Climate Related Disclosure Standards
Need for ESG Reporting
Several countries around the globe, like the EU and the US, have already implemented ESG reporting due to its benefits for different stakeholders. Considering these advantages, the CIPC board has initiated ESG reporting in Q4 for South Africa.
ESG reporting benefits the government, businesses, and consumers in the following ways:
- Governments worldwide are making stricter rules for reporting to ensure companies are open and transparent about their sustainability practices.
- Businesses recognise the benefits of disclosing ESG data to attract investors and customers seeking responsible and sustainable investments.
- Consumers are also becoming more aware of the impact of their purchasing decisions on society and the environment. As a result, they are demanding more accountability from companies.
Who Should File ESG Reports to CIPC?
CIPC implemented XBRL filing in South Africa in July 2018. After five years of mandate, the regulatory body is introducing ESG reporting in Q4 of 2023 alongside XBRL filing. Significant developments have shaped South Africa’s ESG reporting scene in recent years, primarily driven by a growing need for transparent and accurate disclosure of ESG aspects.
South African companies that are required to file ESG reports to CIPC in iXBRL format include:
- Public companies
- State-owned companies
The companies mentioned above can opt for voluntary filing in Q4 2023. From next year, companies will be mandated to disclose their ESG information with minimum tagging. From the financial year 2025-26, the disclosure will be mandated with moderate and detailed tagging.
Preparing for ESG Reporting in South Africa
In Q4, South African companies must prepare themselves for ESG reporting. Companies can benefit by preparing themselves for ESG reporting in the voluntary phase. The volitional phase aims to help filers become familiar with the new update. Companies that adopt ESG reporting in Q4 2023 can be better prepared for mandatory filing from next year.
Service providers in South Africa offer a platform to prepare accounts and XBRL financial statements. However, no service provider other than DataTracks offers ESG reporting in XBRL. So if you are looking to prepare for ESG reporting while filing XBRL reports, consider DataTracks to avail of these services under one roof.
DataTracks: CIPC’s Approved Software and Service Provider for ESG Reporting!
In the coming years, CIPC may develop its own taxonomy for ESG reporting. However, since ESG reporting began in South Africa, CIPC has adopted the European Union’s taxonomy for sustainability disclosures. What is the best in business for ESG reporting in the EU? DataTracks!
While ESG reporting may be new to your business, it is not for DataTracks! The experts at DataTracks have experience preparing ESG reports for several other regions like the EU, UK, and US. The company has robust software, making it well-equipped to prepare ESG reports. All you need to do is provide your financial reports, and the DataTracks professionals will prepare error-free iXBRL and ESG reports. So if you want a smooth transition into ESG reporting in the coming quarter, outsource your requirements to DataTracks! Contact an expert @ +27-10-446-9061 or e-mail enquiry@datatracks.co.za.